Magnolia Petroleum Plc has acquired a 100 percent interest in 800 acres in the oil producing Mississippi Lime formation, Oklahoma and minority interests in leases over a further 284 net acres.
The transaction is in line with the Company's growth strategy to operate wells in the Mississippi Formation and follows the successful participation in the Sundance well with Chesapeake.
Magnolia COO, Rita Whittington said, "Today's news represents a key milestone for Magnolia. The new acreage lies on the Mississippi formation in Oklahoma, recognized as having the potential to be the next big play in onshore US and where many of the leading players operating in the Bakken have recently been busy acquiring large tracts of land. Last year we participated in a well with Chesapeake that was completed in the Mississippi formation in which we recovered all of our costs in just three months. In addition, the cost of drilling in the Mississippi is considerably less than that of the Bakken, and so offers higher margins and a much reduced payback time. During our due diligence process, we identified a number of prospects on the acreage and following further analysis we aim to spud a first well by the end of this year."
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