Magnolia Petroleum Plc / Index: AIM / Epic: MAGP / Sector: Oil & Gas

22 August 2014

             Magnolia Petroleum Plc (`Magnolia' or `the Company')

                     Reserves Report & Production Update

Magnolia Petroleum Plc, the AIM quoted US onshore focused oil and
gas exploration and production company, has received an independent Reserves
Report covering its leases in proven formations such as the Woodford and
Mississippi Lime, Oklahoma, and the Bakken and Three Forks Sanish, North
Dakota, as at 1 July 2014. In addition, the Company has received an
independent production report which has demonstrated an increase in Magnolia's
net daily production to 257 boepd as at 1 July 2014, up from 150 boepd as at 1
April 2014.

Overview

 CPR Update

- Net proved and developed producing reserves (`PDP') estimated at
  162 Mbbl of oil and condensate and 540 MMcf gas with NPV10 of US$9.143 million

- Total net proved reserves (`1P') of 719 Mbbl of oil and
  condensate and 2,093 MMcf gas with NPV10 of US$31.832 million

- Total net proved and probable reserves (`2P') of 749 Mbbl of oil
  and condensate and 2,307 MMcf gas with NPV10 of US$34.693 million

- Total net proved, probable and possible reserves (`3P') of 877
  Mbbl of oil and condensate and 2,554 MMcf gas with NPV10 of US$35.884 million

- Report reflects reclassification of large proportion of
  Mississippi Lime formation reserves on undrilled leases as Contingent
  Resources - in line with industry-wide view of the play being comprised of
  wedges rather than a uniform resource (see announcement of 6 May 2014 for
  further details)

- Multiple potentially highly productive Mississippi Lime wedges
  identified on Magnolia's leases - future drilling expected to lead to
  reassignment from contingent resources to reserves

- Report does not reflect the potential of the Woodford formation,
  which lies below the Mississippi Lime and is at an earlier stage of
  development - viewed by operators as the more prospective of the two
  formations in certain areas

Production Update

- Net production stood at 257 boepd as at 1 July 2014 compared to
  150 boepd on 1 April 2014 due to a number of wells in which Magnolia holds
  larger than average NRIs commencing production

Rita Whittington, COO of Magnolia, said, "At US$31.832m, the value
of our proven reserves provides Magnolia with considerable asset backing,
particularly when compared to our market valuation. From current levels, our
reserves are set to grow strongly. Not only do we have interests in 79 wells
at various stages of development but we continue to receive multiple drilling
proposals. A growing proportion of these are targeting the Woodford, which is
increasingly viewed as the more productive formation. Meanwhile, the improved
understanding of the geology of the Mississippi Lime allows us to prioritise
drilling activity alongside those operators who are consistently hitting
highly productive `wedges'.

"As wells in which we have larger than average interests have come
on line, Magnolia's net production has increased to 257 boepd as at 1 July
2014 from 150 boepd as at 1 April 2014. Thanks to the combination of growing
revenues from production and our US$5m credit facility, we are well placed to
deliver on our objective to prove up the reserves on our leases and I look
forward to providing further updates on our progress in due course."

Summary of Magnolia Reserves

As of 1 July 2014, Magnolia's net reserves, future net cash flow
and net present value discounted at 10% per annum (`NPV10') have been
estimated to be as follows:

                             Grand Total as of July 1, 2014
                 Gross Reserves      Net Reserves               Net Cash Flow

   Reserve
Class/Category
                 Oil &    Natural   Oil &    Natural Future  Future Future  Future  NPV
               Condensate   Gas   Condensate   Gas     Net    Net     Net    Net   Disc @
                 (Mbbl)   (MMcf)    (Mbbl)   (MMcf)  Revenue  OPEX  Capital  Cash   10%
                                                     ($000)    &    ($000)   Flow  ($000)
                                                             Taxes          ($000)
                                                             ($000)
Proved           66,999   528,764    162       540   19,670  5,190     -    14,480 9,143
Developed
Producing
Proved           3,098    14,265      61       286    8,247  1,760    8.6   6,478  4,586
Developed
Behind Pipe
Proved Shut        -         -        -         -       -      -       -      -      -
In
Proved           25,169   89,254     496      1,268  57,245  10,781 14,051  32,412 18,103
Undeveloped
Total Proved     95,266   632,284    719      2,093  85,162  17,732 14,060  53,370 31,832
Probable          666      1,980      4        5.5     385     70     10     305    168
Behind Pipe
Probable          840     11,216      26       209    5,433  1,012    347   4,074  2,692
Undeveloped
Total            1,506    13,195      30       214    5,817  1,082    356   4,379  2,860
Probable
Total 2P         96,772   645,479    749      2,307  90,979  18,814 14,416  57,749 34,693
Possible          200      2,524     7.9       83     1,130   207     628    295     86
Behind Pipe
Possible         10,245   24,925     120       164   11,255  3,153   4,582  3,520  1,106
Undeveloped
Total            10,445   27,449     128       247   12,385  3,360   5,211  3,814  1,192
Possible
Total 3P        107,217   672,928    877      2,554  103,364 22,174 19,627  61,563 35,884

The estimates shown in this report are for proved developed
producing, proved non-producing, proved shut-in, proved undeveloped, probable
and possible reserve classes. This report does not include any value that
could be attributed to interests in undeveloped acreage beyond those tracts
for which undeveloped reserves have been estimated.

The future net revenue is based on the 1 July 2014 NYMEX futures
strip prices for WTI Oil and Henry Hub Gas. The future net cash flow is the
future net revenue, less estimated future net OPEX (well operating cost and
production taxes) and future net capital. The total reserves are those defined
as natural gas and liquid hydrocarbon reserves to Magnolia's interest after
deducting all royalties, overriding royalties, and reversionary interests
owned by outside parties that become effective upon pay-out of specified
monetary balances. All reserves estimates have been prepared using standard
engineering practices generally accepted by the petroleum industry and conform
to the guidelines adopted by the 2007 SPE/SPEE/WPC PRMS Guidelines.

The information contained in this announcement has been reviewed
and approved by P. Dee Patterson on behalf of Moyes & Co. Mr. Patterson has 33
years of relevant experience in the oil industry and is currently Managing
Director, with Moyes & Co. in Dallas, Texas.

Appointment of Vice President of Accounting

The Company is pleased to announce that it has appointed Derec
Norman as Vice President of Accounting. Derec has spent the last eight years
working in the oil and gas industry in Oklahoma City, Oklahoma. He began his
career with Chesapeake Energy Corporation (NYSE: CHK), a leading operator in
Oklahoma, where in his role as Acquisition & Divestiture Supervisor, he
specialised in oil and gas accounting, acquisitions, divestitures, and mergers
managing deals totalling over US$10billion. Derec graduated from the
University of Central Oklahoma with an honours degree in finance.

                                  ** ENDS **

Glossary

`1P' means Proved Reserves

`2P' means Proved plus Probable Reserves

`3P' means Proved plus Probable plus Possible Reserves

`BOE' means barrels of oil equivalent, gas is converted at its
energy equivalent of 6000 cubic feet per barrel of oil

`BOEPD' means barrels of oil equivalent per day,

`BOPD' means barrels of oil per day, Abbreviation for barrels of
oil per day, a common unit of measurement for volume of crude oil. The volume
of a barrel is equivalent to 42 US gallons

`Contingent resources' means quantities of petroleum estimated as
of a given date, to be potentially recoverable from known accumulations by
application of development projects, but which are not currently considered
commercially recoverable due to one or more contingencies

 `M' means Thousand

`MBO' means Thousand Barrels of Oil

`Mcfd' means Thousand Cubic Feet per Day

`MM' means million (thousand thousand not million million), as used
in oilfield and heat content units such as MMSTB and MMBtu

`MMBbl' means Million barrels

`MMcfd' means Million Cubic Feet per Day

`NRI' means Net Revenue Interests

`Proved Reserves' means those quantities of petroleum which, by
analysis of geological and engineering data, can be estimated with reasonable
certainty to be commercially recoverable, from a given date forward, from
known reservoirs and under current economic conditions, operating methods, and
government regulation - Proved reserves can be categorized as developed or
undeveloped

`Probable reserves' are those unproved reserves which analysis of
geological and engineering data suggests are more likely than not to be
recoverable. In this context, when probabilistic methods are used, there
should be at least a 50% probability that the quantities actually recovered
will equal or exceed the sum of estimated proved plus probable reserves

`Possible Reserves' are those unproved reserves which analysis of
geological and engineering data suggests are less likely to be recoverable
than probable reserves. In this context, when probabilistic methods are used,
there should be at least a 10% probability that the quantities actually
recovered will equal or exceed the sum of estimated proved plus probable plus
possible reserves

Reserve Status Categories

`Unproved Reserves' are based on geologic and/or engineering data
similar to that used in estimates of proved reserves; but technical,
contractual, economic, or regulatory uncertainties preclude such reserves
being classified as proved. Unproved reserves may be further classified as
probable reserves and possible reserves

Reserve status categories define the development and producing
status of wells and reservoirs

`Developed reserves' are expected to be recovered from existing
wells including reserves behind pipe. Improved recovery reserves are
considered developed only after the necessary equipment has been installed, or
when the costs to do so are relatively minor. Developed reserves may be
subcategorised as producing or non-producing.

`Producing reserves' are expected to be recovered from completion
intervals which are open and producing at the time of the estimate. Improved
recovery reserves are considered producing only after the improved recovery
project is in operation.

`Non-producing reserves' include shut-in and behind-pipe reserves.
Shut-in reserves are expected to be recovered from (1) completion intervals
which are open at the time of the estimate but which have not started
producing, (2) wells which were shut-in for market conditions or pipeline
connections, or (3) wells not capable of production for mechanical reasons.
Behind-pipe reserves are expected to be recovered from zones in existing
wells, which will require additional completion work or future recompletion
prior to the start of production.

`Undeveloped reserves' are expected to be recovered: (1) from new
wells on undrilled acreage, (2) from deepening existing wells to a different
reservoir, or (3) where a relatively large expenditure is required to (a)
recomplete an existing well or (b) install production or transportation
facilities for primary or improved recovery projects.

For further information on Magnolia Petroleum Plc visit
www.magnoliapetroleum.com or contact the following:

Steven Snead         Magnolia Petroleum Plc        +01 918 449 8750
Rita Whittington     Magnolia Petroleum Plc        +01 918 449 8750
Jo Turner/James      Cairn Financial Advisers LLP  +44 20 7148 7900
Caithie
John Howes/Alice     Northland Capital Partners    +44 20 7796 8800
Lane                 Limited
Lottie Brocklehurst  St Brides Media and Finance   +44 20 7236 1177
                     Ltd
Frank Buhagiar       St Brides Media and Finance   +44 20 7236 1177
                     Ltd
Notes

Magnolia Petroleum Plc is an AIM quoted, US focused, oil and gas
exploration and production company. Its portfolio includes interests in 171
producing and non-producing assets, primarily located in the highly productive
Bakken/Three Forks Sanish hydrocarbon formations in North Dakota as well as
the oil rich Mississippi Lime and the substantial and proven Woodford and
Hunton formations in Oklahoma.

Summary of Wells

Category                                        Number of wells
Producing                                                   171
Waiting on first sales / IP rates                            19
Being drilled / completed                                     8
Elected to participate / waiting to                          52
spud
TOTAL                                                       250