Arena Resources Announces Second Quarter and Six Month 2005 Financial and Operating Results

158% Increase In Revenue For The Three Months to $4.6 Million 216% Increase In Net Income For The Three Months to $1.7 Million
Tulsa, Oklahoma — July 29, 2005 — Arena Resources, Inc. (AMEX: ARD, ARD.WS) ("Arena") ("Company") announced today financial results for the second quarter and six months ended June 30, 2005. For the three month period ended June 30, 2005, Arena had oil and gas revenues of $4,628,554, compared to $1,792,414 for the quarter ended June 30, 2004, a 158% increase. For the three month period ended June 30, 2005, the Company had net income of $1,731,974, or $0.15 per fully diluted share, compared to net income of $548,548 or $0.07 per fully diluted share, for the same period in 2004, a 216% increase. For the six month period ended June 30, 2005, the Company reported oil and gas revenues of $8,543,289, compared to oil and gas revenues of $2,992,814 for the six month period ended June 30, 2004, a 185% increase. Net income for the six month period ended June 30, 2005 was $3,045,227, or $0.27 per fully diluted share, compared to net income of $858,190, or $0.11 per fully diluted share, for the same period in 2004, a 255% increase.

The revenue increase was due to increases in production volumes, primarily due to acquisitions made in 2004, development activity and increased oil and gas prices. For the three months ended June 30, 2005, oil sales volume increased to 92,233 barrels, compared to 44,663 barrels for the same period in 2004, a 107% increase. For the three months ended June 30, 2005, gas sales volume increased to 84,968 MCF (thousand cubic feet), compared to 40,793 MCF for the same period in 2004, a 108% increase. For the six months ended June 30, 2005, oil sales volume increased to 169,494 barrels, compared to 78,446 barrels for the same period in 2004, a 116% increase. For the six months ended June 30, 2005, gas sales volume increased to 168,283 MCF, compared to 60,116 MCF for the same period in 2004, a 180% increase. The average commodity prices received by Arena were $44.97 per barrel of oil and $5.66 per MCF of natural gas for the quarter ended June 30, 2005, compared to $36.02 per barrel of oil and $3.76 per MCF of natural gas for the quarter ended June 30, 2004. The average prices received for the six months ended June 30, 2005 were $45.32 per barrel of oil and $5.12 per MCF of natural gas, compared to $34.92 per barrel of oil and $4.22 per MCF of natural gas for the six month period ended June 30, 2004.

Total operating expenses for the three and six months ended June 30, 2005 were $1,757,478 and $3,547,536, respectively, as compared to $904,832 and $1,589,150 for the same periods ended June 30, 2004. Depletion costs for the three month period ended June 30, 2005 were $478,351compared to $202,648 for the same period ended June 30, 2004. For the six month period ended June 30, 2005, depletion totaled $891,656 compared to $309,867 for the same period ended June 30, 2004. General and administrative costs for the three and six month periods ended June 30, 2005 were $273,599 and $543,104, respectively, compared to $163,569 and $341,771for the same periods ended June 30, 2004.

Outstanding debt on the Company's bank credit facility at June 30, 2005 was $5 million as compared to $10 million at December 31, 2004 and $10 million at June 30, 2004. Subsequent to June 30, 2005, the Company repaid the $5 million existing balance on its bank credit facility. Net cash flow from operations for the six months ended June 30, 2005 was $5,730,359, or $0.50 per fully diluted share, compared to net cash flow of $1,689,410, or $0.21 per fully diluted share for the same period in 2004 (1).

Through July 29, 2005, Arena has drilled thirteen wells, successfully completed and placed into production nine and has four additional wells that are in varying stages of completion. Additionally, the Company has re-stimulated eight existing wells using the "lite-prop" process. Management has increased its capital budget by $4 million to approximately $18.5 million, thereby increasing the number of development wells to be drilled in 2005 from 33 to 39, and the number of re-stimulations from 12 to 20. Also, the Company has initiated drilling on the first of three test wells on their recent 15,000 acre Kansas lease acquisitions.

Arena's Chief Executive Officer, Mr. Tim Rochford, stated, "As proud and excited as we are regarding the results of the second quarter, we are just now beginning to see the production results of our developmental drilling and re-stimulation work on our Fuhrman-Mascho property. We believe that the drilling activity and infrastructure improvements we began in the second quarter will have a very positive effect on the second half results."

(1) Cash Flow from Operations is a non-GAAP financial measure that represents "Net Cash Provided By Operating Activities" adjusted for the change in operating Assets and liabilities. See below for a reconciliation of the related amounts.

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