Arena Resources, Inc. — Oil and Gas Development

Arena Resources Announces Record Third Quarter Financial and Operating Results
47% Increase in Revenue
42% Increase in Net Income
33% Increase in Production
Tulsa, Oklahoma — November 9, 2007 — Arena Resources, Inc. (NYSE-ARD)(“Arena”)(“Company”) announced today financial results for the three months and nine months ended September 30, 2007. For the three month period ended September 30, 2007, Arena had oil and gas revenues of $26,731,699, compared to $18,192,860 for the quarter ended September 30, 2006, a 47% increase and net income of $11,403,777(a 42% increase), or $0.32 per fully diluted share, compared to net income of $8,006,824, or $0.26 per fully diluted share, for the same period in 2006. For the nine month period ended September 30, 2007, the Company reported oil and gas revenues of $65,003,299, compared to oil and gas revenues of $43,263,323 for the nine month period ended September 30, 2006, a 50% increase. Net income for the nine month period ended September 30, 2007 was $25,011,045(a 39% increase), or $0.76 per fully diluted share, compared to net income of $18,034,724, or $0.61 per fully diluted share, for the same period in 2006.

The revenue increase for the third quarter was a result of increases in production volumes due to increased development activity and increased commodity prices. For the three months ended September 30, 2007, oil sales volume increased to 344,399 barrels, compared to 256,366 barrels for the same period in 2006, a 34% increase, and gas sales volume increased to 351,498 MCF (thousand cubic feet), compared to 276,881 MCF for the same period in 2006, a 27% increase. For the nine months ended September 30, 2007, oil sales volume increased to 954,228 barrels, compared to 631,455 barrels for the same period in 2006, a 51% increase, and gas sales volume increased to 1,024,602 MCF, compared to 617,745 MCF for the same period in 2006, a 66% increase. The average commodity prices received by Arena were $69.78 per barrel of oil and $7.68 per MCF of natural gas for the quarter ended September 30, 2007, compared to $63.91 per barrel of oil and $6.53 per MCF of natural gas for the quarter ended September 30, 2006. The average prices received for the nine months ended September 30, 2007 were $60.16 per barrel of oil and $7.43 per MCF of natural gas, compared to $61.91 per barrel of oil and $6.75 per MCF of natural gas for the nine month period ended September 30, 2006.

Lease operating expenses, including production taxes, for the three months ended September 30, 2007 were $11.19 per barrel of oil equivalent (“BOE”), a 34% increase from the prior year. Depreciation, depletion and amortization costs increased 27% to $7.54 per BOE. General and administrative costs, which included a $956,072 charge for stock based compensation, were $3.65 per BOE, a 4% decrease. Net interest income was $461,355, or $1.14 per BOE, a 153% increase. For the nine months ended September 30, 2007, lease operating expenses, including production taxes, were $10.37 per BOE, a 12% increase. Depreciation, depletion and amortization costs were $7.43 per BOE, a 28% increase, and general and administrative costs, which included a $2,476,823 charge for stock based compensation, were $4.01 per BOE, a 12% increase. Net interest expense was $0.55 per BOE, a 1200% increase.

There was no outstanding debt on the Company’s $150 million bank credit facility at September 30, 2007.

Net cash flow from operations for the three and nine months ended September 30, 2007 was $22,164,986, or $0.62 per fully diluted share, and $50,690,604 or $1.54 per fully diluted share, compared to net cash flow of $14,914,941, or $0.48, and $34,535,543, or $1.16 per fully diluted share for the same periods in 2006 (1).

During the third quarter, Arena drilled 28 new development wells, completing and placing in production 22. The remaining six wells were completed and placed in production in the fourth quarter. Additionally, four development wells drilled in the second quarter of 2007 were successfully completed and placed in production. The Company also re-stimulated ten existing wells, all on its Fuhrman-Mascho property in Andrews County, Texas. The Company continues to have a 100% success rate on wells drilled and completed on this asset. Sales as a result of production for the quarter ended September 30, 2007 rose to 402,982 barrels of oil equivalent (BOE), as compared to production of 302,513 BOE for the same quarter in 2006, a 33% increase, and a 5% increase over the 385,318 BOE produced in the second quarter of 2007. Average net daily production increased from 3,288 barrels of oil equivalent per day (BOEPD) in the third quarter of 2006 to approximately 4,380 BOEPD. Production continued to be adversely affected by pipeline issues in New Mexico and Kansas.

Arena’s Chief Executive Officer, Mr. Tim Rochford, stated, “We maintained our overall development program in the third quarter, with particular emphasis on our Permian Basin properties. We drilled 28 new development wells and re-fraced ten existing wells on our Fuhrman Mascho properties, despite having only one drilling rig working for over 30 days due to delays in the assembly and delivery of our second company-owned rig. We continued infrastructure improvements and injector well reactivations on our Seven Rivers, North Benson and East Hobbs, New Mexico assets, but continued to have pipeline compression issues on both our East Hobbs asset and Auntie Em property in Kansas. Our third quarter sales of approximately 403,000 BOEs was a 33% increase over the same period in 2006 and an approximate 5% increase over the second quarter. We have now taken delivery of our second company-owned rig and brought back a contract drilling rig we have used in the past, making three active drilling rigs at the Fuhrman Macho. With the personnel additions we have made we will continue with three rigs into 2008 and are postured to accelerate our development activities moving forward. We have a preliminary CAPEX budget for 2008 of approximately $200 million and project drilling over 200 wells at the Fuhrman Macho alone. We are continuing to look at acquisition opportunities, primarily concentrating on those that compliment our existing properties as evidenced by our recent acquisitions.”

Non-GAAP Financial Measures:
Earnings for the three months ended September 30, 2007 include a non-cash charge for stock based compensation of $956,072. Earnings for the nine months ended September 30, 2007 include a non-cash charge for stock based compensation of $2,476,823. Excluding such items, the Company’s earnings would have been $0.34 per diluted share for the three months ended September 30, 2007, and $0.81 for the nine months ended September 30, 2007. 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
September 30,

Nine Months Ended
September 30,

2007
(Unaudited)

2006
(Unaudited)

2007
(Unaudited)

2006
(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)
Other financing expense
Interest income (expense)
Interest 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

Other Comprehensive Income
   Unrealized loss on oil derivatives,
   net of tax

Total Other Comprehensive Income

$26,731,699

2,969,674
1,541,612

3,039,529
46,414
1,472,855

9,070,084

—
481,387
(20,032)

461,355

18,122,970

(6,719,193)

$ 11,403,777

$ 0.33

$ 0.32

34,068,128

35,584,238

(22,098)

11,381,679

$18,192,860

1,455,453
1,067,114

1,791,681
41,755
1,154,243

5,510,246

—
154,977
(19,705)

135,272

12,817,886

(4,811,062)

$8,006,824

$ 0.27

$ 0.26

29,251,578

31,159,484

—

8,006,824

$65,003,299

7,946,155
3,717,095

8,356,796
135,177
4,507,220

24,662,443

—
633,451
(1,252,499)

(619,048)

39,721,808

(14,710,763)

$25,011,045

$ 0.80

$ 0.76

31,368,107

32,968,11

(22,098)

24 ,988,947

$43,263,323

4,124,281
2,673,768

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

13,782,547

(785,598)
240,415
(200,406)

(745,589)

28,735,187

(10,700,463)

$18,034,724

$ 0.65

$ 0.61

27,731,056

29,655,078

—

18,034,724

COMPARATIVE OPERATING STATISTICS

Three Months Ended September 30,

2007

2006

Change

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

  Operating Costs
  DD&A
  General & Administrative Expenses
  Interest Expense (Income)

4,380

$ 66.33

11.19
7.54
3.65
(1.14)

3,288

$60.14

8.34
5.92
3.82
(0.45)

33%

-10%

34%
27%
-4%
153%

Nine Months Ended September 30,

2007

2006

Change

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

  Operating Costs
  DD&A
  General & Administrative Expenses
  Interest Expense (income)

4,121

$ 57.78

10.37
7.43
4.01
0.55

2,690

$58.91

9.26
5.79
3.58
(0.05)

53%

-2%

12%
28%
12%
-1200%

CONSOLIDATED BALANCE SHEET

September 30
2007

December 31
2006

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

$ 32,300,916
14,262,988
3,154,002
253,090
49,970,996

$ 4,919,984
6,702,677
2,949,099
102,585
14,674,345

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

253,421,876
60,051
5,422,313
2,868,180
210,466
261,982,886
(20,749,318)
241,233,568
$ 291,204,564

171,708,200
59,332
1,996,899
—
120.929
173,885,360
(12,246,727)
161,638,633
$ 176,312,978

LIABILITIES AND STOCKHOLDERS' EQUITY

Current Liabilities
   Accounts payable
   Accrued liabilities
   Total Current Liabilities
Long-Term Liabilities
   Notes payable
   Notes payable to related parties
   Fair value of oil derivatives
   Asset retirement liability
   Deferred income taxes
   Total Long-Term Liabilities

$ 9,491,288
903,083
10,394,371

—
—
35,076
2,584,515
30,213,243
32,832,834

$ 14,367,252
628,618
14,995,870

19,300,000
400,000
—
2,250,332
19,322,724
41,273,056

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; 14,668,787 shares and
13,099,702 shares outstanding respectively
   Additional paid-in capital
   Options and warrants outstanding
   Retained earnings
   Accumulated other comprehensive loss
   Total Stockholders' Equity
Total Liabilities and Stockholders' Equity

—

34,137
182,920,821
4,749,327
60,295,172
(22,098)
247,977,359
$ 291,204,564

—

29,338
81,857,599
2,872,988
35,284,127
—
120,044,052
$ 176,312,978

STATEMENTS OF CASH FLOW

	Nine Months Ended September 30,
	2007	2006

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
Stock based compensation
   Accretion of discounted liabilities
Changes in assets and liabilities:
   Accounts & joint interest receivable
   Other changes in deferred income taxes
   Prepaid expenses
   Excess tax benefits from shared-based
      payment arrangements
   Accounts payable & accrued liabilities
Net Cash Provided by Operating Activities

$ 25,011,045

—
8,356,796
14,710,763
2.476,823
135,177

(7,765,214)
—
(150,505)

(3,807,266)
(4,646,518)
34,321,101

$ 18,034,724

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

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

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

Cash Flows from Investing Activities
   Purchase and development of oil and gas properties
   Proceeds from sale of oil and gas properties
   Purchase of building equipment
Net Cash Used in Investing Activities

(83,235,525)
1,915,640
(6,383,851)
(87,703,736)

(61,556,302)
—
(717,818)
(62,274,120)

Cash Flows From Financing Activities
   Proceeds from issuance of common stock and
      warrants, net of offering costs
   Proceeds from exercise of warrants
   Proceeds from exercise of options
   Excess tax benefits from share-based
     payment arrangements
   Funds received and 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 Financial Activities
  Common stock issues for properties and equipment
  Asset retirement obligation incurred
    in property development
  Depreciation on drilling rig capitalized
    as part of oil and gas properties

95,099,298
270,003
1,287,000

3,807,266
—
30,700,000
(50,400,000)

80,763,567
27,380,932
4,919,984
$ 32,300,916

—
$ 1, 438,973

—

270,357

149,766

29,788,881
150,000
640,000

1,851,813
1,272,093
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

—

RECONCILIATION OF CASH FLOW FROM OPERATIONS

Net cash provided by
operating activities

Change in operating assets
and liabilities

Cash flow from activities

Management believes that the non-GAAP measure of cash flow from operations is useful information for investors because it is used internally and is accepted by the investment community as a means of measuring the Company's ability to fund its capital program. It is also used by professional research analysts in providing investment recommendations pertaining to companies in the oil and gas exploration and production industry.

$ 34,321,101

16.369,503

$ 50,690,604

$ 30,260,511

4.275,032

$ 34,535,543

NON-GAAP DISCLOSURE RECONCILIATION ADJUSTED EBITDA
	Nine Months Ended

NET INCOME

Warrants issued for financing expense
Interest expense
Income tax expense
Depreciation, depletion and amortization
Accretion of discounted liabilities
Stock based compensation

ADJUSTED EBITDA

September 30,
2007

$ 25,011,045

—
619.048
14,710,763
8,356,796
135,177
2,476,823

$ 51,309,652

September 30,
2006

$ 18,034,724

785,598
(40,009)
10,700,463
4,253,142
104,697
656,919

$ 34,495,534

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:
Bill Parsons
Vice President Investor Relations
480-947-1589
bparsons@arenaresourcesinc.com