SOURCE: Arena Resources, Inc.

December 07, 2006 09:30 ET

Arena Resources, Inc. Adds 4.7 Million Barrels of Oil Equivalent of Proved Reserves in Permian Basin

Increases 2006 Capital Expenditure Budget to $93 Million

TULSA, OK -- (MARKET WIRE) -- December 7, 2006 -- Arena Resources, Inc. (NYSE: ARD) ("Company") ("Arena") announced today that it has acquired three properties ("Leases") located in Andrews County, Texas for a purchase price of $6,117,500, consisting of $5.8 million in cash and 10,200 shares of restricted common stock of the Company valued at $31.13 per share. The cash portion of the purchase price was financed by borrowing on the Company's $150 million credit facility. The effective dates are October 1, 2006 for two of the acquisitions, and November 1, 2006 for the third acquisition.

Property Information

The Leases consist of approximately 5,000 acres. Arena will be the operator and have an average working interest of 97% and average net revenue interest of 74% in these properties. The Leases are contiguous to the Company's Fuhrman-Mascho lease acquired in December 2004. In addition to the producing wells currently on the Leases, Arena's engineering team has identified 90 new drilling locations on 20 acre spacing, with the potential to increase that number through additional in-fill drilling and development.

Production and Reserves

The current net production to the Company from the Leases is approximately 100 BOE (Barrels of Oil Equivalent) per day. The Company's initial reserve estimates, as determined by internal engineering evaluations, indicate the Leases have approximately 4.7 million BOEs of proved reserves net to Arena based on 20 acre spacing. This represents an estimated cost of $1.30 per BOE.

Mr. Tim Rochford, President and CEO of Arena, stated, "We have continued to look for acquisitions that will complement our existing properties. These acquisitions allow us to add significant reserves and drilling locations to our current inventory in the Fuhrman-Mascho at a very attractive price. We have been working on acquiring these properties since we acquired the Fuhrman-Mascho leases in December 2004, and are very pleased to have been able to successfully close these acquisitions."

CAPEX Increase

Arena announced it has also increased its capital expenditure budget to $93 million. The $16.5 million increase in the 2006 capital expenditure budget is primarily a result of the acquisitions described above and escalated development and infrastructure work on the Company's Fuhrman-Mascho lease in Andrews County, Texas and on the East Hobbs San Andres Unit and the Seven Rivers Queen Unit, both located in Lea County, New Mexico.

About Arena Resources, Inc.

Arena Resources, Inc. is an oil and gas exploration, development and production company with current operations in Texas, Oklahoma, Kansas and New Mexico.

This release contains forward-looking statements within the meaning of the "safe-harbor" provisions of the Private Securities Litigation Reform Act of 1995 that involve a wide variety of risks and uncertainties, including, without limitations, statements with respect to the Company's strategy and prospects. Readers and investors are cautioned that the Company's actual results may differ materially from those described in the forward-looking statements due to a number of factors, including, but not limited to, the Company's ability to acquire productive oil and/or gas properties or to successfully drill and complete oil and/or gas wells on such properties, general economic conditions both domestically and abroad, and the conduct of business by the Company, and other factors that may be more fully described in additional documents set forth by the Company.

Contact Information

  • For further information contact:
    Bill Parsons
    K M Financial, Inc.
    (480) 947-1589