Magnum Successfully Drills 1st Well at Provost Viking Oil Proj.

Magnum Energy announced that the first well at the Provost Viking Oil Project has been successfully drilled and completed with a horizontal leg of 1200 meters. The well was fracture stimulated in 13 stages.

Upon completion of stimulation, the well was equipped with pumping equipment for production testing purposes. Peak rate during this testing was 156 BOEPD (119 bbls/day oil, and 220 mcf/d gas). The well was production tested for a total of 278 hours over 16 days. Total production over this period was 363.5 BBLs of oil and 248 BOE of gas. On Oct 3, 2011, a decision was made to commence construction of a gas pipeline to facilitate production.

Currently, Magnum and its joint venture partner are applying for necessary approvals to complete this pipeline. In addition, Magnum's technical team is reviewing optimization programs to increase production levels from the first horizontal well prior to completion of the gas pipeline.

Magnum entered into a joint venture agreement in February, 2011 to acquire and develop certain Viking oil assets. This agreement calls for its joint venture partner to drill, complete and tie-in two horizontal wells to earn a 50% interest in 3.25 sections of land described within the joint venture agreement. Subsequent to this agreement, additional lands were secured for potential Viking oil exploration and development.