Magnolia Petroleum’s (LON:MAGP) underlying profits will be ahead of expectations after a strong trading performance in the year to December, it said today.
The onshore US oil and gas group that has 142 wells in total across Oklahoma and North Dakota added that revenues are still on course to grow by 240% year-on-year.
Magnolia’s licences are located in the Missippi Lime, Woodford, Hunton and Bakken/Three Forks Sanish onshore formations.
To take advantage of an increasing number of offers to participate in new wells it has also increased the borrowing limit on its credit facility to US$2.1mln from US$1.6mln.
This limit is reassessed on a six monthly basis using Magnolia’s developed producing reserves and the higher limit is an endorsement of the progress it is making said Rita Whittington, Magnolia’s chief operating officer.
“The increase in the borrowing limit of the Credit Facility before the completion of our updated Reserves Report provides third party recognition of the rapid progress made.
"Magnolia's excellent operational performance in 2013 in terms of well count, production and proven reserves, has translated into a strong set of full year financial results.
“Since the turn of the year, there has been a significant increase in the number of new well proposals across our leases in proven formations such as the Bakken and Three Forks Sanish in North Dakota and Mississippi Lime and Woodford in Oklahoma from established operators such as Devon Energy.
“As a result, we are confident that the strong momentum behind Magnolia will continue into the current financial year and beyond."