Arena Resources, Inc. reported that its estimated total proved reserves of oil and natural gas as of December 31, 2007 increased 29% to 55.4 million barrels of oil equivalent (BOE), from 43.1 million BOE at year end 2006, and 32% when adjusted for 2007 oil and gas sales. The 2007 year-end proved reserves consisted of 47.4 million barrels of crude oil (86%) and 48.1 Bcf of natural gas (14%). Of the 55.4 million BOE of total proved reserves, 36% are proved developed and 64% are proved undeveloped. The proved developed reserves consist of proved developed producing (26%), proved developed non-producing (6%) and proved developed behind-pipe (4%).
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 December 31, 2007, was $1.982 billion, using year-end average pricing of $88.89 per barrel for oil and $8.74 per Mcf for natural gas. This compares to $848 million at year-end 2006 using prices of $54.21 per barrel for oil and $5.94 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, Oklahoma.
Total net sales production for the fourth quarter of 2007 was 441,632 BOE, as compared to 331,200 BOE for the same period in 2006, an increase of 33%. Net sales production for the full year 2007 was 1,566,627 BOE, compared to 1,065,613 BOE in 2006, an increase of 47%. The Company's average net daily sales production in the fourth quarter of 2007 was approximately 4,800 BOE per day, as compared to 3,600 BOE in the fourth quarter 2006, and 4,380 BOE in the third quarter 2007.
Mr. Tim Rochford, CEO, stated, "Our acquisition and development activities combined to replace 885% of our 2007 production, with over 44% of that being accomplished through our development activities. We announced the completion of a series of Permian Basin property acquisitions in November and December, all in close proximity to our existing New Mexico and Texas assets, adding additional reserves and drilling locations. We drilled 134 new wells, 133 of which were drilled on our Fuhrman Mascho leases with a 100% success rate.
"Fourteen of those wells were not completed until this year and have contributed to our average daily production increasing to over 6,000 BOE per day during the month of February. We have announced a preliminary 2008 capital expenditure budget of $218 million, with over 90% of it allocated to our Permian Basin properties. We will focus on the continued development of our existing core properties, while continuing to seek additional acquisitions."
Most Popular Articles