Magnolia Petroleum Plc / Index: AIM /
Epic: MAGP / Sector: Oil & Gas
5 August 2016
Magnolia Petroleum
Plc (‘Magnolia’ or ‘the Company’)
Q2 2016 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 2016 (‘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. This includes an updated independent Reserves
Report as at 1 July 2016 as part of
the six month bank debt redetermination process.
Q2 Highlights to 30 June 2016
- Total number of producing wells as at end of Q2 2016 stands at
146 – 21 uneconomic wells with little or no value were divested
during the quarter for a nominal sum to free up accounting
resources and eliminate monthly lease operating costs
- Elected to participate in one new well during the Quarter
- 10 well drilling programme alongside Continental Resources
on-going, targeting gas in the prolific South-Central Oklahoma Oil
Province (‘SCOOP’) play in Oklahoma, where an estimated total of 3.2
billion barrels of conventional oil have been recovered from 60
reservoirs
- Activity currently taking place on all ten wells - either
drilling, completing or logging operations
- All are lower risk increased density wells to maximise the
recovery of reserves in two sections on leases that are held by
production
Updated Reserves Report
- Total net proved and developed producing reserves (‘PDP’) of
133.31 Mbbl of oil and condensate and 580.67 MMcf gas as at
1 July 2016 (1
Jan 2016: 138.63 Mbbl and 352.38 MMcf)
- Value of net PDP as at 1 July
2016 increased to US$3,445,180
(1 Jan 2016: US$2,917,390)
- Further headroom created as borrowing base limit of
US$6 million Credit Facility adjusted
up to US$1,894,849 from US$1,604,565 to reflect positive effect of
slightly higher oil prices on the value of Magnolia’s net PDP
reserves
- Magnolia has made a US$400,000
repayment (as announced on 18 April
2016) and has agreed to make amortised payments over a 5
year period on the outstanding amount which, based on 1 July 2016 reserve estimates, stands at
US$840,764
- Magnolia continues to pay interest only on the remaining
US$1,894,849 balance of the loan on a
monthly basis
Outlook
- New wells due to come into production in Q3 2016 drilled by
Continental Resources
- Additional participation with leading operators in new wells
and infill drilling where commercial at lower oil prices
- On-going lease acquisition and management activity in line with
strategy to grow and diversify portfolio
Magnolia COO, Rita Whittington
said, “During the Quarter we continued to high grade our
portfolio of producing wells in proven US onshore formations,
specifically the divestment of a further 21 wells, which have
little or no economic value and where we have a below average
interest. As a result, the disposal of these wells will have
a minimal effect on our overall production, which stood at 242
boepd as at 31 March 2016.
“The active management of our producing wells should be seen in
the context of freeing up internal resources to not only focus on
those leases and wells in which we have a higher interest and which
are located in highly productive areas, but also to acquire low
cost acreage in those areas where we have been looking to gain
exposure. In the meantime we continue with our strategy of
participating alongside established operators in new wells where it
makes commercial sense to do so, and I look forward to providing
further updates on our progress.”
Well Developments
The full list of well developments occurring in the quarter is
set out below.
Well |
Formation |
Status |
NRI % |
Operator |
Sympson 2-7-6XH |
Woodford, Oklahoma |
Drilling |
0.40 |
Continental Resources |
Sympson 4-7-6XH |
Woodford, Oklahoma |
Drilled |
0.40 |
Continental Resources |
Chalfant |
Woodford, Oklahoma |
Drilled |
0.36 |
Continental Resources |
Sympson 10-6H |
Woodford, Oklahoma |
Drilled |
0.44 |
Continental Resources |
Sympson 8-7-6H |
Woodford, Oklahoma |
Drilling |
0.40 |
Continental Resources |
Sympson 3-7-6XH |
Woodford, Oklahoma |
Drilling |
0.40 |
Continental Resources |
Sympson 9-7-6XH |
Woodford, Oklahoma |
Drilling |
0.40 |
Continental Resources |
Sympson 5-7-6XH |
Woodford, Oklahoma |
Drilled |
0.40 |
Continental Resources |
Sympson 7-6-7XH |
Woodford, Oklahoma |
Drilling |
0.40 |
Continental Resources |
Sympson 6-6-7XH |
Woodford, Oklahoma |
Drilling |
0.40 |
Continental Resources |
Michele Abel H1-2XH |
Springer, Oklahoma |
Drilling |
0.13 |
Marathon |
* * ENDS * *
For further information on Magnolia Petroleum Plc visit
http://www.magnoliapetroleum.com/ or contact the following:
Steven Snead |
Magnolia Petroleum Plc |
+01918449 8750 |
Rita Whittington |
Magnolia Petroleum Plc |
+01918449 8750 |
Jo Turner / James
Caithie |
Cairn Financial Advisers
LLP |
+44207 1487900 |
Colin Rowbury |
Cornhill Capital Limited |
+44207710 9610 |
Lottie Brocklehurst |
St Brides Partners Ltd |
+44207236 1177 |
Frank Buhagiar |
St Brides Partners
Ltd |
+44207236 1177 |
Notes
Magnolia Petroleum Plc is an AIM quoted, US focused, oil and gas
exploration and production company. Its portfolio includes
interests in 146 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 |
146 |
Being drilled / completed |
11 |
Elected to participate / waiting to
spud |
18 |
TOTAL |
176 |