Second Company-owned Drilling Rig to Be in Operation at
Fuhrman-Mascho in June
Arena Resources, Inc. (NYSE: ARD) (“Arena”) (“Company”) announced today
that the Board of Directors of Arena has approved a $20 million increase
in its capital expenditure budget (“CAPEX”) for 2009, making a total of
$85 million. The additional funds are directly related to increased
activity at the Company’s Fuhrman-Mascho property in Andrews County,
Texas.
Management stated that it will put in operation in early June its second
company-owned drilling rig at the Fuhrman-Mascho. During 2008, with
commodity prices at their peak, the Company had as many as five rigs
active at the Fuhrman-Mascho. The additional funds will be used to
increase the number of new development wells to be drilled on this
property in 2009 from approximately 80 to an estimated 120.
In preparation for the increased development activity, the Company
announced today that effective June 1, 2009, it had monetized its
current hedging component, a costless collar, on 1,000 barrels of oil
per day with a $100.00 floor and $197.00 ceiling and a remaining period
to December 31, 2009. This will result in additional cash to the Company
of approximately $9.5 million. In addition, the Company implemented a
new hedge, a costless collar, on 3,000 barrels of oil per day with a
$50.00 floor and $72.60 ceiling for the period June 1, 2009, to December
31, 2009.
Mr. Phil Terry, President and Chief Executive Officer, stated, “We are
pleased to announce that we are accelerating our development activity
and have taken steps to assure that growth. With the monetization of our
current hedge and the implementation effective June 1 of our new hedge,
we will have approximately $65 million in cash. By combining our cash
position with our restructured credit facility which is expected to be
finalized in the next 30 days, we will have immediate access to
approximately $140 million and the ability to add an additional $75
million through the accordion feature. With these new strategies in
place and the resulting cash availability, management is confident in
its ability to accelerate growth and continue to manage that growth
within anticipated cash flow while remaining postured to take advantage
of potential acquisition opportunities.”
About Arena Resources, Inc.
Arena Resources, Inc. is an oil and gas exploration, development and
production company with current operations in Texas, Oklahoma, Kansas
and New Mexico.
This release contains forward-looking statements within the meaning of
the “safe-harbor” provisions of the Private Securities Litigation Reform
Act of 1995 that involve a wide variety of risks and uncertainties,
including, without limitations, statements with respect to the Company’s
strategy and prospects. Readers and investors are cautioned that the
Company’s actual results may differ materially from those described in
the forward-looking statements due to a number of factors, including,
but not limited to, the Company’s ability to acquire productive oil
and/or gas properties or to successfully drill and complete oil and/or
gas wells on such properties, general economic conditions both
domestically and abroad, and the conduct of business by the Company, and
other factors that may be more fully described in additional documents
set forth by the Company.
Arena Resources, Inc.
Bill Parsons, VP Investor Relations,
480-947-1589
