Arena Approves $12 Million Increase in 2007 Spending Budget

Arena has approved a $12 million increase in its capital expenditure budget ("CAPEX") for the remainder of 2007, making a total of $116 million. The additional funds are directly related to increased activity at the Company's Fuhrman Mascho properties.

Arena has received delivery and commenced drilling operations with its second company-owned rig, making a total of three drilling rigs in operation at the Fuhrman Mascho. The additional funds will be used to increase the number of new development wells to be drilled on the property in 2007 from 120 to 130, start the preliminary work on some of the existing well bores that could be candidates for re-completion as Yates gas wells and continue drilling additional multi-zone development wells, producing from both the San Andres and Grayburg formations.

The Company continues to look for acquisition opportunities but has made no provision in its 2007 budget for acquisitions. The $6.5 million of recently announced acquisitions (Nov. 7, 2007) is not included the 2007 CAPEX budget.

Mr. Tim Rochford, CEO, stated, "The CAPEX budget increase will allow us to maintain an aggressive development program through the remainder of 2007. We now have three drilling rigs working full-time in the Fuhrman Mascho and intend on keeping all three for the foreseeable future. The additional acquisitions we recently announced have increased our acreage to over 20,000 acres at the Fuhrman Mascho. As we enter 2008 we intend to continue an accelerated development program in the Permian Basin with an estimated preliminary CAPEX budget for 2008 of approximately $200 million. Approximately 75% of the budget will be allocated to the Fuhrman Mascho, resulting in over 200 San Andres development wells drilled, along with additional re-completions and the ongoing development of our Yates gas wells."