Arena Resources Expands Position in Permian Basin
Arena Resources, Inc. reports a multiple property acquisitions located in Eddy County, New Mexico and Andrews County, Texas. The Company also announced it has signed Letters of Intent ("LOI") for the acquisition of two additional properties located in Lea County, New Mexico and Andrews County, Texas, subject to the completion of due diligence and execution of definitive agreements. The purchase price for all the properties is $6,523,500 to be paid from existing cash balances. The effective dates for the completed transactions are October 1, 2007 and November 1, 2007. Closing on the properties with LOIs is scheduled to occur on or before December 1, 2007.
The properties consist of approximately 8,900 acres. Arena will be the operator and have an average working interest of 96% and average net revenue interest of 72% in these properties. All of the properties are in close proximity to existing Company-owned assets that are currently in varying stages of development. In addition to the producing wells currently on the properties, internal engineering has identified 120 new potential drilling locations, with the potential for additional locations through increased in-fill drilling and development.
The current net production to the Company from the properties is approximately 100 BOE (Barrels of Oil Equivalent) per day. The Company's initial reserve estimates, as determined by internal engineering evaluations, indicate the properties have approximately 4.2 million BOEs of proved reserves net to Arena. This represents an estimated cost of $1.55 per BOE.
Mr. Tim Rochford, CEO of Arena stated, "All of these newly acquired Permian Basin properties are near assets that are currently being developed and can be serviced out of our Hobbs, New Mexico field office. With the addition of the new properties in Andrews County, Texas, we now have over 20,000 acres at our Fuhrman-Mascho property. We will continue to look for acquisition opportunities that compliment our existing properties."
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