🕐26.03.12 - 08:27 Uhr
MAGNOLIA PETROLEUM: POSITIVE QUARTERLY OPERATIONS UPDATE
Magnolia Petroleum Plc / Index: AIM / Epic: MAGP / Sector: Oil & Gas
26 March 2012
Magnolia Petroleum Plc (Magnolia or the Company)
Quarterly Operations Update
Magnolia Petroleum Plc, the AIM quoted US focused oil and gas exploration and production company, announces a quarterly update on its operations across its portfolio of interests focused on proven and producing US onshore hydrocarbon formations, including the Bakken / Three Forks Sanish Formations in North Dakota and the Hunton / Woodford and Mississippi Formations in Oklahoma.
Achievements Q1 2012
* Six new wells brought on stream during the quarter, four of which are now producing revenues
* The total number of producing wells in which the Company has an interest now stands at 70, predominantly oil producing
* Three wells currently being drilled and a further three wells are expected to be spud in the next 30 days
* Acquisition of leases covering 1,564 net mineral acres located within the boundaries of the reopening Mississippi Formation, Oklahoma, with average net revenue interests of 79%
* Participation with ExxonMobil (the operator) in a Nitrogen Rejection Unit at the Hawkins Field Unit, which is expected to significantly increase oil recovery rates
* Oversubscribed 1.3 million placing completed - funds raised to be invested in further wells and on-going leasing activities
Outlook
* Expect to participate with Chesapeake in drilling three horizontal increased density wells targeting the Mississippi Formation within the same spacing unit as the successful Sundance well, in Woods County Oklahoma - the Sundance well recouped all costs in three months, a record for the Company
* Target to operate first well later this year on Mississippi acreage acquired during the quarter
* Targeting step change in production and revenues by the end of the year as a result of participating in wells with working and net revenue interests materially greater than the current averages
* Expected upgrade in Magnolias reserves (in Q1 2013) through the reclassification of the Companys Three Forks Sanish reserves from possible to probable following the successful drilling and subsequent production at the Skunk Creek 15H well and also the inclusion of recently acquired leases
Magnolia COO, Rita Whittington said, Our operating cash flows are expected to increase further as a result of the new wells due to come on stream in the near future.
Together with the proceeds of the recent fundraising, the Company is well positioned to take advantage of the numerous proposals we are receiving to participate in drilling in proven oil formations.
In addition, we continue to evaluate further opportunities in both the Bakken and Mississippi oil plays.
2012 is shaping up to be a highly exciting year and we believe our target of a significant jump in production and revenues by the year end is realistic and achievable.
In addition, we expect to announce in Q1 2013 an upgrade in Magnolias reserves which will further underpin the Companys inherent value.
Update on New Wells
Well
Formation
Status
NRI %
Operator
Skunk Creek 15H
Three Forks Sanish
Producing
0.44825
Kodiak
Skunk Creek 14H
Bakken
Producing
0.44825
Kodiak
Stocke 1-4-9H
Bakken
Producing
2.57
Hunt Oil
Drone 1
Bakken
Producing
1.00078
Slawson
Eckelberg 14-23H
Bakken
Completed
0.400254
Marathon
Eckelberg 14-23TF
Three Forks Sanish
Completed
0.400254
Marathon
Drone 2-34-27H
Bakken
Planned
1.00078
Slawson
Zenyatta 2-6
Hunton
Completed
0.7929
Avalon
Lois Rust 7-27-12 1H
Mississippi
Drilling
1.8678
Chesapeake
Thomason 10-27-12 1H
Mississippi
Completed
9.375
Chesapeake
Quill 2-12-3H
Bakken
Planned
0.2909
Hunt Oil
* * ENDS * *
For further information on Magnolia Petroleum Plc visit www.magnoliapetroleum.com or contact the following:
Steven Snead
Magnolia Petroleum Plc
+01 918 449 8750
Rita Whittington
Magnolia Petroleum Plc
+01 918 449 8750
Antony Legge / James Thomas
Daniel Stewart & Company Plc
+44 (0) 20 7776 6550
John Howes / John-Henry Wicks
Northland Capital Partners Limited
+44 (0) 20 7796 8800
Lottie Brocklehurst
St Brides Media and Finance Ltd
+44 (0) 20 7236 1177
Frank Buhagiar
St Brides Media and Finance Ltd
+44 (0) 20 7236 1177
Notes
Magnolia Petroleum Plc is an AIM quoted, US focussed, oil and gas exploration and production company.
Its portfolio includes interests in 70 producing and non-producing assets, primarily located in the highly productive Bakken/Three Forks Sanish hydrocarbon formations in North Dakota as well as the substantial and proven Woodford and Hunton formations and the oil rich Mississippi formation, in Oklahoma.
As Magnolia currently participates in drilling with leading oil and gas companies, management does not have control over the timing of well proposals or drilling.
As a result, management rely on receiving confirmation of field activity such as date of spudding or completion from the relevant operator.
Expected timings of activity provided by the Company are therefore to be treated as estimations.
Magnolia intends to operate its first well later this year and as operator the Company will be in a position to provide more accurate information regarding the timing of drilling.
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