Arcan Resources Ltd. Announces Record Second Quarter 2008 Results as Well as Continued Drilling Success in Deer Mountain and an

Arcan Resources Ltd. (TSX VENTURE:ARN) ("Arcan" or the "Company"), is pleased to
announce a record second quarter, expansions at Deer Mountain and an increase to
its capital budget.


SECOND QUARTER 2008 HIGHLIGHTS

- The Company experienced record production, revenue, cash flow from operating
activities, funds from operations, netbacks and net income;


- The Company increased production to 1,604 boe per day for the three months
ended June 30, 2008 up 24% over the 1,289 boe per day in Q2, 2007 and 9% over
Q1, 2008;


- Operating netbacks of $75.95 per boe (revenue of $108.21 per boe and operating
cost of $12.55 per boe) were up 91% from $39.86 per boe in Q2, 2007 and up 42%
from $53.47 per boe in Q1, 2008;


- Funds from operations increased 218% to $9.6 million ($0.24 per diluted share)
from $3.0 million ($0.10 per diluted share) in Q2, 2007 and up 55% from the $6.2
million ($0.16 diluted per share) in Q1, 2008;


- Drilled one (0.5 net) gas well in McLeod, drilled one (0.8 net) well and
started drilling another (0.8 net) well in Deer Mountain; 


- Expanded Deer Mountain with the acquisition of varied interests (30% to 100%)
in over 50 sections of land in addition to a 19.5 section farm-in on lands
immediately to the south of our unit; and


- Expanded its 2008 capital budget by approximately 50% from $26 million to $40
million, deploying these additional funds into expansion at Deer Mountain.




Financial and Operating Summary      Three Months Ended   Six Months Ended
                                    ----------------------------------------
                                      June 30,  June 30,  June 30,  June 30,
                                         2008      2007      2008      2007
                                    ----------------------------------------
Financials ($000s except per share
 amounts)
 Oil and NGL sales                     13,385     5,072    22,583     8,861
 Natural gas sales                      2,408     2,193     4,285     3,610
Total petroleum and natural gas
 revenue                               15,793     7,265    26,868    12,471
Funds from operations (1)               9,617     3,021    15,820     4,779
 Per share basic (1)                     0.25      0.10      0.42      0.16
 Per share diluted (1)                   0.24      0.10      0.41      0.16
Net Income (loss)                       3,983      (356)    5,628      (932)
 Per share basic                         0.11     (0.01)     0.15     (0.03)
 Per share diluted                       0.10     (0.01)     0.15     (0.03)
Capital expenditures - cash             4,062     6,120    13,618    20,368
Total Assets                          132,263   101,498   132,263   101,498
Total Liabilities                      45,901    32,485    45,901    32,485
Shareholders' equity                   86,362    69,013    86,362    69,013
Bank Loan, net of cash and cash
 equivalents                           26,829    11,911    26,829    11,911
Net debt and working capital           27,835    16,964    27,835    16,964
----------------------------------------------------------------------------

Financial and Operating Summary      Three Months Ended   Six Months Ended
                                    ----------------------------------------
                                      June 30,  June 30,  June 30,  June 30,
                                         2008      2007      2008      2007
----------------------------------------------------------------------------
Operating, General and
 Administrative (G&A)
Production:
 Crude oil (bbls per day)               1,241       792     1,162       734
 Natural gas (mcf per day)              2,174     2,980     2,270     2,454
 Total (boe per day) (6:1)              1,604     1,289     1,541     1,143
Average realized price:
 Crude oil ($ per bbl)                 118.48     70.35    106.76     66.73
 Natural gas ($ per mcf)                12.17      8.09     10.37      8.13
 Combined average (incl. processing
  revenue)                             108.21     61.94     95.82     60.30
 ($ per boe)
Netback ($ per boe)
Petroleum and natural gas sales        108.21     61.94     95.82     60.30
Royalties                               19.71     14.64     18.74     15.32
Operating and transportation
 expenses                               12.55      7.44     11.90      8.83
Operating netback                       75.95     39.86     65.18     36.15
G&A expenses - cash                      7.46     12.64      6.32     11.43
Interest expense - net                   2.21      1.47      2.12      1.62
Corporate netback                       66.28     25.75     56.74     23.10
----------------------------------------------------------------------------
Common Shares (000s)
Shares outstanding, end of period      37,869    33,635    37,869    33,635
Weighted average shares (2)
 - basic                               37,793    31,721    37,254    30,318
 - diluted                             39,473    31,721    38,568    30,318

(1) The reader is referred to the section - "Non-GAAP Measurements".

(2) In computing the net loss per diluted share in the 2007 periods, nil
    shares were added to the weighted average number of shares outstanding
    because they were anti-dilutive.



Overview

Light oil price increases and record oil production lifted Arcan's funds from
operations for the three and six month periods ended June 30, 2008, to $9.6
million and $15.8 million, respectively, based on operating netbacks of $75.95
and $65.18, respectively. For the three months ended June 30, 2008 production
was 1,604 boe per day which is 24% higher than the 1,289 boe per day average
production for the three months ending June 30, 2007. The higher Q2, 2008
production levels incorporated elevated production from the test period for the
new well in Hamburg which more than offset marginal declines due to the impact
of the mid-June gas shut-in from McLeod. Production in Deer Mountain continues
to perform well as we see pressure response from injection and new drilling
locations being tied-in. 


The increased cash flow allows Arcan to announce an increase to its budgeted
capital program by 50% to $40.0 million from $26.0 million at the start of 2008.
The expanded budget is mainly focused in Deer Mountain, increasing the drill
program to 10 - 15 wells from the original 6 wells. The additional wells are
expected to be mainly oriented at pool expansion and extension, both on the
existing unit and onto the newly acquired lands. 


In the second quarter of 2008, Arcan expended $4.1 million of capital drilling
one well and commencing a second well in Deer Mountain in addition to farming-in
on 19.5 sections of land as well as purchasing varied interests (from 30% to
100%) on over 50 sections of land to the south and immediately adjacent to our
Deer Mountain unit. As well, Arcan participated in drilling a partner operated
gas well (0.5 net) in McLeod. Our investments currently have Arcan with a 70-80%
weighting towards light oil as the Company continues to benefit from record oil
prices.


Production is expected to be hampered in Q3, 2008 in McLeod as all production
was shut-in for the month of July relating to a Nova Gas Transmission Limited
("Nova") outage and only re-commenced at the start of August. In Hamburg, a
prolific new well was producing in Q2, 2008, during its new oil period, and will
be shut in for the majority of the third quarter of 2008. Arcan continues its
efforts to have its Hamburg Maximum Rate limitations ("MRL's"), and thereby
production, lifted. Accounting for the impact of these issues, and unless the
MRL's in Hamburg are lifted, Arcan expects to produce between 1,200 and 1,500
boe per day in the third quarter of 2008. Arcan anticipates wells drilled in
Deer Mountain will be completed and will add to production late in Q3 and into
Q4 of 2008, reducing the negative impact of the Nova outage. Arcan's production
and investment in drilling continues to be levered to high netback light oil.


Arcan operates its core properties and is able to re-allocate capital
expenditures among exploration and development drilling for both oil and natural
gas. Arcan has a large inventory of infill oil locations with low risk profiles,
high reserve potential and high operating netbacks. Paramount to Arcan and to
its management team is adding value for the Company's shareholders. Arcan is oil
weighted and expects to continue to benefit from historically high oil prices as
investment is directed into these areas. The industry has been challenging for
smaller producers as the impact of record crude oil prices is dampened by the
increased royalties proposed by the Alberta government for January 2009.
Significant commodity price increases continue to lift Arcan's funds from
operations and continue to provide a basis for expanded exploration initiatives.
Arcan will continue to adjust for these items and evaluate and modify capital
expenditures accordingly.


At June 30, 2008 Arcan had 19 full time employees.

Overview of Arcan's Core Areas

Hamburg

Production averaged 975 boe per day with $81.94 per boe operating netbacks for
the three months ended June 30, 2008 up from 393 boe per day and $57.08 per boe
operating netbacks in the three months ended June 30, 2007. For the six months
ended June 30, 2008 production averaged 846 boe per day with $73.08 per boe
operating netbacks up from 303 boe per day and $50.08 per boe operating netbacks
in the six months ended June 30, 2007. Strong production rates in the second
quarter reflected the capability of our new well at 13-17, which was drilled in
the first quarter of 2008. The new well produced at high rates during its new
oil well production period and was shut-in due to over production.


Arcan has drilled a total of seven wells in the area of the GG Pool located in
Twp. 096 Range 09W6M. So far, only three (two producers and one injector) of
these wells are within the boundaries of the approved Enhanced Recovery Scheme
and have Good Production Practice ("GPP") status with the balance of the wells
remaining on limited rates by MRL's. 


In addition to the five to six additional locations identified within the area
of the GG Pool which could be drilled this coming winter, Arcan anticipates
completing the exploration well it drilled at the end of last winter. Arcan has
numerous ready to drill exploration plays in the Hamburg area, both in Alberta
and in British Columbia and continues to add to its drill ready inventory for
this winter's exploration. Arcan is assessing budget availability as well as
other avenues to facilitate its exploration programs.


McLeod

Production averaged 140 boe per day with $48.72 per boe operating netbacks for
the three months ended June 30, 2008, down from 497 boe per day with $32.07 per
boe netbacks in the three months ended June 30, 2007. Production averaged 219
boe per day with $36.07 per boe operating netbacks for the six months ended June
30, 2008, down from 416 boe per day with $30.43 per boe netbacks in the six
months ended June 30, 2007. Production declines reflect both shut in periods as
well as normal declines from lack of investment. Over the past eighteen months
Arcan has reduced drilling in McLeod to focus on higher netback oil. 


In mid-June 2008, Nova commenced a planned shut down in the McLeod area which
shut-in Arcan's production from McLeod until the start of August. The production
impact will be reflected in the third quarter of 2008. The majority of these
wells, plus an additional 100 boe per day well that has been shut-in since
March, are back on production now. With the wells back on-line, production from
the area is now averaging approximately 250 boe per day.


Arcan participated in drilling one (0.5 net) well in McLeod during the second
quarter of 2008. The well has been subsequently completed and should be
on-stream in Q4, 2008 at an initial rate of 200-300 (100-150 net) boe per day,
subject to pipeline capacity. Arcan anticipates drilling additional wells to
offset the most recent development well. Four additional locations with proposed
drilling depths of around 2,500 meters have been surveyed in the McLeod Area and
other deeper opportunities in the area are being accumulated. 


Deer Mountain

Production averaged 485 boe per day with $81.42 per boe operating netbacks for
the three months ended June 30, 2008 up from 398 boe per day with $38.08 per boe
operating netbacks in the three months ended June 30, 2007. Production averaged
473 boe per day with $69.39 per boe operating netbacks for the six months ended
June 30, 2008 up from 395 boe per day with $36.43 per boe operating netbacks in
the six months ended June 30, 2007. In Deer Mountain pressure maintenance
remains the key to maximizing asset potential. Arcan has been injecting over
1,000 boe of water per day for the majority of the second quarter of 2008 and
has subsequently drilled an additional water source well.


Arcan drilled one (0.8 net) oil well and commenced drilling one (0.8 net) step
out well in Deer Mountain in the second quarter of 2008. Subsequent to the end
of the second quarter the two wells have been completed and another (0.8 net)
step out well has been drilled. The two step out wells, drilled on the northern
lobe of the reef off of our proprietary 3D seismic, have verified the presence
of reservoir to the east of the existing productive wells and have established
further drilling locations on the eastern edge of the field as well as adding
additional validity to our seismic interpretation. These three new wells are
anticipated to be on production by the end of August 2008. One well on the new
eastern edge will likely be turned into an injector and Arcan anticipates that
the production and related injection system should be on-stream by the end of
2008. These successful wells have lead to an expanded drilling and capital
budget in this area for 2008.


During the second quarter of 2008 Arcan expanded its interests in the area with
the acquisition of varied interests (30% to 100%) in over 50 sections and a 19.5
section farm-in on lands immediately to the south of our unit. Arcan plans to
drill its first test well on these new lands late in the third quarter of 2008.
A successful well could generate an extensive oil resource play and generate
significant follow-up and extension opportunities. 


Arcan plans to employ a second rig to expedite the drilling process as we have
lined up an eight to ten well development and step-out program based on the
expanded capital budget. Arcan's Deer Mountain property contains a large
inventory of low risk development infill oil wells with high reserve impact and
high netbacks. Additional success on the newly acquired lands would add
significantly to that inventory.


Outlook

The capital plan for the balance of 2008 is to develop and expand the assets we
already own and have invested in. That leads us to drill reserve development
wells and pool extension wells in Deer Mountain, additional development gas
wells in McLeod, exploration opportunities in McLeod, possibly late fourth
quarter development drilling in our Hamburg pool and look to add and possibly
consolidate interests in our core areas. These activities are expected to add
production and value on a very capital effective basis. On the operations side
we expect to continue to focus on water injection in Hamburg and in Deer
Mountain which remain the key driver to harvesting value. Arcan is maximizing
our daily production and taking advantage of the high netback environment. For
the balance of 2008 we intend to stay within our bank lines, drill expansion
wells in Deer Mountain and build up our exploration opportunities and our
platform for continued growth. We are oil weighted and expect to continue to
benefit from record oil prices as we direct our investments into these areas and
we are monitoring and planning for the impact of the changes to the Alberta
royalty rates. 


Arcan has prepared the Management Discussion and Analysis ("MD&A") and the
unaudited interim financial statements for the three and six month periods
ending June 30, 2008 as compared to the three and six month periods ending June
30, 2007 and compared to the three month period ended March 31, 2008. The MD&A
complements and supplements the financial statements of Arcan. For a full
understanding of the financial position and results of operations of the Company
the MD&A should be read in conjunction with the unaudited interim financial
statements for the three and six month periods ended June 30, 2008 and 2007
together with the notes thereto, the unaudited interim financial statements for
the three month periods ended March 31, 2008 and 2007 together with the notes
thereto, as well as the audited financial statements for the year ended December
31, 2007, the six months ended December 31, 2006 and the year ended June 30,
2006, together with the notes related thereto and other documents filed on
SEDAR, including historical financial statements, the Company's management
information circular dated April 22, 2008 and the Company's Annual Information
Form ("AIF") dated April 3, 2008 for the year ended December 31, 2007. These
documents, as well as historical press releases and filings including historical
Management Discussion and Analysis, financial statements and related notes, will
or have been filed and will be available under Arcan's SEDAR profile at
www.sedar.com. 


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. Arcan has 37,868,560 common
shares, 586,631 Warrants, 1,500,000 performance warrants, and 3,713,667 stock
options outstanding. 


BOE Presentation - Production and reserve information is commonly reported in
units of barrel of oil equivalent ("boe"). For purposes of computing such units,
natural gas is converted to equivalent barrels of oil using a conversion factor
of six thousand cubic feet to one barrel of oil. BOEs may be misleading,
particularly if used in isolation. A BOE conversion ratio of six thousand cubic
feet of natural gas to one barrel of oil (i.e., 6 Mcf: 1 bbl) is based on an
energy equivalency conversion method primarily applicable at the burner tip and
does not represent a value equivalency at the wellhead. Readers should be aware
that historical results are not necessarily indicative of future performance.


Netbacks - Operating netbacks are defined as sales revenue, less royalties and
operating expenses. Corporate netbacks are defined as operating netback, less
G&A and interest.


Special Note Regarding Non-GAAP Measures - This press release contains financial
terms that are not considered measures under Canadian generally accepted
accounting principles ("GAAP"), such as "funds from (used in) operations". This
measures is commonly utilized in the oil and gas industry and is considered
informative for management and shareholders. Specifically, "funds from (used in)
operations" represents net loss for the period adjusted for non-cash items in
the statement of operations. This term should not be considered an alternative
to, or more meaningful than cash flow from operating activities as determined
under GAAP as an indicator of the Company's performance. Management considers
this term to be important as it helps evaluate performance and demonstrates the
Company's ability to generate sufficient cash to fund future growth
opportunities.


Advisory Regarding Forward-Looking Statements

Certain information with respect to the Company contained herein, including its
assessment of future plans and operations contain forward-looking statements. In
some cases, forward-looking statements and information can be identified by
terminology such as "may", "will", "should", "expects", "projects", "plans",
"proposed", "anticipates", "targets", "believes", "estimates", "continue", "
designed", "objective", "potential" and similar expressions. In particular, this
document contains forward-looking statements and information with respect to:
estimated volumes and timing of future production; business plans for drilling,
exploration and development; estimated dates for seismic and other programs; and
other expectations, beliefs, plans, goals, objectives, assumptions, information
and statements about possible future events, conditions, results of operations
and performance. These forward-looking statements are based on assumptions and
are subject to numerous risks and uncertainties, certain of which are beyond the
Company's control, including: the impact of general economic conditions,
industry conditions, volatility of commodity prices, currency exchange rate
fluctuations, imprecision of reserve estimates, uncertainty regarding drilling
results, environmental risks, competition from other explorers, stock market
volatility and ability to access sufficient capital. As a result, the Company's
actual results, performance or achievement could differ materially from those
expressed in, or implied by, these forward-looking statements and, accordingly,
no assurance can be given that any events anticipated by the forward-looking
statements will transpire or occur. In addition, the reader is cautioned that
historical results are not necessarily indicative of future performance.