2nd Jun 2015 06:59
LONDON (Alliance News) - Magnolia Petroleum PLC Tuesday said it will participate in 16 new wells across its US leases in onshore formations including the Bakken, Woodford and the Mississippi Lime at much lower costs compared to the wells it drilled back in 2014.
"We are pleased to see a number of new well proposals on our US onshore leases from established operators including Chesapeake Energy and Whiting Petroleum," said Chief Operating Officer Rita Whittington. "The new wells highlight the value and diversity of our acreage and the multiple payzones that are being targeted."
The total cost for participating in the 16 wells to Magnolia is USD686,335, and the wells will include a number of low-cost vertical wells targeting conventional plays and horizontal wells targeting unconventional hydrocarbons, including increased density wells on leases where production has been established, such as the Skunk Creek wells, it said in a statement.
The company said the cost of drilling wells in the area has experienced a "dramatic fall" as the wells Magnolia drilled on Skunk Creek in January 2014 cost around USD6.8 million each.
"The Skunk Creek wells also demonstrate how far costs have fallen to drill horizontal wells in the Bakken/Three Forks Sanish in North Dakota in the last 18 months," said Whittington. "Such a
dramatic fall in costs has clear implications for payback, and goes a long way to mitigating the impact of the lower oil price environment.
Magnolia said the 16 wells was in line with its mission to "rapidly" build up production through further drilling. The company holds different stakes in the 16 wells that varies from 0.2% to 11%, and the partners who are also participating in the wells include BP America, part of BP PLC, Gulf Exploration and Transpor.
By Joshua Warner; [email protected]; @JoshAlliance
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