Magellan Petroleum Corp. (Nasdaq: MPET) has completed the transaction contemplated by the share sale and purchase deed (the sale deed) entered into with Central Petroleum Ltd. (ASX: CTP.AX), a Brisbane, Australia-based junior exploration and production company that operates one of the largest holdings of prospective onshore acreage in Australia.

Pursuant to the terms of the sale deed, Magellan received AUD $15.0 million in cash on the completion date and will receive an additional AUD $5 million in cash on or before April 15, 2014. On the completion date, Magellan also received approximately 39.5 million newly issued shares of Central stock, equivalent to an approximate 11% ownership interest. Based on the Central closing price on March 28, 2014, this stock represents a total value of AUD $20.7 million, or a AUD $5.7 million, or 38%, increase over the issuance value of AUD $15 million as determined on the execution date. In addition, Magellan is entitled to receive bonus payments from Central in the event that future gas sales revenues from Palm Valley exceed certain levels. Following completion, the company will wind down its office in Brisbane, Australia, for expected annual savings in general and administrative expense of AUD $2 million to AUD $3 million.

J. Thomas Wilson, president and CEO of the company, stated: "Completing this transaction is an important milestone for Magellan. With AUD $20 million in cash proceeds and a substantial reduction in general and administrative expenses, Magellan should be in a very strong financial position to pursue its strategy of proving up the value of its other assets and to fund its operations. Furthermore, I'm excited that Magellan will retain exposure to onshore Australia through a significant ownership stake in Central, which we view as a long-term strategic investment for our shareholders. Central is well placed to realize incremental value from Palm Valley and Dingo. More importantly, our shareholders can now benefit from the development potential of Central's approximately 70 million acres in several under-explored Australian basins prospective for unconventional development. Although Magellan's primary focus will remain its CO2-enhanced oil recovery (CO2-EOR) project at Poplar, through our ownership interest in Central and our acreage position in the U.K., we now also offer shareholders a compelling exposure to multiple emerging large-scale unconventional plays."