1st Aug 2012 07:00
Magnolia Petroleum Plc / Index: AIM / Epic: MAGP / Sector: Oil & Gas
01 August 2012 Magnolia Petroleum Plc (`Magnolia' or `the Company') Well Updates
Initial Production from Lois Rust, Mississippi Lime Formation, Oklahoma
Magnolia Petroleum Plc, the AIM quoted US focused oil and gas exploration and production company, is pleased to report an initial production rate of 353.75 boepd for the Lois Rust 7-27-12 1H well (`Lois Rust') in the Mississippi Lime Formation in Oklahoma.
As with the initial production rate for the Thomason well (announced on 31 May 2012), the output of Lois Rust is mainly liquids rich gas which, at 353.75 boepd, is in line with management's expectations. As a result, the net initial production attributable to Magnolia arising from the well is approximately 6.5 boepd. Please note in the announcement of 12 April 2012, Magnolia's working/ net revenue interests for Lois Rust were stated as being 2.29% and 1.72% respectively; however, the interests have now increased to a 2.48505% working interest and a 1.86% net revenue interest.
Participation in the James 4-28-14 1H well (`Jameswell')
Magnolia has also elected to participate in the James well, an increased density horizontal well to test the Mississippi Lime Formation within the same spacing unit as the successful Sundance well, in Woods County Oklahoma. The Sundance well, which Magnolia participated in with Chesapeake, resulted in payout being achieved in three months, a record for the Company. Magnolia holds a 0.796% working interest and a 0.597% net revenue interest in the James well which is also operated by Chesapeake. The total estimated cost for the proposed work is US$4,894,900 with the Company's share estimated at US$38,964.
The James well is expected to spud in September and is one of three wells to be drilled within this spacing unit of 640 acres. Increasingly it is the view of the directors and other operators in the formation including Chesapeake that four horizontal wells are required to drain one spacing unit in the Mississippi Lime Formation in order to recover all the reserves.
Other Well Updates
The company has also been informed by the relevant operators of a change in status for the following wells:
Well Formation Net Revenue Status Operator Interest % LaDonna 19-28-16 Mississippi 0.08 Completed Chesapeake 1H Lime Brandt 31-28-12 Mississippi 3.35496 Completing Chesapeake 1H Lime Joan 2-21 Mississippi 2.8125 Completing Tessara Energy Lime Montecristo 6-1H Mississippi 5.3486 Waiting Cisco Lime completion Beebe 24-W1H Mississippi 0.242188 Drilling Longfellow Lime Energy Otis 2-27-12 1H Mississippi 3.35032 Drilling Chesapeake Lime
Magnolia COO, Rita Whittington said, "We are delighted with the initial production rate of the Lois Rust well, which is in line with our expectations. In addition, we now have nine wells either drilling or waiting completion and a further eight waiting to spud. Combined with the 80 wells in which we have an interest that are producing in proven formations such as the Bakken/ Three Forks Sanish, North Dakota, and Mississippi Lime, Oklahoma, we are on course to increase this total to 100 by the end of the year, as we look to deliver on our strategy to significantly increase net revenues and production."
** 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
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 Northland Capital Partners +44 (0) 20 7796 8800Wicks 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 80 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 80 Being Drilled / Completed 9 Elected to participate / waiting to 8spud TOTAL 97
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.
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