The firm says it will use the funds to scale up its operations by acquiring leases to drill and operate new wells on its prospects in the Mississippi formation in Oklahoma.
The management team, led by chief executive Steven Snead and chief operating officer Rita Whittington, say they will target acquisitions in established reservoirs in order to minimise exploration risk.
Magnolia claims that 22 of the last 23 wells it has participated in have generated an aggregate equity return of three to one.
The firm, which is listed on the Plus exchange, announced a deal last week to develop prospects in the Mississippi Lime formation in northern Oklahoma and southern Kansas.
The firm said the last well it was involved in the area paid back all costs within three months.
In the six months to the end of June, Magnolia reported a loss of $140,000 after taking a $123,000 impairment charge relating to mineral leases.
Its revenues increased by a third year-on-year to hit $123,000.
Magnolia holds leases on more than 90,000 acres, including interests in 64 oil and gas producing properties in North Dakota, which are estimated to hold between 175bn and 500bn barrels of recoverable oil.
The company has an estimated market cap of £1.9m.