2nd Jun 2015 07:00
MAGNOLIA PETROLEUM PLC - Participating in 16 New US Onshore WellsMAGNOLIA PETROLEUM PLC - Participating in 16 New US Onshore Wells
PR Newswire
London, June 1
Magnolia Petroleum Plc / Index: AIM / Epic: MAGP / Sector: Oil & Gas
2 June 2015
Magnolia Petroleum Plc (‘Magnolia’ or ‘the Company’)
Operations Update
Magnolia Petroleum Plc, the AIM quoted US onshore focused oil and gas exploration and production company, is pleased to announce it is participating in 16 new wells across its leases in proven US onshore formations including the Bakken, North Dakota and Woodford and Mississippi Lime, Oklahoma, at a net aggregate cost of US$686,335. This update is in line with the Company’s strategy to rapidly build production through drilling and to prove up the reserves on its leases, which were independently valued at US$26.65 million as at 1 January 2015.
| Well Name | Targeted Formation | Operator | Magnolia’s WI/NRI% | Net Cost to Magnolia | Status |
| Whistler 1-26H | Hunton, Oklahoma | Equal Energy | 5.4/4.2 | US$165,288 | Waiting to spud |
| Gray 7-27-12 1H (previously announced) | Mississippi Lime, Oklahoma | Chesapeake Energy | 2.48/1.86 | US$73,785 | Completing |
| Gray 7-27-12 2H | Mississippi Lime, Oklahoma | Chesapeake Energy | 2.48/1.86 | US$73,785 | Completing |
| Bowen 1-30 (previously announced) | Wilcox, Simpson, Viola, Hunton, Earlboro, Oklahoma | Basis | 10.94/8.75 | US$64,083 | Drilling |
| Skunk Creek 1-8-17-15H3 | Three Forks Sanish, North Dakota | Whiting Petroleum | 0.9/0.68 | US$60,603 | Waiting to spud |
| Skunk Creek 1-8-17-15H | Bakken, North Dakota | Whiting Petroleum | 0.9/0.68 | US$60,603 | Waiting to spud |
| Skunk Creek 1-8-17-16H | Bakken, North Dakota | Whiting Petroleum | 0.9/0.68 | US$60,603 | Waiting to spud |
| Skunk Creek 1-8-17-16H3 | Three Forks Sanish, North Dakota | Whiting Petroleum | 0.9/0.68 | US$60,603 | Waiting to spud |
| Wilber 1-25 | Mississippi Lime, Oklahoma | Chesapeake Energy | 1.61/1.22 | US$60,781 | Waiting to spud |
| Maxine#1 | Woodford, Oklahoma | Newfield | 0.52/0.39 | US$47,262 | Waiting to spud |
| McClain 2 | Woodford, Oklahoma | AEP | 1.2/0.9 | US$25,720 | Waiting to spud |
| Bonnie 29-1 | Wilcox, Oklahoma | Bill Jack Sharber | 3.125/2.34 | US$21,873 | Waiting to spud |
| Crow#1 | Woodford, Oklahoma | BP America | 0.25/0.20 | US$14,490 | Waiting to spud |
| S.Tecumseh#1 | Basal Penn Sand | Gulf Exploration | 2.5/1.875 | US$14,517 | Waiting to spud |
| S.Tecumseh#2 | Basal Penn Sand | Gulf Exploration | 2.5/1.875 | US$14,517 | Waiting to spud |
| Hensley 2-30H | Simpson Dolomite | Transpro | 0.35/0.28 | US$4,127 | Waiting to spud |
| SW Romulus#1 | Hunton, Oklahoma | Marjo Operating | 0.21/0.16 | US$1,563 | Waiting to spud |
Rita Whittington, COO of Magnolia, said, “We are pleased to see a number of new well proposals on our U.S. onshore leases from established operators including Chesapeake Energy and Whiting Petroleum. The new wells highlight the value and diversity of our acreage and the multiple payzones that are being targeted. A number are low cost vertical wells targeting conventional plays. Others are horizontals targeting unconventional hydrocarbons including increased density wells on leases where production has been established, such as the Skunk Creeks wells.
“The Skunk Creek wells also demonstrate how far costs have fallen to drill horizontal wells in the Bakken/Three Forks Sanish in North Dakota in the last 18 months. In January 2014, Magnolia participated in four wells on the same lease, each of which had a total cost of over US$9 million. These latest Skunk Creek wells are estimated to have a gross cost of US$6,760,000 each. Such a dramatic fall in costs has clear implications for payback, and goes a long way to mitigating the impact of the lower oil price environment.
“Following the recent successful fundraise together with our positive operating cash flow, Magnolia is also preparing to operate and drill two low cost 94% owned vertical wells and is well capitalised for further non-operated well proposals in the coming months. These upcoming wells will add to daily production and continue the growth seen in the level of our proven reserves, which have increased to 985 Mbbl of oil and 2,905 MMcf gas as at 1 January 2015 from 46.6Mbbl and 198.2 MMcf in October 2011. I look forward to providing further updates on our progress in due course.”
** ENDS **
Glossary
‘MBbl’ means Thousand barrels
‘MMcfd’ means Million Cubic Feet per Day
‘NRI’ means net revenue interest
‘WI’ means working interest
For further information on Magnolia Petroleum Plc visit http://www.magnoliapetroleum.com/ or contact the following:
| Steven Snead | Magnolia Petroleum Plc | +01918449 8750 |
| Rita Whittington | Magnolia Petroleum Plc | +01918449 8750 |
| Jo Turner / James Caithie | Cairn Financial Advisers LLP | +44207 1487900 |
| Jamie Vickers/Max Bascombe | Sanlam Securities UK Limited | +44207280 8700 |
| Colin Rowbury | Cornhill Capital Limited | +44207710 9610 |
| Lottie Brocklehurst | St Brides Partners Ltd | +44207236 1177 |
| Frank Buhagiar | St Brides Partners Ltd | +44207236 1177 |
Notes
Magnolia Petroleum Plc is an AIM quoted, US focused, oil and gas exploration and production company. Its portfolio includes interests in 193 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
| Category | Number of wells |
| Producing | 193 |
| Being drilled / completed | 3 |
| Elected to participate / waiting to spud | 25 |
| TOTAL | 221 |
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