Magnolia Petroleum Regulatory News (MAGP)

Magnolia Petroleum Plc / Index: AIM / Epic: MAGP / Sector: Oil & Gas 18 December 2014 Magnolia Petroleum Plc(`Magnolia' or `the Company') Update on Operated Leases in Oklahoma Magnolia Petroleum Plc, the AIM quoted US onshore focused oil and gasexploration and production company, is pleased to provide an update on itsoperated leases in Oklahoma including a more than doubling of production at its100% owned Roger Swartz #1 well following the successful completion of low coststimulation work, and the drilling of additional vertical wells scheduled tocommence in H1 2015. This update is in line with the Company's strategy torapidly build production through drilling and prove up the reserves on itsleases. Roger Swartz Vertical Well, Oklahoma Production from the 100% owned Roger Swartz #1 vertical well (`Roger Swartz' or`the Well') has more than doubled to 12.2 bopd following the completion of asuccessful fracture stimulation (`frac') exercise in November 2014. Prior tothis, the Well had been producing between 4-5 bopd from the Mississippi Limeformation. Following the frac, production has remained stable at current ratesand is not expected to experience significant decline. The total cost of thefrac was US$79,400 and based on current production rates, payback is expectedto be less than 12 months. Roger Swartz is currently producing from the Mississippi Lime and Vertzformations from which the Company estimates a total of up to 56,500 barrels ofoil equivalent are recoverable. H1 2015 Two new vertical wells, Oklahoma Magnolia has recently secured the necessary permits for two vertical wells inOklahoma: the Roger Swartz #2 and the Shimanek #2. Both wells will be targetingmultiple conventional payzones, including the Mississippi Lime/Chat, RedforkSand and the Lower Skinner Sand. The total cost of drilling, completing andstimulating each well is estimated at US$700k. Following the farm-out of a 6%working interest to an industry partner, Magnolia has a 94% working interestand a 76.375% net revenue interest in each well. The Company is fully funded todrill these two new wells, with drilling anticipated to commence in H1 2015. Rita Whittington, COO of Magnolia, said, "From the outset, it has always beenour intention to drill our own vertical wells targeting proven conventionalformations in Oklahoma. As the results of the latest frac of our 100% owned andoperated Roger Swartz#1 well demonstrate, vertical wells provide low costopportunities to grow production and prove up the reserves on our leases. Weare preparing to spud two additional vertical wells in H1 2015, which thanks toour large interests, have the potential to significantly increase Magnolia'sproduction and reserves. Upon success, these two wells will set up additionalwell offsets. "At the same time we continue to receive proposals to participate in drillingactivity alongside leading operators. In our view this continued interesthighlights the attractive returns still available through drilling andproducing from Oklahoma's historic formations even in the current oil priceenvironment. With both an operated and non-operated drilling strategy in placefor 2015, we remain focused on proving up the reserves on our leases and in theprocess generating significant value for our shareholders. I look forward toproviding further updates on our progress during the year ahead." ** ENDS ** Glossary `boe' means barrels of oil equivalent: a unit of energy based on theapproximate energy released by burning one barrel (42 US gallons or 158.9873litres) of crude oil. There are 42 gallons (approximately 159 litres) in one barrel of oil, whichwill contain approximately 5.8 million British Thermal Units (MBtus) or 1,700kilowatt hours (kWh). The value is necessarily approximate as various grades ofoil have slightly different heating values. BOE is used by oil and gascompanies in their financial statements as a way of combining oil and naturalgas reserves and production into a single measure. `boepd' means barrels of oil equivalent per day `bopd' means barrels of oil per day, Abbreviation for barrels of oil per day, acommon unit of measurement for volume of crude oil. The volume of a barrel isequivalent to 42 US gallons `IPR' means initial production rates `NRI' means net revenue interest `WI' means working interest 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 7382 1100 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 176 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 176 Waiting on first sales / IP rates 1 Being drilled / completed 9 Elected to participate / waiting to 38spud TOTAL 224