ARAPAHOE ENERGY CORPORATION
TSX VENTURE : AAO

ARAPAHOE ENERGY CORPORATION

October 11, 2005 13:08 ET

Arapahoe Energy Corporation Announces Granting of Stock Options

CALGARY, ALBERTA--(CCNMatthews - Oct. 11, 2005) - Arapahoe Energy Corporation (TSX VENTURE:AAO) (the "Corporation"- "Arapahoe") announces that it has granted stock options to purchase 300,000 common shares to consultants employed to evaluate and assist in the development of the Corporations Horseshoe Canyon formation Coal Bed Methane ("CBM") project on the Tsuu T'ina First Nation (Sarcee Indian Reserve) immediately west of the City of Calgary.

The consultants are: (1) Dr. Marc Bustin, P.H.D., a professor of petroleum and coal geology in the Department of Earth and Ocean Sciences at the University of British Columbia and President of RMB Earth Sciences Consultants Ltd. Dr. Bustin is a founding shareholder and President of CBM Solutions Ltd., a leading Coal Bed Methane consulting firm located in Calgary, Alberta. Dr. Bustin has in excess of 30 years in the petroleum sector and is an internationally recognized expert in the CBM field. Dr. Bustin is a registered petroleum geologist. (2) Mr. Ron Brezovski, P.Geol., is a founding shareholder of CBM Solutions Ltd. Mr. Brezovski has in excess of 19 years of petroleum industry experience, specializing in CBM project evaluation and production. (3) Brent Nassichuk, P.Geol. (4) Todd Werner, P.Geol.

The stock options were granted with an exercise price of $0.65 per share and shall vest one-half immediately and one-half on the first anniversary from the date of grant. All options will expire on October 7, 2010. The stock option grant is subject to regulatory approval. The Corporation has determined that exemptions from the various requirements of the TSX Venture Exchange Policy 5.9 are available for the grant of options.

The Corporation has varying working interests ranging from 19.25% to 100% in 42.5 sections (27,200 gross acres) (17,533 net acres). Based on preliminary analysis it is the Corporations opinion that a considerable portion of the lands / leases are geologically prospective for potential Horseshoe Canyon Coal Bed Methane production.

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. Arapahoe's primary area of exploration focus is the Alberta Foothills specifically on the Tsuu T'ina First Nation (Sarcee Area) immediately west of the City of Calgary and Central Alberta.

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

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