Magnum Energy Inc. ("the Company" or "Magnum") (TSX VENTURE: MEN)
is pleased to announce that it has filed on SEDAR its audited
financial statements and related management's discussion and
analysis ("MD&A") for the year ended August 31, 2009. The
Company has also filed, on November 30, 2009, its reserves data and
other oil and gas information for the year ended August 31, 2009 as
mandated by National Instrument 51-101 Standards of Disclosure for
Oil and Gas Activities. Selected operational and financial results
are outlined below and should be read in conjunction with Magnum's
audited financial statements and MD&A. Copies of these filings
can be found at www.SEDAR.com.
Magnum was formed to operate in Canada as an oil and gas
exploration, development and production company. The goal of the
Company is to create sustainable and profitable growth in
production and cash flow. To accomplish this, Magnum plans to
develop existing properties using cash flow generated from existing
production and from development drilling and recompletions.
Initially, efforts will be concentrated in the Sedalia area where
the Company has an average 78% working interest in 13.24 sections
of land and operates a gas processing facility. Magnum currently in
the process of re-entering or recompleting eight wells in the area
and plans to drill two additional wells in Sedalia early in
2010.
HIGHLIGHTS FOR THE YEAR ENDED AUGUST 31, 2008
- Petroleum and natural gas production was 39,361 boes for the
year, an increase of 35% compared to 29,234 boes for the year ended
August 31, 2008.
- The Company drilled three successful gas wells (100% w.i.) in
the Sedalia area that commenced production during the year.
FINANCIAL AND OPERATING HIGHLIGHTS
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Three Months Year
Ended August 31 Ended August 31
2009 2008 2009 2008
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FINANCIAL
Oil and natural gas sales $ 329,349 $ 470,114 $1,528,419 $1,868,137
Cash flow from (used in)
operations (83,592) 21,550 30,453 407,385
Per share, basic and diluted 0.00 0.00 0.00 0.02
Net income (loss) 3,024 (281,914) (401,206) (82,825)
Per share, basic and diluted 0.00 (0.01) (0.02) 0.00
Capital expenditures (net of
dispositions) 33,960 361,417 2,051,947 1,198,037
Working capital deficiency,
end of period (2,084,842) (108,310) (2,084,842) (108,310)
Weighted average shares
outstanding -
Basic and diluted 25,143,572 24,929,514 25,024,521 24,536,069
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OPERATIONS
Production
Oil and NGL's (bbls) 2,133 2,381 14,915 11,114
Gas (mcf) 65,241 22,943 146,677 108,720
Combined (boe) 13,007 6,205 39,361 29,234
Average selling price
Oil and NGLs($/bbl) 63.52 115.08 64.53 98.24
Gas ($/mcf) 2.97 8.55 3.86 7.14
Total ($/boe) 25.32 75.77 38.83 63.90
Operating netback
(per boe at 6:1) $ 12.39 $ 57.83 $ 24.04 $ 43.35
Cash flow netback
(per boe at 6:1) $ (6.43) $ 3.47 $ 0.77 $ 13.94
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As referred to above, to view a full copy of the Company's
audited financial statements, the accompanying MD&A and the
Reserves Data and Other Information for the year ended August 31,
2009, please refer to the SEDAR website at www.sedar.com.
Reader Advisory
This news release and the documents referred to therein contain
certain forward-looking statements, including management's
assessment of future plans and operations and capital expenditures
and the timing thereof, that involve substantial known and unknown
risks and uncertainties, certain of which are beyond Magnum's
control. Such risks and uncertainties include, without limitation,
risks associated with oil and gas exploration, development,
exploitation, production, marketing and transportation, loss of
markets, volatility of commodity prices, currency fluctuations,
imprecision of reserves estimates, environmental risks, competition
from other producers, inability to retain drilling rigs and other
services, delays resulting from or inability to obtain required
regulatory approvals and ability to access sufficient capital from
internal and external sources, the impact of general economic
conditions in Canada, the United States and overseas, industry
conditions, changes in laws and regulations, including the adoption
of new environmental laws and regulations, and changes in how they
are interpreted and enforced, increased competition, the lack of
availability of qualified personnel or management, fluctuations in
foreign exchange or interest rates, stock market volatility and
market valuations of companies with respect to announced
transactions and the final valuations thereof, and obtaining
required approvals of regulatory bodies. Actual results could
differ materially from those expressed in or implied by these
forward-looking statements. No assurances can be given that any of
the events anticipated by any forward-looking statements will
transpire or occur, or if any of them do so, what benefits Magnum
will derive there from. Readers are cautioned that the foregoing
list of factors is not exhaustive. All subsequent forward-looking
statements, whether written or oral, attributable to Magnum or
persons acting on behalf are expressly qualified in their entirety
by these cautionary statements. The forward-looking statements
contained in this news release and the documents referred to
herein, are made as at the date of this news release, and Magnum
does not undertake any obligation to update publicly or to revise
any of the included forward-looking statements, whether as a result
of new information, future events or otherwise, except as may be
required by applicable securities laws.
Petroleum and natural gas volumes are converted to an equivalent
measurement basis referred to as a "barrel of oil equivalent" (boe)
on the basis of 6 thousand cubic feet of natural gas equaling 1
barrel of oil. This is based on an energy equivalency conversion
method applicable at the burner tip and does not necessarily
represent a value equivalency at the wellhead. Readers are
cautioned that boe figures may be misleading, particularly if used
in isolation.
Neither TSX Venture Exchange nor its Regulation Services
Provider (as that term is defined in the policies of the TSX
Venture Exchange) accepts responsibility for the adequacy or
accuracy of this release.
Contacts: Magnum Energy Inc. Mr. Richard Nemeth President &
CEO (604) 669-3155 rnemeth@magnumenergyinc.com
www.magnumenergyinc.com
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