(Source: Business Wire)
Arena Resources, Inc. (NYSE: ARD) ("Arena")("Company") announced today that the Board of Directors of Arena has approved an increase in the 2009 capital expenditure budget ("CAPEX") to a total of $107 million. The previous 2009 CAPEX was $85 million. The additional funds are directly related to increased activity at the Company's Fuhrman-Mascho property in Andrews County, Texas. Management is confident that at current commodity prices the 2009 CAPEX can be fully funded through internally generated operating cash flow.
The increased Fuhrman Mascho activity has begun with the hiring of a contract drilling rig, which is now drilling its first well. The addition of the third drilling rig to the Company's two drilling rigs now operating in the Fuhrman Mascho Field will result in 166 new development wells being drilled in 2009, which is an increase of 46 wells from the previous CAPEX budget.
In addition, the Company announced it will refrac an estimated 16 existing San Andres oil wells prior to year end. Historically, the Company has refraced 139 San Andres wells beginning in 2005 resulting in both increased production and proved reserves.
Mr. Phil Terry, President and Chief Executive Officer, stated, "We are pleased to announce that we are continuing to accelerate our development activity with the addition of a third drilling rig at our Fuhrman-Mascho property. We estimate an additional 113 new development wells being drilled and 16 refracs being completed in the second half of 2009. In addition, we plan on drilling four new Yates gas wells to go along with 60 additional recompletions of existing wellbores. We continue to upgrade our infrastructure in preparation for the completion of our oil gathering and pipeline connection by year end, which should generate a reduction of approximately $1 per barrel in transportation charges. We have no debt, available cash reserves, and an untapped credit facility, all of which position Arena to grow and to seek and react to acquisition opportunities that complement our current areas of operation."
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.
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