25th Jun 2012 09:00
Magnolia Petroleum Plc / Index: AIM / Epic: MAGP / Sector: Oil & Gas Magnolia Petroleum Plc (`Magnolia' or `the Company') Positive Update on Operations in Oklahoma
Magnolia Petroleum Plc, the AIM quoted US onshore focused oil and gas exploration and production company, is pleased to announce an update on its activities across its portfolio of interests in proven oil plays including the Bakken / Three Forks Sanish, North Dakota and the Mississippi Lime and Woodford / Hunton formations in Oklahoma, in line with its expansion strategy to rapidly grow production and revenues.
Overview
* Production commenced at Westline 30-28-16 1H well - operated by Chesapeake - Magnolia holds 0.0013% working interest: * + Output is mainly liquids rich gas, with an oil equivalent production rate of 403.33 boepd + Participation provides access to critical well information for use in further evaluation of the Mississippi Lime play * Total number of producing wells in which Magnolia has an interest now increased to 80 * Four wells currently drilling/completing - Henry 2-29 has been drilled and is now being completed in multiple zones; Montecristo 6-1H and Bollinger 1-27XL are now drilling * Nine wells waiting to spud - participating in additional well, LaDonna 19-28-16 1H, targeting the Mississippi * Numerous well proposals received in last few weeks - a pipeline of additional potential wells to increase revenue streams
Magnolia COO, Rita Whittington said, "We now have an interest in 80 producing properties with a further 13 either being drilled or waiting to be spud, giving an aggregate total of 93. Since the turn of the year, we have added 16 producing wells to our total. Not only does this show we are delivering on our objective of significantly increasing production and revenues, it also illustrates the heightened level of activity in the prolific plays in which we are active, such as the Bakken in North Dakota and, increasingly, the Mississippi Lime, Oklahoma where we intend to drill our first well as operator with a larger working interest later this year. In the last few weeks, we have received multiple proposals to drill on our leases and we therefore expect to provide the market with further updates in due course."
Full Release
The Company has participated in the drilling and completion of the Westline 30-28-16 1H well targeting the Mississippi Lime play, Woods County, Oklahoma. Magnolia has a 0.0013% working interest in the well, the total estimated cost of which is US$3,757,900. Chesapeake Energy, the operator, has reported that the output is mainly liquids rich gas, with an oil equivalent production rate of 403.33 boepd. Although the relatively small size of its interest means there will be a negligible impact on Magnolia's revenues, the decision to participate in Westline was taken to gain access to critical well information that will aid the Company's ongoing evaluation of potential drilling activity and acquisitions in this area of the Mississippi Lime play.
The Company has been informed by the relevant operators that the following three wells in which it has elected to participate in are currently in the drilling / completion stage:
* Premier, the operator of the Henry 2-29 located in Pottawatomie County, Oklahoma has reported that drilling has been completed and the well is now being completed in multiple zones. * The Montecristo 6-1H horizontal well, located in Noble County, Oklahoma in which Magnolia has a 6.1879% working interest is operated by Cisco. Total drill costs are estimated at US$3,786,200 with the Company's share estimated at US$234,286. * The Bollinger 1-27XL well, targeting the Woodford formation, is operated by Cimarex Energy. The total estimated cost of the well is US$12,746,000. With its 0.45955% working interest, Magnolia's share of the costs is estimated at US$58,574. The total number of wells that are currently drilling / completing now standsat four: * SPS 6 -26 * Henry 2-29 * Montecristo 6-1H * Bollinger 1-27XL
The Company has elected to participate in an additional well the LaDonna 19-28-16 1H well, targeting the Mississippi Lime, Oklahoma. The well, in which Magnolia has a 0.0103% working interest, is located in Woods County Oklahoma and is operated by Chesapeake Energy. Total drill costs are estimated at US$4,270,025.
The nine wells that Magnolia has elected to participate in and which arewaiting to spud are: * The Drone 2-34 * Redfork 1-25H * Joan 1-21 * Sherri #1 * 3 Sundance offsets * Beebe 24-W1H * LaDonna 19-28-16 1H ** ENDS **
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 4 Elected to participate / waiting to 9spud TOTAL 93Notes
* In the announcement dated 11 June 2012, the total number of wells in which the Company is participating in was incorrectly stated as being 77. The actual number that should have been reported at the time was 79.
*\* This table 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