MAGP Magnolia Pet

 
TIDMMAGP 
 
Magnolia Petroleum Plc / Index: AIM / Epic: MAGP / Sector: Oil & Gas 
 
21 July 2017 
 
             Magnolia Petroleum Plc ('Magnolia' or 'the Company') 
 
                              Divestment of Wells 
 
Magnolia Petroleum Plc, the AIM quoted US focused oil and gas exploration and 
production company, is pleased to announce the divestment of 19 new wells in 
North Dakota and Oklahoma via two separate transactions ('the Transactions') 
for a total of US$411,000. 
 
In addition to raising funds for the Company, the divestment assists Magnolia 
in realigning its forthcoming well investments into core counties in which 
Western Energy Development LLC ('WED') can invest to allow the Company to 
participate alongside the anticipated WED investments and, as a result, the 
carried interests the Company will receive. 
 
Transaction#1: Farm out of six Marathon Oil-operated wells in North Dakota 
 
Further to its announcement of 20 May 2017, Magnolia has agreed to farm-out 
('the Farm-Out') its interest in six Marathon Oil-operated wells targeting the 
Bakken and Three Forks Sanish formations in North Dakota for an upfront cash 
consideration of US$150,000.  Magnolia did not incur any costs in relation to 
these interests. 
 
In addition to receiving an upfront cash payment, Magnolia will retain an 
interest in all six wells via a back-in after payout arrangement, providing the 
Company with exposure to future production and cash flow.  As a result of the 
Farm-Out, Magnolia will no longer be required to pay any of its share of the 
costs for drilling and completing the six wells. 
 
Transaction#2: Divestment of 13 Continental Resources-operated wells in 
Oklahoma 
 
The Company has additionally divested its interest in the thirteen Sympson 
wells, which it acquired in Q4 2015 and are only now being drilled/completed by 
Continental Resources in Oklahoma, for an upfront cash consideration of 
US$261,000.  To date Magnolia has incurred US$200,000 in drilling costs in 
these wells and will no longer be required to meet any of its share of the 
future costs in drilling or completing these wells. 
 
US$210,000 of the cash consideration received will be used to reduce the 
Company's reserve based lending facility ('the Facility'), which will fall to 
US$2,353,080 following the payment.  The remaining funds will be used for 
working capital and for future investment. 
 
Magnolia CEO, Rita Whittington said, "After securing what we regard as a 
game-changing agreement with WED to invest and manage on their behalf up to 
US$18.5 million of foreign capital under the US Immigrant Investor Programme, 
today's transactions are part of a re-evaluation and realignment of our 
portfolio to participate alongside WED.  By providing Magnolia with an 
additional revenue stream based on asset management services as well as low 
risk expansion of our lease position and well count, WED represents an 
excellent platform with which to fast-track our objective to generate 
substantial value, and we intend to take full advantage of this opportunity. 
 
"The WED agreement and the multiple opportunities within our existing leases 
and wells in Oklahoma are the building blocks we intend to use to transform 
Magnolia into the significant US onshore oil and gas company we believe it can 
become. This is an exciting period for Magnolia and I look forward to providing 
further updates on our progress." 
 
For further information on the WED capital management agreement and the 
additional revenue stream and assets it is expected to deliver to Magnolia, 
please refer to the Company's announcement of 4 July 2017.  In addition, the 
Company's latest Investor Presentation has been uploaded onto the corporate 
website www.magnoliapetroleum.com 
 
The information contained within this announcement constitutes inside 
information stipulated under the Market Abuse Regulation (EU) No. 596/2014. 
 
                                 * * ENDS * * 
 
For further information on Magnolia Petroleum Plc visit 
www.magnoliapetroleum.com or contact the following: 
 
Rita Whittington           Magnolia Petroleum Plc       +01918449 8750 
 
Jo Turner / James Caithie  Cairn Financial Advisers     +44207213 0880 
                           LLP 
 
Colin Rowbury              Cornhill Capital Limited     +44207710 9610 
 
Lottie Brocklehurst        St Brides Partners Ltd       +44207236 1177 
 
Frank Buhagiar             St Brides Partners           +44207236 1177 
                           Ltd 
 
 
 
END 
 

(END) Dow Jones Newswires

July 21, 2017 02:00 ET (06:00 GMT)

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