Issue of Equity & Appointment of Joint Brokers

MAGNOLIA PETROLEUM PLC - Issue of Equity & Appointment of Joint Brokers

PR Newswire

London, May 28

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

29 May 2015

Magnolia Petroleum Plc (‘Magnolia’ or ‘the Company’)

Subscription to raise £1 million & Appointment of Joint Brokers

Magnolia Petroleum Plc, the AIM quoted US onshore focussed oil and gas exploration and production company, is pleased to announce that it has raised £1 million via the issue of 142,857,143 new ordinary shares (the ‘Subscription Shares’) in the Company at a price of 0.7 pence per share (the ‘Subscription’). The Subscription was completed through Sanlam Securities UK Limited.

The net proceeds of the Subscription will be used to further expedite the Company's existing growth and investment strategy. Specifically, the funds raised will be invested in Magnolia's participation in new wells across its leases in proven US onshore plays. These will include the drilling of Magnolia operated vertical wells, which are 94% owned by the Company targeting the Mississippi Lime, Skinner and Red Fork formations in Oklahoma. Additionally, the net proceeds will fund Magnolia’s participation in nine wells with an average working interest of 1.9%, three wells targeting the Woodford, three targeting the Mississippi Lime and three vertical wells targeting various formations.

Rita Whittington, COO of Magnolia Petroleum, said, “We intend to deploy the funds that we have successfully raised today targeting significant returns for the Company. Specifically, we are delighted to be picking up the drill bit again for our own operated wells. In the second half of this year, we plan to drill two low cost vertical wells in which we have a 94% interest. Together with the low risk nature of the conventional formations we are targeting, the new wells have the potential to significantly add to our existing production and our net proven reserves. These currently stand at 985 Mbbls of oil and 2,905 MMcf of gas, and as at 1 January 2015 were independently valued at US$26.65 million, considerably higher than our current market valuation.

“In addition, we continue to receive proposals to drill new wells on our leases in North Dakota and Oklahoma, alongside established operators. We view this as testament to the quality of our acreage which offers multiple opportunities to generate attractive returns in the current volatile oil price environment. As a result of all this activity, the second half of the year promises to be a highly exciting period for Magnolia and I look forward to providing further updates on our progress.”

Admission and dealings

The Subscription Shares will rank pari passu in all respects with the Company's existing issued ordinary shares and will be equivalent to 13.6% of the enlarged issued share capital. Application has been made for the admission of the Subscription Shares to trading on AIM and it is expected that admission will occur and that dealings will commence at 8.00 a.m. on 2 June 2015. The Subscription is conditional, inter alia, on Admission becoming effective.

For the purposes of the Financial Conduct Authority's Disclosure and Transparency Rules, the Company announces that following the issue of the Subscription Shares, the Company will have 1,053,529,994 Ordinary Shares in issue ("Enlarged Share Capital").

The Company has no ordinary shares held in treasury. The total number of voting rights in the Company will therefore be 1,053,529,994. This figure may be used by shareholders in the Company as the denominator for the calculations by which they will determine if they are required to notify their interest in, or a change in their interest in, the share capital of the Company under the FCA's Disclosure and Transparency Rules.

Appointment of Joint Brokers

Sanlam Securities UK Limited and Cornhill Capital Limited have today been appointed as Joint Brokers to the Company.

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For further information on Magnolia Petroleum Plc visit http://www.magnoliapetroleum.com/ or contact the following:

Notes

Magnolia Petroleum Plc is an AIM quoted, US focused, oil and gas exploration and production company. Its portfolio includes interests in 192 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