Magnum Energy Inc.
TSX VENTURE : MEN

Magnum Energy Inc.

June 09, 2009 11:31 ET

Magnum Energy Inc.: Sedalia Production Update

VANCOUVER, BRITISH COLUMBIA--(Marketwire - June 9, 2009) - Magnum Energy Inc. (the Company) (TSX VENTURE:MEN) is pleased to report the initial production results of the 100% Working Interest operated wells in the Sedalia area which were placed on production in the first and second week of April 09. The on production dates were timed to take advantage of the 5% Crown Royalty cap on the initial 12 months of production for new wells, as announced in the Alberta Government Incentive Program on March 3, 2009.

The Company is producing from the Magnum 1-23 well which had combined test results from the primary and secondary zone of approximately 1.35 MMcf/d or 225 boe/d, and the Magnum 13-35 well, which tested approximately 1.0 MMcf/d or 166 boe/d. Currently, the wells are each producing out of one zone on a restricted basis due to capacity limitations at the 3rd party gas gathering and processing facility to which the Company delivers this production. The wells have been producing at a stabilized rate of approximately 900Mcf/d or 150 boe/d since being placed on production.

With this new production, Magnum's combined total daily production has reached a new Company high of approximately 200 boe/d, with an additional 200 boe/d behind pipe, awaiting resolution of the processing constraints. This includes the Magnum 3-24 well, which is equipped and tied-in, but currently shut in. The well tested at 1.25MMScf/d from the primary and secondary zones.

The Company is evaluating several options that would enable Magnum to either increase capacity at the present facility, or take all of the Company's current, along with the "behind pipe" production to alternative facilities in the area. Discussions are underway with various operators to determine the most effective strategy.

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.

The TSX Venture Exchange has neither approved or disapproved the contents of this press release.

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