Q3 Projections are as follows:
Oil production:____________117,713 BBL
Gas production:___________85,124 Mcf (14,187 Boe)
Total O&G Production:_____ 131,900 BOE
Total O&G Production Range 131,900 to 138,500 BOE (+5%/-0%)
Realized Oil price:_________$54 per BOE
Revenue:________________$7.13 million
Net Profit Margin:_________41% (up from 37% in Q2.)
Net Profit Margin Range 40% to 42%
Net Income:______________$2.92 million
EPS:_________________$0.22 (Up from $0.13 in Q2.)
Shares Fully Diluted:_______13 million

Ranges are provided for Total O&G Production and Net Profit Margin as these are the most important metrics provided and should be considered PRIMARY PERFORMANCE indicators. The other performance parameters should be considered SECONDARY PERFORMANCE indicators. Anything within my range should be considered acceptable. Anything outside the range on the low end should be considered a disappointment. Anything outside the range on the high end should be considered SUPERIOR OPERATING PERFORMANCE. Note that 6Mcf = 1 Boe.

Projection Commentary

ARD stated, "From mid-April through the end of the quarter, the Company performed a re-freak on five wells, three of which are currently in production averaging approximately 30 BIPED per well. Each of these wells was producing one to two BIPED prior to the re-stimulation. The Company plans on performing this re-freak technique on 20 wells in 2005."

I feel that the re-stimulation should at a minimum offset the natural production declines. Therefore I considered these items as "production neutral."

I didn't account for any growth in gas production in my Q3 projections as growth in gas production in Q over Q was virtually neutral.

In light of my projections I feel that they are conservative and there is potential for ART to surprise on the upside. I feel ART could surprise to the upside by no more than 5% of my estimate of 131,900. In other words, the maximum oil and gas production ceiling that one should expect under the most optimum circumstances would be 138,500 BOE.

Anything over this number would really be a GRANDSONS HOME RUN in every sense of the term.