Magnus Energy Inc.

Magnus Energy Inc.

August 10, 2005 14:35 ET

Magnus Signs Multi-Section Farmin and Rolling Option Agreement

CALGARY, ALBERTA--(CCNMatthews - Aug. 10, 2005) - Magnus Energy Inc. (TSX VENTURE:MEI.A) (TSX VENTURE:MEI.B) is pleased to announce that it has signed a Farmin and Rolling Option Agreement covering eight sections (5120 gross acres) in the Paradise Valley Area of East Central Alberta. Magnus has committed to the drilling of two test wells to evaluate the Lloydminster Formation at a depth of 650 metres, which will be commenced on or before September 15, 2005. Under the terms of this deal, Magnus will earn a 60% working interest in each section drilled with the opportunity to retain up to a 100% working interest, subject to a non-convertible GOR reserved unto the Farmor. Magnus also retains the option to drill additional wells on a rolling option basis to earn on the same terms in the balance of the Option Lands. As part of this arrangement, Magnus will have the right to interpret eight square miles of three-dimensional seismic covering the Farmin and Option Lands.

"This Farmin and Rolling Option Agreement will give Magnus exposure to the multi-zone oil and gas potential of East Central Alberta," remarked Murray Stewart, President & CEO of Magnus. "This area is characterized by shallow, high deliverability Mannville targets and year round surface access and is part of the balanced business strategy of Magnus Energy," said Stewart.

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

ADVISORY: Certain information regarding Magnus Energy Inc. including management's assessment of future plans and operations, may constitute forward-looking statements under applicable securities laws and necessarily involve risks associated with oil and gas exploration, production, marketing and transportation such as loss of market, volatility of prices, currency fluctuations, imprecision of reserve estimates, environment risks, competition from other producers and ability to assess sufficient capital from internal and external source. As a consequence, actual results may differ materially from those anticipated in the forward-looking statements.

15,415,000 Class A Shares
1,044,000 Class B Shares

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) 215-2426
    (403) 261-6601 (FAX)
    Magnus Energy Inc.
    Suite 1420, 1122 - 4th Street S.W.
    Calgary, Alberta T2R 1M1