Exhibit 10.7

EXECUTION COPY

MAGELLAN PETROLEUM CORPORATION

NONQUALIFIED STOCK OPTION AWARD AGREEMENT

THIS AGREEMENT is made as of the grant date indicated in Section 3 below (the
“Grant Date”) between Magellan Petroleum Corporation, a Delaware corporation
(the “Company”), and the undersigned individual (the “Optionee”), pursuant to
the Magellan Petroleum Corporation 1998 Stock Incentive Plan, as amended from
time to time (the “Plan”). Terms used but not defined herein shall have the same
meaning as in the Plan.

WHEREAS, the Optionee serves as the Chief Financial Officer, Vice President and
Treasurer of the Company; and

WHEREAS, the Company, acting through the Compensation, Nominating and Governance
Committee and the full Board of Directors has approved the award of Nonqualified
Stock Options (the “Options”) under the Plan to the Optionee (the “Award”).

NOW, THEREFORE, in consideration of the terms and conditions of this Agreement
and pursuant to the Plan, the parties agree as follows:

 

1. Grant of Options. The Company hereby grants to the Optionee the right and
option to purchase from the Company, at the exercise price set forth in
Section 3 below, all or any part of the aggregate number of shares of common
stock, par value $0.01 per share, of the Company, as such common shares are
presently constituted (the “Stock”), set forth in said Section 3.

 

2. Terms and Conditions. It is understood and agreed that the Options evidenced
hereby shall at all times be subject to the provisions of the Plan (which are
incorporated herein by reference) and the following terms and conditions:

 

  (a) Expiration Date; Effect of Specified Terminations. The Options evidenced
hereby shall expire on the date specified in Section 3 below, or earlier as
provided in Section 7 of the Plan; provided however, that:

(i) if the Company terminates the Optionee’s employment under Section 1.1 of
Optionee’s Employment Agreement with the Company, then the Options evidenced
hereby shall immediately terminate; and

(ii) if the Optionee terminates his employment with the Company for “Good
Reason” (as such term is defined in the Optionee’s Employment Agreement with the
Company), then the Optionee may exercise the Options (unless previously
terminated or exercised) at any time during the three (3) month period following
such termination of employment, but only to the extent that the Options were
exercisable by the Optionee as of the date of termination of his employment.

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  (b) Exercise of Option. The Options evidenced hereby shall be exercisable from
time to time by (i) providing written notice of exercise ten (10) days prior to
the date of exercise specifying the number of shares for which the Options are
being exercised, addressed to the Company at its principal place of business,
and (ii) either:

 

  (A) Cash Only Exercise – submitting the full cash purchase price of the
exercised Stock; or

 

  (B) Cashless Exercise – submitting appropriate authorization for the sale of
Stock in an amount sufficient to provide the full purchase price in accordance
with Section 5(d) of the Plan; or

 

  (C) Combination – tendering a combination of (A) and (B) above.

 

  (c) Withholding Taxes. Without regard to the method of exercise and payment,
the Optionee shall pay to the Company, upon notice of the amount due, any
withholding taxes payable with respect to such exercise, which payment may be
made with shares of Stock which would otherwise be issued pursuant to the
Options.

 

  (d) Vesting. The shares covered by the Options shall vest as follows:

 

  (i) Two hundred thousand (200,000) Option shares shall vest in full on
November 30, 2012; and

 

  (ii) Two hundred thousand (200,000) Option shares shall vest in full on
November 30, 2013; and

 

  (e) Acceleration. The Options evidenced hereby shall immediately be
accelerated and vest in full upon: (i) the occurrence of a “Change of Control”
of the Company as defined in Section 15 of the Plan; (ii) the Company’s
termination of the Optionee’s employment with the Company without “Cause” (as
such term is defined in the Optionee’s employment agreement with the Company);
or (iii) upon the Optionee’s resignation from the Company for “Good Reason” (as
such term is defined in the Optionee’s Employment Agreement with the Company).

 

  (f) Compliance with Laws and Regulations. The Options evidenced hereby are
subject to restrictions imposed at any time on the exercise or delivery of
shares in violation of the By-Laws of the Company or of any law or governmental
regulation that the Company may find to be valid and applicable.

 

  (g)

Interpretation. Optionee hereby acknowledges that this Agreement is governed by
the Plan, a copy of which Optionee hereby acknowledges having

 

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  received, and by such administrative rules and regulations relative to the
Plan and not inconsistent therewith as may be adopted and amended from time by
the Committee (the “Rules”). Optionee agrees to be bound by the terms and
provisions of the Plan and the Rules.

 

  3. Option Data.

 

Optionee’s Name:   Antoine J. Lafargue Number of shares of Stock Subject to this
Option:   400,000 shares Grant Date:   November 30, 2011 Exercise Price Per
Share:   $1.10 per share Expiration Date:   November 30, 2021

 

  4. Miscellaneous. This Agreement and the Plan (a) contain the entire Agreement
of the parties relating to the subject matter of this Agreement and supersede
any prior agreements or understandings with respect thereto; and (b) shall be
binding upon and inure to the benefit of the Company, its successors and assigns
and the Optionee, his heirs, devisees and legal representatives. In the event of
the Optionee’s death or a judicial determination of his incompetence, reference
in this Agreement to the Optionee shall be deemed to refer to his legal
representative, heirs or devisees, as the case may be.

* * * * * *

IN WITNESS WHEREOF, the Company has caused this instrument to be executed by its
authorized officer, as of the date identified below.

 

Agreed to:    

MAGELLAN PETROLEUM

CORPORATION

By:   /s/ Antoine J. Lafargue     By:   /s/ J. Thomas Wilson   Optionee: Antoine
J. Lafargue      

Name: J. Thomas Wilson

Title: President and CEO

Date: November 30, 2011

 

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