Monday's oil and gas news: Magnolia strikes oil in Oklahoma

Magnolia Petroleum, Xtract Energy and President Energy all updated investors on Monday. Read on to see what they had to say.

Magnolia Petroleum issues Oklahoma drilling update

Magnolia Petroleum (MAGP) on Monday confirmed that hydrocarbons had been encountered in the Roger Swartz #1 vertical well in the Mississippi Lime formation, Oklahoma.

The well had been drilled to a total depth of 5,180 feet, logged and casing has been set to a depth of 5,000 feet.

Testing was underway to determine production capabilities and/or the economic feasibility of further fracturing or stimulation of these zones.

"The company's disclosure that its most recent well, intersecting Oklahoma's Mississippian Lime is a significant step forward on two counts: (i) that the company has intersected a new potential hydrocarbon source; and (ii) that this marks a departure to a more direct operatorship, both a positive for the company," commented analysts at FoxDavies.

"Ultimately, further testing will be required before the well can be deemed anything more than a technical success, but as first steps go, this is a pretty good one."

Xtract Energy slims down

Xtract Energy (XTR) has announced the disposal of its Australian and Moroccan shale assets for an overriding royalty.

The company talked of a "strategic alignment" of Xtract's interest in Julia Creek in Queensland, Australia with Global Oil Shale Group (GOS) as an investor and developer for the deposit.

Under the terms of the agreement, Xtract will assign its oil shale rights in Julia Creek to GOS in exchange for a strategic equity stake in GOS of six million shares on signing the share purchase agreement and satisfying all closing commitments. Xtract will receive a further maximum of 1.5 million shares in GOS in the event of its planned initial public offering, a long-term interest in the Julia Creek project through a 1% net smelter royalty and an initial cash payment of AU$50,000 (

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