Magellan Petroleum: Evans Shoal Transaction Process Update (Australia)

February 1, 2011

Magellan Petroleum Australia Ltd, a wholly-owned subsidiary of Magellan Petroleum Corporation, and Santos Offshore Pty Ltd have agreed to extend the closing date for the sale of Santos’ 40% stake in the Evans Shoal gas field located offshore Northern Territory, Australia to MPAL. This extension will allow us to continue to work to obtain the customary approvals to complete the transaction as contemplated by the Assets Sale Deed dated March 25, 2010.

As amended on January 31, 2011, the Evans Shoal Agreement provides for an extension of the Transaction through to May 31, 2011, and a A$10 million additional contribution toward the original closing payment.

As previously stated, given the high CO2 content of the Evans Shoal gas, Magellan believes that methanol production is the best development option for the field. This potential has attracted the interest of leading Methanol market participants. These potential industrial partners are prepared to begin work to develop the field for onward Olefins markets and for fuel oxygenation in Asia.

MPAL is committed to close the Transaction and will provide further updates in due course.

About Evans Shoal

Evans Shoal is a gas field located offshore Northern Territory, Australia, 325 km northwest of Darwin. Evans Shoal is estimated to contain approximately 7 trillion cubic feet of recoverable gas reserves (including CO2). The field was discovered over twenty years ago. Interest in the field is currently held by Santos (40%), Petronas Carigali (Australia) Pty Limited (25%), Shell Development (Australia) Pty Limited (25%) and Osaka Gas Australia Pty Limited (10%).

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Source: Magellan Petroleum, February 2, 2011;