Texon Petroleum Limited (ASX:TXN) New Texon-Wandoo Prospect Generation Agreement

Sydney, Nov 18, 2011 AEST (ABN Newswire) - Texon Petroleum Limited (ASX:TXN) is pleased to announce the following regarding the New Texon - Wandoo Prospect Generation Agreement

Shareholder Approval

Where required (as indicated by a "#" symbol), shareholder approval of the following arrangements which have been agreed between Texon and Wandoo Energy LLC will be sought at the next General Meeting of the Company.

(Note: Wandoo is a USA based company associated with Mr David Mason, CEO of Texon.)

IPO - and 3D Potential

At the time of its 2007 IPO, through its Prospect Generation Agreement ("PGA") with Wandoo, the Company had first right of refusal on all prospects generated by Wandoo from some 133 3D surveys available to Wandoo. This lead to the Company having a success rate of 80% from its first 26 wells - including Eagle Ford, Olmos, Yegua and Frio targets, illustrating the potential value of having access to this very extensive 3D seismic data base.

Texon - Wandoo Agreement - 100% Increase in Area (#)

Texon and Wandoo have agreed to extend the area which is subject to the PGA by over 100% (the red area) as shown on the attached map (see link at the bottom of the release). All prospects created by Wandoo in the blue and red areas will be subject to Texon's first right of refusal entitlement per the PGA.

Texon - Wandoo Agreement - 5 Year Extension (#)

Texon and Wandoo have agreed to extend the PGA for a further 5 years to May 2019. This will ensure that Texon's first right of refusal on all prospects generated by Wandoo will be available for the next seven and a half years. This extension applies to both blue and red areas on the attached map (see link at the bottom of the release). Working Interest and Royalty arrangements in the red area are similar to those in the blue which are set out in the Company's 2007 IPO document. Texon's red area Working Interest and Nett Revenue entitlements are the same as in the blue.

180 3D Seismic Surveys

Wandoo now has access to 180 3D seismic surveys - a 35% increase which will cover additional key parts of the Eagle Ford resource play, but also other oil and gas trends which are expected to provide an ongoing series of opportunities for the Company. If Wandoo obtains access to new surveys, these also become part of the PGA arrangement between Texon and Wandoo.

Texon will fund the engagement by Wandoo of several new very experienced Texas Gulf Coast project mappers targeting increased Wandoo prospect output for Texon.

As part of this Agreement, Wandoo or its nominee will receive 5 million unlisted Texon incentive stock options. Please refer to the attached Explanatory Note (see link at the bottom of the release).

The Board is very pleased with the extended term and area of the Company's arrangement with Wandoo which should provide the Company with a steady and reinvigorated flow of oil and gas project opportunities.

For the complete Texon Petroleum announcement including figures, please view the following link:
http://media.abnnewswire.net/media/en/docs/ASX-TXN-237440.pdf

Contact

David Mason President & CEO Email: dave.mason@texonpetroleum.com.au John Armstrong Chairman Email: john.armstrong@texonpetroleum.com.au Web: http://www.texonpetroleum.com.au