Not reserved about it.
Magnolia Petroleum Plc, the AIM quoted US onshore focused oil and gas exploration and production company, has received an independent Reserves Report covering its leases in proven formations such as the Woodford and Mississippi Lime, Oklahoma, and the Bakken and Three Forks Sanish, North Dakota, as at 1 July 2014. In addition, the Company has received an independent production report which has demonstrated an increase in Magnolia’s net daily production to 257 boepd as at 1 July 2014, up from 150 boepd as at 1 April 2014.
Overview
CPR Update:
– Net proved and developed producing reserves (`PDP’) estimated at 162 Mbbl of oil and condensate and 540 MMcf gas with NPV10 of US$9.143 million
– Total net proved reserves (`1P’) of 719 Mbbl of oil and condensate and 2,093 MMcf gas with NPV10 of US$31.832 million
– Total net proved and probable reserves (`2P’) of 749 Mbbl of oil and condensate and 2,307 MMcf gas with NPV10 of US$34.693 million
– Total net proved, probable and possible reserves (`3P’) of 877 Mbbl of oil and condensate and 2,554 MMcf gas with NPV10 of US$35.884 million
– Report reflects reclassification of large proportion of Mississippi Lime formation reserves on undrilled leases as Contingent Resources – in line with industry-wide view of the play being comprised of wedges rather than a uniform resource (see announcement of 6 May 2014 for further details)
– Multiple potentially highly productive Mississippi Lime wedges identified on Magnolia’s leases – future drilling expected to lead to reassignment from contingent resources to reserves
– Report does not reflect the potential of the Woodford formation, which lies below the Mississippi Lime and is at an earlier stage of development – viewed by operators as the more prospective of the two formations in certain areas
Production Update:
– Net production stood at 257 boepd as at 1 July 2014 compared to 150 boepd on 1 April 2014 due to a number of wells in which Magnolia holds larger than average NRIs commencing production
Rita Whittington, COO of Magnolia, said, “At US$31.832m, the value of our proven reserves provides Magnolia with considerable asset backing, particularly when compared to our market valuation. From current levels, our reserves are set to grow strongly. Not only do we have interests in 79 wells at various stages of development but we continue to receive multiple drilling proposals. A growing proportion of these are targeting the Woodford, which is increasingly viewed as the more productive formation. Meanwhile, the improved understanding of the geology of the Mississippi Lime allows us to prioritise drilling activity alongside those operators who are consistently hitting highly productive `wedges’.
“As wells in which we have larger than average interests have come on line, Magnolia’s net production has increased to 257 boepd as at 1 July 2014 from 150 boepd as at 1 April 2014. Thanks to the combination of growing revenues from production and our US$5m credit facility, we are well placed to deliver on our objective to prove up the reserves on our leases and I look forward to providing further updates on our progress in due course.”