Magnolia Petroleum Regulatory News (MAGP)

Magnolia Petroleum Plc / Index: AIM / Epic: MAGP / Sector: Oil & Gas 10 June 2014 Magnolia Petroleum Plc (`Magnolia' or `the Company') Annual General Meeting Statement Magnolia Petroleum Plc, the AIM quoted US focused oil and gas exploration andproduction company, is holding its Annual General Meeting (`AGM') later today.At the meeting, CEO Steven Snead will make the following statement: "Magnolia Petroleum is a high growth company focused on acquiring anddeveloping leases in proven US onshore formations such as the Bakken/ThreeForks Sanish in North Dakota and the Woodford/Mississippi Lime in Oklahoma. Wehave now completed two full years on AIM and in each of these we have lived upto our high growth billing and reported exceptional progress in terms of ourproduction, revenues and reserves. "While 2012 saw us acquire 13,500 net mineral acres in liquids rich US onshoreplays, 2013 saw a step up in our drilling activity alongside establishedoperators such as Devon Energy and Statoil, as we focused on growing ourproduction generated revenues to fund more drilling to prove up the reserves onour leases. Revenue growth is therefore a key performance indicator and for2013 we reported a 244% jump in net revenues to US$2,443,244, which followedthe previous year's 194% increase to US$709,395. "Revenue growth is driven by net production which has grown from 7 boepd at thetime of our AIM Admission in November 2011 to 150 boepd on 1 April 2014 havingbeen as high as 214 boepd as at 1 August 2013. Over short timeframes Magnolia'snet production will fluctuate as it is a function of several variablesincluding decline rates; the timing and number of new wells; and the size ofour interests in new drilling activity. Over the medium term however theupwards trend for Magnolia's net production is intact thanks to our fastgrowing well count, a long pipeline of drilling opportunities, and a risingaverage interest in wells. Our well count has increased from 64 at the time ofour AIM IPO to 184 by end of December 2013, and it has since grown to 227.Meanwhile over the same time frame we have upped our average net revenueinterest to over 3% from 0.6%. "Our overall objective is to prove up the reserves on our US onshore leases andhere too excellent progress is being made with Magnolia's PDP reserves nowstanding at US$8.4 million having been US$919,000 in October 2011. From theoutset, we have looked to enter reopening US onshore plays early, such as theMississippi Lime in Oklahoma. This allows us to acquire leases at attractiverates from which we can maximise value through development, but it does giverise to the possibility that the accepted understanding of the formation'sgeology may evolve as the play matures. This is indeed what has happened andinstead of viewing the Mississippi Lime as a uniform resource, the historicplay is now viewed as being made up of multiple wedges or `sweet spots' whichif hit can result in excellent production and recovery rates. As a result, our2P and 3P reserves are currently being rebased to a lower level by ourcompetent person to reflect the revised industry view of the Mississippi Limeformation in Oklahoma and an updated Reserves Report will be available shortly. "Once the Report has been completed, we are confident strong reserves growthwill resume thanks to the improved geological model for the Mississippi Lime,the identification of multiple sweet spots on our acreage, and betterfamiliarity with the practices and performance of the operators with whom wepartner. Of course a maturing of plays in which Magnolia has entered earlyworks both ways and with this in mind, the industry is increasingly regardingthe Woodford, which underlies the Mississippi Lime across much of our acreagein Oklahoma, as being the more prospective and productive of the two plays.This view is supported by the performance of wells in which we haveparticipated, most recently the Parmley well where we have a 12.187% interest.More horizontal wells need to be drilled to the Woodford before Magnolia'sreserves in the formation are upgraded but we are confident the Woodford willplay a major role in Magnolia's reserves growth going forward, and even has thepotential to surpass our original expectations for our Mississippi Limereserves. "Our US$5 million reserves backed credit facility as well as our recentlyreported full year revenues of US$2.4 million show how far Magnolia has come ina short space of time. We are successfully establishing a track record ofstrong growth, and we are highly confident we will build on this further in thecurrent year and beyond." * * ENDS * * For further information on Magnolia Petroleum Plc visitwww.magnoliapetroleum.com or contact the following: Steven Snead Magnolia Petroleum Plc +01 918 449 8750 Rita Whittington Magnolia Petroleum Plc +01 918 449 8750 Jo Turner / James Caithie Cairn Financial Advisers LLP +44 20 7148 7900 John Howes / Alice Lane / Northland Capital Partners +44 20 7796 8800Luke Cairns Limited Lottie Brocklehurst St Brides Media and Finance Ltd +44 20 7236 1177 Frank Buhagiar St Brides Media and Finance Ltd +44 20 7236 1177 Notes Magnolia Petroleum Plc is an AIM quoted, US focused, oil and gas explorationand production company. Its portfolio includes interests in 155 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 155 Being Drilled / Completed 23 Elected to participate / waiting to spud 49 TOTAL 227