Magellan Petroleum Provides Update on its Australian Operations

DENVER, Jan. 28, 2013 /PRNewswire/ -- Magellan Petroleum Corporation ("Magellan" or the "Company") (NASDAQ: MPET) (ASX: MGN) today announced several updates with respect to its Australian operations.

NT/P82, Bonaparte Basin

In December 2012, Magellan successfully conducted, via a third-party contractor, a 3-D and 2-D seismic survey over its NT/P82 Exploration Permit in the Bonaparte Basin, offshore Northern Territory, Australia. The seismic recording vessel Voyager Explorer, operated by Seabird Exploration FZ-LLC, acquired a total of 76 square miles of 3-D full fold data and 65 miles of 2-D full fold data. The survey was completed on time and approximately $500 thousand under budget. Currently, the seismic data is being processed by CGGVeritas. The results of processing and interpreting the seismic data are expected to be available in or around May 2013.

Dingo Gas Field, Amadeus Basin

The Company remains focused on developing and executing a plan to bring Dingo gas to market in order to generate sustainable revenue from this asset.  The Company is in active discussions with potential customers regarding long-term gas supply from Dingo.  In parallel to the marketing effort, Magellan has recently commissioned a preliminary front-end engineering and design ("Pre-FEED") study from GPA Engineering Pty Ltd of Adelaide, Australia, to evaluate the cost and logistics of treating and tying-in Dingo gas to existing pipeline infrastructure near Alice Springs in Central Australia.  Magellan is planning to use the existing two wells at Dingo to supply gas from the field and would not be required to drill any new wells in the medium term.   

Palm Valley Gas Field, Amadeus Basin

With the termination of the long-term gas supply contract with Power and Water Corporation in January 2012, Magellan successfully re-marketed Palm Valley's gas.

The Palm Valley field is expected to increase its run rate production to approximately 1.3 Bcf per year in the quarter ending March 31, 2014, and to produce at its full entitlement under the existing contract of 1.5 Bcf per year during the quarter ending June 30, 2015, when customers already under contract are scheduled to ramp-up demand for gas deliveries. Current net sales volumes average approximately 0.6 MMcf per day, representing approximately 15% of the field's current production capacity.  In an effort to accelerate full production from Palm Valley, Magellan remains in active discussions with other potential customers who may be able to take gas deliveries prior to that date.

Tom Wilson, president and CEO of Magellan, commented, "Since the end of Palm Valley's long-term sales contract one year ago, we have been working diligently to return Palm Valley to full production and bring Dingo gas to market.  Meanwhile, we have been focused on pushing forward with exploration of NT/P82.  We are beginning to experience some encouraging results from these efforts, and we believe we are on the right path for delivering value to our shareholders from these assets."

CAUTIONARY INFORMATION ABOUT FORWARD LOOKING STATEMENTS
Statements in this release that are not historical in nature are intended to be, and are hereby identified as, forward-looking statements for purposes of the Private Securities Litigation Reform Act of 1995.  These statements about Magellan may relate to its businesses, prospects, and other matters that involve a number of risks and uncertainties that may cause actual results to differ materially from the results expressed or implied in the forward-looking statements.  Among these risks and uncertainties are: (i) whether the processing and interpretation of seismic data will be concluded in or around May 2013; (ii) whether Dingo gas can be brought economically to market; (iii) whether Palm Valley can be fully contracted by September 2014; and those set forth in the Risk Factors sections of Magellan's most recent 10-K and subsequent 10-Qs filed with the SEC.

ABOUT MAGELLAN
Magellan is an independent energy company engaged in the exploration, development, production, and sale of crude oil and natural gas from currently held assets in the United States, Australia, and the United Kingdom.  Traded on NASDAQ since 1972, the Company conducts its operations through two wholly owned subsidiaries, Nautilus Poplar LLC, which owns interests at Poplar, a highly attractive oil field in the Williston Basin, and Magellan Petroleum Australia Limited, a successful independent oil and gas company in Australia and the UK in existence since the 1964.  The Company's mission is to enhance shareholder value by maximizing the full potential of existing assets.  Magellan routinely posts important information about the Company on its website at www.magellanpetroleum.com.

For further information, please contact:
Matthew Ciardiello, Manager, Investor Relations at 720.484.2404

SOURCE Magellan Petroleum Corporation