Arrow Energy Ltd.
TSX VENTURE : AOF

Arrow Energy Ltd.

November 29, 2006 17:30 ET

Arrow Energy Ltd. Announces 2006 Third Quarter Results

CALGARY, ALBERTA--(CCNMatthews - Nov. 29, 2006) -

(Not for dissemination in the United States of America)

Arrow Energy Ltd. (TSX VENTURE:AOF) announces its financial results for the quarter ended September 30, 2006.

Quarter Review

On September 7, 2006 the Company closed the transaction between Tirmoil Energy Ltd. ("Tirmoil") and Arrow Energy Ltd. Tirmoil Energy Ltd. acquired 87.45% of the shares of Arrow Energy Ltd. for $0.55 in cash per share. Subsequent to the transaction, Tirmoil transferred 3,173,729 of the Arrow common shares acquired to the individual beneficial owners of the shares for whom they were being held in trust for no further consideration. This ensured that Arrow maintained its listing on the TSX-V.

The third quarter of 2006 has been a challenge for the Company. During the third quarter the Company experienced decreased revenue and cash flow as a result of decreased production volumes, lower commodity prices and large G&A fees associated with the takeover transaction by Tirmoil of Arrow. In addition, no new projects were undertaken during Q3 to optimize the Company's production base. Further, Arrow's major partner, which operates a significant amount of Arrow's production, was acquired. During the transition of these two transactions, communication and operations were curtailed.

Despite a difficult third quarter 2006, The Company's future outlook is bright. Currently, the Company is poised to increase its production base and to take advantage of higher commodity prices. The Company expects to increase its production base by stabilizing and enhancing Arrow's historical producing areas; through the acquisition of Peavine/Springburn production, which has been rolled into Arrow effective November 1(st), 2006; and through an active capital expenditure program. The Company expects to exit Q4 2006 at approximately 350 to 400 BOE/day.

Prior to the acquisition of Arrow by Tirmoil the Company's production base consisted of 100% gas making it vulnerable to market pricing conditions. The new management of Arrow has successfully decreased the Company's vulnerability by acquiring all of Tirmoil's oil and gas assets, which includes approximately 200 BOE/day of light sweet crude oil. To further protect the Company from dramatic fluctuations in market pricing, Arrow has incorporated balance into its upcoming capital expenditure program. With a balanced production base between oil and gas, management believes that Arrow is better positioned to generate the best economic return through periods of product pricing volatility.



Financial Summary
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Three months Nine months Three months Nine months
ended ended ended ended
September 30, 2006 September 30, 2006
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Revenue, net of
royalties 465,293 1,552,096 1,051,076 2,586,325
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G&A 229,899 699,463 309,951 827,357
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Operating expenses 208,585 608,270 303,262 730,830
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Net earnings (loss) (806,002) (1,090,342) 25,532 (212,357)
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per share basic (0.06) (0.08) 0.00 (0.02)
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per share diluted (1) N/A N/A 0.00 N/A
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Cash flow from
operations (2) (778,474) (673,113) 463,788 1,079,865
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per share basic (0.06) (0.05) 0.03 0.08
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per share diluted (1) N/A N/A 0.03 0.07
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Notes:

(1) With negative cash flow or a net loss, a diluted per share calculation
would be anti-dilutive and is therefore not applicable.
(2) Cash flow from operations and cash flow per share are non-GAAP terms
that represent cash generated from operating activities before changes
in non-cash working capital and other operating items. Arrow's cash
flow from operations may not be comparable to other companies. Arrow
considers cash flow a key - measure of performance as it demonstrates
Arrow's ability to generate the cash flow necessary to fund future
capital investments.


For the three-month period ended September 30, 2006, the Company incurred a net loss of $806,002 compared to net earnings of $25,532 in the same period 2005. For the nine-month period ended September 30, 2006, the Company incurred a net loss of $1,090,342 compared to a net loss of $212,357 in the same period 2005. The increase in the Company's net loss position is primarily due to one-time reorganization costs associated with the take over transaction of Arrow Energy Ltd. by Tirmoil Energy Ltd.

Results of Operations

The table below provides a summary of Arrow's natural gas production and prices received for the quarters ended September 30, 2006 and 2005.



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Three months Nine months
September 30 September 30
OPERATIONS 2006 2005 2006 2005
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Reported Production
Natural gas - (Mcf) 97,218 125,627 293,751 388,106
Natural gas (Mcf/d) 1,057 1,366 1,076 1,422
Oil equivalent
(BOE/d) (6:1) 176 228 179 237
16,203 20,938 48,959 64,684
Prices
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Gas ($/Mcf) $ 5.84 $ 9.46 $ 6.55 $ 8.01
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Additional Information

Additional information relating to Arrow, including an Annual Information Form, can also be found on SEDAR at www.sedar.com.

Certain information contained in this document includes forward-looking statements. Such forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from actual or implied.

Shares outstanding - Basic 14,138,914

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

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