Arsenal Energy Inc.

Arsenal Energy Inc.

September 15, 2011 19:42 ET

Arsenal Energy Inc. Releases Operational Update

CALGARY, ALBERTA--(Marketwire - Sept. 15, 2011) - At Stanley, North Dakota, Arsenal (TSX:AEI) as operator has mobilized a drilling rig to the Gjoa Lynn (50% working interest) Bakken horizontal well location and expects to spud this weekend. It is estimated that the well will take 22 days to drill. The drilling rig will then be released to another operator with the plan to return it to Arsenal in early winter to drill the Anthony Robert and Wade Morris Bakken horizontal wells. Arsenal has acquired additional interests in those two wells and now has an 80% working interest in each.

At Princess, in Southeast Alberta, Arsenal is licensing two horizontal wells targeting a Glauconite channel complex. Last year Arsenal cored the Glauconite and confirmed the presence of a 12 meter oil saturated channel sandstone with average porosity of 16% and permeability of 0.7 millidarcies. With success, 6 additional drills have been identified on 3D seismic. Arsenal expects to spud the first well in early October and has a 100% WI in the play.

At Edgerton, in Southeast Alberta, Arsenal is licensing a horizontal well to test the Leduc formation. Offsetting operators have initial production rates of 100 bbls/d of oil with reserves > 100,000 bbls/well. If successful, Arsenal has identified 7 additional development locations. Also, Arsenal has an interest in two additional structures of similar size. Arsenal expects to drill in early November and has a100% WI in all of its Leduc play lands.

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Certain statements and information contained in this press release, including but not limited to management's assessment of Arsenal's future plans and operations, production, reserves, revenue, commodity prices, operating and administrative expenditures, funds from operations, capital expenditure programs and debt levels contain forward- looking statements. All statements other than statements of historical fact may be forward looking statements. These statements, by their nature, are subject to numerous risks and uncertainties, some of which are beyond Arsenal's control including the effect of general economic conditions, industry conditions, changes in regulatory and taxation regimes, volatility of commodity prices, escalation of operating and capital costs, currency fluctuations, the availability of services, imprecision of reserve estimates, geological, technical, drilling and processing problems, environmental risks, weather, the lack of availability of qualified personnel or management, stock market volatility, the ability to access sufficient capital from internal and external sources and competition from other industry participants for, among other things, capital, services, acquisitions of reserves, undeveloped lands and skilled personnel that may cause actual results or events to differ materially from those anticipated in the forward looking statements. Such forward-looking statements, although considered reasonable by management at the time of preparation, may prove to be incorrect and actual results may differ materially from those anticipated in the statements made and should not unduly be relied on. These statements speak only as of the date of this press release. Arsenal does not intend and does not assume any obligation to update these forward-looking statements, whether as a result of new information, future events or otherwise, except as required by applicable law. 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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