Arena Resources Announces Second Quarter and Six Month 2005 Financial and Operating Results.TULSA Tulsa (tŭl`sə), city (1990 pop. 367,302), seat of Tulsa co., NE Okla., on the Arkansas River east of its junction with the Cimarron; inc. 1898. , Okla. -- 158% Increase in Revenue for the Three Months to $4.6 Million; 216% Increase in Net Income for the Three Months to $1.7 Million Arena Resources Inc. (AMEX AMEX See: American Stock Exchange : ARD Ard (ärd), in the Bible. 1 Son of Benjamin. 2 Benjamite, perhaps the same as (1.) An alternate form is Addar. , ARD.WS)("Arena")("company") announced today financial results for the second quarter and six months ended June June: see month. 30, 2005. For the three month period ended June 30, 2005, Arena had oil and gas revenues of $4,628,554, compared to $1,792,414 for the quarter ended June 30, 2004, a 158% increase. For the three month period ended June 30, 2005, the company had net income of $1,731,974, or $0.15 per fully diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. share, compared to net income of $548,548 or $0.07 per fully diluted share, for the same period in 2004, a 216% increase. For the six month period ended June 30, 2005, the company reported oil and gas revenues of $8,543,289, compared to oil and gas revenues of $2,992,814 for the six month period ended June 30, 2004, a 185% increase. Net income for the six month period ended June 30, 2005 was $3,045,227, or $0.27 per fully diluted share, compared to net income of $858,190, or $0.11 per fully diluted share, for the same period in 2004, a 255% increase. The revenue increase was due to increases in production volumes, primarily due to acquisitions made in 2004, development activity and increased oil and gas prices. For the three months ended June 30, 2005, oil sales volume increased to 92,233 barrels, compared to 44,663 barrels for the same period in 2004, a 107% increase. For the three months ended June 30, 2005, gas sales volume increased to 84,968 MCF MCF malignant catarrhal fever. (thousand cubic feet), compared to 40,793 MCF for the same period in 2004, a 108% increase. For the six months ended June 30, 2005, oil sales volume increased to 169,494 barrels, compared to 78,446 barrels for the same period in 2004, a 116% increase. For the six months ended June 30, 2005, gas sales volume increased to 168,283 MCF, compared to 60,116 MCF for the same period in 2004, a 180% increase. The average commodity prices received by Arena were $44.97 per barrel barrel: see English units of measurement. of oil and $5.66 per MCF of natural gas for the quarter ended June 30, 2005, compared to $36.02 per barrel of oil and $3.76 per MCF of natural gas for the quarter ended June 30, 2004. The average prices received for the six months ended June 30, 2005 were $45.32 per barrel of oil and $5.12 per MCF of natural gas, compared to $34.92 per barrel of oil and $4.22 per MCF of natural gas for the six month period ended June 30, 2004. Total 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. for the three and six months ended June 30, 2005 were $1,757,478 and $3,547,536, respectively, as compared to $904,832 and $1,589,150 for the same periods ended June 30, 2004. Depletion depletion n. when a natural resource (particularly oil) is being used up. The annual amount of depletion may, ironically, provide a tax deduction for the company exploiting the resource because if the resource they are exploiting runs out, they will no longer be able costs for the three month period ended June 30, 2005 were $478,351, compared to $202,648 for the same period ended June 30, 2004. For the six month period ended June 30, 2005, depletion totaled $891,656 compared to $309,867 for the same period ended June 30, 2004. 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. for the three and six month periods ended June 30, 2005 were $273,599 and $543,104, respectively, compared to $163,569 and $341,771 for the same periods ended June 30, 2004. Outstanding debt on the company's bank credit facility at June 30, 2005 was $5 million as compared to $10 million at Dec. 31, 2004 and $10 million at June 30, 2004. Subsequent to June 30, 2005, the company repaid the $5 million existing balance on its bank credit facility. 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 six months ended June 30, 2005 was $5,730,359, or $0.50 per fully diluted share, compared to net cash flow of $1,689,410, or $0.21 per fully diluted share for the same period in 2004 (1). Through July July: see month. 29, 2005, Arena has drilled 13 wells, successfully completed and placed into production nine and has four additional wells that are in varying stages of completion. Additionally, the company has re-stimulated eight existing wells using the "lite-prop" process. Management has increased its capital budget by $4 million to approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. $18.5 million, thereby increasing the number of development wells to be drilled in 2005 from 33 to 39, and the number of re-stimulations from 12 to 20. Also, the company has initiated drilling on the first of three test wells on their recent 15,000 acre Kansas Kansas, state, United States Kansas (kăn`zəs), midwestern state occupying the center of the coterminous United States. It is bordered by Missouri (E), Oklahoma (S), Colorado (W), and Nebraska (N). lease acquisitions. Arena's Chief Executive Officer Tim Rochford stated, "As proud and excited as we are regarding the results of the second quarter, we are just now beginning to see the production results of our developmental drilling and re-stimulation work on our Fuhrman-Mascho property. We believe that the drilling activity and infrastructure improvements we began in the second quarter will have a very positive effect on the second half results." (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 Oklahoma (ōkləhō`mə), state in SW United States. It is bordered by Missouri and Arkansas (E); Texas, partially across the Red R. (S, W); New Mexico, across the narrow edge of the Oklahoma Panhandle (W); and Colorado and Kansas (N). , Kansas and New Mexico New Mexico, state in the SW United States. At its northwestern corner are the so-called Four Corners, where Colorado, New Mexico, Arizona, and Utah meet at right angles; New Mexico is also bordered by Oklahoma (NE), Texas (E, S), and Mexico (S). . This release contains forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. within the meaning of the "safe harbor Safe Harbor 1. A legal provision to reduce or eliminate liability as long as good faith is demonstrated. 2. A form of shark repellent implemented by a target company acquiring a business that is so poorly regulated that the target itself is less attractive. " 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 and/or conj. Used to indicate that either or both of the items connected by it are involved. Usage Note: And/or is widely used in legal and business writing. 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.
CONDENSED STATEMENTS OF OPERATIONS
Three Months Ended Six Months Ended
June 30, June 30,
2005 2004 2005 2004
(Unaudited)(Unaudited) (Unaudited)(Unaudited)
Oil and Gas Revenues $4,628,554 $1,792,414 $8,543,289 $2,992,814
--------- --------- --------- ---------
Costs and Operating
Expenses
Oil and gas
production costs 626,199 403,531 1,438,436 719,820
Oil and gas
production taxes 374,397 133,026 661,114 211,733
Depreciation,
depletion and
amortization 483,283 204,706 904,882 315,826
General and
administrative
expense 273,599 163,569 543,104 341,771
--------- --------- --------- ---------
Total Costs and
Operating
Expense 1,757,478 904,832 3,547,536 1,589,150
--------- --------- --------- ---------
Other Income (Expense)
Gain from change
in fair value of
put options (8,176) 2,905 65,870 2,905
Accretion expense (27,254) (12,770) (49,325) (25,065)
Interest expense (76,877) (58,998) (170,276) (68,111)
-------- -------- --------- --------
Net Other Expense (112,307) (68,863) (153,731) (90,271)
--------- -------- --------- --------
Income Before Provision
for Income Taxes 2,758,769 818,719 4,842,022 1,313,393
Provision for Deferred
Income Taxes (1,026,795) (270,171) (1,796,795) (455,203)
----------- --------- ----------- ---------
Net Income $ 1,731,974 $ 548,548 $ 3,045,227 $ 858,190
============ =========== =========== ===========
Basic Income Per
Common Share $ 0.17 $ 0.08 $ 0.30 $ 0.12
Diluted Income Per
Common Share $ 0.15 $ 0.07 $ 0.27 $ 0.11
Basic Weighted-Average
Common Shares
Outstanding 10,361,226 7,183,855 10,078,555 7,173,795
Diluted Weighted-Average
Common Shares
Outstanding 11,674,164 8,145,484 11,463,378 8,013,728
COMPARATIVE OPERATING STATISTICS
(Unaudited)
Three Months Ended
------------------
6/30/05 6/30/04 Change
----------------------------
Net Production - BOE per day 1,169 566 + 107%
Per BOE:
Average Sales Price $43.50 $34.83 + 25%
Operating Costs 9.40 10.43 - 10%
DD&A 4.54 3.49 + 30%
General & Administrative Expenses 2.57 3.18 - 19%
Interest Expense .72 1.15 - 37%
(Unaudited)
Six Months Ended
----------------
6/30/05 6/30/04 Change
----------------------------
Net Production - BOE per day 1,091 486 + 125%
Per BOE:
Average Sales Price $43.25 $33.83 + 25%
Operating Costs 10.63 10.53 + 1%
DD&A 4.58 3.49 + 31%
General & Administrative Expenses 2.75 3.86 - 29%
Interest Expense .86 .77 + 12%
CONDENSED BALANCE SHEET DATA
June 30, Dec. 31,
2005 2004
(Unaudited) (Audited)
Assets
Current assets $ 3,122,722 $ 2,498,423
Properties, buildings &
equipment, net 39,243,216 32,943,884
Other assets & deposits 434,990 900,000
----------- ------------
$42,800,928 $36,342,307
=========== ============
Liabilities & Shareholders' Equity
Current Liabilities $ 2,202,021 $ 1,840,665
Deferred income taxes 3,926,788 2,129,993
Long-term debt 5,400,000 10,400,000
Other long-term liabilities 1,346,481 1,363,026
Shareholders' Equity 29,925,638 20,608,623
----------- -----------
$42,800,928 $36,342,307
=========== ===========
CONDENSED STATEMENTS OF CASH FLOW
Six Months Ended
June 30,
2005 2004
(Unaudited) (Unaudited)
Cash flows from operating activities:
Net income $ 3,045,227 $ 858,190
Depreciation, depletion and
amortization 904,882 315,826
Deferred income taxes 1,796,795 455,203
Other, net (16,545) 60,191
Net changes in operating assets
and liabilities (111,744) (212,276)
--------- ---------
Net Cash Provided by Operating
Activities 5,618,615 1,477,134
Net Cash Used in Investing Activities (6,480,089) (1,557,625)
Net Cash Provided by (Used in)
Financing Activities 1,012,673 925,799
--------- ---------
Net Increase in Cash 151,199 845,308
Cash at Beginning of Period 1,253,969 1,076,676
--------- ---------
Cash at End of Period $ 1,405,168 $ 1,921,984
=========== ===========
RECONCILIATION OF CASH FLOW FROM OPERATIONS
Net cash provided by operating
activities $ 5,618,615 $ 1,477,134
Change in operating assets and
liabilities $ 111,744 $ 212,276
----------- -----------
Cash flow from operations $ 5,730,359 $ 1,689,410
=========== ===========
Management believes that the non-GAAP measure of cash flow from operations is useful information for investors because it is used internally and is accepted by the investment community as a means of measuring the company's ability to fund its capital program. It is also used by professional research analysts in providing investment recommendations pertaining per·tain intr.v. per·tained, per·tain·ing, per·tains 1. To have reference; relate: evidence that pertains to the accident. 2. to companies in the oil and gas exploration and production industry. |
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