ARAPAHOE ENERGY CORPORATION
TSX VENTURE : AAO

ARAPAHOE ENERGY CORPORATION

May 30, 2006 17:29 ET

Arapahoe Energy Corporation Announces Closing of $3,650,010 Private Placement

CALGARY, ALBERTA--(CCNMatthews - May 30, 2006) - Arapahoe Energy Corporation (TSX VENTURE:AAO) (the "Corporation") is pleased to announce it has completed a brokered private placement subject to TSX Venture Exchange Inc. final approval. The Corporation issued 5,615,400 common shares issued as "flow-through shares" within the meaning of the Income Tax Act (Canada), at a price of $0.65 per flow-through share for total gross proceeds of $3,650,010.

Dominick & Dominick Securities Inc. ("Dominick") acted as the Corporation's agent in connection with the private placement. Dominick was paid aggregate fees of $255,500.70 cash and issued an aggregate of 561,540 broker warrants. The warrants issued to Dominick are exercisable for a period of 12 months at an exercise price of $0.65 per share.

The net proceeds of the private placement will be used to fund exploration on the Freemont, Senlac and Poundmaker properties in Saskatchewan and to further fund drilling of the CBM projects on the Sarcee properties.

The Corporation is a publicly traded junior oil and natural gas exploration company with its shares listed on the TSX Venture Exchange under the trading symbol "AAO". The Corporation is engaged in the exploration, development and production of oil and natural gas in Western Canada.

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

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