MGM Energy Corp. Announces Completion of Partner Search Process, Potential Proposal to Acquire its Shares and Updated Assessment

MGM Energy Corp. Announces Completion of Partner Search Process, Potential 
Proposal to Acquire its Shares and Updated Assessment of
Canol Shale Oil Play 
CALGARY, ALBERTA -- (Marketwired) -- 02/27/14 -- MGM Energy Corp.
(TSX:MGX) ("MGM Energy" or the "Company") announces that it has
completed its formal search for a partner for its Canol shale oil
lands. To date, the Company has not been successful in obtaining a
partner to assist in the funding of further assessment of the Canol
shale oil play and, as a result, the Company will not be drilling any
additional wells in the Canol shale oil play in the upcoming winter
of 2014/15.   
As a result of the Company's inability to obtain a partner to assist
it in funding its Canol shale play, the Company has had high level
discussions with management of Paramount Resources Ltd.
("Paramount"), which owns 13.9% of MGM Energy's shares, regarding
Paramount acquiring the MGM Energy shares not owned by it. Through
such discussions, Paramount has indicated to MGM Energy that it is
investigating potentially making a proposal to acquire all of the
issued and outstanding shares of MGM Energy. However, there are no
assurances that any such proposal will be made by Paramount and, if
made, Paramount has indicated to MGM that such a proposal is
currently expected to be at or below the current trading price of MGM
Energy's shares. In addition, Paramount has indicated to the Company
that it is supportive of MGM Energy searching for other strategic
alternatives and if Paramount were to make a proposal, such proposal
would also allow MGM Energy to search for strategic alternatives for
a period of time after any definitive agreement was entered into
regarding Paramount's acquisition of the Company's shares not owned
by it.  
The Company continues to have sufficient cash to fund its expected
expenditures through to at least mid 2015.   
MGM Energy also announces an update of its assessment of the shale
oil initially-in-place ("OIIP") within the Canol and Bluefish
formations on the Company's land holdings in the Central Mackenzie
Valley, Northwest Territories.   
The assessment is updated from the estimate provided in the 2012
Annual Information Form dated March 25, 2013 and is based on analysis
completed by the Company from (i) the drilling, co
ring, logging,
fracture stimulation and testing of the East MacKay I-78 well drilled
in 2013, (ii) additional well data available to the Company, and
(iii) further geological and geophysical work completed on the Canol
shale oil play. The updated assessment was completed internally by
Qualified Reserves Evaluators, and is as of December 31, 2013. The
table below summarizes the estimated OIIP on a 100% gross and
Company-interest basis. The estimates presented are in accordance
with the definitions and guidelines in the COGE Handbook and NI
51-101. 


 
                               Discovered Shale Oil Initially-In-Place -    
                                              MMbbl(1)(3)                   
                          --------------------------------------------------
                                                                            
                                                        Company Gross(5)    
                              100% Gross(1)(4)         Mean Estimate(6)     
Exploration Licence            Mean Estimate(6)       As at Dec. 31, 2013   
----------------------------------------------------------------------------
EL466                               1,000                     625           
                          --------------------------------------------------
  Total Discovered OIIP             1,000                     625           
                              Undiscovered Shale Oil Initially-In-Place -   
                                              MMbbl(2)(3)                   
                          --------------------------------------------------
                                                                            
                                                        Company Gross(5)    
                               100% Gross(2)(4)        Mean Estimate(6)     
Exploration Licence            Mean Estimate(6)       As at Dec. 31, 2013   
----------------------------------------------------------------------------
EL474                               3,100                    1,550          
EL475                               5,000                    2,500          
EL487                               3,000                     750           
                          --------------------------------------------------
  Total Undiscovered OIIP           11,100                   4,800          
                                                                            
Notes:                                                                      
(1) There is no certainty that it will be commercially viable to produce any
    portion of the resources.                                               
(2) There is no certainty that any portion of the resources will be         
    discovered. If discovered, there is no certainty that it will be        
    commercially viable to produce any portion of the resources.            
(3) "MMbbl" is millions of barrels at standard conditions.                  
(4) 100% Gross means OIIP without any adjustments for working interest,     
    royalties or other encumbrances.                                        
(5) Company Gross means OIIP with adjustments for working interest, but not 
    for royalties or other encumbrances.                                    
(6) The mean estimate is the mean volume of OIIP from the probabilistic     
    assessment of oil that is in place.                                     

 
Discovered shale oil initially in place (equivalent to discovered
resources) are those quantities of petroleum estimated on a given
date to be remaining in known accumulations. Undiscovered shale oil
initially in place (equivalent to undiscovered resources) is that
quantity of petroleum that is estimated, on a given date, to be
contained in accumulations yet to be discovered. It is not possible
at this time to determine an estimate of what portion of the OIIP is
recoverable and what portion is unrecoverable as additional drilling,
seismic and development engineering is required to determine an
anticipated recovery factor. A portion of the OIIP may become
recoverable in the future as commercial circumstances change or
technological developments occur; the remaining portion may never be
recovered due to the physical/chemical constraints represented by
subsurface interaction of fluids and reservoir rocks. Additional
information regarding the risks associated with the Canol shale oil
play and the estimate of OIIP can be found in the Company's 2012
Annual Information Form dated March 23, 2013.   
MGM Energy is a Canadian oil and natural gas exploration and
development company active in Northern Canada. MGM Energy's common
shares are listed on the Toronto Stock Exchange under the symbol
"MGX".  
Certain statements or information included in this press release
constitute forward-looking statements under applicable securities
legislation, including statements and information about a potential
proposal from Paramount. Such forward-looking statements or
information are based on information known to date and a number of
assumptions which may prove to be incorrect. Although MGM Energy
believes that the expectations reflected in such forward-looking
statements or information ar
e reasonable, undue reliance should not
be placed on forward-looking statements because MGM Energy can give
no assurance that such expectations will prove to be correct.
Forward-looking statements or information are based on current
expectations, estimates and projections that involve a number of
risks and uncertainties which could cause actual results to differ
materially from those anticipated by MGM Energy and described in the
forward-looking statements or information. The forward-looking
statements or information contained in this document are made as of
the date hereof and MGM Energy undertakes no obligation to update
publicly or revise any forward-looking statements or information,
whether as a result of new information, future events or otherwise,
unless so required by applicable securities laws.
Contacts:
MGM Energy Corp.
Henry Sykes
President
(403) 781-7800
(403) 781-7801 (FAX) 
MGM Energy Corp.
Rick Miller
Chief Financial Officer
(403) 781-7800
(403) 781-7801 (FAX)
 
 
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