US-focused onshore junior oil and gas firm Magnolia Petroleum issued an upbeat operations report Monday covering its portfolio of interests in North Dakota and Oklahoma.
The Prucha 1-23MH well, which is targeting the Mississippi Lime Formation in Oklahoma, has now completed and Magnolia and the well's operator, Devon Energy, are awaiting initial production rates. Magnolia holds a 25-percent working interest in Prucha.
Magnolia also reported that, after the success of initial production in the Henry well, which is targeting the Wilcox formation in Oklahoma, it is now participating with Henry's operator in two additional direct offsets to the well: Bowen 2-29 and Bowen 3-29.
Henry's operator, Basis, has recently reported that it hit an initial production rate of 35 barrels of oil per day – which was in line with expectations. Magnolia holds a 2.4-percent working interest in both Bowen wells.
Meanwhile, Magnolia has also elected to participate in the Phenom well – a horizontal well aimed at testing the Mississippi Lime Formation. Magnolia now holds a 2.1-percent interest in the well.
Magnolia Chief Operating Officer Rita Whittington noted that the firm's participation in the Phenom well and the two Bowen wells brings the total number of wells in which Magnolia has an interest in to 100. These include 82 that are producing, nine that are drilling and nine waiting to spud.
"The speed with which we have reached this milestone is testament to the accelerating activity and interest in the proven oil formations in which we are active, including the prolific Bakken/Three Forks Sanish, North Dakota and the Mississippi Lime and Woodford/Hunton, Oklahoma," said Whittington in a statement accompanying the operations update.
Oil analysts who follow Magnolia's shares, which are quoted on London's Alternative Investment Market, described the update as positive.
Analysts at Northland Capital Partners described the participation by Magnolia in 100 wells as a rapid delivery of the firm's business plan.
Kate Fisher, of Daniel Stewart & Company added:
"We believe that the most important part of the announcement is completion of the Prucha well as it signifies a step towards greater participation which we believe will drive the step change in attributable production and revenues that we would now like to see Magnolia achieve."
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