MEN

Magnum Energy Inc. (the "Company") (TSX VENTURE:MEN) is pleased to announce that
it has entered into a Conditional Asset Acquisition Agreement (the
"Acquisition") to acquire 13 gross (9.24 net) sections of land with existing
production of natural gas of 415 mcf/d (70 BOE/D). As part of the Acquisition,
the Company will also acquire a 30% working interest in a gas processing
facility (the "Facility"). The Acquisition is expected to close in October, 2009
and remains subject to certain conditions and TSX approval.


The Company has also entered into an "Indicative Term Sheet" with a major bank
focusing on the energy sector in Calgary for a Revolving Production Loan
Facility of $5,000,000 (the "Loan Facility"). This Loan Facility will be used by
the Company for the Acquisition, retirement of existing bank debt, expansion of
the processing facility, and for general corporate purposes related to the
development and production of oil and gas reserves in the Sedalia area of
Alberta. The Indicative Term Sheet contemplates the issuance of a Commitment
Letter and remains subject to certain conditions.


In the event the Company is able to close the Acquisition and the Loan Facility
described above, the Company intends to work with the Co-Owner of the processing
facility to enhance its capacity. This should enable the Company to begin
processing natural gas from wells which it has already drilled and/or re-entered
in the Sedalia area and which are currently behind pipe. Initially, the combined
production being purchased as part of the Acquisition together with the
Company's existing production will be approximately 1200 mcf/d (200 BOE/D). The
Company expects that after the first phase of upgrading the processing facility
in November, 2009 it will be processing an additional 1000 mcf/d ( 165 BOE/D)
from wells which have been drilled, tested and currently are behind pipe.


The transactions described above, when closed, will add strategic value to the
Company's assets and initiatives in the Sedalia area. Richard Nemeth, President
of the Company, commented that "By adding production, an interest in a
processing facility and the ability to enhance that processing capability adds
key assets and a large opportunity for the Company. This will enable us to
continue to develop and fully exploit our assets in the Sedalia area."


Disclaimer: Natural gas volumes have been converted to barrels of oil
equivalent. Barrels of oil equivalent ("boe") may be misleading, particularly if
used in isolation. A boe conversion ratio of 6 thousand cubic feet ("mcf")
equals 1 barrel ("bbl") of oil is based on an energy equivalency conversion
method primarily applicable to the burner tip and does not represent a value
equivalency at the wellhead.

(TSXV:MEN)
Historical Stock Chart
From Jun 2024 to Jul 2024

(TSXV:MEN)
Historical Stock Chart
From Jul 2023 to Jul 2024