Acquisition of Mississippi Lime Acreage, Oklahoma

MAGNOLIA PETROLEUM PLC - Acquisition of Mississippi Lime Acreage, Oklahoma

PR Newswire

London, April 10

Magnolia Petroleum Plc / Index: AIM / Epic: MAGP / Sector: Oil & Gas

11 April 2013

Magnolia Petroleum Plc, the AIM quoted US onshore focused oil and gasexploration and production company, is pleased to announce that it has acquireda further 250 net mineral acres in the Mississippi Lime formation, Oklahoma(`the Acquisition') which has existing production and multiple potentialdrilling locations from Fairmount Ridge Partners LP (`Fairmount'), a subsidiaryof Fairmount Energy LLC. The Acquisition is in line with the Company's strategyto significantly grow net production and reserves by acquiring and developingleases in proven US onshore formations. The Company also announces it hasagreed to sell an interest in leases it already owns to ISDX listed NorthAmerican Petroleum plc (`NAP') as part of its ongoing lease managementactivity.

Highlights

Magnolia COO, Rita Whittington said, "This acquisition not only increases thenumber of producing wells in which we have an interest to 104, it significantlyincreases the amount of potential drilling locations across our leases inproven US onshore formations. Selling down our interests in 13 existingsections where we have a large exposure monetises a portion of our acreage andreleases funds for reinvestment into further acquisitions or drilling, as welook to build a diversified portfolio of leases, that can be systematicallydrilled to prove up reserves, increase production, and generate significantvalue for shareholders."

Further information

The 250 net mineral acres acquired from Fairmount includes five wells alreadyproducing from the Mississippi Lime formation, bringing the total number ofproducing wells in which the Company has an interest to 104. The details of thefive wells are provided in the table below. The acquired acreage providesexposure to 56 new sections/units in Oklahoma where Magnolia has until now beenunder - represented. It is the view of the Directors that up to three wells arerequired in each unit to maximise the recovery of reserves in the MississippiLime. As a result, the Acquisition provides the Company with exposure to apotential 168 drilling locations.

Producing Wells on the Acquired Acreage

In addition, four new wells have already been proposed on the acquired acreageand are waiting to spud. Magnolia has elected to participate in these wells,the drilling costs for which are included in the purchase price of theacquisition.

Participating in the following four new wells:

Campbell 1-17H Mississippi Lime, Truevine 0.112%/ 0.089%

McClure 36-2H Mississippi Lime, Highmount 0.070%/ 0.0552%

The acquisition includes acreage upon which the Miss Frank 1-6H well (`MissFrank') is located. As a result of the purchase, Magnolia's WI/NRI in MissFrank increases to 4.648% and 3.672% respectively from 0.686% and 0.557%previously. Miss Frank is operated by Devon Energy and is currently waiting tospud.

Transaction with North American Petroleum plc

As part of its ongoing strategy to diversify its portfolio and maintain a broadspread of interests, the Company has agreed to sell a 2% leasehold interest in13 individual sections of its currently held inventory, representing 166.4 netacres, to North American Petroleum plc (`NAP'). Following this transaction,Magnolia will retain an interest of up to 22.5% in these 13 sections. Under theterms of the transaction, upon payout (i.e. when drilling costs have beenrecovered), 25% of NAP's NRI will be reassigned (`Back-in') to Magnolia.

As a result of this transaction, NAP has the right to participate in 13possible wells and up to 26 increased density wells to optimise the recovery ofreserves in each individual unit.

For further information on Magnolia Petroleum Plc visitwww.magnoliapetroleum.com or contact the following:

Magnolia Petroleum Plc is an AIM quoted, US focussed, oil and gas explorationand production company. Its portfolio includes interests in 104 producingproperties as well as non-producing assets, primarily located in the highlyproductive Bakken/Three Forks Sanish hydrocarbon formations in North Dakota aswell as the oil rich Mississippi Lime and the substantial and proven Woodfordand Hunton formations in Oklahoma.

This summary excludes four out of six wells acquired as part of the acquisitionof 800 gross acres with a 100% working interest in Osage County, Oklahoma, asannounced on 10 February 2012. These four wells are currently `shut in' andwill require a workover programme at some point in the future to bring backinto production.