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Arena
Resources, Inc. Adds 4.7 Million Barrels of Oil Equivalent
of Proved Reserves in Permian Basin
Increases 2006 Capital Expenditure Budget
To $93 Million
Tulsa, Oklahoma — December 7, 2006 —
Arena Resources, Inc. (AMEX: ARD) ("Arena" or the "Company")
announced today that it has acquired three properties
(“Leases”) located in Andrews County, Texas
for a purchase price of $6,117,500, consisting of $5.8
million in cash and 10,200 shares of restricted common
stock of the Company valued at $31.13 per share. The
cash portion of the purchase price was financed by borrowing
on the Company’s $150 million credit facility.
The effective dates are October 1, 2006 for two of the
acquisitions, and November 1, 2006 for the third acquisition.
Property
Information
The Leases consist of approximately 5,000 acres. Arena
will be the operator and have an average working interest
of 97% and average net revenue interest of 74% in these
properties. The Leases are contiguous to the Company’s
Fuhrman-Mascho lease acquired in December 2004. In addition
to the producing wells currently on the Leases, Arena’s
engineering team has identified 90 new drilling locations
on 20 acre spacing, with the potential to increase that
number through additional in-fill drilling and development.
Production and Reserves
The current net production to the Company from the Leases
is approximately 100 BOE (Barrels of Oil Equivalent)
per day. The Company's initial reserve estimates, as
determined by internal engineering evaluations, indicate
the Leases have approximately 4.7 million BOEs of proved
reserves net to Arena based on 20 acre spacing. This
represents an estimated cost of $1.30 per BOE.
CAPEX Increase
Arena announced it has also increased its capital expenditure
budget to $93 million. The $16.5 million increase in
the 2006 capital expenditure budget is primarily a result
of the acquisitions described above and escalated development
and infrastructure work on the Company’s Fuhrman-Mascho
lease in Andrews County, Texas and on the East Hobbs
San Andres Unit and the Seven Rivers Queen Unit, both
located in Lea County, New Mexico.
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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