DENVER, Sept. 12, 2013 /PRNewswire/ -- Magellan Petroleum
Corporation ("Magellan" or the "Company") (NASDAQ: MPET) today
announced that on September 12, 2013,
the Company through its indirect subsidiary, Magellan Petroleum
Corporation (NT) Pty Ltd ("MPNT"), signed a gas supply and purchase
agreement (the "Dingo GSPA") with Northern Territory Power and
Water Corporation ("PWC") for the long-term sale of gas from the
Company's Dingo gas field. Pursuant to the Dingo GSPA, the
Company has contracted to supply up to 31 PJ (30 Bcf) of gas to PWC
on a 100% take-or-pay basis over a 20‑year supply period. The
Company's supply obligation is expected to begin in early calendar
year 2015 at a fixed price escalating with Australian CPI.
The Dingo GSPA has been approved by the boards of directors of both
PWC and Magellan. The Dingo GSPA is subject to certain
customary conditions, including the Company successfully obtaining
all regulatory approvals and constructing facilities necessary for
commissioning the Dingo field for commercial gas production.
With this long term contract now in place, the Company will use
the time before the commencement of gas supply to design,
construct, and commission the surface facilities and tie-in
pipeline necessary for the production and delivery of Dingo's gas.
Currently, the Company is undertaking the front-end
engineering and design ("FEED"), which is a continuation of work
performed during the pre-FEED stage in fiscal year 2013, and which
is expected to take approximately six months to complete. Gas
volumes are expected to be produced from three wells drilled at
Dingo in the 1980s and 1990s, two of which have since been
temporarily shut-in, and which are expected to be capable of
producing gas volumes sufficient to meet the delivery requirements
under the Dingo GSPA. Concurrently with the FEED work, the
Company will be applying for various regulatory approvals necessary
for constructing the Dingo facilities and pipeline and
commissioning Dingo for commercial gas production. The
Company expects to receive all approvals by the summer of 2014 and
intends to begin construction of the pipeline and facilities
immediately thereafter.
J. Thomas Wilson, President and
CEO of Magellan, stated, "Contracting for the sale of a substantial
portion of Dingo's gas resources is yet another milestone achieved
in our strategy of proving up the value of the Company's
assets. Dingo's reserves potential was established nearly 25
years ago through a four-well exploratory program, but, with no
customer, the field has since been left dormant. We will work
vigorously to achieve the regulatory approvals and commissioning of
Dingo as quickly as possible, and we look forward to working once
again with PWC, who has been a valued customer of Magellan at our
Palm Valley gas field over the past three decades.
"We believe we have now achieved the key milestones of our
strategy for our Amadeus Basin assets, onshore Australia: we completed an asset swap with
Santos in September 2011 to
consolidate our interests in Palm Valley and Dingo and received
$25 million in cash, we contracted
most of Palm Valley's remaining gas reserves to Santos in
September 2011 under a long-term
contract, and now we have contracted up to 30 Bcf of Dingo's gas
reserves with PWC. Following on the Company's initiation of the
CO2-EOR pilot program at Poplar announced on
August 12, 2013, we remain focused on
executing the other key milestones of our strategy to increase net
asset value per share."
CAUTIONARY INFORMATION ABOUT FORWARD LOOKING
STATEMENTS
Statements in this press
release, including forecasts or projections that are not historical
in nature, are intended to be, and are hereby identified as,
forward-looking statements for purposes of the Private Securities
Litigation Reform Act of 1995. The words "anticipate",
"assume", "believe", "budget", "estimate", "expect", "forecast",
"intend", "initial", "plan", "project", and similar expressions are
intended to identify forward looking statements. These statements
about the Company may relate to its businesses and prospects,
planned capital expenditures, increases or decreases in oil and gas
production and reserves, revenues, expenses, operating cash flows,
and borrowings, and other matters that involve a number of
uncertainties that may cause actual results to differ materially
from expectations. Among these risks and uncertainties are the
following: successfully restoring production from the wells at the
Dingo field; the results of the FEED study; our ability to receive
regulatory approvals and to construct the Dingo facilities in a
timely manner; uncertainties inherent in projecting future rates of
production from drilling and completion activities at the Dingo
field; the uncertainty of drilling and completion conditions and
results; the availability and cost of drilling, completion, and
operating equipment and services; and other matters discussed in
the "Risk Factors" section of the Company's most recent Annual
Report on Form 10K and most recent Quarterly Report on Form 10Q.
Any forward-looking information provided in this report should be
considered with these factors in mind. The Company assumes no
obligation to update any forward-looking statements contained in
this report, whether as a result of new information, future events,
or otherwise.
ABOUT MAGELLAN
Magellan Petroleum
Corporation is an independent oil and gas exploration and
production company with assets in the US, Australia, and the UK. The Company is
primarily focused on the development of a CO2-enhanced
oil recovery ("CO2-EOR") program at Poplar Dome in
eastern Montana. Historically active in Australia, Magellan operates two gas fields
onshore Northern Territory and an exploration block in the
Bonaparte Basin, offshore Northern Territory. Magellan also
maintains a large acreage position onshore the UK prospective for
unconventional shale oil and gas production. Magellan is
headquartered in Denver, Colorado.
The Company's mission is to enhance shareholder value by
maximizing the full potential of existing assets. Magellan
routinely posts important information about the Company on its
website at www.magellanpetroleum.com.
For further information, please contact:
Matthew Ciardiello, Manager,
Investor Relations at 720.484.2404 or
IR@magellanpetroleum.com
SOURCE Magellan Petroleum Corporation