ARAPAHOE ENERGY CORPORATION
TSX VENTURE : AAO

ARAPAHOE ENERGY CORPORATION

June 01, 2005 18:15 ET

Arapahoe Energy Corporation Announces Shares for Debt Settlement

CALGARY, ALBERTA--(CCNMatthews - June 1, 2005) - Arapahoe Energy Corporation (TSX VENTURE:AAO) (the "Corporation") announces that on May 28, 2005, the Corporation reached agreements for the full satisfaction of outstanding indebtedness owed to directors in the amount of $86,973 and on June 1, 2005 reached agreement for the full satisfaction of outstanding indebtedness owed to an outside creditor in the amount of $40,000 through the issuance of securities of the Corporation (the "Debt Settlement").

The Corporation announces the Debt Settlement available up to and including a total of 289,910 common shares at a price of $0.30 per common share in satisfaction of $86,973 owing to directors and a total of 100,000 common shares at a price of $0.40 per common share in satisfaction of $40,000 owing to an outside creditor of the Corporation who wishes to convert outstanding debt into shares.

It is anticipated that the closing of the Debt Settlement will occur prior to June 15, 2005.

The issuance of the Debt Settlement is subject to the approval of the TSX Venture Exchange.

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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