Third Drilling Rig Added; Arena Resources First Quarter 2006 Operations Update is Excellent
The Company Produces 192,000 BOE and Projects Revenue of $10.4 Million
The first quarter 2006 operational update was fantastic. The highlight is the addition of a third drilling rig. In a press release Tim Rochford, president & CEO, stated, "With the delivery of the rig we acquired in December 2005, and a second contract rig, we will for the first time have three rigs drilling at the same time in the Permian Basin." In Q1 2005 Arena drilled 16 wells and performed 13 refracs. Currently Q2 2005 is scheduled for 31 development wells and 6 refracs. This will no doubt increase sequential quarterly production growth over the previous period. This could easily increase Q2 production by 30,000 BOE over Q1 production levels. This would equate to 222,000 BOE. Expect the majority of production growth in the second half of 2006 as all three rigs are put in play.
The first mention of a third drilling rig being acquired in 2006 was first published here on February 1, 2006 when it was stated, "I'm looking for ARD to make significant acquisitions and add a third rig in 2006 in order to continue production increases going into 2007. "
Production for the quarter was approximately 192,000 BOE as compared to production of only 91,000 BOE in the year ago period. The April 20th edition of this blog had a headline calling for production of over 190,000 BOE.
Projected Revenues for the quarter are $10.4 million. While production is up 12% from the previous quarter revenues are up 11%. This seems to indicate that natural gas has increased slightly as a percentage of total production over the previous quarter. Historical natural gas production as a percentage of total production is as follows:
FY 2002: 11.7%
FY 2003: 8.7%
FY 2004: 12.6%
FY 2005: 13.0%
Q4 2005: 12.2%
In today's blogpost entitled, "Hibernia Research Report Discloses Relationship with Arena Resources" a timeline and chronology of events is presented as clear evidence that a major acquisition is going to occur or has already occurred. While today's operational update did indicate that the company has acquired approximately 9,000 additional acres effectively expanding the Auntie Em property to more than 13,000 acres, I don't believe this is the big acquisition to be expected. The acquisition I am expecting will dwarf the Fuhrman-Macho acquisition as explained in today's earlier post. With a third drilling rig put into action the evidence is beyond a reasonable doubt that a major property purchase has occured or will occur.
In summary, ARD investors should be very pleased with today's operational update. Tim and Stan are making all the right moves to build Arena Resources into a midcap powerhouse. Share price will continue to appreciate over time as oil prices rise and production increases. The "story" of Arena Resources is just beginning to be told. The best part is yet to come.
The Company Produces 192,000 BOE and Projects Revenue of $10.4 Million
The first quarter 2006 operational update was fantastic. The highlight is the addition of a third drilling rig. In a press release Tim Rochford, president & CEO, stated, "With the delivery of the rig we acquired in December 2005, and a second contract rig, we will for the first time have three rigs drilling at the same time in the Permian Basin." In Q1 2005 Arena drilled 16 wells and performed 13 refracs. Currently Q2 2005 is scheduled for 31 development wells and 6 refracs. This will no doubt increase sequential quarterly production growth over the previous period. This could easily increase Q2 production by 30,000 BOE over Q1 production levels. This would equate to 222,000 BOE. Expect the majority of production growth in the second half of 2006 as all three rigs are put in play.
The first mention of a third drilling rig being acquired in 2006 was first published here on February 1, 2006 when it was stated, "I'm looking for ARD to make significant acquisitions and add a third rig in 2006 in order to continue production increases going into 2007. "
Production for the quarter was approximately 192,000 BOE as compared to production of only 91,000 BOE in the year ago period. The April 20th edition of this blog had a headline calling for production of over 190,000 BOE.
Projected Revenues for the quarter are $10.4 million. While production is up 12% from the previous quarter revenues are up 11%. This seems to indicate that natural gas has increased slightly as a percentage of total production over the previous quarter. Historical natural gas production as a percentage of total production is as follows:
FY 2002: 11.7%
FY 2003: 8.7%
FY 2004: 12.6%
FY 2005: 13.0%
Q4 2005: 12.2%
In today's blogpost entitled, "Hibernia Research Report Discloses Relationship with Arena Resources" a timeline and chronology of events is presented as clear evidence that a major acquisition is going to occur or has already occurred. While today's operational update did indicate that the company has acquired approximately 9,000 additional acres effectively expanding the Auntie Em property to more than 13,000 acres, I don't believe this is the big acquisition to be expected. The acquisition I am expecting will dwarf the Fuhrman-Macho acquisition as explained in today's earlier post. With a third drilling rig put into action the evidence is beyond a reasonable doubt that a major property purchase has occured or will occur.
In summary, ARD investors should be very pleased with today's operational update. Tim and Stan are making all the right moves to build Arena Resources into a midcap powerhouse. Share price will continue to appreciate over time as oil prices rise and production increases. The "story" of Arena Resources is just beginning to be told. The best part is yet to come.
posted by -Aztec- at 10:47 AM
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