When two bar magnets with their north poles facing each other are released, they will repel each other due to the magnetic force. As they move away from each other, the potential energy associated with their magnetic fields decreases because the magnets are moving apart against the repulsive force. As they gain speed while moving away from each other, their kinetic energy increases.
As a result, the correct statement is:
Potential energy decreases, and kinetic and thermal energy increase.
This means the potential energy of the system decreases as the magnets move apart, while the kinetic energy increases as they accelerate away from each other. Thermal energy may also increase due to any internal friction or vibrations from the release.