Arena Resources, Inc. today announced its operations update for the fourth quarter of 2007.
During the fourth quarter, Arena drilled a total of 49 new wells; 48 wells on its Fuhrman-Mascho lease in Andrews County, Texas, and one well on its Y-6 lease in Fisher County, Texas. In addition, the company re-stimulated three existing wells on its Fuhrman-Mascho lease.
Sales for the quarter ended December 31, 2007 were approximately 425,000 BOE, as compared to sales of 331,200 BOE for the same quarter in 2006, a 28 percent increase, and a 5 percent increase over the 402,982 BOE sold in the third quarter of 2007.
Total production for the fourth quarter was approximately 435,000 BOE. Total sales production for 2007 was approximately 1,550,000 BOE, as compared to 1,065,613 BOE in 2006, a 45 percent increase. Average net daily sales increased to approximately 4,620 BOEPD in the fourth quarter 2007, as compared to 3,600 BOEPD in the fourth quarter of 2006, and 4,380 BOEPD in the third quarter of 2007.
In 2007, the company announced property lease acquisitions of over 13,000 acres for approximately $55.5 million. All of the leases are located in West Texas and Southeast New Mexico and are near, or contiguous to, the company’s existing Permian Basin assets. The current net production to the company from the leases is approximately 400 BOE per day. The company’s internal reserve estimates indicate the leases have approximately 13 million BOE of proved reserves net to Arena. This represents an estimated cost of $4.25 per BOE.
Tim Rochford, CEO, stated, “The fourth quarter of 2007 was one of the most significant in the history of Arena Resources. By adding a second company-owned drilling rig, we were able to drill a record number of wells on our Fuhrman-Mascho leases in the quarter and achieve another record in quarterly and annual production. We made $55 million of acquisitions during the quarter adding both acreage and proved reserves to our Permian Basin properties at an estimated cost of $4.25 per BOE. We were able to finalize our agreement to develop and sell Yates gas production. We moved into our company-owned headquarters building in Tulsa and greatly enhanced our in-house capabilities by adding several senior management executives. We have nearly doubled our CAPEX budget for 2008 and look forward to the coming year.”