Texon Petroleum Limited : Iluka - 38 Feet of Pay

ASX Announcement

Date: 29 August 2011

Texon Petroleum LtdABN 24 119 737 772

Level 9, 46 Edward Street

Brisbane, Qld Australia 4000

Postal: GPO Box 402

Brisbane, Qld Australia 4001

Telephone: [phone]

Fax: [phone]

Directors: John Armstrong David Mason Bernard RowleyCompany Secretary:

Des Olling

Contact: David Mason President & CEO

[e-mail]

or:

John Armstrong Chairman [e-mail]

Website:

www.texonpetroleum.com.au

ASX Code: TXN

Iluka - 38 Feet of Pay

Texon advises that its Iluka well (Scherer #1) has reached its total depth of 6,750 feet.

Electric logs indicate 38 feet of Yegua gas pay across two reservoirs. The lower 14 ft reservoir (good average porosity of 30% and log gas indications) will now be tested and if successful connected for production. The upper 24 ft reservoir (good average porosity of 32% and log gas indications) will be tested once the lower reservoir has finished producing.

The Company’s three previous discoveries in this area in the Yegua formation (Avoca, Lennox, Nambucca) had similar log pay indications and initial production rates of between 0.4 and

1.5mcfgpd. All of these prospects have been identified using some of the 180 3D seismic surveys to which Texon has access through its Prospect Generation Agreement with Wandoo.

Texon has a 32.5% WI (24.375% NRI) in the Iluka well. The cost to Texon’s 32.5%WI has been largely covered by the promoted USA based company in this drilling joint venture.

After completing this well in the next few days, the rig will move to drill Texon’s first Wilcox oil test which is expected to spud in about a week.

-ends

Oil and gas futures prices:

Source: NYMEX October 2011

Oil: US$85.13/bbl

Gas: US$3.88/mmbtu (this translates to approx. US$6.40/mcf for all

Texon gas – including US$7.40/mcf for Olmos and Eagle Ford gas)

Glossary:

bbl: barrel

mcf: thousand cubic feet

mcfgpd: thousand cubic feet of gas per day mmbtu: million British thermal units

NRI: Nett Revenue Interest

WI: Working Interest