Magnolia Petroleum says that the Roger Swartz #1 (‘the Well’), a vertical well targeting the producing Mississippi Lime formation, Oklahoma, commenced drilling on 19 November 2012. Drilling is expected to last between 8-10 days at an estimated cost of US$729,148 and has a targeted total depth of 5,500ft.

The Well is located in Noble County, Oklahoma, and forms part of the acquisition of 800 gross acres as previously announced by the Company on 10 February 2012. The directors believe that a further seven potential well sites could exist on this acreage.

Under the terms of the original farm in deal, Magnolia acquired a 100% working interest in the leases at no initial cost to the Company. The farmors have a 16.25% back-in to the Well once pay-out has been achieved i.e. drilling costs have been recovered. Upon pay-out Magnolia's working interest/ net revenue interest in the Well will therefore be 83.75% and 68.05% respectively.

Tags: Magnolia Petroleum