Magnolia Petroleum (LON:MAGP) reported a significant increase in oil production and said the latest results from its wells in North Dakota could lead to a significant upgrade in its reserves.
This morning, the company reported initial production rates at three of its wells in North Dakota with one of the wells, Skunk Creek 15H, reaching a record 2,303 barrels of oil per day (bopd).
At current levels, the three wells have increased net daily production attributable to Magnolia by 18 bopd to 38 bopd.
The company said the results underscored the potential of the Three Forks Sanish formation, which the US government estimated could hold recoverable reserves of two billion barrels and could result in a significant upgrade in its reserves.
“The 2,303 bopd initial production rate of the Skunk Creek 15H well is our best ever and graphically illustrates the enormous potential of this emerging play,” said chief operational officer of Magnolia Rita Whittington.
However, Magnolia also noted that as is the case with all producing wells, rates are expected to decline over the life of the wells and the actual output may be less than 38 bopd.
The news boosted demand for shares in Magnolia this morning, driving the stock up 4.5 percent to trade at 1.8 pence to value the company at £10.25 million.