Arsenal Energy Inc.

Arsenal Energy Inc.

January 05, 2005 17:43 ET

Arsenal Drilling Program Update; Increases Production to 912 BOE/D


NEWS RELEASE TRANSMITTED BY CCNMatthews

FOR: ARSENAL ENERGY INC.

TSX VENTURE SYMBOL: AEI

JANUARY 5, 2005 - 17:43 ET

Arsenal Drilling Program Update; Increases Production
to 912 BOE/D

CALGARY, ALBERTA--(CCNMatthews - Jan. 5, 2005) - Arsenal Energy Inc.
(TSX VENTURE:AEI) ("Arsenal") is pleased to announce that it has drilled
six (6) wells (4.75 net) during the fourth quarter 2004 resulting in two
100% working interest producing oil wells, two 100% working interest
cased potential oil wells awaiting completions, one cased 20% working
interest potential gas exploration well, and one dry 50% working
interest exploration well.

The two producing oil wells and one reactivated well have increased
Arsenal's current production by 262 BOE/D to 912 BOE/D. Arsenal intends
to complete and equip the two potential cased oil wells with any
associated production to commence in January, 2005. The said wells were
drilled in the Tangleflags/Lashburn areas of western Saskatchewan.

The 20% cased potential gas well is located near Edson in western
Alberta and is expected to be completed and tested this month. As the
result of Arsenal's participation in the well, Arsenal has earned a 20%
interest in five (5) additional sections in this potential gas play.
Upon successful testing, this development well will be placed on
production during the first quarter of 2005.

Arsenal intends to drill a further three (3) 100% working interest wells
at the Tangleflags/Lashburn area during the month of January. Upon
successful results, these development wells could be placed on
production as early as the end of January 2005.

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Contact Information

  • FOR FURTHER INFORMATION PLEASE CONTACT:
    Arsenal Energy Inc.
    Michael S. Vandale
    President
    (403) 262-4854
    (403) 265-6877 (FAX)
    or
    Arsenal Energy Inc.
    Trevor Mitzel
    Chief Financial Officer
    (403) 262-4854
    (403) 265-6877 (FAX)
    Email: info@aren.ca
    Website: www.aren.ca
    or
    Arsenal Energy Inc.
    1110 - 521 - 3rd Avenue S.W.
    Calgary, Alberta
    T2P 3T3
    The TSX Venture Exchange does not accept responsibility for the adequacy
    or accuracy of this release.