ARAKIS ENERGY REPORTS FURTHER ON APPROVAL PROCESS FOR SUDAN PROJECT FINANCING.

VANCOUVER, BC--(BUSINESS WIRE)--Aug. 16, 1995-- ARAKIS ENERGY CORPORATION refers to its previously announced US$750,000,000 Sudan project financing commitment by the Saudi Arabia-based Arab Group International for Investments and Acquisition Co. Ltd. ("AGI") and its associated investors.

The Company wishes to clarify that in any prior announcements, reference to the Arab Group International specifically relates to AGI in its sole capacity. The Company wishes to further clarify that closing remains subject to a number of conditions precedent including, approval of the Company's shareholders to the acquisition of greater than a 20 percent interest in the Company's issued share capital by AGI or its associates, provision of appropriate independent appraisals of the equipment if supplied by AGI, and submission to and acceptance of final documentation by the Vancouver Stock Exchange ("V.S.E."). The V.S.E. has given preliminary approval to the financing. The special shareholders meeting has been scheduled for August 24, 1995 and the formal closing is scheduled on or before September 15, 1995. All required regulatory disclosure requirements have been satisfied.

In this regard, AGI has committed a total of US$345,000,000, to close by September 15, 1995, toward the equity portion of the financing; a further US$405,000,000 in the form of a letter of credit has been committed and guaranteed by AGI to fund the complete construction of a 950-mile, 24" oil export pipeline connecting the company's Greater Heglig and Unity field areas in central Sudan to the saltwater export terminal at Port Sudan. Initial commercial production of 100,000 bopd is slated to begin in late 1996/early 1997; it is anticipated to grow to over 300,000 bopd by the end of the decade.

Arakis engineering staff have fast-tracked the development of the 100 percent-owned, 12.2 million acre concession, granted to Arakis' wholly-owned subsidiary, State Petroleum Corporation, in 1993. State Petroleum also holds an option on an additional 30 million acres. Arakis' concession area is currently estimated to contain over 395 million barrels of recoverable reserves with additional potential of 3.5 billion barrels of recoverable reserves, according to estimates by independent engineers. Approximately 150 technical staff skilled in various aspects of oil exploration, development and pipeline construction and operation are presently based at the Company's field camp at Heglig. With the assistance of AGI, construction equipment and materials are presently being mobilized to the Sudan from Jeddah, Saudi Arabia, and elsewhere. Various tenders for key portions of the project have been or are in the process of being submitted to a number of pre-qualified international contractors and vendor suppliers. Arakis and AGI are endeavouring to have all major contracts in place by September 15, 1995. The export pipeline and field development is scheduled for completion by late 1996. Trucking of oil from the fields to supply local needs within Sudan is currently being reviewed. This could begin immediately once suitable trucks are in place; AGI is working with Arakis to arrange this.

Arab Group International, based in Riyadh, Saudi Arabia, has investments in international trucking, transportation, construction and real estate. The Chairman of AGI, H.R.H. Prince Sultan bin Saud bin Abdullah al Saud was elected Chairman of the Board of Directors of Arakis Energy Corporation at a special directors' meeting held on July 25, 1995, in Vancouver. Through this Sudan project financing, Prince Sultan will be purchasing 10,000,000 shares in the capital stock of Arakis. Mr. Abbas Salih, Managing Director of AGI will also be purchasing 10,000,000 shares; and Mr. Haroun Hamid Haroun, a close associate of Prince Sultan, will be purchasing 3,000,000 shares. The shares will be issued in four separate tranches, with each tranche requiring a separate filing with the V.S.E. The Company will be filing concurrently with the closing of the private placement a Statement of Material Facts with the V.S.E. and the British Columbia Securities Commission.

Arakis Energy Corporation is a Canadian-based independent oil and gas company which, in addition to exploring and developing its Sudan concessions, holds interests in exploration concessions in Papua New Guinea and Oman. The Company is also a significant producer and developer of natural gas reserves in the Appalachian Basin of the U.S.

ON BEHALF OF THE BOARD

Terry Alexander, President and Chief Executive Officer

CONTACT: David Harrison, 604/685-7933 or

604/685-8109 (Fax)