Magnum Energy Inc.: Sedalia Production Update
June 09 2009 - 11:31AM
Marketwired
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.
Contacts: Magnum Energy Inc. Richard Nemeth President & CEO
604.663.3155 604.669.3177 (FAX) rnemeth@magnumenergyinc.com
www.magnumenergyinc.com