Magnolia Petroleum Plc Operations Update
19 May 2017 - 4:00PM
UK Regulatory
TIDMMAGP
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 Operator Magnolia's WI Net Cost to Status
Formation /NRI% Magnolia
Pauline Woodford, Trinity 0.71/0.53 $31,800 Waiting on
4-24/25H Oklahoma spud
Pauline Woodford, Trinity 0.71/0.53 $31,380 Waiting on
3-24/25H Oklahoma spud
Pauline 2/ Woodford, Trinity 0.53/0.39 $20,580 Waiting on
24/25H Oklahoma spud
Pauline Woodford, Trinity 0.34/0.25 $17,680 Waiting on
1-24/25/36H Oklahoma spud
Vergie Woodford, Comanche 0.39/0.29 Fully Waiting on
26-23-1H Oklahoma Exploration carried spud
Fazio 1706 Mississippi Oklahoma 0.20/0.15 Fully Producing
Well Lime, Energy carried Gross IP:
Oklahoma Acquisitions 644bopd;
1,507MCF
Celesta 2 Springer, Continental 0.02/0.016 $2,255.00 Waiting on
Oklahoma Resources 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 Operator Magnolia's Net Cost to Workover
Formation NRI% Magnolia
Cummings Mississippi Chesapeake 3.34 $9,600 ESP install
31-28-12-1H Lime, Energy
Oklahoma
Cummings 2H Mississippi Chesapeake 3.34 $9,600 ESP install
Lime, Energy
Oklahoma
Brandt Mississippi Chesapeake 3.35 $8,400 install
31-28-12 1H Lime, Energy pumping
Oklahoma unit
Blaser 1-10H Mississippi Cummings 9.375 $5,100 clean and
Lime, repair pump
Oklahoma
Oakley Cash Mississippi Chesapeake 0.8 $1,735 install
3-27-17 1H Lime, pumping
Oklahoma unit
Clive Pelton Bakken, North Marathon 0.40 $1,330 Subsequent
34-23H Dakota Oil refrac
Mack Mississippi Chesapeake 0.53 $1,165 install
10-27-17 1H Lime, Energy pumping
Oklahoma unit
Sundance Mississippi Chesapeake 0.60 $500 install
1-4H Lime, Energy plunger
Oklahoma lift
Rosemary Bakken, North Marathon 0.35 $500 workover
Eckelberg Dakota Oil
Alison 16-1H Mississippi Chesapeake 0.20 $500 install
Lime, Energy pumping
Oklahoma unit
Jacob 16-1H Mississippi Chesapeake 0.20 $500 install
Lime, Energy pumping
Oklahoma 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 +44207213 0880
LLP
Colin Rowbury Cornhill Capital Limited +44207710 9610
Lottie Brocklehurst St Brides Partners Ltd +44207236 1177
Frank Buhagiar St Brides Partners +44207236 1177
Ltd
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 49
spud
TOTAL 219
END
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