Magnolia Petroleum Plc Gilchrist Well Update, Oklahoma

 
TIDMMAGP 
 
Magnolia Petroleum Plc / Index: AIM / Epic: MAGP / Sector: Oil & Gas 
 
3 November 2017 
 
                            Magnolia Petroleum plc 
 
                         ('Magnolia' or 'the Company') 
 
                        Gilchrist Well Update, Oklahoma 
 
Magnolia Petroleum plc, the AIM quoted US focused oil and gas exploration and 
production company is pleased to announce an update on the Gilchrist 2016 1-36H 
well ('Gilchrist' or 'the Well') in Oklahoma in which Magnolia has a carried 
working interest through its agreement with Western Energy Development LLC 
('WED').  The Gilchrist Well is currently being completed by the operator 
SandRidge Energy, Inc and is flowing back from the targeted Mississippi Lime 
formation in Oklahoma. 
 
Based on highly encouraging results being seen from an offset well that has 
been drilled directly to the north of the Gilchrist Well and which is projected 
to produce over 250 MBO and 2.5 BCF, Magnolia and WED have elected to take 
their proportionate share of any interests in the lease that become available 
as a result of the non-participation of leaseholders in a forced pooling order. 
 This is expected to see WED and Magnolia increase their combined 1.57% Working 
Interest ('WI') in the spacing unit on which the Gilchrist Well is located and 
where additional increased density wells are expected to be drilled in the 
future. Under the terms of its agreement with WED, Magnolia is carried for 25% 
of the 1.57% WI in the Gilchrist Well at no cost. 
 
As announced on 4 July 2017, Magnolia entered into an exclusive agreement with 
WED to invest, on behalf of WED, up to US$18,500,000 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 of a spacing unit. The Gilchrist Well forms 
part of a successful pilot programme under which Magnolia invested US$500,000 
on behalf of WED into qualifying oil and gas properties in Oklahoma.  To date, 
this pilot programme has generated a rate of return of 100%; a return on 
investment of 3.26 times; US$75,500 in value for Magnolia (lease bonus plus a 
carried interest for 25% in the first well, within each spacing unit); and 
US$127,982 uplift in the PV9 value of Magnolia's reserves. 
 
WED is an affiliate of Western Energy Regional Center LLC, a United States 
Citizenship and Immigration Services ('USCIS')-designated Regional Center which 
can accept investment in job-creating projects from foreign nationals through 
the Immigrant Investor Program.  WED has informed the Company that it expects 
the first tranche of US$500,000 of capital to be available for investment under 
the Immigrant Investor Program in Q4 2017 following amendments to the terms of 
the Program. 
 
Magnolia CEO, Rita Whittington said, "The Gilchrist Well provides a readymade 
example of how our agreement with WED provides Magnolia with risk free exposure 
to new leases in Oklahoma, which we can then look to increase if additional 
interests become available and if results of nearby wells drilled to the same 
formations are highly positive.  Following the initiation of a forced pooling 
order by the operator and excellent production rates being achieved by a direct 
offset well, we are set to increase our interest in the Gilchrist Well and any 
subsequent wells that are to be drilled on the same spacing unit.  With this in 
mind, we are eager to receive the IP rates for Gilchrist from SandRidge and I 
look forward to providing these to the market as and when they become 
available." 
 
                                 * * 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 / Liam Murray    Cairn Financial Advisers     [phone] 
                           LLP 
 
Nick Beeler                Cornhill Capital Limited     [phone] 
 
Lottie Wadham              St Brides Partners Ltd       [phone] 
 
Frank Buhagiar             St Brides Partners           [phone] 
                           Ltd 
 
 
 
END 
 

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November 03, 2017 03:00 ET (07:00 GMT)