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Quarterly Operations Updatefor the Period Ended 31 December2014
Magnolia Petroleum Plc, the AIM quoted US focused oil and gas exploration and production company, has announced a quarterly update on its operations across proven and producing US onshore hydrocarbon formations, including the Bakken/Three Forks Sanish in North Dakota and Montana, and the Mississippi Lime and the Hunton/Woodford in Oklahoma.
Quarter Highlights
* 15 new wells commenced production bringing the total to 176 producing wells
as at end of Q4 2014 – a further 48 at various stages of development
* Elected to participate in 14 new wells in low cost formations including the
Mississippi Lime and Woodford in Oklahoma
* Strong initial production rates from six Devon Energy operated wells
drilled on the same spacing unit in Oklahoma added 96 boepd to Magnolia’s
net production – highlights low risk high impact potential of infill
drilling to rapidly increase production and maximise the recovery of
reserves
* Doubling of production from Magnolia’s 100% owned and operated Roger Swartz
#1 vertical well to an average of 12.2 bopd from the Mississippi Lime
following successful fracture stimulation
*
+ US$79,400 cost of the frac expected to be recovered in approximately 12
months as production is not expected to experience significant decline
from current rates
* Permits secured to drill two vertical wells in Oklahoma in 2015: the Roger
Swartz #2 and the Shimanek #2 targeting multiple conventional payzones,
including the Mississippi Lime/Chat, Redfork Sand and the Lower Skinner
Sand
Outlook:
* New wells due to come into production in Q1 2015
* Drilling 94% owned Roger Swartz #2 and the Shimanek #2 vertical wells in
2015
* Additional participations in new wells and infill drilling with leading
operators expected
* On-going lease acquisition and management activity in line with strategy to
grow and diversify portfolio
* Updated Competent Person’s Report to be released in Q1 2015 – as at 1 July
2014 proven reserves stood at 719 Mbbl of oil and condensate and 2,093 MMcf
gas
Magnolia COO, Rita Whittington said, “With 15 new wells commencing production during the quarter, our total producing well count now stands at 176. In addition, we elected to participate in 14 new wells alongside established operators and secured permits to drill two vertical wells targeting conventional payzones in 2015. We therefore continue to make excellent progress towards delivering on our objective to rapidly build Magnolia’s production and prove up the reserves on our leases, covering over 13,500 net mineral acres in historic US onshore formations. Against a backdrop of heightened oil price volatility, we view the continued high level of activity in our key areas of interest as testament to the attractive economics of drilling proven plays in Oklahoma, where costs to drill are relatively low, access to infrastructure is excellent, and payback credentials are strong.”
