Arawak Energy Corporation - Exploration well hits new oil pool in the Besbolek block in Kazakhstan

Arawak Energy Corporation (the "Company" or "Arawak") is pleased to announce an exploration success in its 100% owned Besbolek block in Kazakhstan. Exploration well No. 50 has discovered oil in a previously untested structure in the south of the block. The exploratory concept of the extension of the Upper Triassic paleo-flows into the down-faulted southern Besbolek block was confirmed by the drilling and testing of the exploration well.

Open hole logs establish three hydrocarbon-bearing intervals.

The primary oil accumulation was encountered in the upper Triassic sediments within the lower interval of 347 - 379 meters with gross sand thickness of 33 meters and effective net pay of about 30 meters. On July 19, 2007, the well was perforated in the Upper Triassic interval which resulted in a strong natural flow rate of 90 barrels of oil per day ("bopd") on a 3 mm choke with 7 atm FTP. After the installation of artificial lift we expect the production rate to increase to 250-400 bopd. Extended production testing is still in progress. The oil is of 30 degree API gravity, which is lighter than the main Triassic pool.

The other two hydrocarbon accumulations were penetrated in the Middle Jurassic intervals of 205-213 and 220-230 meters. The exact saturation content will be established after perforating and production testing of the pay intervals. It can be presumed that the oils within these intervals will also be lighter with a higher gas factor than typical Besbolek crude.

The Company's preliminary assessment of reserves discovered indicates likely additions of between 3 to 6 million barrels of proved and probable reserves. These figures will be confirmed after further follow-up wells and updates to the Company's reserves to be undertaken by reserve auditors at year end. Proved and probable reserves attributed to the Besbolek block as of the date of the last audited reserve report, 31 December 2006, were 5.8 million barrels. 28.2 million barrels of proved and probable reserves have been attributed to all of the Company's properties in Kazakhstan.

The 3D seismic model of South Besbolek reveals a complex faulted structure with up to five separate multi-level tectonic blocks. The first appraisal well, No. 51, has already been spudded and is presently drilling at 250 meters and has encounterd encouraging hydrocarbon shows in the Jurassic sediments. A further appraisal drilling program of three to four additional wells is planned for this year to delineate the southern block.

In second half of 2007, Arawak plans a balanced drilling program of exploration, appraisal and development drilling at Besbolek. The Company's drilling program at Besbolek has just been stepped up with the program to the year end increased to 18 wells from the previous 14. All of these wells have been permitted and presently, a 2-rig program is underway. Well No. 50 is the first of 4 exploration leads generated through the 21 square km. 3D seismic shoot acquired, processed and interpreted in 2006.

Alastair McBain, CEO said "We are delighted by the results of the well 50 flow test, which is our first Kazakhstani well with natural flow. Together with the follow up results from well 51 this suggests a significant increase in our reserves on the Besbolek block. This is the perfect start to our ambitious 2007 Kazakhstan drilling program, where we now have 2 rigs running in each of the Besbolek and Akzhar blocks, and demonstrates the excellent technical capabilities of our in house G&G group. We have 3 other new leads identified in the Besbolek block which will be drilled this year as well as numerous leads at Akzhar and we look forward to further good news. The shallow nature of the plays is ideal for our low cost multi well drilling program."

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Arawak's common shares are listed for trading on the TSX under the symbol "ABG". The Company is engaged in the exploration, development and production of oil and natural gas in Kazakhstan, Russia and Azerbaijan. The Company's three producing fields and two exploration blocks in Kazakhstan are held through its 100% wholly-owned subsidiary Altius Energy Corporation ("Altius"). Altius' main producing field is Akzhar, extended in 2006 from 3.8 to 71.5 sq km, with smaller fields at Besbolek and Karataikyz. The two exploration blocks, Alimbai and East Zharkamys III, are also situated in western Kazakhstan. Arawak's assets in Russia are held through ZAO PechoraNefteGas ("PNG") and LLC NK Recher-Komi ("Recher-Komi") in which Arawak has a 50% interest with the remaining interest being held by Lundin Petroleum AB. Also in Russia, Arawak holds a 100% interest in the Kymbozhyuskaya exploration block. In the Azerbaijan Republic, the Company's asset is its interest in the South West Gobustan Exploration Development and Production Sharing Agreement (the "EDPSA"). Commonwealth Gobustan Limited ("CGL"), in which Arawak has a 37.17% interest, holds an 80% interest in the EDPSA with the remaining 20% owned by SOCAR Oil Affiliate.

This press release includes "forward looking statements", which are based on the opinions and estimates of management at the date the statements are made, and are subject to a variety of risks and uncertainties and other factors that could cause actual events or results to differ materially from those projected in the forward looking statements. These risks and uncertainties include, but are not limited to, risks associated with the oil and gas industry (including operational risks in development, exploration and production; delays or changes in plans with respect to exploration or development projects or capital expenditures; the uncertainty of reserve estimates; the uncertainty of estimates and projections in relation to production, costs and expenses and health, safety and environmental risks), the risk of commodity price and foreign exchange rate fluctuations, the uncertainty associated with commercial negotiations and negotiating with foreign governments and risks associated with international activity. Although Arawak believes that its expectations represented by these forward-looking statements are reasonable, there can be no assurance that such expectations will prove to be correct. Additionally, the estimates of reserves and future net revenue for individual properties may not reflect the same confidence level as estimates of reserves and future net revenue for all properties, due to the effects of aggregation. Due to the risks, uncertainties and assumptions inherent in forward-looking statements, prospective investors in the Company's securities should not place undue reliance on these forward-looking statements. For a detailed description of the risks and uncertainties facing Arawak, readers should refer to Arawak's Annual Information Form as filed at www.sedar.com.

Source: Arawak Energy Corporation