Arsenal Energy Inc. Announces Normal Course Issuer Bid

Marketwired

CALGARY, ALBERTA--(Marketwire -07/05/12)- Arsenal Energy Inc. ("Arsenal" or the "Corporation") (AEI.TO) (AEYIF.PK) announces that it has made the necessary filings, and received the necessary approvals, to make a normal course issuer bid through the facilities of the Toronto Stock Exchange and the Alpha Alternative Trading System commencing July 9, 2012 and ending July 8, 2013, or on such earlier date as Arsenal may complete its purchases under the bid.

A total of 7,809,705 common shares may be acquired under the bid, representing approximately 5 percent of the 156,194,094 common shares outstanding as of July 4, 2012. Pursuant to section 628 of the TSX Company Manual, under the bid Arsenal is permitted to acquire up to 25 percent of the average daily trading volume or 60,499 common shares per day. Arsenal will acquire its common shares at the market price at the time of purchase, with acquired shares being cancelled.

Under its previous normal course issuer bid from June 20, 2011 to June 19, 2012, the Corporation purchased 6,600,044 of its common shares representing approximately 4.2% of the Corporation's outstanding common shares as at July 4, 2012, for an average price of $0.65 per common share. In the opinion of Arsenal's Board of Directors, Arsenal common shares are, from time to time, undervalued by the market, and the cost of acquiring the shares is an expense prudently incurred by Arsenal to increase shareholder value.

Forward-Looking Information

This press release contains "forward looking information" within the meaning of applicable securities legislation that is based on expectations, estimates and projections as of the date of this press release.

Examples of such forward looking information in this press release include, but are not limited to Arsenal's views regarding the market price of its common shares, its plans to undertake a normal course issuer bid and the objectives of the normal course issuer bid. These statements are subject to certain assumptions, risks and uncertainties including factors relating to the business, financial position, operations and prospects of Arsenal. Forward looking information involves known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of Arsenal to be materially different from any future results, performance or achievements expressed or implied by the forward looking information in this press release. We have no intention to update this forward looking information, except as required by applicable securities law. This forward looking information should not be relied upon as representing our views as of any date subsequent to the date of this press release.

To receive company news releases via e-mail, please advise info@arsenalenergy.com and specify "Arsenal Press Releases" in the subject line.

Advisory

All barrels of oil equivalent (boe) conversions in this report are deprived by converting natural gas to oil at the ratio of six thousand cubic feet (Mcf) of natural gas to one barrel (bbl) of oil. Certain financial values are presented on a boe basis and such measurements may not be consistent with those used by other companies. Boe amounts may be misleading, particularly if used in isolation. A boe conversion ratio has been calculated using a conversion rate of six thousand cubic feet of natural gas to one barrel of oil (6 Mcf: 1 bbl) and is based on an energy equivalency conversion method applicable at the burner tip and does not represent a value equivalency at the wellhead.

Certain financial measures referred to in this release, such as funds from operations and funds from operations per share, are not prescribed by generally accepted accounting principles (GAAP). Funds from operations is a key measure that demonstrates the ability to generate cash to fund expenditures. Funds from operations is calculated by taking the cash provided by operations from the consolidated statement of cash flows and adding back changes in non-cash working capital. Funds from operations per share is calculated using the same methodology for determining net income per share. These non-GAAP financial measures may not be comparable to similar measures presented by other companies. These financial measures are not intended to represent operating profits for the period nor should they be viewed as an alternative to cash provided by operating activities, net income or other measures of financial performance calculated in accordance with GAAP.

Management uses certain industry benchmarks such as field netback to analyze financial and operating performance. Field netback has been calculated by taking oil and gas revenue less royalties, operating costs and transportation costs. This benchmark does not have a standardized meaning prescribed by GAAP and may not be comparable to similar measures presented by other companies. Management considers field netback as an important measure to demonstrate profitability relative to commodity prices.

Certain statements and information contained in this press release, including but not limited to management's assessment of Arsenal's future plans and operations, production, reserves, revenue, commodity prices, operating and administrative expenditures, funds from operations, capital expenditure programs and debt levels contain forward-looking statements. All statements other than statements of historical fact may be forward looking statements. These statements, by their nature, are subject to numerous risks and uncertainties, some of which are beyond Arsenal's control including the effect of general economic conditions, industry conditions, changes in regulatory and taxation regimes, volatility of commodity prices, escalation of operating and capital costs, currency fluctuations, the availability of services, imprecision of reserve estimates, geological, technical, drilling an processing problems, environmental risks, weather, the lack of availability of qualified personnel or management, stock market volatility, the ability to access sufficient capital from internal and external sources and competition from other industry participants for, among other things, capital, services, acquisitions of reserves, undeveloped lands and skilled personnel that may cause actual results or events to differ materially from those anticipated in the forward looking statements. Such forward-looking statements although considered reasonable by management at the time of preparation, may prove to be incorrect and actual results may differ materially from those anticipated in the statements made and should not unduly be relied on. These statements speak only as of the date of this press release. Arsenal does not intend and does not assume any obligation to update these forward-looking statements, whether as a result of new information, future events or otherwise, except as required by applicable law. Arsenal's business is subject to various risks that are discussed in its filings on the System for Electronic Document Analysis and Retrieval (SEDAR).

Contact:

Arsenal Energy Inc.
Tony van Winkoop
President and Chief Executive Officer
(403) 262-4854
(403)-265-6877 (FAX)
Arsenal Energy Inc.
J. Paul Lawrence
Vice President, Finance and CFO
(403) 262-4854
(403)-265-6877 (FAX)
Arsenal Energy Inc.
1900, 639 - 5th Avenue S.W.
Calgary, Alberta, T2P 0M9
info@arsenalenergy.com
www.arsenalenergy.com

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