Texon Petroleum Limited (ASX:TXN) Announce Successful Capital Raising

Brisbane, Feb 23, 2011 AEST (ABN Newswire) - Texon Petroleum Limited (ASX:TXN) announces that it has successfully completed a placement of 24,166,681 million shares to sophisticated and institutional investors at an issue price of A$0.65 per share to raise approximately A$15.7 million. The placement, was very strongly supported by existing shareholders, institutional and sophisticated investors. RBS Morgans was the Lead Manager to the placement with the support of Patersons Securities Limited.

The new shares will be issued in accordance with the 15% Listing Rule 7.1 which does not require shareholder approval. The price represents a discount of 12% to the last closing price of the Company's shares traded prior to the Company requesting a trading halt.

The Company also plans to offer eligible shareholders the opportunity to subscribe for additional shares under a Share Purchase Plan ("SPP") in the near future at the same price as the placement. The Record Date for shareholders to participate in the SPP will be 5:00pm AEST on 22 February 2011. The SPP offer will be posted to shareholders on or about 7 March 2011.

Work Programme

The funds will primarily be used to drill, frac and test a fourth Eagle Ford well. The Company's third Eagle Ford well will be funded from existing cash and cashflow. These wells are scheduled for drilling in May and June, and fraccing and testing in August. The raising will also fund the acquisition of 1,140 acres of Eagle Ford prospective leases near the Company's Leighton/Mosman/Rockingham/Sutton ("LMRS") leases (see separate release dated 23 February 2011) as well as 3D seismic over these new leases.

The funds will be used to frac and test one and possibly two existing vertical wells on the LMRS where the Eagle Ford is present.

Also, it is planned to drill and test the Wilcox oil shows referred to in the Company's release of 21 February 2011 in two vertical wells, one in the Leighton area and one on Mosman.

The Company has embarked on an Expanded Mapping Project to more comprehensively investigate the 180 3D seismic surveys for prospects for drilling in 2012.

In addition to the above projects the Company plans, from existing cash and cashflow during 2011, to:

- Frac and test its second Eagle Ford well in March;

- Prepare and adopt a plan to monetize and develop its Eagle Ford lease holdings;

- Drill seven (7) Leighton Olmos development wells;

- Conduct 3D seismic over its Mosman-Rockingham leases to enable more thorough mapping of the Eagle Ford, Olmos, Wilcox and Pearsall targets;

- Drill the Coolangatta and Scarborough prospects in Q2 and Q3 respectively. These projects have a combined upside potential of 34 mmboe as to the Company's Working Interest.

The coming months will be an important time for Texon when successful project outcomes could see an increase in the value of the Company.

Contact

Dr. John Armstrong Chairman Brisbane: Tel: +61-7-3211-1122 Mr. David Mason Chief Executive Officer Brisbane: Tel: +61-7-3211-1122 Houston: Tel: +1-281-419-4976 (Houston is 16 hours behind Aust. Eastern Standard time) http://www.texonpetroleum.com.au