Magellan Starts Production from its first Cooper Basin Well

Magellan Petroleum Australia Limited reports that its first Cooper Basin oil production has commenced from the Aldinga-1 oil discovery. Aldinga-1, drilled in August 2002, is located in PEL 95, approximately 70 kilometers south of Moomba. Interests in the PEL 95 license are Beach Petroleum 50% (Operator) and Magellan Petroleum Southern Limited 50%.

Beach Petroleum said that the well commenced production testing from the Cadnaowie Formation at an initial rate of 70-80 barrels of oil per day, supplementing Magellan's oil and gas production from its producing fields in the Amadeus Basin, Palm Valley and Mereenie.

The Aldinga-1 oil-bearing zone lies at shallow depths of around 1,000 meters. Any additional wells, if warranted after production testing, can be drilled at relatively low cost.

The Aldinga-1 production has additional significance in that it is the southernmost oil production to date in the Cooper Basin. This has enhanced the prospectivity of a number of targets identified in the PEL 95 license, and also adds credence to the Company's strategy of adding to its reserves base by exploration of the oil-prone flanks of the Cooper Basin.

To capitalize on this strategy, Magellan will be participating in three firm wells, plus one contingent well, scheduled for the third quarter of 2003, in its Cooper Basin acreage.

In PEL 95, Magellan will have a 50% interest in Seacliff-1 (firm) and Chiton-1 (contingent). Seacliff-1 has mean potential recoverable reserves of approximately 1.4 million barrels. Chiton-1 has mean potential recoverable reserves of approximately 4.1 million barrels.

In adjacent PEL 94, Magellan will have a 50% interest in Waitpinga-1, with mean potential recoverable reserves of approximately 7.5 million barrels.

In PEL 110, Magellan will have a 37.5% interest in the Semaphore-1 well, which will target oil on the northwestern flank of the Patchawarra Trough. Located approximately 20 kilometers north of the Keleary oil field, the prospect has mean potential recoverable reserves of approximately 1.5 million barrels.

In a period of increased exploration activity, Magellan will also be participating at a 25% interest level in two onshore Taranaki Basin wells in New Zealand, also scheduled for the third quarter 2003.


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