Oil and gas exploration and production company Magnolia Petroleum has divested 13 new wells in North Dakota and Oklahoma, while agreeing to sell six other wells in the region. 

To be carried out through two separate transactions, the divestment programme will accrue an aggregate amount of $411,000.

Through the sale of these assets, the company is planning to realign its near-term well investments into core counties, in which Western Energy Development (WED) can invest.

The realignment strategy will allow it to earn carried interests by purchasing assets alongside the anticipated WED investments.

Earlier this month, Magnolia Petroleum signed an agreement to invest up to $18.5m into the Oklahoma oil and gas market, on behalf of WED.

"Today’s transactions are part of a re-evaluation and realignment of our portfolio to participate alongside WED."

Magnolia Petroleum CEO Rita Whittington said: “After securing what we regard as a gamechanging agreement with WED to invest and manage on their behalf up to $18.5m of foreign capital under the US Immigrant Investor Programme, today’s transactions are part of a re-evaluation and realignment of our portfolio to participate alongside WED.”

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Under the farm-out agreement, Magnolia agreed to sell its interest in six Marathon Oil-operated wells targeting the Bakken and Three Forks Sanish formations in North Dakota for an initial payment of $150,000.

However, Magnolia has the option to retain an interest in all six wells through a back-in after payout arrangement, ensuring exposure to future production, as well as cash flow.

Following the agreement, the company need not incur expenditure towards drilling and completing the six wells.

In addition, it divested its interest in the 13 Sympson wells for $261,000.

With respect to these 13 wells, the company so far has invested $200,000 towards drilling costs.