March 31, 2006 11:10 ET

Arapahoe Energy Enters into Letter of Intent with SNRG Corporation to Develop S.W. Saskatchewan Lands

CALGARY, ALBERTA--(CCNMatthews - March 31, 2006) - Arapahoe Energy Corporation (TSX VENTURE:AAO) - Mr. Jeffrey L. Standen, President and C.E.O. reports:

Arapahoe Energy Corporation ("Arapahoe" or the "Corporation") announces that the Corporation has entered into a Letter of Intent dated March 30, 2006 with SNRG Participating Income Fund 1, LLC. ("SNRG") pursuant to which Arapahoe and SNRG may explore, develop and exploit Arapahoe's oil and gas properties in the Freemont and Poundmaker areas of S. W. Saskatchewan comprising approximately 30,000 undeveloped acres.

SNRG is a special purpose oil and gas asset development fund under the management and participatory ownership of SNRG Corporation (OTC BB: SNRG.OB).

Under the terms of the Letter of Intent, SNRG will pay Arapahoe $3,750,000; $500,000 of which is payable on or before April 14, 2006 with the balance being payable on or before May 15, 2006. SNRG has further agreed to pay to Arapahoe an additional $2,100,000 for a portion of the costs of a planned 60 square mile 3D seismic program to be conducted on the Freemeont and Poundmaker Prospect Lands. SNRG will then expend $3,000,000 on drilling wells on the Freemont and Poundmaker undeveloped Prospect Lands to conclude its earning obligations. Seismic and drilling is expected to commence in June 2006. Upon SNRG fulfilling the foregoing earning requirements Arapahoe and SNRG will be 50% - 50% partners in the previously undeveloped Freemont and Poundmaker Prospect Lands and 50% - 50% partners in an anticipated ongoing two (2) year exploration, development and exploitation program on the Freemont and Poundmaker Prospect Lands.

Arapahoe is a publicly traded junior oil and gas exploration, development and production company with shares listed on the TSX-Venture Exchange under the trading symbols "AAO". Arapahoe's primary focus is on exploring and developing First Nation lands in western Canada. Arapahoe has exploration and development agreements in place with the Tsuu T'ina First Nation in the Alberta foothills immediately west of the City of Calgary, Alberta and with the Poundmaker First Nation in S.W. Saskatchewan.

The TSX Venture Exchange has neither approved nor disapproved of the contents contained in this News Release.

Contact Information

  • Arapahoe Energy Corporation
    Brett Standen
    Corporate Communications
    (403) 538-8443
    Arapahoe Energy Corporation
    Graeme Dick
    Investor Relations
    (403) 668-9539