ABN Newswire - Sydney, July 15, 2010

Texon advises that it has entered into a binding agreement to sell a 20% WI in the Leighton Field Olmos reservoir for US$6.7 Million to a USA based oil and gas company. After the sale, Texon's retained WI in the 1,280 acres of Olmos reservoir at Leighton will average 59%.

Proceeds from the sale, together with the funds (approx. A$14.2 Million) recently raised (refer to Texon's announcement of 29 June) will be directed to drilling a number of Eagle Ford wells in the Company's Leighton and Mosman-Rockingham leases.

The sale does not involve Texon's Leighton Eagle Ford holding which still averages some 79% WI across the 1,280 acres of the Company's Leighton leases.

Texon has six (6) wells producing from the Olmos reservoir which are part of the sale. Gross production from these wells is currently about 820 boepd.

A seventh (7th) Olmos well is scheduled to begin drilling in the next two weeks.

A rig has also been identified for the Company's first Eagle Ford well in Leighton. This well is scheduled to commence drilling in the first half of September.

Oil and gas futures prices (Source: NYMEX August 2010 contracts)

• Oil: US$76.67/bbl
• Gas: US$4.32/mmbtu (approx. US$5.00/mcf for all Texon gas - including US$6.00/mcf for Leighton Olmos gas)

http://www.abnnewswire.net/media/en/docs/63310-ASX-TXN-222080.pdf

About Texon Petroleum Ltd

Texon's goal is to find commercially producible oil and gas by drilling 3D seismic controlled high equity prospects which have targets analogous to adjacent producing wells on established oil and gas producing trends in Texas

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 15 hours behind Aust. Eastern Standard time)