Magellan Agrees to Amend Terms of Strategic Investment

Magellan has agreed to amend the securities purchase agreement with Young Energy Prize S.A., a Luxembourg corporation ("YEP"), by which YEP will make a strategic $10 million equity investment in the Company.

Amendment Terms

As previously disclosed on February 10, 2009, the Company's purchase agreement with YEP provides that YEP will acquire a total of 8,695,652 shares of the Company's Common Stock (the "Shares") at a price of $1.15 per share. When issued at the closing, the Shares will represent approximately 17.3% of the Company's total outstanding shares on a pro forma basis. In addition, the Company has agreed at closing to issue a five-year warrant to YEP entitling YEP to purchase an additional 4,347,826 shares of the Company's Common Stock through warrant exercise at a per share price of $1.20 (the "Warrant Shares").

As previously disclosed, on April 3, 2009, the Company and two of its shareholders, ANS Investments LLC and its CEO, Jonah M. Meer (together, the "ANS Parties"), entered into a Settlement Agreement that terminates the proxy solicitation efforts of the ANS Parties on mutually agreeable terms. Separately, YEP has advised the Company that YEP and the ANS Parties have entered into an agreement by which YEP will, upon completion of YEP's equity investment in the Company, purchase 568,985 shares of the Company's common stock currently owned by the ANS Parties (the "ANS Shares") at a price of $1.15 per share.

On April 3, 2009, the Company and YEP agreed to amend their securities purchase agreement to extend the outside termination date for the closing of YEP's equity investment from April 30, 2009 to June 30, 2009, in order to provide sufficient time to conduct the 2008 Annual Meeting and complete the YEP equity investment transaction. The amendment also provides that, if YEP completes the purchase of the ANS Shares from the ANS Parties described above, then the exercise price payable by YEP for the Warrant Shares shall be reduced from $1.20 to $1.15 per share. The Company will file with the SEC a current report on Form 8-K which will include as an exhibit a copy of the first amendment to the YEP purchase agreement.