Magnolia Petroleum reported on Monday a significant rise in oil and gas production during the last quarter.

The US focused oil and gas exploration and production company said it now has interest in 86 producing wells, an increase of 34%, for the period ended December 31st, 2012.

The AIM-listed business is drilling 19 wells across its operations in US onshore hydrocarbon formations, including the Bakken/Three Forks Sanish in North Dakota and Montana, and the Mississippi Lime and the Hunton/Woodford in Oklahoma.

Magnolia said it acquired 6,881 net mineral acres in the Montana section of the Bakken/Three Forks Sanish formation and 496.28 net mineral acres in the Mississippi Lime, Oklahoma.

The company raised £2.9m at blended price of 4.5365p per share by way of draw down from £10m equity financing facility with Darwin Strategic. There is £5.3m left to be drawn down if and when required.

An increase in activity is expected in the first quarter of 2013 as the company begins production on new wells.

"Magnolia now has interests in 86 producing wells, all of which are generating revenues for the company, a further 19 currently drilling/completing and 10 waiting to spud," said Magnolia Chief Operating Officer, Rita Whittington said.

"In line with our strategy, all of these wells are located in proven, producing US onshore formations and many are in partnership with established operators such as Anadarko and Chesapeake Energy."

Shares fell 5.44% to 3.48p at 9:34 Monday.

RD

Related share prices
Magnolia Petroleum (MAGP) share price