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Oil Capital
EPIC: MAGP
Market: AIM
52-week High/Low: 0.21p / 0.08p
Sector: Energy
Market Cap: 1.93M
Phone: +01 918 449 8750
Address: 18452 E 111th St, Broken Arrow, OK 74011.
Website: www.magnoliapetroleum.com

Magnolia Petroleum plc is an AIM listed oil and gas production company focused on the acquisition, exploitation and development of oil and gas properties primarily located onshore in the United States. Led by a highly skilled management team with over 100 years combined experience in the on shore oil and gas industry, the Company already has interests in over 60 producing properties and significant acreage in two major project areas, the potentially game-changing and highly productive Bakken shale in North Dakota and the proven Woodford and Hunton formations in Oklahoma. The Company is also currently targeting the Mississippi Formation in Oklahoma, a known play with proven and substantial reservoirs

Magnolia Petroleum is traded in the ISDX Exchange HERE

Magnolia Petroleum PLC

www.magnoliapetroleum.com

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Big picture - Why invest in Magnolia Petroleum PLC

Magnolia Petroleum PLC Snapshot

Strategy

Magnolia’s growth strategy is aimed at building a significant US onshore focussed oil & gas production company. The Company is run by highly experienced industry professionals with proven track records in building value. The Directors believe that this experience in the acquisition of leases, development of projects and operations will allow it to take advantage of multiple opportunities existing in areas that are on the leading edge of developing successful drilling plays.

 

Defined Investment Criteria

 

 

The strategy is focussed on two areas. Firstly, Magnolia plans to continue to increase its production by participating with successful operators in developmental wells on its current acreage in the Bakken and Three Forks Sanish area in North Dakota and its Mississippi Lime, Woodford/Hunton Oil acreage in Oklahoma. The current portfolio has been developed in tandem with leading US oil companies including Marathon Oil & Gas and Chesapeake Energy.

 

Magnolia Petroleum targets prime areas of onshore US oil and gas development in North Dakota and Oklahoma. The Company has a diverse portfolio of revenue-generating assets including leases on 91,520 gross acres in the potentially game-changing and highly productive Bakken/Three Forks Sanish Formation in North Dakota and the proven Woodford/Hunton oil formations in Oklahoma. Magnolia is also targeting acreage on the Mississippi Formation in Oklahoma, a known play with proven substantial reservoirs.

 

 

Producing Working Interests:

 

  • Interests in 64 oil and/or gas producing properties located onshore United States;

 

23 of these wells have been drilled since Magnolia was founded

These interests have a current net present value at a 10% discount rate of approximately $1,531,000

 

Non-Producing Working Interests

 

  • Leases in respect of approximately 33,920 gross mineral acres (557 net mineral acres) in the Bakken/Three Forks Sanish formations, giving rights to participate in the drilling in up to eight wells per section in 28 sections located in North Dakota
  • Leases in respect of approximately 57,600 gross mineral acres (702 net mineral acres) located in the Woodford and Hunton formations, giving rights to participate in the drilling in up to two wells per section in 87 sections in Oklahoma
  • These interests have a current net present value at a 10% discount rate of approximately $16,482,000

 

 

Future Opportunities – Mississippi Formation

 

  • Magnolia has executed an agreement with a geologist to use his data and analysis to evaluate and then acquire acreage on 21,000 gross mineral acres in the Mississippi formation located in Oklahoma. This acreage covers five prospects. This oil-rich region, considered tapped out by vertical drilling decades ago, has been yielding reservoirs to horizontal operators during the past two years.

 

 
 
Bakken/Three Forks Sanish
 
Magnolia’s Bakken/Three Forks Sanish Interests target the Bakken formation, which comprises three separate reservoirs, and the Three Forks Sanish Formation which sits above. The interests comprise of leases covering approximately 11,520 gross mineral acres (412 net mineral acres) distributed across a total of 28 sections all of which are located in Dunn, Williams and McKenzie Counties, North Dakota. The Bakken is being infill drilled to four wells per 1,280 acres spacing unit by other operators. The leases grant Magnolia the right to participate in 92 identified well locations (78 increased density locations) targeting the Bakken as well as 107 identified well locations (82 increased density locations) targeting the Three Forks Sanish.
 
 
Magnolia has the opportunity to produce oil on the same lease from both separate formations. The operator is entitled to drill 4 wells on each of the Bakken and Three Forks Sanish formations in each section. At the time of acquisition of the Company’s interests in the Bakken it was unknown that the Three Forks Sanish formation was a separate and distinct reservoir. It is now thought that the Three Forks Sanish formation could be equally or more productive than the Bakken formation. 
 
 
Based on the current pace of development, the Directors expect it to take several years to develop fully Magnolia’s Bakken/Three Forks Sanish Interest; operators in this area expect to drill 4 wells per unit in each of the Middle Bakken and Three Forks Sanish formations. Magnolia has experienced average stabilised production rates of 400 barrels of oil per day on its multi-stage frac wells.
 
 
Woodford/Hunton Formation
 
Woodford is an established and proven reservoir located in south east Oklahoma. The reservoir was thought to be mostly depleted until the introduction of horizontal drilling and stimulation technology, which has opened up exciting ventures for Magnolia and other participating companies. These formations have not been exploited to the same extent as the Bakken to date, but several qualified independent exploration companies have now begun aggressive drilling programmes. 
 
 
Magnolia holds leases in respect of approximately 67,200 gross mineral acres (800 net mineral acres), giving rights to participate in the drilling of wells in 105 sections located in 26 counties in central Oklahoma. The Company has an average working interest of approximately 2.65% and an average net revenue interest of approximately 2.36% .in the 105 sections.
 
 
Mississippi Lime Play
 
The Mississippi formation was historically considered tapped out by vertical ddrilling decades ago.  It is only in recent years that horizontal drilling has established the opportunity for further exploitation of the reservoir.  The horizontal wells drilled in the play have lateral lengths of between 2,500 feet and 5,000 feet and are fracture stimulated in 6-12 stages.  The fracture stimulation treatments are not as large as those in the Bakken play or the other unconventional resource plays such as the Eagle Ford.  Because of the shallow depths and smaller fracture stimulation treatments, the typical completed well cost ranges from US $2.4-US $2.9 million.  Current drilling times are approximately 17-28 days from spud to total depth.
 
 
Magnolia has been granted a permit to become an operator, and it is the intention of the management to acquire more material working interests (of up to 50%) in sections in this formation and other potentially productive formations. As an Oklahoma operator, the Company will be able to control the timing of the drilling, proposing and producing of its oil and gas wells in the State of Oklahoma. The Company will offer the opportunity to participate to the non-operator working interest owners.
 

To read more click here 

Rita Fern Whittington - Chief Operations Officer

Mrs Whittington is a petroleum landman with more than 32 years’ experience in acquisitions, operations and management of oil and gas properties. She joined Primary Natural Resources I and II as a senior member of the asset management team, where she was jointly responsible for company growth. Both companies were sold in an aggregate eight-year period generating a 3:1 return on equity.

Steven Otis Snead - Chief Executive Officer

Mr Snead is a petroleum landman with 35 years’ experience in the US onshore oil and gas industry. During this period he has owned and operated successful oil and gas operating and services companies. He founded and still owns Enerlex Inc. for the purpose of acquiring and managing royalty interests. He has extensive experience in oil and gas lease acquisition, drilling, development and operations.

Thomas Wagenhofer - Non-Executive Chairman

Mr. Wagenhofer is a petroleum engineer with more than 20 years experience in the global E&P sector. Past positions include Senior Managing Director of Metals and Energy Capital at Macquarie Bank Limited, Vice President of Ryder Scott Company and Research Engineer at Atlantic Richfield Company. Currently, Mr. Wagenhofer is founder and technical lead for Giant Capital and Gate Energy.


Ronald Sanford Harwood - Non-Executive Director

Mr Harwood has had active involvement in originating and developing projects in oil and gas exploration and production since 1981. He founded Bellwood Petroleum Corporationin 1985, Bellwood Petroleum LL Cin 2007 and Colony Petroleum, LLC in 1990. Colony secured US and international investors to participate in oil and gas exploration and production ventures originated and operated by American and Canadian independent oil and gas companies.


Derec Norman - Vice President of Accounting

Derec has spent the last eight years working in the oil and gas industry in Oklahoma City, Oklahoma.  He began his career with Chesapeake Energy Corporation (NYSE: CHK), a leading operator in Oklahoma, where in his role as Acquisition & Divestiture Supervisor, he specialised in oil and gas accounting, acquisitions, divestitures, and mergers managing deals totalling over US $10 billion.  Derec graduated from the University of Central Oklahoma with an honours degree in finance.

Magnolia Petroleum PLC

18452 E 111th St

Broken Arrow, OK 74011

T: +01 918 449 8750

F: +01 918 449 0180

 

To send an enquiry please click here 

Cairn Financial Advisers, LLP | Nominated Adviser
61 Cheapside
London
EC2V6AX

Cornhill Capital Limited | Broker
18 St. Swithins Lane
London
EC4N 8AD

PKF Littlejohn LLP | Auditors and Reporting Accountants
1 Westferry Circus
Canary Wharf
London
E14 4HD

Pray Walker, P.C. | Attorneys to the Company in the USA
100 W. 5th Street
Suite 900
Tulsa OK 74103
United States of America

Neville Registrars Limited | Registrars
Neville House
18 Laurel House
Halesowen
B63 3DA

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