In addition, the company has continued to improve and develop a number of its other properties. In the fourth quarter Arena will drill two development wells and convert one additional well to water injection in preparation for secondary recovery on its East Hobbs lease, drill one development well on its Eva South lease in Texas County, Okla., convert three wells to water injection in preparation for secondary recovery on its Y-6 unit in Fisher County, Texas, and drill three additional wells in Kansas (two developmental wells on the Auntie Em lease and a second exploratory well on the Rocky Prospect).
Arena management estimates that based on the current level of activity, with no additional acquisitions, its capital expenditure budget for 2006 will be approximately $35 million; however, management will examine the proposed budget more closely at year end, with the possibility of increasing it based on the opportunity to accelerate specific lease development. It is anticipated that the majority of the 2006 capital expenditure budget will be used to further develop the Fuhrman-Mascho lease, on which the company estimates there are currently a minimum of 139 proved undeveloped locations to be drilled.
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