Magellan Reports $1.5MM Net Income for Third Quarter

Magellan has reported consolidated net income of $1.5 million, or $.04 per share on gross revenues of $10.4 million in its fiscal first quarter ended September 30, 2008, as compared to a net loss of $474,000, or $.01 per share on revenues of $9.3 million in last year's first quarter.

Magellan's president, Dan Samela, said, "We are pleased with our operating results for this quarter. Operating income is up by $3.4 million compared to last year's quarter and $816,000 over the fourth quarter of fiscal 2008. Though oil production was down 33% over last year, oil sales increased 19% due mostly to a 65% increase in the average price per barrel compared to last year's quarter."

The Company's Mereenie gas contract expires in June 2009. Mereenie gas sales were approximately $3.5 million (net of royalties) or 84% of total gas sales for the quarter ended September 30, 2008. Though the competition is strong, the Company is actively pursuing gas sales contracts for its remaining Mereenie reserves.

Depletion, depreciation and amortization costs for the 2008 quarter are down $1.9 million over the 2007 quarter due mostly to lower depletable costs and the 5% increase in the average exchange rate.