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

Magnus Energy Inc.

May 01, 2007 14:42 ET

Magnus Energy Releases 2006 Results

CALGARY, ALBERTA--(CCNMatthews - May 1, 2007) - Magnus Energy Inc. ("Magnus") (TSX VENTURE:MEI.A) (TSX VENTURE:MEI.B) announces its financial and operating results for the three months and year ended December 31, 2006. The audited financial statements and related Management's Discussion and Analysis for the year ended December 31, 2006 were filed yesterday with Canadian securities regulatory authorities on SEDAR at www.sedar.com and posted on the Company's website at www.magnusenergy.ca. Highlights for the 2006 fiscal year are set out below.



2006 Highlights

- Acquired KVR Resources for $15 million.

- Raised $19.1 million of equity.

- Obtained $11 million bank operating line.

- Drilled 29 wells (17.5 net) with a 77% success rate.

- Incurred capital expenditures of $29.8 million.

- Averaged 252 BOE per day for the 2006 year.

- Averaged 359 BOE per day for the fourth quarter.

- Incurred loss of $9.8 million for the fiscal year which includes a $7.5
million write down of asset value.

- Reserves at December 31, 2006:
916 MBOE (total proven) with a before tax present value of $16,816,000
(10% DCF), and 1,659 MBOE (total proven plus probable) with a before
tax present value of $31,212,000 (10% DCF).

- Undeveloped land at December 31, 2006 was 80,677 net acres ($13,398,000
current market value).

- Working capital deficit at December 31, 2006 of $5,701,020.

- Bank debt at December 31, 2006 of $10,450,000.

- Flow through expenditure obligation for 2007 of $12,500,000.


The Company also announces that its well located in the Kakwa area at 01 - 30 - 062 - 05 W6M has been completed, tied-in for production and is currently being tested in line.

About Magnus Energy Inc.

Magnus Energy 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 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.

37,836,353 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. The TSX Venture Exchange does not accept responsibility for the adequacy or accuracy 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.
    1650, 801 - 6th Avenue S.W.
    Calgary, Alberta T2P 3W2
    Website: www.magnusenergy.ca