🕐05.06.13 - 09:27 Uhr

MAGNOLIA PETROLEUM: COMMENCEMENT OF PRODUCTION AT FIRST WELL DRILLED AS OPERATOR



Magnolia Petroleum Plc / Index: AIM / Epic: MAGP / Sector: Oil & Gas 5 June 2013 Magnolia Petroleum Plc (Magnolia or the Company) Commencement of Production at Magnolia Operated Well in Mississippi Lime Formation, Oklahoma and Operations Update Magnolia Petroleum plc, the AIM quoted US onshore focused oil and gas exploration and production company, is pleased to report an update on the Companys activities in proven US onshore formations such as the Bakken/Three Forks Sanish, North Dakota, and the Mississippi Lime and Woodford/Hunton formations in Oklahoma. Update on the Magnolia Operated Roger Swartz Vertical Well, Oklahoma Following the fracture stimulation of the Magnolia operated, 100% owned Roger Swartz #1 vertical well (Roger Swartz or the Well) targeting the Mississippi Lime formation, an initial production rate (IPR) of 17 bopd has been recorded, which is in line with managements expectations.

To date, the Company is pleased to report that 338 barrels of oil recovered by Roger Swartz have been sold.

The total cost of the Well including drilling, completing and stimulating costs came in on budget at approximately US$730,000. Roger Swartz is currently producing from the Mississippi Lime formation from which the Company estimates a total of up to 51,000 barrels of oil equivalent are recoverable.

The Directors believe there is a potential payzone up hole known as the Vertz, which holds an additional 10,000 barrels of recoverable reserves.

Once all production has been recovered from the Mississippi Lime, the Company intends to move up hole and complete in the Vertz. Commencement of Production The Company has been informed by the relevant operator that production has commenced at the following well, with the IPR as set out below: Well Name Formation Operator Gross IPR Magnolias NRI Net IPR Flinders 1-25H Mississippi Lime, Oklahoma Redfork 143 boepd 1.848 2.64 boepd
Participation in new wells The Company is pleased to announce that it is participating in the following new wells: Well Name Targeted Formation Operator Magnolias WI/NRI Net Cost to Magnolia Omega 1-33H Hunton, Oklahoma Equal Energy 1.066%/ 0.799% US$36,255 N.

Cana Filler 1H-34X Woodford, Oklahoma Newfield 0.390%/ 0.293% US$43,628 Smith Trust 1-2H Woodford, Oklahoma Marathon Oil 0.065%/ 0.049% US$7,566
Rita Whittington, COO of Magnolia, said, "The commencement of production at Roger Swartz, our first vertical well drilled as operator, is a major milestone for Magnolia.

The initial production rates are in line with our expectations, while the identification of another potential payzone, the Vertz, adds to the attractive economics of the Well and highlights the multiple horizons that exist in Oklahoma.

Drilling as operator complements our strategy of participating in new wells in proven US onshore formations with other operating companies such as Devon Energy and Marathon Oil, as we look to increase net production, prove up reserves on our 13,500 plus net mineral acres and, in the process, generate significant value for shareholders." Existing well updates The Company has been informed by the relevant operators of a change in status in the following wells in which it is participating: Well Formation Status NRI % Operator
Cordray-Ritter 4-28-14 1H Mississippi Lime, Oklahoma Completed and waiting on initial production rates 0.597 Chesapeake Energy Gustafson 31-30H Bakken, North Dakota Frac scheduled for 7 June 2013 4.071 Marathon Oil Helgeson 41-30H Bakken, North Dakota Frac scheduled for 11 June 2013 4.071 Marathon Oil Blaser 1-10H Mississippi Lime, Oklahoma Drilling 9.375 Cummings JKL 1-08 H* Mississippi Lime, Oklahoma Drilling 1.305 Devon Energy JKL 1-04 H** Mississippi Lime, Oklahoma Drilling 0.333 Devon Energy *JKL 1-08 H well was previously known as ?1-08H **JKL 1-04 H well was previously known as ?1-04 H ** ENDS ** Glossary boe means barrels of oil equivalent: a unit of energy based on the approximate energy released by burning one barrel (42 US gallons or 158.9873 litres) of crude oil. There are 42 gallons (approximately 159 litres) in one barrel of oil, which will contain approximately 5.8 million British Thermal Units (MBtus) or 1,700 kilowatt hours (kWh).

The value is necessarily approximate as various grades of oil have slightly different heating values.

BOE is used by oil and gas companies in their financial statements as a way of combining oil and natural gas reserves and production into a single measure. boepd means barrels of oil equivalent per day bopd means barrels of oil per day WI means working interest NRI means net revenue interest 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 Jo Turner / James Caithie Cairn Financial Advisers LLP +44 20 7148 7900 John Howes / Alice Lane / Luke Cairns Northland Capital Partners Limited +44 20 7796 8800 Lottie Brocklehurst St Brides Media and Finance Ltd +44 20 7236 1177 Frank Buhagiar St Brides Media and Finance Ltd +44 20 7236 1177 Notes Magnolia Petroleum Plc is an AIM quoted, US focused, oil and gas exploration and production company.

Its portfolio includes interests in 112 producing and non-producing assets, primarily located in the highly productive Bakken/Three Forks Sanish hydrocarbon formations in North Dakota as well as the oil rich Mississippi Lime and the substantial and proven Woodford and Hunton formations in Oklahoma. Summary of Wells Category Number of wells Producing 112 Being Drilled / Completed 15 Elected to participate / waiting to spud 27 TOTAL 154
This table excludes four out of six wells acquired as part of the acquisition of 800 gross acres with a 100% working interest in Osage County, Oklahoma, as announced on 10 February 2012.

These four wells are currently shut in and will require a workover programme at some point in the future to bring back into production.
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