Magellan Petroleum Corporation Announces Second Quarter Earnings

HARTFORD, Conn., Feb. 14 /PRNewswire-FirstCall/ -- Magellan Petroleum Corporation (Nasdaq: MPET) (ASX: MGN) reported a consolidated net loss of $9.7 million ($.23 per share) on gross revenues of $10.4 million in its fiscal second quarter ended December 31, 2007, as compared to a net loss of $8,000 ($.00 per share) on revenues of $8.4 million in last year's second quarter.

For the six-month period ended December 31, 2007, the Company reported a net loss of $9.3 million ($.22 per share) on $19.7 million in revenues, compared to net income of $1 million ($.02 per share) on revenues of $15.2 million in the prior period last year.

The net loss for both the second quarter and the six month period ended December 31, 2007 includes a charge of $12.8 million ($.31 per share) in the income tax provision for the tax settlement between Magellan's 100% owned Australian subsidiary, Magellan Petroleum Australia Limited (MPAL) and the Australian Taxation Office (ATO). (See Magellan's press release dated February 7, 2008)

Magellan's president, Dan Samela said "A look at operating results before the tax provision tells a different story. Pretax income was up $2.9 million over last year's quarter due mostly to the successful drilling campaign in the Nockatunga oil field. Pretax income for the six months ended December 31, 2007 was $.09 per share, nearly double the $.05 per share last year.

Though we had to absorb a tough ATO settlement, we are pleased with our operating results for this quarter and the first half of fiscal 2008. Total revenues are up 23% and 29% for the quarter and six months, respectively over last year."

Exploration and dry hole costs for the 2007 quarter are down $1.8 million over the 2006 quarter due to reduced exploration expenditures in the Cooper Basin.

Statements in this press release which are not historical in nature are intended to be, and are hereby identified as, forward looking statements for purposes of the "Safe Harbor" Statement under the Private Securities Litigation Reform Act of 1995. The Company cautions readers that forward looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from those indicated in the forward looking statements. Among these risks and uncertainties are pricing and production levels from the properties in which the Company has interests, and the extent of the recoverable reserves at those properties. In addition, the Company has a large number of exploration permits and faces the risk that any wells drilled may fail to encounter hydrocarbons in commercially recoverable quantities. The Company undertakes no obligation to update or revise forward- looking statements, whether as a result of new information, future events, or otherwise.

Comparative, consolidated results for the three and six-month periods are shown in the following consolidated statements of operations:



                           THREE MONTHS ENDED          SIX MONTHS ENDED
                               DECEMBER 31,               DECEMBER 31,
                            2007        2006           2007         2006
     Oil sales           $4,887,721  $3,227,393    $9,620,541     $6,152,907
     Gas sales            4,772,980   4,490,952     8,762,164      7,894,350
     Other production
      related revenues      713,280     695,740     1,313,209      1,189,992
     Total revenues      10,373,981   8,414,085    19,695,914     15,237,249
     Production costs     2,525,231   1,806,267     4,623,257      3,597,406
     Exploration and
      dry hole costs        724,117   2,541,280     2,737,591      2,973,263
     Salaries and
      employee benefits     375,840     394,972       820,349        710,102
      and amortization    2,796,390   2,762,867     5,957,646      4,764,819
      accounting and
      legal services        321,052     148,204       558,103        324,009
     Accretion expense      176,180     134,413       346,388        266,179
      communications        154,222     159,342       201,288        235,890
     Gain on sale of
      field equipment       (17,304)          -       (26,957)             -
     Other administrative
      expenses              771,732     644,969     1,641,645      1,167,581
     Total costs and
      expenses            7,827,460   8,592,314    16,859,310     14,039,249
    Operating income
     (loss)               2,546,521    (178,229)    2,836,604      1,198,000
     Interest income        569,862     425,793     1,059,079        770,913
    Income before
     income taxes         3,116,383     247,564     3,895,683      1,968,913
    Income tax
     provision          (12,797,866)   (255,471)  (13,178,636)      (946,684)
    NET (LOSS) INCOME    (9,681,483)     (7,907)   (9,282,953)     1,022,229
    Average number of
     shares outstanding
      Basic              41,500,325  41,500,325    41,500,325     41,500,325
      Diluted            41,500,325  41,500,325    41,500,325     41,500,325
     (BASIC AND DILUTED)      $(.23)      $(.00)       $.(.22)          $.02

SOURCE Magellan Petroleum Corporation