Arsenal Energy Inc.

Arsenal Energy Inc.

November 30, 2007 19:10 ET

Arsenal Announces Closing of First Tranche of Private Placement of Flow-Through Shares

CALGARY, ALBERTA--(Marketwire - Nov. 30, 2007) -


Arsenal Energy Inc. (TSX:AEI) (FRANKFURT:A1E) ("Arsenal") is pleased to announce that it has closed the first portion of its previously announced brokered private placement of up to 9,302,326 million common shares issued on a "flow-through share" basis, ("Flow-Through Shares") at a subscription price of $0.43 per Flow-Through Share, for total gross proceeds of up to (Cdn) $4,000,000 (the "Offering"). Pursuant to the Offering, Arsenal issued an aggregate of 3,245,279 Flow-Through Shares for aggregate gross proceeds of (Cdn) $1,395,470 to subscribers in British Columbia, Alberta and Saskatchewan.

Emerging Equities Inc. acted as sole agent in respect of the placement of Flow-Through Shares in British Columbia and Alberta and was paid a cash commission in respect of the Flow-Through Shares issued in such jurisdictions.

All of the Flow-Through Shares issued today are subject to a hold period under applicable securities laws until March 31, 2008.

The proceeds from the Flow-Through Shares will, where appropriate, be used to incur certain types of Canadian Exploration Expense ("CEE") and/or deemed CEE as defined in the Income Tax Act (Canada) and renounce, for the 2007 taxation year, such CEE in favour of original holders of the Flow-Through Shares in an amount equal to the subscription price for each Flow-Through Share.

Certain officers, directors and insiders of Arsenal subscribed under the private placements. As a result of the insiders' participation, the private placement may be classified as a "related party transaction" as such term is defined in Ontario Securities Commission Rule 61-501 ("Rule 61-501"). Arsenal currently anticipates that it will be able to rely upon valuation exemptions contained in Rule 61- 501 or an equivalent exemption under applicable securities law.

Arsenal is an aggressive junior oil and gas company engaged in the exploration for, and development and production of natural gas and oil reserves primarily in the provinces of Alberta and Saskatchewan, North Dakota, U.S.A. and Egypt. Arsenal's common shares trade on the Toronto Stock Exchange under the symbol "AEI" and on the Frankfurt Stock Exchange under the symbol "A1E".

This press release may contain forward-looking statements. The words or phrases "would be", "will", "intend", "will likely result", "are expected to", "will continue", "anticipate", "estimate" or similar expressions are intended to identify "forward-looking statements". Those statements are based on current expectations, estimates and projections that involve a number of risks and uncertainties, which could cause actual results to differ from those anticipated by Arsenal. Arsenal's business is subject to various risks that are discussed in its filings on the System for Electronic Document Analysis and Retrieval (SEDAR).

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