Arrow Energy Ltd.
TSX VENTURE : AOF

Arrow Energy Ltd.

May 30, 2006 19:27 ET

Arrow Energy Ltd. Announces 2006 First Quarter Results and Provides Operational Update

CALGARY, ALBERTA--(CCNMatthews - May 30, 2006) -

(Not for dissemination in the United States of America)

Arrow Energy Ltd. (TSX VENTURE:AOF) ("Arrow" or the "Company") announces its financial results for the quarter ended March 31, 2006 and provides an operational update.

Summary of Financial Results

Production revenue for the first quarter was $762,168 as compared to $954,855 for the first quarter of 2005. Cash flow from operations was $150,109 for the first quarter of 2006, as compared to $333,319 for the first quarter of 2005. Net loss was $135,033 for the first quarter of 2006, as compared to $70,312 for the first quarter of 2005.

Certain selected financial information concerning Arrow is provided below. Arrow's interim financial statements and management's discussion & analysis for the quarter ended March 31, 2006 is available at www.sedar.com.



Three months ended
March 31
2006 2005
$ $
------------------------------------------------------------------------
Production Revenue 762,168 954,855
Working (Deficit) Capital (868,858) 67,420
Shareholders' Equity 7,946,062 8,258,817
Cash flow from operations (1) 150,109 333,319
Per share basic 0.01 0.02
Per share diluted 0.01 0.02
Net Loss (135,033) (70,312)
Per share basic (0.01) (0.01)
Per share diluted (2) N/A N/A
Capital Assets 11,008,670 10,113,750
Long-term liabilities 2,193,750 1,922,353

(1) Cash flow from operations and cash flow per share are non-GAAP terms
that represent cash generated from operating activities before
changes in non-cash working capital and other operating items.
Arrow's cash flow from operations may not be comparable to other
companies. Arrow considers cash flow a key measure of performance
as it demonstrates Arrow's ability to generate the cash flow
necessary to fund future capital investments.

(2) With negative cash flow or a net loss, a diluted per share
calculation would be anti-dilutive and is therefore not applicable


Operational Update

During the first quarter 2006, Arrow produced an average of 182 BOE/d, in contrast to recent net production rates in excess of 200 BOE/d on May 15, 2006. The Company received an average gas price of $7.71/Mcf for the quarter.

Tie-in activities were completed at both Westlock (40% W.I.) and Doris (25% W.I.) to bring our new discovery wells online. The Westlock well was brought on-stream at a reduced rate of 170 Mcf/d (gross), as opposed to an expected rate of 1000 Mcf/d (gross), due to gathering system pressure and capacity issues, which are expected to be remedied after break-up by adding compression. The Doris well was brought on-stream at an initial gross rate of 490 Mcf/d and has subsequently been increased to a gross rate of 560 Mcf/d.

At Buck Lake Arrow re-entered the 15-27 well and established gas flow from the Mannville Group. The Company will stimulate production after break-up and expects to achieve commercial rates of production

At Westlock, the Company's 1-3 Leduc exploratory test will be completed in both the Leduc and Viking zones after break-up.

Canaccord Enermarket Solutions Ltd. is currently engaged in actively marketing the Company to affect a sale or merger. The sale process has taken longer than initially expected to facilitate marketing the Company to an expanded number of potential acquirers to maximize shareholder value. As a result, Arrow's data room has remained open and additional potential acquirers have been invited to review the company's assets. It is the Board and management's intention to bring the sale process to a conclusion in the near future.

About Arrow

Arrow, a Calgary based company, engages in the exploration, development, acquisition and production of natural gas and light gravity crude oil reserves in Western Canada. With a focus on natural gas, Arrow's primary area of exploration is in central Alberta.

Note on Abbreviations

"BOE" means a barrel of oil equivalent on the basis of 1 BOE to 6 Mcf of natural gas. BOEs may be misleading, particularly if used in isolation. A BOE conversion ratio of 1 BOE for 6 Mcf is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead.



"BOE/d" means a barrel of oil equivalent per day.

Mcf means a thousand cubic feet of natural gas.

Mcf/d means Mcf per day.

W.I. means working interest


Forward Looking Statements

This press release includes certain forward-looking statements. In particular, it includes forward-looking statements concerning the Company's proposed exploration and development activities and the proposed timing of the conclusion of the sale process involving Canaccord Enermarket Solutions Ltd.

The forward-looking statements are based on certain key expectations and assumptions made by the Company, including expectations and assumptions concerning prevailing commodity prices and exchange rates, availability and cost of labour and services, the timing of receipt of regulatory approvals, the sufficiency of budgeted capital expenditures in carrying out the Company's planned activities and the pace at which key steps of the sale involving Canaccord Enermarket Solutions Ltd. will be completed.

Although the Company believes that the expectations and assumptions on which the forward-looking statements are based are reasonable, undue reliance should not be placed on the forward-looking statements because the Company can give no assurance that they will prove to be correct. Since forward-looking statements address future events and conditions, by their very nature they involve inherent risks and uncertainties. Actual results could differ materially from those currently anticipated due to a number of factors and risks. These include, but are not limited to, the risks associated with the oil and gas industry in general (e.g., operational risks in development, exploration and production; delays or changes in plans with respect to exploration or development projects or capital expenditures; the uncertainty of reserve estimates; the uncertainty of estimates and projections relating to production, costs and expenses, and health, safety and environmental risks), commodity price and exchange rate fluctuations and uncertainties resulting from potential delays or changes in plans with respect to exploration or development projects or capital expenditures. These risks are set out in more detail in the Company's annual information form for the year ended December 31, 2005, which can be accessed at www.sedar.com.

The forward-looking statements contained in this press release are made as of the date hereof and the Company 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.

Shares outstanding - Basic 14,138,914


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

Contact Information

  • Arrow Energy Ltd.
    Eric G. Gosselin
    President & CEO
    (403) 850-7333
    Email: gosseline@arrow-energy.com
    or
    Arrow Energy Ltd.
    Jeff Thomson
    VP Finance & CFO
    (403) 540-7042
    Email: thomsonj@arrow-energy.com
    or
    Arrow Energy Ltd.
    Suite 300, 407 - 2nd Street S.W.
    Calgary, Alberta T2P 2Y3
    (403) 264-0415
    (403) 264-0416 (FAX)