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19 Jan 2012 07:00
Magnolia Petroleum Plc / Index: AIM / Epic: MAGP / Sector: Oil & Gas
19 January 2012
Magnolia Petroleum Plc (`Magnolia' or `the Company') Increase in production targeted at the ExxonMobil operated Hawkins Field Unit, Wood County, Texas
Magnolia Petroleum Plc, the AIM quoted US focussed oil and gas exploration and production company, announces a positive update on its participation in the Hawkins Field Unit, located in Wood County, Texas and operated by oil and gas major, ExxonMobil Production Company (`ExxonMobil'), and a targeted increase in oil and gas production.
Overview
* New Nitrogen Rejection Unit/Natural Gas Recovery plant (`NRU') at the Hawkins Field Unit, expected to be operational in February 2012 * The operator, ExxonMobil, expects the NRU to lead to: * + increase in current oil production from 5,400 bopd to between 6 - 7,000 bopd, an increase of up to 30% + increase in liquids (condensate) production to 3,000 boepd + increase in gas production to between 20,000-25,000 mcfs/d + increase in the life of the field by up to 25 years + the recovery of up to a further 40 million boe * Hawkins Field Unit has the largest Proved 2P oil and gas reserves among Magnolia's interests, previously reported as being: * + Gross 2P oil reserves 29,063.22Mbbl + Gross 2P gas reserves 42,919.53MMcf + Net 2P oil reserves attributable to Magnolia 3.98Mbbl + Net 2P gas reserves attributable to Magnolia 5.88MMcf * Magnolia holds a 0.01543% working interest in the Hawkins Field Unit and will receive a meaningful increase in revenues as a result of the increased output * Extra revenues generated to be used to help fund further Magnolia projects
Magnolia Petroleum COO, Rita Whittington said, "We are highly encouraged by the results of our participation with ExxonMobil in the NRU plant, which is expected to significantly raise the efficiency of the Hawkins field. We look forward to receiving the production results. The Hawkins field is one of Magnolia's largest assets in terms of both gross and net proved 2P reserves and meaningful additional revenues will be generated. These will be channelled to fund the development of our extensive and highly prospective portfolio of assets in the prolific Bakken/Three Forks Sanish hydrocarbon formations, North Dakota, the producing Hunton and Woodford formations in Oklahoma and the oil rich Mississippi also in Oklahoma where we participate with other major oil and gas companies including Marathon, Chesapeake and Hunt Oil."
Full Details
In October 2008, ExxonMobil proposed, and Magnolia elected to participate in, the installation of a new jointly owned plant consisting primarily of a Nitrogen Rejection Unit/NRU plant, to be known as the Hawkins Nitrogen Rejection Unit, at a total cost of US$583m gross. As part of this project, ExxonMobil proposed to convert and upgrade certain portions of its current 100% owned facility into a modern processing plant as a field unit asset.
Since October 2008, the Company has been participating with its 0.01543% working interest, by paying its share of expenses to install the NRU at an aggregate net cost to Magnolia of approximately US$90,000.
ExxonMobil has notified the working interest owners of its planned start-up of the NRU in early February 2012. According to ExxonMobil, expectations for oil production should increase to approximately 6-7,000 barrels of oil per day from the current production of 5,400 bopd, liquids (condensate) should increase to approximately 3,000 barrels a day, gas production is expected to range between 20-25,000 mcfs/d, the life of the field should increase by up to 25 years and up to a further 40 million boe should be recovered.
The Hawkins Field was discovered in 1940 and over the last 70 years has produced more than 800MMbbls out of original estimated reserves of 1.3 billion barrels. The field is part of the Woodbine formation which is also the source of oil for the giant East Texas Field that neighbours Hawkins.
** ENDS **
Glossary
`bopd' means barrels of oil per day
`boe' means barrels of oil equivalent
`boepd' means barrels of oil equivalent per day
`2P' means proved plus probable reserves
`Mbbl' means thousand barrels
`MMbbl' means million barrels
`MMcf' means million cubic feet per day
`mcfs/d' means thousand cubic feet per day
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 Charles Vaughan Northland Capital Partners +44 (0) 20 7796 Limited 8800 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 Notes
Magnolia Petroleum Plc is an AIM quoted oil and gas exploration and production company focussed on the US. Magnolia has an extensive and highly prospective portfolio of both producing and non-producing oil and gas interests, primarily located in the highly productive Bakken/Three Forks Sanish hydrocarbon formations in North Dakota as well as on the substantial and proven Woodford/ Hunton reservoirs in Oklahoma and the oil rich Mississippi located in Oklahoma. Currently, Magnolia has interests in 64 oil and/or gas producing properties.
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