Magnolia Petroleum Regulatory News (MAGP)

9 Aug 2012 11:59

Magnolia Petroleum Plc / Index: AIM / Epic: MAGP / Sector: Oil & Gas

9 August 2012

Magnolia Petroleum Plc (`Magnolia' or `the Company') £10 million Financing Facility Secured

Magnolia Petroleum Plc, the AIM quoted US focussed oil and gas exploration and production company, is pleased to announce that further to the news release of 12 July 2012, it has signed an agreement for a £10 million Equity Financing Facility ("EFF") with Darwin Strategic Limited ("Darwin"), a majority owned subsidiary of Henderson Global Investors' Alphagen Volantis fund. The EFF will be used, at the Company's discretion, to further expedite the Company's existing growth and investment strategy.

Following the recent announcements made by the Company, it intends to seek out further acquisitions of both producing and non-producing interests in the highly productive Bakken / Three Forks Sanish hydrocarbon formations in North Dakota as well as in the oil rich Mississippi Formation located in Oklahoma and the substantial and proven Woodford/Hunton reservoirs also in Oklahoma.

In addition, the Company is reviewing a number of additional well proposals and will be participating in new drilling as appropriate.

Rita Whittington, Chief Operating Officer of Magnolia said: "We are extremely pleased to have received the support of Henderson Global in our recent placing and delighted to have now signed the £10 million EFF with Darwin.

"I am encouraged by the level of institutional support we have received from Darwin and Henderson. The EFF provides us with a long-dated and flexible source of funding which we can use at our discretion. Our Board believes that Magnolia has significant potential and with the right mix of funding sources can take advantage of larger opportunities. The EFF offers a useful and cost effective source of equity funding, which allows us to maximise the value of existing and new opportunities."

Anand Sambasivan, Chief Executive of Darwin said: "We are delighted to support Magnolia and the highly skilled management team to advance the potentially game-changing projects in North Dakota and Oklahoma."

Equity Finance Facility

The EFF agreement with Darwin provides Magnolia with a facility which (subject to certain limited restrictions) can be drawn down at any time over the next three years. The timing and floor subscription price of any draw down is at the sole discretion of the Company.

Magnolia is under no obligation to make a draw down and may make draw downs at its discretion, up to the total value of the EFF, by way of issuing subscription notices to Darwin, although there will be an additional fee payable to Darwin in the event that less than £500,000 is drawn down within each year of the facility. Following delivery of a subscription notice, Darwin will subscribe and the Company will allot to Darwin new ordinary shares in Magnolia ('Ordinary Shares').

The subscription price for any Ordinary Shares to be subscribed by Darwin under a subscription notice will be at a 5% discount to the average of the three lowest closing bid prices of the Ordinary Shares over the 15 trading days following the subscription notice.

Magnolia is also obliged to specify in each subscription notice a minimum price below which Ordinary Shares will not be issued to Darwin. The Company will have the right (with the consent of Darwin) to modify that minimum price at any time during the relevant Pricing Period.

The number of Ordinary Shares which may be issued under any individual subscription notice may be up to the lower of 25 per cent of the Company's issued share capital following completion of the relevant subscription, or four times the average daily trading volume of Magnolia's Ordinary Shares over the 15 trading days preceding the issue of the relevant subscription notice. This may be reduced in certain circumstances, including where the minimum price is not maintained or the trading volume is less than 10,000 shares. The maximum amount of a subscription notice may not exceed £1 million without Darwin's discretion.

There is also an over-allotment facility available to Magnolia, under which the Company may authorise Darwin, at Darwin's discretion, to increase the amount of the draw down by up to the aggregate undrawn amount under the EFF.

The issuance of a Subscription Notice is conditional upon the satisfaction of certain Subscription Notice Conditions which have been agreed between Darwin and the Company. Any subscription notice which Magnolia may issue will only be valid to the extent that it has the requisite shareholder authority to issue the maximum number of Ordinary Shares that Darwin may be required to subscribe under the relevant subscription notice.

Darwin and the Company may terminate the EFF agreement if certain conditions are not met.

About Magnolia

Magnolia Petroleum Plc is an AIM quoted, US focussed, oil and gas exploration and production company. Its portfolio includes interests in 80 producing and non-producing assets, primarily located in the highly productive Bakken/Three Forks Sanish hydrocarbon formations in North Dakota as well as the oil rich Mississippi Lime and the substantial and proven Woodford and Hunton formations in Oklahoma.

About Darwin

Darwin works in conjunction with Henderson's Volantis Capital Team, to address the growing scarcity of funding alternatives and lack of institutional visibility available to many AIM-listed companies. Darwin seeks to build long-term financing partnerships with growth companies via a range of equity, debt and equity-linked structures.

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For further information on Magnolia Petroleum Plc visit www.magnoliapetroleum.com or contact the following:

Steven Snead Magnolia Petroleum Plc +01 918 449 8750 Rita Whittington Magnolia Petroleum Plc +01 918 449 8750 Antony Legge / James Thomas Daniel Stewart & Company Plc +44 (0) 20 7776 6550

John Howes / John-Henry Northland Capital Partners +44 (0) 20 7796 Wicks

Limited 8800 Anand Sambasivan / Jamie Darwin Strategic Limited +44 (0)20 7938 5754Vickers Hugo de Salis St Brides Media and Finance Ltd +44 (0) 20 7236 1177 Lottie Brocklehurst St Brides Media and Finance Ltd +44 (0) 20 7236 1177 Frank Buhagiar St Brides Media and Finance Ltd +44 (0) 20 7236 1177 NotesMagnolia Petroleum Plc is an AIM quoted, US focussed, oil and gas explorationand production company. Its portfolio includes interests in 80 producing andnon-producing assets, primarily located in the highly productive Bakken/ThreeForks Sanish hydrocarbon formations in North Dakota as well as the oil richMississippi Lime and the substantial and proven Woodford and Hunton formationsin Oklahoma.Summary of Wells*Category Number of wells Producing 80 Being Drilled / Completed 9 Elected to participate / waiting to 8spud TOTAL 97

\* This table excludes four out of six wells acquired as part of the acquisition of 800 gross acres with a 100% working interest in Osage County, Oklahoma, as announced on 10 February 2012. These four wells are currently `shut in' and will require a workover programme at some point in the future to bring back into production.