11 Jun 2012 07:00
Magnolia Petroleum Plc / Index: AIM / Epic: MAGP / Sector: Oil & Gas
11 June 2012
Magnolia Petroleum Plc (`Magnolia' or `the Company') Positive Update on Operations inOklahoma
Magnolia Petroleum Plc, the AIM quoted US onshore focused oil and gas exploration and production company, is pleased to provide an update on its activities in the producing Mississippi Lime and Hunton formations in Oklahoma, in line with its expansion strategy to rapidly grow production and revenues.
Overview
* Assumed operatorship for the first time through workover of two producing wells (Osage Lynn and Solman) * The Brady 17-27-12 1H and Lois Rust 7-27-12 1H wells are now both producing - inital production rates have not yet been released by the operators * Total number of producing wells in the Bakken/Three Forks Sanish, North Dakota and the Mississippi Lime and Woodford/Hunton formations in Oklahoma now 77 * The SPS 6-26 well, operated by Paul Gillham & Co, located in Pottawatomie County, Oklahoma and targeting the Hunton Formation has now been spudded and is currently drilling - total number of wells drilling or awaiting completion now stands at two (SPS 2-26 and Henry 2-29) * Elected to participate in two additional wells (the Montecristo 6-1H and Beebe 24-W1H) - total number of wells waiting to be spud now stands at 10 * Acquired further 470.39 net mineral acres with average working interest of 16% - total net acreage in Mississippi Lime now stands at 4,011.39
Magnolia COO, Rita Whittington said, "I am delighted that, with the Osage Lynn and Solman, Magnolia is now operating its own wells. Importantly, our production from these two shallow wells is holding our Mississippi acreage, meaning it is now `Held By Production' and will not expire. We believe the Mississippi to have significant upside and we intend to drill down to this formation in due course.
"These developments are in line with our strategy and brings the total number of producing properties in which we have an interest in to 77 with a further 12 either being drilled or waiting to be spud, giving an aggregate total of 89. We remain on track to increase this to 100 by the end of the year.
"In addition, Magnolia continues to increase its mineral rights and is now interested in an aggregate 4,011.39 net mineral acres within the boundaries of the Mississippi Lime oil play, Oklahoma, which substantially exceeds the goal we set at the time of our admission to AIM. Not only does this acreage broaden our pipeline of opportunities, it further underpins Magnolia's asset backing."
Full Release
As announced on 10 February 2012, as part of the acquisition of 800 gross acres with a 100% working interest in Osage County, Oklahoma, Magnolia acquired six "active" wells along with existing infrastructure already on the site including tanks, separators and an injection well. These six wells have historically produced from a shallower formation than the Mississippi Lime which lies below, and all had recompletion and workover potential.
The Osage Lynn and Solman are two of these six shallow vertical wells in which Magnolia holds a 100% working interest and a 75% net revenue interest. Both are being operated by the Company and are currently producing an aggregate 2 bopd (a net 1.5 bopd to Magnolia). Magnolia intends to drill further wells on this acreage in due course targeting the Mississippi formation.
Further to the Company's announcement on 20 December 2011, the SPS 6-26 well, located in Pottawatomie County, Oklahoma and targeting the Hunton Formation has now been spudded and is currently drilling. The well in which Magnolia has a 0.8333% working interest is operated by Paul Gillham Oil Company.
The Company has elected also to participate in two additional wells targeting the Mississippi Lime formation, Oklahoma:
The Montecristo 6-1H horizontal well, located in Noble County, Oklahoma in which Magnolia has a 6.1879% working interest is operated by Cisco. Total drill costs are estimated at US$3,786,200 with the Company's share estimated at US$234,286. The well is expected to spud on, or around, 13 June 2012.
The Beebe 24-W1H horizontal well, located in Garfield County, Oklahoma in which Magnolia has a 0.3125% working interest is operated by Longfellow Energy. The total cost of the well has been estimated at US$4,564,848 with the Company's share estimated at US$14,265. A spud date for the well has yet to be confirmed.
The ten wells that Magnolia has elected to participate in and which are waiting to spud are: the Drone 2-34, Redfork 1-25H, Joan 1-21, Sherri #1, Bollinger 1-27H, 3 Sundance offsets, Beebe 24-W1H and the Montecristo 6-1H:
In line with its AIM Admission document, the Company has acquired a further 470.39 net mineral acres, with an average 16% working interest and 12.45% net revenue interest, in the proven Mississippi Formation, Oklahoma. The total net mineral acres acquired since admission to AIM now totals 4,011.39.
** 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 77 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 77 Being Drilled / Completed 2 Elected to participate / waiting to spud 10 TOTAL 89