Revenue declines for Magnolia Petroleum

Oklahoma based holding company Magnolia Petroleum has seen significantly increased activity across the first half of its trading year, but fell short of translating production into profit.

Magnolia said that it had taken an interest in 28 new wells in the six months leading to 30 June, taking its total to 159 producing wells in proven US onshore formations.

But despite the increased level of activity, the AIM-listed firm saw revenues drop to $0.5m from £0.6m at the same time a year earlier, while EBITDA fell to just $77,558 from $135,556.

Tangible assets as of 30 June were almost half what they were twelve months beforehand, dropping to $3.86m from $7.22m.

The group made a $0.2m repayment to its existing credit facility, taking its balance down to $2.6m at the time of the report.

Chief executive, Rita Whittington said, "Our portfolio of 159 producing wells, low cost / low risk strategy to acquire and develop leases alongside established operators, and management team with a track record of value generation in the US onshore sector provide us with a strong platform to capitalise on the pick-up in sentiment and activity we are seeing.

"WED recognises this and, along with the successful pilot programme, lay behind their decision to select Magnolia as their exclusive partner to manage US$18.5m on their behalf under the US Immigrant Investor programme. We look forward to receiving the initial funds under this agreement."

As of 0840 BST, shares had not moved for the day and were sitting at 0.0860p.