Arsenal Energy Inc.
TSX : AEI
FRANKFURT : A1E

Arsenal Energy Inc.

September 26, 2005 08:30 ET

Arsenal Completes Oil Well; Swab Rate 390 bbls/day

CALGARY, ALBERTA--(CCNMatthews - Sept. 26, 2005) -

This news release is not for distribution in the United States.

Arsenal Energy Inc. ("Arsenal") (TSX:AEI)(FRANKFURT:A1E) is pleased to announce it has drilled and completed its first operated well at Evi in North Central Alberta. During completion the well swab tested at a rate of 390 bbls/day of light oil (39 degree API). No water was recovered during the swabbing operation. Arsenal intends to place the well on production at 200 bbls oil per day. Arsenal will be applying to the Alberta Utilities and Energy Board for GPP (Good Production Practice) to maintain or potentially increase the oil production rate.

Arsenal has cased a potential second oil well near the first location. The second cased well should be completed within 10 days. Both wells should be on production by the end of the third fiscal quarter barring any weather related delays.

Arsenal will operate both wells which carry an undivided 50% operated working interest before payout. Upon reaching payout (deemed to be approximately 43,000 gross barrels of oil production per well), Arsenal may have its interest reduced to 30% operated working interest in each well. Arsenal has a further five well locations in the area to drill prior to year end. A 3D seismic program will be shot after freeze up to help develop further drilling locations.

Certain statements in this material may be "forward-looking statements" including outlook on oil and gas prices, estimates of future production, estimated completion dates of acquisitions and construction and development projects, business plans for drilling and exploration, estimated amount and timing of capital expenditures and anticipated future debt levels and royalty rates. Information concerning reserves contained in this material may also be deemed forward-looking statements as such estimates involve the implied assessment that the resources described can be profitably produced in the future. These 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.

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