Magellan Petroleum Announces Production and Exploration Activities for the Quarter Ended March 31, 2007

HARTFORD, Conn., April 30 /PRNewswire-FirstCall/ -- Magellan Petroleum Corporation (Nasdaq: MPET; ASX: MGN) ("Magellan") announced its production and exploration activities for the quarter ended March 31, 2007.

OIL & GAS SALES

Natural Gas

The Company's share of natural gas sales during the quarter ended March 31, 2007 increased by 5.1 percent from the March 2006 quarter, as detailed below:



                            Million Cubic Feet

    Field (Magellan Share)                     Terajoules   Variance

                             Total     Daily
    Mereenie               1,354.0     15.1        1,582      +7.3%
    Palm Valley              445.0      4.9          507      -1.4%

    Total Gas              1,799.0     20.0        2,089      +5.1%


Crude Oil and Condensate

The Company's share of crude oil and condensate produced for sale during the quarter ended March 31, 2007 decreased by 7.5 percent from the March 2006 quarter, as detailed below:



                                  Barrels

    Fields (Magellan Share)                    Kilolitres   Variance

                              Total    Daily
     Mereenie                29,946      333       4,761      + 5.5%
     Nockatunga              19,192      213       3,051     + 55.0%
     Kiana                    2,627       29         418     - 82.6%
     Aldinga                    679        8         108     - 17.6%

     Total Crude Oil
      and Condensate         52,444      583       8,338      - 7.5%



    PRODUCTION AND DEVELOPMENT ACTIVITIES

    AUSTRALIAN PRODUCTION

Palm Valley Gas Field (PL 3) - Amadeus Basin NT (52.023% Interest)

The Palm Valley field which is operated by Magellan produced an average of approximately 10 million cubic feet per day (MMcf/D) of natural gas for sale during the March quarter. The Palm Valley Joint Venture's objective for the field is to maximize gas production from the existing facilities while maintaining a safe and efficient operation, conducted in accordance with good oil field practice.

Mereenie Oil and Gas Field (PL 4 & 5) - Amadeus Basin NT (35% Interest)

The Mereenie oil and gas field which is operated by Santos Ltd produced an average of approximately 43 MMcf/D of natural gas and 950 barrels of oil and condensate per day for sale during the December quarter. No major projects were undertaken on the Mereenie field during the quarter.

Nockatunga Oil Fields (PLs 33, 50 & 51) - Cooper Basin Qld (40.936% Interest)

The Nockatunga oil fields which are operated by Santos Ltd produced an average of approximately 560 barrels of oil per day (BOPD) during the March quarter.

The exploration, appraisal and development, drilling campaign at the Nockatunga area, which commenced on December 31, 2006, was completed during the quarter. The 10-well campaign in Petroleum Lease 51 was part of Santos' Cooper Oil Project. Santos is operator of the Nockatunga joint venture. As reported last quarter, the Dilkera North-1 exploration well and the Thungo-9 and Thungo-10 development wells were each cased and suspended as a future Murta Member oil producers. The Dilkera North-1 well will be connected to the Muthero field facilities.

The Thungo-11 appraisal well spudded on March 26 and was drilled to a total depth of 1391 meters. Oil shows were encountered in the Murta Member and the well was cased and suspended as a future oil producer.

Thungo-13, an appraisal well on the southeast margin of the field, spudded on January 21 and was drilled to a total depth of 1,138 meters. Oil shows were recorded in the Murta Member and wireline logs indicated 8 meters of net pay. The well was cased and suspended as a future oil producer.

Four wells were drilled on the Muthero field. The Muthero-4 appraisal well spudded on February 13 and was drilled to a total depth of 1,440 meters. Muthero-4 was designed to appraise the eastern extent of the Murta Member and Birkhead Formation oil pools encountered in Muthero-3 which was drilled in early 2006. Oil shows were recorded in the Murta Member and the upper Birkhead Formation. Wireline logs indicate 6 meters of net pay in the upper Birkhead Formation. The well was cased and suspended and will be completed as a future Birkhead oil producer.

The Muthero-5 appraisal well spudded on February 23, 2007 and oil shows were also recorded in the Murta Member and the Birkhead Formation. The well was designed to test the southern extension of the Muthero-3 oil pools. The well was cased and suspended and will be completed as a future Birkhead oil producer.

The Muthero-6 appraisal well located to the east of Muthero-3 spudded on March 4, 2007 and encountered oil shows in the Coorikiana Sandstone, Murta Member and the Birkhead Formation. The well was cased and suspended as a future Murta oil producer.

The Muthero-7 development well spudded on February 8 and was drilled to a total depth of 1,146 meters. Muthero-7 was designed to develop the Murta Member oil pool encountered in Muthero-3. Oil shows were recorded in the Murta Member as anticipated and the well was cased and suspended as a future Murta oil producer.

The Kamel-1 exploration well, located approximately 1.7 kilometers north northwest of the Thungo oil field, spudded on March 16 and was drilled to a total depth of 1,391 meters. Oil shows were recorded in the Murta Member during drilling. Wireline logs were run and the well was cased and suspended

as a future Murta Member oil producer. The well will be connected to the Thungo field facilities.

Planning for the completion for production and tie-in of the wells to the existing facilities is well advanced with several of the wells expected to be on-line by the end of May. An upgrade of the surface facilities at the Thungo and Muthero fields is currently being undertaken to accommodate the anticipated increased production from these fields.

Kiana Oil Field (PPL 212) - Cooper Basin SA (30% Interest)

Production from the Kiana-1 well averaged 97 BOPD during the March quarter. The well is producing from both upper and lower Patchawarra Formation zones.

Aldinga Oil Field (PPL 210) - Cooper Basin SA (50% Interest)

Production from the Aldinga-1 well is continuing at around 15-20 BOPD. There are no current plans to develop the field further.

CANADIAN PRODUCTION

Kotaneelee Gas Field, YT (2.67% interest)

Magellan has a 2.67% carried interest in the Kotaneelee gas field in the Yukon Territory of Canada. Devon Canada Corporation is operator of this partially developed field which is connected to a major pipeline system. Due to the completion of well L-38 drilled in the field, in which Magellan has a carried interest, Magellan will not receive any revenue until its share of the drilling costs is recovered by the operator of the field, which it is estimated will not occur until the second or third calendar quarter of 2007. This estimate could change based upon future production and expenses related to this well.


    EXPLORATION ACTIVITIES

AUSTRALIAN EXPLORATION

The Tunkalilla-1 exploration well was drilled in PEL 94 (Magellan 35% interest) in South Australia during the quarter. Tunkalilla-1 is located on the southern flank of the Cooper Basin, and was designed to test a simple anticlinal structure located on the north-western flank of the Milpera Horst. The primary objective was the Namur Sandstone and the McKinlay Member with secondary potential in the Murta Member. The nearby Maslins-1 well recovered oil from the Murta Member when drilled in 2002. Tunkalilla-1 spudded on February 13 and was drilled to a total depth of 1,422 meters. No hydrocarbon shows were encountered and the well was plugged and abandoned. The rig was released on February 20 and moved to the Telowie-1 well location also in PEL 94.

The Telowie-1 exploration well was designed to test a simple anticlinal structure on the north-eastern end of the Milpera Horst. The well is approximately 4.8 kilometers northeast of Maslins-1. The primary objective was the Namur Sandstone and the McKinlay Member with secondary potential in the Murta Member. Telowie-1 spudded on February 23 and was drilled to a total depth of 1,384 meters. Minor oil shows were recorded in the Murta Member and wireline logs were run. The well was plugged and abandoned without encountering commercial hydrocarbons.

Elsewhere in the Cooper Basin of South Australia, exploration evaluation of PEL 95 (Magellan 50% interest), PEL 107 (Magellan 20% interest) and PEL 110 (37.5% interest) is ongoing.

The 167 kilometer 2D Scutus seismic survey was conducted in PEL 95 during January 2007 to better define prospects and leads in the northern portion of the permit area. Beach petroleum is operator of the PEL 94 and PEL 95 joint ventures.

In ATP 613P (Magellan 100% interest) in the Maryborough Basin of Queensland, two exploration wells, Burrum-1 and 2, were drilled to test the Coal Seam Gas potential of the previously unexplored Burrum Coal Measures in the northern portion of the Burrum Syncline. Magellan is operator of the Burrum joint venture.

The Burrum-1 well spudded on February 28 and was drilled to a total depth of 438 meters. The well was fully cored over the 252-438 meters interval. Several coal seams were intersected and sampled for desorption analysis. Wireline logs were run to further evaluate the coal seams intersected, particularly those in the open-hole section. The well was plugged and abandoned as planned.

Burrum-2 spudded on March 8 and was drilled to a total depth of 545 meters. The well was fully cored over the 115-390 meter interval. Several coal seams with a total net thickness of approximately 16 meters were cored and sampled for desorption analysis. Three Drill Stem Tests were conducted over coaly intervals in the cored section which indicated that the coals have low primary permeability. Burrum-2 was plugged and abandoned as planned and the rig released on March 20.

Eureka Petroleum, a wholly-owned subsidiary of Energy Investments Limited, is funding 100% of a two-staged coal seam gas exploration program, in return for which it will be assigned a 90% working interest in the Burrum Syncline farmin area. Stage 1 comprised the current two-well program. Magellan has the right to back-in to retain up to a 50% participating interest in any development by matching Eureka's prior expenditures. Evaluation of the coal seam gas potential of the seams encountered in Burrum-1 and 2 is continuing.

UNITED KINGDOM EXPLORATION

Magellan (40% interest) will participate in the Markwells Wood-1 exploration well in PEDL 126 and the Leigh Park-1 exploration well in PEDLS 155 and 099 of the Weald Basin of southern England in 2007. Well sites and planning consents are being sought for the drilling by Northern Petroleum, operator of these joint ventures. Both wells will target oil in the Great Oolite Formation, and Markwells Wood-1 will test a possible extension of the currently producing Horndean oil field.

Magellan holds interests in ten other exploration licenses in the Weald- Wessex Basin (PEDLs 098, 112, 113, 125, 135, 136, 137, 152, 153 and 154). Three of the areas (PEDLs 135, 136 and 137) are held and operated by Magellan with a 100% interest and all other licenses are operated by Northern Petroleum, with Magellan's interests ranging from 22.5% to 50%. Magellan has completed the reprocessing of around 720 kilometers of existing 2D seismic data in its 100% held licenses to more closely define several oil and gas drilling prospects already identified.

EXPENDITURES

Expenditures incurred on exploration, appraisal and development activities during the March 2007 quarter, totaled $3,371,000. All figures are unaudited.

Forward Looking Statements

Statements in this release which 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 and MPAL may relate to their businesses and prospects, revenues, expenses, operating cash flows, and other matters that involve a number of uncertainties that may cause actual results to differ materially from expectations. Among these risks and uncertainties are pricing and production levels from the properties in which Magellan and MPAL have interests, the extent of the recoverable reserves at those properties, the future outcome of the negotiations for gas sales contracts for the remaining uncontracted reserves at both the Mereenie and Palm Valley gas fields in the Amadeus Basin, including the likelihood of success of other potential suppliers of gas to the current customers of Mereenie and Palm Valley production. In addition, MPAL has a large number of exploration permits and faces the risk that any wells drilled may fail to encounter hydrocarbons in commercially recoverable quantities. Any forward-looking information provided in this release should be considered with these factors in mind. Magellan assumes no obligation to update any forward-looking statements contained in this release, whether as a result of new information, future events or otherwise.

SOURCE Magellan Petroleum Corporation