2009-10-26-2009-10-19-2009-10-19

Closed acquisition of additional 1.25% WI in Poplar Dome, Mont., program.

Magellan Petroleum Corp., Portland, Maine, (Nasdaq: MPET; Australia: MGN) has acquired an 83.5% controlling interest in Denver-based Nautilus Poplar LLC with oil development assets in Roosevelt County, Montana, known as the East Poplar Unit and Northwest Poplar Field for $10.9 million in cash and stock. Magellan paid $7.3 million and issued 1.7 million new shares valued at $1.40 per share. It also assumed $1.2 million of net debt. The controlling interest in Nautilus is from White Bear LLC and YEP I, SICAV- FIS, entities affiliated with Nicolay Bogachev and Thomas Wilson, two directors of the company. Based on proven developed reserves of 1.6 million barrels net, the acquisition price is approximately $6.81 per barrel, according to Magellan. The transaction is Magellan's first entry into the domestic U.S. oil market. Nautilus holds a 68.75% interest in the East Poplar Unit and varied interests ranging from 60% to 75% in the Northwest Poplar Oil Field. Magellan, through Nautilus, will begin an active development program using secondary infill and tertiary programs. Upside potential is seen in the three producing oil horizons in the Mississippian Charles formation, up to 23,000 acres of Bakken shale, and both shallow and deep gas plays. Magellan president and chief executive William H. Hastings says, "Our entry into North America is a fairly substantive one. We gain a highly-regarded technical staff and a key development position. The two fields purchased were first discovered in the early 1950s and have unrecovered oil reserves. Our neighbors there have had strong success with tertiary development programs. We aim to establish a pilot program to determine the viability of those strategies at Poplar Dome and to drill infill sites in the fields."