The evaluation of 5,000 acres acquired by Arena Resources for $49 million has yielded initial reserve estimates of eight million barrels of oil equivalent. The acreage, spread across two properties, are located in Andrews County, Texas.
One of the properties is located in the Fuhrman-Mascho field immediately adjacent to Arena’s Fuhrman-Mascho properties acquired in December 2004. In addition to the producing wells currently on the properties, Arena’s engineering team has identified approximately 120 new drilling locations, with the potential to increase that number through additional in-fill drilling and development.
Along with the current production from the San Andres and Queen formations, Arena has also secured the rights to the Yates gas formation throughout the acreage.
Arena’s current net production from the properties is approximately 560 barrels of oil equivalent per day and is over 85% oil. Arena’s initial reserve estimate of eight million barrels is exclusive of any potential Yates gas reserves and any additional probable or possible oil reserves. The proved reserves represent an estimated cost of $6.00 per BOE and are approximately 10% proved developed producing.
Arena CEOTim Rochford said, “These acquisitions allow us to add significant reserves and drilling locations to our current inventory in the Fuhrman-Mascho at a very attractive price as we continue to focus on those acquisitions that will complement our existing Permian Basin properties.”
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