Magnolia Petroleum Plc / Index: AIM / Epic: MAGP / Sector: Oil & Gas       
         Magnolia Petroleum Plc (`Magnolia' or `the Company')               

                  FinalResultsforthe year to 31 December 2012                  

Magnolia Petroleum Plc, the AIM quoted US focused oil and gas exploration and
production company, announces its final results for the year ended 31 December


  * $11.1 million capital raised to acquire acreage in proven onshore US
    formations such as the Bakken, North Dakota and participate in wells with
    leading operators such as Marathon Oil and Statoil
      * Interests in 101 wells as at 31 December 2012 - 86 producing and 15
    drilling/completing - 46% increase year on year
      + Production as at 31 December 2012 stood at 122.5 boepd

  * 194% increase in full year revenues to US$709,395 (2011: US$241,038) 

      + monthly run rate increasing - December 2012 revenues three times higher
        than January 2012

  * Significant increase in 2P reserves to 1.367 million barrels of oil and 

    condensate and 4,513 MMcf of natural gas (1 January 2013) compared to
    68,700 barrels of oil and condensate and 249.8 MMcf (1 October 2011)
      * 3P reserves valued at US$94million underpinning market valuation - 422%
    increase since Admission to AIM in November 2011
      + Reserves estimate only includes approximately 5,500 net acres out of a
        total of 12,700 in proven formations - substantial upside potential

  * Over 13,000 net mineral acres with more than 600 potential drilling 

    locations in producing onshore US plays acquired during the year providing
    strong future pipeline of growth
      * First well drilled as operator in Oklahoma - awaiting fracture stimulation

Magnolia CEO, Steven Snead said, "The increase in proved and probable (`2P')
net reserves to 1.367 million barrels of oil and condensate and 4,513 MMcf of
natural gas reflects the excellent progress made by the Company in 2012 in
terms of drilling wells and acquiring leases in proven US onshore formations.
This reserve upgrade, which only includes 5,500 of the 13,500 plus acres we
hold, highlights both the asset-backing behind our current market valuation, as
well as the tremendous scope within our portfolio of over 600 potential
drilling locations to create further substantial value for shareholders. During
the year, we also significantly increased the number of producing wells in
which we have an interest, resulting in a three fold increase in full year
revenues to over US$700,000. In line with our strategy, revenues will be
reinvested into more drilling to grow net reserves further, as we look to
monetise the sizeable asset base we have acquired to date." 
Chief Executive's Statement 
We aim to create substantial value for shareholders through the acquisition and
subsequent development of leases in producing US onshore formations, such as
the Bakken in North Dakota and the Mississippi Lime, Hunton and Woodford in
Oklahoma. By systematically drilling acquired leases both as a partner and
operator, we are focused on proving up and growing the Company's net reserves.
Set against this context, I am pleased to report that the year under review has
been a transformative period for Magnolia Petroleum, one that has seen a step
up in the scale of our operations culminating in a four fold increase in the
value of our proved, probable and possible reserves (`3P') to US$94 million, a
considerable increase in the Company's asset backing. 
In 2011, with limited capital we successfully proved the potential of our low
risk/high return business model to generate multiples of the capital employed.
In the two years prior to our Admission to AIM, we participated in the drilling
of 23 wells, 22 of which generated commercial returns, illustrating the
relatively low exploration risk associated with drilling historic US onshore
plays. In aggregate we turned an initial £300,000 capital into a NPV of US$1.5
million as valued by Moyes & Co in the Company's AIM Admission document. 
Having successfully moved to AIM at the end of 2011, we immediately set about
putting in place the key building blocks, specifically leases and capital that
would enable us to replicate our previous success on a larger scale. The
numbers speak for themselves. At the beginning of the year, Magnolia held 1,259
net mineral acres in proven US onshore hydrocarbon formations such as the
Bakken/Three Forks Sanish in North Dakota and the Hunton/Woodford in Oklahoma.
By 31 December 2012 this figure had risen to 13,513 net mineral acres.
Similarly, over the course of 2012, we raised $11.1 million in five tranches,
each at a higher price than previously. Importantly we secured a £10 million
Equity Financing Facility (`EFF') and a £500,000 investment from Henderson
Global Investors. £4.665 million of the EFF remains available for utilisation. 
Armed with leases and access to capital, we stepped up our involvement in
drilling activity during the period under review with the aim of growing
reserves. In January 2012 we had interests in 66 producing properties with a
further three at various stages of drilling/completion. By the end of the year,
the number of producing/drilling wells Magnolia had an interest in had risen to
101. Drilling serves four main purposes: to grow net production and revenues;
to prove up reserves; to increase the number of proven undeveloped reserves;
and to hold leases by production. 
In line with our strategy, revenues generated from production are reinvested
into new wells. With this in mind, payback (recovery of costs) is a key metric
that we focus on when evaluating initial production rates, as this tells us how
quickly we can recycle funds invested into more drilling to prove up our
reserves further. 
The results of the activity we undertook in 2012 were highlighted in the
updated Reserves Report by our Competent Person, Moyes & Co. (`Moyes'). This
shows that in the period between our Admission to AIM in November 2011 and 31
December 2012, Magnolia's 2P reserves grew from 68,700 barrels of oil and
condensate and 249.8 million cubic feet (`MMcf') of natural gas to 1.367
million barrels and 4,513 MMcf. Meanwhile our 3P reserves grew to 2.818 million
barrels of oil and 9,231 MMcf of gas from 975.6 thousand barrels of oil and
1,175 MMcf of gas previously. Moyes has assigned a Net Present Value after
applying a 10% discount rate of approximately US$94 million to our 3P reserves,
a figure that stands at a significant premium to our current market
capitalisation and highlights the considerable value we have created in our
first full year on AIM. 
As expected, the early stage nature of our recently acquired Montana acreage
and limited drilling activity in the area to date meant that it did not
contribute to the reserves upgrade this time round; however, Moyes has
classified our leases in Montana as prospective resources with a value of over
US$12 million. Our acreage is surrounded by the 320,000 net acres acquired by
Apache last year. In addition to producing formations such as the Ratcliffe,
Apache, like us, view their acreage in Daniels County as having the potential
to be an extension of the Bakken/Three Forks Sanish formations that are so
prolific in North Dakota. As Apache press on with their drilling programme in
Montana, the prospectivity of our acreage in the area will become more
apparent. We remain highly confident that our entry into Montana will lead to
another substantial increase in Magnolia's net 3P reserves in the future. 
Financial Review 
During the twelve month period, our net production generated revenues of
US$709,395 compared to US$241,038 the previous year. Importantly, the monthly
run rate consistently improved over the course of the year so that December's
revenues were almost three times as much as those of January. We expect this
trend to continue. The growth in revenues has been mirrored by a near
quadrupling in tangible assets to US$3,437,869 at end December 2012 compared to
US$861,975 the previous year. Growth in intangible assets (new leases and wells
that are drilling but not yet completed) was even stronger having increased to
US$6,200,828 from US$1,111,634 in 2011. At the end of the year we retained
$2,293,151 in cash for continued development of our acreage. Administrative
costs continue to be tightly managed, allowing the vast majority of additional
revenues generated to be recycled into further wells or acquiring additional
leases. In 2012, $8,098,566 was invested in increasing the asset base with only
$623,249 used in operating activities. 
Reflecting the results of activity covering just a little over twelve months,
the recently reported 422% growth in 3P reserves is just the beginning. Having
amassed a portfolio of 13,513 net mineral acres with over 600 potential
drilling locations, considerable scope remains for further substantial reserves
growth for many years to come just by drilling our existing portfolio alone. We
continue to receive multiple proposals to drill new wells, and at the same time
we are constantly working towards increasing our acreage, providing further
opportunities to create value above and beyond our existing leases. With this
in mind and a considerable pipeline of drilling locations in place, we are
highly excited by the scale of the opportunity in front of us, as we look to
build a significant US onshore focused oil and gas company. 
Finally, I would like to thank the Board, management team and all our advisers
for their hard work during the year and also to our shareholders for their
support over the last twelve months. 
Steven Snead 
Chief Executive Officer 
Chief Operations Officer's Report 
The Bakken / Three Forks Sanish Formations, North Dakota 
At the time of our Admission to AIM in November 2011, the Company anticipated
participating in four new wells on its Bakken/Three Forks Sanish (`TFS')
acreage in North Dakota in 2012. In the event, Magnolia elected to participate
in ten new wells targeting the Bakken and TFS formations, bringing the total
number of wells in which the Company has an interest in these two formations to
24, of which 22 are currently producing. 
Four of the wells brought on stream during the year are producing from the
Bakken, a reservoir which currently produces over 700,000 bopd and is estimated
to hold mean undiscovered recoverable volumes of 3.65 Bbbls and 1.85 Tcf (2008
US Geological Survey). Initial production rates for these four wells were: 
* Eckelberg 14-23 H well: 1,263 bopd and 625 MCF; 

      * Quill 2-12-3H well: 877 bopd;
      * Skunk Creek 14H well: 212 bopd;
      * Stocke 1-4-9H 295 bopd.

Post period end, the Company reported initial production rates for two wells
operated by Marathon Oil: Nicky Kerr 14-8 well (1,501 boepd); and Curtis Kerr
24-8H (1,496 boepd). 
Two further wells, Skunk Creek 15H and Eckelberg 14-23 TF, are producing from
the Three Forks Sanish formation, a separate reservoir lying directly below the
Bakken. At 2,303bopd and 1,234bopd and 602MCF respectively, the initial
production rates for both wells exceeded the directors' expectations and in the
case of Skunk Creek 15H are Magnolia's best rates recorded to date. A state
study evaluating oil reserves in the Three Forks Sanish formation in western
North Dakota concluded that there could be as much as 2 billion barrels of
recoverable oil in this formation. 
The remaining two wells in which Magnolia has an interest where drilling/
stimulating operations are on-going are the Jake 2-11 1H and Jake 2-11 TFH,
both operated by Statoil. 
Magnolia holds leases in respect of 11,520 gross acres across 28 sections,
equating to 421 net mineral acres within the boundaries of the Bakken / TFS
formations. As the Three Forks Sanish lies beneath the Bakken, the number of
wells which can be drilled per section doubles to eight (four per formation),
providing Magnolia with a total of 120 proven development locations on its
acreage, 60 on the Bakken and 60 on the Three Forks Sanish, as set out in the
Updated Reserves Report by Moyes & Co. dated 8 April 2013. In their report,
Moyes & Co. estimated Magnolia's Bakken 2P reserves at 153,000 barrels of oil
and condensate and 83 MMcf of natural gas to which Moyes has assigned a value
of US$1.35 million. 
As expected, the initial production rates from the Skunk Creek 15H and
Eckelberg 14-23 TF wells have led to an upgrade in Magnolia's Three Forks
Sanish reserves. In the updated Competent Person's Report, Magnolia's 2P
reserves in this formation are estimated at 27,000 barrels of oil and
condensate and 15 MMcf of natural gas which Moyes has assigned a value of
US$0.673 million. 
Mississippi Lime Formation, Oklahoma 
At the time of Magnolia's Admission to AIM, the directors identified the
Mississippi Lime as the next big play in onshore US. In 2012, Magnolia entered
this historic formation and over the course of the year, acquired 4,319.55 net
mineral acres. The acquired acreage includes leases with working interests of
up to 100%, 74 proven undeveloped locations and an additional 222 increased
density locations in which Magnolia could propose and/or operate. In total,
there are 296 potential drilling locations on the Company's acreage. 
Over the course of the year, Magnolia participated in 13 wells targeting the
Mississippi Lime. Initial production rates for seven of these wells were
reported during 2012, all of which were ahead of expectations: 
* Brady 17-27-12 1H (702.5 boepd); 

      * Lois Rust 7-27-12 1H (353.75 boepd);
      * LaDonna 19-28-16 1H (297 boepd);
      * Thomason 10-27-12 1H (441 boepd);
      * Westline 30-28-16 1H (403 boepd);
      * Brandt 31-28-12 1H (499.33);
      * Otis 2-27-12 1H (341 boepd).

Due to higher than expected recovery rates, production was temporarily shut
down at the Thomason and Lois Rust wells to enable the installation of
additional sales capacity. 
The remaining six wells were at various stages of drilling/completion or
fracture stimulation as at end of December 2012. Post period end, the Company
has since reported Initial Production Rates for the Montecristo 6-1H well (50
In the updated Reserves Report, Moyes & Co. estimated the Company's Mississippi
Lime 2P reserves at 1.164 million barrels of oil and condensate and 3,857 MMcf
with a value of US$40.592 million. 
The Mississippi Lime is an historic oil and gas system that has been producing
at depths ranging from 4,500 to 7,000 feet from several thousand vertical wells
for over 50 years. As with the Bakken, new technology and horizontal drilling
has reopened the oil play. Due to the relatively shallow depths and less tight
rock formation, drilling costs at between US$2.4 million and US$3.5 million per
well in the Mississippi Lime are considerably lower than those in the Bakken,
which should lead to shorter pay-out periods than with the Bakken wells. 
Woodford / Hunton Formations, Oklahoma 
At the time of the AIM Admission, the Company anticipated participating in five
new wells on its Woodford/Hunton acreage in 2012. In the event, Magnolia
participated in the drilling of ten new wells in the formation, bringing the
overall total to 18. Initial production rates for three wells were made
available during the period under review: 
* Bollinger 1-27XL targeting the Woodford (686.388 boepd); 

      * SPS 6-26 vertical well targeting the Hunton (108 boepd);
      * Zenyatta 2-6 vertical well targeting the Hunton (17 bopd).

Post period end, initial production for the Beebe 24-W1H in the Woodford
formation was reported at 73 boepd. 
In the updated Reserves Report, Moyes & Co. estimated the Company's Woodford /
Hunton 2P reserves at 6 million barrels of oil and condensate and 397 MMcf
natural gas with a value of US$387,000. 
Like the Bakken, the Woodford / Hunton formations in Oklahoma are established
reservoirs that have been reopened following the introduction of horizontal
drilling and stimulation technology. As a result the Woodford oil play in
particular is increasingly being drilled by leading operators. Magnolia holds
leases in respect of approximately 67,200 gross mineral acres (800 net mineral
acres), giving rights to participate in the drilling of wells in 87 sections
located in 26 counties in central Oklahoma. 
In November 2012, Magnolia acquired 6,700 acres in the Montana section of the
Bakken/Three Forks Sanish formation located in Daniels County and three
surrounding counties in Montana. The acreage lies amongst, and is surrounded
by, leases owned by Apache Corporation (`Apache'), a leading international oil
and gas exploration and production company. Post period end, Magnolia acquired
a further 985 net mineral acres in the Montana section of the Bakken/Three
Forks Sanish formation, bringing the total acreage acquired in the district to
In recent years, activity in the Montana section of the Bakken has been
increasing. According to oil services company Baker Hughes, as of April 2012,
there were 18 rigs active in eastern Montana, compared to 10 the previous year
and zero in July 2009. In addition, the Montana Board of Oil and Gas issued 228
oil permits in June 2012, more than the total number issued in 2011. 
In 2012, Apache acquired 320,000 net acres, an indication of the growing
interest in the Bakken in Montana. Apache believe there are over 1,900
potential drilling locations on its 320,000 net mineral acres and that sixteen
horizontal wells, eight for the Bakken and a further eight for the Three Forks
Sanish, will be required to optimise the recovery of reserves. According to
Apache, the Estimated Ultimate Recovery (`EUR') of reserves stands at 670MBo
for the Bakken and 377MBo for the Three Forks Sanish on each drilling location. 
Oil production in Montana peaked in 2006 at approximately 100,000 bopd, a
similar level to North Dakota during that year. The figure in Montana has since
dropped and there is currently no horizontal Bakken production in Daniels
County, Montana, though conventional oil has historically been recovered by
vertical wells from the Ratcliff, Madison, Mission Canyon and McGowan
formations. In addition to the Bakken/Three Forks Sanish, there is the
potential for unconventional oil to be recovered from the Mississippian aged
Lodge Pole and Madison formations as well as the deeper Devonian aged Nisku
At 7,000-7,400ft, the Bakken in Daniels County lies at a shallower depth than
in North Dakota. As a result costs to drill horizontal wells to the Bakken in
Montana are estimated at US$7.5 million compared with US$10 million in North
In the updated Reserves Report, Moyes & Co. classified the Company's Montana
leases as prospective resources and estimated these at 5.77 million barrels of
oil and condensate and 2,885 MMcf of natural gas with a value of
US$12.267million, reflecting the early stage nature of the play. 
In 2012, Magnolia achieved a number of key milestones: the acquisition of over
12,000 net mineral acres in Oklahoma and Montana; the participation in wells
with significantly higher working interests; the drilling of a first well as
operator with a 100% working interest; and the securing of a £10 million EFF
together with the financial backing of Henderson Global Investors. Post period
end, the updated reserves report provides a summary of the progress made during
the period between the Company's Admission to AIM in November 2011 and 31
December 2012: a 422% increase in 3P reserves to 2.8 million barrels of oil and
9,231 MMcf of gas with an estimated value of US$94 million. As a result of
these achievements, Magnolia is well placed for further significant growth in
both net production and reserves in the year ahead. 
Rita Whittington 
Chief Operations Officer 
consolidated Statement of Comprehensive Income 
Year ended 31 December 2012 

                                                Year ended       Year ended
                                                                31 December
                                               31 December                 
                                                         $                $

Continuing Operations                                                       
Revenue                                            709,395          241,038 
Operating expenses                               (240,173)        (145,365) 
Gross Profit                                       469,222           95,673 


Impairment of mineral leases            11       (227,858)        (224,892) 
Administrative expenses                 8      (1,314,973)        (213,228) 


Operating Loss                                 (1,073,609)        (342,447) 
Finance income                                           -                - 
Finance costs                                      (1,569)                - 


Loss before Tax                                (1,075,178)        (342,447) 
Taxation                                                 -                - 
Loss for the year                              (1,075,178)        (342,447) 
Other Comprehensive Income:                                                 


Exchange differences on translating                173,924         (10,931)
Other Comprehensive Income for the                 173,924         (10,931)
Year, Net of Tax                                                            
Total Comprehensive Income for the               (901,254)        (353,378)
Loss per share for loss attributable                                       
to the equity holders of the Company                                       
during the year                                                             
Basic and diluted (cents per share)     9           (0.16)           (0.09) 
The loss for the Parent Company for the year was $334,035 (2011: $80,574). 
As at 31 December 2012 

                                          Note            As at        As at
                                                    31 December  31 December
                                                           2012         2011
                                                              $            $

Non-Current Assets                                                           
Property, plant and equipment             10          3,437,869      861,975 
Intangible assets                         11          6,200,828    1,111,634 
Total Non-Current Assets                              9,638,697    1,973,609 
Current Assets                                                               
Trade and other receivables                             208,936       70,308 
Cash and cash equivalents                             2,293,151      874,037 
Total Current Assets                                  2,502,087      944,345 


TOTAL ASSETS                                         12,140,784    2,917,954 


EQUITY AND LIABILITIES                                                       
Equity attributable to Owners of                                            
Share capital                                         1,390,244      926,128 
Share premium                                        11,888,717    2,218,877 
Merger reserve                                        1,975,950    1,975,950 
Share option reserve                                     66,603       66,603 
Reverse acquisition reserve                         (2,250,672)  (2,250,672) 
Translation reserve                                      47,300    (126,624) 
Retained losses                                     (1,577,896)    (502,718) 
Total Equity - Capital and Reserves                  11,540,246    2,307,544 


Non-Current Liabilities                                                      
Trade and other payables                                      -      278,431 
Total Non-Current Liabilities                                 -      278,431 
Current Liabilities                                                          
Trade and other payables                                600,538      331,979 
Total Current Liabilities                               600,538      331,979 


TOTAL EQUITY AND LIABILITIES                         12,140,784    2,917,954 
CONSOLIDATED Statement of Changes in Equity 
Year ended 31 December 2012 
Group ($)            Share      Share    Merger   Share     Reverse Translation  
Retained       Total 

                   capital    Premium   reserve  option acquisition     reserve 
     losses      equity
                                                reserve     reserve             

Balance at         587,336  1,347,983 1,867,790  66,603 (2,250,672)   (115,693) 
  (160,271)   1,343,076
1 January 2011                                                                   




Loss for the             -          -         -       -           -           - 
  (342,447)   (342,447)




Exchange                 -          -         -       -           -    (10,931)  
      -    (10,931)
differences on                                                                   


Total                    -          -         -       -           -    (10,931) 
  (342,447)   (353,378)
Income for the                                                                   


with Owners                                                                      


Proceeds from      338,792  1,524,567         -       -           -           -  
      -   1,863,359
share issues                                                                     


Share issue              -  (653,673)         -       -           -           -  
      -   (653,673)


Movements in the         -          -   108,160       -           -           -  
      -     108,160


Total              338,792    870,894   108,160       -           -           -  
      -   1,317,846
with Owners                                                                      


Balance at         926,128  2,218,877 1,975,950  66,603 (2,250,672)   (126,624) 
  (502,718)   2,307,544
31 December 2011                                                                 


Balance at         926,128  2,218,877 1,975,950  66,603 (2,250,672)   (126,624) 
  (502,718)   2,307,544 
1 January 2012                                                                   




Loss for the             -          -         -       -           -           - 
(1,075,178) (1,075,178)




Exchange                 -          -         -       -           -     173,924  
      -     173,924
differences on                                                                   


Total                    -          -         -       -           -     173,924 
(1,075,178)   (901,254)
Income for the                                                                   


Transaction with                                                                 


Proceeds from      464,116 10,664,377         -       -           -           -  
      -  11,128,493




Share issue              -  (994,537)         -       -           -           -  
      -   (994,537)


Movements in the         -          -         -       -           -           -  
      -           -


Total              464,116  9,669,840         -       -           -           -  
      -  10,133,956
with Owners                                                                      


Balance at       1,390,244 11,888,717 1,975,950  66,603 (2,250,672)      47,300 
(1,577,896)  11,540,246
31 December 2012                                                                 


CONSOLIDATED Statement of Cash Flows

Year ended 31 December 2012
                                                   Year ended      Year ended
                                                  31 December     31 December
                                        Note             2012            2011
                                                            $               $

Cash Flows from Operating Activities                                          
Loss before tax                                   (1,075,178)       (342,447) 
Impairment of mineral leases                          227,858         224,892 
Depreciation                                          222,033         101,284 
Foreign exchange                                      158,351           (781) 
(Increase)/Decrease in trade and other              (136,925)          19,619
(Decrease)/Increase in trade and other               (19,388)         147,892
Net Cash generated (used in)/from                   (623,249)         150,459
Operating Activities                                                          
Cash Flows from Investing Activities                                          
Purchases of intangible assets           11       (5,691,408)       (364,998) 
Purchases of property, plant and         10       (2,407,158)       (213,593)
Net Cash generated used in Investing              (8,098,566)       (578,591)
Cash Flows from Financing Activities                                          
Proceeds from issue of ordinary shares             11,128,493       1,863,359 
Issue costs                                         (994,537)       (653,673) 
Net Cash generated from Financing                  10,133,956       1,209,686
Net Increase in Cash and Cash                       1,412,141         781,554
Movement in Cash and Cash Equivalents                                         
Cash and cash equivalents at the                      874,037          97,523
beginning of the period                                                       
Exchange gain/(loss) on cash and cash                   6,973         (5,040)
Net increase in cash and cash                       1,412,141         781,554
Cash and Cash Equivalents at the End of             2,293,151         874,037
the Period                                                                    
The condensed Financial Information of Magnolia Petroleum plc ("the Company")
consists of the following companies; Magnolia Petroleum plc and Magnolia
Petroleum Inc. (together "the Group"). 
The Company is a public limited company which is listed on the London Stock
Exchange AIM market and incorporated and domiciled in England and Wales. Its
registered office address is The Fitzpatrick Building, 188-194 York Way,
London, N7 9AS. 
The condensed Financial Information should be read and have been prepared using
accounting policies consistent with the annual Financial Statements for the
year ended 31 December 2011, which have been prepared in accordance
International Financial Reporting Standards (IFRSs) as adopted by the EU and
IFRIC interpretations and the parts of the Companies Act 2006 applicable to
companies reporting under IFRS. The Directors anticipate that the auditor's
report, to be issued with the Group's statutory accounts for the year ended 31
December 2012 will be unqualified. 
The comparatives for the year ended 31 December 2011 are derived from the
statutory accounts for the year ended 31 December 2011. These statutory
accounts, which contained an unqualified audit report under Section 495 of the
Companies Act 2006 and which did not make any statement under Section 498 of
the Companies Act 2006, have been delivered to the register of companies in
accordance with Section 441 of the Companies Act 2006. 
The Company will announce its full audited Financial Statements and
accompanying notes later in May 2013. 
* Going concern 
The Directors, having made appropriate enquiries, consider that adequate
resources exist for the Group to continue in operational existence for the
foreseeable future and that, therefore, it is appropriate to adopt the going
concern basis in preparing the condensed Financial Information for the year
ended 31 December 2012. 
* Risks and uncertainties 
The Board continuously assesses and monitors the key risks of the business. The
key risks that could affect the Group have not substantially changed from those
set out in the Group's 2011 Annual Report and Financial Statements, a copy of
which is available on the Group's website: 
* Critical accounting estimates and judgements 
The preparation of the condensed Financial Information requires management to
make estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the end of
the reporting period. Significant items subject to such estimates are set out
in note 4 of the Group's Annual Report and Financial Statements. The nature and
amounts of such estimates have not changed significantly during the period. 
* Significant accounting policies 
The condensed Financial Information has been prepared under the historical cost
The same accounting policies, presentation and methods of computation have been
followed in these condensed Financial Information as were applied in the
preparation of the Group's Financial Information for the year ended 31 December
* segmental information 
The Group operates in two geographical areas, the United Kingdom and the United
States of America. Activities in the UK are mainly administrative in nature
whilst the activities in the USA relate to exploration and production from oil
and gas wells. The reports reviewed by the Board of Directors that are used to
make strategic decisions are based on these geographical segments. 

                                       Year ended 31 December 2012           
                                    USA          UK Intra-segment       Total
                                      $           $             $           $

Revenue from external           709,375           -             -     709,395
Gross profit                    469,222           -             -     469,222 
Operating loss                (739,574)   (334,035)             - (1,073,609) 
Impairment - expired leases     227,858           -             -     227,858 
Depreciation                    222,033           -             -     222,033 
Capital expenditure           8,098,564           -             -   8,098,564 
Total assets                 11,646,146  14,696,234  (14,574,225)  11,768,155 
Total liabilities            11,347,265      44,975  (10,791,702)     600,538 

                                      Year ended 31 December 2011           
                                   USA         UK  Intra-segment       Total
                                     $          $              $           $

Revenue from external          241,038          -              -     241,038
Gross profit                    95,673          -              -      95,673 
Operating loss               (261,873)   (80,574)              -   (342,447) 
Impairment - expired leases    224,892          -              -     224,892 
Depreciation                   101,284          -              -     101,284 
Capital expenditure            578,593          -              -     578,593 
Total assets                 2,314,906  4,867,652    (4,620,820)   2,561,738 
Total liabilities            1,275,042    340,280    (1,004,912)     610,410 
A reconciliation of the operating loss to loss before taxation is provided as

                                                      Year ended   Year ended
                                                     31 December  31 December
                                                            2012         2011
                                                               $            $

Operating loss for reportable segments               (1,073,609)    (342,447) 
Finance income                                                 -            - 
Finance costs                                            (1,569)            - 
Loss before tax                                      (1,075,178)    (342,447) 
The amounts provided to the Board of Directors with respect to total assets are
measured in a manner consistent with that of the Financial Statements. These
assets are allocated based on the operations of the segment and physical
location of the asset. Goodwill recognised by the Group is managed centrally
and is not considered to be a segmental asset. 
Reportable segments' assets are reconciled to total assets as follows: 

                                                Year ended    Year ended     
                                                31 December   31 December    
                                                2012          2011           
                                                $             $              

Segmental assets for reportable segments        11,768,155    2,561,738       
Unallocated: goodwill                           372,629       356,216         
Total assets per balance sheet                  12,140,784    2,917,954       

                                  Year ended    Year ended              
                             31 December   31 December              
                                    2012          2011              

Group                                                $             $ 
Directors' fees                                340,423         8,186 
Consulting fees                                292,418        24,350 
Legal, professional and compliance costs       127,431        90,762 
Difference due to foreign exchange             263,774      (10,988) 
Depreciation                                   145,943        51,113 
Other costs                                    144,984        49,805 
Total administrative expenses                1,314,973       213,228 
* Loss per Share 
The calculation of the basic loss per share of 0.16 cents per share (31
December 2011 loss per share: 0.09 cents) is based on the loss attributable to
ordinary shareholders of $1,075,178 (31 December 2011 loss: $342,447) and on
the weighted average number of ordinary shares of 691,240,908 (31 December
2011: 363,155,502) in issue during the period. 
In accordance with IAS 33, no diluted earnings per share are presented as the
effect on the exercise of share options would be to decrease the loss per
Details of share options and warrants that could potentially dilute earnings
per share in future periods are set out in Note16. 
* Property, plant and equipment 

                               Producing     Drilling       Motor         Total
                              properties    costs and    vehicles              
                                            equipment  and office             $
                                       $                equipment              

At 1 January 2011                323,890      398,606           -       722,496 
Additions                              -      213,593           -       213,593 
Transferred from intangible      133,758            -           -       133,758
At 31 December 2011              457,648      612,199           -     1,069,847 
Additions                        405,015    1,986,889      15,254     2,407,158 
Transferred from intangible       35,104      364,998           -       400,102
                            (14,000)            -           -      (14,000)
At 31 December 2012              883,767    2,964,086      15,254     3,863,107 
At 1 January 2011                 47,787       58,801           -       106,588 
Charge for the period             50,171       51,113           -       101,284 
At 31 December 2011               97,958      109,914           -       207,872 
Charge for the period             39,918      179,266       2,850       222,033 
Impairment                       (4,667)            -           -       (4,667) 
At 31 December 2012              133,208      289,180       2,850       425,238 
Net Book Amount                                                                 
At 1 January 2011                276,103      339,805                   615,908 
At 31 December 2011              359,690      502,285           -       861,975 
At 31 December 2012              750,559    2,674,906      12,404     3,437,869 
Transfers from intangible assets represent licence areas where production has
commenced together with drilling costs associated with these licences. 
Depreciation expense of $39,918 (2011: $50,171) has been charged in cost of
sales and $182,115 (2011: $51,113) in administrative expenses. 
* intangible assets 


Cost                               Goodwill    Drilling     Mineral       Total
                                          $       costs      leases           $
                                                      $           $            

At 1 January 2011                   360,918           -     749,070   1,109,988 
Additions                                 -     364,998           -     364,998 
Transferred to property, plant            -           -   (133,758)   (133,758)
and equipment                                                                   
Exchange movements                  (4,702)           -           -     (4,702) 
Impairment                                -           -   (224,892)   (224,892) 
At 31 December 2011                 356,216     364,998     390,420   1,111,634 
Additions                                 -     710,727   4,980,681   5,691,408 
Transferred to property, plant            -   (364,998)    (35,104)   (400,102)
and equipment                                                                   
Exchange movements                   16,413           -           -      16,413 
Impairment                                -           -   (218,525)   (218,525) 
As at 31 December 2012              372,629     710,727   5,117,472   6,200,828 
At 1 January 2011, 31 December   -          -           -           -          
And 31 December 2012                                                            
Net Book Amount                                                                 
At 1 January 2011                   360,918           -     749,070   1,109,988 
At 31 December 2011                 356,216     364,998     390,420   1,111,634 
At 31 December 2012                 372,629     710,727   5,117,472   6,200,828 
Impairment review 
Drilling costs and mineral leases represent acquired intangible assets with an
indefinite useful life and are tested annually for impairment. As disclosed
within Accounting Policies, expenditure incurred on the acquisition of mineral
leases is capitalised within intangible assets until such time as the
exploration phase is complete or commercial reserves have been discovered.
Exploration expenditure including drilling costs are capitalised on a well by
well basis if the results indicate the existence of a commercially viable level
of reserves. 
The Directors have undertaken a review to assess whether circumstances exist
which could indicate the existence of impairment as follows: 
* The Group no longer has title to the mineral lease. 

      * A decision has been taken by the Board to discontinue exploration due to
    the absence of a commercial level of reserves.
      * Sufficient data exists to indicate that the costs incurred will not be
    fully recovered from future development and participation.

Following their assessment the Directors recognised an impairment charge to the
cost of mineral leases and producing properties of $218,525 (2011 - $224,892)
in respect of expired mineral leases. 
The Directors believe that no impairment is necessary on the carrying value of
goodwill. Goodwill arose on the reverse acquisition of Magnolia Petroleum Plc.
The goodwill represents the value of the parent company being an AIM quoted
entity to Magnolia Petroleum Inc. 
                             * * ENDS * *                                   
For further information on Magnolia Petroleum Plc visit or contact the following: 
Steven Snead               Magnolia Petroleum Plc         +01 918 449 8750   
Rita Whittington           Magnolia Petroleum Plc         +01 918 449 8750   
Jo Turner / James Caithie  Cairn Financial Advisers LLP   +44 20 7148 7900   
John Howes / Alice Lane /  Northland Capital Partners     +44 20 7796 8800  
Luke Cairns                Limited                                           
Lottie Brocklehurst        St Brides Media and Finance    +44 20 7236 1177   
Frank Buhagiar             St Brides Media and Finance    +44 20 7236 1177   
Magnolia Petroleum Plc is an AIM quoted, US focused, oil and gas exploration
and production company.  Its portfolio includes interests in 104 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                                                                 104 
Being Drilled / Completed                                                  12 
Elected to participate / waiting to                                        18
TOTAL                                                                     134 
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. 
-0- Apr/23/2013 06:00 GMT
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