Arsenal Energy Inc. Announces Bought Deal Private Placement Financing

CALGARY, ALBERTA--(Marketwired - June 19, 2015) -

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Arsenal Energy Inc. ("Arsenal" or the "Company") (TSX:AEI) announces it has entered into a private placement equity financing agreement, on a bought deal basis, with PI Financial Corp., as lead underwriter, on behalf of a syndicate of underwriters including Acumen Capital Finance Partners Limited, National Bank Financial Inc., Industrial Alliance Securities Inc. and Paradigm Capital Inc (collectively the "Underwriters").

Under the terms of the agreement Arsenal will issue 635,000 common shares at a price of $3.15 per common share and 545,000 common shares to be issued on a "flow-through" basis pursuant to the Income Tax Act (Canada) (the "Tax Act") in respect of Canadian exploration expenses (the "CEE FT Shares") at a price of $3.70 per CEE FT Share (the "Offering Price") for gross proceeds of $4,016,750 (the "Offering"). The Underwriters have been granted an option by the Company (the "Over-Allotment Option") to acquire either common shares at the issue price of $3.15 per common share, CEE FT Shares at the issue price of $3.70 per CEE FT Share or a combination thereof totaling additional gross proceeds of $602,500. The Over-Allotment Option is exercisable by the Underwriters at any time in whole or in part up to forty-eight (48) hours prior to the closing of the Offering.

The Offering is expected to close on or about July 14, 2015 and is subject to approval of the Toronto Stock Exchange, receipt of all necessary regulatory approvals and other customary conditions.

Arsenal will use the proceeds of the common share portion of the Offering to position the Company to take advantage of property dispositions by competitors in its core areas and will use the proceeds of the CEE FT Share portion of the Offering to incur eligible Canadian exploration expenses on its core properties and renounce such expenses to subscribers of CEE FT Shares for the 2015 tax year.

Forward-Looking Information

This news release contains forward-looking information which is not comprised of historical facts. Forward-looking information involves risks, uncertainties and other factors that could cause actual events, results, performance, prospects and opportunities to differ materially from those expressed or implied by such forward-looking information. Forward-looking information in this news release includes statements with respect to the Company's intention to complete the Offering, the use of proceeds from the Offering, the exercise of the Over-Allotment Option and the renunciation of qualifying expenditures. Material assumptions and factors that could cause actual results to differ materially from such forward-looking information includes the performance of the underwriters' and the Company's obligations in relation to the Offering; the failure to obtain approval from the Toronto Stock Exchange; and the failure by the Company to renounce the qualifying expenditures as planned. Although the Company believes that the material assumptions and factors used in preparing the forward-looking information in this news release are reasonable, undue reliance should not be placed on such information, which only applies as of the date of this news release, and no assurance can be given that such events will occur. Arsenal disclaims any intention or obligation to update or revise any forward-looking information, whether as a result of new information, future events or otherwise, other than as required by law.

THIS NEWS RELEASE DOES NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATIN OF AN OFFER TO SELL ANY SECURITIES IN THE UNITED STATES. THE SECURITIES HAVE NOT BEEN AND WILL NOT BE REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1993, AS AMENDED (THE "U.S. SECURITIES ACT") OR ANY STATE LAWS AND MAY NOT BE OFFERED OR SOLD WITHIN THE UNITES STATES OR TO A US PERSONS UNLESS REGISTERED UNDER THE U.S. SECURITIES ACT AND APPLICABLE STATE SECURITIES LAWS OR AN EXEMPTION FROM SUCH REGISTRATION IS AVAILABLE.