Magnolia Acquires Oklahoma Mississippi Lime Acreage

Acquired 100% WI in 800 acres in Mississippi lime formation in OK & minority interests in leases over a further 284 net acres.

Magnolia Petroleum Plc, London, (London AIM: MAGP) has acquired a 100% interest in 800 acres in the oil-producing Mississippi Lime formation in Oklahoma and minority interests in leases over a further 284 net acres from an undisclosed seller for $230,000.

The deal includes 100% working interests in 800 net Mississippi formation acres, including the right to drill, and ongoing leasing activity has acquired a further 284 net acres with an average working interest of 3.4% with further acreage expected to be acquired in due course.

Magnolia plans to drill at a minimum three vertical wells to test the Mississippi in the near future.

Magnolia chief operating officer Rita Whittington says, “Today's news represents a key milestone for Magnolia. The new acreage lies on the Mississippi formation in Oklahoma, recognized as having the potential to be the next big play in onshore U.S. and where many of the leading players operating in the Bakken have recently been busy acquiring large tracts of land. Last year we participated in a well with Chesapeake that was completed in the Mississippi formation in which we recovered all of our costs in just three months. In addition, the cost of drilling in the Mississippi is considerably less than that of the Bakken, and so offers higher margins and a much reduced payback time.”