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MAGNOLIA PETROLEUM PLC - Quarterly Operations Update

Date : 01/08/2013 @ 6:00PM
Source : PR Newswire (US)
Stock : Magnolia Pet (MAGP)
Quote : 1.175  0.025 (2.17%) @ 5:57PM
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MAGNOLIA PETROLEUM PLC - Quarterly Operations Update

Magnolia Pet (LSE:MAGP)
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MAGNOLIA PETROLEUM PLC - Quarterly Operations Update

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

8 January 2013


             Magnolia Petroleum Plc (`Magnolia' or `the Company')              

Quarterly Operations Update for the period ended 31 December 2012

Magnolia Petroleum Plc, the AIM quoted US focused oil and gas exploration and production company, announces a quarterly update on its operations across proven and producing US onshore hydrocarbon formations, including the Bakken/ Three Forks Sanish in North Dakota and Montana and the Mississippi Lime and the Hunton/Woodford in Oklahoma.

Quarter Highlights

  * The total number of producing wells in which the Company has an interest
    now stands at 86 - 34% increase since the beginning of 2012
   
  * 19 wells currently being drilled/completed and a further 10 waiting to be
    spud
   
  * First well, the Roger Swartz #1, drilled as operator to the Mississippi
    Lime formation in Oklahama - testing currently underway
   
  * Significant increase in acreage during the quarter:
   
  * 
      + 6,881 net mineral acres acquired in the Montana section of the Bakken/
        Three Forks Sanish formation - the majority of leases surrounded by
        those recently acquired by Apache Corporation, the leading
        international oil and gas company
       
      + 496.28 net mineral acres acquired in the Mississippi Lime, Oklahoma,
        bringing total acreage in this formation to 4,507.35
       
  * Raised £2.9 million at blended price of 4.5365p per share by way of draw
    down from £10 million Equity Financing Facility (`EFF') with Darwin
    Strategic Limited (`Darwin'), of which approximately £5.3m remains to be
    drawn down if and when required
   

Outlook

  * Q1 2013 expected to see further significant activity with numerous new
    wells due to come into production
   
  * Multiple well proposals being received - expected to lead to further
    participations with leading operators
   
  * Results of testing of first well drilled as operator to the Mississippi
    Lime
   
  * Plans to drill additional wells in Oklahoma as operator, with 50%+ net
    revenue interests
   
  * On-going leasing activity likely to result in additional acreage being
    acquired in proven onshore US formations
   
  * 
      + 985 net mineral acres acquired in the Bakken, Montana bringing total
        net acreage in this formation to 7,866 as announced on 4 January 2013
       
  * Commissioned Moyes & Co. to update Reserves and Competent Person's Report
    covering Magnolia's assets as at year end 2012 - Report will include:
   
  * 
      + an estimate on the Company's average production rates
       
      + an anticipated reserves upgrade due to reclassification of the
        Company's Three Forks Sanish reserves from "possible" to "proven
        undeveloped" and newly acquired Mississippi Lime acreage with multiple
        "proven undeveloped" locations
       

Well Developments

The full list of well developments occurring in the quarter is set out below.


Well                Formation      Status            NRI %      Operator     
                                                                             
SPS 6-26            Hunton         Producing         0.68079    Paul Gillham 
                                                                             

Otis 2-27-12 1H Mississippi Producing 3.370244 Chesapeake

Roger Swartz #1 Mississippi Undergoing 81.25 Magnolia

                                   testing                      Petroleum    
                                                                             
Lois Rust 7-27-12   Mississippi    Sales line        1.8678     Chesapeake   
1H                                 capacity is being                         
                                   increased.                                
                                   Waiting on                                
                                   installation                              
                                                                             
Thomason 10-27-12   Mississippi    Sales line        9.375      Chesapeake   
1H                                 capacity is being                         
                                   increased.                                
                                   Waiting on                                
                                   installation.                             
                                                                             
Walker 2-29         Viola          Completed -       0.8335     Transpro     
                                   waiting on                                
                                   initial                                   
                                   production                                
                                                                             
Prucha 1-23MH       Mississippi    Production        18.75      Devon Energy 
                                   facilities and                            
                                   pipeline                                  
                                   installed - frac                          
                                   water being                               
                                   extracted                                 
                                                                             

Montecristo 6-1H Mississippi Waiting on 5.3486 Cisco

                                   installation of                           
                                   pumping unit                              
                                                                             
Beebe 24-W1H        Woodford       Unloading frac    0.242188   Longfellow   
                                   water                        Energy       
                                                                             
Curtis Kerr 24-8H   Bakken         Undergoing        1.46677    Marathon     
                                   fracture                                  
                                   stimulation                               
                                                                             
Nicky Kerr 14-8     Bakken         Undergoing        1.46677    Marathon     
                                   fracture                                  
                                   stimulation                               
                                                                             
Joan 1-21           Mississippi    Unloading frac    2.8125     Tessara      
                                   water                        Energy       
                                                                             

Phenom 1-14H Mississippi Waiting on frac 1.72626 Territory

                                                                Resources    
                                                                             
Bowen 2-29          Wilcox         Completed-waiting 1.736006   Basis        
                                   on initial                                
                                   production                                
                                   results                                   
                                                                             
Bowen 3-29          Wilcox         Completed-waiting 1.736006   Basis        
                                   on initial                                
                                   production                                
                                   results                                   
                                                                             

Mack 10-27-17 1H Mississippi Drilled - waiting 0.504985 Chesapeake

                                   on completion                             
                                                                             

Jake 2-11 # 1H Bakken Drilling 1.4648 Statoil

Jake 2-11 # 2TFH Three Forks Stimulating, 1.4648 Statoil

                    Sanish         waiting on                                
                                   initial                                   
                                   production                                
                                   results                                   
                                                                             
Campbell 1-H*       Woodford       Drilling          0.026025   Newfield     
                                                                             
Kelly 1-2H*         Woodford       Drilling          0.1302     Eagle Rock   
                                                                Energy       
                                                                             
Forrest 1-8H        Woodford       Drilling          0.5859     Continental  
                                                                Resources    
                                                                             
Bessie Todd Estate  Cotton Valley  Drilling          0.17306    Anadarko     
GU 31H                                                                       
                                                                             
Partagas 1-1H       Mississippi    Planned           3.75976    Cisco        
                                                                             
Sympson 1-6H        Woodford       Planned           0.71115    Continental  
                                                                Resources    
                                                                             
Condit 1-5H*        Woodford       Planned           0.04981    Continental  
                                                                Resources    
                                                                             
Peck 1-5H           Mississippi    Planned           0.502      Range        
                                                                Resources    
                                                                             
Cox 1-29H           Hunton         Planned           2.1875     Crown Energy 

*From time to time, the Company elects to participate in wells with relatively small working/net revenue interests. This allows Magnolia to gain access to critical well information which is then used to further enhance its understanding of the relevant formation.

Magnolia COO, Rita Whittington said, "Magnolia now has interests in 86 producing wells, all of which are generating revenues for the Company, a further 19 currently drilling/completing and 10 waiting to spud. In line with our strategy, all of these wells are located in proven, producing US onshore formations and many are in partnership with established operators such as Anadarko and Chesapeake Energy.

"In the year ahead, we expect a further significant increase in the number of wells in which we have an interest, thanks to the over 4,500 net mineral acres in the Mississippi Lime and the 7,866 net acres in the Montana section of the Bakken we have acquired in the last twelve months. With this in mind, as further drilling progressively proves up the prospectivity of our acreage, leading to higher revenues and reserves attributable to our Company, I am confident Magnolia is well placed to build further substantial value for shareholders."


                                 * * 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   Daniel Stewart & Company Plc   +44 (0) 20 7776 6550  
Thomas                                                                      
                                                                            
John Howes /           Northland Capital Partners     +44 (0) 20 7796 8800  
John-Henry Wicks       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                                                  

Notes

Magnolia Petroleum Plc is an AIM quoted, US focused, oil and gas exploration
and production company.  Its portfolio includes interests in 86 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                                                                  86
                                                                             
Being Drilled / Completed                                                  19
                                                                             
Elected to participate / waiting to                                        10
spud                                                                         
                                                                             
TOTAL                                                                     115

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.

Copyright ry 7 PR Newswire



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