Texon Petroleum (ASX:TXN) Quarterly Activities Report For Period Ending 31 March 2010

Brisbane, May 3, 2010 AEST (ABN Newswire) - Texon Petroleum (ASX:TXN) Quarterly Activities Report For Period Ending 31 March 2010 including the following summary:

LEIGHTON OIL AND GAS PROJECT (Texon 79% WI, 59% NRI)

In February the Company mandated the Commonwealth Bank of Australia (CBA) to look at financing options over the next few months that would enable acceleration of the development of the Leighton field where there remains 25 potential well locations. If funding is obtained drilling is planned to commence in Q3, 2010. The Company approved an issue of 300,000 unlisted options to CBA exercisable over three years at an exercise price of A$0.26 cents per option as part of the mandate fee.

Five wells are producing from the Olmos formation on Leighton and the sixth, Tyler Ranch #5, has recently completed drilling and is expected to be tied into the sales pipeline by the end of April, continuing the 100% success rate the Company has achieved in the field.

SUTTON LEASE (95% WI)

An additional 320 acres were acquired adjacent to Leighton which has both Olmos and EFS potential totaling 4mmboe. The lease contains two existing wells. One is producing gas from the Edwards formation at a low rate.

MOSMAN-ROCKINGHAM PROJECT (96.6% WI, 72.4% NRI)

The first well to be drilled on the Mosman-Rockingham 3,270 acre leases, located about 8 kilometres south west of the Leighton field, MR#1 began drilling on 15 March and reached a depth of 3,466 metres. 157 feet of oil and gas shows were encountered across the Olmos and Eagle Ford (EFS) reservoirs.

MR#1 encountered similar thickness of Olmos reservoir as the Leighton field and there are an additional 51 possible Olmos drill sites in the Mosman-Rockingham area representing a resource potential of 6.6 mmboe as to the Company's WI. The EFS also had a similar thickness and quality as encountered in Tyler Ranch #4 in the Leighton field proving the lateral extent of the EFS across the Company's leases. The EFS represents a resource potential of 35mmboe as to the Company's WI across Mosman-Rockingham.

The Olmos reservoir was fracture stimulated this week and is expected to be tied into sales in early May.

An additional one or two wells are planned for Q3 and Q4 this year.

The Company is also investigating application of horizontal drilling and multi stage fracture stimulation technology for developing the Olmos reservoir in Leighton and Mosman-Rockingham. US Independent Swift Energy has achieved a 10-times uplift in production rates compared to vertical wells by utilising this technology to the south of Texon's Olmos leases.

INDUSTRY EAGLE FORD SHALE ACTIVITY

Eagle Ford Shale drilling activity continues to increase in the area. Initial flow rates of between 1000 and 2,800boepd are being achieved. Future Eagle Ford wells planned to be drilled by the Company are expected to achieve initial flow rates in this range.

RESERVES

During the quarter the Company reported that Proved and Probable reserves at the end of December 2009 increased to 3.0mmboe* as to the Company's WI which is an increase of 220% from the December 2008 reserves of 0.93mmboe. The increase is primarily due to the development of the Leighton field by the drilling of four producing wells in the December 2009 year bringing the total to 5 producing wells. There remain 15 Proved undeveloped well locations and 11 Probable well locations.

* Reserves information where referred to in this report was compiled by Delilah B Hainey of Hainey & Hainey, a reservoir consultant to the Company who is qualified in accordance with ASX Listing Rule 5.11 and has consented to the form and context of the reserves appearing in this report.

LEASING

With the addition of Sutton this brings the total "reservoir acres" under lease close to 10,000 acres.

GAS PROSPECTS

Three Yegua gas prospects were farmed out to US independent Bright & Co this month. The farminee is committed to drill two (2) of the prospects and has an option on the third. The Company will retain an average of 32.4% WI (24.3% NRI) with drilling and completion costs substantially covered by the farminee.

The gross potential of the 3 prospects is 2-4bcf + 10,000 to 20,000bo. Drilling of the first two wells is expected to take place in June and July this year.

FUTURE DRILLING

The current 2010 plans being considered involve working with the CBA in order to begin a 25 development well program in Q3, 2010, drilling one to two additional Mosman-Rockingham Olmos wells, one or two horizontal EFS wells and participation in the drilling of two, possibly three Yegua wells.

Previous announcements can be found on the Company's website at www.texonpetroleum.com.au

For the Full Quarterly Report, please visit:
http://www.abnnewswire.net/media/en/docs/62769-ASX-TXN-220343.pdf

Contact

Dr John Armstrong, Chairman Brisbane: +61-7-3211-1122 Mr David Mason, Chief Executive Officer & President Brisbane: +61-7-3211-1122 Houston: +1-281-419-4976