Magellen Energy Issues Corporate Update

TORONTO, May 19 (MARKET WIRE) --
Magellan Energy Ltd. (PINKSHEETS: MGLG). I would like to thank our
shareholders for the patience they demonstrated while Magellan resolved
the high BTU/shut-in situation with the Thomas D. Martin and Robert
Anderson Leases.

In late 2008, the federal government, through the agency FERC, mandated
that any gas with a BTU count higher than 1100 is unsafe and should not be
transported in interstate pipelines or sold to consumers. Gas originating
from oil wells usually has a high BTU count, and this is especially true
in the Burville area where the Anderson and Martin wells are located. As a
result, Magellan, as well as many other area producers, had their wells
shut in by Citizens Gas for the past six months.

To resolve the issue, Citizens Gas placed a large compressor in its
Burrville gathering system where it ties into a 350 lb. pressure line.
Citizens Gas receives its gas supply from the east Tennessee gas pipeline
and from various local gas producing wells in Scott, Morgan, Fentress and
Anderson counties, and will be "blending" the gas from all other wells in
these counties to lower the BTU levels. All operators in the area,
including Magellan's operator, TMD Energy Inc., have agreed to pay for the
compressor lease.

The blending process for the high BTU gas from the Burrville system will
ensure that the BTUs will not exceed the critical 1100 level. Magellan
intends to sell gas through this system from both the Martin and the
Anderson leases.

The long delay in resolving this issue can be attributed to a number of
factors. Many parties were affected by the shut-in and each had to be part
of negotiating the solution; many logistical issues had to be addressed;
and in the end, the solution had to satisfy federal guidelines.

Work has virtually been completed on the wells and the production phase
will commence very shortly. In order to gauge volumes, and therefore,
revenues, we must let the gas run through the lines to achieve consistency
in gas flow to obtain a true estimation of what is pushing through the
lines. Consumption = Sales = Revenues. A meter placed on each well will
measure the volume. The production must carry on for at least a week to
achieve average volumes. An added benefit of gas production commencing is
that the process will also increase oil production on the wells. As these
values are established, Magellan will update its shareholders.

Magellan is gearing up for production at a time when the U.S. economy may
have reached a turning point in the current recession, at least in some
sectors and the overall outlook for natural gas seems to be optimistic.
The Obama administration's energy policy hinging on reducing dependence on
foreign energy, especially oil, is encouraging at a time when Magellan's
natural gas and oil production is set to expand.

This is an exciting time for Magellan. While we certainly have faced
challenges in our existing projects, we have worked diligently to overcome
them and progress is being made on all of our properties.

We remain committed to creating shareholder value through development,
efficient operations and strategic acquisitions.

Management.

About Magellan Energy: Magellan Energy is a publicly traded independent
oil and gas company (PINKSHEETS: MGLG). The company is actively acquiring
oil and gas leases, producing properties, mineral rights, and surface
interests in Tennessee and Oklahoma. Once acquired, the company intends
to develop each property to maximize the income from each property by
re-establishing production, refurbishing and improving the existing
production and operations.

Forward-Looking Statements: The statements which are not historical facts
contained in this release are forward-looking statements that involve
risks and uncertainties, including but not limited to, the effect of
economic conditions, the impact of competition, the results of financing
efforts, changes in consumers' preferences and trends. The words
"estimate," "possible," and "seeking" and similar expressions identify
forward-looking statements, which speak only to the date the statement
was made. The Company undertakes no obligation to publicly update or
revise any forward-looking statements, because of new information, future
events, or otherwise. Future events and actual results may differ
materially from those set forth herein, contemplated by, or underlying
the forward-looking statements.

Contact:
MAGELLAN ENERGY LTD.
Member of the Tennessee Oil and Gas Association
Website: http://www.magellan-energy.com
Phone: 1-866-365-4724

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