Arena Resources Inc. (ARD) filed Quarterly Report for the period ended 2009-09-30.
ARENA RESOURCES INC. is engaged in oil and natural gas acquisition exploration development and production with activities in Oklahoma Texas New Mexico and Kansas. The Company has a portfolio of oil and natural gas reserves with approximately 84% of its proved reserves consisting of oil and approximately 16% consisting of natural gas. Approximately 28% of Arena's proved reserves are classified as proved developed producing approximately 5% of its proved reserves are classified as proved developed non-producing approximately 5% are classified as proved developed behind pipe and approximately 62% are classified as proved undeveloped. Arena Resources Inc. has a market cap of $1.56 billion; its shares were traded at around $40.56 with a P/E ratio of 30.5 and P/S ratio of 7.4. Arena Resources Inc. had an annual average earning growth of 112% over the past 5 years.
Highlight of Business Operations:
Oil and natural gas sales. For the three months ended September 30, 2009, oil and natural gas sales revenue decreased $32,351,808 to $36,060,878, compared to $68,412,686 for the same period during 2008. Oil sales decreased $28,153,050 and natural gas sales decreased $4,198,758. The decreases were the result of significantly lower oil and gas prices between periods and lower oil production. For the three months ended September 30, 2009, oil sales volume decreased 16,940 barrels to 511,104 barrels, compared to 528,044 barrels for the same period in 2008. The average realized per barrel oil price decreased 44% from $115.41 for the three months ended September 30, 2008 to $64.16 for the three months ended September 30, 2009. For the three months ended September 30, 2009, gas sales volume increased 64,283 thousand cubic feet (MCF) to 609,030 MCF, compared to 544,746 MCF for the same period in 2008. The average realized natural gas price per MCF decreased 61% from $13.71 for the three months ended September 30, 2008 to $5.37 for the three months ended September 30, 2009.
Depreciation, depletion and amortization. Our depreciation, depletion and amortization expense decreased by $847,583 to $8,994,389 for the three months ended September 30, 2009, compared to the same period in 2008. The decrease was primarily a result of slightly lower production volume and a decrease in the average depletion rate from $13.81 per BOE during the three months ended September 30, 2008 to $13.55 per BOE during the three months ended September 30, 2009.
Oil and natural gas sales. For the nine months ended September 30, 2009, oil and natural gas sales revenue decreased $91,993,626 to $83,890,733, compared to $175,884,359 for the same period during 2008. Oil sales decreased $83,266,046 and natural gas sales decreased $8,727,580. The decreases were the result of significantly lower oil and gas prices between periods partially offset by higher production. For the nine months ended September 30, 2009, oil sales volume increased 3,314 barrels to 1,461,844 barrels, compared to 1,458,530 barrels for the same period in 2008. The average realized per barrel oil price decreased 52% from $109.42 for the nine months ended September 30, 2008 to $52.21 for the nine months ended September 30, 2009. For the nine months ended September 30, 2009, gas sales volume increased 184,155 thousand cubic feet (MCF) to 1,599,142 MCF, compared to 1,414,987 MCF for the same period in 2008. The average realized natural gas price per MCF decreased 59% from $11.51 for the nine months ended September 30, 2008 to $4.73 for the nine months ended September 30, 2009.
Depreciation, depletion and amortization. Our depreciation, depletion and amortization expense increased by $78,199 to $23,634,894 for the nine months ended September 30, 2009, compared to the same period in 2008. The increase was primarily a result of higher production volume, partially offset by a decrease in the average depletion rate from $13.81 per BOE during the nine months ended September 30, 2008 to $13.55 per BOE during the nine months ended September 30, 2009.
As shown in the financial statements for the nine months ended September 30, 2009, the Company had cash on hand of $67,779,486, compared to $58,489,574 as of December 31, 2008. The Company had net cash provided by operating activities for the nine months ended September 30, 2009 of $77,212,801, compared to $142,458,787 for the same period 2008. Other significant sources of cash inflow include proceeds from option and warrant exercises of $2,065,881 and $4,653,439 for 2009 and 2008, respectively, and proceeds from issuance of common stock of $116,130,189 and $11,000,000 drawn down on the Company s credit facility in 2008. The most significant cash outflows during the nine months ended September 30, 2009 and 2008 were capital expenditures of $69,988,770 and $154,212,644, respectively, and $46,000,000 payment on notes payable in 2008.
Cash settlements of cash flow hedges are recorded as a gain on derivatives in the operating section of the Company s statement of operations. During the nine months ended September 30, 2009, the Company monetized an existing costless collar, resulting in our realizing a gain during the period of $7,992,900, part of which would not have been realized until later in 2009. As a result of this monetization, our statement of operations for the three and nine months ended September 30, 2009 include gain on derivative instrument of zero and $15,870,007, respectively, as compared to a loss of $3,462,283 and $9,008,822 for the three and nine months ended September 30, 2008, respectively.
ARD is in the portfolios of Robert Bruce of Bruce & Co., Inc..
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