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Extended to US$2.75m
Magnolia Petroleum Plc, the AIM quoted US onshore focused oil and gas exploration and production company, has announced the borrowing base limit of its Credit Facility has been increased to US$2.75 million from US$2.1 million.
This development follows the recent increase in the value of the Company’s net attributable proved and developed producing reserves to US$8.416million.
The Credit Facility, along with revenues generated from production, funds Magnolia’s drilling activity to prove up the reserves on its leases in proven US onshore formations, such as the Bakken/Three Forks Sanish, North Dakota and the Woodford/Mississippi Lime, Oklahoma.
As announced on 22 October 2013, the Company agreed a three year revolving line of credit with a nominal value of US$5 million and interest charged on credit drawn down at Wall Street Journal Prime +1.00%.
An initial borrowing base limit of US$1.6 million was set which, under the terms of the Credit Facility, is reassessed on a six monthly basis and adjusted in line with the level of Magnolia’s PDP reserves.
Rita Whittington, COO of Magnolia, said, “This is the second increase in the borrowing base limit since we secured the Credit Facility in October 2013. The first was based on the strong trading performance as detailed in the recent
full year results which included a 244% jump in revenues to US$2,443,244 and
EBITDA of US$975,622; while today’s increase is based on the progress made in
growing our PDP reserves.
WWith US$2.75 million available from the Credit Facility and revenues growing strongly, we are well placed to prove up thereserves on our leases, and in the process generate value for shareholders.”
