🕐02.04.14 - 08:27 Uhr
MAGNOLIA PETROLEUM: 29 NEW WELLS ADDED IN Q1 2014 BRINGING TOTAL WELL COUNT TO 2
13 IN PROVEN US ONSHORE FORMATIONS - FURTHER STRONG GROWTH EXPECTED
Magnolia Petroleum Plc / Index: AIM / Epic: MAGP / Sector: Oil & Gas
2 April 2014
Magnolia Petroleum Plc (Magnolia or the Company)
Quarterly Operations Update for the Period Ended 31 March 2014
Magnolia Petroleum Plc, the AIM quoted US focused oil and gas exploration and production company, is pleased to announce a quarterly update on its operations across proven and producing US onshore hydrocarbon formations, including the Bakken/Three Forks Sanish in North Dakota and Montana, and the Mississippi Lime and the Hunton/Woodford in Oklahoma.
Quarter Highlights
* 151 producing wells as at end of Q1 2014 - an increase of 11 during the period
* Elected to participate in 29 new wells including those with larger than average interests such as Rothermel 2MH (5.41%) in the Mississippi Lime Formation and Marion 1-23HW (5.41%) and Peters 1-27H (5.21%) targeting the Woodford Formation, Oklahoma
* Significant increase in infill well proposals on the Companys leases held by production in North Dakota and Oklahoma to maximise recovery of reserves on individual spacing units
* First proposal received to drill eight wells on one spacing unit in Oklahoma targeting Mississippi Lime and lower lying Woodford formations
* Borrowing base limit of Credit Facility raised from US$1.6 million to US$2.1 million to accelerate drilling activity and prove up reserves on leases as a result of strong trading performance and increase in new well proposals
Outlook
* New wells due to come into production in Q2 2014 - several with higher than average interests including the Parmley 1-1WH well
* Further participations in new wells and infill drilling with leading operators expected
* 240% expected increase in full year revenues to approximately US$2.4 million, in line with market expectation, with full year EBITDA expected to be ahead of market expectations
* On-going lease acquisition and management activity in line with strategy to grow and diversify portfolio
* Updated Reserves Report (CPR) to be issued in Q2 2014 - to include estimates for the Companys average production rates and PDP reserves
* Reserves estimate covers approximately 5,500 net acres out of total of over 13,500 in proven formations, such as the Bakken/Three Forks Sanish, North Dakota, and the Mississippi Lime, Woodford, Oklahoma
Magnolia COO, Rita Whittington said, "During the quarter we added 29 new wells at various stages of development to our US onshore focussed well inventory.
As well as interests in 151 producing wells, a further 16 are being drilled or completed and 46 waiting to spud.
Thanks to our excellent drilling success rate and a higher proportion of lower risk infill wells being drilled on already producing leases, our 62 wells undergoing development or waiting to spud represent a strong pipeline of future revenue growth, on top of the 240% increase for the year ended December 2013.
"With operators such as Devon Energy increasingly looking to drill eight wells per spacing unit in Oklahoma targeting the Mississippi Lime and Woodford formations, we are confident our well count will continue to rise strongly.
In line with our strategy, the higher production and associated revenues, together with our increased credit facility, will fund further drilling activity on our leases as we continue to systematically prove up the reserves on our 13,500 net mineral acres in proven US onshore formations."
Well Developments
The full list of well developments occurring in the quarter is set out below.
Well
Formation
Status
NRI %
Operator
Parmley 1-1WH
Mississippi Lime, Woodford, Oklahoma
Undergoing fracture stimulation
12.187
Devon Energy
Blaser 1-10H
Mississippi Lime, Oklahoma
Producing
9.375
Cummings
Linda 1-4
Wilcox, Oklahoma
Producing
9.375
MT.
Dora
Voise 1-24WH
Mississippi Lime, Woodford, Oklahoma
Drilled and awaiting completion
6.4
Devon Energy
Peters 1-27H
Woodford, Oklahoma
Waiting to spud
4.2
Paul Gillham
Marion 1-23HW
(formerly ?1-23HW)
Woodford, Oklahoma
Completing
4.1
Devon Energy
Rothermel 2MH
Mississippi Lime, Oklahoma
Waiting to spud
4.1
Devon Energy
Jimmy1-28H
Woodford, Oklahoma
Waiting to spud
3.0
Red Fork
Bolay #1-19HW
Woodford, Oklahoma
Undergoing fracture stimulation
2.059
Devon Energy
SPS Lucy 1-14H
Hunton, Oklahoma
Waiting on IP rates
1.562
Paul Gillham
Giles 1-6H
Mississippi Lime, Oklahoma
Producing
1.22
Red Fork
Skunk Creek 4-8-17-13H3
Three Forks Sanish, North Dakota
Drilled and awaiting completion
0.675
Kodiak Exploration
Skunk Creek 4-8-17-13H
Bakken, North Dakota
Waiting to spud
0.675
Kodiak Exploration
Skunk Creek 4-8-17-14H3
Three Forks Sanish, North Dakota
Waiting to spud
0.675
Kodiak Exploration
Skunk Creek 4-8-17-14H
Bakken, North Dakota
Completing
0.675
Kodiak Exploration
The Company only provides details and updates for wells in which it has a working interest of 1.5% or more.
The Summary of Wells table at the end of each release includes all wells in which Magnolia has an interest and is updated as and when a change in status occurs for all wells.
The four Skunk Creek wells are included due to their combined costs and being located in North Dakota.
Participation in new wells
Well Name
Targeted Formation
Operator
Magnolias WI/NRI
Net Cost to Magnolia
Rothermel 1-3WH
Woodford, Oklahoma
Devon Energy
5.41%/4.1%
US$190,594
Cummings 31-28-12-1H
Mississippi Lime, Oklahoma
Chesapeake Energy
4.18%/3.34%
US$141,648
Commencement of production
Well Name
Targeted
Formation
Operator
Gross IPR
Magnolias NRI
Net IPR
Giles 1-6H
Mississippi Lime, Oklahoma
Red Fork Energy
122 boepd
1.22%
1.5boepd
* * 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 151 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
151
Being Drilled / Completed
16
Elected to participate / waiting to spud
46
TOTAL
213
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Frank Buhagiar
St Brides Media & Finance Ltd
3 St Michaels Alley, London, EC3V 9DS
www.stbridesmedia.co.uk
Tel: 0207 236 1177 | Mob: 07788410221 | Twitter: @StBrides1