Magnum Energy Inc. Announces Signing of Letter of Intent
March 31 2010 - 9:30AM
Marketwired
Magnum Energy Inc. (the "Company") (TSX VENTURE: MEN) is pleased to
announce that it has entered into a Conditional Land Acquisition
Agreement (the "Acquisition") to acquire 13.75 (gross and net)
sections of land in two areas in Alberta for a total cost of
$2,200,000. The purchase price will be paid in half with cash and
in half with the issuance of no less than 1,100,000 Common shares
of the Company. The Acquisition remains subject to certain
conditions, including financing and TSX approval.
Three of the sections to be acquired are in the Company's core
Sedalia area, close to Magnum's existing production and operations.
These lands offset a recently drilled new pool gas discovery and
will add significantly to drilling inventory, production and
reserves in the area.
The remaining 10.75 sections are in a block of 100% owned and
operated lands in west central Alberta stretching from Pembina to
Windfall. These lands have defined drilling locations for both
light oil and liquids rich gas and represent excellent close-in
development opportunities for the Company. This will add a new
second core area to exploit as Magnum increases its cash flow from
Sedalia and will diversify its production base.
Initially, 11 drilling opportunities have been identified,
geologically and seismically, on the lands. Management believes
that these initial drilling locations have the potential to add up
to 1000 boe/d of production.
Reader Advisory
This news release and the documents referred to therein contain
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 Magnum'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 reserves 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 bodies. Actual results could
differ materially from those expressed in or implied by these
forward-looking statements. No assurances can be given that any of
the events anticipated by any forward-looking statements will
transpire or occur, or if any of them do so, what benefits Magnum
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 Magnum or
persons acting on behalf are expressly qualified in their entirety
by these cautionary statements. The forward-looking statements
contained in this news release and the documents referred to
herein, are made as at the date of this news release, and Magnum
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.
Petroleum and natural gas volumes are converted to an equivalent
measurement basis referred to as a "barrel of oil equivalent" (boe)
on the basis of 6 thousand cubic feet of natural gas equaling 1
barrel of oil. This is based on an energy equivalency conversion
method applicable at the burner tip and does not necessarily
represent a value equivalency at the wellhead. Readers are
cautioned that boe figures may be misleading, particularly if used
in isolation.
Neither TSX Venture Exchange nor its Regulation Services
Provider (as that term is defined in the policies of the TSX
Venture Exchange) accepts responsibility for the adequacy or
accuracy of this release.
Contacts: Magnum Energy Inc. Mr. Richard Nemeth President &
CEO (604) 669-3155 rnemeth@magnumenergyinc.com
www.magnumenergyinc.com