Magnolia Petroleum has said expects to see a pick-up in US onshore activity.
It comes after the firm finalized a major asset portfolio, shedding 67 wells.
The firm has operations in US onshore hydrocarbon formations, including the Bakken and Three Forks Sanish in North Dakota, and the Woodford, Mississippi Lime and the Hunton in Oklahoma.
Chief executive Rita Whittington said: “Thanks to two new wells coming on stream during the Quarter and following the divestment of 67 producing wells with little or no economic value in 2016, Magnolia ended the year with a portfolio of 153 producing wells located in proven US onshore formations.
“With WTI consistently trading above the US$50 level on the back of the recent OPEC meeting and our cost base almost a third lower than it was a year ago, Magnolia is well placed to step up our level of drilling activity once a recovery in sentiment has become firmly entrenched. With this in mind, we are encouraged by the noticeable pick up we are seeing in planned drilling by operators in our areas of focus; while on a wider level the near 10% month on month increase in the US rig count to 634 in December 2016 bodes well. Our strategy and objective remains the same: to drill alongside established operators to prove up the reserves on our leases, and in the process generate value for our shareholders.”
The firm has elected to participate in five new wells. Magnolia’s new wells are expected to come into production in the first quarter of this year. It’s raised £225,000 to fund drilling commitments on its US onshore leases. It currently has nine wells currently at various stages of development.
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