Kallisto announces production results from its first Pembina well and
approval to amend the terms of convertible debenture

CALGARY, Dec. 1 /CNW/ - Kallisto Energy Corp. (TSX Venture: KEC) (formerly Arrow Energy Ltd. - AOF) ("Kallisto" or the "Company") is pleased to announce initial production results from its Pembina, Alberta drilling program. The first well of the program, located at 6-4-48-3 W5M, produced an average of 194 boe per day for the 27.5 days that it produced in the month of November. The second well, located at 16-34-47-3 W5M was placed on production November 19. Production from the 16-34 well is meeting management's expectations and on a production profile similar to the 6-4 well. The third well of the program, located at 6-33-47-3 W5M was placed on production December 1. Kallisto will be reporting production rates for the 16-34 and 6-33 wells after a period of regular production has occurred and rates have stabilized.

Management anticipates that production from the Pembina wells will perform similar to industry and analyst expectations for wells drilled in the Cardium formation and completed using multi-stage fracture stimulations, with initial production rates of between 200 and 300 barrels per day, decreasing by more than 50% during the first six months. It is expected that each well will produce between 150,000 and 180,000 barrels of oil over its economic life.

Kallisto has a 16.667% working interest in the first two wells and a 13.667% working interest in the third well. The Company can increase its working interest to 25% through the exercise of purchase options. The funds required to exercise the purchase options are largely expected to be generated by Kallisto's working interest revenues from the Pembina wells.

The Company also announces that it has received conditional approval from the TSX Venture Exchange to restructure the terms of its $200,000 Convertible Debenture (the "Debenture") as initially announced on November 20, 2009. Under the terms of the amendment:

    
    -   the maturity date of the Debenture is extended to January 25, 2011;
    -   the conversion price of the Debenture is:
        -   $0.285 per common share (on a post 4:1 share consolidation basis)
            if the exercise date is on or before June 25, 2010;
        -   $0.40 per common share (on a post 4:1 share consolidation basis)
            if the exercise date is between June 26, 2010 and January 25,
            2011; and
    -   the Debenture holder waived the default that existed under the
        Debenture and confirmed that the Debenture is in good standing.
    

Kallisto is a Calgary-based junior resource company engaged in the exploration, development and production of natural gas and oil primarily in Alberta.

This press release contains forward-looking statements which include, but are not limited to: operations plans and outlook, expectations, opinions, forecasts, projections, guidance or other statements that are not statements of fact. Although the Company believes that the expectations reflected in such forward-looking statements are reasonable, it cannot give any assurance that such expectations will prove to be correct. Results of the Company may be affected by a variety of variables and risks associated with oil and gas exploration, production and transportation, such as loss of market, volatility of oil and gas prices, currency fluctuations, imprecision of reserve estimates, environmental risks, competition from other producers, ability to access sufficient debt and equity capital from internal and external sources, ability to replace and expand oil and gas reserves, ability to generate sufficient cash flow from operations to meet its current and future obligations, and risks associated with existing and potential future lawsuits and regulatory actions made against the Company; as a consequence, actual results could differ materially from those anticipated or implied in the forward-looking statements. The Company's forward-looking statements are expressly qualified in their entirety by this cautionary statement and are made as of the date of this news release. Unless otherwise required by applicable securities laws, the Company does not intend nor does it undertake any obligation to update or review any forward-looking statements to reflect subsequent information, event, results or circumstances or otherwise.

THE TSX VENTURE EXCHANGE HAS NOT REVIEWED AND DOES NOT ACCEPT RESPONSIBILITY FOR THE ADEQUACY OR ACCURACY OF THIS RELEASE.

SOURCE Kallisto Energy Corp.

For further information: For further information: Robyn Lore, President, Telephone: (403) 237-9996, Facsimile: (403) 264-0416

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Kallisto Energy Corp.

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