Arcan Resources Ltd. Announces Third Quarter 2008 Results

Arcan Resources Ltd. (TSX VENTURE:ARN) ("We", "Arcan" or the "Company"), is
pleased to announce third quarter results.


THIRD QUARTER 2008 HIGHLIGHTS

- The Company increased production, revenue, cash flow from operating
activities, funds from operations, netbacks and net income over Q3, 2007;


- The Company increased production to 1,444 boe per day for the three months
ended September 30, 2008 up 11% over the 1,304 boe per day in Q3, 2007 and down
10% from 1,604 boe per day in Q2, 2008;


- Operating netbacks of $56.64 per boe (revenue of $103.03 per boe and operating
cost of $18.68 per boe) were up 37% from $41.49 per boe in Q3, 2007 and down 25%
from $75.95 per boe in Q2, 2008;


- Funds from operations increased 69% to $6.7 million ($0.17 per diluted share)
from $4.0 million ($0.11 per diluted share) in Q3, 2007 and down 30% from the
$9.6 million ($0.24 diluted per share) in Q2, 2008;


- Drilled five (4.0 net) oil wells including one water source well in Deer Mountain;

- Bank line increased to $50 million from $40 million with net debt and working
capital of $32.4 million at September 30, 2008; and


- In early Q4 2008, successfully drilled its first oil well on its new 59
section block of lands south and adjacent to its Deer Mountain Unit property.
Arcan's management expects that this well will prove up additional reserves and
demonstrate drilling opportunities south and east of Arcan's existing unit.




Financial and                Three Months Ended           Nine Months Ended
 Operating Summary  --------------------------------------------------------
                     September 30, September 30, September 30, September 30,
                             2008          2007          2008          2007
                    --------------------------------------------------------
Financials ($000s
 except per share
 amounts)
 Oil and NGL sales         11,863         6,452        34,447        15,313
 Natural gas sales          1,827         1,344         6,111         4,953
                    --------------------------------------------------------
Total petroleum and
 natural gas revenue       13,690         7,796        40,558        20,226
Cash flow from
 operating (GAAP)           7,150         3,414        19,379         6,830
Funds from operations (1)   6,747         3,981        22,567         8,760
 Per share basic (1)         0.18          0.12          0.60          0.28
 Per share diluted (1)       0.17          0.11          0.58          0.28
Net Income (loss)           2,145           152         7,772          (779)
 Per share basic             0.06          0.00          0.21         (0.02)
 Per share diluted           0.05          0.00          0.20         (0.02)
Capital expenditures -
 cash                      11,323        11,500        24,941        41,039
Total Assets              143,006       107,175       143,006       107,175
Total Liabilities          54,340        27,747        54,340        27,747
Shareholders' equity       88,666        79,427        88,666        79,427
Bank Loan, net of cash
 and cash equivalents      22,919         8,619        22,919         8,619
Net debt and working
 capital                   32,412        14,585        32,412        14,585
----------------------------------------------------------------------------
Operating, General and
 Administrative (G&A)
Production:
 Crude oil (bbls per day)   1,087           929         1,137           800
 Natural gas (mcf per day)  2,144         2,246         2,228         2,384
                    --------------------------------------------------------
 Total (boe per day) (6:1)  1,444         1,304         1,508         1,197
Average realized price:
 Crude oil ($ per bbl)     118.63         75.47        110.57         70.15
 Natural gas ($ per mcf)     9.26          6.51         10.01          7.61
                    --------------------------------------------------------
 Combined average (incl.
  processing revenue)      103.03         65.01         98.14         62.02
 ($ per boe)
Netback ($ per boe)
Petroleum and natural
 gas sales                 103.03         65.01         98.14         62.02
Royalties                   27.71         14.12         21.63         14.88
Operating and
 transportation expenses    18.68          9.40         14.08          9.04
                    --------------------------------------------------------
Operating netback           56.64         41.49         62.43         38.10
G&A expenses - cash          5.06          6.02          5.91          9.44
Interest expense - net       0.78          2.26          1.69          1.85
                    --------------------------------------------------------
Corporate netback           50.80         33.21         54.83         26.81
----------------------------------------------------------------------------
Common Shares (000s)
Shares outstanding, end
 of period                 37,869        36,471        37,869        36,471
Weighted average shares
 (2) - basic               37,829        33,744        37,448        31,472
     - diluted             39,096        36,370        38,746        31,472

(1) The reader is referred to the section -- "Special Note Regarding
    Non-GAAP Measures".
(2) In computing the net loss per diluted share in the nine month 2007
    period, nil shares were added to the weighted average number of shares
    outstanding because they were anti-dilutive.



Overview

Global equity markets have contracted significantly and this has been, and may
continue to be, very challenging for smaller producers. This volatile and
uncertain environment poses new challenges, including the assessment of when a
recovery will occur and what other unpredictable series of events could precede
it. To deal with these uncertainties Arcan is utilizing the knowledge of its
Board of Directors and financial partners, and is assessing all operating and
capital needs on an ongoing basis. Arcan continues to work closely with its
financiers and lenders to keep abreast of external credit issues as well as
keeping our lenders informed of Arcan's ongoing operations and plans. Oil and
gas prices now hover near Q4, 2006 levels with oil near $60 per boe Edmonton and
gas near $40 per boe for Alberta spots. At these prices Arcan has adequate cash
resources to complete the $4.0 million in capital commitments it has outstanding
as well as fund operations and working capital requirements. Arcan's common
shares have traded recently at levels that management considers do not reflect
the full value of the Company. Arcan is reviewing all areas of its operations to
generate cost reductions in order to remain competitive in this restrictive
environment. Arcan's production base should remain relatively stable as its
largest asset at Deer Mountain is part of a large very mature and predictable
oil field. The majority of Arcan's assets are under waterflood, which should
assist in limiting production decline rates. Under a stable production base,
Arcan estimates that it would remain cash flow positive even at $30.00 per boe
oil prices. Arcan will continue to adjust to commodity and market conditions and
modify its spending accordingly.


Strong oil production combined with price for light oil provided Arcan with
funds from operations for the three and nine month periods ended September 30,
2008, of $6.7 million and $22.6 million, respectively, a 70% and 159% increase
over the $4.0 million and $8.8 million, respectively, for the three and nine
month periods ended September 30, 2007. For the three months ended September 30,
2008 production was 1,444 boe per day which is 11% higher than the 1,304 boe per
day average production for the three months ending September 30, 2007.


Successful drilling in Deer Mountain lifted production at the end of the third
quarter, with current production from Deer Mountain exceeding 1,000 (800 net)
boe per day. Deer Mountain continues to perform well as we see reservoir
pressure response from water injection and new drilling locations being tied-in.
Subsequent to the third quarter, Arcan drilled its first well on its new 59
section block of lands immediately adjacent to the south of Deer Mountain Unit
2. The new well is on production at over 75 (50 net) boe per day and Arcan's
management expects that this well will prove up additional reserves and
demonstrate productivity extensions south and east of Arcan's existing unit.


Arcan continues its efforts to have its Maximum Rate Limitations ("MRL's"), and
thereby production, lifted in Hamburg. Arcan expects to produce between 1,600
and 1,800 boe per day in the fourth quarter of 2008 taking into consideration
the impact of new production in Deer Mountain, however providing no increases
for potential MRL's being lifted in Hamburg. Arcan's production and investment
in drilling continues to be levered towards 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 and high reserve potential.
Paramount to Arcan and to its management team is adding value for the Company's
shareholders.


Overview of Arcan's Core Areas

Hamburg

Production averaged 775 boe per day with $55.95 per boe operating netbacks for
the three months ended September 30, 2008 up from 491 boe per day and $45.73 per
boe operating netbacks in the three months ended September 30, 2007. For the
nine months ended September 30, 2008 production averaged 822 boe per day with
$67.66 per boe operating netbacks up from 367 boe per day and $48.11 per boe
operating netbacks in the nine months ended September 30, 2007. Production rates
in the third quarter partially 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 a portion of the third quarter and was shut-in due to over
production and will likely be converted into a water injection well as part of
an expanded Enhanced Recovery Scheme ("ER Scheme"). Elevated operating costs in
the third quarter reflected an expensive work-over performed by helicopter on
one of the wells. Arcan is investigating all weather roads to limit the high
costs of summer access.


Arcan has drilled a total of seven wells in the area of the GG Pool located in
Twp. 096 Range 09W6M. As of the date hereof, only three (two producers and one
injector) of these wells are within the boundaries of the approved ER Scheme and
have Good Production Practice ("GPP") status with the balance of the wells
remaining on limited rates by MRL's. Recently Arcan, together with its partner,
have filed a joint application to expand the ER Scheme to include all producing
wells. As well, Arcan's partner has filed a letter of non-objection. Arcan
anticipates that this may expedite the final approval process.


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 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 market conditions, budget availability,
as well as other avenues to facilitate its development and exploration programs.


McLeod

Production averaged 145 boe per day with $18.96 per boe operating netbacks for
the three months ended September 30, 2008, down from 359 boe per day with $22.97
per boe operating netbacks in the three months ended September 30, 2007.
Production averaged 194 boe per day with $31.78 per boe operating netbacks for
the nine months ended September 30, 2008, down from 397 boe per day with $28.15
per boe operating netbacks in the nine months ended September 30, 2007.
Production declines reflect both shut in periods as well as normal declines from
lack of investment. Higher operating costs reflected work done related to
operations to re-commence production from the area after the shut-in period as
well as $188,000 in retro-active processing cost adjustments.


In mid-June 2008, a third party operator commenced a planned shut down of its
infrastructure which shut-in Arcan's production from McLeod until the start of
August. These wells, one (0.5 net) new well that was drilled late in Q2, 2008
plus an additional well that has been shut-in since March, are now on production
and are averaging approximately 200-300 boe per day under continued facility
capacity constraints.


Arcan is evaluating further delineation drilling and down-space drilling in our
main pool in McLeod. However, additional drilling would cause further pipeline
capacity issues and would involve expending capital for any production
additions. Arcan's budget remains restricted in the McLeod areas and has been
restricted over the past eighteen months to focus on its higher netback oil
properties. In the McLeod area Arcan has a further four locations with proposed
drilling depths of around 2,500 meters which have been surveyed and other deeper
opportunities in the area are being accumulated.


Deer Mountain

Production averaged 521 boe per day with $62.93 per boe operating netbacks for
the three months ended September 30, 2008 up from 444 boe per day with $53.75
per boe operating netbacks in the three months ended September 30, 2007.
Production averaged 489 boe per day with $67.08 per boe operating netbacks for
the nine months ended September 30, 2008 up from 412 boe per day with $40.45 per
boe operating netbacks in the nine months ended September 30, 2007. In Deer
Mountain development drilling followed by reservoir pressure maintenance through
water pressure remain the keys to maximizing asset potential.


Since early June, 2008 Arcan has drilled nine (8.1 net) wells in Deer Mountain
Unit 2. Six of the new unit wells are on production as oil wells, one well has
been completed as a water injector, one well was drilled off reef and abandoned,
and one well is awaiting tie-in as a water source well. The newly completed oil
wells are on-stream at initial rates between 60 - 250 (50 - 200 net) boe per day
each of flush production. Arcan has been encouraged by the north eastern reef
edge extension wells delineated by its proprietary 3D seismic. These wells have
indicated the presence of economic reservoir and established further drilling
locations on the eastern edge of the field, as well as adding validity to
Arcan's seismic interpretation. Arcan anticipates drilling additional wells into
this newly defined reef edge extension followed by subsequent reservoir pressure
support through increased water injection.


In addition to the drilling in Deer Mountain Unit 2, Arcan has drilled and
completed its first well in early Q4, 2008 on its new lands immediately to the
south of Deer Mountain Unit 2. Earlier in 2008, Arcan expanded its interests in
the area with the acquisition of varied interests (30% to 100%) in over 59
sections and a 19.5 section farm-in on lands immediately adjacent to the south
of its Deer Mountain Unit. The new well is on production at over 75 (50 net) boe
per day and Arcan's management expects that this well will prove up additional
reserves and demonstrate productivity extensions south and east of Arcan's
existing unit. Arcan has further option wells that it may embark upon to expand
this play. Arcan has proprietary 3D seismic over this first drilling location
and has elected to shoot further 3D seismic to the south to delineate additional
drilling locations. Further successful wells could add to Arcan's extensive oil
resource play and generate significant follow-up and extension opportunities.
Arcan's Deer Mountain property contains a large inventory of low risk
development infill oil wells with high reserve impact and light oil netbacks.


Outlook

The significant reductions in commodity prices combined with the impact of the
securities market fluctuations in the fourth quarter of 2008 make forecasting as
difficult as it has ever been. To ensure maximization of value to Arcan
shareholders, cost reduction measures and increased scrutiny of capital and
related controls will be paramount. Arcan's capital plan for the balance of 2008
and into 2009 is to develop and expand the assets we already own and have
invested in. Arcan expects that will lead it to drill reserve development wells
and pool delineation wells in Deer Mountain, additional development gas wells
and exploration wells in McLeod, and development wells in our Hamburg pool.
Arcan may also look to add and possibly consolidate interests in its core areas.
These activities are expected to add production and value on a very capital
effective basis. Arcan continues to consider possible opportunities for
strategic acquisitions or other business transactions. 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 increasing value. Arcan is maximizing its 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 continue to direct our
investments into these areas as oil prices and netbacks continue to outperform
those of natural gas on a per boe basis. We are monitoring and planning for the
impact of the changes and the modifications to the Alberta royalty rates.


Arcan will be filing its 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. 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 of the Company 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 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 3,656,000 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.