8-K

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): May 30, 2012 (September 20, 2011)

Magellan Petroleum Corporation

(Exact name of registrant as specified in its charter)

Delaware

(State or other jurisdiction of incorporation)

1-5507	06-0842255
(Commission File Number)	(IRS Employer Identification No.)
700 East Ninth Avenue, Suite 200, Denver, CO	80203
(Address of principal executive offices)	(Zip Code)

(720) 570-3858
(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.):
o	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

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MAGELLAN PETROLEUM CORPORATION

FORM 8-K

TABLE OF CONTENTS

ITEM 1.01	Entry into a Material Definitive Agreement
ITEM 2.01	Completion of Acquisition or Disposition of Assets
ITEM 9.01	Financial Statements and Exhibits
(a)	Unaudited pro forma condensed combined financial statements
(b)	Exhibits
	Signatures
EXHIBIT 99.1	Unaudited pro forma condensed combined financial statements
EXHIBIT 99.2	Press release announcing the completion of the Santos transaction

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MAGELLAN PETROLEUM CORPORATION

FORM 8-K

ITEM 1.01 Entry into a Material Definitive Agreement

Magellan Petroleum Corporation (the “Company” or “Magellan” or “we” or “us”) is an independent energy company engaged in the acquisition, exploration, exploitation, development, production and sale of crude oil and natural gas. All amounts presented are in United States dollars. Amounts expressed in Australian currency are indicated as “AUD.”

On May 25, 2012 (the “Closing Date”), Magellan completed an asset swap agreement (the “Santos SA”) entered into through its wholly owned subsidiary Magellan Petroleum (N.T.) Pty Ltd (“Magellan NT”) with Santos QNT Pty Ltd (“Santos QNT”) and Santos Limited (collectively the “Santos Entities”). The completed Santos SA resulted in Magellan becoming the sole owner of the Palm Valley Interests (as defined below) and of the Dingo Interests (as defined below), while the Santos Entities will become the sole owner of the Mereenie Interests (as defined below). In accordance with the terms of the Santos SA, the transaction is deemed to be effective as of July 1, 2011 (the “Effective Date”). Pursuant to the Santos SA transfer of the following assets are provided for:

• Magellan NT's 35% interest in each of the Mereenie Operating Joint Venture (Petroleum Leases 4 and 5 (the “Mereenie Titles”) and associated property interests, related joint venture contracts (including a crude oil sales contract) and plant and equipment, subject to royalty obligations) and the Mereenie Pipeline Joint Venture (Pipeline License 2 and associated property interests, related joint venture contracts and plant and equipment) (collectively, the “Mereenie Interests”) to Santos QNT, giving the Santos Entities a combined 100% interest in the assets of each of the Mereenie Operating Joint Venture and the Mereenie Pipeline Joint Venture;

• The Santos Entities' combined interests of 48% in the Palm Valley Joint Venture (Petroleum Lease 3 and associated property interests, related joint venture contracts (including a gas supply and purchase agreement “GSPA”) and plant and equipment, subject to royalty obligations) (collectively, the “Palm Valley Interests”) and combined interests of 66% in the Dingo Joint Venture (Retention License 2, associated joint venture contracts and plant and equipment, subject to royalty obligations) (collectively, the “Dingo Interests”) to Magellan NT, giving Magellan NT a 100% interest in the assets of each of the Palm Valley Joint Venture and the Dingo Joint Venture.

The cash consideration payable for the sale of the Mereenie Interests by Magellan NT is AUD $28.0 million. The cash consideration payable for the sale of the Palm Valley Interests by the Santos Entities is AUD $2.9 million. The cash consideration payable for the sale of the Dingo Interests by the Santos Entities is AUD $0.1 million. The net cash proceeds to Magellan totaled AUD $25.0 million, and Magellan is entitled to purchase price adjustments of approximately AUD $3.7 million.

For a period of 20 years after the Effective Date, the Santos Entities will pay Magellan NT a series of contingent payments (the “Bonus Amounts”) based on meeting certain threshold volumes of net sales of petroleum from the Mereenie Titles (“Threshold Levels”) set out in the Santos SA. If all Threshold Levels are achieved, the cumulative Bonus Amount shall be AUD $17.5 million.

ITEM 2.01 Completion of Acquisition or Disposition of Assets

The information set forth under Item 1.01 is incorporated by reference into Item 2.01 of this Current Filing.

ITEM 9.01 Financial Statements and Exhibits

(a) Unaudited pro forma condensed combined financial statements: Exhibit 99.1 attached hereto includes presentation of the following unaudited pro forma condensed combined financial statements:

Unaudited pro forma condensed combined balance sheet as of March 31, 2012.

Unaudited pro forma condensed combined income statement for the year ended June 30, 2011.

Unaudited pro forma condensed combined income statement for the nine months ended March 31, 2012.

Notes to the unaudited pro forma condensed combined financial statements.

(b) Exhibits

99.1 Unaudited pro forma combined financial statements

99.2 Press release announcing the completion of the Santos transaction

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized:

	MAGELLAN PETROLEUM CORPORATION
May 30, 2012	By:	/s/ J. Thomas Wilson
		Name: John Thomas Wilson
		Title: President and Chief Executive Officer

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EX-99.1

Exhibit 99.1

MAGELLAN PETROLEUM CORPORATION

UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS

Introduction

On May 25, 2012 (the “Closing Date”), Magellan Petroleum Corporation ( “Magellan”) completed an asset swap agreement (the “Santos SA”) entered into by its wholly owned subsidiary Magellan Petroleum (N.T.) Pty Ltd (“Magellan NT”) with Santos QNT Pty Ltd (“Santos QNT”) and Santos Limited (collectively the “Santos Entities”). The net cash proceeds from the Santos SA were approximately $24.4 million as of the Closing Date. Including adjustments of approximately $3.6 million, the total cash proceeds from the Santos SA will be approximately $28.0 million.

Following the completion of the Santos SA, Magellan has become the sole owner of the Palm Valley Interests and the Dingo Interests, and the Santos Entities have become the sole owner of the Mereenie Interests. In accordance with the terms of the Santos SA, the transaction is deemed to be effective as of July 1, 2011.

The unaudited pro forma condensed combined financial statements presented below are based on the historical condensed consolidated financial statements of Magellan give effect to the disposal of the Mereenie Interests and acquisition of the Palm Valley Interests and the Dingo Interests as contemplated in the Santos SA. It is assumed that the Santos SA gives effect to the condensed combined statement of operations as of July 1, 2010, and gives effect to the condensed combined balance sheet as of March 31, 2012. The pro forma adjustments below are (1) considered directly attributable to the Santos SA, (2) factually supportable, and (3) with respect to the condensed combined statement of operations, expected to have a continuing impact on the consolidated results.

The unaudited pro forma condensed combined financial statements have been prepared for illustrative purposes only and are not necessarily indicative of the consolidated financial position or results of operations in future periods or the results that actually would have been realized had Magellan closed on the Santos SA during the specified periods. The unaudited pro forma condensed combined financial statements, including the notes thereto, have been derived and should be read in conjunction with, the historical consolidated financial statements of Magellan, which are incorporated in this document by reference, included in its Annual Report on Form 10-K for the year ended June 30, 2011, and its unaudited condensed financial statements included in its Form 10-Q for the three, six, and nine month period ending September 30, 2011, December 31, 2011, and March 31, 2012, respectively.

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MAGELLAN PETROLEUM CORPORATION

UNAUDITED PRO FORMA CONDENSED COMBINED BALANCE SHEET as of March 31, 2012

	Magellan as Reported			Pro Forma
				Acquisition (a)				Disposition (b)				Combined
ASSETS				(In thousands)
Current assets:
Cash and cash equivalents	$	17,210		$	(2,927	)	(c)	$	27,314		(d)	$	41,597
Accounts receivable - trade (net of allowance for doubtful accounts of $66,702)	2,375			—				—				2,375
Accounts receivable - working interest partners	1,012			561			(c)	3,006			(d)	4,579
Inventories	591			—				—				591
Assets held for sale	1,755			—				(1,755		)		—
Prepaid assets	774			—				—				774
Other assets	1,329			—				—				1,329
Total current assets	25,046			(2,366		)		28,565				51,245
Property and equipment, net (successful efforts method):
Proved oil and gas properties	34,031			2,808			(c)	—				36,839
Less accumulated depletion, depreciation and amortization	(11,309		)	—				—				(11,309		)
Unproved oil and gas properties	3,220			1,394			(c)	—				4,614
Wells in progress	6,485			—				—				6,485
Land, buildings and equipment (net of accumulated depreciation of $3,984,985)	989			354			(c)	—				1,343
Net property and equipment	33,416			4,556				—				37,972
Other non-current assets:
Securities available for sale	167			—				—				167
Goodwill	4,695			—				(4,288		)	(e)	407
Other long term assets	242			—				—				242
Total other non-current assets	5,104			—				(4,288		)		816
Total assets	$	63,566		$	2,190			$	24,277			$	90,033
LIABILITIES AND EQUITY
Current liabilities:
Short term line of credit	$	650		$	—			$	—			$	650
Current portion of note payable	504			—				—				504
Accounts payable	2,643			—				—				2,643
Income tax payable	—			—				—			(f)	0
Accrued liabilities	3,350			—				—				3,350
Liability related to asset held for sale	7,202			—				(7,202		)		—
Total current liabilities	14,349			—				(7,202		)		7,147
Long term liabilities:
Note payable	498			—				—				498
Other long term liabilities	245			—				—				245
Asset retirement obligations	5,430			2,190			(c)	—				7,620
Contingent consideration payable	4,279			—				—				4,279
Total long term liabilities	10,452			2,190				—				12,642
Commitments and contingencies
Equity:
Total equity attributable to Magellan	38,765			—				31,479			(g)	70,244
Total equity	38,765			—				31,479				70,244
Total liabilities and equity	$	63,566		$	2,190			$	24,277			$	90,033

See notes to the unaudited pro forma condensed combined financial statements.

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MAGELLAN PETROLEUM CORPORATION

UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS

THE YEAR ENDED June 30, 2011

	Magellan as Reported			Pro Forma
				Acquisition (a)				Disposition (b)				Combined
				(In thousands)
REVENUES:
Oil production	$	11,815		$	—			$	(6,842	)		$	4,973
Gas production	1,796			1,762				—				3,558
Other	4,565			2,730				(1,971		)		5,324
Total revenues	18,176			4,492				(8,813		)		13,855
OPERATING EXPENSES:
Lease operating	9,247			955				(5,677		)		4,525
Depletion, depreciation, amortization, and accretion	2,891			968				(990		)		2,869
Exploration	2,854			27				(671		)		2,210
General and administrative	16,307			110				(350		)		16,067
Loss on Evans Shoal Deposit	15,893			—				—				15,893
Gain on sale of assets	(969		)	(23		)		4				(988		)
Impairment loss	173			—				—				173
Total operating expenses	46,396			2,037				(7,684		)		40,749
Loss from operations	(28,220		)	2,455				(1,129		)		(26,894		)
Other income (expense)
Interest income, net	923			16				(15		)		924
Total other income	923			16				(15		)		924
Loss before income tax benefit	(27,297		)	2,471				(1,144		)		(25,970		)
Income tax expense	5,141			—			(f)	—			(f)	5,141
Net loss after income tax benefit	(32,438		)	2,471				(1,144		)		(31,111		)
Net (loss) income attributable to non-controlling interest in subsidiaries	(5		)	—				—				(5		)
Net loss attributable to Magellan Petroleum Corporation	$	(32,443	)	$	2,471			$	(1,144	)		$	(31,106	)
Average number of basic and dilutive common shares outstanding	52,398,936											52,398,936
Net loss per basic and dilutive common shares attributable to Magellan Petroleum Corporation common shareholders	$	(0.62	)									$	(0.59	)

See notes to the unaudited pro forma condensed combined financial statements.

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MAGELLAN PETROLEUM CORPORATION

UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS

NINE MONTHS ENDED March 31, 2012

	Magellan as Reported			Pro Forma
				Acquisition (a)				Disposition (b)				Combined
				(In thousands)
REVENUES:
Oil production	$	10,641		$	—			$	(5,909	)		$	4,732
Gas production	1,148			1,050				—				2,198
Other	(46		)	(25		)		18				(53		)
Total revenues	11,743			1,025				(5,891		)		6,877
OPERATING EXPENSES:
Lease operating	10,412			1,026				(5,790		)		5,648
Depletion, depreciation, amortization, and accretion	1,242			115				(273		)		1,084
Exploration	3,619			32				(432		)		3,219
General and administrative	9,083			107				(38		)		9,152
Loss (gain) on sale of assets	(4,029		)	(27		)		(205		)		(4,261		)
Total operating expenses	20,327			1,253				(6,738		)		14,842
Loss from operations	(8,584		)	(228		)		847				(7,965		)
Other income (expense)
Interest income, net	357			5				(12		)		350
Other expenses	5			—				—				5
Total other income	362			5				(12		)		355
Loss before income tax benefit	(8,222		)	(223		)		835				(7,610		)
Income tax expense	—			—			(f)	—			(f)
Net loss after income tax benefit	(8,222		)	(223		)		835				(7,610		)
Net (loss) income attributable to non-controlling interest in subsidiaries	15			—				—				15
Net loss attributable to Magellan Petroleum Corporation	$	(8,207	)	$	(223	)		$	835			$	(7,595	)
Average number of basic and dilutive common shares outstanding	53,592,958											53,592,958
Magellan Petroleum Corporation common shareholders Net loss per basic and dilutive common shares attributable to	$	(0.15	)									$	(0.14	)

See notes to the unaudited pro forma condensed combined financial statements.

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MAGELLAN PETROLEUM CORPORATION

NOTES TO THE UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS

Note 1 - Unaudited Pro Forma Adjustments

The Company will finalize amounts recognized in terms of the Santos SA as information necessary to complete the analysis is obtained. The Company expects to finalize these amounts during fiscal 2012, which will remain subject to change until finalized.

(a) Reflects the acquisition of assets, liabilities, and results from operations for the periods presented related to the Palm Valley Interests and the Dingo Interests in accordance with the terms of the Santos SA.

(b) Reflects the elimination of assets, liabilities, and results from operations for the periods presented related to the disposal of the Mereenie Interests in accordance with the terms of the Santos SA.

(c) The Company has determined that the purchase of the Palm Valley Interests qualifies as a business combination and that the purchase of the Dingo Interests qualifies as an asset acquisition. The following table summarizes the values of the assets acquired and liabilities assumed as of the Closing Date based on the most recent preliminary purchase price allocation as of May 25, 2012.

	Palm Valley Interests		Dingo Interests		Total
	(In thousands)
Accounts receivable - working interest partners	$	558	$	3	$	561
Proved oil and gas properties	2,808		—		2,808
Unproved oil and gas properties	—		1,394		1,394
Land, buildings and equipment	354		—		354
Total assets	3,720		1,397		5,117
Asset retirement obligations	2,056		134		2,190
Net assets acquired	$	1,664	$	1,263	$	2,927
Cash consideration	$	1,664	$	1,263	$	2,927

The Company has not recognized a contingent asset related to the series of contingent payments (the “Bonus Amounts”) set out in the Santos SA as such amounts are not reasonable assured.

(d) The net cash proceeds from the Santos SA, as of the Closing Date, in addition to the purchase price adjustment to be finalized during fiscal 2012, is summarized in the following table:

	Mereenie Interests		Palm Valley Interests			Dingo Interests			Total
	(In thousands)
Cash consideration received/(paid)	$	27,314	$	(1,664	)	$	(1,263	)	$	24,387
Purchase price adjustment	3,006		558			3			3,567
Total net consideration received for asset swap transaction	$	30,320	$	(1,106	)	$	(1,260	)	$	27,954

(e) Represents the preliminary allocation of goodwill as of the Closing Date of the representative fair value of the Mereenie Interests as a separate portion of a reporting segment of the Company.

(f) The Company has estimated that it has sufficient U.S. state net operating losses, state net operating loss carry forwards, and Australian capital loss tax credits available, and as a result no income tax effect on the gain from the disposition of the Mereenie Interests have been provided for.

(g) Represents the estimated gain related to the Santos SA, net of income taxes.

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EX-99.2

Exhibit 99.2

MAGELLAN PETROLEUM COMPLETES AUSTRALIAN ASSET SWAP TRANSACTION WITH SANTOS

Company receives A$25 million in net proceeds and expects post closing adjustments of approximately A$3 million from Santos

Magellan cash position now stands at approximately US$45 million

Enters into 17-year contract with Santos for all Palm Valley field natural gas production with potential undiscounted revenue value of A$100 million

Denver, CO/May 30, 2012---Magellan Petroleum Corporation (NASDAQ: MPET), which focuses on exploring and maximizing the potential of its oil and gas assets in the United States, Australia, and the United Kingdom, today announced the completion of its previously announced Australian asset swap with Santos Ltd. Under the terms of the agreement, Magellan has:

▪ Received A$25.0 million in net cash proceeds and expects to receive post-closing adjustments in an additional amount of approximately A$3.6 million within the next sixty days from Santos;

▪ Increased ownership to 100% in the Palm Valley and Dingo natural gas fields;

▪ Sold all of its interests in the Mereenie oil and natural gas field to Santos;

▪ Executed a 17-year gas sales contract with Santos for the sale of natural gas production in an amount of up to 23 Bcf from the Palm Valley field, which production volumes have in turn been sold by Santos to a sizeable mining customer in Australia; and

▪ Retained the opportunity to earn up to A$17.5 million in bonus payments based on Mereenie achieving certain production milestones over the next 20 years.

As a result of the transaction's completion, Magellan's consolidated cash position has increased to approximately US$45.0 million, including expected post-closing adjustments. In addition, the 17-year contract for all of the currently existing Palm Valley field production is expected to increase Magellan's total reported proved reserves by approximately 18 Bcf of natural gas (3 MMboe) as well as to generate approximately A$100.0 million in cumulative undiscounted revenue. The Company will now focus on marketing Dingo's natural gas resources to the Australian mining industry. The Company will also undertake a review of Palm Valley in an attempt to determine if there exist additional undeveloped reserves in this field.

“Completing our asset swap transaction with Santos is a transformational milestone for Magellan Petroleum and illustrates the continued execution of our turnaround strategy set in place last year,” said Tom Wilson, President and CEO of Magellan. “In addition to enhancing a very strong balance sheet, the transaction completes our Australian asset rationalization effort and provides our company with a long term, stable cash flow resource with more operational and cost control. At the same time, a potential for upside from our Australian assets has been created based on the Mereenie field achieving certain production milestones, the development of our Dingo asset, and, longer-term, the results of the upcoming seismic survey of our Bonaparte Basin asset.”

“The Australian mining industry is seeking alternatives to the costly diesel oil currently used in most mining operations,” continued Mr. Wilson. “Palm Valley's proximity to mining operations enabled Santos to enter into a long-term supply agreement and illustrates the current attractiveness of the Australian market for natural gas. Our goal is to directly enter into a similar agreement with a blue-chip mining customer for Dingo's natural gas resources, and we are actively pursuing such negotiations.”

Magellan also announced today that the 3-D seismic survey for its 100% owned exploration block in the Bonaparte Basin, offshore Australia in the Timor Sea, is expected to be conducted in the Australian winter of 2012. The survey is designed to determine the existence, and, if so, the possible size, of a natural gas exploration prospect that existing 2-D data suggests is present on this block.

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 the Company and its subsidiaries 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: (i) uncertainties inherent in the expected amount and timing of post-closing adjustments to be recovered

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from Santos; (ii) whether the Palm Valley wells will perform as predicted and possess the existing estimated natural gas reserves, and whether there exist additional reserves in this field that can be economically produced and marketed; (iii) whether the Dingo field resources exist as currently estimated and, if so, whether these resources can be sold on acceptable terms to a third party; (iv) whether the currently perceived exploration prospect on the Bonaparte Basin license will prove to exist and yield an economically feasible field; and (v) those set forth in the Company's Risk Factors section of its most recent Form 10-K and subsequent Form 10-Qs filed with the SEC.

ABOUT MAGELLAN

Magellan is an independent energy company engaged in the exploration, development, production, and sale of crude oil and natural gas from currently held assets in the United States, Australia, and the United Kingdom. Traded on the NASDAQ since 1972, the Company conducts its operations through two wholly owned subsidiaries, Nautilus Poplar LLC, which owns Poplar, a highly attractive oil field in the Williston Basin, and Magellan Petroleum Australia Limited, a successful independent oil and gas company in Australia and the UK in existence since the 1960s. The Company's mission is to enhance shareholder value by maximizing the full potential of existing assets.

* * * * *

For further information, please contact: 

Matthew Ciardiello, Manager, Investor Relations at 720.570.3858, ext. 3

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