Magellan Commences Natural Gas Production in Tennessee

Magellan Energy has completed connection of all gas lines from the Thomas Martin and the Robert Anderson Lease in Morgan County, Tennessee and that gas production has commenced.

This is a significant development for Magellan Energy. After much time, effort and hard work, the Company is now in a position to rapidly increase its daily natural gas production rate and make additions to its reserves. In order to obtain an accurate estimate on the daily output from both wells, gas must flow through the lines for a period of approximately one to two weeks. This waiting period will enable Magellan to get a better understanding of production, as readings will have stabilized enough to achieve a balanced, daily output count. Magellan plans further studies in order to exploit the full potential of this project.

The operators, TMD Energy Inc. will continue to work with Citizens Gas and monitor the situation to ensure there are no further disruptions.

Management believes that this is an exciting time for Magellan and its shareholders. The Company has entered the production phase on both projects and will soon realize a new revenue source. While the delays have been frustrating for the Company and shareholders, the company has successfully dealt with the high BTU issue and has connected the lines to the compressor and begun natural gas production. Magellan is well on its way to increasing revenues and value and will be disclosing production numbers as soon as they are available.