Arsenal Energy Inc.
TSX VENTURE : AEI

Arsenal Energy Inc.
Quadra Resources Corp.
CNQ : QDRA.U
FRANKFURT : QR1

Quadra Resources Corp.

July 04, 2005 01:20 ET

Arsenal And Quadra Obtain Fairness Opinions; 43% Of Quadra Shareholders Enter Into Lock Up Agreements

CALGARY, ALBERTA--(CCNMatthews - July 4, 2005) - Arsenal Energy Inc. ("Arsenal") (TSX VENTURE:AEI) and Quadra Resources Corp. ("Quadra") (CNQ:QDRA.U)(FRANKFURT:QR1) are pleased to announce that they have obtained fairness opinions from their respective financial advisors relating to the proposed transaction (the "Transaction") previously announced June 20, 2005.

Bolder Investment Partners Ltd. ("Bolder") was retained by Quadra as financial advisor to the Quadra board with respect to the fairness, from a financial point of view, of the Transaction to Quadra shareholders. On June 30, 2005, Bolder advised the board of Quadra that the Transaction is fair to Quadra shareholders from a financial point of view.

Wellington West Capital Inc. ("Wellington West") was retained by Arsenal as financial advisor to the Arsenal board with respect to the fairness, from a financial point of view, of the Transaction to Arsenal shareholders. On June 30, 2005 Wellington West advised the board of Arsenal that the Transaction is fair to Arsenal shareholders, from a financial point of view.

On June 20, 2005 Quadra management, directors and shareholders holding 17% of the shares of Quadra agreed to enter into lockup agreements in which they will agree to irrevocably vote in favor of the Transaction. Quadra is pleased to announce that shareholders holding an additional 26% of the shares of Quadra have also entered into lockup agreements in which they will agree to irrevocably vote in favor of the Transaction, totaling 43% of the outstanding securities of Quadra.

The Transaction will require the approval of 66 2/3% of the votes cast by Quadra shareholders, warrantholders, and broker warrantholders voting at a meeting of Quadra security holders to be called to consider the Transaction. The proposed Transaction will as also require Court of Queen's Bench of Alberta and regulatory approvals.

The TSX Venture Exchange, CNQ and the Frankfurt Exchange have not accepted responsibility for the adequacy or accuracy of this release.

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