🕐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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