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Magnum Energy Inc. - Asset/Corporate Sale

Magnum Energy Inc., (Magnum) has engaged NRG Divestitures to market its Alberta oil and gas properties.

Magnum has three core areas currently producing 105 boe/d with positive yearly cash flow of $412,000.00.

The Provost property is producing at a rate of 33 boe/d from five oil wells. The net cash flow for the Provost asset is $396,000.00 per year. The introduction of tank heaters (currently being installed) in addition to the engine and tubing repairs on two of the wells will result in further production increases to 61 boe/d with an estimated cash flow increase to $566,000.00 per year.

Further operational saving in Provost can be achieved with the reactivation of a disposal well. In addition to these operational savings there are a number of new step out drilling locations to further increase production and lower operational cost per barrel.

Sedalia is the second property currently producing 350 mcf/d. There are plans in place to increase production to 560 mcf/d with reactivation of wells. These work-overs will see cash  ow improve to $10,000.00 per month or $120,000.00 per year.

The third revenue stream is a GORR on the Oyen asset currently generating $1,400.00 per month or $16,800.00 annually.

With all the operational improvements, Magnum has projected 2016 free cash flow of $702,800.00, including royalty income of $1,400/month, assuming oil prices at $50/bbl and gas prices at $2.70/mcf.

The Jenner gas property is abandoned awaiting detailed site assessments for surface conditions. All wells have been abandoned, with 40 out of 63 wells having passed Phase 1. The property includes a used, fully maintained, complete plant site with a compressor, inlet separator, and dehydrator, all of which can be deployed elsewhere.

Magnum’s LLR rating is 0.97, as of November 7th, 2015.

Please send signed CAs to John Deinum.

The following asset files are available for download.

Download details Download CA Download PSA Letter of Intent