Magnolia Petroleum has marked up the value of reserves after announcing participation in 16 new wells.
The US based oil and gas company announced participation of the new wells in the SCOOP and STACK plays in Oklahoma.
The news comes as Magnolia’s proved developed producing reserves (PDP) increased from $4.026million to $4.3million.
The PDP increase follows the reduction of operating costs of three wells in Oklahoma, with one of these wells, the 100% Magnolia owned Roger Swartz well increasing in value to $205,000 from $50,000.
The rest of the increase comes after the operation of two Chesapeake Energy wells, in which Magnolia holds a 1.86% stake, exceeded expectations.
Rita Whittington, COO of Magnolia, said: “This upgrade to the valuation of our PDP reserves to $4.3million provides further asset backing to Magnolia’s current market capitalisation.
“Importantly, this valuation only covers proved developed producing and proved developed non-producing reserve classes. It does not include other reserve categories such as proved shut-in, proved undeveloped, probable and possible reserve classes as well as Magnolia’s interests in undeveloped acreage.
“We therefore believe the value of our portfolio of leases in the US onshore formations is far greater than today’s reported figure.”