May 26, 2006 14:18 ET

Arapahoe Energy Corporation Closes Joint Venture with Leroy Ventures Inc. at Sarcee

CALGARY, ALBERTA--(CCNMatthews - May 26, 2006) - Arapahoe Energy Corporation ("Arapahoe" or the "Corporation") (TSX VENTURE:AAO) announces that it has closed the previously announced Joint Venture Agreement with Reconnaissance Energy Corporation ("Reconnaissance") (news release dated March 3, 2006) whereby Arapahoe and Reconnaissance will explore, develop and exploit oil and natural gas potential on the Tsuu T'ina First Nation (Sarcee Project") immediately west of the City of Calgary. Leroy Ventures Inc. ("Leroy") ("LRV" TSX Venture Exchange) in a news release dated May 15, 2006 announced that it had acquired all of Reconnaissance's rights and obligations in the Sarcee project Joint Venture agreement with Arapahoe.

The initial exploration and development focus will be on establishing Coal Bed Methane natural gas reserves in the Horseshoe Canyon formation underlying the Sarcee project lands. An 18.5 square mile 3D seismic program has recently been completed on the Sarcee project lands at a cost of approximately $4 million. The data is currently being processed and interpretation will commence upon completion of the processing.

The 3D seismic data when integrated with the geological data will allow for evaluation of oil and gas potential in the Horseshoe Canyon, Belly River, Cardium, Blairmore and deeper Mississippian and Devonian formations. Initial drilling of two (2) Horseshoe Canyon test wells should commence the first week of June 2006. Arapahoe will be the initial operator of the Arapahoe, Leroy joint venture.

Arapahoe is a junior oil and gas exploration company engaged in the exploration, development and production of oil and natural gas in Western Canada. Arapahoe's primary areas of exploration focus are the Alberta Foothills, specifically on the Tsuu T'ina First Nation (Sarcee Area) immediately west of the City of Calgary and in western Saskatchewan on Poundmaker Cree Nation lands.

The TSX Venture Exchange does not accept responsibility for the adequacy or accuracy of this news release.

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