🕐22.10.13 - 09:27 Uhr
MAGNOLIA PETROLEUM: US$5M CREDIT FACILITY SECURED TO FUND FUTURE DRILLING ACTIVI TY ALONGSIDE ESTABLISHED OPERATORS IN PROVEN US ONSHORE FORMATIONS AND PROVE UP RESERVES
Magnolia Petroleum Plc / Index: AIM / Epic: MAGP / Sector: Oil & Gas
22 October 2013
Magnolia Petroleum Plc (Magnolia or the Company)
US$5 million Credit Facility Secured
Magnolia Petroleum Plc, the AIM quoted US onshore focused oil and gas exploration and production company, is pleased to announce it has secured a US$5 million three year Credit Facility (the Credit Facility).
Combined with the Companys fast growing revenues from production, which as at 1 August 2013 stood at 214 boepd, the Credit Facility will provide funding for future drilling activity alongside established operators, as well as the acquisition of additional leases in proven US onshore formations.
Credit Facility
The Credit Facility is a three year revolving line of credit with a nominal value of US$5 million.
Interest is charged on credit draw down at Wall Street Journal Prime (currently 3.25%) +1.00%.
No warrants or equity are to be issued as part of the facility.
Under the terms of the credit line, an initial borrowing base limit of US$1.6 million has been set which will be reassessed on a six monthly basis and adjusted in line with the level of Magnolias Proven Developed Producing reserves (PDP).
The Directors expect the strong growth seen to date in the Companys PDP reserves will be maintained as a result of a pipeline of 50 new wells at various stages of development and the multiple well proposals being received.
Equity Financing Facility (EFF)
The Company announced on 9 August 2012 that it had secured an EFF providing additional optionality when issuing shares on a non-pre-emptive basis.
The Directors are very conscious of minimising the amount of new equity issued and from the outset it has been the ambition of the Company to become self-funding.
Based on current trading and todays announcement of the US$5 million Credit Facility, the Directors do not anticipate drawing down under the EFF in the foreseeable future.
Rita Whittington, COO of Magnolia, said, "Securing this US$5 million Credit Facility not only represents a third party validation of both our business model and the progress we have made to date, but also goes a long way to propelling Magnolia towards self-funding status.
Combined with our strong revenue growth profile, which, in line with our strategy, is already allowing us to increasingly fund new well participations using recycled capital, we are now in a position to accelerate our drilling activity and at the same time prove up our reserves.
"In the two years since our Admission to AIM, we have proven our model can create value for shareholders having grown our 2P reserves from US$2.2 million at the time of our IPO to US$47 million as at 1 August 2013.
With over 600 potential drilling locations on our acreage and having secured the Credit Facility, we are delighted that we are in a position to prove up the reserves on our acreage while retaining more of the value upside for our shareholders.
I look forward to providing further updates, as we continue to grow our reserves through drilling."
** 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
Jo Turner / James Caithie
Cairn Financial Advisers LLP
+44 20 7148 7900
John Howes / Alice Lane / Luke Cairns
Northland Capital Partners Limited
+44 20 7796 8800
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 exploration and production company.
Its portfolio includes interests in 124 producing and non-producing assets, primarily located in the highly productive Bakken/Three Forks Sanish hydrocarbon formations in North Dakota as well as the oil rich Mississippi Lime and the substantial and proven Woodford and Hunton formations in Oklahoma.
Summary of Wells
Category
Number of wells
Producing
124
Being Drilled / Completed
18
Elected to participate / waiting to spud
32
TOTAL
174
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