Magnolia Petroleum announces divestment of North Dakota and Oklahoma wells

Magnolia Petroleum, an Oklahoma based oil and gas investment company, has divested and agreed farmouts over several wells in North Dakota and Oklahoma for a total of $411,000.

According to a Friday press release, the group has reached a farmout agreement in six of its Marathon Oil operated wells for an upfront cash consideration of $150,000.

In addition to receipt of the upfront cash payment, Magnolia will retain an interest in the wells, giving the company exposure to future production and cash flow.

The group stated it had also sold thirteen Sympson wells in Oklahoma which it had acquired as recently as 2015, which it will no longer be required to meet any further expenditure on these wells after having already incurred $200,000 in costs.

Just over half the funds gained from the sales will be used to reduce the company’s reserve based lending facility, which will fall to just over $2.3m. The remaining funds will be used for working capital and for future investment.

Magnolia said the divestment will assist in "realigning its forthcoming well investments into core counties."

As of BST 1640 shares were at 0.116p, up more than 20%