Magnolia Petroleum is joining Aim on 25 November having raised £1.16m at 0.55p a share.
The net proceeds will be £730,000. Magnolia will be capitalised at £3.08m at the placing price.
Magnolia is focused on oil and gas onshore in the US. Magnolia has interests in the Bakken Shale in North Dakota, as well as the Woodford and Hunton formations in Oklahoma. The producing interests have a NPV of $1.53m – based on a 10% discount rate. The non-producing interests have an NPV of $16.5m.
Future opportunities are likely to be in the Mississippi formation, Oklahoma. Magnolia will use £125,000 of the cash raised to acquire a working interest here.
Magnolia’s two executive directors have combined experience of the oil and gas sector totalling 67 years. Chief executive Steven Snead subscribed for 3.64m shares in the placing. Along with his family he owns 35.3% of Magnolia. Snead is entitled to annual director fees of £10,000.
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