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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Magnolia Pet | LSE:MAGP | London | Ordinary Share | GB00B63QSF76 | ORD SHS 0.1P |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 0.30 | 0.20 | 0.40 | 0.00 | 01:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| 0 | 0 | N/A | 0 |
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TIDMMAGP
Magnolia Petroleum Plc / Index: AIM / Epic: MAGP / Sector: Oil & Gas
28 September 2016
Magnolia Petroleum Plc ('Magnolia' or 'the Company')
Half-yearly Results
Magnolia Petroleum Plc, the AIM quoted US focused oil and gas exploration and
production company, announces its half-yearly results for the six month period
ended 30 June 2016.
Operational Overview
* 151 producing wells (H1 2015: 195) in proven US onshore formations
* Active management of portfolio during H1 2016 saw:
+ Divestment of 67 producing wells with little or no economic value
+ 13 new wells commence production
* Elected to participate in three new wells - 14 wells currently at various
stages of development
* Total net proved and developed producing reserves ('PDP') of 133.31 Mbbl of
oil and condensate and 580.67 MMcf gas as at 1 July 2016 (1 Jan 2016:
138.63 Mbbl and 352.38 MMcf)
* Value of net PDP as at 1 July 2016 increased to US$3,445,180 (1 Jan 2016:
US$2,917,390) - provides significant asset backing to current market
valuation
* 31% reduction in corporate overheads and operating costs achieved as part
of management's focus on realigning the business to the lower oil price
environment
Financial Overview
* H1 2016 revenues of US$633,585 (H1 2015: US$1,083,998)
* Half year EBITDA (after removing gain on foreign exchange) of US$59,416
compared to US$(560,919) during six months to 30 June 2015 (after removing
loss on foreign exchange)
* Tangible assets of US$7,217,415 during six months to 30 June 2016
* Borrowing base limit of US$6 million Credit Facility adjusted up to
US$1,894,849 from US$1,604,565 to reflect positive effect of slightly
higher oil prices on the value of Magnolia's net PDP reserves
+ US$400,000 repayment and agreement to make amortised payments over a 5
year period on the outstanding amount which, based on 1 July 2016
reserve estimates, stands at US$840,764
* GBP250,000 raised via a placing to fund drilling commitments
* Appointment of Leonard Wallace, a highly experienced oil and gas engineer,
as a non-executive director
Magnolia CEO, Steven Snead said, "Against such a challenging market backdrop,
to have generated underlying earnings of US$59,416 for the first half having
reported a loss of US$560,919 in H1 2015, is testament to the excellent
progress we have made in realigning the business to the current low oil price
environment. This has seen a 31% reduction in our cost base; the divestment of
interests in 67 non-economic wells; the repayment of a large portion of our
reserves based lending facility; and our focus on participating in only those
wells which have attractive economics at today's oil and gas prices.
"Combined with proven developed reserves of 133.31 Mbbl of oil and condensate
and 580.67 MMcf gas as at 1 July 2016, which have been assigned a value of
US$3,445,180, Magnolia is an asset backed, low cost cash flow generative
business with a diversified portfolio of 151 producing wells. As a result we
are confident that when a sustainable recovery in the oil price takes hold, we
are well placed to take advantage of opportunities which may present themselves
and in the process kick-start our strategy to build a leading US onshore
focused oil and gas company."
Chief Executive's Statement
November 2016 will mark the fifth anniversary of Magnolia Petroleum's Admission
to London's AIM market. In 2011 we came to AIM with a strategy to acquire
leases in proven US onshore formations and participate in drilling new wells
alongside established operators, such as Chesapeake Energy, Continental
Resources, Marathon, and Statoil. Our objective was, and continues to be, to
prove up the reserves on our acreage and in the process generate value for
shareholders.
At the time of our IPO our portfolio of 64 producing wells produced seven
barrels of oil equivalent per day and had combined Proved Developed Producing
('PDP') reserves of 24.2 Mbbl Oil & Condensate and 146.5MMcf of Natural Gas.
Five years on and our portfolio of wells has grown to 151 with PDP reserves of
133.31 Mbbl of oil and condensate and 580.67 MMcf gas as at 1 July 2016.
The fivefold increase in Magnolia's PDPs since November 2011 does not tell the
whole story. Having traded around the US$100 per barrel level during our
first three years on AIM, WTI has since fallen to less than half this level.
Such a sharp retrenchment in the oil price was always going to leave its mark
on our top line performance. Lower oil prices have both a direct and an
indirect effect on our revenues: direct in terms of Magnolia receiving a
reduced price for its product; and indirect as a result of operators in the US
onshore space either shutting in uneconomic wells or drastically curtailing
drilling activity to rein in capital spending and preserve cash. While larger
companies might consider taking out expensive hedging contracts, there is
little a company of Magnolia's size can do to cushion the hit to revenues
caused by lower oil prices. On the positive side, as Magnolia does not have
the sizeable overheads and financial commitments many of its peers are saddled
with, we are able to take steps to minimise the impact lower revenues have on
our bottom line. This is what we have done.
In anticipation of a substantially lower revenue profile, we swiftly realigned
both our costs and our assets to match the scaled back level of activity seen
across the US onshore sector. A reduction in all outgoings was targeted and
subsequently achieved: at the time of our full year results in June 2016 we
reported a 31% reduction in operating costs compared to those incurred in the
previous year; our policy to only participate in drilling those wells which
offer attractive returns has substantially reduced our capital commitments;
while a US$400,000 repayment of our credit facility during the period has
resulted in the Company's financing costs being reduced.
While our short term focus has been to ensure our cost base matches activity on
the ground, our objective to build a portfolio of proven reserves and generate
value for shareholders has not been cast aside. It is with this overriding
objective very much in mind that the first half divestment of 67 non-commercial
wells with little or no economic value ought to be seen. It not only leaves us
with a portfolio of 151 producing wells, but it also creates administrative
capacity to replace uneconomic wells with more productive ones, such as the 13
which commenced production during the first half. These include two Chesapeake
Energy operated wells, Gray 7-27-12 1H and Gray 7-27-12 2H, which are producing
from the Mississippi Lime formation in Oklahoma. As Magnolia's average
interest in each of the 67 divested wells was below the portfolio average,
there has been no material effect on the Company's overall production and
financial performance during the half year period.
It is not just the quality of our portfolio of wells and leases that we have
been upgrading over the course of the first half of 2016. With the appointment
of Leonard Wallace as a non-executive director we have also upgraded our
Board. Leonard's appointment has added the expertise and experience of a
specialist drilling engineer, well and rig operator to our existing Board's
collective skillset. We are confident that following Leonard's appointment we
now have a Board in place with the right mix of industry experience to take
Magnolia forward.
Financial Review
During the six months to 30 June 2016, net production generated revenues of
US$633,585, compared to US$1,083,998 the previous year. The sharp fall in the
price of oil is responsible for the drop in revenues, both directly by lowering
sale prices achieved and indirectly through operators shutting in wells to
curtail production. The Company has taken steps to reduce overheads to help
accommodate the revenue decline: administrative costs totalled US$374,371 as at
30 June 2016 compared to US$518,425 for the six months to 30 June 2015. EBITDA
(after removing gain on foreign exchange) totalled US59,416 compared to US$
(560,919) in H1 2015 (after removing loss on foreign exchange).
Tangible assets as at end June 2016 stood at US$7,217,415, while intangible
assets (new leases and wells that are drilling but not yet completed) stood at
US$1,675,999.
Operating Expenses during the period totalled US$613,915, US$490,257 of this
total is a non-cash item covering depreciation costs. A further US$317,026 was
due to Lease Operating Expenses with US$(278,772) being reduced on two wells
that were previously included but removed from Magnolia's portfolio. A further
US$85,404 was due to other operating expenses.
During the period under review, GBP250,000 was raised via a placing to fund
existing drilling commitments alongside a number of leading operators including
Chesapeake Energy, Continental Resources and BP America. As a result,
250,000,000 new ordinary shares in the Company were issued.
Outlook
The focus of the Board and management team during the period has been to ensure
Magnolia navigates the lower oil price environment from a position of
strength. However we have also been working hard to ensure that when oil
prices recover and sentiment returns, we are able to hit the ground running.
We have disposed of uneconomic wells; high graded our leasehold position; and
further bolstered our Board with the appointment of a highly experienced oil
and gas engineer. Despite challenging markets, I am confident that Magnolia's
future on AIM will see another step-up in our production and proven reserves,
as we deliver on our vision to build a leading US onshore focused oil and gas
company and in the process generate value for our shareholders.
Finally, I would like to thank the Board, management team and all our advisers
for their hard work over the last six months and also to our shareholders for
their continued support.
Steven Snead
Chief Executive Officer
Chief Operations Officer's Report
The Bakken / Three Forks Sanish Formations, North Dakota
Magnolia holds interests in 41 wells which are producing from the Bakken and
Three Forks Sanish ('TFS') formations in North Dakota. The Bakken is a
reservoir which is estimated to hold 3.65 billion barrels of undiscovered,
technically recoverable oil (2013 US Geological Survey). The TFS is a separate
reservoir lying directly below the Bakken, with an estimated 3.73 billion
barrels of recoverable oil (2013 US Geological Survey).
As at 1 July 2016, Moyes & Co. ('Moyes') estimated Magnolia's Bakken Proven
Developed Reserves ('PDP') at 44,970 barrels of oil and condensate and 22.81
MMcf of natural gas to which Moyes assigned a value of US$813,050. Meanwhile,
Magnolia's PDP ("proved") reserves in the TFS formation were estimated at
13,550 barrels of oil and condensate and 7.96MMcf of natural gas which Moyes
has assigned a value of US$256,920.
Mississippi Lime Formation, Oklahoma
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. In the first half of 2016, the following six wells in which
Magnolia holds interests in commenced production from the Mississippi:
* Gray 7-27-12 1H (1.86%): 439.83boepd
* Gray 7-27-12 2H (1.86%): 903 boepd
* Wilber (1.22%): 960.83 boepd
* Maxine (0.40%): 1030 boepd
* Billy Rae 1 (0.54%): 365.5 boepd
* Double R 9 (0.44%): 216.33 boepd
Magnolia holds interests in 41 wells which are producing from the Mississippi
Lime. In the updated Reserves Report dated 1 July 2016, Moyes estimated the
Group's Mississippi Lime PDP reserves at 57,170 barrels of oil and condensate
and 169.36 MMcf of natural gas with a value of US$1,411,410.
Woodford Formation, Oklahoma
The Woodford lies below and is the source rock to the Mississippi Lime
formation in Oklahoma. As a result much of Magnolia's leases in Oklahoma are
prospective for both the Woodford and the Mississippi Lime. Like the Bakken,
the Woodford formation in Oklahoma is an established reservoir that has been
reopened following the introduction of horizontal drilling and stimulation
technology.
In the first half of 2016, the following seven wells in which Magnolia holds
interests in commenced production from the Woodford:
* Billy Rae 2 (0.54%): 73.33 boepd
* Moore (0.22%): 902.83 boepd
* Baxendale 3H-1X (0.03%): 1217.83 boepd
* Baxendale 2H-1X (0.03%): 1327.83 boepd
* Baxendale 4H-1X (0.03%): 1448.50 boepd
* Baxendale 5H-1X (0.03%): 2493.66 boepd
* Baxendale 6H-1X (0.03%): 2099.66 boepd
Magnolia holds interests in 51 wells which are producing from the Woodford
formation in Oklahoma. In the updated Reserves Report dated 1 July 2016, Moyes
estimated the Group's Woodford PDP reserves at 13,170 barrels of oil and
condensate and 367.36 MMcf of natural gas with a value of US$876,800.
Other Formations in Oklahoma
Magnolia holds interests in 18 wells which are producing from other formations
in Oklahoma, including the Hunton, Cleveland, Wilcox, Wayside, Simpson
Dolomite, Springer and Viola reservoirs.
In the updated Reserves Report dated 1 July 2016, Moyes estimated the Group's
PDP reserves in these other formations in Oklahoma at 4,450 barrels of oil and
condensate and 13.18 MMcf of natural gas with a value of US$87,000.
Summary
During the period, 13 new wells in proven US onshore formations in which
Magnolia has an interest commenced production. Together with the divestment of
67 uneconomic wells the total number of producing wells within our portfolio
currently stands at 151. Revenues generated from these wells are reinvested
into acquiring leases and drilling new wells to increase the Company's
production and reserves profile. I look forward to providing further updates
on our progress over the course of the second half of the year.
Rita Whittington
Chief Operations Officer
Glossary
'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
'bopd' means barrels of oil per day, Abbreviation for barrels of oil per day, a
common unit of measurement for volume of crude oil. The volume of a barrel is
equivalent to 42 US gallons
'IPR' means initial production rates
'NRI' means net revenue interest
'WI' means working interest
Condensed Consolidated Statement of Comprehensive Income
6 months ended 30 June 2016
6 months to 6 months to
30 June 2016 30 June 2015
Unaudited Unaudited
Note US $ US $
Continuing Operations
Revenue 633,585 1,083,998
Operating expenses (613,915) (1,389,578)
______ ______
Gross Profit/(Loss) 19,670 (305,580)
Administrative expenses (374,371) (518,425)
Impairment of mineral leases (8,334) (379,354)
(Loss)/profit on disposal of - -
mineral leases
Gain/(loss) on foreign exchange 1,974,513 (144,779)
______ ______
Operating Profit/(Loss) 1,611,478 (1,348,138)
Finance income - 139
Finance costs (67,806) (55,600)
______ ______
Profit/(Loss) from ordinary 1,543,672 (1,403,599)
activities before tax
Taxation - -
______ ______
Profit/(Loss) for the period
attributable to the equity holders 1,543,672 (1,403,599)
of the Company ______ ______
Other comprehensive income:
Items that may be reclassified
subsequently to profit or loss
Currency translation differences (1,355,904) 145,163
______ ______
Total comprehensive income for the
period attributable to the equity
holders of the Company 187,768 (1,258,436)
______ ______
Earnings per share attributable to
the equity holders of the Company
(expressed in cents per share) 4
- basic 0.121 (0.133)
- diluted 0.121 (0.133)
Condensed Consolidated Balance Sheet
As at 30 June 2016
Notes 30 June 31 December
2016 2015
Unaudited Audited
ASSETS US $ US $
Non-Current Assets
Property, plant and equipment 5 7,217,415 11,511,266
Intangible assets 6 1,675,999 6,187,408
________ ________
Total Non Current Assets 8,893,414 17,698,674
Current Assets
Trade and other receivables 401,307 600,911
Cash and cash equivalents 589,603 1,851,232
________ ________
Total Current Assets 990,910 2,452,143
________ ________
Total Assets 9,884,324 20,150,817
________ ________
EQUITY & LIABILITIES
Equity
Called up share capital 2,019,699 1,704,763
Share premium account 15,315,149 15,202,583
Warrants and options reserve 209,042 209,042
Merger reserve 1,975,950 1,975,950
Reverse acquisition reserve (2,250,672) (2,250,672)
Translation reserve (2,318,791) (120,311)
Retained losses (8,416,305) (1,570,299)
________ ________
Total Equity - Capital and Reserves 6,534,072 15,151,056
________ ________
Non-current Liabilities
Borrowings 3,154,784 3,284,210
________ ________
Total Non-current Liabilities 3,154,784 3,284,210
________ ________
Current Liabilities
Borrowings - -
Trade and other payables 195,468 1,715,551
_________ _________
Total Current Liabilities 195,468 1,715,551
_________ _________
Total Equity and Liabilities 9,884,324 20,150,817
_________ _________
Condensed Consolidated Statement of Changes in Equity
Attributable to the owners of the parent
Warrants
and Reverse
Share Share Merger Options Acquisition Translation Retained
Capital Premium Reserve Reserve Reserve Reserve Earnings Total
US $ US $ US $ US $ US $ US $ US $ US $
As at 1 January 1,481,396 13,954,026 1,975,950 209,042 (2,250,672) (265,472) (166,701) 14,937,569
2015
Comprehensive
income
Loss for the - - - - - - (1,403,599) (1,403,599)
period
Other
comprehensive
income
Currency - - - - - 145,163 - 145,163
translation
differences
________ ________ ________ ______ ________ _______ _______ ________
Total - - - - - 145,163 (1,403,599) (1,258,436)
comprehensive
income for the
period
________ ________ ________ ______ ________ _______ _______ ________
Proceeds from 223,367 1,340,201 - - - - - 1,563,568
share issue
Share issue (91,644) - - - - - (91,644)
costs
________ ________ ________ ________ ________ ________ ________ ________
Transactions 223,367 1,248,557 - - - - - 1,471,924
with owners of
the parent,
recognised
directly in
equity
________ ________ ________ ________ ________ ________ ________ ________
As at 30 June 1,704,763 15,202,583 1,975,950 209,042 (2,250,672) (120,309) (1,570,300) 15,151,057
2015
________ ________ ________ ________ ________ ________ ________ ________
As at 1 January 1,704,820 15,200,219 1,975,950 209,042 (2,250,672) (962,887) (9,959,977) 5,916,495
2016
Comprehensive
income
Profit for the - - - - - - 1,543,672 1,543,672
period
Other
comprehensive
income
Currency - - - - - (1,355,904) - (1,355,904)
translation
differences
________ ________ ________ ________ ________ ________ ________ ________
Total - - - - - (1,355,904) 1,543,672 187,768
comprehensive
income for the
period
________ ________ ________ ________ ________ ________ ________ ________
Proceeds from 314,879 136,807 - - - - - 451,686
share issue
Share issue (21,877) - - - - - (21,877)
costs
________ ________ ________ ________ ________ ________ ________ ________
Transactions 314,879 114,930 - - - - - 429,809
with owners of
the parent,
recognised
directly in
equity
________ ________ ________ ________ ________ ________ ________ ________
As at 30 June 2,019,699 15,315,149 1,975,950 209,042 (2,250,672) (2,318,791) (8,416,305) 6,534,072
2016
________ ________ ________ ________ ________ ________ ________ ________
Condensed Consolidated Cash Flow Statement
6 months ended 30 June 2016
6 months to 6 months to
30 June 2016 30 June
Unaudited 2015
Unaudited
US $ US $
Cash flow from operating activities
Profit/(loss) before tax 1,543,672 (1,403,599)
Finance income - (139)
Loss/(profit) on disposal of mineral leases - -
Depreciation and amortisation 490,257 697,901
Exchange differences (1,291,349) 138,281
Impairment of mineral leases 8,334 379,354
Decrease in trade and other receivables 40,457 396,754
(Decrease)/increase in trade and other payables (946,020) 181,737
_______ _______
Net cash (outflow)/inflow from operating (154,649) 390,289
activities
_______ _______
Cash flows from investing activities
Purchases of intangible assets 100 (82,733)
Purchases of property, plant and equipment (301,665) (913,757)
Proceeds from disposal of property, plant and - -
equipment
Interest received - 139
_______ _______
(301,565) (996,351)
Net cash used in investing activities
_______ _______
Cash flows from financing activities
Proceeds from issue of ordinary shares 451,686 1,563,568
Issue costs (21,877) (91,644)
Proceeds from borrowings - 547,936
_______ _______
Net cash from financing activities 429,809 2,019,860
_______ _______
Net (decrease)/increase in cash and cash (26,405) 1,413,798
equivalents
Cash and cash equivalents at the beginning of 645,759 433,748
the period
Exchange (loss)/gain on cash and cash (29,751) 3,686
equivalents
_______ _______
Cash and cash equivalents at the end of the 589,603 1,851,232
period
_______ _______
Comprising:
Cash at bank 589,603 1,851,232
_______ _______
Notes to the unaudited financial statements
1. General information
The principal activity of the Group is the acquisition, exploration and
development of oil and gas properties primarily located onshore in the United
States.
The address of its registered office is Suite 321, 19-21 Crawford Street,
London, W1H 1PJ.
2. Basis of preparation
These condensed consolidated interim financial statements have been prepared in
accordance with the requirements of the AIM Rules for Issuers. As permitted,
the Company has chosen not to adopt IAS 34 "Interim Financial Statements" in
preparing this interim financial information. The condensed interim financial
statements should be read in conjunction with the annual financial statements
for the year ended 31 December 2015, which have been prepared in accordance
with International Financial Reporting Standards (IFRS) as adopted by the
European Union.
The interim financial information set out above does not constitute statutory
accounts within the meaning of the Companies Act 2006. It has been prepared on
a going concern basis in accordance with the recognition and measurement
criteria of International Financial Reporting Standards (IFRS) as adopted by
the European Union. Statutory financial statements for the year ended 31
December 2015 were approved by the Board of Directors on 24 June 2016 and
delivered to the Registrar of Companies. The report of the auditors on those
financial statements was unqualified.
The preparation of consolidated interim financial statements 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 the Group's 2015 Annual Report and Financial Statements. The
nature and amounts of such estimates have not changed significantly during the
interim period.
3. Accounting policies
The same accounting policies, presentation and methods of computation are
followed in this condensed consolidated financial information as were applied
in the preparation of the Company's annual audited financial statements for the
year ended 31 December 2015.
The presentational currency of the Group is US dollars.
4. Earnings per share - basic and diluted
The calculation of earnings per share is based on a profit of $1,543,672 for
the 6 months ended 30 June 2016 (6 months ended 30 June 2015: loss $1,403,599)
and the weighted average number of shares in issue in the period to 30 June
2016 of 1,276,458,563 (30 June 2015: 1,056,815,707).
The basic and diluted loss per share in the period ended 30 June 2016 is the
same, as the effect of the exercise of share options and warrants would be to
decrease the loss per share.
The basic and diluted loss per share in the period ended 30 June 2015 is the
same, as the effect of the exercise of share options and warrants would be to
decrease the loss per share.
5. Property, plant and equipment
Drilling
Producing costs and Other
properties equipment Assets Total
$ $ $ $
Cost
At 1 January 2016 1,349,349 13,316,115 24,729 14,690,193
Additions 7 301,658 - 301,665
Transferred from intangible assets 18,992 92,545 - 111,537
At 30 June 2016 1,368,348 13,710,318 24,729 15,103,395
Depreciation
At 1 January 2016 1,087,007 6,290,454 18,262 7,395,723
Charge for the period 21,250 466,859 2,148 490,257
At 30 June 2016 1,108,257 6,757,313 20,410 7,885,980
Net Book Amount at 31 December 2015 262,342 7,025,661 6,467 7,294,470
Net Book Amount at 30 June 2016 260,091 6,953,005 4,319 7,217,415
6. Intangible Assets
Cost Drilling Mineral
Goodwill costs leases Total
$ $ $ $
At 1 January 2016 340,253 81,832 1,408,689 1,830,774
Additions - - (100) (100)
Transferred to property, plant and - (92,545) (18,992) (111,537)
equipment
Exchange movements (34,804) - - (34,804)
Impairment - - (8,334) (8,334)
Disposals - - - -
As at 30 June 2016 305,449 (10,713) 1,381,263 1,675,999
Amortisation
At 1 January 2016 and - - - -
At 30 June 2016
Net Book Amount at 31 December 2015 340,253 81,832 1,408,688 1,830,773
Net Book Amount at 30 June 2016 305,449 (10,713) 1,381,263 1,675,999
Impairment review
Drilling costs and mineral leases represent acquired intangible assets with an
indefinite useful life and are tested annually for impairment. 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 of $8,334 (2015 - $379,354) in respect of expired
mineral leases.
The Directors believe that no impairment is necessary on the carrying value of
goodwill.
**ENDS**
For further information on Magnolia Petroleum Plc visit http://
www.magnoliapetroleum.com/ or contact the following:
Steven Snead Magnolia Petroleum Plc +01918449 8750
Rita Whittington Magnolia Petroleum Plc +01918449 8750
Jo Turner / James Caithie Cairn Financial Advisers +44207 1487900
LLP
Colin Rowbury Cornhill Capital Limited +44207710 9610
Lottie Brocklehurst St Brides Partners Ltd +44207236 1177
Frank Buhagiar St Brides Partners +44207236 1177
Ltd
Notes
Magnolia Petroleum Plc is an AIM quoted, US focused, oil and gas exploration
and production company. Its portfolio includes interests in 151 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 151
Being drilled / completed 14
Elected to participate / waiting to 10
spud
TOTAL 175
END
(END) Dow Jones Newswires
September 28, 2016 02:00 ET (06:00 GMT)
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