Magnolia Petroleum Plc Operations Update

 
TIDMMAGP 
 
Magnolia Petroleum Plc / Index: AIM / Epic: MAGP / Sector: Oil & Gas 
 
19 May 2017 
 
             Magnolia Petroleum Plc ('Magnolia' or 'the Company') 
 
                               Operations Update 
 
Magnolia Petroleum Plc, the AIM quoted US focused oil and gas exploration and 
production company, is pleased to announce its participation in seven new wells 
in the prolific SCOOP and STACK plays in Oklahoma, including five increased 
density wells which are to be drilled on the same spacing unit as already 
producing wells and are therefore deemed to have been significantly de-risked. 
 In addition, the Company is participating in the workover of eleven existing 
wells, all of which are low cost and are expected to increase both the level of 
production and the estimated recoverable reserves for each well. 
 
Participating in seven new wells with an aggregate net cost of US$103,695 
 
Well Name   Targeted    Operator     Magnolia's WI Net Cost to  Status 
            Formation                /NRI%         Magnolia 
 
Pauline     Woodford,   Trinity      0.71/0.53     $31,800      Waiting on 
4-24/25H    Oklahoma                                            spud 
 
Pauline     Woodford,   Trinity      0.71/0.53     $31,380      Waiting on 
3-24/25H    Oklahoma                                            spud 
 
Pauline 2/  Woodford,   Trinity      0.53/0.39     $20,580      Waiting on 
24/25H      Oklahoma                                            spud 
 
Pauline     Woodford,   Trinity      0.34/0.25     $17,680      Waiting on 
1-24/25/36H Oklahoma                                            spud 
 
Vergie      Woodford,   Comanche     0.39/0.29     Fully        Waiting on 
26-23-1H    Oklahoma    Exploration                carried      spud 
 
Fazio 1706  Mississippi Oklahoma     0.20/0.15     Fully        Producing 
Well        Lime,       Energy                     carried      Gross IP: 
            Oklahoma    Acquisitions                            644bopd; 
                                                                1,507MCF 
 
Celesta 2   Springer,   Continental  0.02/0.016    $2,255.00    Waiting on 
            Oklahoma    Resources                               spud 
 
The four Pauline wells are increased density wells targeting the Woodford Shale 
in Hughes County, Oklahoma. These wells will offset two previously completed 
Woodford Shale wells: the Trinity-operated Clara 1-13/24H and Regina 1-25/24H. 
Both the Clara and Regina wells have been and continue to be prolific 
producers: 
 
  * The Regina well has cumulatively produced 1.3 BCF to date, currently 
    produces at a rate of 1.7 MMCFD and has a projected estimated ultimate 
    recovery ('EUR') of over 7.3BCF. 
  * The Clara well's cumulative production to date stands at 0.800 BCF, its 
    daily production is currently 1 MMCFD and its EUR is over 3.5BCF. 
 
The four Pauline wells will have a longer horizontal section in the Woodford 
Shale compared to the Clara and Regina wells, and therefore they have the 
potential to generate even larger reserves than either of the two initial 
wells. 
 
Participating in the workover of the following 11 wells at an aggregate net 
cost of US$38,930: 
 
Well Name    Targeted      Operator    Magnolia's  Net Cost to Workover 
             Formation                 NRI%        Magnolia 
 
Cummings     Mississippi   Chesapeake  3.34        $9,600      ESP install 
31-28-12-1H  Lime,         Energy 
             Oklahoma 
 
Cummings 2H  Mississippi   Chesapeake  3.34        $9,600      ESP install 
             Lime,         Energy 
             Oklahoma 
 
Brandt       Mississippi   Chesapeake  3.35        $8,400      install 
31-28-12 1H  Lime,         Energy                              pumping 
             Oklahoma                                          unit 
 
Blaser 1-10H Mississippi   Cummings    9.375       $5,100      clean and 
             Lime,                                             repair pump 
             Oklahoma 
 
Oakley Cash  Mississippi   Chesapeake  0.8         $1,735      install 
3-27-17 1H   Lime,                                             pumping 
             Oklahoma                                          unit 
 
Clive Pelton Bakken, North Marathon    0.40        $1,330      Subsequent 
34-23H       Dakota        Oil                                 refrac 
 
Mack         Mississippi   Chesapeake  0.53        $1,165      install 
10-27-17 1H  Lime,         Energy                              pumping 
             Oklahoma                                          unit 
 
Sundance     Mississippi   Chesapeake  0.60        $500        install 
1-4H         Lime,         Energy                              plunger 
             Oklahoma                                          lift 
 
Rosemary     Bakken, North Marathon    0.35        $500        workover 
Eckelberg    Dakota        Oil 
 
Alison 16-1H Mississippi   Chesapeake  0.20        $500        install 
             Lime,         Energy                              pumping 
             Oklahoma                                          unit 
 
Jacob 16-1H  Mississippi   Chesapeake  0.20        $500        install 
             Lime,         Energy                              pumping 
             Oklahoma                                          unit 
 
All the above wells are or have previously been producing.  Adding an 
artificial lift to each well, either by installing a pumping unit or plunger 
lift, is expected to lead to an uplift in production and an upgrade to reserves 
which will be reflected in future reserves reports. 
 
Magnolia CEO, Rita Whittington said, "We are encouraged by the number of new 
proposals we are receiving to drill alongside established operators.  In our 
view, this provides further evidence of a pick-up in activity and sentiment in 
the US onshore sector, as highlighted by a more than doubling in the latest 
Baker Hughes oil rig count to 712 from 318 a year ago.  It also validates our 
strategy to focus our lease acquisition strategy on prolific plays, such as the 
SCOOP and STACK in Oklahoma, where the economics of drilling are attractive in 
the current oil price environment. Furthermore, all seven wells are deemed to 
be low risk due to either being drilled on the same spacing unit as an existing 
producer or as a result of Magnolia's share of the drilling costs being fully 
carried. 
 
"Working over an existing well provides a low cost, low risk opportunity to 
increase production rates and recoverable reserves.  In a low oil price 
environment, this is an attractive proposition for operators and with a 
portfolio of 157 producing wells we expect to participate in additional 
workovers going forward.  Workovers have positive implications for the overall 
level and value of our proven developed producing ('PDP') reserves which were 
recently independently valued at US$4,300,000. At this level, the value of our 
PDPs already outstrips our current market capitalisation.  Workovers therefore 
have the potential to increase the already strong asset backing behind the 
Company." 
 
The information contained within this announcement constitutes inside 
information stipulated under the Market Abuse Regulation (EU) No. 596/2014. 
 
                                 * * 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 
 
Colin Rowbury              Cornhill Capital Limited     [phone] 
 
Lottie Brocklehurst        St Brides Partners Ltd       [phone] 
 
Frank Buhagiar             St Brides Partners           [phone] 
                           Ltd 
 
Notes 
 
Magnolia Petroleum Plc is an AIM quoted, US focused, oil and gas exploration 
and production company.  Its portfolio includes interests in 219 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                                                           157 
 
Being drilled / completed                                            13 
 
Elected to participate / waiting to                                  49 
spud 
 
TOTAL                                                               219 
 
 
 
END 
 

(END) Dow Jones Newswires

May 19, 2017 02:00 ET (06:00 GMT)