Magnus Energy Inc.
TSX VENTURE : MEI.A
TSX VENTURE : MEI.B

Magnus Energy Inc.

November 02, 2007 14:17 ET

Magnus Energy Announces Completion of Arrangement With Questerre and Financing

CALGARY, ALBERTA--(Marketwire - Nov. 2, 2007) - Magnus Energy Inc. (TSX VENTURE:MEI.A) (TSX VENTURE:MEI.B) ("Magnus") announces that it has completed its previously announced Arrangement (the "Arrangement") with Questerre Energy Corporation ("Questerre") pursuant to a Plan of Arrangement. In the Arrangement, Questerre acquired all of the outstanding securities of Magnus through the issuance of 0.015316 of a Questerre share for each Class A Share of Magnus. Each Class B Share of Magnus was exchanged for ten Class A Shares of Magnus prior to the exchange of Class A Shares of Magnus for Questerre shares. Magnus is now a wholly-owned subsidiary of Questerre. As a condition of the Arrangement, all secured debt of Magnus in the approximate amount of $17,000,000, was paid or satisfied. Magnus shareholders may now tender their Magnus shares and letters of transmittal in exchange for Questerre shares pursuant to the Arrangement.

At the Annual and Special Meeting of the shareholders of Magnus which was held on October 31, 2007, the Arrangement was approved by over 93% of the votes cast by shareholders. Final approval from the Court of Queen's Bench of Alberta was also received on the same day.

Concurrent with the closing of the Arrangement, Magnus completed an equity placement for gross proceeds of $9.3 million. The proceeds of the private placement will be used by Questerre to fund the flow-through commitments of Magnus, including the 50% share of drilling costs committed by Magnus in the A-8 well at the Beaver River Field in British Columbia.

It is anticipated that the Class A Shares and Class B Shares of Magnus will be delisted from trading on the TSX Venture Exchange shortly and application will be made to applicable securities regulatory authorities for Magnus to cease to be a reporting issuer under applicable securities laws.

READER ADVISORY

This news release contains 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 the Company'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 reserve 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 authorities. The Company's actual results, performance or achievements could differ materially from those expressed in, or implied by, these forward-looking statements and, accordingly, no assurances can be given that any of the events anticipated by the forward-looking statements will transpire or occur, or if any of them do so, what benefits, including the amount of proceeds, that the Company 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 the Company or persons acting on its behalf are expressly qualified in their entirety by these cautionary statements. Furthermore, the forward-looking statements contained in this news release are made as at the date of this news release and the Company 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.

The term BOE or BOEs may be misleading, particularly if used in isolation. A BOE (barrel of oil equivalent) conversion rate of 6 Mcf per one (1) BOE is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead.

501,488,396 Class A Shares

1,044,000 Class B Shares

The TSX Venture Exchange has in no way passed upon the merits of the proposed transaction and has neither approved nor disapproved of the contents of this news release and does not accept responsibility for the adequacy or accuracy of this release.

Contact Information

  • Questerre Energy Corporation
    Jason D'Silva
    Vice-President, Finance
    (403) 777-1185
    (403) 777 -1578 (FAX)
    or
    Questerre Energy Corporation
    1580, 727 - 7th Avenue SW
    Calgary, Alberta T2P 0Z5