Arena Resources Announces 2005 Year-End Production and Reserves
Arena Resources Inc. (AMEX: ARD) says that its estimated total proved reserves of oil and natural gas as of Dec. 31, 2005, increased 42% to 30.2 million barrels of oil equivalent (Boe), from 21.2 million Boe at year-end 2004. The 2005 year-end proved reserves consisted of 24.9 million barrels of crude oil (82%) and 32 Bcf of natural gas (18%). Of the 30.2 million Boe of total proved reserves, 38% are proved developed and 62% are proved undeveloped. The proved developed reserves consist of proved developed producing (26%), proved developed non-producing (4%) and proved developed behind-pipe (8%).
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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