Kallisto announces Pembina reserve report

CALGARY, Dec. 21 /CNW/ - Kallisto Energy Corp. (TSX Venture: KEC) (formerly Arrow Energy Ltd. - AOF) ("Kallisto" or the "Company") announces that it has received a Sproule Associates Limited letter report as of December 31, 2009 (November 2009 Sproule Prices) (the "Report") on its Pembina, Alberta oil property. The Report is a precursor to the annual NI 51-101 reserve report that is expected to be completed early in February, 2010. The Company has submitted the Report to its lenders for their review and is in discussions with the lender to normalize its loan facility.

The following is a summary of the Report findings:

                                                   Proved    Proved+Probable
    Reserves - Company Gross (Mboe)                 215.7         518.2
    NPV10 - BT (M$)                                 6,483        12,469
    2010 production - Company gross (boe/day)          87           144

The Report assumes the drilling of 7 wells (1.75 net) in the proved case, 9 wells (2.25 net) in the proved plus probable case (of which three wells have been drilled to date) and confirms that the economics for this project are strong and provide a significant value lift to shareholders. An additional 3 wells planned for the project area (making a total of 12 wells) are considered possible for which no value has been given in the Report. A summary of the key project metrics is shown below:

                                                   Proved    Proved+Probable
    F&D costs ($/boe)                                8.95          6.52
    NPV10 per net well - BT (M$)                    3,705         5,542
    NPV10 - BT ($/boe)                              30.06         24.06
    IRR (BT)                                         179%          281%
    P/I Ratio (BT)                                   6.62         10.32

The Report assumes that the Company exercises its purchase option to increase its working interest to 25%. The funds required to exercise the purchase option have been taken into account in the Report and are expected largely to be paid out from net revenues generated from the Pembina wells.

This Report does not include Kallisto's other oil and gas properties. A June 30, 2009 mid-year reserve report prepared by Sproule valued Kallisto's other proved reserves at $8.8 million (NPV10 - BT) and its proved plus probable reserves at $13.3 million (NPV10 - BT).

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.


SOURCE Kallisto Energy Corp.

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

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