Operations Update North Dakota
07/12/2011 7:00am
UK Regulatory
TIDMMAGP
Magnolia Petroleum Plc / Index: AIM / Epic: MAGP / Sector: Oil & Gas
7 December 2011
Magnolia Petroleum Plc (`Magnolia' or `the Company')
Operations Update in the Highly Productive Bakken/Three Forks Sanish
hydrocarbon formations, North Dakota
Magnolia Petroleum Plc, the AIM listed US focussed oil and gas exploration and
production company, is pleased to announce a positive update on its operations
in North Dakota where the Company has a portfolio of interests in the
potentially game-changing and highly productive Bakken/Three Forks Sanish
hydrocarbon formations.
Overview
* Successful drilling of the two Skunk Creek Wells located in the Bakken/
Three Forks Sanish formations, Dunn County, North Dakota
*
+ Magnolia participated with a 0.59% interest in the drilling of each
well with Kodiak Exploration
+ Highly encouraging initial shows and subsequent application made to
drill an additional three Bakken wells and three Three Forks Sanish
wells within the same 1,280 acre spacing unit
+ On completion of these further six wells, a substantial increase in
overall production attributable to Magnolia is expected
+ Completion of both wells expected to commence by end of 2011 - between
23 and 24 multi stage frac techniques are to be performed on the two
wells
* Stocke 1-4-9H well, located in McKenzie County, North Dakota, now reached
total depth, awaiting completion
*
+ Magnolia participating with Hunt Oil Company with a 3.17% working
interest
Magnolia Petroleum COO, Rita Whittington said, "We are delighted to be able to
provide our shareholders with such a positive update on our operations so close
to our listing on AIM last month. The successful drilling of the two wells at
Skunk Creek and reaching total depth in the Stocke well provides us with huge
encouragement as we continue to participate in drilling in the highly
productive Bakken/Three Forks Sanish formations. We are particularly excited
about the Skunk Creek Three Forks Sanish well, as Moyes & Co. our Competent
Person singled out this well as a trigger for a significant shift in Magnolia's
reserve categories once the well has been successfully drilled and is
producing.
"Modern technology such as multi-stage frac techniques used in the completion
of horizontal wells has increased production tremendously in non-conventional
oil and gas plays. Magnolia's participation in the Drone well, completed as a
30 stage frac, yielded an initial production of 1,199 barrels of oil per day,
and nearly trebled Magnolia's net production interests to approximately 20
barrels per day. We are extremely pleased with the Company's participation in
successful drilling programmes to date and our highly experienced Board
anticipates the Stocke and Skunk Creek wells will prove to be highly productive
and will add to our outstanding success rate to date. With this in mind, I very
much look forward to updating shareholders on our progress."
Detailed Information
Reports have now been received from the operator in respect to the Skunk Creek
Wells, located in Dunn County, North Dakota. Magnolia participated with a 0.59%
interest in the drilling of each of these two wells with Kodiak Exploration.
The primary targets for these wells were the Three Forks Sanish and the Bakken
Formations. Both wells have successfully been drilled and are awaiting
completion. According to the operator, they are highly encouraged by the shows
and have applied to the North Dakota Industrial Commission to drill an
additional three Bakken wells and three Three Forks Sanish wells within the
same spacing unit. Multi-stage frac techniques between 23 and 24 stages are to
be performed on these wells. This information is in line with Magnolia's
Competent Person's Report (announced 25 October 2011 and contained, in full in
the AIM admission document) which indicates that the Bakken is being infill
drilled to four wells per 1,280 acres spacing and the Three Forks Sanish is
also starting to be developed in the area at four wells per 1,280 acre spacing
unit. This infill drilling would allow for an additional 78 Bakken and 107
Three Forks Sanish locations for a total of 108 wells in the Bakken and 108
wells in the Three Forks Sanish. Once permission is obtained and these initial
six wells are drilled, the Company expects that its overall production
interests will increase substantially.
In addition, Magnolia participated with Hunt Oil Company in the drilling of the
Stocke 1-4-9H well, located in McKenzie County, North Dakota. The Stocke well
reached total depth on 2 December 2011 and is awaiting completion. This well
will have a 21 stage frac treatment. Magnolia has a 3.17% working interest in
this well, which is nearly two and a half times larger than Magnolia's 1.34%
working interest in the Drone well which yielded total initial production of
1,199 barrels of oil per day (as announced on 4 November 2011).
Completion on the Skunk Creek and Stocke wells described above are expected to
start by year-end.
* * 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 Daniel Stewart & Company Plc +44 (0) 20 7776 6550
Charles Vaughan Northland Capital Partners +44 (0) 20 7796 8800
Limited
Hugo de Salis St Brides Media and Finance +44 (0) 20 7236 1177
Ltd
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
END