Magnolia Petroleum Regulatory News (MAGP)

Magnolia Petroleum Plc - Q2 2017 Operations Update

PR Newswire

London, August 2

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

3 August 2017

Magnolia Petroleum Plc (‘Magnolia’ or ‘the Company’)

Q2 2017 Operations Update

Magnolia Petroleum Plc, the AIM quoted US focused oil and gas exploration and production company, is pleased to announce a quarterly update for Q2 2017 (‘the Quarter’) on its operations across proven and producing US onshore hydrocarbon formations, including the Bakken/Three Forks Sanish in North Dakota, and the Woodford, Mississippi Lime and the Hunton in Oklahoma. 

Q2 Highlights to 30 June 2017

Outlook

Magnolia CEO, Rita Whittington said, “Over the years, Magnolia has had great success acquiring and developing onshore US leases alongside leading operators, particularly when oil prices were trading at US$90 per barrel. Since the downturn, we have worked hard to bring costs down and to focus more on areas which require low oil prices to breakeven so that we can have the same success at today’s US$40-50 oil prices. Our low cost, low risk model has generated substantial returns in the past for two previous companies I was a part of and, together with a highly experienced management team and Board, I am focused on doing the same with Magnolia. Thanks to the agreement we have signed with WED, I am confident we can start to make material progress towards this objective in the near term.”

Well Developments

The full list of well developments occurring in the quarter is set out below. A number of these include wells in which Magnolia has small interests. This is in line with management’s strategy to minimise exploration risk, which includes the evaluation of drilling data gained through its participation in wells in which it has very small interests.

Please note Magnolia has previously announced it had elected to participate in the drilling of the Pickle 2/9/4/33H well to the Woodford and Celesta 2 well to the Springer in Oklahoma. However, the Company is no longer participating in either of these two wells for the following reasons:

As a result of Magnolia not participating in the above two wells, the Company will not be liable for its share of drilling costs, which have a combined total of US$59,939.

The information contained within this announcement constitutes inside information stipulated under the Market Abuse Regulation (EU) No. 596/2014.

Glossary

‘M’ means Thousand

‘MBO’ means Thousand Barrels of Oil

‘Mcfd’ means Thousand Cubic Feet per Day

‘MM’ means million (thousand thousand not million million), as used in oilfield and heat content units such as MMSTB and MMBtu

‘MMBbl’ means Million barrels

‘MMcfd’ means Million Cubic Feet per Day

‘NRI’ means Net Revenue Interests

‘Proved Reserves’ means those quantities of petroleum which, by analysis of geological and engineering data, can be estimated with reasonable certainty to be commercially recoverable, from a given date forward, from known reservoirs and under current economic conditions, operating methods, and government regulation - Proved reserves can be categorized as developed or undeveloped

‘Probable reserves’ are those unproved reserves which analysis of geological and engineering data suggests are more likely than not to be recoverable. In this context, when probabilistic methods are used, there should be at least a 50% probability that the quantities actually recovered will equal or exceed the sum of estimated proved plus probable reserves

‘Possible Reserves’ are those unproved reserves which analysis of geological and engineering data suggests are less likely to be recoverable than probable reserves. In this context, when probabilistic methods are used, there should be at least a 10% probability that the quantities actually recovered will equal or exceed the sum of estimated proved plus probable plus possible reserves

Reserve Status Categories

‘Unproved Reserves’ are based on geologic and/or engineering data similar to that used in estimates of proved reserves; but technical, contractual, economic, or regulatory uncertainties preclude such reserves being classified as proved. Unproved reserves may be further classified as probable reserves and possible reserves

Reserve status categories define the development and producing status of wells and reservoirs

‘Developed reserves’ are expected to be recovered from existing wells including reserves behind pipe. Improved recovery reserves are considered developed only after the necessary equipment has been installed, or when the costs to do so are relatively minor. Developed reserves may be subcategorised as producing or non-producing.

‘Producing reserves’ are expected to be recovered from completion intervals which are open and producing at the time of the estimate. Improved recovery reserves are considered producing only after the improved recovery project is in operation.

‘Non-producing reserves’ include shut-in and behind-pipe reserves. Shut-in reserves are expected to be recovered from (1) completion intervals which are open at the time of the estimate but which have not started producing, (2) wells which were shut-in for market conditions or pipeline connections, or (3) wells not capable of production for mechanical reasons. Behind-pipe reserves are expected to be recovered from zones in existing wells, which will require additional completion work or future recompletion prior to the start of production.

‘Undeveloped reserves’ are expected to be recovered: (1) from new wells on undrilled acreage, (2) from deepening existing wells to a different reservoir, or (3) where a relatively large expenditure is required to (a) recomplete an existing well or (b) install production or transportation facilities for primary or improved recovery projects.

* * ENDS * *

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