May 31, 2005 17:09 ET

Arapahoe Energy Corporation Announces Closing of Private Placement

CALGARY, ALBERTA--(CCNMatthews - May 31, 2005) - Arapahoe Energy Corporation (TSX VENTURE:AAO) (the "Corporation") is pleased to announce that further to a news release dated May 5, 2005, the brokered private placement has closed subject to TSX Venture Exchange Inc. final approval, for total gross proceeds of $4,970,451.25. The Corporation issued 8,823,225 Flow-Through Common Shares at a price of $0.45 per Flow-Through Common Share and 2,500,000 Common Shares at a price of $0.40 per Common Share. All of the securities issued in connection with this private placement are subject to a four-month hold period. Proceeds of the private placement will be used to fund the Corporation's 2005 exploration drilling project and will be used for general working capital purposes.

Dominick & Dominick Securities Inc. received a total fee equal to 7% of gross proceeds and broker warrants equal to 10% of the total number of Common Shares and Flow-Through Shares sold. The broker warrants are exercisable for a period of 12 months at an exercise price of $0.40 per share.

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 the Western Canadian Foothills, primarily on the Tsuu T'ina First Nation immediately west of the City of Calgary.

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

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