Arena Resources Announces 2009 Capital Expenditure Increase to $85 Million
Second Company-owned Drilling Rig To Be in Operation at Fuhrman-Mascho in June
Tulsa, Oklahoma — May 7, 2009 — Arena Resources, Inc. (NYSE-ARD)(“Arena”)(“Company”) announced today that the Board of Directors of Arena has approved a $20 million increase in its capital expenditure budget (“CAPEX”) for 2009, making a total of $85 million. The additional funds are directly related to increased activity at the Company’s Fuhrman-Mascho property in Andrews County, Texas.
Management stated that it will put in operation in early June its second company-owned drilling rig at the Fuhrman-Mascho. During 2008, with commodity prices at their peak, the Company had as many as five rigs active at the Fuhrman-Mascho. The additional funds will be used to increase the number of new development wells to be drilled on this property in 2009 from approximately 80 to an estimated 120.
In preparation for the increased development activity, the Company announced today that effective June 1, 2009, it had monetized its current hedging component, a costless collar, on 1,000 barrels of oil per day with a $100.00 floor and $197.00 ceiling and a remaining period to December 31, 2009. This will result in additional cash to the Company of approximately $9.5 million. In addition, the Company implemented a new hedge, a costless collar, on 3,000 barrels of oil per day with a $50.00 floor and $72.60 ceiling for the period June 1, 2009 to December 31, 2009.
Mr. Phil Terry, President and Chief Executive Officer stated, “We are pleased to announce that we are accelerating our development activity and have taken steps to assure that growth. With the monetization of our current hedge and the implementation effective June 1 of our new hedge, we will have approximately $65 million in cash. By combining our cash position with our restructured credit facility which is expected to be finalized in the next 30 days, we will have immediate access to approximately $140 million and the ability to add an additional $75 million through the accordion feature. With these new strategies in place and the resulting cash availability, management is confident in its ability to accelerate growth and continue to manage that growth within anticipated cash flow while remaining postured to take advantage of potential acquisition opportunities.”
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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. |
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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.
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For further information contact:
Bill Parsons • Vice President Investor Relations
480-947-1589 • bparsons@arenaresourcesinc.com |
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