Arrow Energy Ltd. announces Second Quarter 2008 results

    TSX-V: AOF

    CALGARY, Sept. 3 /CNW/ - Arrow Energy Ltd. ("Arrow" or the "Company")
(TSX.V: AOF) is pleased to announce record revenue from petroleum and natural
gas sales of $2,178,631 (up 70%) for the three months ended June 30, 2008 and
$3,162,353 (up 46%) for the six months then ended as compared to $1,280,783
and $2,172,621 for the three and six months ending June 30, 2007. The
significant improvement in revenue reflects Arrow's continued expansion in its
core operating areas in Northern Alberta as well as higher oil prices during
the period.

    Q2 2008 Highlights:

    - Average production of 256 boe/day, up 67% from Q1 2008 and up 4% from
      Q2 2007

    - Exit Q2 production of 313 boe/day, a new corporate record

    - The Company reported record production revenue net of royalties of
      $1.75 million up 134% over Q1 2008 and up 85% over Q2 2007

    - The Company reported record funds flow of $616,465 up 131 % over Q2

    - Successfully completed the disposition of a non-core property for
      $426,406 and identified other non-core assets for disposition in Q3.

    - Closed the acquisition of the Gift property which added approximately
      75 barrels of high quality light oil

    About Arrow Energy Ltd.

    Arrow Energy Ltd. is a Calgary-based junior resource company engaged in
the exploration, development and production of natural gas and oil primarily
in the Gift Lake, Peavine/Dawson, Westlock, and Redwater/Jeffrey areas of

    Non-GAAP Measurements

    This Press Release may contain the term "funds flow", which should not be
considered an alternative to, or more meaningful than "cash flow from
operating activities" as determined in accordance with Canadian GAAP; it is
used by Arrow to analyze leverage and liquidity. Funds flow as presented does
not have any standardized meaning prescribed by Canadian GAAP and therefore
may not be comparable with the calculation of similar measures by other
entities. Funds flow from operations per share is calculated using the same
weighted average number of shares outstanding used in the calculation of
income per share. Funds flow from operations represents cash flow from
operating activities expressed before changes in non-cash working capital and
asset retirement.
    Arrow also uses "operating netbacks" as a key performance indicator of
field results by commodity. Operating netbacks do not have a standardized
meaning prescribed by Canadian GAAP and therefore may not be comparable with
the calculation of similar measures by other companies. Operating netbacks are
determined by deducting royalties and operating, processing and transportation
expenses from petroleum and natural gas sales.
    Funds flow and operating netbacks are not intended to represent operating
profits, nor should they be viewed as an alternative to cash flow from
operating activities, net earnings or other measures of financial performance
calculated in accordance with Canadian GAAP.

    Advisory Regarding Forward Looking Statements

    This report may contain certain forward-looking statements, including
management's assessment of future plans and operations, and capital
expenditures and the timing thereof, that involve substantial known and
unknown risks and uncertainties, certain of which are beyond the Company's
control. Such risks and uncertainties include, without limitation, risks
associated with oil and gas exploration, development, exploitation,
production, marketing and transportation, loss of markets, volatility of
commodity prices, currency fluctuations, imprecision of reserve estimates,
environmental risks, competition from other producers, inability to retain
drilling rigs and other services, delays resulting from or inability to obtain
required regulatory approvals and ability to access sufficient capital from
internal and external sources, the impact of general economic conditions in
Canada, the United States and overseas, industry conditions, changes in laws
and regulations (including the adoption of new environmental laws and
regulations) and changes in how they are interpreted and enforced, increased
competition, the lack of availability of qualified personnel or management,
fluctuations in foreign exchange or interest rates, stock market volatility
and market valuations of companies with respect to announced transactions and
the final valuations thereof, and obtaining required approvals of regulatory
authorities. The Company's actual results, performance or achievements could
differ materially from those expressed in, or implied by, these
forward-looking statements and, accordingly, no assurances can be given that
any of the events anticipated by the forward-looking statements will transpire
or occur, or if any of them do so, what benefits, including the amount of
proceeds, that the Company will derive there from. Readers are cautioned that
the foregoing list of factors is not exhaustive. All subsequent
forward-looking statements, whether written or oral, attributable to the
Company or persons acting on its behalf are expressly qualified in their
entirety by these cautionary statements. Furthermore, the forward-looking
statements contained in this report are made as at the date of this report and
the Company does not undertake any obligation to update publicly or to revise
any of the included forward-looking statements, whether as a result of new
information, future events or otherwise, except as may be required by
applicable securities laws.

    BOE conversion: In this news release, Arrow applies the widely used
conversion ratio of six thousand cubic feet ("Mcf") of natural gas to one
barrel ("bbl") of oil. Boes may be misleading, particularly if used in
isolation. A boe conversion ratio of 6 Mcf: 1 bbl is based upon an energy
equivalency conversion method primarily applicable at the burner tip and does
not represent a value equivalency at the wellhead.


    %SEDAR: 00017135E

For further information:

For further information: Investor Relations Contacts; Richard Edgar,
Executive Director, Phone: (403) 237-9996, Toll-free: 1-866-528-9996, Email:, Web site:

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