Magnolia Petroleum Plc Q2 2016 Operations Update

 
TIDMMAGP 
 
Magnolia Petroleum Plc / Index: AIM / Epic: MAGP / Sector: Oil & Gas 
 
5 August 2016 
 
             Magnolia Petroleum Plc ('Magnolia' or 'the Company') 
 
                           Q2 2016 Operations Update 
 
Magnolia Petroleum Plc, the AIM quoted US focused oil and gas exploration and 
production company, is pleased to announce a quarterly update for Q2 2016 ('the 
Quarter') on its operations across proven and producing US onshore hydrocarbon 
formations, including the Bakken/Three Forks Sanish in North Dakota, and the 
Woodford, Mississippi Lime and the Hunton in Oklahoma.  This includes an 
updated independent Reserves Report as at 1 July 2016 as part of the six month 
bank debt redetermination process. 
 
Q2 Highlights to 30 June 2016 
 
  * Total number of producing wells as at end of Q2 2016 stands at 146 - 21 
    uneconomic wells with little or no value were divested during the quarter 
    for a nominal sum to free up accounting resources and eliminate monthly 
    lease operating costs 
  * Elected to participate in one new well during the Quarter 
  * 10 well drilling programme alongside Continental Resources on-going, 
    targeting gas in the prolific South-Central Oklahoma Oil Province ('SCOOP') 
    play in Oklahoma, where an estimated total of 3.2 billion barrels of 
    conventional oil have been recovered from 60 reservoirs 
      + Activity currently taking place on all ten wells - either drilling, 
        completing or logging operations 
      + All are lower risk increased density wells to maximise the recovery of 
        reserves in two sections on leases that are held by production 
 
Updated Reserves Report 
 
  * 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) 
  * Further headroom created as 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 
  * Magnolia has made a US$400,000 repayment (as announced on 18 April 2016) 
    and has agreed 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 
  * Magnolia continues to pay interest only on the remaining US$1,894,849 
    balance of the loan on a monthly basis 
 
Outlook 
 
  * New wells due to come into production in Q3 2016 drilled by Continental 
    Resources 
  * Additional participation with leading operators in new wells and infill 
    drilling where commercial at lower oil prices 
  * On-going lease acquisition and management activity in line with strategy to 
    grow and diversify portfolio 
 
Magnolia COO, Rita Whittington said, "During the Quarter we continued to high 
grade our portfolio of producing wells in proven US onshore formations, 
specifically the divestment of a further 21 wells, which have little or no 
economic value and where we have a below average interest.  As a result, the 
disposal of these wells will have a minimal effect on our overall production, 
which stood at 242 boepd as at 31 March 2016. 
 
"The active management of our producing wells should be seen in the context of 
freeing up internal resources to not only focus on those leases and wells in 
which we have a higher interest and which are located in highly productive 
areas, but also to acquire low cost acreage in those areas where we have been 
looking to gain exposure.  In the meantime we continue with our strategy of 
participating alongside established operators in new wells where it makes 
commercial sense to do so, and I look forward to providing further updates on 
our progress." 
 
Well Developments 
 
The full list of well developments occurring in the quarter is set out below. 
 
       Well           Formation        Status        NRI %    Operator 
 
Sympson 2-7-6XH    Woodford,          Drilling       0.40    Continental 
                   Oklahoma                                  Resources 
 
Sympson 4-7-6XH    Woodford,           Drilled       0.40    Continental 
                   Oklahoma                                  Resources 
 
Chalfant           Woodford,           Drilled       0.36    Continental 
                   Oklahoma                                  Resources 
 
Sympson 10-6H      Woodford,           Drilled       0.44    Continental 
                   Oklahoma                                  Resources 
 
Sympson 8-7-6H     Woodford,          Drilling       0.40    Continental 
                   Oklahoma                                  Resources 
 
Sympson 3-7-6XH    Woodford,          Drilling       0.40    Continental 
                   Oklahoma                                  Resources 
 
Sympson 9-7-6XH    Woodford,          Drilling       0.40    Continental 
                   Oklahoma                                  Resources 
 
Sympson 5-7-6XH    Woodford,           Drilled       0.40    Continental 
                   Oklahoma                                  Resources 
 
Sympson 7-6-7XH    Woodford,          Drilling       0.40    Continental 
                   Oklahoma                                  Resources 
 
Sympson 6-6-7XH    Woodford,          Drilling       0.40    Continental 
                   Oklahoma                                  Resources 
 
Michele Abel       Springer,          Drilling       0.13    Marathon 
H1-2XH             Oklahoma 
 
                                 * * 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     [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 146 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                                                           146 
 
Being drilled / completed                                            11 
 
Elected to participate / waiting to                                  18 
spud 
 
TOTAL                                                               176 
 
 
 
END 
 

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August 05, 2016 02:00 ET (06:00 GMT)