Magnolia Petroleum Plc (`Magnolia' or `the Company')
Participation in Four Additional Wells in the Bakken Formation, North Dakota
and Hunton Formation, Oklahoma and Production Update for Hunton Well
Magnolia Petroleum Plc, the AIM quoted US focussed oil and gas exploration and production company, announces positive updates on certain non-producing assets within the highly productive Bakken and Three Forks Sanish hydrocarbon formations, North Dakota and in the Hunton Formation, Oklahoma and on the producing Zenyatta 1-6 well in Oklahoma.
* Participating in the drilling of two new wells in the Bakken / Three Fork Sanish Formations with leading US oil and gas operator, Marathon Oil Company
* Participating in the drilling of two new wells in the Hunton Formation, Oklahoma
* Production commenced from Zenyatta 1-6 well in Oklahoma with Avalon Oil & Gas III, LLC, producing an average of 79.66 barrels of oil per day and 118.18 MCF of gas per day - production increasing
Rita Whittington, COO of Magnolia Petroleum, said, "This is an extremely exciting time for the Company as we are now receiving multiple proposals for wells on both the Three Forks Sanish and Bakken Formations acreage from leading operators such as Marathon Oil Company. Today's news is in line with the expected drilling for 2012, as set out in our Admission document and in this regard I am delighted to report Magnolia is delivering on its strategic targets.
"While the Bakken Formation, in which we are active, continues to excite strong interest, our assets in Oklahoma are also looking highly promising and we anticipate a steady flow of news as we move into 2012."
Bakken/Three Forks Sanish, North Dakota
The two new wells announced today in the Bakken/Three Forks Sanish Interest is in line with the Admission Document of 15 November 2011, in which Magnolia referred to participating in the drilling of four new wells on its acreage.
* Eckelberg 14-23H infill well in Dunn County, North Dakota (0.53367% working interest) in partnership with Marathon Oil Company, located in Sections 14 & 23-146N-93W. This well will be drilled to the Middle Bakken Sandstone interval and is expected to be completed with a 30 stage frac at a cost to Magnolia of approximately US$43,232.
* Eckelberg 14-23TFH infill well in Dunn County, North Dakota (0.53367% working interest) in partnership with Marathon Oil Company drilling to the Three Forks Sanish Formation using the same pad as the above well. The well, anticipated to spud on 12 January 2012, is expected to be completed with a 30 stage frac at a cost to Magnolia of approximately US$44,933.
Both Eckelberg wells will be drilled within the same spacing unit as the Clive Pelton 34-23H well, which was drilled to the Middle Bakken Sandstone Interval by Marathon Oil Company and participated in by the Company in 2008. The Pelton well was completed with a single stage frac with an initial production of 483 barrels of oil per day and 148 MCF of gas per day. In comparison, the two new Eckelberg wells will be completed with 30 stage fracs, and as a result, the directors believe that production from these two new wells should be substantially higher.
Hunton Formation, Oklahoma
Magnolia, with its 1.057% working interest, has elected to participate with Avalon Oil & Gas III, LLC in an infill well, Zenyatta 2-6, located within the same spacing unit as Zenyatta 1-6, to test the Upper Hunton interval. The expected spud date is 15 January 2012.
In addition, Magnolia has elected to participate in a further Hunton well, located in Pottawatomie County, Oklahoma with a 0.8333% working interest. This well will be drilled by Paul Gillham Oil Company, which has had previous successes in the area. Magnolia estimates that the cost to the Company of participating in this well will be approximately US$11,745.
Magnolia recently participated with its 1.057% working interest in the drilling and completion of the Zenyatta 1-6 well, located in Section 6-8N-2E, Pottawatomie County, Oklahoma with Avalon Oil & Gas III, LLC. This well was drilled in the Hunton Formation. Production was established in October 2011 and is steadily climbing. The well is currently producing an average of 79.66 barrels of oil per day and 118.18 MCF of gas per day and has gross proved reserves of 77.90 Mbbl.
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