Arcan Resources Ltd. (TSX VENTURE:ARN) ("Arcan" or the "Corporation") executes
on its commitment to reduce debt and focus on its core assets through the sale
of approximately ten sections of undeveloped land assets in the Virginia Hills
area of Alberta for $7.0 million. These lands were isolated from Arcan's
existing core production and infrastructure and did not include the successfully
drilled horizontal well, or related lands, at Virginia Hills 13-32-64-13W5. 


"The land sale is consistent with our stated intention to dispose of non-core
assets through a number of disposition processes," said Arcan President Doug
Penner. "The sale proceeds will apply directly against the debt on our balance
sheet. We remain focused on the excellent opportunities in our core operating
areas of Deer Mountain and Ethel. We are pleased with this sale price, as we
originally acquired these lands for $3.4 million and had not yet begun to
develop them." 


Arcan's second quarter 2012 production was up 83 per cent over the second
quarter of 2011 to average 5,250 barrels of oil equivalent per day (boepd)
during the three-month period ending June 30, 2012. Unusually wet conditions in
the Swan Hills area have impacted production, operations and costs. As a result,
five wells drilled in the second quarter and scheduled to be fractured in June
have not yet been completed. The first of these wells, at Gere 16-20-64-8W5, was
fractured on August 2, 2012. Arcan expects to complete the other four wells at
the 10-05-67-08 surface drill pad when access conditions provide for safe and
economical completion operations. 


In light of poor weather conditions and volatility in oil pricing, Arcan
continues to adjust its operational plans for the remainder of 2012. Slowing the
pace of drilling is intended to ensure that the Corporation will continue
financially sustainable growth and efficiently deployed capital. Thus, while
Arcan drilled 16 wells in the first half of 2012, the Corporation plans to limit
drilling to a maximum three wells in the second half of the year. Based on the
reduced capital and drilling program, Arcan has also disposed of the surplus raw
acid inventory held by its subsidiary, StimSol Canada Inc. Although Arcan
realized a net loss of approximately $8.0 million on the sale, the disposition
will strengthen the Corporation's balance sheet. Arcan has retained an adequate
inventory of acid for its drilling plans over the next twelve months. 


Arcan continues to respond to the current weakness and uncertainty in the
capital markets with reductions in the number of new wells planned and
operational modifications to achieve capital efficiencies. With no new
production coming on-stream since early in the second quarter and production
impacts related to to the anticipated shut-down and turnaround of a downstream
third party processing facility in September, Arcan now expects 2012 full-year
production to average 4,500 - 5,000 boepd, which is over 50 per cent higher than
the 2011 average rate. 


"Having invested heavily in the infrastructure needed to realize the potential
of our Swan Hills land base, our top two current priorities are to strengthen
our balance sheet and maximize our capital efficiency," Mr. Penner continued.
"Waiting for drier weather to complete and tie in our most recent wells is in
line with our commitment to reduce capital and operating costs, fund operations
from cash flow and maximize the impact of our spent capital. We are taking a
measured approach to capital investment as we transition Arcan from a
high-growth junior to an efficient oil producer positioned for longer term
success. We are also reviewing all aspects of our assets, operations and
governance to strengthen Arcan's operational capability and to support our
larger base of production." 


About Arcan Resources Ltd.

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


Legal Advisories

Barrels of oil equivalent ("BOE") may be misleading, particularly if used in
isolation. A BOE conversion ratio of six thousand cubic feet ("Mcf") of natural
gas to one barrel ("bbl") of oil is 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. 


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
"estimates", ''expects'', ''will'', ''plans'' 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:
future availability of acid to facilitate Arcan's drilling plans for the next 12
months, second quarter 2012 anticipated production; anticipated average
production for 2012; anticipated timing of the fracture and completion of
Arcan's recent wells; Arcan's expectations respecting its growth and activities
throughout the remainder of 2012; Arcan's ability to execute on the remainder of
its 2012 business plans and strategic direction; future growth including
development, exploration, acquisition, construction and operational activities
and related expenditures. 


The forward-looking information and statements contained in this press release,
including but not limited to the estimates of 2012 annual production, 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 lack of any further adverse weather
conditions; the lack of significant changes in capital markets or commodity
prices; 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 and its Ethel oil pool; availability of debt
and/or equity sources to fund Arcan's capital and operating requirements as
needed; 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 assumptions and estimates. 


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 reach the levels currently
expected; the application and modification of horizontal, multi-stage fracture
technologies may not have the impact currently anticipated by Arcan; the future
drilling locations identified by Arcan may prove to be unsuitable or unavailable
and drilling on the locations identified may not occur; water injection at
additional sites in the Deer Mountain Unit #2 or in the Ethel field may not have
the impact on production currently anticipated by Arcan; the operation of
Arcan's oil gathering pipeline and the Pembina pipeline may not have the impact
on operating costs currently anticipated by Arcan and there may be interruptions
of service in the future; Arcan's capital spending and operational plans for
2012 may not be completed in the timelines anticipated, in the manner
anticipated or at all and the execution of such plans may be negatively affected
further; 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; increased costs and expenses; the impact of competitors;
changes in commodity prices; reliance on industry partners; 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 www.sedar.com.


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.