MAGNUM ENERGY INC. (the "Corporation") (TSX VENTURE: MEN) is pleased to announce that it has closed its previously announced financing (the "Offering"). Pursuant to the Offering, the Corporation has issued a total of 10,219,000 Units (the "Unit(s)") at a price of $0.30 per Unit for gross proceeds of $3,065,700. Each Unit consists of one Class A Voting Common Share of the Corporation (a "Class A Common Share") and one-half of a non-transferable Class A Common Share purchase warrant (each whole warrant a "Warrant"). Each whole Warrant will entitle the holder thereof to purchase one Class A Common Share (a "Warrant Share") at an exercise price of $0.45 per Warrant Share until May 18, 2012, subject to acceleration. If the closing sales price of the Class A Common Shares (or the closing bid, if no sales were reported on a trading day) as quoted on the TSX Venture Exchange is greater than $0.60 for 20 consecutive trading days, the Corporation may, within 5 days of such event, accelerate the expiry date of the Warrants to the 30th day on which the Corporation gives notice of such acceleration in accordance with the Warrants.

The Corporation has agreed to pay to Wolverton Securities Ltd. (the "Agent") a commission equal to 8% of the gross proceeds raised plus a corporate finance fee in addition to the reimbursement of legal fees and incidental expenses it incurred with respect to the Offering. As additional compensation, the Corporation has granted to the Agent and its sub-agents non-transferable options to purchase 817,520 Units (equal to 8% of the total Units issued), at $0.30 per Unit, until May 18, 2013. The Agent has also been granted the right of first refusal to participate in and act as an agent of the Corporation with respect to subsequent public or private equity or debt financings undertaken by May 18, 2012.

The proceeds from the Offering will be used to partially pay for the Corporation's share of the consideration paid in the recent acquisition of a Viking oil producing property in Provost, Alberta. Proceeds will also be used to partially repay bank indebtedness, for capital expenditures to be incurred in the Provost and Sedalia areas of Alberta, and for general working capital. See the Corporation's short form prospectus dated May 3, 2011 for further details.

ON BEHALF OF THE CORPORATION

Richard A. Nemeth, President

Forward-looking Statements

This news release contains certain forward-looking information and statements that are based on the Corporation's current expectations, estimates, projections and assumptions in light of its experience and its perception of historical trends. In this news release, such forward-looking information and statements can be identified by terminology such as "will", "to be", "expected", "anticipated" and similar expressions.

In particular, this news release contains forward-looking statements and information relating to the planned use of proceeds of the financing. These forward-looking statements and information are being made by the Corporation based on certain assumptions that the Corporation has made in respect thereof as at the date of this document. These forward-looking statements are not guarantees of future performance and are subject to a number of known and unknown risks and uncertainties, including, but not limited to: non-performance of agreements in accordance with their terms; the impact of competition; commodity prices; regulatory environment and inability to obtain required regulatory approvals; fluctuations in operating results; the ability of the Corporation to raise sufficient capital to complete future projects and satisfy future commitments; labour and material shortages; and certain other risks detailed from time to time in the Corporation's public disclosure documents including, among other things, those detailed under the heading "Risk Factors" in the annual information form of the Corporation for the year ended August 31, 2010, dated March 18, 2011 and in its short form prospectus, both of which can be found at www.sedar.com.

Accordingly, readers are cautioned that events or circumstances could cause results to differ materially from those predicted, forecasted or projected. Such forward-looking statements are expressly qualified by the above statements. The Corporation does not undertake any obligation to publicly update or revise any forward-looking statements or information contained herein, except as required by applicable laws.

This press release shall not constitute an offer to sell or a solicitation of an offer to buy these securities in any jurisdiction. The securities have not and will not be registered under the United States Securities Act of 1933, as amended (the "U.S. Securities Act") or any state securities laws and may not be offered or sold in the United States or to any U.S. person except in certain transactions exempt from the registration requirements of the U.S. Securities Act and applicable state securities laws.

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. Richard Nemeth President & CEO 604.669.3155 rnemeth@magnumenergyinc.com www.magnumenergyinc.com