Magnolia Petroleum Plc / Index: AIM /
Epic: MAGP / Sector: Oil & Gas
19 May 2017
Magnolia Petroleum
Plc (‘Magnolia’ or ‘the Company’)
Operations
Update
Magnolia Petroleum Plc, the AIM quoted US focused oil and gas
exploration and production company, is pleased to announce its
participation in seven new wells in the prolific SCOOP and STACK
plays in Oklahoma, including five
increased density wells which are to be drilled on the same spacing
unit as already producing wells and are therefore deemed to have
been significantly de-risked. In addition, the Company is
participating in the workover of eleven existing wells, all of
which are low cost and are expected to increase both the level of
production and the estimated recoverable reserves for each
well.
Participating in seven new wells with
an aggregate net cost of US$103,695
Well Name |
Targeted Formation |
Operator |
Magnolia’s WI/NRI% |
Net Cost to Magnolia |
Status |
Pauline 4-24/25H |
Woodford, Oklahoma |
Trinity |
0.71/0.53 |
$31,800 |
Waiting on spud |
Pauline 3-24/25H |
Woodford, Oklahoma |
Trinity |
0.71/0.53 |
$31,380 |
Waiting on spud |
Pauline 2/24/25H |
Woodford, Oklahoma |
Trinity |
0.53/0.39 |
$20,580 |
Waiting on spud |
Pauline 1-24/25/36H |
Woodford, Oklahoma |
Trinity |
0.34/0.25 |
$17,680 |
Waiting on spud |
Vergie 26-23-1H |
Woodford, Oklahoma |
Comanche Exploration |
0.39/0.29 |
Fully carried |
Waiting on spud |
Fazio 1706 Well |
Mississippi Lime, Oklahoma |
Oklahoma Energy Acquisitions |
0.20/0.15 |
Fully carried |
Producing Gross IP: 644bopd;
1,507MCF |
Celesta 2 |
Springer, Oklahoma |
Continental Resources |
0.02/0.016 |
$2,255.00 |
Waiting on spud |
The four Pauline wells are increased density wells targeting the
Woodford Shale in Hughes County,
Oklahoma. These wells will offset two previously completed
Woodford Shale wells: the Trinity-operated Clara 1-13/24H and
Regina 1-25/24H. Both the Clara and Regina wells have been and
continue to be prolific producers:
- The Regina well has cumulatively produced 1.3 BCF to date,
currently produces at a rate of 1.7 MMCFD and has a projected
estimated ultimate recovery (‘EUR’) of over 7.3BCF.
- The Clara well’s cumulative production to date stands at 0.800
BCF, its daily production is currently 1 MMCFD and its EUR is over
3.5BCF.
The four Pauline wells will have a longer horizontal section in
the Woodford Shale compared to the Clara and Regina wells, and
therefore they have the potential to generate even larger reserves
than either of the two initial wells.
Participating in the workover of the
following 11 wells at an aggregate net cost of US$38,930:
Well Name |
Targeted Formation |
Operator |
Magnolia’s NRI% |
Net Cost to Magnolia |
Workover |
Cummings 31-28-12-1H |
Mississippi Lime, Oklahoma |
Chesapeake Energy |
3.34 |
$9,600 |
ESP install |
Cummings 2H |
Mississippi Lime, Oklahoma |
Chesapeake Energy |
3.34 |
$9,600 |
ESP install |
Brandt 31-28-12 1H |
Mississippi Lime, Oklahoma |
Chesapeake Energy |
3.35 |
$8,400 |
install pumping unit |
Blaser 1-10H |
Mississippi Lime, Oklahoma |
Cummings |
9.375 |
$5,100 |
clean and repair pump |
Oakley Cash 3-27-17 1H |
Mississippi Lime, Oklahoma |
Chesapeake |
0.8 |
$1,735 |
install pumping unit |
Clive Pelton 34-23H |
Bakken, North Dakota |
Marathon Oil |
0.40 |
$1,330 |
Subsequent refrac |
Mack 10-27-17 1H |
Mississippi Lime, Oklahoma |
Chesapeake Energy |
0.53 |
$1,165 |
install pumping unit |
Sundance 1-4H |
Mississippi Lime, Oklahoma |
Chesapeake Energy |
0.60 |
$500 |
install plunger lift |
Rosemary Eckelberg |
Bakken, North Dakota |
Marathon Oil |
0.35 |
$500 |
workover |
Alison 16-1H |
Mississippi Lime, Oklahoma |
Chesapeake Energy |
0.20 |
$500 |
install pumping unit |
Jacob 16-1H |
Mississippi Lime, Oklahoma |
Chesapeake Energy |
0.20 |
$500 |
install pumping unit |
All the above wells are or have previously been producing.
Adding an artificial lift to each well, either by installing a
pumping unit or plunger lift, is expected to lead to an uplift in
production and an upgrade to reserves which will be reflected in
future reserves reports.
Magnolia CEO, Rita Whittington
said, “We are encouraged by the number of new proposals we are
receiving to drill alongside established operators. In our
view, this provides further evidence of a pick-up in activity and
sentiment in the US onshore sector, as highlighted by a more than
doubling in the latest Baker Hughes oil rig count to 712 from 318 a
year ago. It also validates our strategy to focus our lease
acquisition strategy on prolific plays, such as the SCOOP and STACK
in Oklahoma, where the economics
of drilling are attractive in the current oil price environment.
Furthermore, all seven wells are deemed to be low risk due to
either being drilled on the same spacing unit as an existing
producer or as a result of Magnolia’s share of the drilling costs
being fully carried.
“Working over an existing well provides a low cost, low risk
opportunity to increase production rates and recoverable
reserves. In a low oil price environment, this is an
attractive proposition for operators and with a portfolio of 157
producing wells we expect to participate in additional workovers
going forward. Workovers have positive implications for the
overall level and value of our proven developed producing (‘PDP’)
reserves which were recently independently valued at US$4,300,000. At this level, the value of our
PDPs already outstrips our current market capitalisation.
Workovers therefore have the potential to increase the already
strong asset backing behind the Company.”
The information contained within this announcement constitutes
inside information stipulated under the Market Abuse Regulation
(EU) No. 596/2014.
* * ENDS * *
For further information on Magnolia Petroleum Plc visit
www.magnoliapetroleum.com or contact the following:
Rita Whittington |
Magnolia Petroleum Plc |
+01918449 8750 |
Jo Turner / James
Caithie |
Cairn Financial Advisers
LLP |
+44207213 0880 |
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 219 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 |
157 |
Being drilled / completed |
13 |
Elected to participate / waiting to
spud |
49 |
TOTAL |
219 |