First Quarter Operations Update
PERMIAN BASIN:
East Hobbs Unit, Lea County, New Mexico – Two wells which were part of a seven well drilling program in the fourth quarter of 2004, were completed and placed in production in the first quarter of 2005. All of these wells typically have four potential production zones with most of them producing from the lower three zones. In one of these wells the Company also recently opened the upper zone and that well is currently producing in excess of 100 BOEPD (Barrels of Oil Equivalent Per Day). Two of the other wells, which were recently completed, have similar structural characteristics and comparable log values as this well and, therefore, the Company intends to recomplete these two wells by early May. Net production from the seven wells drilled in the fourth quarter approximates 235 BOEPD. Arena plans to drill three additional developmental wells on this property in 2005.

The Company is initiating a waterflood project on three formations on this property as well. The construction of a tank battery and water plant was approximately 30% completed in the first quarter and should be completed, including the installation of a water injection pump, by the end of May. One well was converted to a water injection well in the first quarter and four additional wells are to be converted by late May. Water injection is anticipated to commence in June 2005. Since acquiring this lease in May 2004, the Company has more than doubled net daily production to over 510 BOE at a cost of approximately $2 million, or approximately 20% of its original acquisition cost.

Fuhrman – Mascho, Andrews County, Texas – Acquired in December 2004, the Company has identified 130 developmental drilling locations on this 11,300 acre property which is located in an area of intense current development drilling activity. The Company has secured a drilling rig under a long-term contract and the first of 27 wells planned to be drilled in 2005 will commence in mid April. Also in the second quarter the Company will begin a re-stimulation program using new fracturing technology that has been utilized by others to greatly improve daily production in surrounding fields. Arena has over 200 wellbores which are being evaluated for this program, with work on the first 12 wells scheduled to commence in early May.

West San Andres, Yoakum County, Texas – One developmental well was drilled in January 2005 through multiple San Andres zones. Now completed, current production is over 30 BOEPD and increasing daily from the upper zones. The lower two zones have been completed and are considered commercial. Production from the lower two zones will be combined with the upper zone for an estimated total of 60 BOEPD. The lease has 11 currently active producing wells, most of which have never been fractured. The lease contains several inactive wellbores which could also have re-frac potential. The Company currently plans to perform the new frac procedure on two wells during the second quarter.

Seven Rivers Queen, Lea County, New Mexico – In the second quarter, remedial work on five existing wells and the workover of two existing wells using the new fracturing technique is scheduled to be completed.

KANSAS:
Auntie Em Unit, Haskell County, Kansas – In March 2005, the Company tripled its acreage position on this prospect by acquiring an additional 2,500 acres. In the third quarter, 2005, two additional developmental wells are planned to be drilled on this lease. The Company currently has three producing gas wells on the original lease.

Syracuse Prospect, Hamilton County, Kansas – Arena entered into a definitive agreement in March 2005, to acquire approximately 13,000 acres for future exploration and development.

Rocky Prospect, Greeley County, Kansas – Arena entered into a definitive agreement in March 2005, to acquire approximately 2,000 acres for future exploration and development.

CREDIT FACILITY:
The Company's credit facility with Mid First Bank of Oklahoma City has been increased from $25 million with an immediate borrowing base of $15 million to $50 million with an immediate borrowing base of $35 million. The interest rate is LIBOR + 2 _ %. The Company currently has $5 million outstanding on this facility.

RECENT STOCK SALES BY EXECUTIVE OFFICERS:
During the period from March 31 - April 8, the Company's two principal stockholders and executive officers, Stan McCabe and Tim Rochford, each sold 100,000 shares of Company common stock owned by them through representatives of the Company's underwriters utilized in the Company's 2004 public offering of units. These sales were made after the representatives of the underwriters requested that Messrs. McCabe and Rochford make available some of their shares. The representatives waived the provisions of the Lock-Up Agreements entered into as part of the 2004 offering, which otherwise prohibit Messrs. Rochford and McCabe from selling shares until August 2005. Following these sales, Messrs. McCabe and Rochford continue to own 1,113,000 and 1,112,600 shares of the Company's outstanding common stock, respectively (with each holding approximately 11% of the Company's outstanding common stock, compared to 12% before the sales, which amounts do not include shares which they may each acquire pursuant to currently exercisable stock options). These shares continue to remain subject to the Lock-Up Agreement, until August, 2005. Neither Mr. McCabe nor Mr. Rochford has any present intention to sell any additional shares.

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08.25.05
Arena Resources, Inc. Announces Redemption of Public Warrants

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04.13.05
Arena Resources, Inc. Provides
First Quarter 2005
Operations Update