Magnolia Petroleum has secured a new US$6 million two year Credit Facility ('the Credit Facility') with improved terms. This replaces the Company's existing US$5 million facility, the details of which were announced on 22 October 2013. Combined with Magnolia's fast growing revenues from production, which stood at 257 boepd as at 1 July 2014, the new Credit Facility will help fund future drilling activity alongside established operators, as well as the acquisition of additional leases in proven US onshore formations.
The Credit Facility is a two year revolving line of credit with a nominal value of US$6 million. Interest is charged on credit drawn down at Wall Street Journal Prime (currently 3.25%) +0.75%. No warrants or equity are to be issued as part of the facility. Under the terms of the credit line, an initial borrowing base limit of US$4,596,944 has been set which will be reassessed on a six month basis and adjusted in line with the level of Magnolia's proven developed producing reserves ('PDP').