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

Magnus Energy Inc.

January 26, 2007 16:47 ET

Magnus Initiates Strategic Alternatives Process and Sales Process for Non-Core Properties

CALGARY, ALBERTA--(CCNMatthews - Jan. 26, 2007) - Magnus Energy Inc. (TSX VENTURE:MEI.A) (TSX VENTURE:MEI.B) ("Magnus" or the "Company") announces that it has retained Dundee Securities Corporation ("Dundee") as its financial advisor to pursue certain strategic alternatives for the Company and that CB Securities Inc. ("CB Securities") has been retained as its advisor for the divestiture of certain non-core natural gas properties. Strategic alternatives may include the sale, merger or takeover of the Company, or the reorganization or restructuring of some or all of the Company's properties, or any other alternatives that are considered to be in the best interest of Magnus shareholders.

Special Committee Formed

The Company's management and board of directors, upon reviewing its alternatives has decided that it is in the best interest of shareholders to form a Special Committee made up of four independent board members (Owen C. Pinnell, Ross O. Drysdale, Jed M. Wood and J. Ronald Woods) and to initiate a process to review a range of strategic and financial alternatives. The Special Committee has retained Dundee to assist in considering the alternatives.

Property Sales

In parallel with the pursuit of strategic alternatives, the Company has engaged CB Securities to manage the divestiture of certain non-core properties. The properties include Leahurst, Paradise Valley and North Esther/Provost with current combined net production of 180 BOE/day. Proceeds from the sale of properties will be added to working capital and used to pay down debt.

About Magnus Energy

Magnus is a junior oil and gas company focused on the acquisition, exploration, exploitation and development of oil and natural gas properties in Western Canada.

READER ADVISORY

This press release includes forward-looking statements and assumptions respecting the Company's strategies, future operations, expected financial results, financial sources, commodity prices, costs of production and quantum of oil and natural gas reserves and discusses certain issues, risks and uncertainties that can be expected to impact on any of such matters. By their nature, forward-looking statements are subject to numerous risks and uncertainties that can significantly affect future results. Actual future results may differ materially from those assumed or described in such forward-looking statements as a result of the impact of issues, risks and uncertainties whether described herein or not, which the Company may not be able to control. The reader is therefore cautioned not to place undue reliance on such forward-looking statements. The Company disclaims any intention or obligation to update or revise these forward-looking statements, as a result of new information future events or otherwise. In addition, the term BOE or BOE's may be misleading, particularly if used in isolation. A BOE (barrel of oil equivalent) conversion ratio 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.

37,836,353 Class A Shares

1,044,000 Class B Shares

The TSX Venture Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this release and has neither approved nor disapproved the contents of this release.

Contact Information

  • Magnus Energy Inc.
    Murray M. Stewart
    President and Chief Executive Officer
    (403) 233-4963
    (403) 262-9920 (FAX)
    Email: stewartm@magnusenergy.ca
    or
    Magnus Energy Inc.
    Stewart Larsen
    Chief Financial Officer
    (403) 233-4960
    (403) 262-9920 (FAX)
    Email: larsen@magnusenergy.ca
    or
    Magnus Energy Inc.
    Suite 1650, AMEC Place
    801 - 6th Avenue S.W.
    Calgary, Alberta T2P 3W2
    Website: www.magnusenergy.ca