MPET Posts a Profit for 15th Consecutive Year; Files Form 10-K With the SEC and Announces Date for 2007 Annual Meeting of Stockholders

HARTFORD, Conn., Oct. 9 /PRNewswire-FirstCall/ -- Magellan Petroleum Corporation (Nasdaq: MPET) (ASX: MGN) reported consolidated net income of $447,000 ($.01 per share) on gross revenues of $30.7 million for its fiscal year ended June 30, 2007 compared to net income of $749,000 ($.03 per share) on revenues of $26.6 million in fiscal 2006.

Magellan's president, Daniel Samela said that, "although results were mixed, we are encouraged by the 15% increase in oil and gas revenues over last year, the increase in the cash provided by operating activities of $23.7 million, a 106% increase over fiscal 2006, and the successful completion of a 10 well drilling campaign in the Nockatunga field. The wells have been completed and tied in to the existing facilities and will contribute to fiscal 2008 revenues."

Mr. Samela continued by saying that "the Company has determined that an asset impairment charge of $1.9 million was required to be booked in fiscal 2007," and also commented on the significant increase in depletion, depreciation and amortization charges of $4.4 million, much of which was related to the accounting effects of the Company's acquisition of the minority interest of MPAL which was effective July 1, 2006. Mr. Samela noted that these accounting charges are non-cash charges.

Filing of Form 10-K

Magellan reports on a consolidated basis with its 100% owned Australian subsidiary, Magellan Petroleum Australia Limited (MPAL). Magellan's consolidated results for the fiscal year ended June 30, 2007 are reported in its annual report on Form 10-K which was filed earlier today with the U.S. Securities and Exchange Commission and was also filed with the Australian Stock Exchange.

Annual Meeting of Stockholders

Magellan also reported that the Board of Directors has scheduled its 2007 Annual Meeting of Stockholders for Thursday, December 6, 2007, to be held at The Goodwin Hotel, One Haynes Street, Hartford, CT 06103 at 1:00 P.M. local time (telephone 860-246-7500).

The Board of Directors has established October 26, 2007 as the record date for determination of stockholders entitled to receive notice of, and vote at, the 2007 Annual Meeting. Magellan anticipates mailing its proxy materials with respect to the 2007 Annual Meeting on or about October 29, 2007, to stockholders of record on October 26, 2007.

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 business properties 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 the ultimate outcome of the MPAL tax audit by the ATO, 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, pricing and production levels from the properties in which the Company has interests, the extent of the recoverable reserves at Magellan/MPAL properties and 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 or revise any forward-looking statements contained in this release, whether as a result of new information, future events or otherwise.

Comparative, consolidated results for fiscal 2007 and the two prior years are shown in the following statements of income:



                                            Years Ended June 30,
                                    2007            2006          2005
      Oil sales                 $11,922,574     $10,615,761    $7,574,022
      Gas sales                  16,396,334      14,060,968    12,478,293
      Other production related
       revenues                   2,356,317       1,885,706     1,818,471
      Total revenues             30,675,225      26,562,435    21,870,786
    Costs and expenses:
      Production costs            6,965,641       8,220,013     6,144,339
      Exploratory and dry hole
       costs                      5,520,460       3,264,837     4,157,344
      Salaries and employee
        benefits                  1,549,277       1,448,004     1,314,793
      Depletion, depreciation and
       amortization              10,693,415       6,308,608     6,986,967
      Auditing, accounting and
       legal services               628,114         398,514       379,153
      Accretion expense             517,856         425,254       406,960
      Stockholder communications    459,298         449,561       227,032
      Loss on settlement of asset
       retirement obligation              -         444,566             -
      Gain on sale of field
       equipment                    (10,346)       (119,445)            -
      Impairment loss             1,876,171               -             -
      Other administrative
       expenses                   2,699,733       2,795,387     2,281,523
      Total costs and expenses   30,899,619      23,635,299    21,898,111
      Operating income (loss)      (224,394)      2,927,136       (27,325)
    Interest income               1,669,798       1,268,641     1,141,802
    Income before income taxes
     and minority interests       1,445,404       4,195,777     1,114,477
    Income tax expense (benefit)    998,565       1,678,980       (82,152)
    Income before minority
     interests                      446,839       2,516,797     1,196,629
    Minority interests                    -      (1,768,023)   (1,109,669)
    Net income                     $446,839        $748,774       $86,960
    Average number of shares:
      Basic                      41,500,325      28,353,463    25,783,243
      Diluted                    41,500,325      28,453,270    25,783,243
    Per share (basic and
     diluted) net income               $.01            $.03             -

SOURCE Magellan Petroleum Corporation