Magnum Energy Inc. Provides Operations Update

MAGNUM ENERGY INC. ("Magnum or the "Company") (TSX VENTURE:MEN) is pleased to
announce an update of its recent operations at the Provost Viking Oil and
Sedalia Natural Gas projects in Alberta. 


Provost Development Update 

In Provost, Magnum fracture stimulated one of the producing vertical oil wells
on June 1, 2011. The well's production rate was 5 bopd prior to the stimulation.
After thirty days, the well is producing at a stable rate of 29 bopd (14.5 bopd
net to Magnum). At the current rate of production the operation will reach
payout in approximately three months. 


Our joint venture partner is required to pay 100% of the costs to drill and
complete to tie-in two horizontal wells to earn a 50% working interest in
certain lands in the Provost area. The first horizontal well spudded on June 28,
2011. The well, targeting the Viking "A" formation, has been drilled to a depth
of 800 meters with a 1200 meter horizontal leg which passes entirely through an
oil bearing Viking sand. The horizontal leg is being prepared for a multi-stage
fracture stimulation scheduled for July 24, 2011. Under the terms of the joint
venture agreement, the second horizontal well must be spudded within 30 days of
the completion of the first horizontal well. 


Magnum was also successful at a recent land sale in the Provost Viking "A" Oil
Pool, acquiring a 50% working interest in all petroleum and natural gas rights
in a section that falls within the Viking oil halo Magnum has identified. The
section includes two cased well bores that the Company will recomplete using a
similar fracture stimulation that was successfully used on the first vertical
operation described above. Magnum has identified a second light oil play on the
section below the Viking zone which will be developed utilizing existing 3D
seismic. 


With the addition of the section acquired at the recent land sale, Magnum has
identified a total of 4 existing vertical Viking oil wells that can be fracture
stimulated adding production at a very economic rate. 


Sedalia Development Update

In June 2011, Magnum fracture stimulated two wells and re-entered two wells to
complete operations from previous work programs in the Sedalia area. 


The two wells that have been successfully fracture stimulated are still in the
clean up phase and may require further coil clean outs before the Company can
announce stabilized production rates. Work to date on the re-entries has added
over 100 boed. The Company still has production of approximately 40 boed behind
pipe on other zones that will be comingled once the clean out phase has been
completed on the wells that have been fracture stimulated. 


In the past six weeks, Magnum has added approximately 120 boe/d of production
with several operations yet to be completed. 


President Richard Nemeth comments, "We have had a very busy summer to date and
the results thus far have exceeded our expectations. We look forward to the
completion and tie-in of the first horizontal Viking oil well. With the addition
of the recent land acquisition, Magnum will be focused on expanding our
production and reserves in the Viking 'A' Oil Pool." The Company has an
inventory of from 16 to 32 additional horizontal oil locations (depending upon
the length of the horizontal legs) in the Provost area and 12 horizontal gas
locations in the Sedalia area.


Forward looking statements: 

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 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.