Magellan Energy Announces Corporate and Project Update

TORONTO–(EMWNews – August 7, 2008) – Magellan Energy Ltd. (PINKSHEETS: MGLG), an

independent oil and gas company, issues an update on the status of its

current projects including the participation agreements in Morgan County,

Tennessee. This update addresses the ongoing work over procedures as well

as the company restructuring notices.

Magellan Energy is pleased to announce that the work on the Robert Anderson

Lease has made some significant progress. The compressor has been

installed and all electrical needs have been addressed and met. The new

pipeline is now in place, and the project will require additional work to

be completed in order to be fully operational, and for Magellan to connect

the well and begin production. The operator, TMD Energy Inc., has been in

meetings with Citizens Gas to negotiate a possible re-connect to their

lines, which will enable us to sell our gas while we wait for the new

lines.

There has also been some increased activity on the Davidson well. The

operators have opened the well and found a strong presence of gas and also

that the well is bubbling. This is a strong indication that fluid is

returning to the bore hole and coming back up. We have scheduled for a

rig to come back onto the well to determine production levels.

The WaterFlood project (Martin Wells) is progressing on a steady pace. The

well is continuing to produce 3BOPD. The gas on these wells presently

remain shut in and await the completion of the new lines. We will continue

to work closely with TMD Energy Inc. to ensure that all the criteria of

this project are met and that preparations are in place for us to begin the

WaterFlood.

Magellan Energy’s President, Mr. Akrivos, said, “There have been many

questions and concerns brought to my attention regarding the company

projects and my status with the company that I would like to address.

First and foremost, the issue of my resignation as CEO from Magellan Energy

Ltd. I have been offered a CEO position with another company that I have

accepted. To this, I have stepped down as CEO of Magellan but will

continue to stay on board as a director, consultant and advisor. My

participation in our company’s daily activities and projects will continue

and I will remain an active part and will continue to invest a great deal

of time with Magellan’s staff alongside its new CEO, Mr. Apolinar V.

Carcasona, on its current and future ventures. I expect the transition to

be seamless and in the best interests for Magellan Energy Ltd.

“Mr. Carcasona has been working with us for some time and has a great deal

of enthusiasm and brings with him a knowledge and desire that will be

beneficial to Magellan Energy Ltd and its shareholders. We have had some

unexpected delays with our projects but we are not deterred from our goals.

The current situation with the development of new gas lines has hindered

the progress and production of many projects in the surrounding area. It is

unfortunate that we have been placed in this predicament which has halted

some production and progress on our wells. However, we will continue to

work closely with the operators, TMD Energy Inc., to ensure we maintain a

level of progress that is ultimately beneficial to Magellan and it’s

shareholders.”

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.