15th Jan 2013 07:00
MAGNOLIA PETROLEUM PLC - Operational UpdateMAGNOLIA PETROLEUM PLC - Operational Update
PR Newswire
London, January 14
Magnolia Petroleum Plc / Index: AIM / Epic: MAGP / Sector: Oil & Gas
15 January 2013
Magnolia Petroleum Plc(`Magnolia' or `the Company') OperationalUpdateMagnolia Petroleum Plc, the AIM quoted US onshore oil and gas exploration andproduction company, is pleased to report an update on the Company's commercialactivities in proven US onshore formations including the Bakken/Three ForksSanish, North Dakota and the Mississippi Lime and Woodford/Hunton formations inOklahoma.
Initial Production Rates
Commencement of production at the Basis operated Bowen 2-29 and Bowen 3-29vertical wells in the Wilcox formation, Oklahoma
* Bowen 2-29 - Gross initial production rate above expectations at 65 boepd (1.13 boepd net) * Bowen 3-29 - Gross initial production rate above expectations at 30 boepd (0.52 boepd net) * Both wells expected to payout (recover costs) in less than 12 monthsThe Bowen wells are two additional direct offsets to the Henry 2-29 verticalwell that is producing from the historic Wilcox formation in Oklahoma.Following the success of the Henry well, the two Bowen wells were drilled tooptimise the recovery of all the reserves. As with the Henry well, Magnolia hasa 2.4373% WI and a NRI of 1.736006% in each Bowen well, resulting in its shareof drilling costs of US$13,612 each. Based on the initial production rates, itis estimated the Bowen wells will both payout (recover costs) in less than 12months.
The gross initial production rate for the Paul Gillham & Co operated SPS 6-26vertical well in the Hunton formation in Oklahoma came in above expectations at108 boepd (0.678 boepd net). As a result, the SPS well has achieved payout inless than five months. Magnolia's WI/NRI in the well are 0.8333% and 0.62799%respectively.
Participation in sixnewwells
The Company is also pleased to announce that it is participating in a furthersix wells, with a share of aggregate drill costs totalling approximately$183,000.
Well Name Targeted Formation Operator Magnolia's WI/NRI Nighswonger Farms Mississippi Lime, Slawson Exploration 3.125% / 2815 1-13H Oklahoma 2.241875% 1H-18 Woodford, Oklahoma Newfield 0.529278% / Exploration 0.44485% Miss Frank 1-6H Mississippi Lime, Devon Energy 0.68594% / Oklahoma 0.55732625% BB Rice~2 Bakken Formation, Hess Corporation 0.11719% / North Dakota 0.0878925% BB Rice#3 Three Forks Sanish Hess Corporation 0.11719% / Formation, North Dakota 0.0878925% Gritz 1-7H Hunton Formation, Husky Ventures 0.0434% / Oklahoma 0.0352625 Existing Well UpdateMagnolia COO, Rita Whittington said, "The initial production rates reported forthe two vertical Bowen wells, combined with the quick payout achieved by theSPS vertical well provide ready-made examples of the attractive economicsbehind drilling the proven reservoirs in Oklahoma. Magnolia's interests in theBakken, Three Forks Sanish, Mississippi Lime and Hunton formations continue toprovide attractive opportunities, as demonstrated by the participation in sixnew wells mentioned today."
** ENDS ** Glossary`boe' means barrels of oil equivalent: a unit of energy based on theapproximate energy released by burning one barrel (42 US gallons or 158.9873litres) of crude oil.
There are 42 gallons (approximately 159 litres) in one barrel of oil, whichwill contain approximately 5.8 million British Thermal Units (MBtus) or 1,700kilowatt hours (kWh). The value is necessarily approximate as various grades ofoil have slightly different heating values. BOE is used by oil and gascompanies in their financial statements as a way of combining oil and naturalgas 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 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 focused, oil and gas explorationand production company. Its portfolio includes interests in 88 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 88 Being Drilled/Completed 17 Elected to participate/waiting to spud 16 TOTAL 121This 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.
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