Magnolia Petroleum sells 24 smaller stakes in three US non-core wells

Oil and gas production firm Magnolia Petroleum has sold 24 smaller stakes in non-core wells located in the US states of Alabama, Florida and Texas.

The minority interests range between 0.0068% and 1.54%. Magnolia will receive $240,750 in cash, which the company says will represent a 190% premium to the $83,000 book value assigned to proved and developed reserves.

The sale is part of Magnolia’s ongoing portfolio management of leases covering more than 13,500 net mineral acres in proven US formations.

Magnolia plans to reinvest the cash to help prove-up additional reserves in core areas in North Dakota and Oklahoma.

Magnolia Petroleum COO Rita Whittington said: "We are delighted with the $240,750 sale proceeds for these wells, which, at a multiple of almost three times the value ascribed to their PDP reserves, provide a ready-made example of how the market values non-operated properties in the US.

"The value of our PDP reserves for our producing wells now stands at more than $9m, while our proven reserves have been independently valued at $31.832m.

"With a remaining 147 producing wells, 79 additional wells at various stages of development and more than 600 potential drilling locations on our acreage, there remains considerable scope for further significant growth, as we prove-up the reserves on our leases through drilling."

Magnolia is focused on the acquisition, exploitation and development of oil and gas properties primarily located onshore in the US.