MAGNOLIA PETROLEUM PLC: Operational Update
Magnolia Petroleum Plc / Index: AIM / Epic: MAGP / Sector: Oil & Gas
15 January 2013
Magnolia Petroleum Plc(`Magnolia' or `the Company')
OperationalUpdate Magnolia Petroleum Plc, the AIM quoted US onshore oil and gas exploration and production company, is pleased to report an update on the Company's commercial activities in proven US onshore formations including the Bakken/Three Forks Sanish, North Dakota and the Mississippi Lime and Woodford/Hunton formations in Oklahoma. Initial Production Rates Commencement of production at the Basis operated Bowen 2-29 and Bowen 3-29 vertical wells in the Wilcox formation, Oklahoma * Bowen 2-29 - Gross initial production rate above expectations at 65 boepd (1.13 boepd net) * Bowen 3-29 - Gross initial production rate above expectations at 30 boepd (0.52 boepd net) * Both wells expected to payout (recover costs) in less than 12 months
The Bowen wells are two additional direct offsets to the Henry 2-29 vertical well that is producing from the historic Wilcox formation in Oklahoma. Following the success of the Henry well, the two Bowen wells were drilled to optimise the recovery of all the reserves. As with the Henry well, Magnolia has a 2.4373% WI and a NRI of 1.736006% in each Bowen well, resulting in its share of drilling costs of US$13,612 each. Based on the initial production rates, it is estimated the Bowen wells will both payout (recover costs) in less than 12 months.
The gross initial production rate for the Paul Gillham & Co operated SPS 6-26 vertical well in the Hunton formation in Oklahoma came in above expectations at 108 boepd (0.678 boepd net). As a result, the SPS well has achieved payout in less than five months. Magnolia's WI/NRI in the well are 0.8333% and 0.62799% respectively.
Participation in sixnewwells
The Company is also pleased to announce that it is participating in a further six wells, with a share of aggregate drill costs totalling approximately $183,000.
Well Name Targeted Formation Operator Magnolia's WI/NRI
Nighswonger Farms Mississippi Lime, Slawson Exploration 3.125% / 2815 1-13H Oklahoma
1H-18 Woodford, Oklahoma Newfield 0.529278% /
Miss Frank 1-6H Mississippi Lime, Devon Energy 0.68594% /
BB Rice~2 Bakken Formation, Hess Corporation 0.11719% /
North Dakota 0.0878925%
BB Rice#3 Three Forks Sanish Hess Corporation 0.11719% /
Formation, North Dakota 0.0878925%
Gritz 1-7H Hunton Formation, Husky Ventures 0.0434% /
Existing Well Update
Magnolia COO, Rita Whittington said, "The initial production rates reported for the two vertical Bowen wells, combined with the quick payout achieved by the SPS vertical well provide ready-made examples of the attractive economics behind drilling the proven reservoirs in Oklahoma. Magnolia's interests in the Bakken, Three Forks Sanish, Mississippi Lime and Hunton formations continue to provide attractive opportunities, as demonstrated by the participation in six new wells mentioned today."
** ENDS **
`boe' means barrels of oil equivalent: a unit of energy based on the approximate energy released by burning one barrel (42 US gallons or 158.9873 litres) of crude oil.
There are 42 gallons (approximately 159 litres) in one barrel of oil, which will contain approximately 5.8 million British Thermal Units (MBtus) or 1,700 kilowatt hours (kWh). The value is necessarily approximate as various grades of oil have slightly different heating values. BOE is used by oil and gas companies in their financial statements as a way of combining oil and natural gas reserves and production into a single measure.
`boepd' means barrels of oil equivalent per day
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 Wicks Northland Capital Partners +44 (0) 20 7796 8800
Lottie Brocklehurst St Brides Media and Finance +44 (0) 20 7236 1177
Frank Buhagiar St Brides Media and Finance +44 (0) 20 7236 1177
Magnolia Petroleum Plc is an AIM quoted, US focused, oil and gas exploration and production company. Its portfolio includes interests in 88 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
Being Drilled/Completed 17
Elected to participate/waiting to spud 16
This summary 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.
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