Magnolia Petroleum increase in production targeted at ExxonMobil operated Hawkins Field Unit

Magnolia Petroleum Plc, the AIM quoted US focussed oil and gas exploration and production company, announces a positive update on its participation in the Hawkins Field Unit, located in Wood County, Texas and operated by oil and gas major, ExxonMobil Production Company, and a targeted increase in oil and gas production.

• New Nitrogen Rejection Unit/Natural Gas Recovery plant ('NRU') at the Hawkins Field Unit, expected to be operational in February 2012
• The operator, ExxonMobil, expects the NRU to lead to:
  • increase in current oil production from 5,400 bopd to between 6 - 7,000 bopd, an increase of up to 30%
  • increase in liquids (condensate) production to 3,000 boepd
  • increase in gas production to between 20,000-25,000 mcfs/d
  • increase in the life of the field by up to 25 years
  • the recovery of up to a further 40 million boe

• Hawkins Field Unit has the largest Proved 2P oil and gas reserves among Magnolia's interests, previously reported as being:
  • Gross 2P oil reserves 29,063.22Mbbl
  • Gross 2P gas reserves 42,919.53MMcf
  • Net 2P oil reserves attributable to Magnolia 3.98Mbbl
  • Net 2P gas reserves attributable to Magnolia 5.88MMcf

• Magnolia holds a 0.01543% working interest in the Hawkins Field Unit and will receive a meaningful increase in revenues as a result of the increased output
• Extra revenues generated to be used to help fund further Magnolia projects

Magnolia Petroleum COO, Rita Whittington said, 'We are highly encouraged by the results of our participation with ExxonMobil in the NRU plant, which is expected to significantly raise the efficiency of the Hawkins field. We look forward to receiving the production results. The Hawkins field is one of Magnolia's largest assets in terms of both gross and net proved 2P reserves and meaningful additional revenues will be generated. These will be channelled to fund the development of our extensive and highly prospective portfolio of assets in the prolific Bakken/Three Forks Sanish hydrocarbon formations, North Dakota, the producing Hunton and Woodford formations in Oklahoma and the oil rich Mississippi also in Oklahoma where we participate with other major oil and gas companies including Marathon, Chesapeake and Hunt Oil.'