Magnolia Petroleum plc is an AIM listed oil and gas production company focused on the acquisition, exploitation and development of oil and gas properties primarily located onshore in the United States.
Magnolia Petroleum delighted by stellar performance of latest Bakken well
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The Marathon-operated Gustafson 31-30H, in the prolific Bakken formation in North Dakota, came on at 1,216 barrels a day, or a net 50 barrels a day to Magnolia, which has 4.07%.
It was the highlight of a four-well update from the various operators the AIM-listed group is working with. Condit in Oklahoma flowed at 1,546 barrels. Magnolia receives a net 7.7 barrels. Meanwhile, Voise 1-10H in the Mississippi Lime in the same state came on at 105 barrels, or 1.3 net, while Joan 1-21, also a Lime play, came on at 12 barrels a day, or 0.3 net.
Whittington said: "With Gustafson's excellent results in mind, we are looking forward to receiving the initial production rate for the Helgeson well, situated close to Gustafson, in which we also hold a four per cent net revenue interest, as we look to continue to increase net production and prove up reserves on the 13,500 plus net mineral acres we hold in proven US onshore formations."
Magnolia’s shares advanced 7% in early trade to 2.44p.
Analyst Andrew McGeary, of Northland Capital, said: “Assuming the company is producing in the region of 150 barrels a day, Gustafson would represent a 26% increase in revenue alone.
“Depending on ultimate decline rates, we would expect the well to payback in less than two years.
“Gustafson was the first in what we expect will be a number of high-impact well announcements.”
He points to another Marathon Oil-operated Bakken well, Helgeson (where Magnolia has a 4.51% net interest), which is expected to be “similarly material”.
Meanwhile, in the Mississippi Lime, the company recently announced its participation in the Cummings-operated Blaser well in which Magnolia has a 9.4% interest.