Magnolia Petroleum acquires new leases, farms down existing interests
TULSA -- Onshore E&P company Magnolia Petroleum announced that it has acquired a further 250 net mineral acres in Oklahoma’s Mississippi Lime formation, which has existing production and multiple potential drilling locations, from Fairmount Ridge Partners, a subsidiary of Fairmount Energy.
The acquisition is in line with Magnolia’s strategy to grow net production and reserves by acquiring and developing leases in proven U.S. onshore formations. Magnolia also announced it has agreed to sell an interest in leases it already owns to North American Petroleum (NAP) as part of its ongoing lease management activity.
The additional Mississippi Lime acreage provides Magnolia with exposure to 56 new sections/units, with 168 potential drilling locations. It also includes five producing wells and four new wells waiting to spud. Magnolia will farm down to NAP a 2 percent leasehold interest in 13 of its currently held leases, representing 166.4 net acres, and will maintain up to 22.5 percent interest in these 13 sections.
The acquisition brings Magnolia’s number of producing wells in which it has an interest to 104, and will increase the number of potential drilling locations across its proven onshore formations. According to Magnolia, the selling down of interests in 13 existing wells to NAP will monetize a portion of their acreage, releasing funds for reinvestment into further acquisitions or drilling.