HELP LANCE CORPORAL ROBERT PENNINGTON!!!

www.DefendRob.com

Update 27 August 2006 Video of Terry on Hannity and Colmes from June of this year is located here.
Update 20 August 2006 Rob's hometown newspaper, The Mukilteo Beacon, has printed a couple of pieces in the last two weeks which are of great value. The first, a news story by Paul Archipley appeared in the August 9th edition of the paper.










And on another front, Rob was finally allowed to see a dentist last week. It took the Marines almost three months to respond to his constant tooth pain. It took them a full week to provide medical treatment for a severely sprained ankle. Would someone like to tell our elected representatives who love to whine about "torture" at the detainment facility at Guantanamo Bay Cuba about the torture that's being perpetrated on our Marine heroes in the brig at Camp Pendleton? I'd love to hear their response to these facts.
Update 16 August 2006 Rob's Article 32 hearing, the preliminary hearing which will determine whether or not he faces general court martial has been scheduled for the 25th of September. Deanna and I plan to attend.



You can now write to Rob directly at:
Lcpl Pennington, Robert B.
Camp Pendleton Brig
Box 555226 Camp Pendleton CA 92055-5226

You can write to the others as well by substituting their rank and name.

Rob is going to need about $100,000 to hire a quality defense team. Currently his family has raised about $33,000. While it is true that the government can provide a defender, it is also true that the skills of that appointed defense lawyer are lacking in a case where Rob's life is on the line.

Please visit Rob's Website for more details on how to help him.

www.DefendRob.com

~Dok~ "God Bless You Rob."

ARD Co-founders Tim Rochford and Stan McCabe Continue Plan to Grow the Company and Impress the Shareholders
ARD CEO Tim Rochford and Chairman Stan McCabe Ring the opening bell at the NYSE

















Today is a very proud day for Arena co-founders Tim Rochford and Stan McCabe and also for the shareholders as well. Tim is standing in front of the podium. The gentleman immediately behind and to Tim's left with the red tie is Stan.

ARD v SU: Why ARD is the Better Investment
Arena Resources has the Advantage in Terms of Fundamentals and Future Growth Prospects

Analysis of the information and facts reveals that ARD is the better investment based on a whole host of reasons. Lets us begin the comparison and grasp a better understanding of why ARD shares will appreciate faster over time than those of SU.

1. Production Growth: ARD has been growing oil and gas production much faster than SU since 2002. Specifically each company had the following production growth:
______ARD____SU_____
2003:__93%____5%
2004:__73%____5%
2005:__127%__-21%

Average annual production growth for ARD is over 97%. In contrast, SU has been experiencing an average production decline of over 3.6% since 2002. In a best case scenario SU is targeting 350,000 BOE/D for 2008. That is only 10.4% annual growth in production until 2008. ARD will no doubt continue to grow production a rate many times that of SU.

(SU data taken from 2005 Annual report page 5. ARD data taken from various 10K filings.)

2. Revenue Growth
SU: 71% (Quarterly YoY)
ARD: 217% (Quarterly YoY)

Clearly ARD has been growing quarterly revenues faster than SU in the YoY. Also, between 2003 and 2005 SU did not even double their annual revenues. In contrast, ARD increased their annual revenues by a factor of 7.

4. Net Income Growth
SU: 7%
ARD: 244%

The above figures represent average annual growth in net income since 2003. Clearly ARD has significantly superior growth in net income.

5. EPS Growth:
SU: 12%
ARD: 733%

The above figures represent the EPS growth between 2003 and 2005. ARD grew EPS in the latest two year period over 61X faster than that of SU.

6. Share Price Growth:
SU: 200%
ARD: 500% +

As share price longterm is always a function of earnings, the fact that ARD grew earnings faster than SU in the previous two years it should come as no surprise that ARD share price appreciation was also greater. Just remember: The 3 main drivers for share price growth are Earnings, Earnings, Earnings! (Here is the ARD v SU comparison.)

7. Operating Margin (ttm):
SU: 25%
ARD: 65%

ARD is THE low cost producer of oil and gas. Over 86% of production is oil. ARD operating margin is the highest in the oil and gas universe. SU operating margin is average at best.

8. Net Profit Margin (ttm)
SU: 22%
ARD: 38%

ARD is over 72% MORE EFFICIENT than SU in converting revenue dollars into earnings.

9. Debt/Equity Ratio (The Lower the # the Better)
SU: 0.29
ARD: 0.00

ARD is virtually debt free. In contrast, SU has over $2.1 BILLION in debt or 29% debt when measured against the value of its equity.

10. Market Cap (The Lower the # the Better)
SU: $35 Billion
ARD: $571 million

Since ARD has the smaller market cap it will be easier for ARD to double the size of the company from $571 million to $1.142 Billion as compared to SU growing from a $35 Billion company to one of $70 Billion. SU has a lot more resistance in growth potential than ARD. Consequently future share price will be much more limited at SU than at ARD.

The above 10 components of each company's fundamentals is a fair representation of why ARD is the better investment. It should be very clear that ARD has the had the superior grow in production, revenues, net income and EPS and will continue to maintain this advantage into the future. $10,000 invested in ARD today will be worth more on August 31, 2007 than if the money were invested in SU. If anyone wants to put their reputation on the line by challenging this assessment I"d be more than happy to revisit both companies one year from now.

Any takers?

sincerely,
Dok

Arena Resources Celebrates Transfer to the NYSE
Watch the Event LIVE Starting at 9:26 a.m. ET on August 31, 2006

Arena Resources (NYSE-Listed ARD) celebrate its transfer to the NYSE. In honor of the occasion Chairman Stan McCabe and CEO Tim Rochford ring the Opening Bell.

Click this link at 9:26 a.m. ET on August 31, 2006 to view a live webcast of The Opening Bell.

U.S. Oil Addiction Index & Peak Oil Meter
For the Week of August 25, 2006

U.S. Crude Production: 5,099,000 bpd
Decline from Year Ago: 328,000 bpd
Percent Decline: 6.0%

Gasoline Demand: 9,610,000 bpd
Increase from Year Ago: 204,000 bpd
Percent Increase: 2.1%

U.S. Average Retail Regular Gasoline Price: $2.84
Increase from Year Ago: 8.8%


Figures for Year Ago Weekly Amounts:
U.S. Crude Production: 5,427,000 bpd
Gasoline Demand: 9,406,000 bpd
U.S. Average Retail Regualar Gasoline Price: $2.61

Arena Resources #2 on IBD 100 List
Report in August 28th Edition; Coverage Begins on Page 1B

Author of "The coming Economic Collapse," Stephen Leeb Interviewed

"No one knows for sure. I mean we could discover oil ahh you know in the core of the earth but based upon what we do know right now as we sit yes that's exactly the case."

~Dr. Steven Leeb when asked if we know for sure that demand for oil exceeds supply


Reporter Greg Greenberg from Thestreet.com showing everyone his pierced tongue.


Dr. Stephen Leeb defending himself and Peak Oil against a barrage of questions from an unconvinced reporter.

ARD Shares Begin Trading on NYSE Effective August 31, 2006
Move is Likely Part of Master Plan Since Inception of Arena Resources

Today's announcement of ARD shares being listed on the NYSE is an important step that enhances ARD value and visibility. To understand today's news we must first review the history of ARD's management team.

ARD CEO Tim Rochford and Chairman Stan McCabe are a pair that have previously worked together. They co-founded Magnum Petroleum in 1989. In 1995 they acquired Hunter Resources and the combined company became Magnum Hunter. Magnum Hunter became a NYSE listed stock in 2002. Eventually it was acquired by XEC (Cimarex) in January 2005 for $2.1B.

One should expect Tim and Stan to use the Magnum Hunter "blue-print" with Arena Resources. One positive is that Tim and Stan not only have a proven track record with their successes with Magnum Hunter Resources but they also have the ability to use that experience as a learning experience and avoid making any of the same mistakes at Arena Resources. In addition the connections and relationships that have blossomed as a result of their dealings in the oil and gas industry will prove to be a significant asset for Arena Resources shareholders.

One drawback of the listing on the NYSE is that it will cost money to do. By looking at the list of fees for the NYSE it seems that there is at least $148,000 in fees to be paid each year. Based on 15.5 million shares this would come out to less than one penny a share in EPS for the year. This is reasonable. In comparison the AMEX has a fee structure of about $21,500 each year based on ARD share count. So in the end it is only costing an additional $126,500 a year or so to be listed on the NYSE instead of the AMEX. This is less than a penny. Given the benefits of being listed on NYSE it is a very small price to pay. Arena Resources is no doubt an example of the biggest little oil and gas company on the planet. The shares deserve to be listed on the most prestigious exchange in the world: the NYSE. This company continues to impress.

ARD FY2007 Estimates Announced
Expect Revenues of $148 million, Net income of $72.37 million, and EPS of $4.15 on production of 1.85 million BOE in FY2007;


Today will mark the official release of ARD FY2007 estimates. The "official" estimates released today are in essence the 'realistic' projections of a previous calculation of ARD FY2007 estimates. Analysis indicates that ARD will have EPS of $4.15 in FY2007.

To arrive at FY2007 EPS of $4.15 the following was projected:

1. Production: 1.85 million BOE
2. Average Realized Price per BOE: $80
3. Average Net Profit Margin: 48.9%
4. Shares Outstanding: 17.43 million shares

The math is as follows:

Revenue:
1.85mm (BOE) X $80 (ave realized price)= $148 million

Net income:
$148mm (revenue) X .489 (net profit margin)=$72.37mm

EPS:
$72.37 mm(net income) /17.42 million shares = $4.15 EPS

Lets now compare our estimate with that of the Wallstreet consensus estimate. First lets meet the Wallstreet analysts. Everyone but Richard Moorman has a bio online. The current analysts covering ARD include:

1. Philip J. McPherson - C. K. Cooper & Co.
(Director of Research)
* Degree in Economics - East Carolina University

2. Barry Borak - Decision Economics, Inc.
(Sr. Analyst - Energy Sector)
* MBA - Boston College (1990)
* MS Petroleum Geology - Rennselaer Polytechnic Institute (1978)
* BA Geology and Mid-Eastern History/Archeology - Queens College, CUNY (1975)

3. Richard T. Moorman - Capital One Southcoast
(No Bio Available)

4. David M. Heikkinen - Pickering Energy Partners, Inc
(Managing Director)
* MBA - Tulane University
* BS - Mechanical Engineering - University of Missouri

5. Neal Dingmann - Pritchard Capital Partners
(Vice President and senior energy analyst)
* MBA - University of Minnesota

6. John J. Gerdes - Sun Trust Robinson Humphrey
(Analyst - Energy Exploration & Production)
* MBA - University of Chicago (1994)
* BS Petroleum Engineering - University of Tulsa (1986).

The above gentleman who get paid to cover ARD have impressive resumes for the most part. At least 4 of the 6 individuals have an MBA. At least 2 of the 6 have degrees in petroleum or geology. They all have many years of experience analyzing companies. The FY2007 consensus EPS estimate coming from these seemingly very intelligent people is $2.79. (The range is $2.47 to $3.13.) The consensus estimate is a result of 4 of the 6 individuals above submitting their earnings estimates when polled. Keep in mind that at least 2 of the 4 estimates (maybe all 4) are coming from guys with an MBA. These people are often referred to as "smart money." They comprise a small section of Mr.Market. Afterall, their analysis and target prices help many investors value ARD shares and is what leads many to buy or sell the shares. We all know that Mr. Market taken as a whole is often times "irrational" and "inefficient."

Based on my simple math there is no doubt in my mind that barring a collapse in oil prices (ain't gonna happen) ARD will earn $4.15 in FY2007. This is 48.7% higher than the current consensus analyst estimate of $2.79. ARD will earn 32.5% more than even the current high consensus estimate of $3.13.

If we lock in our best efforts guess on FY2007 EPS there is no doubt in my mind that I will be closer than that of the analysts.

Disclosure: I do not have an MBA or degree in business. I feel this is to my advantage as I am able to realize the big picture and don't over analyze. The other advantage I have is that I have a portfolio that allows me to devote a significant percentage of my time studying ARD. The analysts don't have this advantage. They must cover a much larger portfolio of companies. Another advantage I have is that I can make a projection that I feel is accurate without fear of going against Wallstreet sentiment (groupthink), being questioned and having to justify my estimate, being denied a bonus or even worse: losing my job for being wrong. In other words, these guys make EPS estimates and price targets with the goal of "not being wrong" instead of "trying to be correct." One need only look at the price target of some of these seemingly intelligent people. One guy has a price target of $40. Another $43. Based on the current price of $38 these target prices seem to reflect a high degree of analyst paralysis in light of the fact that ARD is growing production, revenues, net income, and earnings per share consistently and rapidly.


Based on the FY2007 EPS of $4.15 and a P/E multiple of 25 the target price for FY2007 is $103.75. The target price is expected to occur on or before the release of Q4 FY2007 results (expected release March 2008.)

$4.15 (EPS) X 25 (P/E) = $103.75

This represents an increase of 72.9% over the FY2006 target price of $60.

In conclusion, it is evident that growth in earnings at ARD will be phenomenal in the coming 6 quarters. Earnings growth will continue to drive share price higher. The drilling programs in 2006 and 2007 will also add significant proved reserves in absolute terms and also on a per share basis. This will serve to reinforce the rising valuation of ARD shares based on earnings. Expect analysts to revise their FY2007 EPS estimates and price targets higher with each passing quarter. Those who hold the shares long term (years) will realize significant financial reward.

ARD FY2006 Estimates Revisited

Some folks are wondering if I have changed my FY2006 earnings and price target estimates for ARD. Certainly I could leave my estimates in place as they were on April 21, 2006. On this date I was calling for $2.33 in EPS based on the following projections:

Production: 1 million BOE
Production Composition: 83% Oil & 17% NG
Average Realized Price of Oil: $71
Average Realized Price of Gas: $42/BOE ($7 per Mcfe)
Revenue: $66.07 million
Average Realized Price/ BOE Oil and Gas Combined: $66.07
Average Total Cost per BOE Produced: $20
Average EBIT/ BOE Produced: $46.07
Total EBIT: $46.07 million
Tax Rate: 25%
Total Tax: $11.5 million
Net Profit: $34.5 million
Share Count: 14.8 million shares
EPS: $2.33

Please allow me to revisit the following assumption in order to come up with my revised EPS projection for FY 2006.

Production: 1 million BOE
Production Composition: 83% Oil & 17% NG
Average Realized Price of Oil: $71
Average Realized Price of Gas: $42/BOE ($7 per Mcfe)
Revenue: $66.07 million
Average Realized Price/ BOE Oil and Gas Combined: $66.07
Average Total Cost per BOE Produced: $20
Average EBIT/ BOE Produced: $46.07
Total EBIT: $46.07 million
Tax Rate: 37% (Increased from 25%)
Total Tax: $17.04 million (Increased from $11.5 million.)
Net Profit: $29.03 million (Decreased from $34.5 million.)
Share Count: 15.25 million (Increased from 14.8 million.)
EPS: $1.90 (Decreased from $2.33)

In summary the only changes I would like to make to my projections from April 21, 2006 is to increase the tax rate from from 25% to 37% and to increase the share count from 14.8 million shares to 15.25 million shares. The result is EPS of $1.90 for FY2006. With a P/E multiple of 31.5 my target price remains $60 on the date that Q4 and FY2006 Earnings are released. This will probably occur in March of 2007. Expect the current FY2006 analyst consensus estimate of $1.69 (range $1.50 to $1.82) to be revised higher between now and the associated earnings release date.

ARD Q2'06 Conference Call is Archived

ARD Q2'06 Press Release Posted

ARD Announces Record Second Quarter Production, Revenues, Net Income, and EPS
Revenues Up 217%, Net Income Up275%, Earnings per Share up 193% and Production up 126.5% Year Over Year

The company 10Q was posted promptly at 4:12pm on Friday afternoon. Arena Resources had the best quarter in the history of the company with Q2'06 results. The Q2 Conference Call is scheduled for Monday, August 7, 2006 - 10:00 AM Central

Some of the highlights are as follows:
*Revenues up 217% YoY
*Revenues up 41.5% QoQ
*Net Income up 275% YoY
*Net Income up 79.8% QoQ
*EPS up 193% YoY
*EPS up 76% QoQ
*Production up 126.5% YoY
*Production up 26.3% QoQ
*Net operating margin 69.9%.
* Net operating margin was up from 62.8% in Q1'06 and 60.8% in Q2'05.
*Net profit margin 43.8%
*Net profit margin was up from 34.5% in Q1'06 and 37% in Q2'05
*Trailing twelve month earnings increase 32% from $0.88 to $1.17
*P/E ttm drops from 42.3 to 31.9 (based on Friday's close of $37.38.)
*Cost per BOE produced is $18.49
*Cost per BOE produced is down from Q1'06 amount of $24.60 but up only slightly from Q2'05 amount of $17.82
*EBIT per BOE produced is $42.43
*EBIT per BOE produced is up from Q1'06 amount of $29.80 and up from Q2'05 amount of $25.67
*Oil production accounted for 86.2% of total production
*Oil average realized price was $64.37
*Gas average realized price was $6.57
*Crude oil production up in all states (TX, NM, OK.)
*Gas production up in TX, NM, OK with the exception of KS.
*Oil production growth driven primarily by Fuhrman-Mascho Field
*Gas production growth driven primarily by Yates Gas Formation in TX.
*ARD topped both the consensus EPS estimate of $0.37 and the high estimate of $0.40 by reporting $0.44

In a July 25, 2006 blogpost I stated, "Also I'd like to say that I"m a bit suspicious of the production figures of 240,000 BOE and $14.5 million in revenue. If ARD really did produce 240,000 BOE then I would have expected something higher than $14.5 given my projection of about 87% production in oil. Unless the Yates Gas formation on the F-M was adding significant amounts of increased incremental BOE then I would have expected the revenue number to be higher. Wouldn't it be a treat if we read the Q2 Earnings to find that revenues were actually closer to $15 million???"

Sure enough, revenues came in at $14.69 million or $190,000 more than estimated. While the revenue number was indeed closer to $14.5 million than $15 million it is interesting to note that the production in the Yates Gas Formation was nearly DOUBLE the previous quarter.

This quarter was absolutely fantastic. ARD is maturing every quarter from a small cap pip-squeak to a soon to be midcap powerhouse. The shares will continue to appreciate in value towards my target price of $60 by year end. Expect analyst upgrades soon. ARD is the best investment out there poised to capitalize on Peak Oil. Fundamentally ARD is second to none. On a valuation basis the company is currently extremely undervalued. Taken together this company will provide shareholders the investment opportunity of a lifetime. The big money will be made by those who hold longterm. Q2'06 was nothing short of an "out of the park home run."

Transocean (RIG) CEO Displays Incompetence and Disregard for Shareholder Value

"We're buying back stock as a chosen method to return excess cash to shareholders and which we think is the most efficient way to do it without taking a view on whether the stock is intrinsically overvalued or undervalued."
~Bob Long RIG CEO


This is absolutely incredible. An angry shareholder(rightfully so) questions RIG CEO Bob Long about the share repurchase program. The question begins at 27:45.

Caller is upset about rational for share repurchase program. Caller notes enormous insider selling while company is buying back shares.

"We're buying back stock as a chosen method to return excess cash to shareholders and which we think is the most efficient way to do it without taking a view on whether the stock is intrinsically overvalued or undervalued." ~Bob Long RIG CEO

That has to be on of the most ridiculous statements I"ve ever heard come from a CEO's mouth. By making such a statement he is CLEARLY not qualified to run a $23 billion company. Either that or he CLEARLY does not have any concern for the shareholders. My question is this: How can a CEO say that he going to buy back shares of the stock without regard to whether the stock is intrinsically overvalued or undervalued? If you feel the stock is overvalued then why is Sam's h*ll would you want to buy it back? All I can say is I"m glad I"m not a shareholder of RIG. I am very happy with Carl Thorne running ESV. Carl talks like he has a brain. Bob Long talks like has NO brain.

I put a big fat "X" on RIG.

You should too.

Disclaimer: I am neither long nor short RIG. I am long ESV.