Magnolia Petroleum Plc - Proposed Disposal of North Dakota Assets
/ Index: AIM / Epic: MAGP / Sector: Oil & Gas
(‘Magnolia’ or ‘the Company’)
Proposed Disposal of North Dakota Assets
, the US focused oil and gas exploration and production company announces it has signed a non-binding agreement with a third party for the sale of all its wells in which it has varying interests in (together ‘the North Dakota Assets’), being approximately 31 wells, for a total consideration of (‘the Proposed Disposal’). In addition, the Company announces the sale of its 100% interest in the Roger Swartz #1 well in for approximately .
The Proposed Disposal is in line with the Company’s debt reduction programme and, subject to shareholder consent and completion, will substantially clear a large portion of the outstanding balance of the reserve-based lending facility (‘the Lending Facility’) of its wholly owned operating subsidiary, (‘Magnolia Inc’). As detailed in the Company’s announcement of , the Company embarked on a debt reduction programme in response to the Bank’s decision not to extend the Lending Facility and its requirement that the full outstanding amount be repaid or refinanced by .
The Proposed Disposal is conditional on the granting of approval of the Board’s asset disposal programme at the Company’s general meeting which is to be held at ( local time) on at the offices of , , Suite 900, 74103, (‘the General Meeting’).
In the event that the Lending Facility is not repaid or refinanced, it is expected that either the Bank will repossess and sell assets to pay off the debt, which is likely to be at a lower value for Shareholders than the Company could achieve, or the Directors will be required to commence Chapter 11 bankruptcy proceedings with respect to This would also likely lead to a loss of control of the debt reduction programme and reduced value being achieved by the Company for its portfolio of wells. In this scenario, shareholders are unlikely to receive any value for the Company’s portfolio of wells with all proceeds of sales being used to settle creditors and the costs of the Chapter 11 proceedings.
The Company’s current portfolio comprises interests in 108 wells and further details of the interests in wells and their economics were included in the Company’s operations update on and in the circular of .
This announcement contains inside information for the purposes of Article 7 of EU Regulation 596/2014.
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For further information on visit or contact the following:
Rita Whittington Magnolia Petroleum Plc +01918449 8750 Jo Turner / James Caithie Cairn Financial Advisers LLP +44207213 0880 Daniel Gee Cornhill Capital Limited +44207710 9610 Lottie Wadham St Brides Partners Ltd +44207236 1177 Frank Buhagiar St Brides Partners Ltd +44207236 1177
Quick facts: Magnolia Petroleum PLC
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