Arsenal Energy Inc. Announces Closing of Bought Deal Private Placement Offering

CALGARY, ALBERTA--(Marketwired - July 14, 2015) -

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Arsenal Energy Inc. ("Arsenal" or the "Company") (TSX:AEI) announces it has closed its previously announced bought deal private placement offering (the "Offering"). Together, with the exercise of the Underwriters option granted in connection with the Offering, the Company issued 778,460 common shares at a price of $3.15 per common share and 585,700 common shares issued on a "flow-through" basis pursuant to the Income Tax Act (Canada) in respect of Canadian exploration expenses (the "CEE FT Shares") at a price of $3.70 per CEE FT Share for aggregate gross proceeds of $4,619,239.

The Offering was led by 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").

Arsenal intends to 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 pay down existing indebtedness 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.

The common shares and CEE FT Shares issued pursuant to the Offering are subject to a statutory hold period under applicable securities legislation until November 15, 2015.

Arsenal is a junior oil and gas company engaged in the exploration for, and development and production of natural gas and oil reserves primarily in Alberta and North Dakota, U.S.A. Arsenal's common shares trade on the Toronto Stock Exchange under the symbol "AEI". Arsenal now has 19,332,706 common shares outstanding.

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 use of proceeds from the Offering 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 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 SOLICITATION 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 UNITED 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.