Arena Resources Inc. said Tuesday that it has entered into an agreement with an undisclosed company to acquire oil and natural gas properties located in West Texas for $10.55 million, comprised of $9.5 million cash and 150,000 restricted shares of the company’s common stock, valued at $7 per share.

Located in Andrews County, TX, the Fuhrman-Mascho prospect is the fifth acquisition by the company of a Permian Basin property located in this geographic area in the past 18 months. The property consists of 11,300 acres, 136 producing wells and net production of 230 Boe/d. The exploration and production firm said it will be the operator and have a 100% working interest and 75% net revenue interest. Based on its review of the property to be acquired and its experience in this geographic area, Arena said it believes that there are substantial future development and exploitation enhancement opportunities available.

An independent reservoir engineering firm reviewed and signed off on Arena’s estimates that the property to be acquired represents 6.5 million Boe — 91% of which is oil — of proved reserves net to Arena’s interest including an estimated 130 proved undeveloped locations. In addition, Arena has acquired the rights to the Yates gas formation, which covers more than 9,000 acres. Arena’s management is currently evaluating for future development and exploration opportunities.

“This acquisition represents our largest to date in cost and, more importantly, in available development and exploitation opportunities,” said Tim Rochford, CEO of Arena. “It also adds to our core Permian Basin properties base in West Texas and New Mexico and now gives us five properties in close proximity to our recently opened Hobbs, NM, office. This acquisition should greatly contribute to our reserves and production growth in this area.”

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