We may hear some news re Magellan today but it appears that they...

We may hear some news re Magellan today but it appears that they may have a bit more time up their sleeves.

This is from their ASX release regarding an amendment to the agreement:

* MPC US SEC Form 8K Investment Agreement 17Feb11 *

On page 4 is the amendment:

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

Whether or not this extra two weeks is just to close the transaction in the event of failure to meet the 31 May deadline, I am not sure, but:

* in the 16 May Q3 operations update here *

MGN state:

'Evans Shoal Transaction

'Due to field partner activity, the terms of our entry into the Evans Shoal license remain under discussion as we continue to work in earnest. Meetings over the next two weeks will add clarity toward final solutions. Magellan, YEP, and Santos remain committed to closing the transaction. We intend to provide updates as material milestones have been achieved.'

There have been no material milestones been announced yet so we can only assume it will be a last minute release o/night, the extension to 15 June is used for further negotiations or a further extension is negotiated. Other than that the deal is in tatters.

The YEP funding the guaranteed $15m through a 5.2m share purchase @ $3.00 per share with the NASDAQ MPET SP at 1.83 is problematic but the ASX MGN sp has been held at $3.00 since March. I don't know where the shares will be purchased if they have not already done so during the MPET spike to $3.45 earlier this year. The unusual MPET volume of 3.792m shares 7 Mar 2011:

* shown here *

could well have been the transaction.

What does this mean for MEO;

If the deal goes through I hope MEO are one of the other parties and get a guaranteed gas feed for TS.

In the speech by SEAOCC speech by William Hastings (MGN CEO) referenced earlier by Needle:

* and can be seen here *

Hastings said:

'Evan's Shoal is in shallow waters and geographically proximate to Darwin that will help us reduce development costs and hopefully start a little bit of a hub in the area that will hopefully aid in the deeper water discoveries that are out there as well.'

To me he is referring to Darwin as being the hub as shown:

* on their website here *

The referenced hub is an arc 300km from Darwin. If he has found resistance from the ES PPs I hope he has come around and seen the more economically sound TS solution.

If the deal does not go through I can understand why MEO has hung on to their 100m cash carrot to dangle in front of Santos. MGN offered 200m but MEO should be able to place a deposit and negotiate a deal for the remainder.

Perhaps the vague NT/P68 farmin deal with Eni and Blackwood hinges on events a Evans Shoal rather than Heron.

But these are only my speculative thoughts.

:>))

PS - I have been offline for a while (in a number of ways). I will take another look at the farmin agreement soon.