Magnus Energy Announces Arrangement Agreement With Questerre Energy and Updates Private Placement

Magnus Energy Inc. ("Magnus") (TSX VENTURE:MEI.A) (TSX VENTURE:MEI.B) is pleased
to announce that it has entered into an Arrangement Agreement (the "Arrangement
Agreement") with Questerre Energy Corporation ("Questerre") to merge the two
companies (the "Transaction"). Pursuant to the Arrangement Agreement, Questerre
will acquire all of the outstanding securities of Magnus on a fully diluted
basis through the issuance of 11.09 million common shares of Questerre based on
a price of $1.04 per share and which price is based on the 20 day weighted
average trading price of the Questerre common shares on the Toronto Stock
Exchange for the period ending on August 17, 2007, subject to certain
adjustments between the parties. The aggregate consideration to be paid by
Questerre will be based upon the settlement of a substantial portion of the
trade payables of secured and unsecured creditors of Magnus. In addition, a
component of the consideration paid by Questerre is comprised of the payout of
approximately $15 million, to satisfy the senior secured debt facilities of
Magnus held by its principal lenders.


Shareholders of Magnus will be asked to approve the Transaction at an Annual and
Special Meeting of Magnus to be held on or about September 28, 2007, (the
"Meeting"). The notice of the Meeting and accompanying Information Circular (the
"Information Circular") detailing the information in respect of matters
contemplated by the Arrangement Agreement will be mailed to shareholders of
Magnus on or about August 31, 2007. The Transaction will require the approval of
66 2/3% of the votes cast by the shareholders and the approval of the Court of
Queen's Bench of Alberta, the TSX Venture Exchange and certain regulatory
authorities. The Transaction is subject to several terms and conditions
including successful due diligence review by Questerre of Magnus and compliance
with all applicable securities and corporate laws and regulatory approvals. The
Board of Magnus believes that the Transaction will maximize value for the
shareholders of Magnus and represents the best alternative to enhance the value
of the assets of Magnus over time. The Transaction is expected to close on or
about September 28, 2007 following the Magnus Meeting.


The directors of each of Magnus and Questerre have unanimously approved the
proposed Transaction. In addition, the Board of Directors of Magnus has
concluded that the proposed Transaction is fair and in the best interests of its
shareholders and has agreed to recommend that the shareholders of Magnus vote in
favour of the Transaction. Holders of in excess of 25% of the issued and
outstanding Class A Shares of Magnus, including all directors, officers and
insiders of Magnus, have entered into lock-up agreements with Questerre whereby
they have agreed to support and vote their shares in favour of the Transaction.


The Transaction will provide the shareholders of Magnus with continued
participation in the upside of the asset base of Magnus through a stake in
Questerre, an oil and gas company focused on the acquisition, exploration,
exploitation and development of oil and natural gas in Canada. The strategic
merits of the proposed Transaction are significant for both groups of
shareholders. The current production of Magnus is complementary to Questerre's
existing production and Questerre expects to realize significant operational and
administrative savings through the combination of the two companies.


In conjunction with the Transaction, Magnus is pleased to announce that it has
entered into an agreement with a wholly-owned subsidiary of Questerre whereby
Magnus has agreed to farmin on the Beaver River Area, British Columbia
properties of Questerre's subsidiary ("Beaver River Farmin Agreement"). The
Beaver River Farmin Agreement contemplates that Magnus will participate in the
drilling of a test well on Questerre's lands to the base of the deepest
formation penetrated in the farmin lands. In conjunction with the Beaver River
Farmin Agreement, Magnus also announces that its previously announced Private
Placement of Subscription Receipts in a press release issued July 19, 2007 has
been amended and Magnus is proceeding with a private placement (the "Private
Placement") to raise aggregate proceeds of $6 million of Class A Shares of
Magnus at $0.10 per share as part of the Transaction requirements in
satisfaction of CEE flow-through expenditures of Magnus. The Class A Shares will
be subject to a four month hold period in the selling jurisdictions commencing
on the Closing Date in accordance with applicable securities laws. Magnus will
pay an advisory fee of cash in the sum of 2% of the funds raised pursuant to the
Offering to Dundee Securities Corporation. The net proceeds of the Private
Placement will be used by Questerre to meet the flow-through obligations of
Magnus.


The Transaction also provides for a farmin by Questerre into the Antler area,
Saskatchewan properties of Magnus (the "Antler Farmin Agreement"). The terms of
the Antler Farmin Agreement include a commitment by Questerre to participate in
the drilling of the next location to be drilled by Magnus with its partners in
Antler.


Magnus also announces that pursuant to its press release issued July 19, 2007,
Magnus has issued approximately 15.5 million Class A Shares of Magnus at a
deemed price of $0.10 per share in satisfaction of a portion of its outstanding
debts and intends to continue to settle its remaining outstanding debts with
trade creditors through the issuance of additional Class A Shares of Magnus. Any
settlements will be subject to final TSX Venture Exchange approval and the Class
A Shares issued will be subject to a four month hold period in accordance with
applicable securities laws.


READER ADVISORY

This news release contains 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 a company'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 reserve 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 authorities. A company's actual results, performance or
achievements could differ materially from those expressed in, or implied by,
these forward-looking statements and, accordingly, no assurances can be given
that any of the events anticipated by the forward-looking statements will
transpire or occur, or if any of them do so, what benefits, including the amount
of proceeds, that a company 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 a company or persons acting
on its behalf are expressly qualified in their entirety by these cautionary
statements. Furthermore, the forward-looking statements contained in this news
release are made as at the date of this news release and neither company
undertakes 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.


The term BOE or BOEs may be misleading, particularly if used in isolation. A BOE
(barrel of oil equivalent) conversion rate of 6 Mcf per one (1) BOE is based on
an energy equivalency conversion method primarily applicable at the burner tip
and does not represent a value equivalency at the wellhead.


MEI.A - 58,170,655 Class A Shares

MEI.B - 1,044,000 Class B Shares