The recently announced reserves report provides an indication of the progress made. In this latest report, Moyes & Co. estimates Magnolia's 2P reserves as at 1 August 2013 stood at 1.437 million barrels of oil and condensate and 5,124 million cubic feet (`MMcf') of natural gas and assigns a Net Present Value of approximately US$47.008 million after applying a 10% discount rate. Due to timing issues this latest reserves upgrade does not fully reflect the results of all the drilling activity announced during the half. For example only nine of the 45 new wells announced between 1 January 2013 and 1 August 2013 (the date of the CPR) commenced production during the period. We therefore expect substantial growth in 2P reserves as and when the remaining 36 wells are drilled and completed, not to mention new drilling that is likely to be announced in the second half.
Over the course of the first six months of the year, we invested approximately US$2.8m into new wells. As the cash flow statement to 30 June 2013 shows, we are increasingly funding our share of new drilling costs from existing production. The gap between our investment in new wells and cash flow from operating activities is closing fast and with revenues due in the second half from a number of wells that recently came into production, not to mention the strong pipeline of drilling activity that is in place, we are highly confident that this gap will continue to significantly narrow in a short space of time.
I had a reply from Frank this morning, He remembered my request from last year, he has forwarded my email to both the company and website managers. Lets hope Magnolia has a bright new cheerful fully updated website very soon. Thanks Frank if you are reading.
Website revamp/renewal seems to have had a good effect on FOGL's share price today(unless I'm missing something else). The first thing a new investor will do is visit the website so reviewing content every 6 months imo is worthwhile, costs should be fairly minor in the scheme of things.
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