The estimated present value, using a 10% discount rate, of the future net cash flows before income taxes of the company's proved oil and natural gas reserves as of Dec. 31, 2005, was $682.9 million, using year-end pricing of $55.00 per barrel for oil and $8.20 per Mcf for natural gas. This compares to $302.4 million at year-end 2004 using prices of $39.00 per barrel for oil and $5.19 per Mcf for gas. These estimates are based on an independent reserve study of Arena's oil and gas properties prepared by Lee Keeling & Associates Inc., Tulsa, Okla.
Total net production for the fourth quarter of 2005 was 172,386 Boe, as compared to 72,965 Boe for the same period in 2004, an increase of 136%. Net production for the full year 2005 was 508,430 Boe, compared to 223,333 Boe in 2004, an increase of 127%. The company's average net daily production in December 2005 was approximately 2,050 Boe per day.
Tim Rochford, president & CEO, stated, "We are very pleased with the operating results for 2005. Our acquisition and development activities have combined to replace 1,770% of our 2005 production. Our original 2005 plans called for drilling a minimum of 33 wells, in addition to various workovers and re-completions on existing wells. We surpassed those goals and finished 2005 with 42 development wells drilled, 24 re-fracs and re-completions, participated in the drilling of two exploratory wells, and continued to upgrade and consolidate the infrastructure on numerous leases. We have received board approval to increase our capital expenditure budget for 2006 to up to $65 million, which will allow us to accelerate our development program, and with the addition of our own drilling rig scheduled to be in operation by the end of the first quarter, we plan to drill a minimum of 120 development wells in 2006 with emphasis on our Fuhrman-Mascho prospect. We will also continue to look for acquisitions that will complement and enhance our core properties."
Arena Resources Inc. is an oil and gas exploration, development and production company with current operations in Texas, Oklahoma, Kansas, and New Mexico.
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