Magnolia Oil & Gas Corp. grew production volumes 10% in second-quarter 2023 compared with the prior-year quarter and 3% sequentially (OGJ Online, Feb. 17, 2023).
The operator’s second-quarter 2023 production volumes averaged 81,900 boe/d, higher than guidance due to well performance from Giddings oil field in South Texas, the company said in an earnings report Aug. 1. The company expects total oil and gas production for this year’s third quarter to be similar to second-quarter levels but has raised its 2023 full-year production growth to 7-8% from 5-7%, also due to the performance of the Giddings asset.
Magnolia will maintain the current 2-rig program throughout the year. One rig will continue to drill multi-well development pads in the Giddings area. The second rig will drill a mix of wells in both the Karnes and Giddings areas, including appraisal wells at Giddings.
For full-year 2023 at Giddings, Magnolia expects to average about 4 wells per pad with average lateral lengths of about 8,000 ft. Earlier this week, the company completed a small, bolt-on asset purchase outside of its core development area in Giddings for $40 million.
Total capital spending for the year is expected to be below the low end of guidance and lower than full-year 2022 spending. Total drilling and completions capital for 2023 of $425-440 million, lower than previous guidance of $440-460 million, is expected. Drilling and completions capital expenditures are expected to average $100 million per quarter during the back half 2023.
Second-quarter 2023 capital spending was $86.1 million, about 15% below earlier guidance, partially due to lower oilfield services and material costs, the company said.
