Four Fold Increase in Value of Total Net Reserves

MAGNOLIA PETROLEUM PLC - Four Fold Increase in Value of Total Net Reserves

PR Newswire

London, April 16

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

17 April 2013

USD94m Valuation Assigned to Net 3P Reserves by Competent Person

Magnolia Petroleum Plc, the AIM quoted onshore US focused oil andgas exploration and production company, is pleased to report an updatedCompetent Person's Report (`CPR') by Moyes & Co. (`Moyes') which confirms asubstantial increase in the value of Magnolia's net attributable proved,probable and possible reserves (`3P') and net production attributable to theCompany.

Highlights

- US$94 million value assigned to Company's proved, probable, possible (`3P')

reserves as at 1 January 2013 compared to US$18 million on Admission to AIM in

November 2011

- Based on upgraded net attributable oil and condensate 3P reserves of 2,818

Mbbl and net attributable gas 3P reserves of 9,231 MMcf

- Reserves estimate covers approximately 5,500 net acres out of total of over

12,700 in proven formations, such as the Bakken/Three Forks Sanish, North Dakota,

and the Mississippi Lime, Hunton/Woodford, Oklahoma

- Contingent and Prospective resources estimate of US$15 million

includes:

- 7,866 net mineral acres in the Bakken formation section ofMontana - classified

as prospective resources due to its status as an emerging play

- Net production as at 31 December 2013 stood at 122.5boepd following significant

increase in new wells since Admission to AIM

- Initial production rates reported for wells in 2013 not included

- CPR estimates the existing portfolio has the potential toincrease net

daily production to approximately 625 boepd and 1,067 boepd by

2017 assuming the 2P and 3P drilling locations respectively were drilled

(excluding Montana) - this would involve Magnolia's participation in over 240

new wells

Magnolia COO, Rita Whittington said, "The CPR provides anindependent assessment of Magnolia's first full year on AIM, which sawexcellent progress made towards delivering on our strategy to build asignificant US onshore oil and gas company. In this time, the value of theCompany's net reserves and production as at 1 January 2013 increased bymultiples of the figures reported at the time of the Admission to AIM inNovember 2011. At US$94m the value of our 3P reserves provides considerableasset backing to our current market valuation, while at 122.5 boepd, netproduction generates revenues that will be reinvested into new wells, as welook to build net production and proved reserves further.

"Our 3P reserves do not include the 7,866 net acres we haveacquired in Montana located in areas we believe are an extension of theprolific Bakken formation. Moyes estimates this acreage could hold up to 696drilling locations, providing the potential for significant upside in thefuture as drilling activity in this emerging play picks up.

"The 625 boepd and 1,067 boepd production estimates provided byMoyes highlight the potential of our existing leases and as a result, they area useful reference point for the future. These forecasts do not take intoaccount our Montana acreage, on-going lease acquisition activity as well asthe opportunities we are regularly seeing in our areas of interest and withthis in mind, I look forward to providing updates on our progress in duecourse, as we look to continue to generate substantial value for all ourshareholders."

Summary of Magnolia Reserves

As of 1 January 2013, Magnolia's net reserves, future net cash flowand net present worth discounted at 10% per annum (NPV) have been estimated tobe as follows:

Class/Category

The properties evaluated are all those owned by Magnolia in NorthDakota, Montana, Oklahoma, Texas, Alabama, and Florida. The producingproperties have been evaluated using decline curve analysis with theassumption that the wells will continue to operate with no material futureinvestments. The undeveloped leasehold has been evaluated based on analogywith offset production. The offset production was evaluated using declinecurve analysis.

Summary of Magnolia Contingent Resources

The Montana leases in Daniels, Roosevelt and Valley Countycurrently lie in an undeveloped portion of what is anticipated to be the mostnorthwestern extent of the Bakken production zone in the Williston Basin.There is currently no production from the Bakken or Sanish Three ForksFormations in Daniels or Valley County, however production from bothformations can be found in southeastern Roosevelt County and in thenortheastern portion of neighbouring Sheridan County near the North Dakotaborder. Permitting activity has accelerated in Daniels County with sevenBakken/Three Forks wells permitted in the last 24 months. Apache, the mostactive operator in the area, currently has six exploratory wells being drilledin central Daniels County. Results from these wells are pending and theMontana properties will remain contingent resources until exploratory drillingyields successful results. Of the 7,866 net acres in Montana, 5,780 lie inDaniels County, 1,171 in Roosevelt County and 915 in Valley County. On 1,280acre spacing, the acreage would allow 174 well locations. Future infilldrilling could allow as many as 696 locations.

In just over five years of active drilling, the Woodford now boastsover 2,350 producing wells in Oklahoma. Most of the wells are where theWoodford Shale is in the dry gas window, greater than 50 ft thick and at arelatively shallow depth (Hughes andCoal Counties Oklahoma is experiencing increasing activity with the mostactive companies being Continental Resources and Newfield.

The production forecast resulting from the forecast of the existingproduction and adding the forecast drilling activity is shown in the tableabove. The forecast shows the result of drilling the Proved, Probable, andPossible well locations all un-risked. Production increases from the currentnet of approximately 122.5 boepd to a peak of 625 (2P) and 1,067 boepd (3P) in2017.

The future net revenue is based on the 1 January 2013 NYMEX futuresstrip prices for WTI Oil and Henry Hub Gas. The future net cash flow is thefuture net revenue, less estimated future net OPEX (well operating cost andproduction taxes) and future net capital. The total reserves are those definedas natural gas and liquid hydrocarbon reserves to Magnolia's interest afterdeducting all royalties, overriding royalties, and reversionary interestsowned by outside parties that become effective upon payout of specifiedmonetary balances. All reserves estimates have been prepared using standardengineering practices generally accepted by the petroleum industry and conformto the guidelines adopted by the2007 SPE/SPEE/AAPG/WPC PRMS Guidelines.

The information contained in this announcement has been reviewedand approved by P. Dee Patterson on behalf of Moyes & Co.. Mr. Patterson has32 years of relevant experience in the oil industry and is currently ManagingDirector, with Moyes & Co. in Dallas, Texas.

Glossary

`1P' means Proved Reserves

`2P' means Proved plus Probable Reserves

`3P' means Proved plus Probable plus Possible Reserves

`BOE' means barrels of oil equivalent, gas is converted at itsenergy equivalent of 6000 cubic feet per barrel of oil

`BOEPD' means barrels of oil equivalent per day,

`BOPD' means barrels of oil per day, Abbreviation for barrels ofoil per day, a common unit of measurement for volume of crude oil. The volumeof a barrel is equivalent to 42 US gallons

`Contingent resources' means quantities of petroleum estimated asof a given date, to be potentially recoverable from known accumulations byapplication of development projects, but which are not currently consideredcommercially recoverable due to one or more contingencies

`M' means Thousand

`MBO' means Thousand Barrels of Oil

`Mcfd' means Thousand Cubic Feet per Day

`MM' means million (thousand thousand not million million), as usedin oilfield and heat content units such as MMSTB and MMBtu

`MMBbl' means Million barrels

`MMcfd' means Million Cubic Feet per Day

`Proved Reserves' means those quantities of petroleum which, byanalysis of geological and engineering data, can be estimated with reasonablecertainty to be commercially recoverable, from a given date forward, fromknown reservoirs and under current economic conditions, operating methods, andgovernment regulation - Proved reserves can be categorized as developed orundeveloped

`Probable reserves' are those unproved reserves which analysis ofgeological and engineering data suggests are more likely than not to berecoverable. In this context, when probabilistic methods are used, thereshould be at least a 50% probability that the quantities actually recoveredwill equal or exceed the sum of estimated proved plus probable reserves

`Possible Reserves' are those unproved reserves which analysis ofgeological and engineering data suggests are less likely to be recoverablethan probable reserves. In this context, when probabilistic methods are used,there should be at least a 10% probability that the quantities actuallyrecovered will equal or exceed the sum of estimated proved plus probable pluspossible reserves

Reserve Status Categories

`Unproved Reserves' are based on geologic and/or engineering datasimilar to that used in estimates of proved reserves; but technical,contractual, economic, or regulatory uncertainties preclude such reservesbeing classified as proved. Unproved reserves may be further classified asprobable reserves and possible reserves

Reserve status categories define the development and producingstatus of wells and reservoirs

`Developed reserves' are expected to be recovered from existingwells including reserves behind pipe. Improved recovery reserves areconsidered developed only after the necessary equipment has been installed, orwhen the costs to do so are relatively minor. Developed reserves may besubcategorized as producing or non-producing.

`Producing reserves' are expected to be recovered from completionintervals which are open and producing at the time of the estimate. Improvedrecovery reserves are considered producing only after the improved recoveryproject is in operation.

`Non-producing reserves' include shut-in and behind-pipe reserves.Shut-in reserves are expected to be recovered from (1) completion intervalswhich are open at the time of the estimate but which have not startedproducing, (2) wells which were shut-in for market conditions or pipelineconnections, or (3) wells not capable of production for mechanical reasons.Behind-pipe reserves are expected to be recovered from zones in existingwells, which will require additional completion work or future recompletionprior to the start of production.

`Undeveloped reserves' are expected to be recovered: (1) from newwells on undrilled acreage, (2) from deepening existing wells to a differentreservoir, or (3) where a relatively large expenditure is required to (a)recomplete an existing well or (b) install production or transportationfacilities for primary or improved recovery projects.

An abridged version of the CPR will be available for download fromthe Magnolia website www.magnoliapetroleum.com in due course.

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

Steven Snead Magnolia Petroleum Plc +01 918 449 8750Rita Whittington Magnolia Petroleum Plc +01 918 449 8750Jo Turner / James Cairn Financial Advisers +44 20 7148 7900Caithie

John Howes / Alice Northland Capital Partners +44 20 7796 8800Lane / Luke Cairns LimitedLottie Brocklehurst St Brides Media and Finance +44 20 7236 1177

Magnolia Petroleum Plc is an AIM quoted, US focused, oil and gasexploration and production company. Its portfolio includes interests in 104producing and non-producing assets, primarily located in the highly productiveBakken/Three Forks Sanish hydrocarbon formations in North Dakota as well asthe oil rich Mississippi Lime and the substantial and proven Woodford andHunton formations in Oklahoma.

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