ˆ200F1w4=q24wXHneÂŠ 200F1w4=q24wXHne RR Donnelley ProFile … · 2011-02-17 ·...

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of 2<ASSEMBLY> SUBMISSION_HEADER_ASSEMBLY </ASSEMBLY><LINK> 8-K_2 </LINK><CYCLE>2</CYCLE><REQUEST><OPTIONS><MERGE-SPLIT-PARAGRAPHS> NO </MERGE-SPLIT-PARAGRAPHS><REMOVE-COMMENTS> YES </REMOVE-COMMENTS><REMOVE-FOLIOS> NO </REMOVE-FOLIOS><REMOVE-RUNNING-TEXT> NO </REMOVE-RUNNING-TEXT><REVISION-TAGS> VISIBLE </REVISION-TAGS><RULE-SIZE> 3 </RULE-SIZE><RULE-COLOR> 999999 </RULE-COLOR><RULE-WIDTH> 100% </RULE-WIDTH><RULE-ALIGNMENT> CENTER </RULE-ALIGNMENT><PAGE-BREAK-TEXT> Style=’page-break-before:always’ </PAGE-BREAK-TEXT><INSERT-TOC-LINKS> YES </INSERT-TOC-LINKS><TOC-LINK-PLACEMENT> TOP </TOC-LINK-PLACEMENT><TOC-LINK-TEXT> Table of Contents </TOC-LINK-TEXT><TOC-LINK-NAME> TOC </TOC-LINK-NAME><INSERT-TITLE-TEXT> NO </INSERT-TITLE-TEXT><TITLE-PLACEMENT> BEFORE </TITLE-PLACEMENT><TITLE-TEXT> Prepared by R.R. Donnelley Financial </TITLE-TEXT><SEPARATOR> RULE,PAGE-BREAK </SEPARATOR><PAGE-TAGS> INSERT </PAGE-TAGS><INSERT-INDEX-LINKS> NO </INSERT-INDEX-LINKS><INDEX-LINK-PLACEMENT> TOP </INDEX-LINK-PLACEMENT><INDEX-LINK-TEXT> Index to Financial Statements </INDEX-LINK-TEXT><INDEX-LINK-NAME> INDEX </INDEX-LINK-NAME></OPTIONS><SUBMISSION-INFORMATION-FILE> <TYPE> 8-K </TYPE><SUBMISSION-CONTACT> <CONTACT-NAME> R.R. Donnelley Financial </CONTACT-NAME> <CONTACT-PHONE> 617-345-4345 </CONTACT-PHONE></SUBMISSION-CONTACT> <NOTIFY-INTERNET> [email protected] </NOTIFY-INTERNET><CONFIRMING-COPY> NO </CONFIRMING-COPY><FILER> <FILER-CCC> #amgr8ic </FILER-CCC> <FILER-CIK> 0000061398 </FILER-CIK></FILER> <SROS> NASD </SROS><PERIOD> 02/11/2011 </PERIOD><ITEMS> 1.01 2.02 8.01 9.01 </ITEMS><RETURN-COPY> YES </RETURN-COPY><DOCUMENT> <TYPE> 8-K </TYPE><DESCRIPTION> Form 8-K </DESCRIPTION><HTML> [152689.TX] </HTML> </DOCUMENT> <DOCUMENT> <TYPE> EX-10.1 </TYPE><DESCRIPTION> First Amendment to Securities Purchase Agreement dated February 11,2011 </DESCRIPTION><HTML> [152689.EXA] </HTML> </DOCUMENT> <DOCUMENT> <TYPE> EX-10.2 </TYPE><DESCRIPTION> Second Amendment to Securities Purchase Agreement dated February 17, 2011 </DESCRIPTION><HTML> [152689.EX10_1] </HTML> </DOCUMENT> <DOCUMENT> <TYPE> EX-10.3 </TYPE><DESCRIPTION> Investment Agreement dated February 11, 2011 </DESCRIPTION><HTML> [152689.EX10_2] </HTML> </DOCUMENT> <DOCUMENT> <TYPE> EX-10.4 </TYPE><DESCRIPTION> Amended Side Letter to Investment Agreement dated February 17, 2011 </DESCRIPTION><HTML> [152689.EX10_3] </HTML>

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of 2</DOCUMENT> <DOCUMENT> <TYPE> EX-99.1 </TYPE><DESCRIPTION> Company press release dated February 17, 2011 </DESCRIPTION><HTML> [152689.EX99_1] </HTML> </DOCUMENT> <DOCUMENT> <TYPE> EX-99.2 </TYPE><DESCRIPTION> Company press release dated February 14, 2011 </DESCRIPTION><HTML> [152689.EX99_2] </HTML> </DOCUMENT> </SUBMISSION-INFORMATION-FILE></REQUEST>

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UNITED STATES SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Date of report (Date of earliest event reported): February 17, 2011 (February 11, 2011)

Magellan Petroleum Corporation (Exact Name of Registrant as Specified in Its Charter)

207-619-8500 (Registrant’s Telephone Number, Including Area Code)

(Former Name or Former Address, if Changed Since Last Report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

Delaware 1-5507 06-0842255(State or Other Jurisdiction

of Incorporation) (CommissionFile Number)

(IRS Employer Identification No.)

7 Custom House Street, Portland, ME 04101(Address of Principal Executive Offices) (Zip Code)

� Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

� Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

� Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

� Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)

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On February 11, 2011, Magellan Petroleum Corporation (“Company”) and its strategic investor, Young Energy Prize S.A. (“YEP”), executed an Investment Agreement, a side letter to the Investment Agreement (“Side Letter”) and a First Amendment to Securities Purchase Agreement (“First Amendment”). On February 17, 2011, the Company and YEP executed a Second Amendment to Securities Purchase Agreement (“Second Amendment”) and an amendment to the Investment Agreement which replaced, in its entirety, the Side Letter (“Amended Side Letter”).

Mr. Nikolay Bogachev, a director of the Company since July 2009, is the President and CEO of YEP as well as an equity owner of YEP. Currently, Mr. Bogachev and YEP collectively own approximately 26.2% of the outstanding shares of the Company’s Common Stock, calculated as if the warrants to purchase shares of such stock currently held by YEP were fully exercised. The Investment Transaction (defined below), upon completion, would result in Mr. Bogachev and YEP, collectively, owning approximately 30.4% of the outstanding shares of the Company.

A copy of the Company’s February 17, 2011 press release announcing the execution of the Investment Agreement and the Second Amendment is filed herewith as Exhibit 99.1 to this Current Report on Form 8-K.

Summaries of the First Amendment, Second Amendment, the Investment Agreement and the Amended Side Letter are set forth below. These summaries are qualified in their entirety by the full text of the agreements, copies of which are filed as exhibits to this Current Report on Form 8-K.

First Amendment to Securities Purchase Agreement The First Amendment revises the August 5, 2010 Securities Purchase Agreement between the Company and YEP where under

the Company agreed to sell, and YEP agreed that YEP and/or one or more of its affiliates would purchase, 5,200,000 shares of the Company’s common stock , par value $0.01 per share (“Common Stock”) at a purchase price of $3.00 per share, for an aggregate purchase price of $15.6 million (“Investment Transaction”) to raise capital for Magellan Petroleum Australia Limited’s (“MPAL”), a wholly owned subsidiary of the Company, planned acquisition of Santos Offshore Pty Ltd.’s 40% ownership interest in the Evans Shoal field, offshore Australia (“Evans Shoal”). The terms and conditions of MPAL’s acquisition of Santos’ interest in the Evans Shoal field (“Evans Shoal Transaction”) are set forth in the March 25, 2010 Assets Sales Deed between MPAL and Santos, as amended by the Deed of Variation executed by those parties on January 31, 2011 (collectively, “Evans Shoal Agreement”).

The First Amendment provides for a final closing of the Investment Transaction on or before June 15, 2011 to the extent that: (i) the Evans Shoal Transaction does not close as contemplated by the Evans Shoal Agreement; and (ii) the failure to close the Evans Shoal Transaction shall have resulted in the failure of the Company to recover its

Item 1.01 Entry into a Material Definitive Agreement

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(A)$10 million deposit towards the purchase price of the Evans Shoal Interest under the provisions of the Deed of Variation (collectively, “Deposit Back Stop”).

A copy of the First Amendment dated February 11, 2011 is attached as Exhibit 10.1 to this Current Report on Form 8-K and is hereby incorporated by reference.

Second Amendment to Securities Purchase Agreement The Second Amendment clarifies the Deposit Back Stop set forth in the First Amendment and states that the funding

contemplated by the First Amendment would not be withheld to the extent that the Company fails to satisfy any condition precedent set forth in the Securities Purchase Agreement if such non-satisfaction is reasonably attributable to the failure to close the Evans Shoal Transaction.

A copy of the Second Amendment dated February 17, 2011 is attached as Exhibit 10.2 to this Current Report on Form 8-K and is hereby incorporated by reference.

Investment Agreement The Investment Agreement outlines: (i) YEP’s participation in MPAL’s purchase of Santos’ interest in the Evans Shoal field

(“Evans Shoal Interest”); (ii) the Acquisition and Reorganization Plan which sets forth the restructuring of MPAL to facilitate the funding of the Evans Shoal Transaction and the allocation of the economic interest in the Evans Shoal Interest (“Plan”); (iii) the basis on which post-closing payments required to be made by MPAL to Santos under the Evans Shoal Agreement will be funded by the Company and YEP; and (iv) the Company and YEP’s obligations to implement and fund the development of Evans Shoal (“Project”).

Yep Funding for the Evans Shoal Transaction. Under the Investment Agreement, YEP shall provide funding to the Company required for the completion of the MPAL’s acquisition of the Evans Shoal Interest in the amount of approximately (A)$85.45 million, which shall include the proceeds of the (US)$15.6 million provided by the Investment Transaction, and of which (A)$10 million will be paid to the Company in reimbursement of the additional deposit made towards the purchase price of the Evans Shoal Interest pursuant to the Deed of Variation. The Investment Agreement states that the funding of the (A)$85.45 million by YEP is contingent upon the requirements and conditions of the Evans Shoal Agreement being satisfied or waived.

The Plan and Participation in the Evans Shoal Interest. The Investment Agreement includes the Plan. The Plan contemplates the reorganization of the Company’s Australian business to facilitate the YEP funding for the Evans Shoal Transaction and to structure the economic participation by each of the Company and YEP in the Evans Shoal Interest. The Investment Agreement provides that each of the Company and YEP (or an affiliate thereof) will obtain a 51% (“Stage A1 Interest”) and a 49% (“Stage A2 Interest”) economic interest, respectively, in the product produced from the Evans Shoal Interest (excluding associated hydrocarbons but including CO ) with agreed offtakers of up to an amount of 3tcf (“Stage A Allocated Quantity”) plus

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associated hydrocarbons. The Investment Agreement also provides that the Company (or an affiliate) will also obtain a 5% interest (“Stage B1 Interest”) in the product produced from the Evans Shoal Interest in amounts greater than the Stage A Allocated Quantity (“Stage B Allocated Quantity”) while YEP (or an affiliate) shall obtain a 49% interest (“Stage B2 Interest”) and a 46% interest (“Stage B3 Interest”) in the Stage B Allocated Quantity. In addition, the Company has an option to acquire from YEP up to 46% of YEP’s Stage B3 Interest under certain conditions. The exercise price shall be based upon 90% of the independently engineered discounted future cashflow of the portion of the Stage B3 Interest which the Company elects to acquire which shall be payable 50% to 75% in Company Common Stock valued at traded market price at the time with the remainder in cash.

The Investment Agreement requires the parties to agree upon a framework for the making of decisions relevant to the Project. Notwithstanding the foregoing, the Investment Agreement provides that a limited number of decisions that may adversely and unfairly impact the rights of the Stage interests shall require unanimous approval of all Stage interest holders while all other decisions relating to the Project will require the approval of 66.67% of the owners of: (i) Stage A interests if decisions relate to Stage A aspects; (ii) Stage B interest if decisions relate to Stage B aspects; and (iii) all Stage interests if the decisions relate to the Project generally. Deadlock procedures are also included in the Investment Agreement to the extent that the parties cannot agree on a material decision.

Responsibility for Post-Closing Payments/Costs of the Evans Shoal Transaction. With respect to post-closing payments required to be made by MPAL to Santos pursuant to the Evans Shoal Agreement, the Investment Agreement generally provides that the first (A)$50 million of Project developments cost incurred by MPAL or other Company subsidiary holding the Evans Shoal Interest prior to the occurrence of final investment decision (“FID”) in relation to the Stage A interests shall be funded by YEP and all Project development costs exceeding that amount shall be funded by the Company (as to 51% of such amounts) and YEP (as to 49% of such amounts). All amounts payable by MPAL to Santos under the Evans Shoal Agreement after closing of the Evans Shoal Transaction shall be funded by the Company (as to 51% of such amounts) and YEP (as to 49% of such amounts). With effect from (but excluding) the FID date, each owner of a Stage A or Stage B interest shall be responsible for Stage A or Stage B costs equal to its Stage interest percentage, as applicable.

Development of Evans Shoal. The Investment Agreement requires the Company and YEP to collaborate and implement the Project and to seek and use reasonable endeavors to seek (i) the development of the Project area and facilities; (ii) develop the strategy and arrangements for the sale of Project product so that one or more long term offtake contracts are entered into for the sale of the Project product in committed quantities of at least the Stage A Allocated Quantity and to the extent feasible, the Stage B Allocated Quantity product from Stage B consistent terms to allow for finance activities contemplated under the Investment Agreement; (iii) sell all Project product, to the extent commercially possible, on an aggregated basis to offtakers and to obtain necessary agreements with offtakers and to the extent that the Project compromises the tolling of Project product, to deliver all or any Project product to one or

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more tollers for processing prior to delivery to an offtaker; and (iv) to the extent consistent with the foregoing, to develop the Project on the basis that at least the Stage A Allocated Quantity, and to the extent feasible, the Stage B Allocated Quantity, will be processed into methanol pursuant to negotiated agreements by an international and reputable methanol producer(s), identify and negotiate agreements for potential offtake opportunities. The Investment Agreement also requires the Company and YEP to use their reasonable endeavors to obtain third party funding to implement the Project in a manner which achieves tax and cost of capital efficiencies and with minimum or no recourse to the parties and their affiliates.

A copy of the Investment Agreement dated February 11, 2011 is attached as Exhibit 10.3 to this Current Report on Form 8-K and is hereby incorporated by reference.

Amended Side Letter The Amended Side Letter clarifies the Investment Agreement by providing that the Company and not YEP shall be responsible

for the payment of all third party out-of-pocket transaction costs and expenses incurred by the Company, YEP and MPAL with respect to the Evans Shoal Transaction (“Costs”) to the extent that the Evans Shoal Transaction does not close and the Investment Transaction closes pursuant to the terms of the First and Second Amendments. The Amended Side Letter also clarifies that such Costs include those relating to the financing of Evans Shoal Transaction and the Investment Transaction.

A copy of the Amended Side Letter dated February 17, 2011 is attached as Exhibit 10.4 to this Current Report on Form 8-K and is hereby incorporated by reference.

On February 14, 2011, the Company issued a press release discussing the Company’s financial results for the fiscal quarter ended December 31, 2010. A copy of this press release is furnished herewith as Exhibit 99.2 and is hereby incorporated herein by reference.

The information under this Item 2.02 shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.

Investment Agreement Press Release On February 17, 2011, the Company issued a press release announcing the execution of the Investment Agreement and the

Second Amendment with YEP. A copy

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Item 2.02 Results of Operations and Financial Condition

Item 8.01 Other Events

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of the Company’s press release is filed herewith as Exhibit 99.1 and is hereby incorporated herein by reference.

Operations Update Press Release On February 14, 2011, the Company issued a press release announcing an operations update as well as YEP’s agreement to back

the Company’s (A)$10 million additional deposit made towards the purchase price of Evans Shoal pursuant to the terms of the Evans Shoal Agreement.

A copy of the Company’s February 14, 2011 press release is filed herewith as Exhibit 99.2 and is hereby incorporated herein by reference

The following document is filed herewith as an exhibit:

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Item 9.01 Financial Statements and Exhibits

(d) Exhibits.

10.1 First Amendment to Securities Purchase Agreement dated February 11, 2011

10.2 Second Amendment to Securities Purchase Agreement dated February 17, 2011

10.3 Investment Agreement dated February 11, 2011

10.4 Amended Side Letter to Investment Agreement dated February 17, 2011

99.1 Company press release dated February 17, 2011


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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned, hereunto duly authorized.

Dated: February 17, 2011

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MAGELLAN PETROLEUM CORPORATION

By: /s/ William H. Hastings Name: William H. Hastings Title: President and Chief Executive Officer

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EXHIBIT INDEX Exhibit

No. Description

10.1 First Amendment to Securities Purchase Agreement dated February 11, 2011

10.2 Second Amendment to Securities Purchase Agreement dated February 17, 2011

10.3 Investment Agreement dated February 11, 2011

10.4 Amended Side Letter to Investment Agreement dated February 17, 2011



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Exhibit 10.1

FIRST AMENDMENT

TO

SECURITIES PURCHASE AGREEMENT

This FIRST AMENDMENT TO SECURITIES PURCHASE AGREEMENT (this “Amendment”) is made and entered into this 11 day of February, 2011, by and between Magellan Petroleum Corporation, a Delaware corporation (the “Company”), and Young Energy Prize S.A., a Luxembourg corporation (the “Investor”).

WHEREAS, the Company and the Investor are parties to that certain Securities Purchase Agreement dated as of August 5, 2010 (the “Purchase Agreement”);

WHEREAS, Section 7.4 of the Purchase Agreement provides that no provision of the Purchase Agreement may be amended except in a written instrument signed by the Company and the Investor; and

WHEREAS, the Company and the Investor desire to amend the Purchase Agreement as set forth herein.

NOW, THEREFORE, in consideration of the mutual covenants, agreements and for other good and valuable consideration, the receipt and adequacy of which is hereby acknowledged, the Company and the Investor hereby agree as follows:

“Asset Sale Deed” means that certain Asset Sale Deed, dated March 25, 2010, by and between Magellan Petroleum Australia Limited, the wholly-owned Australian subsidiary of the Company, and Santos Offshore Pty Ltd.

“Deed of Variation” means that certain Deed of Variation, dated January 31, 2011, by and between Magellan Petroleum Australia Limited, the wholly-owned Australian subsidiary of the Company, and Santos Offshore Pty Ltd.

(b) The definition of “Closing Date” set forth in Section 1.1 of the Purchase Agreement shall be amended to read in its entirety as follows:

1. Amendment of Purchase Agreement.

(a) The following defined terms are added to Section 1.1 of the Purchase Agreement:

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“Closing Date” means a Business Day on which the parties agree to close the purchase and sale of any of the Shares.

(c) The definition of “Evans Shoal Transaction” set forth in Section 1.1 of the Purchase Agreement shall be amended to read in its entirety as follows:

“Evans Shoal Transaction” means the transactions contemplated by the Asset Sale Deed and the Deed of Variation.

(d) Section 5.1(e) of the Purchase Agreement shall be amended to read in its entirety as follows: “(e) Evans Shoal Transaction Status. As of the time of any Closing other than the final Closing at which the last of the

Shares are sold to and purchased by the Investor to provide funds for use in the closing of the Evans Shoal Transaction, the progress and status of the Evans Shoal Transaction shall be satisfactory to the Investor, and, in the case of such final Closing, the conditions to the closing of the Evans Shoal Transaction shall have been satisfied or waived. Notwithstanding the foregoing, the Investor shall be required to complete the final Closing, on or before June 15, 2011, in the absence of a closing of the Evans Shoal Transaction, if the failure of the Evans Shoal Transaction to close shall have resulted in the failure of the Company to recover its A$10,000,000 deposit under the provisions of the Deed of Variation;”

(e) Section 6.1(a) of the Purchase Agreement shall be amended to read in its entirety as follows: “(a) except as set forth in Section 5.1(e), by the Investor or the Company, upon written notice to the other, if no Closing

shall have taken place by 6:30 p.m., Eastern Time, on May 31, 2011; provided, that the right to terminate this Agreement pursuant to Section 6.1(a) shall not be available to any party whose failure to perform any of its obligations under this Agreement is the primary cause of the failure of a Closing to have occurred by such date and time; or”

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2. Effect of this Amendment. Except as specifically amended as set forth herein, each term and condition of the Purchase Agreement shall continue in full force and effect.

3. Memorandum of Agreement. Contemporaneously with the execution of the Purchase Agreement, the Company and the Investor also entered into a Memorandum of Agreement dated August 5, 2010 (the “Memorandum of Agreement”) for the purpose of clarifying certain terms of the Purchase Agreement. The Company and the Investor acknowledge and agree that, in the event of any conflict between the terms of this Amendment and the terms of the Memorandum of Agreement, the terms of this Amendment shall control.

4. Counterparts; Facsimile Signatures. This Amendment may be executed or consented to in counterparts, each of which shall be deemed an original and all of which taken together shall constitute one and the same instrument. This Amendment may be executed and delivered by facsimile or electronically and, upon such delivery, the facsimile or electronically transmitted signature will be deemed to have the same effect as if the original signature had been delivered to the other party.

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The parties have caused this Amendment to be duly executed and delivered by their proper and duly authorized officers as of the date and year first written above.

COMPANY:


By: /s/ William H. HastingsName: William H. HastingsTitle: President and Chief Executive Officer

INVESTOR:

YOUNG ENERGY PRIZE S.A.

By: /s/ Nikolay BogachevName: Nikolay BogachevTitle: President YEP

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Exhibit 10.2

SECOND AMENDMENT

TO

SECURITIES PURCHASE AGREEMENT

This SECOND AMENDMENT TO SECURITIES PURCHASE AGREEMENT (this “Amendment”) is made and entered into this 17 day of February, 2011, by and between Magellan Petroleum Corporation, a Delaware corporation (the “Company”), and Young Energy Prize S.A., a Luxembourg corporation (the “Investor”).

WHEREAS, the Company and the Investor are parties to that certain Securities Purchase Agreement dated as of August 5, 2010, as amended by that certain First Amendment to Securities Purchase Agreement dated February 11, 2011 (together, the “Purchase Agreement”);

WHEREAS, Section 7.4 of the Purchase Agreement provides that no provision of the Purchase Agreement may be amended except in a written instrument signed by the Company and the Investor; and

WHEREAS, the Company and the Investor desire to amend the Purchase Agreement as set forth herein.

NOW, THEREFORE, in consideration of the mutual covenants, agreements and for other good and valuable consideration, the receipt and adequacy of which is hereby acknowledged, the Company and the Investor hereby agree as follows:

1. Amendment of Purchase Agreement. Section 5.1(e) of the Purchase Agreement shall be amended to read in its entirety as follows: “(e) Evans Shoal Transaction Status. As of the time of any Closing other than the final Closing at which the last of the

Shares are sold to and purchased by the Investor to provide funds for use in the closing of the Evans Shoal Transaction, the progress and status of the Evans Shoal Transaction shall be satisfactory to the Investor, and, in the case of such final Closing, the conditions to the closing of the Evans Shoal Transaction shall have been satisfied or waived. Notwithstanding the foregoing and provided that the Company has not recovered its A$10,000,000 deposit under the provisions of the Deed of Variation, the Investor shall be required to complete the final Closing, on or before June 15,

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2011, without regard to the failure of the Evans Shoal Transaction to close and without regard to any failure to satisfy any other condition set forth in this Section 5.1 which non-satisfaction is reasonably attributable to the failure to close the Evans Shoal Transaction;”

2. Effect of this Amendment. Except as specifically amended as set forth herein, each term and condition of the Purchase Agreement shall continue in full force and effect.

3. Counterparts; Facsimile Signatures. This Amendment may be executed or consented to in counterparts, each of which shall be deemed an original and all of which taken together shall constitute one and the same instrument. This Amendment may be executed and delivered by facsimile or electronically and, upon such delivery, the facsimile or electronically transmitted signature will be deemed to have the same effect as if the original signature had been delivered to the other party.

The parties have caused this Amendment to be duly executed and delivered by their proper and duly authorized officers as of the date and year first written above.

COMPANY:


By: /s/ William H. HastingsName: William H. HastingsTitle: President and Chief Executive Officer

INVESTOR:

YOUNG ENERGY PRIZE S.A.

By: /s/ Nikolay Bogachev Name: Nikolay BogachevTitle: President YEP

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Exhibit 10.3

MAGELLAN PETROLEUM CORPORATION - YOUNG ENERGY PRIZE S.A.

EVANS SHOAL PROJECT INVESTMENT

INVESTMENT AGREEMENT

Strictly private and confidential

This Investment Agreement is entered into on FEBRUARY 11, 2011, and sets out the key commercial terms which Magellan Petroleum Corporation (MPC) and Young Energy Prize S.A (YEP) (MPC and YEP being the Parties) agree to be bound by in relation to, amongst other matters (a) the acquisition by Magellan Petroleum Australia Limited (MPAL Old) from Santos Offshore Pty Ltd (Santos) pursuant to the Evans Shoal – Assets Sale Deed dated 25 March 2010 entered into between Santos and MPAL Old (as amended by the Deed of Variation – Assets Sale Deed dated 31 January 2011 and otherwise from time to time, the Assets Sale Deed) of Santos’s 40% interest in the Operating Agreement Covering Exploration Permit NT/P 48 dated 3 June 1996 (as amended) and related interests (the Evans Shoal Interests) between Santos and the other persons party thereto and (b) the ongoing investment and development of the Evans Shoal project (the Project) to which the Operating Agreement relates (together, the Transaction).

Terms defined in the Assets Sale Deed or the Operating Agreement shall have the meanings where used in this Investment Agreement unless a contrary intention appears.

1

1. INTRODUCTION

1.1 Objectives and scope of obligations

The principal objectives of the Parties in relation to the Transaction are to:

(a)

effect YEP’s participation in MPAL Old’s acquisition of the Evans Shoal Interests under the Assets Sale Deed;

(b) set out the basis on which post-Completion payments required to be made by MPAL Old to Santos under the Assets Sale Deed will be funded by the Parties;

(c)

set out the obligations of each Party to implement and give effect to the steps specified in the Acquisition and Reorganisation Plan with a view to:

(i)

funding MPAL Old’s acquisition of the Evans Shoal Interests under the Assets Sale Deed;

(ii)

structuring the legal form of each Party’s direct or indirect ownership of, and participation in, the Evans Shoal Interests; and

(iii)

define and give effect to the respective direct or indirect Stage Interests of MPC and YEP in respect of the Evans Shoal Interests after Completion; and

(d)

set out the obligations of the Parties to implement and fund the Project and carry out certain related activities.

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1.2 Further assurances

(a)

Each Party acknowledges that the Acquisition and Reorganisation Plan is a framework only and does not necessarily detail all actions that may be necessary or desirable to implement the Acquisition and Reorganisation Plan and to give effect to the principal objectives and commercial intent of the Parties.

(b)

Each Party agrees that it shall do all things reasonably necessary to ensure that all action is taken that may be necessary or desirable to implement the Acquisition and Reorganisation Plan and to give effect to the principal objectives and commercial intent of the Parties.

(c)

If and to the extent it becomes possible for the Parties to amend the terms of the Transaction Documents and/or restructure the Parties’ investment in the Project so as to enable MPC for financial reporting and taxation purposes to consolidate within the MPC group its direct or indirect interest in the Evans Shoal Interests, the Parties shall conduct good faith discussions with a view to so amending the Transaction Documents and/or restructuring the Parties’ investment in the Project, but only to the extent that YEP’s economic interests, governance rights and funding obligations as reflected in this Investment Agreement and in the Acquisition and Reorganization Plan are not materially and adversely prejudiced.

2. ACQUISITION AND REORGANISATION PLAN

2.1 Ernst & Young Steps Paper

Ernst & Young, in conjunction with the Parties and their legal advisors, has prepared a proposed acquisition and reorganisation plan (the Acquisition and Reorganisation Plan) which sets out the key steps by which MPC and YEP will, amongst other things, directly or indirectly, fund completion of the acquisition by MPAL Old of the Evans Shoal Interests and structure and effect the direct or indirect participation by each Party in the Evans Shoal Interests, including theexercise by a new entity (MPAL New) as contemplated in the Acquisition and Reorganisation Plan of MPAL Old’s Participating Interest.

The current form of the Acquisition and Reorganisation Plan is attached to this Investment Agreement as Annex I (Short Form) and Annex II (Full Form) and the Parties will work together to finalise and implement the Acquisition and Reorganisation Plan.

2.2 Interim, Partnership and Corporate Structures

Prior to the Cut-Off Date, the Parties shall take all actions necessary to implement the Interim Structure (as contemplated in the Acquisition and Reorganisation Plan) to enable MPAL Old to be funded with the amounts required for it to achieve Completion.

The Interim Structure provides time, if required and if the Parties so choose, for the Parties to seek to obtain the requisite Participants’ Consent to the transfer of the Evans Shoal Interests from MPAL Old to MPAL New (for itself or as nominee for the ES Partnership) pursuant to the exercise by MPAL New under the Evans Shoal Interests Option Deed of the option to acquire the Evans Shoal Interests.

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The Interim Structure facilitates a conversion to a Partnership Structure, if and when the Participants’ Consent is obtained and related issues are resolved and YEP elects to adopt a Partnership Structure. The Interim Structure also allows for the structure to be converted into an alternative Corporate Structure, if the Parties so choose or if the Participants’ Consent is unable to be obtained and or if YEP elects to adopt a Corporate Structure.

Following the Completion Date and the implementation of the Interim Structure but no later than the date which is 12 months after the Completion Date under the Assets Sale Deed), YEP shall deliver to MPC either a Partnership Structure Election Notice or a Corporate Structure Election Notice. A Corporate Election Notice will be deemed to have been delivered by YEP if it has not provided a Partnership Structure election notice by such date.

The Parties acknowledge that if feasible in all material respects the Partnership Structure is the preferred structure for the holding of the Evans Shoal Interests.

3. COMPLETION FUNDING

3.1 YEP funding

YEP shall provide funding required for the completion of the acquisition by MPAL Old of the Evans Shoal Interests in the amount of approximately A$85,450,000, which shall include the proceeds of the US$15,6000,000 PIPE Investment to be made by YEP to MPC, and of which A$ 10,000,000 shall be paid to MPC in reimbursement of the payment made by MPC to Santos which will have been credited by Santos to such required completion payment, plus 50% (up to a cap of US$3,500,000) of all out of pocket costs and expenses incurred by MPC, MPAL Old or YEP associated with the acquisition. Notwithstanding the foregoing, such A$85,450,000 payment by YEP shall not be due unless:

(a)

the other owners of Evans Shoal Interests shall have consented to the acquisition by MPAL Old of the Evans Shoal Interests in accordance with the documents relating to such other owners and to such acquisition; and

(b)

all other requirements and conditions for the acquisition of the Evans Shoal Interests set forth in the Asset Sale Deed shall have been satisfied or waived.

4. MANAGEMENT AND DECISION MAKING

4.1 Management

The supplemental documentation will to the extent necessary and agreed by the Parties set out general management principles and guidelines, including the establishment of a significant presence in Darwin or other city in Australia agreed by the Parties for the purpose of carrying out necessary operations in relation to the Project.

4.2 Decision-making

The Parties will agree upon a framework for the making of decisions in relation to the Project and such framework will be incorporated into the joint venture documentation (which will be included in the supplemental

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documentation) to be entered into to give effect to the investment structure and economic interests of the Parties and their permitted transferees.

The following categories of decisions and their voting requirements are currently intended:

(a)

a limited number of decisions that may adversely and unfairly impact the rights of the owners of Stage Interests will require the unanimous approval of all Stage Interest owners;

(b)

all other decisions in relation to the Project, including exercise of the rights and obligations of MPAL Old or MPAL New (as applicable) under the Operating Agreement and including decisions in relation to operatorship of the Project, will require the approval of at least 66.67% of the owners of (i) Stage A Interests, if the decision relates to Stage A aspects of the Project, (ii) Stage B Interests, if the decision relates to Stage B aspects of the Project, or (iii) all Stage Interests if the decision relates to the Project generally.

4.3 Deadlock

The Parties will agree and incorporate into the supplemental documentation (a) a list of material decisions which reasonably require affirmative action in relation to the Project and that will constitute “deadlock events”, if the Parties are within 45 days unable to agree upon a decision including after escalation to the respective boards of the Parties and (b) mechanisms for resolving deadlock events.

A deadlock event shall be referred to a third party (qualified with respect to the matters involved with the deadlock event) who shall be required to make a binding recommendation with respect to such deadlock event to the relevant Stage Interest owners, on an expedited basis. The relevant Stage Interest owners will be bound to implement the recommendation as soon as reasonably practicable after such recommendation is made. If a relevant Stage Interest owner determines, in good faith and on reasonable grounds, that the effect of implementing the recommendation would result in its interests in such Stage Interest being materially prejudiced, it shall be entitled to deliver to the other relevant Stage Interest owners a notice specifying the grounds on which it has made its determination and requiring the other owners of such Stage Interest to buy (on a pro rata basis) its Stage Interest at a fair market value price determined by a valuer appointed by the Stage Interest owners or if they fail to agree thereon appointed by the third party who made the binding recommendation and on an ‘as is where is’ basis. The completion of such acquisition shall be effected by the relevant Stage Interest owners within a period not later than 120 days after the determination of the value of the Stage Interest to be acquired. All third party costs in relation to the foregoing shall be paid by the relevant Stage Interest owners on a pro rata basis.

4.4 Other obligations Each Party shall:

(a) ensure that each Transaction Related Party which it controls; and

(b)

use its reasonable endeavours to procure that any Transaction Related Party which it does not control but in which it directly or

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indirectly owns any voting share capital or otherwise has voting or other rights of control over (whether by way of direct or indirect ownership of shares or other securities, proxy, contract, agency or otherwise),

complies with all material laws and regulations to which it is subject, maintains all filings and registrations and to the extent applicable in the relevant jurisdictions maintains good standing.

5. ECONOMIC INTERESTS IN THE EVANS SHOAL INTERESTS

5.1 General Principles

The commercial intention is for the Parties to have different economic interests in the Evans Shoal Interests, which shall vary depending on the amount of Project product derived from the Evans Shoal Interests. These economic interests will entitle the Parties to receive a designated percentage share of revenues from Project product and fund certain Project development costs.

MPC and YEP (or their subsidiaries) will obtain a 51% and 49% economic interest, respectively, in Project product (excluding associated hydrocarbons but including C0 ) with agreed offtakers of up to an amount of 3tcf (the Stage A Allocated Quantity) plus associated hydrocarbons.

MPC and YEP (or their subsidiaries) will obtain a 5% and 95% economic interest in, respectively, Project product in amounts greater than the Stage A Allocated Quantity.

To this end, the Parties wish to:

(a)

notionally split the Evans Shoal Interests into a Stage A interest (corresponding to the Stage A Allocated Quantity) (the Stage A Interest) and a Stage B Interest (corresponding to all other Project product) (the Stage B Interest); and

(b) further notionally split:

(i)

the Stage A Interest into a Stage A1 interest (initially to be owned by MPC or an affiliate and will constitute a 51% share of the Stage A Interest) and a Stage A2 interest (initially to be owned by YEP or an affiliate and will constitute a 49% share of the Stage A Interest); and

(ii)

the Stage B Interest into a Stage B1 interest (initially to be owned by MPC or an affiliate and will constitute a 5% share of the Stage B Interest), a Stage B2 interest (initially to be owned by YEP or an affiliate and will constitute a 49% share of the Stage B Interest) and a Stage B3 interest (initially to be owned by YEP or an affiliate, subject to the option described in Section 5.4 below, and will constitute a 46% share of the Stage B Interest).

The Parties may recombine any such interests (each, a Stage Interest) and re-split any Stage Interests by agreement in writing.

2

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5.2 Stage A Interests The owner of a Stage A Interest shall:

(a)

be entitled to receive the applicable Stage Interest percentage of the difference between the Stage A Interest revenue (being revenue derived from offtake contracts entered into in respect of the Stage A Allocated Quantity) and the Stage A Interest costs (which shall be calculated by reference to Project development costs expended for the development of the Stage A Interest); and

(b) fund the applicable Stage Interest percentage of all Stage A Interest costs.

5.3 Stage B Interests The owner of a Stage B Interest shall:

(a)

be entitled to receive the applicable Stage Interest percentage of the difference between the Stage B Interest revenue (being revenue derived from offtake contracts entered into in respect of all Project product other than the Stage A Allocated Quantity) and the Stage B Interest costs; and

(b)

fund the applicable Stage Interest percentage of all Stage B Interest costs (which shall be calculated by reference to the incremental Project development costs expended for the development of the Stage B Interest).

The owners of the Stage B Interest shall not be required to pay to the owners of the Stage A Interests any “shared facilities fee” or similar as consideration for the owners of the Stage B Interest receiving the benefit of the Project facilities constructed, operated and maintained for the purpose of producing all or any part of the Stage A Allocated Quantity.

5.4 Stage B3 Interest Option

YEP shall grant MPC an option to acquire up to a 46% interest in the Stage B Interest. Such option shall be with respect to the Stage B3 interest and may only be exercised upon a date which is 6 months after (a) a final investment decision with respect to the development of the Project in relation to the Stage B Interest and (b) entry into of the Stage B offtake contract(s) in relation to the remaining reserves in the Evans Shoal Field.

The exercise price shall be based upon 90% of the independently engineered discounted future cashflow of the portion of the Stage B3 Interest which MPC elects to acquire (as determined by three valuers; one appointed by each Party and the third appointed by the valuers) which shall be payable 50% to 75% in common shares of MPC valued at their traded market price at that time and 25% to 50% in cash, as determined by MPC.

5.5 Transfers of Stage Interests

(a)

The owner of a Stage Interest may, subject to paragraph (b) below, without requiring the consent of any other owner of a Stage Interest, assign or transfer, including by way of novation (each a transfer) to any person (a transferee) all or part of its rights and/or obligations under or in respect of a Stage Interest, so long as:

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(i)

the transfer and accession requirements, and all other conditions and requirements to any assignment or transfer of a Stage Interest, set out in the relevant joint venture/partnership documentation and any other applicable Transaction documents are complied with;

(ii)

the transferee is not named in any list of sanctioned persons with respect to embargoes or terrorism maintained by any government authority in Australia or the United States of America;

(iii)

if the proposed transferee is a person whose commercial interests could reasonably be expected to be detrimental to the interests of the other Stage Interest owners, each other owner of a Stage Interest also agrees, in its discretion, to such proposed transfer;

(iv)

if the transferee is controlled by one or more persons resident in the Peoples Republic of China, the consent of MPC and YEP (not to be unreasonably withheld or delayed) is obtained prior to the transfer;

(v)

the transferee has the requisite financial capability to assume the responsibilities and obligations as an owner of the relevant Stage Interest, including funding and credit support obligations to Third Party Financiers, under the Transaction Documents and all documents required to be entered into by any Third Party Financier providing Third Party Financing; and

(vi)

the requirements of any Third Party Financier who is providing, or who has indicated an intention or provided a commitment to provide, Third Party Financing, are or are reasonably likely at the required time to be satisfied.

(b)

Notwithstanding anything to the contrary set forth in this Section 5.5, an owner of a Stage Interest who desires to transfer all or any part of its interest in such Stage Interest shall first communicate to the other owners of interests in such Stage Interest such desire and the price and terms which such owner desires to achieve for such transfer. Such other owners may then elect to acquire such interest pursuant to such price and such terms (on a pro rata basis if more than one other owner so elects). If they fail to acquire all of such interest to be transferred, the transferring owner may transfer such interest to one or more other parties provided that if such transfer to such other parties is to be made at a price or on terms which are at least 20 percent more favourable to such other parties than the price and terms previously communicated to the other owners of interests in such Stage Interest, such other owners shall have a right of first refusal (on a pro rata basis if more than one other owner exercises such right) to purchase such interest upon the basis of such more favourable price or terms.

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(c)

In addition to the above, the owner of a Stage Interest may, without any restrictions, transfer a non-voting, non-membership economic interest in the distributions received with respect to its Stage Interest to a third party without requiring the consent of the other Stage Interest owners.

(d)

The owner of a Stage Interest may not grant security over its rights in respect of such Stage Interest without obtaining the prior written consent of the owners of all other Stage Interests unless such security interest is granted to a Third Party Financier as security for Third Party Financing.

6. PROJECT DEVELOPMENT

6.1 Project scope and implementation

The Parties will collaborate and implement the Project. The Parties shall seek and use reasonable endeavours to procure the Participants to seek:

(a)

to develop the Project area and the Project facilities with a view, to the extent feasible, to producing Project product in committed quantities of at least the Stage A Allocated Quantity;

(b) to develop the strategy and arrangements for the sale of Project product so that one or more long term offtake contracts are entered into for the sale of Project product in committed quantities of at least the Stage A Allocated Quantity and to the extent feasible the Stage B Allocated Quantity, and on bankable terms, to allow the financing objectives of the Parties asset out in Section 6.2 to be satisfied;

(c)

to the extent commercially possible to sell all Project product on an aggregated basis to offtakers and to obtain necessary agreements (including letters of intent, heads of agreement, memoranda of understanding, term sheets, sale and purchase agreements and similar agreements) with offtakers and to the extent that the Project comprises the tolling of Project product, to deliver all or any Project product to one or more Tollers for processing prior to delivery of Project product to an offtaker;

(d) to the extent consistent with the foregoing objectives:

(i)

to develop the Project on the basis that at least the Stage A Allocated Quantity, and to the extent feasible the Stage B Allocated Quantity, will be processed into methanol by an international and reputable methanol producer(s);

(ii)

identify and negotiate arrangements with persons satisfying the requirements specified in subparagraph (i) above;

(iii)

identify and negotiate with potential offtakers to sell committed quantities of all other Project product; and

(iv) generally to structure the Project and the related

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agreements to be entered into in such a way to give effect to the objectives set out in the foregoing subparagraphs.

(e)

The Parties shall use their reasonable endeavours to procure the Participants to work in goodfaith (including with the owner(s) of any Downstream Project Plant) to explore the feasibility of including any Downstream Project Plant within the scope of the Project.

6.2 Financing

The Parties shall seek to obtain third party funding to implement the Project in manner which achieves tax and cost of capital efficiencies and with minimum or no recourse to the Parties and their affiliates.

Third party financiers (Stage A Third Party Financiers) providing financing to fund Project development costs for the production and sale of the Stage A Allocated Quantity shall be entitled, subject to the requirements of the Operating Agreement, to take security over:

(a)

MPAL Old or MPAL’s New’s (as applicable) interest in and share of the Project reserves (including Project reserves intended to be used to produce Project product to be sold under Stage B offtake contracts);

(b)

MPAL Old or MPAL New’s (as applicable) rights and interest in the Operating Agreement and the Evans Shoal Title;

(c) all shares held in MPAL Old or MPAL New; and

(d) such other rights and interests necessary to give effect to the security contemplated above.

If commercially acceptable to Stage A Third Party Financiers, the terms of any Stage A financing shall permit any expansion to the Project facilities in connection with implementing the Project for the purpose of producing Project product to be sold under one or more Stage B offtake contracts.

Such expansion financing terms are to include intercreditor arrangements between Stage A Third Party Financiers and financiers financing any such expansion (Expansion Financiers); alignment of the terms and conditions of the expansion financing with the terms and conditions of the Stage A financing; appropriate restrictions on the terms, conditions and extent of the expansion financing; and appropriate financial and credit support to be provided to the Expansion Financiers by the Stage B Interest owners and on the basis that the Stage A Interests owners shall not be required to provide any such credit support.

Should a Third Party Financier require recourse to the owners of a Stage Interest the development costs of which the Third Party Financier is funding, each such Stage Interest owner shall provide such recourse based on the following principles:

(a) such recourse will be several among such Stage Interest owners; and

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(b) each such Stage Interest owner will be liable for its Stage Interest percentage of such recourse.

6.3 Project Operator

The Parties shall use their reasonable endeavours to procure that the Participants appoint MPAL Old and/or, following the exercise of the Evans Shoal Interests Option Deed, MPAL New, as the Operator of the Project.

If MPAL Old or MPAL New (as applicable) is appointed by the Participants as the Operator:

(a)

MPC shall enter into and perform, and the Parties shall procure that MPAL Old or MPAL New (as applicable) enters into and performs, its obligations under an Operating Services Agreement; and

(b)

if MPAL New is elected as Operator, the Parties shall use their reasonable endeavours to procure that Santos, MPAL Old and MPAL New enter into such agreements as may be necessary or desirable to effect a novation or transfer of MPAL Old’s rights and obligations under the Technical Services Agreement to MPAL New.

The Parties agree to undertake good faith negotiations in respect of service fees payable to MPC and the scope and standard of services to be provided by MPC and how such services may be procured through third parties, with consideration given to the manner in which the cost of such MPC services may be borne by the Participants.

7. FUNDING OBLIGATIONS

7.1 Development Costs

The first A$50,000,000 of Project development costs incurred by MPAL Old or MPAL New prior to the occurrence of final investment decision in relation to the Stage A Interest shall be funded by YEP and all such Project development costs exceeding A$50,000,000 shall be funded by MPC (as to 51% of such amounts) and YEP (as to 49% of such amounts). If a Party procures a third party to perform development costs, the obligations of that Party to fund Project development costs shall be satisfied on a dollar for dollar basis if and to the extent that the Evans Shoal Percentage of such development costs payable by MPAL Old or MPAL New (as applicable) is reduced (or waived) by that third party from what would otherwise have been the full invoiced amount.

7.2 Post-Completion payments to Santos

All amounts payable by MPAL Old to Santos under the Assets Sale Deed after Completion shall be funded on a timely basis by MPC (as to 51 % of such amounts) and YEP (as to 49% of such amounts).

7.3 Project Costs and Shared Costs

With effect from (but excluding) the FID Date, each owner of a Stage Interest shall be responsible for funding an amount equal to:

(a)

if its Stage Interest is derived from the Stage A Interest, its Stage Interest percentage of all Stage A Interest costs; and

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(b) if its Stage Interest is derived from the Stage B Interest, its Stage Interest percentage of all Stage B Interest costs.

7.4 Funding Structure

All Project development costs payable by the Parties as set forth above shall be paid to MPAL Old or MPAL New in a timely manner and be structured to achieve tax efficiencies and to ensure that no owner of a Stage Interest shall have any commercial, legal or structural advantage over the owner of another Stage Interest with respect to its rights to receive payment or repayment of such funding.

7.5 Default The owner of a Stage Interest will be in default if:

(a)

it fails to perform any obligation to make any payment or provide any funding in accordance with this Investment Agreement or the supplemental documentation (except that for payments or funding of amounts other than amounts due under the Operating Agreement such amounts must be material), within ten Business Days after notice from any other owner of a Stage Interest of the due date for the relevant payment (the unpaid amount being the Shortfall Amount);

(b) it fails to perform any other material obligation under this Investment Agreement or the supplemental documentation and fails to remedy the default within 60 days after the date on which it receives a notice from any other owner of a Stage Interest specifying the default and requiring it to remedy the default; or

(c)

it becomes insolvent or is subject to winding up or liquidation or similar proceedings which are not discharged within 14 days after initiation of such proceedings.

7.6 Remedies for default If the owner of a Stage Interest is in default (the Defaulting Party), then:

(a)

if the default is under Section 7.5(a) above, any other owner of a Stage Interest (and if more than one, each such owner of a Stage Interest on a pro rata basis) shall be entitled (at its option):

(i)

to provide funding to MPAL Old or MPAL New (as applicable) in an amount equivalent of the Shortfall Amount not later than 10 Business Days after the due date on which the Defaulting Party was required to make the relevant payment, and receive, prior to the Defaulting Party being entitled to receive, the Defaulting Party’s Stage Interest percentage (of each Stage Interest which it owns) of all Stage A Interest distributions and Stage B Interest distributions (as applicable), up to an amount equal to the Shortfall Amount multiplied by a factor of three; and / or

(ii)

if the Defaulting Party is in default under Section 7.5(a) above on three or more occasions, to compulsorily acquire the Defaulting Party’s relevant Stage Interests at fair market value as determined by three valuers (one

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appointed by the Defaulting Party, one appointed by the acquiring Stage Interest owners and the third appointed by the valuers);

(b)

if the default is under Section 7.5(b) or Section 7.5(c), any other owner of a Stage Interest (and if more than one, each such owner of a Stage Interest on a pro rata basis) shall be entitled to compulsorily acquire the Defaulting Party’s relevant Stage Interests at fair market value as determined by three valuers (one appointed by the Defaulting Party, one appointed by the acquiring Stage Interest owners and the third appointed by the valuers);

(c) any other owner of a Stage Interest shall, unless it has exercised any rights under the foregoing paragraphs in respect of the default, be entitled to exercise its rights and remedies (including obtaining any equitable relief or remedies) under applicable general law in respect of such default; and

(d)

during the period of the default, the Defaulting Party shall not be entitled to exercise any voting rights (whether at board level or shareholder level).

8. GOVERNING LAW AND DISPUTE RESOLUTION

8.1 Governing law

This Investment Agreement and the supplemental documentation shall be governed by New York Law.

8.2 Dispute resolution

Any disputes between the Parties with respect to the Parties rights and obligations under the Investment Agreement or the supplemental documentation shall be resolved by arbitration in New York City pursuant to the commercial arbitration rules of the American Arbitration Association.

9. OTHER PROVISIONS

9.1 Non-compete; Area of Mutual Interest; Adjacent Fields

The Parties shall agree upon an area of mutual interest (the AMI) reasonably associated with the Project. None of the Parties shall compete with the Project within the AMI and any business opportunity within the AMI known to a Party shall first be presented to the other Parties and thereafter pursued by such Party for its own account only if the other Parties, following a reasonable period of time and on the basis of material information, elect not to pursue such business opportunity.

9.2 Binding agreement

This Investment Agreement is binding upon the Parties but shall be supplemented and superseded by more detailed documents consistent with the provisions and intent of this Investment Agreement.

9.3 Other

The supplemental documentation will include provisions relating to confidentiality, intellectual property, notices and other customary and reasonable provisions typically included in documentation covering similar subject matter to this Investment Agreement.

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Acknowledged and agreed:

MAGELLAN PETROLEUM CORPORATIONby:

YOUNG ENERGY PRIZE S.A.By:

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ANNEX 1

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Magellan Petroleum CorporationEvans Shoal TransactionErnst & YoungQuality In Everything We Do

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BackgroundMPC and YEP are jointly investing in the Evans Shoal fieldUltimately the parties desire to have differing interests in different stages of the field being 3Tcf of output (NewCo A) and any Tcf over 3 (NewCo B)Various consent related issues in the Joint Operating Agreement and the inability to resolve these prior to closing of the transaction have necessitated the establishment of aninterim structureDetailed steps have been prepared to achieve the final structures and there are a number of tax risks and costs associated with these steps We have discussed these risks withMPC and these are the subject of a separate adviceThis document cannot be relied upon by any party other than MPC for any purpose without our prior written consentPage 2Ernst & YoungQuality In Everything We Do

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Completion StructurePublic YEPEquity $15 6mMPCEquity $15 6m + New shares issued from MPAL (Old) Acquisition Loan [$70m]MP Aus Holdings Loan $15 6mMPAL (Old)MP Aus HoldCoEvans Shoal Aus HoldCo[$25m]+[$75m]Loan [$85m] Loan $15 6m +[$70m]Evans Shoal Permit Option to acquire MPAL (New)Page 3Ernst & YoungQuality In Everything We Do

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Option A: Final StructurePublicYEPEquity $15 6mMPCEquity $15 6m + New shares issued from MPAL (Old) Acquisition51% 49%MP Aus HoldingsLoan [$15m] $15 6mMPAL (Old) MP Aus HoldCoEvans Shoal Aus HoldCo$30 6m $70mA1 B1MPAL (New) A2 B2 B3A and B Partnership Interests $70mA and B PartnershipsInterests $30 6m NomineeES PartnershipEvans Shoal PermitPage 4ERNST & YOUNGQuality In Everything We Do

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Option B: Final StructurePublic Equity $15 6m YEPMPCEquity $15 6m + New shares issued from MPAL (Old) AcquisitionMP Aus HoldingsEquity = $15 6mMPAL (Old) MP Aus HoldCoEquityLoan= $15mEquityNewCo A NewCo B51% 49% A Class Preference Shares B Class Preference SharesEvans Shoal Aus HoldCoEquity $100 6mMPAL (New)Evans ShoalPermitPage 5ERNST & YOUNGQuality In Everything We Do

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ERNST & YOUNGQuality In Everything We Do

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Annex 2

Note: Pursuant to Item 601(b)(2) of Regulation S-K, the registrant has omitted Annex II. The registrant will furnish supplementally to the Securities and Exchange Commission such annex, upon request

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Exhibit 10.4

Young Energy Prize S.A. Rives de Clausen, 26-28

L-2165 Luxembourg

February 17, 2011

Magellan Petroleum Corporation 7 Custom House Street 3rd Floor Portland, ME 04101 Attn: William H. Hastings, President and CEO

Dear Bill,

Magellan Petroleum Corporation (“MPC”) and Young Energy Prize S.A. (“YEP”) entered into an Investment Agreement on February 11, 2011 (the “Investment Agreement”) pursuant to which, among other things, YEP has agreed to provide A$85,450,000 of funding (the “Acquisition Funding”) for the prospective acquisition by Magellan Petroleum Australia Limited (“MPAL”) of a forty percent ownership interest (the “Interest”) in the Evan Shoal natural gas resource (“Evans Shoal”) which prospective acquisition is pursuant to an Asset Sale Deed dated March 25, 2010 between MPAL and Santos Offshore Pty Ltd. (“Santos”), as amended by a Deed of Variation dated January 31, 2011 between MPAL and Santos (together the “Santos Agreement”). This letter sets forth additional agreements between MPC and YEP regarding the Investment Agreement.

1. Notwithstanding anything to the contrary contained in the Investment Agreement and the Santos Agreement, MPC, MPAL and YEP agree that YEP’s obligation to provide the Acquisition Funding pursuant to the Investment Agreement is subject to:

(a) The other owners of Evans Shoal having consented to the acquisition of the Interest by MPAL; and

(b) All other requirements and conditions for the acquisition of the Interest by MPAL set forth in the Santos Agreement having been satisfied or waived.

2. In the event that there is a closing of the acquisition of the Interest by MPAL, YEP and MPC shall equally share the payment (or reimbursement) of all third party out-of-pocket transaction costs (the “Costs”) associated with such acquisition incurred by each party,

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including those related to the financing thereof (to include Costs related to the PIPE), provided that the share of such costs to be paid by YEP shall not exceed $3,500,000. Notwithstanding the foregoing however, in the event that there is not a closing of the acquisition of the Interest but there is a closing of the PIPE as set forth in paragraph 1 above, YEP shall not be obligated to pay any of the Costs and all Costs shall be paid by MPC. Each of MPC and YEP shall have the right to approve all material Costs, which approval shall not be unreasonably withheld.

3. The provisions of this letter agreement supersede any other letter agreement relating to the matters set forth herein, which other letter agreement shall be of no further force or effect.

Please indicate your acceptance of the terms and conditions of this letter by signing in the space indicated below.

Acknowledged and Accepted as of the date of this letter by:

Sincerely,

/s/ Nikolay V. Bogachev

Nikolay V. BogachevChairman and CEOYoung Energy Prize S.A.

Magellan Petroleum Corporation

By: /s/ William H. Hastings

Name: William H. HastingsTitle: President and Chief Executive Officer

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MAGELLAN PETROLEUM CORPORATION ENTERS INTO AN INVESTMENT AGREEMENT WITH YEP IN

RELATION TO EVANS SHOAL

Portland, Maine, February 17, 2011 — Magellan Petroleum Corporation (the “Company”) (NASDAQ: MPET) (ASX: MGN) reports that the Company and its strategic investor, Young Energy Prize, S.A. (“YEP”), executed an Investment Agreement on February 11, 2011. The Investment Agreement sets forth the material terms of YEP’s commitment to fund approximately A$85.45 million to complete Magellan Petroleum Australia Limited’s (“MPAL”), a wholly owned subsidiary of the Company, acquisition of Santos Offshore Pty Ltd.’s (“Santos”) 40% interest in the Evans Shoal field. YEP is expected to use part of the funds to reimburse MPAL for its A$10 million additional deposit made towards the purchase price of the Evans Shoal interest on February 14, 2011 pursuant to the Assets Sale Deed, as amended by the Deed of Variation. The Investment Agreement also addresses some of the main terms of the potential future development of the Evans Shoal field between the Company and YEP.

The second PIPE agreement between YEP and the Company announced on August 9, 2010 has been amended so that the PIPE transaction will close and the Company will receive $15.6 million of proceeds, in the event that MPAL does not complete the acquisition of the Evans Shoal field and as a result forfeits the additional A$10 million deposit made towards the purchase price of the Evans Shoal interest under the terms of the Assets Sale Deed, as amended by the Deed of Variation.

* * * * *

For further information, please contact: William H. Hastings, President and CEO of Magellan, (207) 619-8501 Antoine Lafargue, CFO and Treasurer, (207) 619-8505

Forward Looking Statements Statements in this release which 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. These statements about Magellan and MPAL may relate to their businesses and prospects, revenues, expenses, operating cash flows, 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 ability of MPAL, with the assistance of the Company, to successfully and timely close the Evans Shoal acquisition, the likelihood and timing of the receipt of proceeds from the YEP for the acquisition of the Evans Shoal interests due to conditions stipulated in the agreements and related amendments authorizing the funding, the ability of the Company to successfully develop a strategy for methanol development, pricing and production levels from the properties in which Magellan and MPAL have interests, the extent of the recoverable reserves at those properties, the profitable integration of acquired businesses, including Nautilus Poplar LLC, the future outcome of the negotiations for gas sales contracts for the remaining uncontracted

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reserves at both the Mereenie and Palm Valley gas fields in the Amadeus Basin, including the likelihood of success of other potential suppliers of gas to the current customers of Mereenie and Palm Valley production. In addition, MPAL has a large number of exploration permits and faces the risk that any wells drilled may fail to encounter hydrocarbons in commercially recoverable quantities. Any forward-looking information provided in this release should be considered with these factors in mind. Magellan assumes no obligation to update any forward-looking statements contained in this release, whether as a result of new information, future events or otherwise.

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Exhibit 99.2

MAGELLAN PETROLEUM CORPORATION ANNOUNCES SECOND QUARTER RESULTS

Quarter Ending December 31, 2010

Portland, Maine, February 14, 2011 — Magellan Petroleum Corporation (the “Company”) (NASDAQ: MPET) (ASX: MGN) reported a consolidated net loss of $2.1 million ($.04 per share) on total revenue of $4.5 million for its fiscal second quarter ended December 31, 2010, as compared to a net loss of $3.4 million ($.06 per share) on gross revenues of $3.7 million in the immediately prior quarter. Working capital was $32.4 million at December 31, 2010, a decrease of $4.1 million from the previous quarter.

Magellan’s President and Chief Executive Officer, William H. Hastings said. “Year on year results continue to reflect our business development efforts. Operating results are challenging although oil price trends and recent expense reductions by our Amadeus Basin partner have gained momentum, and will continue to show effect in improving our near-term financial performance.”

In Australia, our Assets Sale Deed, covering the purchase of a 40% working interest in Evans Shoal (“Transaction”), was amended to allow continued development planning discussion and to enable further co-owner review. We have written financial commitment letters and agreements in place to close the Transaction and continue to work diligently to build momentum and provide assurance with regard to our plans. Methanol market trends continue to be favorable. Methanol prices now mirror crude oil trends and new, robust, methanol demand growth forecasts have been issued.

Further, as part of our earnest effort to close, we have transferred A$15 million, previously held in escrow, to Santos and will establish a new escrow account in the amount of A$10 million toward the closing payment on the original Transaction. The Transaction price has not changed. The new escrow transfer will be backed by our Strategic Partner, YEP.

At Mereenie and Palm Valley, early discussions regarding potential gas sales continue. There is the possibility that Mereenie gas can be placed with industrial markets in Darwin.

In Montana, our focus is the generation of short-term cash through a measured in-fill well program.

Core analysis is complete on both the Bakken and Charles formations. Results of both were encouraging. For the Bakken, the results of the core analysis in the laboratory were positive. For the Charles, we have taken the core data, established a Reservoir Engineering review plan, and will begin recompletion testing of the Charles formation to set baseline flow characteristics, to test the applicability of stimulation programs, and to begin early evaluation of CO flood performance with target results late this summer. The latter will, based on core oil saturations, either demonstrate or challenge field-wide CO injection plans.

In the United Kingdom, the Company holds a 40% working interest in a new oil discovery - Markwells Wood 1. Mobile oil was seen in cores of the Oolite formation there. Logs show oil with reasonable water saturations throughout the Oolite segment, drilled at a 56 degree deviated angle. Water contact and Oolite

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porosities are similar to the producing Horndean Oil field to our immediate west. An extended well test program is being constructed by the well Operator for initiation later in the spring.

Magellan, with these initiatives, current production profiles, expense reduction programs, new asset development programs, and access to large underdeveloped reservoirs in North America is well-placed, and undervalued, given current and prospective commodity market trends.

* * * * *

For further information, please contact: William H. Hastings, President and CEO of Magellan, (207) 619-8501 Antoine Lafargue, CFO and Treasurer, (207) 619-8505

Forward Looking Statements Statements in this release which 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. These statements about Magellan and MPAL may relate to their businesses and prospects, revenues, expenses, operating cash flows, 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 ability of MPAL, with the assistance of the Company, to successfully and timely close the Evans Shoal acquisition, the likelihood and timing of the receipt of proceeds from the YEP private placement transaction due to conditions stipulated in the Securities Purchase Agreement, the ability of the Company to successfully develop a strategy for methanol development, pricing and production levels from the properties in which Magellan and MPAL have interests, the extent of the recoverable reserves at those properties, the profitable integration of acquired businesses, including Nautilus Poplar LLC, the future outcome of the negotiations for gas sales contracts for the remaining uncontracted reserves at both the Mereenie and Palm Valley gas fields in the Amadeus Basin, including the likelihood of success of other potential suppliers of gas to the current customers of Mereenie and Palm Valley production. In addition, MPAL has a large number of exploration permits and faces the risk that any wells drilled may fail to encounter hydrocarbons in commercially recoverable quantities. Any forward-looking information provided in this release should be considered with these factors in mind. Magellan assumes no obligation to update any forward-looking statements contained in this release, whether as a result of new information, future events or otherwise

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CONDENSED CONSOLIDATED STATEMENTS OF INCOME (unaudited)

THREE MONTHS ENDED

DECEMBER 31, SIX MONTHS ENDED

DECEMBER 31, 2010 2009 2010 2009

REVENUES:

Oil sales $ 2,756,212 $ 3,155,798 $ 4,926,858 $ 5,942,624 Gas sales 458,420 5,551,734 867,680 10,960,680 Other production related revenues 1,246,372 1,008,737 2,365,647 1,691,751

Total revenues 4,461,004 9,716,269 8,160,185 18,595,055

COSTS AND EXPENSES:

Production costs 2,520,539 2,089,296 4,359,702 5,419,902 Exploration and dry hole costs 614,569 317,943 1,028,239 657,056 Salaries and employee benefits 1,532,736 1,006,793 2,474,412 2,750,301 Depletion, depreciation and amortization 260,732 1,484,130 1,250,070 2,647,136 Auditing, accounting and legal services 520,327 392,686 758,778 777,074 Accretion expense 168,591 209,584 318,283 384,351 Shareholder communications 203,963 223,647 357,118 302,174 Gain on sale of field equipment (443,035) (1,139,465) (463,177) (1,134,275) Impairment loss — 1,604,417 — 1,604,417 Other administrative expenses 2,779,687 1,660,088 5,732,751 4,022,397

Total costs and expenses 8,158,109 7,849,119 15,816,176 17,430,533

Operating (loss) income (3,697,105) 1,867,150 (7,655,991) 1,164,522

Warrant expense — (986,248) — (2,378,719) Investment income 221,494 1,038,394 467,810 2,534,931

(Loss) income before income taxes (3,475,611) 1,919,296 (7,188,181) 1,320,734 Income tax benefit (provision) 1,378,316 (323,104) 1,679,652 (1,021,806)

Net (Loss) Income before non-controlling interest (2,097,295) 1,596,192 (5,508,529) 298,928

Less non-controlling interest (Income) loss (1,838) (3,637) 33,275 (3,637)

Net (Loss) Income attributable to Magellan Petroleum $ (2,099,133) $ 1,592,555 $ (5,475,254) $ 295,291

Average number of shares outstanding

Basic 52,335,977 51,679,618 52,335,977 50,612,610

Dilutive 52,335,977 52,856,331 52,335,977 51,199,170

Net (Loss) income per basic and dilutive common shares attributable to Magellan Petroleum Corporation common shareholders $ (0.04) $ 0.03 $ (0.10) $ 0.01

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