Arrow Energy Ltd.
TSX VENTURE : AOF

Arrow Energy Ltd.

October 12, 2007 12:57 ET

Completion of Plan of Arrangement Between Arrow Energy Ltd. and Castle Rock Petroleum Ltd.

EDMONTON, ALBERTA--(Marketwire - Oct. 12, 2007) -

THIS NEWS RELEASE IS NOT FOR DISSEMINATION IN THE UNITED STATES OR TO ANY UNITED STATES NEWS SERVICES.

Arrow Energy Ltd. (TSX VENTURE:AOF) ("Arrow") and Castle Rock Petroleum Ltd. (formerly RCK.A and RCK.B - TSX Venture Exchange) ("Castle Rock"), jointly announce that the Plan of Arrangement (the "Arrangement") involving Arrow and Castle Rock has been successfully completed.

The transaction, which was originally announced on July 19, 2007, was approved by the securityholders of Castle Rock at a special meeting held on September 13, 2007. The final order of the Court of Queen's Bench of Alberta was granted on September 28, 2007 and subsequently the Articles of Arrangement were filed with the Registrar of Corporations for the Province of Alberta.

Pursuant to the Arrangement, Arrow will continue participation in the upside of Castle Rock's remaining asset base. In addition, the Arrangement has, among other things, provided key financial and operational benefits, including:

- The acquisition is accretive to Arrow's net asset value per share, production per share and cash flow per share;

- The acquisition gives Arrow access to tremendous opportunities which extend its activities in the Peace River Arch area of Alberta to a large land area at Hotchkiss;

- The acquisition targets familiar production formations in Hotchkiss which are part of an ongoing expansion and enhancement of its operations: Bluesky gas and Slave Point/Granite Wash oil plays

- The acquisition brings an exciting oil development project at Pearce into Arrow's mix of assets;

- The acquisition also brings several exploration opportunities to Arrow which could add significant future upside to the company's production and reserves;

Pursuant to the Arrangement, effective as at the close of business on October 3, 2007 each five (5) Class A Shares of Castle Rock outstanding will be deemed to be exchanged for one (1) "new" voting common share of Arrow and each one-half (1/2) Class B Share of Castle Rock outstanding will be deemed to be exchanged for one (1) "new" voting common share of Arrow.

The outstanding stock options to purchase shares of Castle Rock have been cancelled and as such cease to represent any right or claim whatsoever.

All of the directors and officers and certain significant shareholders of Castle Rock have entered into voluntary "hold" agreements with Arrow whereby such persons have agreed not to trade their common shares of Arrow for at least 180 days after the Arrangement is finalized.

Arrow is a Calgary-based junior resource company engaged in the exploration, development and production of natural gas and oil primarily in the Peavine/Dawson, Westlock, and Redwater/Jeffrey areas of Alberta.

Forward-Looking Statements

This press release may include forward-looking statements including opinions, assumptions, estimates and expectations of future production, cash flow and earnings. When used in this document, the words "anticipate," "believe," "estimate," "expect," "intend," "may," "project," "plan", "will", "should" and similar expressions are intended to be among the statements that identify forward-looking statements. Forward-looking statements are subject to a wide range of risks and uncertainties, and although the Castle Rock and Arrow believe that the expectations represented by such forward-looking statements are reasonable, there can be no assurance that such expectations will be realized. Any number of important factors could cause actual results to differ materially from those in the forward-looking statements including, but not limited to, the volatility of oil and gas prices, the ability to implement corporate strategies, the state of domestic capital markets, the ability to obtain financing, changes in oil and gas acquisition and drilling programs, operating risks, production rates, reserve estimates, changes in general economic conditions and other factors more fully described from time to time in the reports and filings made by each of Arrow and Castle Rock with securities regulatory authorities.

None of the Arrow Common Shares, the Castle Rock A Shares or the Castle Rock B Shares have not and will not be registered under the United States Securities Act of 1933, as amended (the "U.S. Securities Act") or any state securities laws and may not be offered or sold in the United States or to any U.S. person except in certain transactions exempt from the registration requirements of the U.S. Securities Act and applicable state securities laws.

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.
    Chris Tesarski
    President & CEO
    (403) 237-9996
    (403) 264-0416 (FAX)