Broken Arrow, OK-based Magnolia Petroleum Plc announced successful well results in the Mississippian Lime play on Tuesday and said well costs would be recovered quickly.

Magnolia announced commencement of production at the Chesapeake Energy operated Otis 2-27-12 1H horizontal well in the Mississippian Lime formation, in which Magnolia has a 4.2128% working interest (WI) and 3.370244% net revenue interest (NRI). The gross initial production rate was above expectations at 341 boe/d (11.49 boe/d net), the company said, based on the first 10 days of production. Recovery of its share of the costs or $157,628 is expected to take less than 12 months, the company said.

The company also announced commencement of production at the Paul Gillham & Co. operated SPS 6-26 vertical well in the Hunton formation, in which Magnolia has a 0.8333% WI and 0.62799% NRI. Gross initial production is above expectations at 108 boe/d (0.678 boe/d net). Magnolia’s costs of $11,745 are expected to be recovered in less than 12 months.

“We are delighted with the initial production rates for the Otis and SPS wells, both of which have exceeded our expectations,” said Magnolia COO Rita Whittington. “At current rates, our participation costs for both wells will be recovered within 12 months. The quicker the payout, the sooner we can recycle revenues into further wells, as well as continue to build our growing inventory of potential drilling locations in proven U.S. onshore formations by acquiring additional leases.

“Following the commencement of production at the Otis and SPS wells, Magnolia now has interests in 86 producing wells in proven U.S. onshore formations including the prolific Bakken/Three Forks Sanish formations in North Dakota, with a further 15 wells currently drilling/completing and 13 waiting to spud.”

The company recently acquired 143.55 acres in the Mississippian Lime formation, bringing its total acreage in the formation to 4,319.55 acres. Additionally, it has acquired 178 net mineral acres in the Montana section of the Bakken/Three Forks Sanish formation, bringing its total acreage in this section of the formation to 6,881 acres.

Magnolia’s Roger Swartz #1 vertical well, operated by Magnolia and targeting the producing Mississippian Lime, reached targeted total depth on Tuesday. Completion is to begin soon, Magnolia said.

Additionally, the Campbell 1-H horizontal well targeting the Woodford Formation in Oklahoma has commenced drilling. Magnolia holds a 0.0694% working interest in the well which is operated by Newfield Exploration.

Others are increasing their efforts in the play. Mississippian Lime development by Devon Energy Corp., the fourth largest acreage holder after Chesapeake Energy, Sandridge Energy, and Apache, proved solid enough during the third quarter to add 13 operated rigs. The company said it would be accelerating activity in the play (See Shale Daily,Nov. 9).

And infrastructure is moving into place. Caballo Energy LLC expects to have a new cryogenic gas processing plant in service by the end of first quarter to process production in the liquids-rich Mississippian Lime and Cana Woodford Shale plays. The Carmen Gas Processing Plant near Carmen OK at the intersection of the two plays will have capacity to process 60 MMcf/d (see Shale Daily, Sept. 20).