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Magnolia Petroleum adds more wells in Oklahoma

Last updated: 18:31 28 Mar 2013 AEDT, First published: 19:31 28 Mar 2013 AEDT

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Magnolia Petroleum (LON:MAGP) has agreed to participate in three new wells in Oklahoma, and it also revealed that production from a newly completed well is exceeding expectations.

The newly completed well, Campbell 1-H, is producing at a gross rate of 614.79 barrels a day, with Magnolia’s 0.02% interest equating to 0.16 barrels of oil per day.

The AIM quoted oil firm will take minority stakes (between 0.1 and 2.4%) in the three new wells – Murl 1, Big Rig 1-35 and Jones 1-24H. This will add to the company's interests in 126 wells in its portfolio.

"The initial production rates of the Campbell well have exceeded our expectations, which bodes well for future drilling activity within the Campbell unit and surrounding acreage where Magnolia has varying interests,” said chief operating officer Rita Whittington.

“Importantly, as the Campbell well is now producing, the reserves within the spacing unit and adjoining areas will now be classified as `proven'.

“While our interest in the Campbell well is small, our participation has given us an insight into the potential of additional wells, and provides us with vital geological information that will further our knowledge of the Woodford, a formation where we hold 702 net mineral acres, conferring the right to drill in 87 sections.

"The wells included in today's release are targeting three separate formations, an indication of the multiple payzones that exist across the 5,000 plus net mineral acres we hold in Oklahoma.

“Combined with the numerous proposals we are receiving to add to the 126 wells at various stages of development in which we have an interest, we remain confident that we will continue to grow Magnolia's net production and reserves, and in the process, generate significant value for shareholders."

Magnolia also told investors that drilling has now started on the Finders 1-25H well and the JoAnn 1H-18, in which it owns 1.84% and 0.44% respectively.

 

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