DENVER, CO, Dec 03, 2014 (Marketwired via COMTEX) -- Magellan Petroleum Corporation (NASDAQ: MPET) ("Magellan" or the "Company") today announced that it has, through an affiliated entity, acquired an option to acquire a large CO2 reservoir called Farnham Dome located in Carbon County, Utah. Pursuant to the agreement, the seller, Savoy Energy, LLC, has granted Magellan the right to either purchase the field outright or purchase uncontracted CO2 at a fixed price. The option will expire on March 31, 2015, unless extended.
J. Thomas Wilson, President and CEO of Magellan, commented: "Since beginning the CO2-enhanced recovery ("CO2-EOR") pilot project at Poplar Dome, Magellan has made a strategic decision to focus the company on EOR opportunities in North America. The utilization of CO2 to increase recovery of oil from existing reservoirs in the Rocky Mountains will be our top priority. Pursuant to that decision, Magellan is seeking to identify both attractive candidates for CO2-EOR projects and a reliable, low-cost supply of CO2. The acquisition of Farnham Dome CO2 would address the latter while the Company actively evaluates opportunities to utilize this CO2 to substantially increase its reserves at attractive costs. Over the last 18 months the Company has developed considerable expertise in utilizing CO2 to enhance recovery from older fields with large volumes of original oil in place. We believe the experience we are gaining at Poplar Dome can be applied to other fields that we are currently evaluating in the vicinity of Farnham Dome. The successful acquisition of applicable properties in combination with a long-term, low-cost source of CO2 will result in profitable projects at current oil prices or even below. It is our belief that the well managed low cost CO2 projects compete well with even the better unconventional plays."
