Arena Resources Reports 2Q 2007 Record Production

Arena Resources provided its operations update for the second quarter of 2007. During the second quarter, Arena drilled 28 new development wells, and re-stimulated 12 existing wells, all on its Fuhrman-Mascho lease in Andrews County, Texas. The Company continues to have a 100% success rate on wells drilled and completed on this lease.

Sales as a result of production for the quarter ended June 30, 2007 rose to approximately 385,000 barrels of oil equivalent (BOE), as compared to production of 241,060 BOE for the same quarter in 2006, a 60% increase, and a 14% increase over the 336,694 BOE produced in the first quarter of 2007. Average net daily production increased from 3,744 barrels of oil equivalent per day (BOEPD) in the first quarter of 2007 to approximately 4,230 BOEPD. Production continued to be adversely affected by inclement weather and power outages in the Permian Basin and the Oklahoma Panhandle and pipeline and refinery disruptions in Oklahoma and Kansas.

Arena announced in May 2007 the purchase of a second drilling rig, currently being completely refurbished, assembled and readied for operation by late September 2007. The rig, capable of drilling to a depth of 9,000 feet, will cost approximately $2.5 million, including additional drill pipe, drill collars and other ancillary equipment and will be the second Company-owned rig working exclusively at Arena's Fuhrman-Mascho leases. The Company has also added a contract rig to drill a minimum of ten wells at the Fuhrman-Mascho beginning in early August.

In June, the Company announced it had signed a letter of intent to produce and sell gas from its Fuhrman-Mascho properties to Aspen Pipeline ("Aspen") of Houston, Texas. The gas, produced from the Yates formation, has high nitrogen content and has often been considered too costly to produce because of the need to remove the nitrogen before transporting. Aspen announced in February 2007 a Memorandum of Understanding with Texas Independent Energy ("TIE") that could lead to the construction of a dedicated pipeline to TIE's 1,000-megawatt energy generation facility just outside Odessa, Texas, which can consume a blend containing Yates formation gas without removing the excess nitrogen. A definitive agreement between Arena and Aspen is expected to be signed shortly, whereby Arena will then commence a re-completion program on up to 90 existing idle well bores to the Yates formation by October 2008.

Also in June, Arena announced the completion of a registered direct common stock offering. The Company issued 2,050,000 shares of its common stock to selected institutional investors at a price of $49.00 per share, resulting in net proceeds of approximately $95.3 million. The Company intends to use the net proceeds from the offering for debt repayment, drilling and development of its current properties, capital expenditures and general working capital.

Mr. Tim Rochford, CEO, stated, "Despite some continuing disruptions, we were able to achieve record production results in the second quarter. With the successful stock offering in June, we have positioned ourselves to continue an aggressive development program throughout 2007 and 2008. In addition to our normal development activity, we will be very active during the remainder of 2007 developing Yates gas wells in anticipation of the arrival of a transmission pipeline during the second quarter of 2008. We continue to look at acquisition opportunities and have 100% of our $150 million credit facility available."

Second Quarter Operations Update


Fuhrman-Mascho, Andrews County, Texas - The Company drilled 28 new development wells in the second quarter. Twenty-four wells have been completed and placed in production and the remaining four are in various stages of completion. Additionally, six development wells, which were drilled in the first quarter of 2007 were successfully completed and placed in production. A total of 179 new development wells have been drilled since initiating a developmental drilling program in mid-April 2005. The Company performed a re-frac on 12 wells during the quarter and has now re-fraced a total of 91 wells on this lease since initiating its development program. The Company has currently budgeted to drill 120 new development wells and re-frac 36 existing wells on this property in 2007.

East Hobbs Unit, Lea County, New Mexico - The Company's secondary recovery waterflood program continues with six additional wells, three in each of the third and fourth quarters 2007, which are being converted to water injection wells. Additional development drilling in 2007 is being evaluated.

Seven Rivers Queen, Lea County, New Mexico - The Company continued infrastructure improvements. Four development wells are budgeted and scheduled for drilling in the fourth quarter of 2007.

North Benson Queen, Eddy County, New Mexico - Twelve previously idle injection wells were returned to active injection status in the first and second quarters. In addition to continued infrastructure improvements and additions, five existing wells have been scheduled to be re-fraced in the second half of 2007.


Y-6 Canyon Unit, Fisher County, Texas - Two wells originally scheduled to be drilled in the second quarter of 2007 are now scheduled to be drilled in the third quarter. Also, two additional wells have been scheduled in the fourth quarter. Third quarter 2007 activity will also include converting three wells to water injection in the south portion of the property, and upgrading injection facilities.


Ona Morrow, Texas County, Oklahoma - A water supply line and injection equipment will be installed in the third and fourth quarters of 2007, as well as drilling one development well in the third quarter and two additional development wells in the fourth quarter.

Hanes, Cimarron County, Oklahoma - Due to severe weather conditions, the four wells to be converted to injection in the second quarter will now be completed in the third and fourth quarters. Fourth quarter activity will include drilling one development well, installing injection equipment, and upgrading the tank battery and treating facilities.

Midwell, Cimarron County, Oklahoma - Arena completed two development wells, drilled in the fourth quarter of 2006 and has placed one in production. It is anticipated the second well will be placed in production by the end of the third quarter. Severe weather and electrical storms have delayed development activity. Power has been partially restored. The 2007 budget for the third and fourth quarters contains funds to construct a water supply line and install injection equipment. Fourth quarter activity will include drilling two additional development wells and upgrading the tank battery and treating facilities, and completing injection facilities.

Eva South, Texas County, Oklahoma - The Company has budgeted and scheduled two development wells to be drilled in the fourth quarter.


Auntie Em, Haskell County, Kansas - Production was limited in the second quarter due to pipeline disruptions, but has now been fully restored on the nine producing wells. The 2007 budget includes funds to drill four wells in the fourth quarter.