Arena Resources Announces Financial and Operational Results for First Quarter 2007.60% Increase in Revenue for the Three Months to $16.65 Million 59% Increase in Net Income for the Three Months to $5.7 Million TULSA, Okla. -- Arena Resources, Inc. (NYSE NYSE See: New York Stock Exchange : ARD Ard (ärd), in the Bible. 1 Son of Benjamin. 2 Benjamite, perhaps the same as (1.) An alternate form is Addar. ) ("Arena")("Company") announced today the financial and operational results for the first quarter ended March 31, 2007. For the three month period ended March 31, 2007, Arena had oil and gas revenues of $16,651,301, compared to $10,380,395 for the quarter ended March 31, 2006, a 60% increase and net income of $5,707,890, or $0.37 per diluted share, compared to net income of $3,582,676 or $0.25 per diluted share, for the same period in 2006, a 59% increase. The revenue increase was due to increases in production volumes, primarily due to development activity. For the three months ended March 31, 2007, oil sales volume increased to 282,538 barrels, compared to 167,167 barrels for the same period in 2006, a 69% increase and gas sales volume increased to 324,935 MCF (thousand cubic feet), compared to 142,036 MCF for the same period in 2006, a 129% increase. The average commodity prices received by Arena were $51.71 per barrel of oil and $6.28 per MCF of natural gas for the quarter ended March 31, 2007, compared to $55.85 per barrel of oil and $7.35 per MCF of natural gas for the quarter ended March 31, 2006. Lease operating expenses Operating expenses The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. , including production taxes, for the three months ended March 31, 2007 were $9.86 per barrel of oil equivalent The barrel of oil equivalent (bboe, sometimes BOE) is a unit of energy based on the approximate energy released by burning one barrel of crude oil. The US Internal Revenue Service defines it as equal to 5.8 × 106 BTU [1]. 5. ("BOE BOE Based on Experience BOE Board of Education BOE Boletín Oficial del Estado (Spanish) BOE Bank of England BOE Board of Equalization BOE Board of Elections BOE Barrel of Oil Equivalent BOE Bind on Equip "), a 9% decrease from the prior year. Depreciation, depletion and amortization costs increased 43% to $7.89 per BOE. General and administrative costs administrative costs, n.pl the overhead expenses incurred in the operation of a dental benefits program, excluding costs of dental services provided. , which included a $639,624 charge for stock based compensation, were $3.67 per BOE, as compared to $3.69 per BOE in 2006, which included a $179,767 charge for stock based compensation. Net cash flow from operations Cash flow from operations A firm's net cash inflow resulting directly from its regular operations (disregarding extraordinary items such as the sale of fixed assets or transaction costs associated with issuing securities), calculated as the sum of net income plus noncash expenses for the three months ended March 31, 2007 was $12,379,230 or $0.79 per diluted share, compared to net cash flow of $7,733,918 or $0.55 per diluted share for the same period in 2006 (1). Arena's Chief Executive Officer, Mr. Tim Rochford, stated, "We continue to ramp up Ramp Up To increase a company's operations in anticipation of increased demand. Notes: A company might 'ramp up' operations if they just signed a contract creating substantially more demand for their product. See also: Demand, Economies of Scale our 2007 development program. Our first quarter resulted in 28 development wells drilled and 13 re-fracs on existing wells on our Fuhrman-Mascho property, where we continue to have a 100% success rate on newly drilled development wells. We have announced an increase in our 2007 CAPEX budget to $104 million, adding an additional 20 development wells to be drilled on our Fuhrman-Mascho lease. In the second quarter, we will continue to concentrate on the development of our Permian Basin properties, as we have budgeted over 30 new development wells to be drilled on our Fuhrman-Mascho lease along with continued infrastructure improvements, water line installations and well conversions in New Mexico." Non-GAAP Financial Measures: Earnings for the first quarter 2007 include a non-cash charge Non-Cash Charge A charge off, made by a company against earnings, that does not require an initial outlay of cash. Notes: Non-cash charges are typically against the depreciation, amortization, and depletion accounts on a company's balance sheet. for stock based compensation of $639,624. Excluding such item, the Company's earnings would have been $0.39 per diluted share. The Company believes results excluding these items are more comparable to estimates provided by security analysts and, therefore, are useful in evaluating operational trends of the Company and its performance, compared to other similarly situated similarly situated adj. with the same problems and circumstances, referring to the people represented by a plaintiff in a "class action," brought for the benefit of the party filing the suit as well as all those "similarly situated. oil and gas producing companies. (1) Cash Flow from Operations is a non-GAAP financial measure that represents "Net Cash Provided By Operating Activities" adjusted for the change in operating assets Operating Assets Another term for working capital. and liabilities. See below for a reconciliation of the related amounts. 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 The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and 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. [TABLE OMITTED] [TABLE OMITTED] [TABLE OMITTED] [TABLE OMITTED] [TABLE OMITTED] [TABLE OMITTED] |
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