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Arena Resources, Inc. Announces 2004 Year End Production and
Reserves
Tulsa,
Oklahoma — March 4, 2005 — Arena Resources, Inc. (AMEX: ARD, ARD.WS)
("Arena") ("Company") announced today that its estimated total proved reserves
of oil and natural gas as of December 31, 2004 increased 179% to 21.2 million
barrels of oil equivalent (Boe), from 7.6 million Boe at year end 2003. The reserve
breakdown was 19.55 million barrels of crude oil (92%) and 10 Bcf of natural gas
(8%). Of the 21.2 million Boe of total proved reserves, 5.5 million (26%) are
developed.
The estimated present value, using a 10% discount rate, of
the future net cash flows before income taxes of the Company's proved oil and
natural gas reserves as of December 31, 2004 was $302.4 million, using average
prices of $39.00 per barrel for oil and $5.19 per Mcf for natural gas. This compares
to $66.6 million at year-end 2003 using prices of $29.25 for oil and $3.46 per
Mcf for gas. These estimates are based on an independent appraisal of Arena's
oil and gas properties prepared by Lee Keeling & Associates, Inc., Tulsa, Oklahoma.
Total net production for the fourth quarter of 2004 was 72,965 Boe, as compared
to 37,546 Boe over the same period a year ago, an increase of 94%. Net production
for the full year 2004 was 223,333 Boe, compared to 128,868 Boe in 2003, an increase
of 73%. The Company's production exit rate on December 31, 2004 was an estimated
1,100 Boe per day.
Mr. Tim Rochford, President & CEO, stated, "We
are very pleased with the operating results for 2004. Our acquisition and development
activities have combined to replace approximately 1,574% of our 2004 production.
The acquisitions of two Permian Basin properties in May and December of 2004 added
a solid base of daily production and substantially increased our inventory of
development opportunities. Our objective when we began operations in 2001 was
to identify acquisition candidates that have positive cash flow, but more importantly,
significant development opportunities through in-fill drilling, increased density,
field expansion and secondary recovery. With the two acquisitions in 2004, we
have now realized our initial objective of having cash flow from existing production
sufficient to fund the implementation of our development program, which we commenced
in the fourth quarter of 2004 by successfully drilling nine wells. Our 2005 plans
call for drilling a minimum of thirty-three wells, in addition to various workovers
and re-completions on existing wells, with emphasis on the recently acquired properties
while continuing to seek and evaluate additional acquisition candidates."
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.
For further
information contact:
K M Financial, Inc.
Bill Parsons
480-947-1589
k-m-financial@msn.com
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