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Magnum Energy Announces August 2009 Reserves Summary and Provides Operations Update

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Nov. 23, 2009) - MAGNUM ENERGY INC. (the "Company") (TSX VENTURE:MEN) is pleased to announce the results of its independent August 31, 2009 year-end reserves evaluation prepared by Ryder Scott LLP ("Ryder Scott"). The report has been prepared on a Pro Forma basis and combines the reserves actually owned by the Company on August 31, 2009 with the reserves acquired effective July 1, 2009 ("Combined Reserves"). The acquisition, which closed on October 20, 2009, includes 13 gross (9.24 net) sections of land in the Sedalia area of Alberta with existing natural gas production of 415 mcf/d (70 boe/d) and associated gas processing facilities. The Company's Oil & Gas Disclosure Filings for the fiscal year ended August 31, 2009 will be released on SEDAR prior to November 30, 2009.

Summary of Reserves - Company Working Interest (before royalties) August 31, 2009 Combined Reserves using Forecast Prices and Costs

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Product Reserves Category
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 Proved
 Proved Developed Proved Total
 Developed Non- Undev- Total Proved +
 Producing Producing eloped Proved Probable Probable
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Oil - Barrels 12,509 Nil Nil 12,509 12,700 25,209
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NGL - Barrels 2,519 553 Nil 3,072 5,000 8,072
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Sales Gas - Mcf 2,035,609 2,725,686 Nil 4,761,295 4,316,553 9,077,848
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Summary of Net Present Value of Future Net Revenue Before Income Taxes August 31, 2009 Combined Reserves using Forecast Prices and Costs

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 Future Net Revenue ($000) Before Income Tax
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 Proved
 Proved Developed Proved Total
 Developed Non- Undev- Total Proved +
 Producing Producing eloped Proved Probable Probable
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Undiscounted 10,403 12,292 Nil 22,695 21,330 44,025
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Discounted @ 5% 8,143 10,669 Nil 18,812 16,422 35,234
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Discounted @ 10% 6,687 9,393 Nil 16,080 13,162 29,242
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Discounted @ 15% 5,689 8,369 Nil 14,058 10,878 24,936
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Discounted @ 20% 4,967 7,534 Nil 12,501 9,209 21,710
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Magnum has had significant growth in its reserves in the past year due to the successful drilling of three gas wells in the Sedalia area and the subsequent acquisition of additional production, lands and facilities. The wells and acquisition (Combined) have resulted in an 820% increase in proved reserves and a 929% increase in proved plus probable reserves as compared to 2008.

To view the graph accompanying this press release please visit the following link: [ http://media3.marketwire.com/docs/mag11232009.jpg ]

The prices used in the reserve report were Ryder Scott's Forecast Prices as at August 31, 2009 as follows:

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 Crude Oil Natural Gas Exchange
 Edmonton AECO Rate
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Year (Cdn$/bbl) ($/mcf) ($US/$Cdn)
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2009 66.50 3.84 0.86
2010 71.00 6.10 0.86
2011 74.00 6.92 0.86
2012 76.00 7.44 0.86
2013 79.00 7.84 0.88
2014 81.00 7.94 0.90
2015 (1) 82.62 8.10 0.90

(1) thereafter, prices escalated at 2%; exchange rate constant at 0.90
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Reserve Life Index

Based on the forecast 2010 combined proved reserve production of 3300 mcfGE/day (550 boe/d), the Company's reserve life index is 4.1 years on a proved basis and 7.7 years on a proved plus probable basis.

Finding and Development Costs

The Company's combined all-in finding and development costs for 2009 were $7.30 per boe for proved reserves and $4.34 per boe for proved plus probable reserves. The three year weighted average finding and development costs are $11.32 per boe for proved reserves and $6.63 per boe for proved plus probable reserves.

Net Asset Value Before Tax

Based on the Ryder Scott determination of a 10% discounted proved plus probable reserve value and Pro Forma (post closing) net debt and shares outstanding, the net asset value per share is determined as follows:

Proved Plus Probable Reserves Value $29.24 mm
Less: Net Debt 4.50 mm
Plus: Undeveloped Land & Seismic Value .10 mm
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 $24.84 mm
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Basic Shares Outstanding 28.1 million
Fully Diluted Shares Outstanding 31.0 million

Net Asset Value Before Tax (Basic) $0.88 per share
Net Asset Value Before Tax (Fully Diluted) $0.80 per share

Operations Update and Outlook

During the three months ended August 31, 2009, the Company's average production was 850 mcfGE/day (141 boe/d). The acquisition of producing wells in the Sedalia area increased Magnum's production to its current level of 1530 mcfGE/day (255 boe/d). The acquisition also included sweet gas compression facilities capable of processing 1300 mcf/day.

The Sedalia gas producing area accounts for 95% of the combined estimated future net income of Magnum's reserves discounted at 10%. The Company is in the process of enhancing the capacity of the gas processing facility to enable it to access productive capacity which is currently behind pipe in 100% owned wells. An additional compressor has been acquired and will be in operation by the end of November, 2009. The 100% Magnum owned expanded compression facilities will be licensed to process up to 7.0 MMcf/day which will ensure low operating costs and sufficient capacity for future production growth in the Sedalia area.

As contemplated in the Ryder Scott report in the Proved Developed Non-Producing reserve category, Magnum will perform seven well operations before year end. Plans for the month of December include three stimulations of producing zones, two new zone completions and commingling in producing wellbores and two well re-entry new zone completions. As a result of these operations and the expanded facility capacity, the Company's total production is anticipated to meet or exceed our calendar 2009 exit target of 3000 mcfGE/day (500 boe/d).

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 there from. 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. Petroleum and natural gas volumes have also been presented in an equivalent measurement basis referred to a "million cubic feet of gas equivalent" (MMcfGE) and a "thousand cubic feet of gas equivalent" (mcfGE). These conversions are based on an energy equivalency conversion method applicable at the burner tip and do not necessarily represent a value equivalency at the wellhead. Readers are cautioned that boe, MMcfGE and mcfGE figures may be misleading, particularly if used in isolation.

ON BEHALF OF THE COMPANY

Richard Nemeth, President

The TSX Venture Exchange has neither approved nor disapproved the contents of this press release.