Top man Frank has just confirmed that the website is being brought right up to date to reflect Directors shareholdings, number of wells, etc as follows: 'You will be pleased to know the content of the website is being updated including those pages you highlight in your email. Hopefully this won’t take too long to complete.' Please remember that the website is operated and updated in the States so Frank's not responsible for it directly but I'm quite certain that it will happen shortly as promised. Good note from Beaufort although they should have made it a 'strong' rather than 'speculative' buy imo!
Magnolia Petroleum (LSE:MAGP): A Darling Growth Story
Magnolia Petroleum is an O&G explorer/developer/producer with a unique, low risk profile not commonly seen amongst its peers. Its assets lie across the USA and consist of conventional and unconventional development plays, including the Bakken, Three Forks Sanish, and the Mississippi Lime. Magnolia’s advantage and niche comes from its ability to enjoy a first-mover advantage, buying up land packages before and around the oil majors well before most have realised the value beneath the ground. For example, Magnolia is thought to have paid, on average $430 per acre across its portfolio, while more recent transactions in comparable areas have sold for ten times this figure.
Once the company acquires these prospective land packages the objective is to prove up. Thus, value is realised and reflected in ever greater production rates and reserve estimates, as reported in regular CPRs (Competent Person’s Report). The last report (as at Aug 2013) estimated production at 214 boe/d (a 74% increase on the 123 boe/d reported as at Dec 2013). This is set to be updated again in Q1 2014 and should show yet further exponential production growth.
Ultimately, management wish to rinse, wash and repeat. The aim is to increase their land holdings, production rates, reserves and % working interests until Magnolia Petroleum can be described as a “significant oil and gas company”. This definition, if memory serves, was described by CEO Steven Snead (who, by the way, draws no salary from the company. A significant shareholding, he insists, is incentive enough) as one with over $100m in proven P1 reserves. The company currently has $40m in P1 reserves. Once this milestone is reached the intention is to put the company up for sale and monetize the significant value generated through this low-risk, high return alternative to the traditional oil and gas industry model.
The stock continues to trade downwards, offering an ever more attractive investment. We believe this is the ‘stale bull’ effect, since the stock price has enjoyed a remarkable run since its AIM listing in November 2011. Its popularity is sure to return, and with it a rising stock price, when the fundamentals really are too good for the prevailing share price.
Yes the RNS was to me a indication that the BOD want to emphasise the strengths of Maggie to potential investors and I hope we more of this going forward. We need volume to really begin motoring so hopefully Rita will provide more good news sooner rather than later.
Datafeed and UK data supplied by NETbuilder and Interactive Data.
While London South East do their best to maintain the high quality of the information displayed on this site,
we cannot be held responsible for any loss due to incorrect information found here. All information is provided free of charge, 'as-is', and you use it at your own risk.
The contents of all 'Chat' messages should not be construed as advice and represent the opinions of the authors, not those of London South East Limited, or its affiliates.
London South East does not authorise or approve this content, and reserves the right to remove items at its discretion.