Magellan Concludes Poplar CO2-EOR Pilot a Technical Success

Magellan Petroleum Corporation (NASDAQ: MPET) ("Magellan" or the "Company") today announced that it has concluded that the CO2-enhanced oil recovery ("CO2-EOR") pilot project at Poplar (the "Pilot") has been a technical success, and demonstrates that the CO2-EOR technique is a technically viable tertiary recovery method in the Charles formation at Poplar Dome. The Company reached this conclusion on the basis of the oil production response observed in, and other injection and pressure data gathered from, the Pilot.

CO2 injection into the Pilot's single injector well began in August 2014. In October, the Pilot's four producer wells were opened for production. Since then, oil production has increased in three of the four producer wells in response to CO2 injection, and the Company expects the fourth well will demonstrate an oil production response soon. The current run-rate of production from the three producing wells together is between 50 and 75 bopd and is expected to increase gradually through the summer.

J. Thomas Wilson, President and CEO of the Company, commented: "Demonstrating that CO2-EOR works in practice at Poplar is a major milestone that substantially de-risks the technical feasibility aspects of this project. Our next objective is to demonstrate that this technique is economic at our field, which is largely a function of (i) how much CO2 a full field development will require and (ii) what the cost of that CO2 will be. A few more months of data from the Pilot should address the former, and our ongoing discussions with CO2 suppliers are addressing the latter. Although oil prices also affect the economics of the project and the current oil price environment remains depressed, we believe that the potential long-term value of CO2-EOR development at Poplar is encouraging, since a full field CO2-EOR development at Poplar would require approximately two to three years to implement, and CO2-EOR projects tend to yield stable production over multi-decade time frames. Overall, the Pilot continues to exceed our expectations, and we believe that we are on track to establish the economic viability and attractiveness of Poplar as a prime CO2-EOR candidate."