Arena Resources, Inc. — Oil and Gas Development

Arena Resources, Inc. Announces Record Third Quarter and Nine Month 2006 Financial and Operating Results
129% Increase In Revenue For The Three Months to $18.19 Million
132% Increase In Net Income For The Three Months to $8 Million
Tulsa, Oklahoma — November 6, 2006 — Arena Resources, Inc. (AMEX: ARD) ("Arena" or the "Company") announced today financial results for the third quarter and nine months ended September 30, 2006. For the three month period ended September 30, 2006, Arena had oil and gas revenues of $18,192,860, compared to $7,937,785 for the quarter ended September 30, 2005, a 129% increase, and net income for the quarter of $8,006,824, or $0.51 per fully diluted share, compared to net income of $3,443,999, or $0.27 per fully diluted share, for the same period in 2005, a 132% increase. For the nine month period ended September 30, 2006, the Company reported oil and gas revenues of $43,263,323, compared to oil and gas revenues of $16,481,074 for the nine month period ended September 30, 2005, a 163% increase. Net income for the nine month period ended September 30, 2006 was $18,034,724, or $1.22 per fully diluted share, compared to net income of $6,445,798, or $0.53 per fully diluted share, for the same period in 2005, a 180% increase.

The revenue increase was due to increases in production volumes, development activity and increased oil and gas prices. For the three months ended September 30, 2006, oil sales volume increased to 256,366 barrels, compared to 123,600 barrels for the same period in 2005, a 107% increase, and gas sales volume increased to 276,881 MCF (thousand cubic feet), compared to 105,629 MCF for the same period in 2005, a 162% increase. For the nine months ended September 30, 2006, oil sales volume increased to 631,455 barrels, compared to 293,094 barrels for the same period in 2005, a 115% increase, and gas sales volume increased to 617,745 MCF, compared to 273,912 MCF for the same period in 2005, a 126% increase. The average commodity prices received by Arena were $63.91 per barrel of oil and $6.53 per MCF of natural gas for the quarter ended September 30, 2006, compared to $58.92 per barrel of oil and $6.20 per MCF of natural gas for the quarter ended September 30, 2005. The average prices received for the nine months ended September 30, 2006 were $61.91 per barrel of oil and $6.75 per MCF of natural gas, compared to $51.05 per barrel of oil and $5.55 per MCF of natural gas for the nine month period ended September 30, 2005.

Lease operating expenses for the three months ended September 30, 2006 were $8.34 per barrel of oil equivalent ("BOE"), a 22% decrease from the prior year. Depreciation, depletion and amortization costs increased 30% to $5.92 per BOE. General and administrative costs, which included a $263,619 charge for stock based compensation and New York Stock Exchange fee of $150,000, were $3.82 per BOE, a 89% increase. For the nine months ended September 30, 2006, lease operating expenses were $9.26 per BOE, a 13% decrease from the prior year. Depreciation, depletion and amortization costs were $5.79 per BOE, a 26% increase, and general and administrative costs, which included a $656,919 charge for stock based compensation and New York Stock Exchange fee of $150,000, were $3.58 per BOE, a 35% increase.

There was no outstanding debt on the Company’s $150 million bank credit facility at September 30, 2006.Net cash flow from operations for the three and nine months ended September 30, 2006 was $14,914,941, or $0.96 per fully diluted share, and $34,535,543, or $2.33 per fully diluted share, compared to net cash flow of $6,142,832 or $0.47 per fully diluted share, and $11,873,191, or $0.98 per fully diluted share for the same periods in 2005 (1).

Arena's Chief Executive Officer, Mr. Tim Rochford, stated, "The third quarter was another record for us in production, revenues, net income and cash flow. We drilled a total of 36 new wells in the quarter with a 100% success rate, including 27 wells on our Fuhrman-Mascho lease in Andrews County, Texas. We plan on drilling 43 new wells in the fourth quarter and re-fracing another 15. We are currently drilling our 107th well on 20-acre spacing on the Fuhrman-Mascho lease with a 100% success rate. We still anticipate our production exit rate doubling from 2,000 BOEs per day at the end of 2005 to 4,000 BOEs per day at the end of 2006. We continue to add acreage in Kansas and Texas and explore acquisition opportunities."

Non-GAAP Financial Measures:
Earnings for the three months ended September 30, 2006 include a non-cash charge for stock based compensation of $263,619. Earnings for the nine months ended September 30, 2006 include a non-cash charge for stock based compensation of $656,919 and a nonrecurring non-cash charge of $785,598 for warrants issued as part of a financing in July, 2005. Excluding such items, the Company’s earnings would have been $0.53 per diluted share for the three months ended September 30, 2006, and $1.25 for the nine months ended September 30, 2006. The Company believes results excluding these items are more comparable to estimates provided by security analysts and, therefore, are useful in evaluating operational trends of the Company and its performance, compared to other similarly situated oil and gas producing companies.

(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.

ARENA RESOURCES, INC. STATEMENTS OF OPERATIONS

Three Months Ended
September30

Nine Months Ended
September30

2006
(Unaudited)

2005
(Unaudited)

2006
(Unaudited)

2005
(Unaudited)

Oil and Gas Revenues

Costs and Operating Expenses
Oil & gas production costs
Oil & gas production taxes
Depreciation, depletion
& amortization
Accretion expense
General & administrative expense

Total Costs &
Operating Expenses

Other Income (Expense)
Gain from change in fair value
of put options
Other financing expense
Interest income (expense)

Net Other Income (Expense)

Income Before Provision for
Income Taxes

Provision for Deferred
Income Taxes

Net Income

Basic Net Income Per
Common Share

Diluted Net Income
Per Common Share

Basic Weighted-Average
Common Shares Outstanding

Diluted Weighted-Average
Common Shares Outstanding

$18,192,860

1,455,453
1,067,114

1,791,681
41,934
1,154,243

5,510,246

—
—
135,272

135,272

12,817,886

(4,811,062)

$ 8,006,824

$ 0.55

$ 0.51

14,625,789

15,579,742

$7,937,785

946,380
569,330

645,908
25,158
285,828

2,472,604

20,627
—
(19,266)

1,361

5,466,542

(2,022,543)

$ 3,443,999

$ 0.30

$ 0.27

11,491,994

12,982,252

$43,263,323

4,124,281
2,673,768

4,253,142
104,697
2,626,659

13,782,547

—
(785,598)
40,414

(745,589)

28,735,187

10,700,463

$18,034,724

$ 1.30

$ 1.22

13,865,528

14,827,539

$16,481,074

2,384,816
1,230,444

1,550,791
74,484
898,195

6,138,730

86,497
—
(189,541)

(103,044)

10,239,300

(3,793,502)

$6,445,798

$ 0.61

$ 0.53

10,554,879

12,061,207

COMPARATIVE OPERATING STATISTICS

Three Months Ended September 30

2006

2005

Change

Net Production - BOE per day
Per BOE:
  Average Sales Price

  Operating Costs
  DD&A
  General & Administrative Expenses
  Interest Expense

3,288

$ 60.14

8.34
5.92
3.82
(0.45)

1,535

$56.21

10.73
4.57
2.02
.14

114%

7%

- 22%
30%
89%
- 421%

Nine Months Ended September 30

2006

2005

Change

Net Production - BOE per day
Per BOE:
  Average Sales Price

  Operating Costs
  DD&A
  General & Administrative Expenses
  Interest Expense

2,690

$ 58.91

9.26
5.79
3.58
(0.05)

1,241

$48.65

10.67
4.58
2.65
0.56

117%

21%

- 13%
26%
35%
- 109%

CONSOLIDATED BALANCE SHEET

September 30
2006

December 31
2005

ASSETS
Current Assets
   Cash
   Account receivable
Joint interest billing receivable
   Prepaid expenses
   Total Current Assets

$ 4,740,380
5,555,236
2,123,377
191,912
12,610,905

$ 4,317,114
3,180,749
140,561
35,436
7,673,860

Property and Equipment,
Using Full Cost Accounting
   Oil and Gas properties subject to amortization
   Equipment
   Drilling rig
   Office equipment
   Total Property and Equipment
   Less: Accumulated depreciation and amortization
   Net Property and Equipment
Total Assets

134,843,146
58,962
2,038,986
124,899
137,065,993
(8,599,770)
128,466,223
$ 141,077,128

69,770,685
26,687
1,191,126
106,177
71,094,675
(4,346,628)
66,748,047
$ 74,421,907

LIABILITIES AND STOCKHOLDERS' EQUITY

Current Liabilities
   Accounts payable
   Accrued liabilities
   Put option
   Total Current Liabilities
Long-Term Liabilities
   Notes payable to related parties
   Asset retirement liability
   Deferred income taxes
   Total Long-Term Liabilitiess

$ 8,358,619
—
318,390
8,677,009

400,000
1,809,370
16,046,187
18,255,557

$ 6,038,691
329,986
221,519
6,590,196

400,000
1,515,347
7,187,609
9,102,9560

Stockholders' Equity
   Preferred stock - $0.001 par value; 10,000,000 shares authorized; no shares issued or outstanding
   Common stock - $0.001 par value; 100,000,000 shares authorized; 14,601,655 shares and 13,099,702 shares outstanding respectively
   Additional paid-in capital
   Options and warrants outstanding
   Deferred compensation
   Retained earnings
   Total Stockholders' Equity
Total Liabilities and Stockholders' Equity

—

14,659
81,446,224
2,632,796
—
30,050,883
114,144,562
$141,077,128

—

13,100
45,331,234
1,483,807
(115,545)
12,016,159
58,728,755
$74,421,907

STATEMENTS OF CASH FLOW

Nine
Months Ended
September 30
2006

Nine
Months Ended
September 30
2005

Cash Flows From Operating Equities
   Net income
   Adjustments to reconcile net income to net cash
   Provided by operating activities:

   Warrants issued for financing expense
   Depreciation, depletion & amortization
   Provision for income taxes
Gain from change in fair value of put option
   Stock based compensation
   Accretion of discounted liabilities
Changes in assets and liabilities:
   Accounts & joint interest receivable
   Pre-paid expenses
   Income taxes payable and deferred income taxes
   Excess tax benefits from shared-based
    payment arrangements
   Accounts payable & accrued liabilities
Net Cash Provided by Operating Activities

$ 18,034,724

785,598
4,253,142
10,700,463
—
656,919
104,697

(4,357,303)
(156,476)
(320,058)

(1,851,813)
2,410,618
30,260,511

$ 6,446,798

—
1,550,791
3,793,502
(86,497)
95,113
74,484

(1,719,545)
—
—

—
(295,567)
9,858,079

Cash Flows From Investing Activities
   Purchase and development of oil and gas properties
   Purchase of machinery & equipment
   Maturity of long-term investment
Net Cash Used in Investing Activities

(61,556,302)
(717,818)
25,234
(62,274,120)

(18,021,414)
(41,874)
51,268
(18,063,288)

Cash Flows From Financing Activities
   Proceeds from issuance of common
      stock, net
   Proceeds from exercise of warrants,
      net of offering costs
   Proceeds from exercise of options
   Excess tax benefits from share-based
     payment arrangements
   Funds received and held for call options
   Funds paid from held for call options
   Proceeds from issuance of notes payable
   Payment of notes payable
   Net Cash Provided by
   Financing Activities
Net Increase in Cash
Cash at Beginning of Period
Cash at End of Period

Supplemental Cash Flow Information
   Cash paid for income taxes
   Cash paid for interest

Non-Cash Investing and Financing Activities
Common stock issued for properties & equipment
Asset retirement obligation incurred in property development

29,788,881

150,000
640,000

1,851,813
1,272,093
(1,265,912)
11,000,000
(11,000,000)

32,436,875
423,266
4,317,114
$   4,740,380

$   329,986
180,702

$   3,507,872
189,326

9,916,749

13,605,728
—

—
—
—
—
(10,000,000)

13,522,477
5,317,268
1,253,969
$ 6,571,237

$ 73,641
189,541

$ 3,507,872
28,090

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