Magnolia Petroleum Plc First USD500,000 Received under USD18.5M Agreement

 
TIDMMAGP 
 
Magnolia Petroleum Plc / Index: AIM / Epic: MAGP / Sector: Oil & Gas 
 
11 December 2017 
 
             Magnolia Petroleum plc ('Magnolia' or 'the Company') 
 
 First US$500,000 Received under US$18.5 million Capital Management Agreement 
 
Magnolia Petroleum plc, the AIM quoted US focused oil and gas exploration and 
production company, is pleased to announce Western Energy Development LLC 
('WED') has received the first US$500,000 tranche of capital as part of its 
exclusive US$18.5 million capital management agreement with Magnolia.  Magnolia 
will invest these funds into oil and gas properties in Oklahoma that qualify 
under the US Immigrant Investor Programme and in return will earn fees and 
equity in new wells and leases. 
 
As announced on 4 July 2017, Magnolia entered into an exclusive agreement with 
WED to invest, on behalf of WED, up to US$18.5 million into the Oklahoma oil 
and gas market. In return Magnolia receives cash fees as well as a 25% carried 
working interest in the first well in each spacing unit. A pilot programme in 
which Magnolia invested US$500,000 on behalf of WED into qualifying oil and gas 
properties in Oklahoma, generated US$75,500 in value for Magnolia in terms of 
lease bonus and the carried interest for 25% in the first well within each 
spacing unit; plus an additional US$127,982 uplift in the PV9 value of 
Magnolia's reserves.  To date, the pilot programme has generated a rate of 
return of 100% and a return on investment of 3.26 times. 
 
Magnolia CEO, Rita Whittington said, "The first US$500,000 under the US$18.5 
million agreement with WED represents a major milestone for Magnolia.  Thanks 
to the quantum of funds involved, the fees generated, and the 25% carried 
interest in new wells, the WED agreement promises to accelerate our strategy 
which is to generate value through the acquisition and development of leases in 
productive US onshore formations alongside established operators such as Devon 
Energy and Continental Resources.  The management fees will complement the 
revenues generated by our portfolio of interests in over 150 producing wells; 
while our carried interest in new wells will provide de-risked, nil cost entry 
into attractive leases." 
 
Western Energy Development LLC CEO, Greg Neher said, "We expect today's 
US$500,000 investment will be the first of many and we look forward to working 
closely with the Magnolia team with a view to replicating the success of the 
pilot programme on a much larger scale.  We feel confident in our near-term 
competitive position because amendments to the EB-5 programme currently being 
considered by the US Congress have the potential to accelerate our growth. 
 Specifically, two changes contemplated in proposed bills: firstly a 
dramatically shorter visa issuance wait for applicants that invest in rural 
projects such as WED's compared to urban real estate projects; and secondly an 
almost doubling in the EB-5 minimum investment amount - meaning we require 
fewer investors to reach or exceed our targets." 
 
Western Energy Development LLC 
 
WED is an affiliate of Western Energy Regional Center LLC, a United States 
Citizenship and Immigration Services - designated Regional Centre which can 
accept investment in job-creating projects from foreign nationals through the 
Immigrant Investor Programme. 
 
                                 * * 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     [phone] 
                           LLP 
 
Nick Beeler                Cornhill Capital Limited     [phone] 
 
Lottie Wadham              St Brides Partners Ltd       [phone] 
 
Frank Buhagiar             St Brides Partners Ltd       [phone] 
 
 
 
 
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(END) Dow Jones Newswires

December 11, 2017 02:00 ET (07:00 GMT)