Magnum Energy Inc.

Magnum Energy Inc.

March 31, 2010 09:30 ET

Magnum Energy Inc. Announces Signing of Letter of Intent

CALGARY, ALBERTA--(Marketwire - March 31, 2010) - Magnum Energy Inc. (the "Company") (TSX VENTURE:MEN) is pleased to announce that it has entered into a Conditional Land Acquisition Agreement (the "Acquisition") to acquire 13.75 (gross and net) sections of land in two areas in Alberta for a total cost of $2,200,000. The purchase price will be paid in half with cash and in half with the issuance of no less than 1,100,000 Common shares of the Company. The Acquisition remains subject to certain conditions, including financing and TSX approval.

Three of the sections to be acquired are in the Company's core Sedalia area, close to Magnum's existing production and operations. These lands offset a recently drilled new pool gas discovery and will add significantly to drilling inventory, production and reserves in the area.

The remaining 10.75 sections are in a block of 100% owned and operated lands in west central Alberta stretching from Pembina to Windfall. These lands have defined drilling locations for both light oil and liquids rich gas and represent excellent close-in development opportunities for the Company. This will add a new second core area to exploit as Magnum increases its cash flow from Sedalia and will diversify its production base.

Initially, 11 drilling opportunities have been identified, geologically and seismically, on the lands. Management believes that these initial drilling locations have the potential to add up to 1000 boe/d of production.

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 therefrom. 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.

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