MGM Energy Corp.
TSX : MGX

MGM Energy Corp.

September 10, 2008 19:47 ET

MGM Energy Corp. Provides Update of 2008/09 Winter Program

CALGARY, ALBERTA--(Marketwire - Sept. 10, 2008) -

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MGM Energy Corp. ("MGM Energy") (TSX:MGX) provided details today of its 2008/09 winter capital program.

Subject to partner and regulatory approval, MGM Energy expects to drill four exploratory wells this winter in the north-western region of the Mackenzie Delta pursuant to the farm-in agreement with Chevron Canada Limited and BP Canada Energy Company. Each of the four drilling locations test distinct play types.

The first 2008/09 location will be located on Ellice Island and will test prospective zones within the Taglu formation.

The second location was identified with 3D seismic acquired by MGM Energy in the 2007/08 season and will test the footwall of the Ellice Island anticline in the Tertiary-aged lower Taglu and Aklak reservoirs in the southern portion of the anticline.

The third well is proposed on the northern portion of the Ellice anticline to test Aklak reservoirs in the crest of the North Ellice anticline. This North Ellice crestal play has additional deeper potential that is unlikely to be tested in the 2008/09 program.

The final well was also identified based on the 3D seismic acquired by MGM Energy in the 2007/08 season and will test a stratigraphic play on the west side of Langley Island. This East Ellice stratigraphic well is a new play type for this portion of the basin and is analogous to the reservoirs found at MGM's Umiak discovery.

The wells to be drilled have depths ranging from approximately 1,500 meters to nearly 2,000 meters. The prospects each have an expected size range of 80 to 100 Bcf (unrisked). Final names for these wells will be determined by the National Energy Board, expected to occur in the next 60 days.

Each of the four wells is expected to be tested and completed before the end of the winter drilling season in mid-April, 2009. The ability to complete the drilling of all four wells during the winter season may be impacted by unforeseen weather and operating conditions. The total cost of the four well program, based on the final location and depth of prospects, is estimated to be $74 million. Existing cash resources, comprised chiefly of funds raised from MGM Energy's equity issue in July 2008, are sufficient to fund expected drilling and logistic costs, plus the Company's other expected general and administrative and operating costs for the next year.

"We expect to spud our first well of this year's program before the end of December" said Henry Sykes, President of MGM Energy. "This is an innovative program for MGM Energy that we believe will generate maximum value for our shareholders: drilling four different play types and optimizing our resources to finish four wells in a season resulting in a lower per well cost. We look forward to reporting on our results as the wells are drilled and tested."

MGM Energy is a Calgary-based Canadian oil and gas exploration and development company with operations in Northern Canada. MGM Energy's common shares are listed on Toronto Stock Exchange under the symbol "MGX".

Certain statements or information included in this press release constitute forward-looking statements under applicable securities legislation. Forward-looking statements or information in this press release include but are not limited to exploration and drilling plans and the timing thereof, and future plans and operations. Such forward-looking statements or information are based on a number of assumptions which may prove to be incorrect. Although MGM Energy believes that the expectations reflected in such forward-looking statements or information are reasonable, undue reliance should not be placed on forward-looking statements because MGM Energy can give no assurance that such expectations will prove to be correct. Forward-looking statements or information are based on current expectations, estimates and projections that involve a number of risks and uncertainties which could cause actual results to differ materially from those anticipated by MGM Energy and described in the forward-looking statements or information. The forward-looking statements or information contained in this press release are made as of the date hereof and MGM Energy undertakes no obligation to update publicly or revise any forward-looking statements or information, whether as a result of new information, future events or otherwise, unless so required by applicable securities laws.

Contact Information

  • MGM Energy Corp.
    Henry Sykes
    President
    (403) 781-7800
    or
    MGM Energy Corp.
    Rick Miller
    Chief Financial Officer
    (403) 781-7800