Arena Increases 2006 Capex Budget to $76.5 Million
Arena Resources Inc. said it has increased its capital expenditure budget by $11.5 million for 2006 to $76.5 million with an estimated total of 130 wells to be drilled. The increase is a result of escalated development work on the company's Fuhrman - Mascho lease in Andrews County, Texas, Seven Rivers Queen lease in Lea County, N.M., and three Kansas properties in the second quarter. Due to rig availability, the company was able to accelerate drilling in New Mexico and Kansas, originally scheduled for the second half of 2006.
The company has continued to improve and accelerate development on a number of its properties. Over the remainder of the year Arena plans to drill approximately 50 additional development wells and re-stimulate 26 more existing wells on its Fuhrman - Mascho lease. Based on the results of the seven wells drilled and five re-stimulations in the second quarter on its Seven Rivers Queen lease, the company will drill six additional wells in the third quarter and re-stimulate seven more existing wells by year end. Originally, the company had planned to drill four development wells on its Auntie Em Prospect in Gray County, Kan., in the fourth quarter. Due to early rig availability, the company drilled the four wells at Auntie Em in the second quarter in addition to four other Kansas wells, two on its Rocky Prospect and two on its Syracuse Prospect. Based on the results of those wells, management has continued to add to its Kansas lease acreage and has now budgeted to drill four more wells on the Auntie Em, two more on the Rocky Prospect and three more on its Syracuse Prospect in the fourth quarter. In addition to these key properties, the company is currently drilling five new development wells on its East Hobbs lease in Eddy County, N.M., and converting eight more existing wells to water injectors as part of a secondary recovery program. The company has budgeted to drill a total of nine new development wells on four different leases in Oklahoma and two on its Y-6 lease in Fisher County, Texas, by year end.
Arena management estimates that based on the current level of activity, with no additional acquisitions, the company will drill approximately 130 new development wells and re-stimulate over 60 existing wells in 2006.
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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