> On today's evidence the SP should remain steady to some extent. As a bid test for 1+m goes to NT only, it suggests the big buyer has retired for the time being. Next lookout points are pending wells and interims. Rightly or wrongly the next surge will be circa third or fourth week in September. That suits me fine for a add-on or two. A check on the bid @ 16:28 was 1.601p.
Oil Barrel Article just hot off the press, see below:
Magnolia Petroleum, like Northcote Energy and North American Petroleum is a small, London quoted minnow which has followed in the wake of Empyrean Energy. The business model was that Empyrean gained a small three per cent stake in the Marathon Oil-operated Sugarloaf AMI, a 24,000 acre tract in the liquids-rich core of the prolific Eagle Ford Shale, one of the most profitable plays to emerge from the North American shale boom.
AIM quoted Empyrean had to be patient. For a long time it was worried about its debt levels, and its small production base. But Marathon in the past couple of years found this play just got better and better. Using new technologies costs came down and recovery levels rose.
In July Empyrean reported a large jump in production to 900 bopd and said output could double over the next year. After years in the doldrums, the share price took off enabling Empyrean to put up the “For Sale “sign.Magnolia too has taken stakes in old fields onshore the US where there were known discoveries and where drilling is cheap. Since floating on London’s AIM in November 2011, Magnolia has focused on fields which often appeared to have been clapped out by loads of vertical wells or have not delivered as expected.
These include the Bakken Shale in North Dakota and the proven Woodford and Hunton formations in Oklahoma. More recently the company has been targeting the Mississippi Lime in Oklahoma. Using new techniques such as hydraulic fracturing (fracking) and horizontal drilling, these fields can be made highly productive.
As with Empyrean patience has been required by Magnolia, in the past year its share price has sunk and last week there was a sell off for some unknown reason and the shares fell from 2 pence to below 1p at 0.98. The Magnolia put out an update which showed the company was getting somewhere, and the shares recovered to reach 1.68p last night.
The company said that it has interests in 79 wells at various stages of development and output rose to 257 boepd up from 150 boepd in April, after new wells came online with a higher level of NRI participation by Magnolia.Net proved reserves (1P) were put at 719,000 barrels of oil and condensate and 2.1 million cubic feet of gas for a NPV10 of US$31.832 million.
Rita Whittingham COO of Magnolia said “At US$31.832 million 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.” Last night Magnolia’s market cap was £15.16 million.
Commencement of production on the wells that I posted earlier, courtesy of Robsky, are due but as we are not the operator then we have to wait until the operator releases them. MAGP have said that they have plans for a vertical well programme targeting the sweet spots on their acreage, thus, in turn with higher NRI% and increase in boepd if they hit a 'sweet spot'. This share may not be as excting to some but I'm in this for the long run. I have no interest in wildcats as more fail than are successful. If you are in for the long term then you must have PATIENCE, as we have been on a rough ride over the last 18 months, I was down over 60%+ at one stage.
I would prefer a nice, slow and steady rise as significant movements only make you a target for rampers, de-rampers, traders and others.
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