Magnolia Petroleum Regulatory News (MAGP)

12 Jul 2012 14:23

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

12 July 2012

Magnolia Petroleum Plc ("Magnolia" or "the Company") Placing with Institutional Investor and subscription by Directors raising GBP565,000 Heads of Terms signed for GBP10,000,000 Financing Facility

Magnolia Petroleum Plc, the AIM quoted US focussed oil and gas exploration and production company, is pleased to announce that it has raised £565,000 via the issue of 23,529,411 new ordinary shares to Henderson Global Investors (the "Placing Shares") and 3,058,824 new ordinary shares to Directors, an employee and an adviser to the Company (the "Subscription Shares") at a price of 2.125 pence per share (together the "Fundraising"). As part of the placing, Henderson will receive 12,000,000 warrants with a deemed exercise price of 2.75p per share (the "Warrants"). The Warrants are subject to a cashless exchange right, exercisable at the discretion of the holder but not prior to 18 December 2012.

In addition, the Company is pleased to announce that it has signed Heads of Terms with Darwin Strategic Limited ("Darwin") for the provision of a £10 million Equity Financing Facility ("EFF"), over a period of 36 months. The subscription price of any draw down of the EFF will be the average of the three lowest daily closing bid prices during the 15 trading days immediately following a draw down notice. Any exercise of the draw down shall have a volume commitment of a minimum of four times the average daily volume traded in Magnolia shares, as reported on Bloomberg for AIM during the 15 days prior to activation, subject to certain restrictions which are yet to be finalised.

Darwin is a majority owned subsidiary of Henderson Global Investors' Alphagen Volantis fund. A further announcement will be made describing the terms of the EFF in more detail, once the final agreement has been entered into, expected to be no later than 20 July 2012.

The net proceeds of the Fundraising will be used to further expedite the Company's existing growth and investment strategy as set out at the time of Admission in November 2011.

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 substantial and proven Woodford/Hunton reservoirs in Oklahoma and the oil rich Mississippi Formation located 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, COO of Magnolia Petroleum, said, "We are extremely pleased to welcome Henderson Global to the share register of Magnolia as an institutional investor and that we have reached Heads of Terms in respect of a £10 million financing facility. Our participation in the drilling of wells, both in number and percentage interest is on the increase. The fundraising will enable us to aggressively participate in the development of prospects in which we have an interest."

Admission and dealings

The Placing Shares and Subscription Shares will rank pari passu in all respects with the Company's existing issued ordinary shares and together will be equivalent to 3.8% of the enlarged issued share capital. Application will be made for the admission of the Subscription Shares to trading on AIM and it is expected that admission will occur and that dealings will commence at 8.00 a.m. on 18 July 2012.

For the purposes of the Financial Services Authority's Disclosure and Transparency Rules, the Company announces that following the issue of the Placing Shares and Subscription Shares, the Company will have 695,469,220 Ordinary Shares in issue ("Enlarged Share Capital").

The Company has no ordinary shares held in treasury. The total number of voting rights in the Company will therefore be 695,469,220. This figure may therefore be used by shareholders in the Company as the denominator for the calculations by which they will determine if they are required to notify their interest in, or a change in their interest in, the share capital of the Company under the FSA's Disclosure and Transparency Rules.

Directors Dealings

The table below sets out the number of shares subscribed for by the Directors under the Subscription and their subsequent holdings.

Director Subscription Subsequent % of Enlarged Number of Shares Holding Share Capital Options and Warrants Steven Snead 941,178 199,915,998* 28.75 14,110,000 Rita 235,294 11,635,294 1.67 10,126,000 Whittington Ronald Harwood 941,176 28,482,426 4.10 1,660,000 Gavin Burnell 235,294 14,185,797 2.04 11,220,768 John Cubitt 235,294 619,908 0.09 4,400,000

*Includes the interest in ordinary shares held by Snead Family LLC

** ENDS **

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 8800Wicks Limited Lottie Brocklehurst St Brides Media and Finance +44 (0) 20 7236 1177 Ltd Frank Buhagiar St Brides Media and Finance +44 (0) 20 7236 1177 Ltd 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 WellsCategory Number of wells Producing 80 Being Drilled / Completed 4 Elected to participate / waiting to 12spud TOTAL 96

\* 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.