Arcan Resources Ltd. (TSX VENTURE:ARN) ("Arcan" or the "Corporation") announces
its financial and operating results for the three and nine month periods ended
September 30, 2012. 

Chief Executive Officer Terry McCoy commented, "We took a number of significant
steps during the third quarter to support Arcan's ongoing strategic transition.
From non-core asset sales to stabilized capital planning, the changes reflect
the evolution underway at Arcan and our vision for the future. As a high-growth
junior explorer, we invested heavily in infrastructure and quickly built a solid
production base of approximately 4,000 barrels per day. We are now evolving into
a sustainable production company developing a high-quality resource play that
will deliver long-term value for investors. This transition has not been easy
and we have had some growing pains, but we have turned the corner. Having
completed some one-time items for immediate impact, including disposing of
non-core assets to pay down debt and selling acid inventory to decrease our
obligations, we are now pursuing more pervasive, long-term changes such as
cutting costs, improving efficiency and ensuring greater accuracy in our
operational forecasting. We are starting to see waterflood response stabilizing
our production, and we have maintained sufficient financial flexibility to keep
our strategic options open. We are striving to position Arcan for long-term
success and to regain the market's confidence based on our excellent underlying
asset base."

FINANCIAL AND OPERATING SUMMARY:                                            
($000s except per share amounts)                                            
                                 Three Months Ended       Nine Months Ended 
                              September   September   September   September 
                               30, 2012    30, 2011    30, 2012    30, 2011 
Cash flow from operating                                                    
 activities                       5,432      10,469      38,934      29,538 
Funds from (used in)                                                        
 operations (1)                  (1,589)     10,490      31,421      29,484 
  Per share diluted (1)           (0.02)       0.12        0.32        0.33 
Net income (loss)               (27,480)        776     (21,797)      2,483 
  Per share basic and                                                       
   diluted                        (0.28)       0.01       (0.22)       0.03 
Capital expenditures, net -                                                 
 cash                            12,398      86,696     164,828     159,097 
Debenture face value            171,250      86,250     171,250      86,250 
Net debt and working                                                        
 capital, excluding                                                         
 debentures (3)                 147,432      89,692     147,432      89,692 
  Crude oil and NGLs                                                        
   (barrels ("bbls") per                                                    
   day)                           3,861       3,477       4,603       2,858 
  Natural gas (thousand                                                     
   cubic feet ("Mcf") per                                                   
   day)                             339       1,242         460       1,090 
  Barrel of oil equivalent                                                  
   ("BOE") per day (6:1) (2)      3,917       3,684       4,679       3,040 
Average realized price:                                                     
  Crude oil and NGLs ($ per                                                 
   bbl)                           81.71       87.31       82.76       90.55 
  Natural gas ($ per Mcf)          2.86        3.85        2.65        4.17 
  Combined price per BOE ($                                                 
   per BOE)                       80.78       83.70       81.66       86.63 
Netback ($ per BOE)(1)                                                      
Petroleum and natural gas                                                   
 sales                            80.78       83.70       81.66       86.63 
Pumping and stimulation                                                     
 services revenue                  1.24        1.03        3.53        0.42 
Royalties                        (14.94)     (16.20)     (12.47)     (17.09)
Production and operating                                                    
 expenses                        (24.00)     (24.33)     (20.32)     (22.42)
Cost of sales for pumping                                                   
 and stimulation services         (5.01)      (2.30)      (4.34)      (0.94)
Consolidated operating                                                      
 netback ($ per BOE) (1)          38.07       41.90       48.06       46.60 
Realized economic hedging                                                   
 gains (losses) - cash             1.27           -       (0.39)      (0.42)
Cash G&A                          (8.88)      (6.06)      (7.61)      (5.98)
Other                                 -        0.01           -        0.14 
Finance expenses - cash          (11.46)      (4.29)      (8.41)      (4.40)
Corporate netback                 19.00       31.56       31.65       35.94 
                                  Three Months Ended       Nine Months Ended
                               September   September   September   September
                                30, 2012    30, 2011    30, 2012    30, 2011
Common Shares (000's)                                                       
Shares outstanding                97,860      88,426      97,860      88,426
  Weighted average - basic        97,859      88,425      97,818      88,242
  Weighted average - diluted      97,859      89,919      97,818      89,397
(1) The reader is referred to the section "Non-GAAP Measurements".          
(2) The reader is referred to the section "Legal Advisories".               
(3) Net debt and working capital is calculated by subtracting the current   
    liabilities and bank debt, but excluding convertible debentures from its
    current assets.                                                         


--  Three asset transactions - Arcan received net proceeds of $18.8 million
    from two non-core asset sales that helped reduce debt during the
    quarter. The Hamburg area properties sold for net proceeds of $11.9
    million, which represented a loss of $25.0 million from the net book
    value of $36.9 million. The Virginia Hills undeveloped land sold for net
    proceeds of $6.9 million, representing a gain of $3.9 million over the
    net book value of $3.0 million. Both assets were sold to the highest
    bidders in an open process that started in May. Arcan also disposed of
    approximately $24.3 million of surplus raw acid inventory during the
    third quarter, realizing a loss of $8.0 million. The inventory
    disposition corresponds to the slow-down in Arcan's activity levels and
    reduced our obligations by $16.3 million. 

--  Exploration and Production ("E&P") operating netbacks were $15.0 million
    or $41.84 per BOE in the third quarter of 2012, similar to the $14.6
    million or $43.17 per BOE in the third quarter of 2011. For the nine
    months ended September 30, 2012, E&P operating netbacks were $62.7
    million or $48.87 per BOE compared to the $39.1 million or $47.12 per
    BOE for the nine month period ended September 30, 2011. 

--  Funds from operations decreased to a negative ($1.6) million during the
    third quarter of 2012 over the $10.5 million from third quarter of 2011.
    The decrease was mainly due to the loss on acid inventory as well as
    costs related to Arcan's subsidiary StimSol Canada Inc. ("StimSol"),
    cash general and administrative ("G&A") expenses and finance charges.
    For the first nine months of the year, Arcan's funds from operations
    increased seven percent to $31.4 million. 

--  Arcan received $81.71 per barrel for its light sweet oil for the three
    months ended September 30, 2012 versus Edmonton light sweet oil pricing
    of $84.72 for the quarter. Oil prices decreased approximately eight
    percent from the third quarter of 2011 and eight percent for the nine
    months year to date 2012 versus the same period in 2011. 

--  Royalties were down to 18 percent of revenue for the third quarter of
    2012 versus 19 percent of revenue in the third quarter of 2011 as a
    result of new wells receiving a royalty rate of five percent. Third
    quarter 2012 royalties include the impact of a $1.1 million revision
    from prior periods. 

--  G&A expenses in the third quarter of 2012 were $8.88 per BOE up from
    $6.06 per BOE in the same quarter in 2011 to but were relatively
    unchanged from the $8.72 per BOE from the second quarter of 2012. G&A
    included $0.8, million or $2.13 per BOE, of G&A expenses incurred as a
    result of StimSol running as a separate operating business. Arcan is
    relocating its corporate head offices in November to reduce ongoing G&A
    expenses by approximately $0.8 million per year. 

--  In line with Arcan's commitment to reducing capital, Arcan spent $12.4
    million of capital on its properties during the three months ended
    September 30, 2012, versus expenditures of $86.7 million for the three
    months ended September 30, 2011. During the quarter the Corporation
    invested in completing one well in Gere, building pipelines and access
    roads for the four wells being completed in northern Ethel and in
    waterflood activities in both Deer Mountain Unit #2 and Ethel. 

--  Arcan announced updated reserves information effective June 30, 2012
    highlighting stabilized proved producing reserves from December 31,

--  Arcan's credit facility borrowing base was confirmed at $200.0 million,
    providing Arcan with financial flexibility to execute its capital
    program. At the end of the third quarter the Corporation had a net debt
    position, in addition to its outstanding long-term debentures, of $147.4
    million, which is down from $151.4 million at the end of the second


--  Production increased six percent to 3,917 BOE per day from 3,684 BOE per
    day for the third quarter of 2011. Year to date production increased 54
    percent to 4,679 BOE per day from 3,040 BOE per day for the same nine
    month period in 2011. However, production decreased from 5,254 BOE per
    day in the second quarter of 2012 due to flush production and steep
    initial production declines on newly drilled horizontal wells. These
    declines have now moderated. 

--  Arcan's per-barrel operating costs decreased by one percent in the third
    quarter of 2012 as compared to the third quarter of 2011, and by nine
    percent for the first nine months of 2012 compared to the first nine
    months of 2011. During the third quarter of 2012, Arcan incurred
    significant one-time costs including with respect to the removal of
    rental equipment from wells that were tied in to the newly constructed
    Ethel production pipeline, in addition to costs incurred as a result of
    weather related issues. Arcan anticipates lower costs for the balance of
    the year based on the Ethel production corridor. 

--  Arcan's production weighting reached 99 percent light oil in the third
    quarter, due to the continued focus on the long life Swan Hills asset
    and the sale of the Hamburg area assets. 

--  Arcan fractured one well during the third quarter of 2012. Completions
    on four wells previously drilled commenced on October 27, 2012, after
    significant delays related to poor weather conditions. 

--  Subsequent to the end of the third quarter, Arcan drilled a well on one
    of the 4.5 sections of land farmed out to the west of Deer Mountain Unit
    #2. Completion of the well is expected during the fourth quarter of
    2012. Arcan has also entered into another farm-out on three sections of
    land. Arcan is the operator in respect of the farmed-out lands and
    expects to drill a well on the lands in the first quarter of 2013. 


Arcan's activities are focused on developing the large light oil resource in the
Swan Hills area. Over the last 18 months Arcan has transformed more than 60
square miles of undeveloped land into a large development inventory of
drill-ready locations within a proven oil reservoir. This development is now
supported by an infrastructure corridor consisting of roads, pipelines, and
facilities. Arcan is already starting to benefit from the key components of this
infrastructure, as demonstrated by reduced development capital on a newly
drilled well; declining operating costs; and response from an enhanced oil
recovery program in the early stages of the field production. Arcan continues to
shift to a program of sustainable growth, supported by a strengthened balance
sheet and focused cost reductions and is working to deliver average production
of approximately 4,500 BOE per day for 2012. To secure cash flow, Arcan is
hedged at 2,000 bbls per day for all of 2013 and 2014 at approximately $100 WTI
for 2013 and at $93 WTI for 2014.  

In line with its strategic direction, Arcan plans to manage capital within its
existing cash flow stream for the first half of 2013 and to further reduce
operating costs as the benefits of completed infrastructure investments are
realized. In addition, reducing general and administrative costs remains a key
area of focus, including an office move slated for November 16, 2012. Management
continues to look strategically at all of Arcan's assets, and will consider all
opportunities for development and acceleration as they arise. Arcan holds a
multi-year inventory of low-risk drilling opportunities targeting light sweet
oil plays. The Corporation is planning further drilling focused on higher impact
production results and continued application of the waterflood process on core

Recently, both WTI price changes as well as the Edmonton par discount to WTI
have impacted Arcan. To further manage and mitigate fluctuations in oil prices,
Arcan continues its efforts to reduce committed capital and control the pace of
its development. This is expected to ensure that the Corporation can continue
financially sustainable growth and efficient deployment of capital. Arcan
anticipates higher capital spending during the winter months spanning the fourth
quarter of 2012 and the first quarter of 2013 to provide for capital
efficiencies, followed by a curtailment of capital in the second quarter of 2013
to provide for cash flow to reduce leverage. The changing environment is driving
Arcan to make operational adjustments as well. Two new farm-out agreements
provide for capital-efficient development on areas of Arcan's land base that
would not otherwise have been developed in the near term. Arcan will continue to
implement changes that provide for a stable financial base, maximize shareholder
value and provide secure growth per share.


Arcan has filed its unaudited condensed interim consolidated financial
statements and the accompanying management's discussion and analysis for the
three month and nine month periods ended September 30, 2012, with the Canadian
securities regulatory authorities. These filings are available for review at or

About Arcan Resources Ltd. 

Arcan Resources Ltd. is an Alberta, Canada corporation that is principally
engaged in the exploration, development and acquisition of petroleum and natural
gas located in Canada's Western Sedimentary Basin. 

Legal Advisories

Additional information about the Corporation, including the Corporation's annual
information form for the year ended December 31, 2011, is available under
Arcan's profile on SEDAR at

BOEs may be misleading, particularly if used in isolation. The calculation of
BOEs is based on a conversion ratio of six Mcf of natural gas to one bbl of oil
based on an energy equivalency conversion primarily applicable at the burner tip
and does not represent a value equivalency at the wellhead. In addition, given
that the value ratio based on the current price of oil as compared to natural
gas is significantly different from the energy equivalent of six to one,
utilizing a BOE conversion ratio of 6 Mcf: 1 bbl would be misleading as an
indication of value. 

Non-GAAP Measurements

Arcan's financial statements have been prepared in accordance with IFRS. 

Readers are cautioned that this press release contains the term "funds from
operations", which should not be considered an alternative to, or more
meaningful than, "cash provided by operating activities" or "net earnings" as
determined in accordance with IFRS as an indicator of Arcan's performance. Arcan
also presents "funds from operations per share", whereby funds from operations
are divided by the basic and diluted weighted average number of common shares of
Arcan outstanding to determine per share amounts. Operating and corporate
netbacks are also presented. "Operating netbacks" for the exploration and
production segment, or "exploration and production netbacks", represent Arcan's
petroleum and natural gas revenue, less royalties and production and operating
expenses. "Operating netbacks" for the pumping and stimulation segment, or
"pumping and stimulation operating netbacks", represent pumping and stimulation
services revenue, less cost of sales for pumping and stimulation services.
"Consolidated operating netbacks" represent the sum of the operating netbacks
for the exploration and production and pumping and stimulation segments.
"Corporate netbacks" represent Arcan's consolidated operating netback, plus
other revenue, plus or minus realized economic hedging gains or losses, less
cash G&A expenses and cash interest expenses in order to determine the amount of
funds generated by production. Operating and corporate netbacks have been
presented on a per BOE basis, as well. 

The measures referenced above do not have any standardized meaning prescribed by
IFRS and therefore are unlikely to be comparable to similar measures presented
by other companies. Management believes that funds from operations and operating
and corporate netbacks are useful supplemental measures as they provide an
indication of the ability of Arcan to fund future growth through capital
investment and/or repay debt. These measures have been described and presented
in this press release in order to provide shareholders and potential investors
with additional information regarding Arcan's liquidity and its ability to
generate funds to finance its operations. Arcan's method of calculating funds
from operations may differ from other companies, and as such, may not be
comparable. Reconciliations between both operating netbacks and corporate
netbacks to revenue are set out in the section "Results of Operations -
Netbacks" in the Corporation's management's discussion and analysis for the
period ended September 30, 2012. 

Arcan determines funds from operations as cash flow from operating activities
before changes in non-cash working capital as follows:

Funds from Operations                                                       
                               Three Months Ended      Nine Months Ended    
($000's)                      September    September  September   September 
                               30, 2012     30, 2011   30, 2012    30, 2011 
Cash flow from operating                                                    
 activities (per IFRS)            5,432       10,469     38,934      29,538 
Change in non-cash working                                                  
 capital                         (7,021)          21     (7,513)        (54)
Funds from (used in)                                                        
 operations                      (1,589)      10,490     31,421      29,484 

Forward-Looking Information and Statements

This press release contains certain forward-looking information and statements
within the meaning of applicable securities laws. The use of any of the words
''expect'', ''anticipate'', ''continue'', ''estimate'', ''guidance'',
''objective'', ''ongoing'', ''may'', ''will'', ''project'', ''should'',
''believe'', ''plans'', ''intends'', "possible" and similar expressions are
intended to identify forward-looking information or statements. In particular,
but without limiting the foregoing, this press release contains forward-looking
information and statements pertaining to, among other things, the following:
Arcan's plans to shift to a program of sustainable growth, strengthening its
balance sheet and focusing on cost reduction; anticipated reserves increases;
the timing, method and results of drilling and waterflood operations; the timing
of pay-out for Arcan's 2012 and 2012 drilling program; anticipated production
volumes; estimated additional drilling locations; changes and improvements to
Arcan's drilling and completion techniques; impact of and estimated waterflood
recoveries; the application and modification of horizontal, multi-stage facture
technologies; future revenues; future liquidity and financial capacity and
resources; cost and expense estimates and expectations; expectations respecting
the use of proceeds from Arcan's drilling program; oil and natural gas prices
and Arcan's risk management programs; Arcan's plans to bring its capital
spending more in line with its cash flow; Arcan's expectation that it will
consider divesting non-core assets as opportunities arise; Arcan's plan to
ensure that continued growth also delivers value for shareholders over time;
Arcan's expectations that expenses will grow marginally going forward as the
Corporation continues to increase activity levels and its expectation that BOE
numbers will decline as production volumes increase; the Corporation's plans
respecting further drilling and application of waterflood processes to de-risk
specific core properties; Arcan's plans to execute on its strategy to grow
production organically by drilling in the Swan Hills area, creating value for
shareholders through increasing reserves, cash flow and production on a per
share basis; the Corporation's current drilling plans and production forecasts;
and Arcan's plans to further reduce operating costs.

The forward-looking information and statements contained in this press release
reflect several material factors and expectations and assumptions of Arcan
including, without limitation: that Arcan will continue to conduct its
operations in a manner consistent with past operations; the accuracy of current
horizontal production data, historical well production and waterflood results;
the general continuance of current or, where applicable, assumed industry
conditions; continuity of reservoir conditions across Arcan's Swan Hills land
base; the continued availability of cash flow and/or debt and equity sources to
fund Arcan's capital and operating requirements as needed; Arcan's 2012 capital
budget and strategic business plans; the continuance of existing and, in certain
circumstances, proposed tax and royalty regimes; the accuracy of the estimates
of Arcan's reserve volumes; and certain commodity price and other cost

Arcan believes the material factors, expectations and assumptions reflected in
the forward-looking information and statements are reasonable at this time but
no assurance can be given that these factors, expectations and assumptions will
prove to be correct. The forward-looking information and statements included in
this press release are not guarantees of future performance and should not be
unduly relied upon. Such information and statements involve known and unknown
risks, uncertainties and other factors that may cause actual results or events
to differ materially from those anticipated in such forward-looking information
or statements including, without limitation: for reasons currently
unanticipated, Arcan's production rates may not increase in the manner currently
expected; the application and modification of horizontal, multi-stage fracture
technologies including the application of additional fracture stimulation stages
may not have the impact currently anticipated by Arcan; Arcan's capital spending
and operational plans for 2012 and 2013 as well as its plans to reduce operating
expenses may not be completed in the timelines anticipated or in the manner
anticipated and the execution of such plans and reductions may not have the
results currently anticipated by Arcan; enhanced recovery operations at
additional sites on Arcan's properties may not have the impact on production
currently anticipated by Arcan; the completion of the pipeline may not have the
effect on operating expenses currently anticipated or at all; changes in
commodity prices; unanticipated operating results or production declines;
changes in tax or environmental laws or royalty rates; increased debt levels or
debt service requirements; inaccurate estimation of Arcan's oil and gas reserves
volumes; limited, unfavourable or no access to debt or equity capital markets;
for reasons currently unforeseen, the current drilling locations identified by
Arcan may prove to be unsuitable or unavailable and drilling on the locations
identified may not occur; increased costs and expenses; the impact of
competitors; reliance on industry partners; should any one of a number of issues
arise, Arcan may find it necessary to alter its current business strategy and/or
capital expenditure program; and certain other risks detailed from time to time
in Arcan's public disclosure documents including, without limitation, those
risks identified in this press release, and in Arcan's annual information form
for the year ended December 31, 2011, copies of which are available on Arcan's
SEDAR profile at

The forward-looking information and statements contained in this press release
speak only as of the date of this press release, and Arcan does not assume any
obligation to publicly update or revise them to reflect new events or
circumstances, except as may be required pursuant to applicable laws.

Arcan Resources Ltd.
Douglas Penner

Arcan Resources Ltd.
Suite 2500, 308 - 4th Avenue S.W.
Calgary, AB T2P 0H7
(403) 262-0321

New address effective November 19, 2012:
Suite 2200, 500 - 4th Avenue S.W.
Calgary, AB T2P 2V6
(403) 262-0321

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