Magnum Enters LOI for Viking Oil Assets

Magnum Energy has entered into a Letter of Intent (LOI) to purchase the Viking oil assets of a private company within its core Sedalia Area for $2.8 million, subject to a third party engineering report and board of directors' approval.

The private company is currently producing approximately 30 barrels of sweet light crude per day from its 100% owned and operated vertical wells situated on 3.25 sections of largely undeveloped land. The 100% owned infrastructure includes a battery, disposal well, and pipelines.

In 1968, a unitization study was performed by McDaniel Consultants engineering evaluators which was submitted to the Energy Resources Conservation Board (ERCB) that indicated an oil resource of 5 million barrels of original oil in place (OOIP) per section in the Viking "A" Pool. Cumulative recovered oil production to date has been less than 5% of this estimate. Viking horizontal wells drilled over the last year along this Viking oil trend have unlocked the remaining recoverable reserves in these pools and vastly improved the economics over vertical development.

This acquisition brings an excellent oil component to Magnum's very economic and growing gas production within its core property, maintaining control of its 100% operated working interest.