Magellan Enters Investment Agreement for Evans Shoal Stake

Magellan Petroleum and its strategic investor, Young Energy Prize, S.A. ("YEP"), executed an Investment Agreement on February 11, 2011. The Investment Agreement sets forth the material terms of YEP's commitment to fund approximately A$85.45 million to complete Magellan Petroleum Australia Limited's ("MPAL"), a wholly owned subsidiary of the Company, acquisition of Santos Offshore Pty Ltd.'s ("Santos") 40% interest in the Evans Shoal field. YEP is expected to use part of the funds to reimburse MPAL for its A$10 million additional deposit made towards the purchase price of the Evans Shoal interest on February 14, 2011 pursuant to the Assets Sale Deed, as amended by the Deed of Variation. The Investment Agreement also addresses some of the main terms of the potential future development of the Evans Shoal field between the Company and YEP.

The second PIPE agreement between YEP and the Company announced on August 9, 2010 has been amended so that the PIPE transaction will close and the Company will receive $15.6 million of proceeds, in the event that MPAL does not complete the acquisition of the Evans Shoal field and as a result forfeits the additional A$10 million deposit made towards the purchase price of the Evans Shoal interest under the terms of the Assets Sale Deed, as amended by the Deed of Variation.

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