ARD Limit Order Filled @ $46.61
Today's Acquisition Increases Value per Share by over $15 ; Management Team is Best in the Business

Today's press release reads: Arena Resources, Inc. Adds 4.7 Million Barrels of Oil Equivalent of Proved Reserves in Permian Basin

How does the acquisition add over $15 per share in value? Let's take a look at the math:

Assume the following:
Share Count (fully diluted)..........17.0 million
Proved Reserves Oil Added..........4.7 million BOE
Acquisition cost...............................$6,117,500

This deal adds oil proved reserves per Share as follows:
4.7mm BOE / 17.0 mm Shares = 0.27 BOE/Share

How much is the 0.27 BOE/share worth?

Lets value the proved reserves at $60/ BOE.

0.27 (BOE/Share) X $60 = $16.20

Acquisition costs were almost $6.2 million. How much were acquisition costs per share?

$6.2 million / 17mm (shares outstanding) = $0.36

The net gain in value of proved reserves per share is as follows:
$16.20 (value of oil) - $0.36 (Cost of oil) = $15.84

In summary, this deal adds over $15 in value to oil proved reserves per share at a cost of only $0.36 per share. This is a deal that is without a doubt stacked in favor of the ARD shareholders. However because the sellers are also receiving ARD shares it is a win-win situation for both parties involved. Congratulations are in order for Tim and Stan for a job well done!