20th Sep 2012 08:57
Magnolia Petroleum Plc / Index: AIM / Epic: MAGP / Sector: Oil & Gas
20 September 2012
Magnolia Petroleum Plc(`Magnolia' or `the Company')
Initial Production from Brandt and Bollinger Wells, Oklahoma
Magnolia Petroleum Plc, the AIM quoted US onshore focused oil and gas exploration and production company, is pleased to report initial production rates of 499.33 boepd for the Brandt well in the Mississippi Lime formation, Oklahoma, and 686.388 boepd for the Bollinger well in the Woodford formation, Oklahoma. This update is in line with the Company's expansion strategy to rapidly grow net production and revenues.
Overview:
* Commencement of production at the Chesapeake Energy operated Brandt 31-28-12 1H horizontal well in the Mississippi Lime formation, Oklahoma -4.1937 % working interest (`WI') and 3.35496% net revenue interest (`NRI') * + Gross initial production rate of 499.33 boepd (16.75 boepd net) - exceeding expectations * Commencement of production at the Cimarex operated Bollinger 1-27XL horizontal well in the Woodford formation, Oklahoma - 0.45955% WI and 0.34% NRI * + Gross initial production rate of 686.388 boepd (2.3 boepd net) - exceeding expectations * Beebe 24-W1H targeting the Hunton formation is now being completed * Interests in 84 producing wells, a further eight at various stages of drilling/ completing and 12 waiting to spud in proven onshore US formations including the prolific Bakken/ Three Forks Sanish in North Dakota * An updated Reserves Report will be commissioned in Q1 2013, which will include an estimate on the Company's average production rates
Magnolia COO, Rita Whittington said, "We are delighted with the initial production rates for the Brandt and Bollinger wells, both of which have exceeded our expectations and highlight the considerable potential of the reopening Mississippi Lime and Woodford/ Hunton formations in Oklahoma. We have a long pipeline of wells at various stages of drilling or waiting to spud in these and other formations. At the same time, we are continuing to receive multiple proposals to participate in additional wells both in Oklahoma as well as in the prolific Bakken/ Three Forks Sanish in North Dakota."
Further Information:
Initial Production from Brandt 31-28-12 1H (`Brandt')
Chesapeake Energy (`Chesapeake'), the operator of the Brandt well, has reported an initial production rate of 499.33 boepd, which is above management's expectations. Brandt is a horizontal well in the producing Mississippi Lime formation in Oklahoma, in which Magnolia has a 4.1937% working interest and a net revenue interest of 3.35496%. As a result, out of a total cost of US$3,715,500, the Company's share is US$155,817. The Company expects the well to payout (recover its costs) in under 12 months approximately.
Initial Production from Bollinger 1-27XL (`Bollinger')
Cimarex, the operator of the Bollinger well, has reported an initial production rate of 686.388 boepd, which is above management's expectations. Bollinger is a horizontal well targeting the producing Woodford formation in Oklahoma in which Magnolia has a 0.45955% working interest and a net revenue interest of 0.34%. As a result, out of a total cost of US$12,746,000, the Company's share is US$58,574. The Company expects the well to payout (recover its costs) in under 12 months approximately.
Other Well Updates
The Beebe 24-W1H well (`Beebe'), operated by Longfellow Energy and targeting the Hunton formation is now completing. Magnolia's WI/ NRI for the Beebe well are 0.3125% and 0.242188% respectively.
A new report to be commissioned from a Competent Person in Q1 2013, which will update the Reserve Report portion of the CPR published at the time of admission to AIM in 2011, will include an estimate of the average production rates for the portfolio of producing wells, incorporating the impact of the decline curve on individual well production rates.
** 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
`Mcf' means thousand cubic feet
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 +44 (0) 20 7796 8800
Limited Lottie Brocklehurst St Brides Media and Finance +44 (0) 20 7236 1177 Ltd Frank Buhagiar St Brides Media and Finance +44 (0) 20 7236 1177 Ltd NotesMagnolia Petroleum Plc is an AIM quoted, US focussed, oil and gas explorationand production company. Its portfolio includes interests in 84 producing andnon-producing assets, primarily located in the highly productive Bakken/ThreeForks Sanish hydrocarbon formations in North Dakota as well as the oil richMississippi Lime and the substantial and proven Woodford and Hunton formationsin Oklahoma.Summary of WellsCategory Number of wells Producing 84 Being Drilled / Completed 8 Elected to participate / waiting to 12spud TOTAL 104
This summary 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.
Related Shares:
Magnolia Petroleum