Magnum Enters Into a Letter of Intent for Acquisition

  Magnum Energy Inc. (the "Company") (TSX VENTURE: MEN) is pleased to announce that it has entered into a Conditional Asset Acquisition Agreement (the "Acquisition") to acquire 13 gross (9.24 net) sections of land with existing production of natural gas of 415 mcf/d (70 BOE/D). As part of the Acquisition, the Company will also acquire a 30% working interest in a gas processing facility (the "Facility"). The Acquisition is expected to close in October, 2009 and remains subject to certain conditions and TSX approval.

The Company has also entered into an "Indicative Term Sheet" with a major bank focusing on the energy sector in Calgary for a Revolving Production Loan Facility of $5,000,000 (the "Loan Facility"). This Loan Facility will be used by the Company for the Acquisition, retirement of existing bank debt, expansion of the processing facility, and for general corporate purposes related to the development and production of oil and gas reserves in the Sedalia area of Alberta. The Indicative Term Sheet contemplates the issuance of a Commitment Letter and remains subject to certain conditions.

In the event the Company is able to close the Acquisition and the Loan Facility described above, the Company intends to work with the Co-Owner of the processing facility to enhance its capacity. This should enable the Company to begin processing natural gas from wells which it has already drilled and/or re-entered in the Sedalia area and which are currently behind pipe. Initially, the combined production being purchased as part of the Acquisition together with the Company's existing production will be approximately 1200 mcf/d (200 BOE/D). The Company expects that after the first phase of upgrading the processing facility in November, 2009 it will be processing an additional 1000 mcf/d ( 165 BOE/D) from wells which have been drilled, tested and currently are behind pipe.

The transactions described above, when closed, will add strategic value to the Company's assets and initiatives in the Sedalia area. Richard Nemeth, President of the Company, commented that "By adding production, an interest in a processing facility and the ability to enhance that processing capability adds key assets and a large opportunity for the Company. This will enable us to continue to develop and fully exploit our assets in the Sedalia area."

Disclaimer: Natural gas volumes have been converted to barrels of oil equivalent. Barrels of oil equivalent ("boe") may be misleading, particularly if used in isolation. A boe conversion ratio of 6 thousand cubic feet ("mcf") equals 1 barrel ("bbl") of oil is based on an energy equivalency conversion method primarily applicable to the burner tip and does not represent a value equivalency at the wellhead.

The TSX Venture Exchange has neither approved or disapproved the contents of this press release.

Contacts: Magnum Energy Inc. Richard Nemeth President & CEO 604.669.3155 604.669.3177 (FAX) [e-mail] www.magnumenergyinc.com