(Mark
One)
|
|
þ
|
Annual
Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of
1934
|
For
the fiscal year ended December 31, 2009
|
|
Or
|
|
¨
|
Transition
Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of
1934
|
For
the transition period from ___________to ___________
|
|
_____________________________
Commission
file number 001-31657
_____________________________
|
|
Arena
Resources, Inc.
(Exact
name of registrant as specified in its
charter)
|
Nevada
|
73-1596109
|
|
(State
or other jurisdiction of incorporation or organization)
|
(I.R.S.
Employer Identification Number)
|
|
6555
South Lewis Avenue
Tulsa,
Oklahoma
|
74136
|
|
(Address
of principal executive offices)
|
(Zip
Code)
|
(918)
747-6060
|
(Registrant’s
telephone number, including area code)
|
____________________________
|
Title of Each Class
|
Name of Each Exchange On Which
Registered
|
|
Common
- $0.001 Par Value
|
New
York Stock Exchange
|
|
PART
I
|
|||
Page
|
|||
Item
1
|
Business
|
4
|
|
Item
1A
|
Risk
Factors
|
8
|
|
Item
1B
|
Unresolved
Staff Comments
|
14
|
|
Item
2
|
Properties
|
14
|
|
Item
3
|
Legal
Proceedings
|
25
|
|
Item
4
|
Submission
of Matters to a Vote of Security Holders
|
25
|
|
PART
II
|
|||
Item
5
|
Market
for Registrant's Common Equity, Related Stockholder
Matters
|
27
|
|
and
Issuer Purchases of Equity Securities
|
|||
Item
6
|
Selected
Financial Data
|
28
|
|
Item
7
|
Management's
Discussion and Analysis of Financial Condition
|
28
|
|
and
Results of Operations
|
|||
Item
7A
|
Quantitative
and Qualitative Disclosures About Market Risk
|
36
|
|
Item
8
|
Financial
Statements and Supplementary Data
|
36
|
|
Item
9
|
Changes
in and Disagreement's With Accountants on Accounting
|
36
|
|
and
Financial Disclosure
|
|||
Item
9A
|
Controls
and Procedures
|
37
|
|
Item
9B
|
Other
Information
|
39
|
|
PART
III
|
|||
Item
10
|
Directors,
Executive Officers and Corporate Governance
|
40
|
|
Item
11
|
Executive
Compensation
|
43
|
|
Item
12
|
Security
Ownership of Certain Beneficial Owners and Management
|
49
|
|
and
Related Stockholder Matters
|
|||
Item
13
|
Certain
Relationships and Related Transactions, and Director
Independence
|
51
|
|
Item
14
|
Principal
Accounting Fees and Services
|
51
|
|
PART
IV
|
|||
Item
15
|
Exhibits
|
52
|
|
•
a
significant portion of our cash flow could be used to service the
indebtedness,
|
|
•
a
high level of debt would increase our vulnerability to general adverse
economic and industry
conditions,
|
|
•
the
covenants contained in our credit facility limit our ability to borrow
additional funds, dispose of assets, pay dividends and make certain
investments,
|
|
•
a
high level of debt could impair our ability to obtain additional financing
in the future for working capital, capital expenditures, acquisitions,
general corporate or other
purposes.
|
Geographic
Area
|
Oil
(Bbl)
|
Natural
Gas (Mcf)
|
Total
(Boe)
|
Pre-Tax
PV10 Value
|
Standardized
Measure of Discounted Future Net Cash Flows
|
|||||||||||||||
New
Mexico
|
9,012,390 | 7,979,726 | 10,342,345 | $ | 185,626,509 | $ | 123,864,486 | |||||||||||||
Texas
|
47,973,061 | 47,946,793 | 55,964,193 | 877,877,087 | 592,237,629 | |||||||||||||||
Oklahoma
|
2,730,061 | 228,959 | 2,768,221 | 57,048,503 | 37,116,698 | |||||||||||||||
Kansas
|
- | 1,059,210 | 176,535 | 805,401 | 1,014,944 | |||||||||||||||
Total
|
59,715,512 | 57,214,688 | 69,251,294 | $ | 1,121,357,500 | $ | 754,233,757 | |||||||||||||
·
|
Introduce
a new definition of oil and gas producing activities. This new definition
allows companies to include in their reserve base volumes from
unconventional resources. Such unconventional resources include bitumen
extracted from oil sands and oil and gas extracted from coal beds and
shale formations.
|
·
|
Report
oil and gas reserves using an unweighted average price using the prior
12-month period, based on the closing prices on the first day of each
month, rather than year-end prices.
|
·
|
Permit
companies to disclose their probable and possible reserves on a voluntary
basis. In the past, proved reserves were the only reserves allowed in the
disclosures. We have chosen not to make disclosure under these
categories.
|
·
|
Requires
companies to provide additional disclosure regarding the aging of proved
undeveloped reserves.
|
·
|
Permit
the use of reliable technologies to determine proved reserves if those
technologies have been demonstrated empirically to lead to reliable
conclusions about reserves volumes.
|
·
|
Replace
the existing “certainty” test for areas beyond one offsetting drilling
unit from a productive well with a “reasonable certainty”
test.
|
·
|
Require
additional disclosures regarding the qualifications of the chief technical
person who oversees the company’s overall reserve estimation process.
Additionally, disclosures regarding internal controls over reserve
estimation, as well as a report addressing the independence and
qualifications of its reserves preparer or auditor will be
mandatory.
|
Oil (Bbl)
|
Gas (Mcf)
|
Total (Boe)
|
%
of Total Proved
|
Pre-tax
PV10 (In thousands)
|
Standardized
Measure of Discounted Future Net Cash Flows (In thousands)
|
Future
Capital Expenditures (In thousands)
|
||||||||||||||||||||||
New
Mexico:
|
||||||||||||||||||||||||||||
PDP
|
3,116,024 | 4,420,485 | 3,852,772 | 6 | % | $ | 53,780 | $ | 35,886 | $ | - | |||||||||||||||||
PDBP
|
1,456,110 | 1,274,437 | 1,668,516 | 2 | % | $ | 34,653 | 23,123 | 2,735 | |||||||||||||||||||
PUD
|
4,440,256 | 2,284,804 | 4,821,057 | 7 | % | $ | 97,194 | 64,855 | 40,215 | |||||||||||||||||||
Total
Proved:
|
9,012,390 | 7,979,726 | 10,342,345 | 15 | % | $ | 185,627 | $ | 123,864 | $ | 42,950 | |||||||||||||||||
Texas:
|
||||||||||||||||||||||||||||
PDP
|
14,920,662 | 18,859,572 | 18,063,924 | 26 | % | $ | 332,309 | $ | 224,184 | $ | - | |||||||||||||||||
PDBP
|
1,243,307 | 2,589,005 | 1,674,808 | 2 | % | $ | 34,795 | 23,474 | 10,236 | |||||||||||||||||||
PUD
|
31,809,092 | 26,498,216 | 36,225,461 | 52 | % | $ | 510,773 | 344,580 | 483,567 | |||||||||||||||||||
Total
Proved:
|
47,973,061 | 47,946,793 | 55,964,193 | 80 | % | $ | 877,877 | $ | 592,238 | $ | 493,803 | |||||||||||||||||
Oklahoma:
|
||||||||||||||||||||||||||||
PDP
|
408,803 | 99,760 | 425,430 | 1 | % | $ | 7,084 | $ | 4,609 | $ | - | |||||||||||||||||
PUD
|
2,321,258 | 129,199 | 2,342,791 | 3 | % | $ | 49,965 | 32,508 | 6,270 | |||||||||||||||||||
Total
Proved:
|
2,730,061 | 228,959 | 2,768,221 | 4 | % | $ | 57,049 | $ | 37,117 | $ | 6,270 | |||||||||||||||||
Kansas:
|
||||||||||||||||||||||||||||
PDP
|
- | 1,059,210 | 176,535 | 1 | % | $ | 805 | $ | 1,015 | $ | - | |||||||||||||||||
Total
Proved:
|
- | 1,059,210 | 176,535 | 1 | % | $ | 805 | $ | 1,015 | $ | - | |||||||||||||||||
Total:
|
||||||||||||||||||||||||||||
PDP
|
18,445,489 | 24,439,027 | 22,518,661 | 33 | % | $ | 393,978 | $ | 265,694 | $ | - | |||||||||||||||||
PDBP
|
2,699,417 | 3,863,442 | 3,343,324 | 5 | % | 69,448 | 46,597 | 12,971 | ||||||||||||||||||||
PUD
|
38,570,606 | 28,912,219 | 43,389,309 | 62 | % | 657,932 | 441,943 | 530,052 | ||||||||||||||||||||
Total
Proved:
|
59,715,512 | 57,214,688 | 69,251,294 | 100 | % | $ | 1,121,358 | $ | 754,234 | $ | 543,023 |
Year
|
Estimated
Oil
Reserves
Developed
(Bbls)
|
Estimated
Gas
Reserves
Developed
(Mcf)
|
Total
Boe
|
Estimated
Development Costs
|
||||||||||||
2010
|
15,262,194 | 12,262,170 | 17,305,889 | $ | 153,627,173 | |||||||||||
2011
|
11,963,553 | 8,237,414 | 13,336,455 | 179,091,886 | ||||||||||||
2012
|
9,818,416 | 9,494,082 | 11,400,763 | 182,626,316 | ||||||||||||
2013
|
2,166,220 | 1,343,823 | 2,390,191 | 19,897,500 | ||||||||||||
Remaining
|
2,059,640 | 1,438,172 | 2,299,335 | 7,780,000 | ||||||||||||
41,270,023 | 32,775,661 | 46,732,633 | $ | 543,022,875 | ||||||||||||
State
|
Average
Daily
Production
|
Oil
|
Natural
Gas
|
|||||||||
Texas
|
88.23 | % | 75.48 | % | 12.75 | % | ||||||
New
Mexico
|
8.73 | % | 7.09 | % | 1.65 | % | ||||||
Oklahoma
|
2.26 | % | 2.16 | % | 0.10 | % | ||||||
Kansas
|
0.77 | % | 0.00 | % | 0.77 | % | ||||||
Total
|
100.00 | % | 84.73 | % | 15.27 | % | ||||||
|
Developed
Acreage
|
|
Undeveloped
Acreage
|
|
Total
Acreage
|
|||||||
|
|
|
|
|
|
|
|
|||||
Gross | Net | Gross | Net | Gross | Net | |||||||
New
Mexico
|
9,850
|
9,038
|
-
|
-
|
9,850
|
9,038
|
||||||
Texas
|
34,569
|
33,923
|
16,116
|
14,411
|
50,685
|
48,335
|
||||||
|
||||||||||||
Oklahoma
|
5,529
|
5,046
|
-
|
-
|
5,529
|
5,046
|
||||||
|
||||||||||||
Kansas
|
5,200
|
5,200
|
0
|
0
|
5,200
|
5,200
|
||||||
|
||||||||||||
Total
|
55,148
|
53,206
|
16,116
|
14,411
|
71,264
|
67,618
|
||||||
|
|
|
|
|
|
Year
Ended December 31,
|
||||||||
2007
|
2008
|
2009
|
||||||
Oil
production (Bbls)
|
1,316,025
|
2,018,335
|
2,004,498
|
|||||
Natural
gas production (Mcf)
|
1,503,611
|
1,911,713
|
2,172,790
|
|||||
Total
production (Boe)
|
1,566,627
|
2,336,954
|
2,366,630
|
|||||
Daily
production (Boe/d)
|
4,292
|
6,385
|
6,484
|
|||||
Average
sales price:
|
||||||||
Oil
(per Bbl)
|
$ 66.89
|
$ 94.16
|
$ 57.51
|
|||||
Natural
gas (per Mcf)
|
8.02
|
9.84
|
5.04
|
|||||
Total
(per Boe)
|
63.89
|
89.37
|
53.34
|
|||||
Average
production cost (per Boe)
|
$ 7.34
|
$ 7.63
|
$ 6.57
|
|||||
Average
production taxes (per Boe)
|
3.61
|
4.50
|
2.73
|
Oil
Wells
|
Gas
wells
|
Total
Wells
|
||||||||||
Gross
|
Net
|
Gross
|
Net
|
Gross
|
Net
|
|||||||
New
Mexico
|
194
|
173
|
-
|
-
|
194
|
173
|
||||||
Texas
|
893
|
876
|
-
|
-
|
893
|
876
|
||||||
Oklahoma
|
36
|
32
|
-
|
-
|
36
|
32
|
||||||
Kansas
|
-
|
-
|
10
|
10
|
10
|
10
|
||||||
Total
|
1,123
|
1,080
|
10
|
10
|
1,133
|
1,090
|
2007
|
2008
|
2009
|
||||||||
Gross
|
Net
|
Gross
|
Net
|
Gross
|
Net
|
|||||
Productive
development wells
|
||||||||||
Texas
|
133
|
130
|
223
|
219
|
176
|
173
|
||||
Oklahoma
|
1
|
1
|
-
|
-
|
-
|
-
|
||||
New
Mexico
|
-
|
-
|
1
|
1
|
5
|
4
|
||||
Total
productive development wells
|
134
|
131
|
224
|
220
|
181
|
177
|
||||
Dry
development wells
|
-
|
-
|
-
|
-
|
-
|
-
|
||||
Total
development wells
|
134
|
131
|
224
|
220
|
181
|
177
|
||||
Productive
exploratory wells
|
-
|
-
|
-
|
-
|
-
|
-
|
||||
Dry
exploratory wells
|
||||||||||
Texas
|
-
|
-
|
-
|
-
|
1
|
1
|
||||
Total
dry exploratory wells
|
-
|
-
|
-
|
-
|
1
|
1
|
||||
Total
exploratory wells
|
-
|
-
|
-
|
-
|
-
|
-
|
||||
Total
productive wells
|
134
|
131
|
224
|
220
|
181
|
177
|
||||
Total
dry wells
|
-
|
-
|
-
|
-
|
1
|
1
|
||||
Total
wells drilled
|
134
|
131
|
224
|
220
|
182
|
178
|
For
the Years Ended December 31,
|
||||||||||||
2007
(1)
|
2008
|
2009
|
||||||||||
Acquisition
of proved properties
|
$ | 53,554,064 | $ | 16,782,225 | $ | 3,942,103 | ||||||
Acquisition
of unproved properties
|
542,650 | - | - | |||||||||
Exploration
costs
|
- | - | - | |||||||||
Development
costs
|
113,084,344 | 190,584,617 | 107,064,257 | |||||||||
Total
Costs Incurred
|
$ | 167,181,058 | $ | 207,366,842 | $ | 111,006,360 |
Natural
Gas
|
||||||
Oil
(Bbls)
|
(Mcf)
|
|||||
Balance,
December 31, 2006
|
36,064,273
|
42,424,199
|
||||
Purchase
of minerals in place
|
7,021,972
|
4,330,246
|
||||
Extensions
and discoveries
|
6,016,660
|
6,852,346
|
||||
Production
|
(1,316,023
|
) |
(1,503,611
|
) | ||
Revisions
of estimates
|
(373,560
|
) |
(4,028,218
|
) | ||
|
||||||
Balance,
December 31, 2007
|
47,413,322
|
48,074,962
|
||||
Purchase
of minerals in place
|
3,638,095
|
2,364,908
|
||||
Extensions
and discoveries
|
9,547,981
|
11,391,853
|
||||
Production
|
(2,018,335
|
) |
(1,911,713
|
) | ||
Revisions
of estimates
|
(2,735,806
|
) |
(1,115,348
|
) | ||
|
||||||
Balance,
December 31, 2008
|
55,845,257
|
58,804,662
|
||||
Purchase
of minerals in place
|
1,589,141
|
2,791,611
|
||||
Extensions
and discoveries
|
14,360,492
|
13,605,184
|
||||
Production
|
(2,004,498
|
) |
(2,172,790
|
) | ||
Revisions
of estimates
|
(10,074,880
|
) |
(15,813,979
|
) | ||
|
||||||
Balance,
December 31, 2009
|
59,715,512
|
57,214,688
|
||||
|
For
the Years Ended December 31,
|
||||||||
2007
|
2008
|
2009
|
||||||
Oil
(Bbls)
|
||||||||
Developed
|
14,951,794
|
20,231,477
|
21,144,906
|
|||||
Undeveloped
|
32,461,428
|
35,613,780
|
38,570,606
|
|||||
Total
|
47,413,222
|
55,845,257
|
59,715,512
|
|||||
Natural
Gas (Mcf)
|
||||||||
Developed
|
30,783,255
|
28,659,033
|
28,302,469
|
|||||
Undeveloped
|
17,291,707
|
30,145,629
|
28,912,219
|
|||||
Total
|
48,074,962
|
58,804,662
|
57,214,688
|
|||||
Total
(Boe)
|
||||||||
Developed
|
20,082,337
|
25,007,982
|
25,861,985
|
|||||
Undeveloped
|
35,343,379
|
40,638,052
|
43,389,309
|
|||||
Total
|
55,425,716
|
65,646,034
|
69,251,294
|
|||||
December
31,
|
2009
|
2008
|
2007
|
|||||||||
Future
cash flows
|
$ | 3,721,873,750 | $ | 2,391,888,946 | $ | 4,634,645,500 | ||||||
Future
production costs
|
(902,963,847 | ) | (716,121,604 | ) | (790,284,047 | ) | ||||||
Future
development costs
|
(543,022,875 | ) | (330,672,457 | ) | (321,485,125 | ) | ||||||
Future
income taxes
|
(746,548,080 | ) | (394,800,287 | ) | (1,254,982,170 | ) | ||||||
Future
net cash flows
|
1,529,338,948 | 950,294,598 | 2,267,894,158 | |||||||||
10%
annual discount for estimated timing of cash flows
|
(775,105,191 | ) | (489,607,688 | ) | (991,727,804 | ) | ||||||
Standardized
Measure of Discounted Cash Flows
|
$ | 754,233,757 | $ | 460,686,910 | $ | 1,276,166,354 |
|
2009
|
2008
|
2007
|
|||||||||
Beginning
of the year
|
$ | 460,686,910 | $ | 1,276,166,354 | $ | 545,439,675 | ||||||
Purchase
of minerals in place
|
28,329,307 | 41,597,736 | 325,058,027 | |||||||||
Extensions,
discoveries and improved recovery, less related costs
|
253,485,559 | 129,110,323 | 297,610,301 | |||||||||
Development
costs incurred during the year
|
107,237,470 | 190,631,820 | 113,109,335 | |||||||||
Sales
of oil and gas produced, net of production costs
|
(110,697,316 | ) | (190,374,853 | ) | (82,949,751 | ) | ||||||
Accretion
of discount
|
48,058,341 | 131,684,244 | 69,291,660 | |||||||||
Net
changes in price and production costs
|
619,543,318 | (1,526,963,575 | ) | 592,749,069 | ||||||||
Net
change in estimated future development costs
|
6,550,757 | (22,637,628 | ) | (111,175,136 | ) | |||||||
Revision
of previous quantity estimates
|
(447,110,784 | ) | 293,723,576 | (7,424,163 | ) | |||||||
Revision
of estimated timing of cash flows
|
(35,543,586 | ) | (409,158,356 | ) | (62,546,312 | ) | ||||||
Net
change in income taxes
|
(176,306,219 | ) | 546,907,269 | (402,996,351 | ) | |||||||
End
of the Year
|
$ | 754,233,757 | $ | 460,686,910 | $ | 1,276,166,354 |
Votes
for
|
Votes
against
|
Abstain
|
|||
Lloyd
T. Rochford
|
33,035,317
|
2,797,173
|
-
|
||
Stanley
M. McCabe
|
27,834,068
|
7,998,422
|
-
|
||
Clayton
E. Woodrum
|
27,820,843
|
8,011,647
|
-
|
||
Anthony
B. Petrelli
|
33,734,756
|
2,097,734
|
-
|
||
Carl
H. Fiddner
|
33,733,780
|
2,098,710
|
-
|
||
Amendment
to stock option plan
|
23,285,445
|
9,184,761
|
3,362,284
|
||
Restricted
stock award plan
|
21,516,700
|
10,958,283
|
3,357,507
|
Item
5:
|
Market for
Registrant’s Common Stock, Related Stockholder Matters and Issuer
Purchases of
Equity
Securities
|
Period
|
High Sale
|
Low Sale
|
||||||
1st
Quarter 2008
|
$ | 44.17 | $ | 29.25 | ||||
2nd
Quarter 2008
|
57.60 | 38.00 | ||||||
3rd
Quarter 2008
|
56.59 | 32.47 | ||||||
4th
Quarter 2008
|
39.03 | 17.63 | ||||||
1st
Quarter 2009
|
$ | 31.51 | $ | 18.62 | ||||
2nd
Quarter 2009
|
38.04 | 26.03 | ||||||
3rd
Quarter 2009
|
36.06 | 27.57 | ||||||
4th
Quarter 2009
|
45.24 | 32.76 | ||||||
1st
Quarter 2010 (through March 1, 2010)
|
$ | 45.06 | $ | 38.34 |
For
the Year Ended December 31,
|
||||||||||||||||||||
2009
|
2008
|
2007
|
2006
|
2005
|
||||||||||||||||
Statement
of Operations Data:
|
||||||||||||||||||||
Revenues
|
$ | 126,240,777 | $ | 208,858,645 | $ | 100,089,698 | $ | 59,760,117 | $ | 25,843,077 | ||||||||||
Cost
of revenues
|
21,999,046 | 28,351,514 | 17,156,338 | 9,960,178 | 5,772,225 | |||||||||||||||
Realized
loss (gain) on oil derivative
|
(14,884,846 | ) | 4,275,330 | 932,361 | - | - | ||||||||||||||
Depreciation,
depletion and amortization
|
8,957,641 | 29,789,794 | 17,968,062 | 7,900,099 | 2,781,504 | |||||||||||||||
Accretion
|
410,926 | 309,402 | 190,904 | 127,132 | 102,585 | |||||||||||||||
General
and administrative
|
13,453,384 | 13,557,202 | 7,815,721 | 3,617,309 | 1,365,590 | |||||||||||||||
Net
income
|
42,294,179 | 83,617,201 | 34,441,939 | 23,267,968 | 9,460,683 | |||||||||||||||
Basic
income per common share
|
$ | 1.10 | $ | 2.28 | $ | 1.07 | $ | 0.83 | $ | 0.42 | ||||||||||
Diluted
income per common share
|
1.09 | 2.20 | 1.02 | 0.77 | 0.38 | |||||||||||||||
As
of December 31,
|
||||||||||||||||||||
2009 | 2008 | 2007 | 2006 | 2005 | ||||||||||||||||
Balance
Sheet Data:
|
||||||||||||||||||||
Current
assets
|
$ | 80,655,878 | $ | 89,530,137 | $ | 30,823,214 | $ | 14,674,345 | $ | 7,673,860 | ||||||||||
Oil
and gas properties subject to amortization
|
661,453,134 | 548,714,235 | 339,887,859 | 171,708,200 | 69,770,685 | |||||||||||||||
Total
assets
|
657,554,954 | 591,684,775 | 350,980,663 | 176,312,978 | 74,421,907 | |||||||||||||||
Total
current liabilities
|
18,256,893 | 19,789,547 | 19,216,475 | 14,995,870 | 6,737,806 | |||||||||||||||
Total
long-term liabilities
|
116,631,301 | 89,599,767 | 73,953,223 | 41,273,056 | 8,919,826 | |||||||||||||||
Total
Stockholders Equity
|
522,666,730 | 482,295,461 | 257,810,965 | 120,044,052 | 58,728,755 |
For
the Years Ended December 31,
|
||||||||||||
2007
|
2008
|
2009
|
||||||||||
Net
production:
|
||||||||||||
Oil
(Bbls)
|
1,316,025 | 2,018,335 | 2,004,498 | |||||||||
Natural
gas (Mcf)
|
1,503,612 | 1,911,713 | 2,172,791 | |||||||||
Net
sales:
|
||||||||||||
Oil
|
$ | 88,025,225 | $ | 190,050,617 | $ | 115,284,731 | ||||||
Natural
gas
|
12,064,473 | 18,808,028 | 10,956,046 | |||||||||
Average
sales price:
|
||||||||||||
Oil
(per Bbl)
|
$ | 66.82 | $ | 94.16 | $ | 57.51 | ||||||
Natural
gas (per Mcf)
|
8.02 | 9.84 | 5.04 | |||||||||
Production
costs and expenses
|
||||||||||||
Oil
and gas production costs
|
$ | 11,500,461 | $ | 17,833,144 | $ | 15,543,461 | ||||||
Production
taxes
|
5,655,877 | 10,518,370 | 6,455,585 | |||||||||
Realized
loss (gain) on oil derivative
|
932,361 | 4,275,330 | (14,884,846 | ) | ||||||||
Depreciation,
depletion and amortization expense
|
17,968,062 | 29,789,794 | 38,957,461 | |||||||||
Accretion
expense
|
190,904 | 309,402 | 410,926 | |||||||||
General
and administrative expenses
|
7,815,721 | 13,557,202 | 13,453,384 |
Year
|
Lease
Obligation
|
|||
2010
|
20,715 | |||
2011
|
21,649 | |||
2012
|
22,584 | |||
2013
|
19,469 | |||
$ | 84,417 |
·
|
the
quality and quantity of available data;
|
·
|
the
interpretation of that data;
|
·
|
the
accuracy of various mandated economic assumptions; and
|
·
|
the
judgments of the persons preparing the
estimates.
|
Commodity
|
Remaining
Period
|
Volume
(Bbls)
|
Floor
|
Ceiling
|
|||||||||
WTI
Crude Oil
|
January
2010 - December 2010
|
730,000 | $ | 65.00 | $ | 93.00 | |||||||
WTI
Crude Oil
|
January
2010 - December 2010
|
365,000 | $ | 70.00 | $ | 92.85 | |||||||
Commodity
|
Remaining
Period
|
Volume
(MMBTU)
|
Floor
|
Ceiling
|
|||||||||
El
Paso Permian Gas
|
January
2010 - December 2010
|
1,825,000 | $ | 4.00 | $ | 7.87 |
/s/ Phillip W. Terry | |
Chief Executive Officer | |
/s/ William R. Broaddrick | |
Chief Financial Officer |
HANSEN, BARNETT & MAXWELL,
P.C.
A Professional
Corporation
CERTIFIED PUBLIC ACCOUNTANTS
5 Triad Center, Suite 750
Salt
Lake City, UT 84180-1128
Phone: (801) 532-2200
Fax: (801) 532-7944
www.hbmcpas.com
|
Registered
with the Public Company
Accounting Oversight
Board
|
/s/ HANSEN, BARNETT & MAXWELL, P.C. |
Name
|
Age
|
Position
|
||
Lloyd
T. Rochford
|
63
|
Chairman
of the Board of Directors
|
||
Phillip
W. Terry
|
62
|
President
and Chief Executive Officer
|
||
William
R. Broaddrick
|
32
|
Vice
President and Chief Financial Officer
|
||
David
D. Ricks
|
49
|
Vice
President of Operations
|
||
Stanley
M. McCabe
|
77
|
Director
|
||
Clayton
E. Woodrum
|
69
|
Director
|
||
Anthony
B. Petrelli
|
57
|
Director
|
||
Carl
H. Fiddner
|
64
|
Director
|
Compensation
Element
|
Compensation
Objectives Attempted to be Achieved
|
|
Base
Salary
|
Attract
and retain qualified executive’s
Motivate
and reward executives performance
|
|
Bonus
Compensation
|
Motivate
and reward executive’s performance
Enhance
profitability of Company and shareholder value
|
|
Equity-Based
Compensation – stock options and restricted stock grants
|
Enhance
profitability of Company and shareholder value by aligning long-term
incentives with shareholders’ long-term interests
|
Summary
Compensation Table
|
||||||||||||||||||||||||||
Name
and Principal Position
|
Year
|
Salary
($)
|
Bonus
($)
|
Stock
Grants (1) ($)
|
Option
Awards (2) ($)
|
All
Other Compensation ($)
|
Total
($)
|
|||||||||||||||||||
Phillip
W. Terry, President and
|
2007
|
$ | 164,167 | $ | 16,000 | $ | - | 3,863,309 | $ | 12,408 | (3 | ) | 4,055,884 | |||||||||||||
Chief Executive Officer |
2008
|
250,000 | 25,000 | - | - | 20,750 | (3 | ) | 295,750 | |||||||||||||||||
2009
|
250,000 | 25,000 | - | - | 32,200 | (3 | ) | 307,200 | ||||||||||||||||||
William
R. Broaddrick,
|
2007
|
89,583 | 9,000 | - | 1,557,976 | 1,400 | (5 | ) | 1,657,959 | |||||||||||||||||
Vice President and |
2008
|
100,008 | 10,000 | - | - | 4,500 | (5 | ) | 114,508 | |||||||||||||||||
Chief Financial Officer |
2009
|
100,008 | 10,000 | - | - | 6,000 | (5 | ) | 116,008 | |||||||||||||||||
David
R. Ricks, Vice President
|
2007
|
28,500 | 1,425 | - | 714,645 | 4,230 | (4 | ) | 748,800 | |||||||||||||||||
of Operations |
2008
|
190,072 | 19,000 | - | 915,270 | 27,523 | (4 | ) | 1,151,865 | |||||||||||||||||
2009
|
195,995 | 29,750 | 20,257 | - | 33,897 | (4 | ) | 279,899 | ||||||||||||||||||
Thomas
W. Wahl,
|
2007
|
50,000 | 2,633 | - | 1,125,176 | 1,800 | (5 | ) | 1,179,609 | |||||||||||||||||
Vice President of Land |
2008
|
125,000 | 12,500 | - | - | 5,625 | (5 | ) | 143,125 | |||||||||||||||||
2009
|
142,869 | 15,625 | 15,645 | - | 8,572 | (5 | ) | 182,711 | ||||||||||||||||||
William
C. Gaines,
|
2007
|
92,639 | 9,741 | - | 981,129 | 575 | (5 | ) | 1,084,084 | |||||||||||||||||
Manager Reservoir |
2008
|
125,000 | 12,500 | - | - | 6,000 | (5 | ) | 143,500 | |||||||||||||||||
Engineering/Acquisitions |
2009
|
135,417 | 21,875 | 15,645 | - | 9,438 | (5 | ) | 182,375 |
Outstanding
Equity Awards
|
|||||||||||||
Name
and Principal Position
|
Number
of Securities Underlying Unexercised Options (#)
Exercisable
|
Number
of Securities Underlying Unexercised Options (#)
Unexercisable
|
Options
Exercise
Price
($)
|
Option
Expiration
Date
|
|||||||||
Phillip
W. Terry
|
40,000 | 120,000 | 19.23 |
07/22/12
|
|||||||||
60,000 | 90,000 | 37.59 |
06/01/13
|
||||||||||
William
R. Broaddrick
|
40,000 | 60,000 | 19.23 |
07/22/12
|
|||||||||
20,000 | 30,000 | 37.59 |
06/01/13
|
||||||||||
David
R. Ricks
|
20,000 | 30,000 | 35.54 |
05/07/13
|
|||||||||
10,000 | 40,000 | 45.68 |
11/01/13
|
||||||||||
Thomas
W. Wahl
|
- | 60,000 | 26.96 |
01/24/13
|
|||||||||
William
C. Gaines
|
- | 60,000 | 23.42 |
12/01/12
|
|||||||||
Option
Exercises and Stock Vesting
|
||
Option
Awards
|
||
Name
|
Number
of Shares
Acquired
on Exercise (#)
|
Value
Realized on
Exercise
($)
|
Thomas
W. Wahl
|
20,000
|
63,200
|
William
C. Gaines
|
27,000
|
277,020
|
Director
Compensation Table
|
||||||
Name
|
Fees
Earned or
Paid
in Cash ($)
|
Option
Awards
($) (1)
|
All
Other
Compensation
($)
|
Total
($)
|
||
Lloyd
T. Rochford
|
22,000
|
-
|
-
|
22,000
|
||
Stanley
M. McCabe
|
22,000
|
-
|
-
|
22,000
|
||
Clayton
E. Woodrum
|
22,000
|
-
|
-
|
22,000
|
||
Anthony
B. Petrelli
|
22,000
|
-
|
-
|
22,000
|
||
Carl
H. Fiddner
|
22,000
|
-
|
-
|
22,000
|
Number
of securities to be issued upon exercise of outstanding
options
|
Weighted-average
exercise price of outstanding options
|
Number
of securities remaining available for future issuance under compensation
plans (excluding securities in column (a))
|
||||||||||
(a)
|
(b)
|
(c)
|
||||||||||
Equity
compensation plans
approved
by security holders
|
1,895,000 | $ | 23.87 | 1,294,774 | ||||||||
Equity
compensation plans not
approved
by security holders
|
- | - | - | |||||||||
Total
|
1,895,000 | $ | 23.87 | 1,294,774 | ||||||||
Shares
of Common Stock Beneficially Owned
|
||||
Name
|
Number
|
Percent
|
||
Lloyd
T. Rochford
|
365,200
(1)
|
1%
|
||
Phillip
W. Terry
|
230,000
(2)
|
1%
|
||
William
R. Broaddrick
|
191,200
(3)
|
1%
|
||
David
D. Ricks
|
30,470
(4)
|
*
|
||
Stanley
M. McCabe
|
350,000
(5)
|
1%
|
||
Clayton
E. Woodrum
|
20,000
(6)
|
*
|
||
Anthony
B. Petrelli
|
97,000
(7)
|
*
|
||
Carl
H. Fiddner
|
38,736
(8)
|
*
|
||
All
directors and executive officers
|
1,322,606
(9)
|
3%
|
||
(1)
|
Includes
70,000 shares issuable upon the exercise of stock options that are
currently exercisable and 80,000 shares issuable upon the exercise of
stock options that are exercisable within 60
days.
|
(2)
|
Includes
100,000 shares issuable upon the exercise of stock options that are
currently exercisable and 40,000 shares issuable upon the exercise of
stock options that are exercisable within 60
days.
|
(3)
|
Includes
60,000 shares issuable upon the exercise of stock options that are
currently exercisable and 20,000 shares issuable upon the exercise of
stock options that are exercisable within 60
days.
|
(4)
|
Includes
30,000 shares issuable upon the exercise of stock options that are
currently exercisable.
|
(5)
|
Includes
270,000 shares issuable upon the exercise of stock options that are
currently exercisable and 80,000 shares issuable upon the exercise of
stock options that are exercisable within 60
days.
|
(6)
|
Includes
10,000 shares issuable upon the exercise of stock options that are
currently exercisable and 5,000 shares issuable upon the exercise of stock
options that are exercisable within 60
days.
|
(7)
|
Includes
50,000 shares issuable upon the exercise of stock options that are
currently exercisable and 20,000 shares issuable upon the exercise of
stock options that are exercisable within 60
days.
|
(8)
|
Includes
30,000 shares issuable upon the exercise of stock options that are
currently exercisable.
|
(9)
|
Includes
620,000 shares issuable upon the exercise of stock options that are
currently exercisable and 245,000 shares issuable upon the exercise of
stock options that are exercisable within 60 days by all executive
officers and directors.
|
*
|
Represents
beneficial ownership of less than
1%
|
Shares of Stock Beneficially Owned | ||||
Name
and Address
|
Number
|
Percentage
|
||
Neuberger
Berman Group, LLC
605
Third Avenue
New
York, New York 10158
|
4,285,209
(1)
|
11.05%
|
||
FMR
LLC
82
Devonshire Street
Boston,
Massachusetts 02109
|
3,233,498
(2)
|
8.30%
|
||
BlackRock,
Inc.
40
East 52nd
Street
New
York, New York 10022
|
2,915,226
(3)
|
7.51%
|
||
T.
Rowe Price Associates, Inc.
100
E. Pratt Street
Baltimore,
Maryland 21202
|
2,147,920
(4)
|
5.54%
|
(1)
|
This
share ownership information was provided by a Schedule 13G filed February
17, 2010, which discloses that each of Neuberger Berman Group, LLC and
Neuberger Berman, LLC possesses shared power to dispose or direct the
disposition of 4,285,209 shares, and shared power to vote 3,562,743
shares. The Schedule 13G further discloses that Neuberger Berman
Management LLC possesses shared power to vote and dispose or direct the
disposition of 1,909,522 shares, and Neuberger Berman, Equity Funds
possesses shared power to vote and dispose or direct the disposition of
3,403,528 shares.
|
(2)
|
This share ownership information was
provided by a Schedule 13G filed February 16, 2010, which discloses that
FMR LLC, possesses beneficial ownership of the reported
shares.
|
(3)
|
This
share ownership information was provided by a Schedule 13G filed January
29, 2010, following the acquisition by BlackRock, Inc. of Barclays Global
Investors, NA; the Schedule discloses BlackRock possesses sole power to
dispose or direct the disposition and sole power to vote or to direct the
vote of such shares.
|
(4)
|
This
share ownership information was provided by a Schedule 13G filed February
11, 2010, which discloses that T. Rowe Price Associates, Inc. possesses
sole dispositive power of the reported
shares.
|
(a) | Financial Statements |
See Index to Financial Statements on page 54 | |
(b) | Exhibits |
3.1 | Articles of Incorporation of Arena Resources, Inc. (i) |
3.2 | By-Laws of Arena Resources, Inc. (i) |
10.1 | Second Amended and Restated Credit Agreement dated as of June 30, 2009, effective as of July 2, 2009, among the Company, MidFirst Bank, Compass Bank and Capital One, N.A. (ii) |
23.1 | Consent of Williamson Petroleum Consultants, Inc., Independent Petroleum Engineers |
23.2 | Consent of Hansen, Barnett & Maxwell, P.C., Independent |
31.1 | Certification of CEO |
31.2 | Certification of CFO |
32.1 | Section 1350 Certification - CEO |
32.2 | Section 1350 Certification – CFO |
99 | Reserves Audit Report of Williamson Petroleum Consultants, Inc. |
Arena
Resources, Inc.
|
|
By:______________________
|
|
Mr.
Phillip W. Terry
|
|
President
and Chief Executive Officer
|
|
Date: March
1, 2010
|
|
By:______________________
|
|
Mr.
William R. Broaddrick
|
|
Chief
Financial Officer
|
|
Date: March
1, 2010
|
|
______________________
|
|
Mr.
Lloyd T. Rochford
|
|
Director
|
|
Date: March
1, 2010
|
|
______________________
|
|
Mr.
Stanley McCabe
|
|
Director
|
|
Date: March
1, 2010
|
|
______________________
|
|
Mr.
Clayton E. Woodrum
|
|
Director
|
|
Date: March
1, 2010
|
|
______________________
|
|
Mr.
Anthony B. Petrelli
|
|
Director
|
|
Date: March
1, 2010
|
|
______________________
|
|
Mr.
Carl H. Fiddner
|
|
Director
|
|
Date: March
1, 2010
|
|
Page
|
|
Report
of Independent Registered Public Accounting Firm
|
55
|
Consolidated
Balance Sheets
|
56
|
Consolidated
Statements of Operations
|
57
|
Consolidated
Statements of Stockholders’ Equity
|
58
|
Consolidated
Statements of Cash Flows
|
59
|
Notes
to Consolidated Financial Statements
|
60
|
Supplemental
Information on Oil and Gas Producing Activities
|
76
|
HANSEN, BARNETT & MAXWELL,
P.C.
A Professional
Corporation
CERTIFIED PUBLIC ACCOUNTANTS
5 Triad Center, Suite 750
Salt
Lake City, UT 84180-1128
Phone: (801) 532-2200
Fax: (801) 532-7944
www.hbmcpas.com
|
Registered
with the Public Company
Accounting Oversight
Board
|
/s/ HANSEN, BARNETT & MAXWELL, P.C. |
December
31,
|
2009
|
2008
|
||||||
ASSETS
|
||||||||
Current
Assets
|
||||||||
Cash
|
$ | 63,635,078 | $ | 58,489,574 | ||||
Accounts
receivable
|
13,103,483 | 8,637,308 | ||||||
Joint
interest billing receivable
|
2,392,814 | 2,836,948 | ||||||
Receivable
from oil derivative
|
- | 2,508,396 | ||||||
Fair
value of oil derivative
|
- | 16,210,478 | ||||||
Prepaid
expenses
|
1,040,513 | 847,433 | ||||||
Total
Current Assets
|
80,171,888 | 89,530,137 | ||||||
Property
and Equipment
|
||||||||
Oil
and gas properties subject to amortization
|
661,453,134 | 548,714,235 | ||||||
Oil
and gas gathering systems
|
2,134,876 | - | ||||||
Inventory
for property development
|
1,052,538 | 1,670,067 | ||||||
Drilling
rigs
|
6,694,841 | 6,899,433 | ||||||
Land,
buildings, equipment and leasehold improvements
|
5,991,983 | 5,799,045 | ||||||
Total
Property and Equipment
|
677,327,372 | 563,082,780 | ||||||
Less: Accumulated
depreciation , depletion and amortization
|
(100,428,326 | ) | (60,928,142 | ) | ||||
Net
Property and Equipment
|
576,899,046 | 502,154,638 | ||||||
Total
Assets
|
$ | 657,070,934 | $ | 591,684,775 | ||||
LIABILITIES
AND STOCKHOLDERS' EQUITY
|
||||||||
Current
Liabilities
|
||||||||
Accounts
payable
|
$ | 17,155,260 | $ | 12,877,084 | ||||
Current
taxes payable
|
314,700 | - | ||||||
Deferred
income taxes
|
- | 6,046,508 | ||||||
Accrued
liabilities
|
1,101,633 | 865,955 | ||||||
Total
Current Liabilities
|
18,571,593 | 19,789,547 | ||||||
Long-Term
Liabilities
|
||||||||
Asset
retirement liability
|
7,209,812 | 5,066,348 | ||||||
Deferred
income taxes
|
108,622,799 | 84,533,419 | ||||||
Total
Long-Term Liabilities
|
115,832,611 | 89,599,767 | ||||||
Stockholders'
Equity
|
||||||||
Preferred
stock - $0.001 par value; 10,000,000 shares authorized;
|
||||||||
no
shares issued or outstanding
|
- | - | ||||||
Common
stock - $0.001 par value; 100,000,000 shares authorized;
|
||||||||
38,693,963
shares and 38,210,187 shares outstanding, respectively
|
38,694 | 38,210 | ||||||
Additional
paid-in capital
|
326,990,590 | 318,701,383 | ||||||
Retained
earnings
|
195,637,446 | 153,343,267 | ||||||
Accumulated
other comprehensive income
|
- | 10,212,601 | ||||||
Total
Stockholders' Equity
|
522,666,730 | 482,295,461 | ||||||
Total
Liabilities and Stockholders' Equity
|
$ | 657,070,934 | $ | 591,684,775 | ||||
For
the years ended December 31,
|
2009
|
2008
|
2007
|
|||||||||
Oil
and Gas Revenues
|
$ | 126,240,777 | $ | 208,858,645 | $ | 100,089,698 | ||||||
Costs
and Operating Expenses
|
||||||||||||
Oil
and gas production costs
|
15,543,461 | 17,833,144 | 11,500,461 | |||||||||
Oil
and gas production taxes
|
6,455,585 | 10,518,370 | 5,655,877 | |||||||||
Realized
loss (gain) on oil derivative
|
(14,884,846 | ) | 4,275,330 | 932,361 | ||||||||
Depreciation,
depletion and amortization
|
38,957,641 | 29,789,794 | 17,968,062 | |||||||||
Accretion
expense
|
410,926 | 309,402 | 190,904 | |||||||||
General
and administrative (which includes $4,649,928, $6,586,279
and
$4,140,747, respectively, in stock based
compensation)
|
13,453,384 | 13,557,202 | 7,815,721 | |||||||||
Total
Costs and Operating Expenses
|
59,936,151 | 76,283,242 | 44,063,386 | |||||||||
Income
from Operations
|
66,304,626 | 132,575,403 | 56,026,312 | |||||||||
Other
Income (Expense)
|
||||||||||||
Interest
income
|
828,992 | 1,299,939 | 884,990 | |||||||||
Interest
expense
|
- | (1,145,456 | ) | (1,411,520 | ) | |||||||
Net
Other Income (Expense)
|
828,992 | 154,483 | (526,530 | ) | ||||||||
Income
Before Provision for Income Taxes
|
67,133,618 | 132,729,886 | 55,499,782 | |||||||||
Provision
for Income Taxes
|
(24,839,439 | ) | (49,112,685 | ) | (21,057,843 | ) | ||||||
Net
Income
|
$ | 42,294,179 | $ | 83,617,201 | $ | 34,441,939 | ||||||
Basic
Net Income Per Common Share
|
$ | 1.10 | $ | 2.28 | $ | 1.07 | ||||||
Diluted
Net Income Per Common Share
|
1.09 | 2.20 | 1.02 | |||||||||
Other
Comprehensive Income (Loss)
|
||||||||||||
Net
income
|
$ | 42,294,179 | $ | 83,617,201 | $ | 34,441,939 | ||||||
Realized
loss (gain) on hedge derivative contract settlements reclassified from
other comprehensive loss (income), net of
tax
|
(10,222,546 | ) | 12,381,887 | - | ||||||||
Change
in unrealized deferred hedging gains (losses), net of tax
|
9,945 | 632,212 | (2,801,498 | ) | ||||||||
Total
Comprehensive Income
|
$ | 32,081,578 | $ | 96,631,300 | $ | 31,640,441 | ||||||
Accumulated
|
||||||||||||||||||||||||||||
Additional
|
Other
|
Total
|
||||||||||||||||||||||||||
Common
Stock
|
Paid-in
|
Deferred
|
Retained
|
Comprehensive
|
Stockholders'
|
|||||||||||||||||||||||
Shares
|
Amount
|
Capital
|
Compensation
|
Earnings
|
Income
(Loss)
|
Equity
|
||||||||||||||||||||||
Balance
December 31, 2006
|
29,337,574 | $ | 29,338 | $ | 84,730,586 | $ | - | $ | 35,284,127 | $ | - | $ | 120,044,052 | |||||||||||||||
Options
exercised for cash
|
570,000 | 570 | 1,851,930 | - | - | - | 1,852,500 | |||||||||||||||||||||
Warrants
exercised for cash
|
127,126 | 127 | 540,169 | - | - | - | 540,295 | |||||||||||||||||||||
Warrants
exercised using cashless exercise provision
|
139,079 | 139 | (139 | ) | - | - | - | - | ||||||||||||||||||||
Shares
issued in property acquisition
|
5,000 | 5 | 204,745 | - | - | - | 204,750 | |||||||||||||||||||||
Tax
impact of option exercises
|
- | - | 4,298,722 | - | - | - | 4,298,722 | |||||||||||||||||||||
Issuance
of common stock for cash, net
|
4,100,000 | 4,100 | 95,085,358 | - | - | - | 95,089,458 | |||||||||||||||||||||
Expense
related to vesting stock based compensation
|
- | - | 4,140,747 | - | - | - | 4,140,747 | |||||||||||||||||||||
Loss
on change in fair value of oil derivative, net of tax
|
- | - | - | - | - | (2,801,498 | ) | (2,801,498 | ) | |||||||||||||||||||
Net
income
|
- | - | - | - | 34,441,939 | - | 34,441,939 | |||||||||||||||||||||
Balance
December 31, 2007
|
34,278,779 | $ | 34,279 | $ | 190,852,118 | $ | - | $ | 69,726,066 | $ | (2,801,498 | ) | $ | 257,810,965 | ||||||||||||||
Options
exercised for cash
|
1,333,000 | 1,333 | 4,689,927 | - | - | - | 4,691,260 | |||||||||||||||||||||
Warrants
exercised for cash
|
97,158 | 97 | 446,099 | - | - | - | 446,196 | |||||||||||||||||||||
Issuance
of common stock for cash, net
|
2,501,250 | 2,501 | 116,126,960 | - | - | - | 116,129,461 | |||||||||||||||||||||
Expense
related to vesting stock based compensation
|
- | - | 6,586,279 | - | - | - | 6,586,279 | |||||||||||||||||||||
Gain
on change in fair value of oil derivative, net of tax
|
- | - | - | - | - | 13,014,099 | 13,014,099 | |||||||||||||||||||||
Net
income
|
- | - | - | - | 83,617,201 | - | 83,617,201 | |||||||||||||||||||||
Balance
December 31, 2008
|
38,210,187 | $ | 38,210 | $ | 318,701,383 | $ | - | $ | 153,343,267 | $ | 10,212,601 | $ | 482,295,461 | |||||||||||||||
Options
exercised for cash
|
317,000 | 317 | 2,922,123 | - | - | - | 2,922,440 | |||||||||||||||||||||
Warrants
exercised for cash
|
161,550 | 162 | 717,161 | - | - | - | 717,323 | |||||||||||||||||||||
Expense
related to vesting stock based compensation
|
- | - | 4,633,873 | - | - | - | 4,633,873 | |||||||||||||||||||||
Restricted
stock grant and vesting
|
5,226 | 5 | 16,050 | - | - | - | 16,055 | |||||||||||||||||||||
Loss
on change in fair value of oil derivative, net of tax
|
- | - | - | - | - | (10,212,601 | ) | (10,212,601 | ) | |||||||||||||||||||
Net
income
|
- | - | - | - | 42,294,179 | - | 42,294,179 | |||||||||||||||||||||
Balance
December 31, 2009
|
38,693,963 | $ | 38,694 | $ | 326,990,590 | $ | - | $ | 195,637,446 | $ | - | $ | 522,666,730 |
For
the years ended December 31,
|
2009
|
2008
|
2007
|
|||||||||
Cash
Flows From Operating Activities
|
||||||||||||
Net
income
|
$ | 42,294,179 | $ | 83,617,201 | $ | 34,441,939 | ||||||
Adjustments
to reconcile net income to net cash
|
||||||||||||
provided by operating activities:
|
||||||||||||
Depreciation,
depletion and amortization
|
38,957,641 | 29,789,794 | 17,968,062 | |||||||||
Provision
for income taxes
|
24,839,439 | 49,112,685 | 21,057,843 | |||||||||
Gain
on sale of equipment
|
- | - | (881 | ) | ||||||||
Stock
based compensation
|
4,649,928 | 6,586,279 | 4,140,747 | |||||||||
Accretion
of asset retirement obligation
|
410,926 | 309,402 | 190,904 | |||||||||
Changes
in assets and liabilities:
|
||||||||||||
Accounts,
joint interest and oil derivative receivable
|
(1,513,645 | ) | 9,835,045 | (14,165,921 | ) | |||||||
Current
and deferred income taxes
|
- | (612,480 | ) | - | ||||||||
Prepaid
expenses
|
(472,478 | ) | (714,040 | ) | (30,808 | ) | ||||||
Excess
tax benefits from share-based payment arrangements
|
- | - | (4,298,722 | ) | ||||||||
Accounts
payable and accrued liabilities
|
4,513,854 | (587,238 | ) | (814,999 | ) | |||||||
Net
Cash Provided by Operating Activities
|
113,679,844 | 177,336,648 | 58,488,164 | |||||||||
Cash
Flows from Investing Activities
|
||||||||||||
Proceeds
from sale of property and equipment
|
- | - | 7,000 | |||||||||
Proceeds
from sale of oil and gas properties
|
- | 296,800 | 1,915,640 | |||||||||
Purchase
and development of oil and gas properties
|
(103,778,202 | ) | (207,022,666 | ) | (168,582,803 | ) | ||||||
Purchase
of inventory for property development
|
(6,068,087 | ) | (1,670,067 | ) | - | |||||||
Construction
of oil and gas gathering systems
|
(2,134,876 | ) | - | - | ||||||||
Purchase
of buildings, machinery and office equipment
|
(192,938 | ) | (1,931,517 | ) | (8,615,501 | ) | ||||||
Net
Cash Used in Investing Activities
|
(112,174,103 | ) | (210,327,450 | ) | (175,275,664 | ) | ||||||
Cash
Flows From Financing Activities
|
||||||||||||
Proceeds
from issuance of common stock and warrants, net of offering
costs
|
- | 116,129,461 | 95,089,458 | |||||||||
Proceeds
from exercise of warrants, net of offering costs
|
717,323 | 446,196 | 540,295 | |||||||||
Proceeds
from exercise of options
|
2,922,440 | 4,691,260 | 1,852,500 | |||||||||
Excess
tax benefits from share-based payment arrangements
|
- | - | 4,298,722 | |||||||||
Issuance
of notes payable
|
- | 11,000,000 | 65,700,000 | |||||||||
Payment
of notes payable
|
- | (46,000,000 | ) | (50,400,000 | ) | |||||||
Net
Cash Provided by Financing Activities
|
3,639,763 | 86,266,917 | 117,080,975 | |||||||||
Net
Increase in Cash
|
5,145,504 | 53,276,115 | 293,475 | |||||||||
Cash
at Beginning of Period
|
58,489,574 | 5,213,459 | 4,919,984 | |||||||||
Cash
at End of Period
|
$ | 63,635,078 | $ | 58,489,574 | $ | 5,213,459 | ||||||
For
the years ended December 31,
|
2009
|
2008
|
2007
|
|||||||||
Supplemental
Cash Flow Information
|
||||||||||||
Cash
paid for income taxes
|
$ | - | $ | 612,480 | $ | - | ||||||
Cash
paid for interest
|
- | 1,280,122 | 1,463,328 | |||||||||
Non-Cash
Investing and Financing Activities
|
||||||||||||
Common
stock issued for properties
|
$ | - | $ | - | $ | 204,750 | ||||||
Asset
retirement obligation incurred in property acquisition and
development
|
1,732,538 | 1,459,534 | 1,001,613 | |||||||||
Depreciation
on drilling rigs capitalized as oil and gas properties
|
542,543 | 640,977 | 306,133 | |||||||||
Use
of inventory in property development
|
6,685,616 | - | - |
For
the Years Ended December 31,
|
||||||||||||
2009
|
2008
|
2007
|
||||||||||
Depletion
|
$ | 38,659,746 | $ | 29,554,184 | $ | 17,885,561 | ||||||
Depletion
rate, per barrel-of-oil-equivalent (BOE)
|
$ | 16.34 | $ | 12.65 | $ | 11.42 |
Buildings
and improvements
|
30
years
|
Office
equipment and software
|
5-7
years
|
Machinery
and equipment
|
5-7
years
|
·
|
Introduce
a new definition of oil and gas producing activities. This new definition
allows companies to include in their reserve base volumes from
unconventional resources. Such unconventional resources include bitumen
extracted from oil sands and oil and gas extracted from coal beds and
shale formations.
|
·
|
Report
oil and gas reserves using an unweighted average price using the prior
12-month period, based on the closing prices on the first day of each
month, rather than year-end prices.
|
·
|
Permit
companies to disclose their probable and possible reserves on a voluntary
basis. In the past, proved reserves were the only reserves allowed in the
disclosures. We have chosen not to make disclosure under these
categories.
|
·
|
Requires
companies to provide additional disclosure regarding the aging of proved
undeveloped reserves.
|
·
|
Permit
the use of reliable technologies to determine proved reserves if those
technologies have been demonstrated empirically to lead to reliable
conclusions about reserves volumes.
|
·
|
Replace
the existing “certainty” test for areas beyond one offsetting drilling
unit from a productive well with a “reasonable certainty”
test.
|
·
|
Require
additional disclosures regarding the qualifications of the chief technical
person who oversees the company’s overall reserve estimation process.
Additionally, disclosures regarding internal controls over reserve
estimation, as well as a report addressing the independence and
qualifications of its reserves preparer or auditor will be
mandatory.
|
·
|
the
period after the balance sheet date during which management of a reporting
entity should evaluate events or transactions that may occur for potential
recognition or disclosure in the financial statements (through the date
that the financial statements are issued or are available to be
issued);
|
·
|
the
circumstances under which an entity should recognize events or
transactions occurring after the balance sheet date in its financial
statements; and
|
·
|
the
disclosures that an entity should make about events or transactions that
occurred after the balance sheet
date.
|
For
the years ended December 31,
|
2009
|
2008
|
2007
|
|||||||||
Net
Income
|
$ | 42,294,179 | $ | 83,617,201 | $ | 34,441,939 | ||||||
Basic
Weighted-Average Common Shares Outstanding
|
38,380,284 | 36,732,000 | 32,071,279 | |||||||||
Effect
of dilutive securities
|
||||||||||||
Warrants
|
75,924 | 205,846 | 325,034 | |||||||||
Stock
options
|
501,737 | 986,251 | 1,271,616 | |||||||||
Diluted
Weighted-Average Common Shares Outstanding
|
38,957,945 | 37,924,097 | 33,667,929 | |||||||||
Basic
Income Per Common Share
|
||||||||||||
Net
income
|
1.10 | 2.28 | 1.07 | |||||||||
Diluted
Income Per Common Share
|
||||||||||||
Net
Income
|
1.09 | 2.20 | 1.02 |
Capitalized
Costs Relating to Oil and Gas Producing Activities
|
||||||||||||
December
31,
|
2009
|
2008
|
2007
|
|||||||||
Unproved
oil and gas properties
|
$ | 5,642,624 | $ | 5,642,624 | $ | 5,642,624 | ||||||
Proved
oil and gas properties
|
655,810,510 | 543,071,611 | 334,245,235 | |||||||||
Oil
and gas gathering systems
|
2,134,876 | - | - | |||||||||
Inventory
for property development
|
1,052,538 | 1,670,067 | - | |||||||||
Drilling
rigs
|
6,694,841 | 6,899,433 | 6,254,737 | |||||||||
Land,
buildings, equipment and leasehold improvements
|
5,991,983 | 5,799,045 | 4,512,224 | |||||||||
Total
capitalized costs
|
677,327,372 | 563,082,780 | 350,654,820 | |||||||||
Less
accumulated depletion, depreciation and amortization
|
(100,428,326 | ) | (60,928,142 | ) | (30,497,371 | ) | ||||||
Net
Capitalized Costs
|
$ | 576,899,046 | $ | 502,154,638 | $ | 320,157,449 | ||||||
Net
Costs Incurred in Oil and Gas Producing Activities
|
||||||||||||
For
the Years Ended December 31,
|
2009 | 2008 | 2007 | |||||||||
Acquisition
of proved properties (net of proceeds from property sale)
|
3,942,103 | 16,782,225 | 53,554,064 | |||||||||
Acquisition
of unproved properties (net of proceeds from property
sale)
|
- | - | 542,650 | |||||||||
Exploration
costs
|
- | - | - | |||||||||
Development
costs
|
107,064,257 | 190,584,617 | 113,084,344 | |||||||||
Total
Net Costs Incurred
|
$ | 111,006,360 | $ | 207,366,842 | $ | 167,181,058 |
Balance,
January 1, 2007
|
$ | 2,250,332 | ||
Liabilities
incurred
|
1,027,945 | |||
Accretion
expense
|
190,904 | |||
Deletion
related to property divestitures
|
(26,332 | ) | ||
Liabilities
settled
|
(45,019 | ) | ||
Balance,
December 31, 2007
|
$ | 3,397,830 | ||
Liabilities
incurred
|
1,459,534 | |||
Accretion
expense
|
309,402 | |||
Liabilities
settled
|
(100,418 | ) | ||
Balance,
December 31, 2008
|
$ | 5,066,348 | ||
Liabilities
incurred
|
1,732,538 | |||
Accretion
expense
|
410,926 | |||
Balance,
December 31, 2009
|
$ | 7,209,812 | ||
2009
|
2008
|
2007
|
||||||||||||||||||||||
Warrants
|
Weighted-Average
Exercise Price
|
Warrants
|
Weighted-Average
Exercise Price
|
Warrants
|
Weighted-Average
Exercise Price
|
|||||||||||||||||||
Outstanding
at beginning of the year
|
161,550 | $ | 4.44 | 258,708 | $ | 4.50 | 536,658 | $ | 4.25 | |||||||||||||||
Issued
|
- | - | - | - | - | - | ||||||||||||||||||
Expired
|
- | - | - | - | - | - | ||||||||||||||||||
Exercised
|
(161,550 | ) | 4.44 | (97,158 | ) | 4.59 | (277,950 | ) | 3.08 | |||||||||||||||
Outstanding
at end of year
|
- | $ | - | 161,550 | $ | 4.44 | 258,708 | $ | 4.50 |
Grant
date
|
#
of options
|
Exercise
price
|
||||||
January
11, 2007
|
100,000 | $ | 18.675 | |||||
January
22, 2007
|
600,000 | 19.23 | ||||||
May
1, 2007
|
200,000 | 23.42 | ||||||
July
24, 2007
|
100,000 | 26.96 | ||||||
November
1, 2007
|
50,000 | 35.53 | ||||||
November
7, 2007
|
50,000 | 35.54 | ||||||
December
1, 2007
|
300,000 | 37.59 | ||||||
December
17, 2007
|
125,000 | 37.85 | ||||||
1,525,000 | ||||||||
Grant
date
|
#
of options
|
Exercise
price
|
||||||
May
7, 2008
|
50,000 | $ | 45.68 | |||||
May
15, 2008
|
50,000 | 49.74 | ||||||
July
24, 2008
|
50,000 | 41.09 | ||||||
August
18, 2008
|
50,000 | 39.02 | ||||||
September
2, 2008
|
25,000 | 40.75 | ||||||
225,000 |
2009
|
2008
|
2007
|
||||||||||||||||||||||
Options
|
Weighted-Average
Exercise Price
|
Options
|
Weighted-Average
Exercise Price
|
Options
|
Weighted-Average
Exercise Price
|
|||||||||||||||||||
Outstanding
at beginning of the year
|
2,252,000 | $ | 22.12 | 3,450,000 | $ | 13.55 | 2,610,000 | $ | 3.31 | |||||||||||||||
Issued
|
- | 225,000 | 43.53 | 1,525,000 | 26.45 | |||||||||||||||||||
Forfeited
|
(40,000 | ) | 41.09 | (90,000 | ) | 22.73 | (115,000 | ) | 3.35 | |||||||||||||||
Exercised
|
(317,000 | ) | 9.22 | (1,333,000 | ) | 3.52 | (570,000 | ) | 3.25 | |||||||||||||||
Outstanding
at end of year
|
1,895,000 | $ | 23.87 | 2,252,000 | $ | 22.12 | 3,450,000 | $ | 13.55 | |||||||||||||||
Exercisable
at end of year
|
705,000 | $ | 20.96 | 537,000 | $ | 13.27 | 1,050,000 | $ | 2.33 | |||||||||||||||
Weighted
average fair value of
|
||||||||||||||||||||||||
options
granted during the year
|
$ | - | $ | 17.52 | $ | 10.84 |
2008
|
2007
|
||
Risk
free interest rate
|
3.14%
|
4.30%
|
|
Expected
life
|
4.25
years
|
4.25
years
|
|
Dividend
yield
|
-
|
-
|
|
Volatility
|
45%
|
47%
|
|
Options
Outstanding
|
||||||||||||||
Exercise
price
|
Number
Outstanding
|
Weighted-Average
Remaining Contractual Life (in years)
|
Number
Exercisable
|
|||||||||||
4.15 | 305,000 | 0.50 | 200,000 | |||||||||||
10.425 | 40,000 | 1.30 | 20,000 | |||||||||||
13.70 | 40,000 | 1.95 | - | |||||||||||
18.675 | 100,000 | 2.53 | 40,000 | |||||||||||
19.23 | 560,000 | 2.56 | 200,000 | |||||||||||
23.42 | 140,000 | 2.84 | 20,000 | |||||||||||
26.96 | 60,000 | 3.07 | - | |||||||||||
35.53 | 40,000 | 3.33 | 10,000 | |||||||||||
35.54 | 50,000 | 3.35 | 20,000 | |||||||||||
37.59 | 250,000 | 3.42 | 100,000 | |||||||||||
37.85 | 125,000 | 3.46 | 50,000 | |||||||||||
39.02 | 50,000 | 3.85 | 10,000 | |||||||||||
40.75 | 25,000 | 3.87 | 5,000 | |||||||||||
41.09 | 10,000 | 4.07 | 10,000 | |||||||||||
45.68 | 50,000 | 4.13 | 10,000 | |||||||||||
49.74 | 50,000 | 4.17 | 10,000 | |||||||||||
1,895,000 | 2.06 | 705,000 |
Year
|
Lease
Obligation
|
|||
2010
|
20,715 | |||
2011
|
21,649 | |||
2012
|
22,584 | |||
2013
|
19,469 | |||
$ | 84,417 |
Provision for income
taxes
|
2009
|
2008
|
2007
|
|||||||||
Current
|
$ | 4,661,395 | $ | - | $ | - | ||||||
Minimum
tax
|
798,690 | 539,793 | ||||||||||
Benefit
of net operating loss
|
(4,661,395 | ) | ||||||||||
Deferred
|
24,040,749 | 49,112,685 | 20,518,050 | |||||||||
$ | 24,839,439 | $ | 49,112,685 | $ | 21,057,843 |
Rate
Reconciliation
|
2009
|
2008
|
2007
|
|||||||||
Tax
at federal statutory rate (34%)
|
$ | 22,825,430 | $ | 45,128,161 | $ | 18,869,926 | ||||||
Non-deductible
expenses
|
- | 29,406 | 13,939 | |||||||||
State
tax, net of federal benefit
|
2,014,009 | 4,380,086 | 1,831,493 | |||||||||
Other
|
- | (424,968 | ) | 342,485 | ||||||||
$ | 24,839,439 | $ | 49,112,685 | $ | 21,057,843 |
Deferred
taxes:
|
2009
|
2008
|
2007
|
|||||||||
Deferred
tax liabilities
|
||||||||||||
Current
unrealized gain on oil derivative
|
$ | - | $ | 6,046,508 | $ | - | ||||||
Property
and equipment
|
124,200,047 | 107,316,108 | 63,011,335 | |||||||||
Total
deferred tax liabilities
|
124,200,047 | 113,362,616 | 63,011,335 | |||||||||
Deferred
tax assets
|
||||||||||||
Stock-based
compensation
|
5,243,557 | 3,953,790 | 1,808,770 | |||||||||
Minimum
tax credit
|
1,765,774 | 967,084 | 862,000 | |||||||||
Unrealized
loss on oil derivative
|
- | - | 1,658,665 | |||||||||
Operating
loss and IDC carryforwards
|
8,567,917 | 17,861,815 | 24,785,172 | |||||||||
Total
deferred tax assets
|
15,577,248 | 22,782,689 | 29,114,607 | |||||||||
Net
deferred income tax liability
|
$ | 108,622,799 | $ | 90,579,927 | $ | 33,896,728 |
Commodity
|
Remaining
Period
|
Volume
(Bbls)
|
Floor
|
Ceiling
|
|||||||||
WTI
Crude Oil
|
January
2010 - December 2010
|
730,000 | $ | 65.00 | $ | 93.00 | |||||||
WTI
Crude Oil
|
January
2010 - December 2010
|
365,000 | $ | 70.00 | $ | 92.85 | |||||||
Commodity
|
Remaining
Period
|
Volume
(MMBTU)
|
Floor
|
Ceiling
|
|||||||||
El
Paso Permian Gas
|
January
2010 - December 2010
|
1,825,000 | $ | 4.00 | $ | 7.87 |
•
|
Level
1 — Quoted prices in active markets for identical assets or liabilities
that the Company has the ability to access. Active markets are those in
which transactions for the asset or liability occur in sufficient
frequency and volume to provide pricing information on an ongoing
basis. The Company does not have any fair value balances
classified as Level 1.
|
||
•
|
Level
2 — Inputs other than quoted prices in active markets included in Level 1,
that are either directly or indirectly observable. These inputs are either
directly observable in the marketplace or indirectly observable through
corroboration with market data for substantially the full contractual term
of the asset or liability being measured. The Company’s Level 2 items
consist of a costless collar.
|
||
•
|
Level
3 — Includes inputs that are not observable for which there is little, if
any, market activity for the asset or liability being measured. These
inputs reflect management’s best estimate of the assumptions market
participants would use in determining fair value. Level 3 would include
instruments valued using industry standard pricing models and other
valuation methods that utilize unobservable pricing inputs that are
significant to the overall fair value. The Company does not have any fair
value balances classified as Level
3.
|
2007
|
||||||||||||||||
Three
Months Ended
|
||||||||||||||||
March
31
|
June
30
|
September
30
|
December
31
|
|||||||||||||
Revenues
|
$ | 16,651,301 | $ | 21,620,299 | $ | 26,731,699 | $ | 35,086,399 | ||||||||
Operating
Income
|
9,395,863 | 13,283,378 | 17,661,615 | 15,685,456 | ||||||||||||
Net
Income
|
5,707,890 | 7,899,378 | 11,403,777 | 9,430,894 | ||||||||||||
Basic
Net Income Per Share
|
$ | 0.19 | $ | 0.26 | $ | 0.33 | $ | 0.28 | ||||||||
Diluted
Net Income Per Share
|
0.18 | 0.24 | 0.32 | 0.26 |
2008
|
||||||||||||||||
Three
Months Ended
|
||||||||||||||||
March
31
|
June
30
|
September
30
|
December
31
|
|||||||||||||
Revenues
|
$ | 45,312,392 | $ | 62,159,281 | $ | 68,412,686 | $ | 32,974,286 | ||||||||
Operating
Income
|
29,650,936 | 39,637,781 | 42,188,778 | 21,097,908 | ||||||||||||
Net
Income
|
18,318,395 | 24,794,349 | 26,922,966 | 13,581,491 | ||||||||||||
Basic
Net Income Per Share
|
$ | 0.52 | $ | 0.69 | $ | 0.71 | $ | 0.36 | ||||||||
Diluted
Net Income Per Share
|
0.51 | 0.67 | 0.69 | 0.35 |
2009
|
||||||||||||||||
Three
Months Ended
|
||||||||||||||||
March
31
|
June
30
|
September
30
|
December
31
|
|||||||||||||
Revenues
|
$ | 20,193,160 | $ | 27,636,695 | $ | 36,060,878 | $ | 42,350,044 | ||||||||
Operating
Income
|
9,998,248 | 22,702,454 | 18,954,179 | 14,649,746 | ||||||||||||
Net
Income
|
6,465,449 | 14,436,065 | 12,113,026 | 9,279,639 | ||||||||||||
Basic
Net Income Per Share
|
$ | 0.17 | $ | 0.38 | $ | 0.32 | $ | 0.24 | ||||||||
Diluted
Net Income Per Share
|
0.17 | 0.37 | 0.31 | 0.24 |
For
the Years Ended December 31,
|
2009
|
2008
|
2007
|
|||||||||
Oil
and gas revenues
|
$ | 126,240,777 | $ | 208,858,645 | $ | 100,089,698 | ||||||
Production
costs
|
(15,543,461 | ) | (17,833,144 | ) | (11,500,461 | ) | ||||||
Production
taxes
|
(6,455,585 | ) | (10,518,370 | ) | (5,655,877 | ) | ||||||
Realized
loss on oil derivative
|
14,884,846 | (4,275,330 | ) | (932,361 | ) | |||||||
Depreciation,
depletion, amortization and accretion
|
(39,368,567 | ) | (30,099,196 | ) | (18,158,966 | ) | ||||||
General
and administrative (exclusive of corporate overhead)
|
(3,804,383 | ) | (3,034,525 | ) | (3,011,753 | ) | ||||||
Results
of operations before income taxes
|
75,953,627 | 143,098,080 | 60,830,280 | |||||||||
Provision
for income taxes
|
(28,102,842 | ) | (52,946,290 | ) | (22,507,204 | ) | ||||||
Results
of Oil and Gas Producing Operations
|
$ | 47,850,785 | $ | 90,151,790 | $ | 38,323,076 |
For the Years
Ended December
31,
|
2009
|
2008
|
2007
|
|||||||||||||||||||||
Oil (1)
|
Gas (1)
|
Oil (1)
|
Gas (1)
|
Oil (1)
|
Gas (1)
|
|||||||||||||||||||
Proved
Developed and Undeveloped Reserves
|
||||||||||||||||||||||||
Beginning
of year
|
55,845,257 | 58,804,662 | 47,413,322 | 48,074,962 | 36,064,273 | 42,424,199 | ||||||||||||||||||
Purchases
of minerals in place
|
1,589,141 | 2,791,611 | 3,638,095 | 2,364,908 | 7,021,972 | 4,330,246 | ||||||||||||||||||
Improved
recovery and extensions
|
14,360,492 | 13,605,184 | 9,547,981 | 11,391,853 | 6,016,660 | 6,852,346 | ||||||||||||||||||
Production
|
(2,004,498 | ) | (2,172,790 | ) | (2,018,335 | ) | (1,911,713 | ) | (1,316,023 | ) | (1,503,611 | ) | ||||||||||||
Revision
of previous estimate
|
(10,074,880 | ) | (15,813,979 | ) | (2,735,806 | ) | (1,115,348 | ) | (373,560 | ) | (4,028,218 | ) | ||||||||||||
End
of year
|
59,715,512 | 57,214,688 | 55,845,257 | 58,804,662 | 47,413,322 | 48,074,962 | ||||||||||||||||||
Proved
Developed at end of year
|
21,144,906 | 28,302,469 | 20,231,477 | 28,659,033 | 14,951,794 | 30,783,255 |
Standardized
Measure of Discounted Cash Flows
|
||||||||||||
December
31,
|
2009
|
2008
|
2007
|
|||||||||
Future
cash flows
|
$ | 3,721,873,750 | $ | 2,391,888,946 | $ | 4,634,645,500 | ||||||
Future
production costs
|
(902,963,847 | ) | (716,121,604 | ) | (790,284,047 | ) | ||||||
Future
development costs
|
(543,022,875 | ) | (330,672,457 | ) | (321,485,125 | ) | ||||||
Future
income taxes
|
(746,548,080 | ) | (394,800,287 | ) | (1,254,982,170 | ) | ||||||
Future
net cash flows
|
1,529,338,948 | 950,294,598 | 2,267,894,158 | |||||||||
10%
annual discount for estimated timing of cash flows
|
(775,105,191 | ) | (489,607,688 | ) | (991,727,804 | ) | ||||||
Standardized
Measure of Discounted Cash Flows
|
$ | 754,233,757 | $ | 460,686,910 | $ | 1,276,166,354 |
Changes
in Standardized Measure of Discounted Future Net Cash
Flows
|
||||||||||||
|
2009
|
2008
|
2007
|
|||||||||
Beginning
of the year
|
$ | 460,686,910 | $ | 1,276,166,354 | $ | 545,439,675 | ||||||
Purchase
of minerals in place
|
28,329,307 | 41,597,736 | 325,058,027 | |||||||||
Extensions,
discoveries and improved recovery, less related costs
|
253,485,559 | 129,110,323 | 297,610,301 | |||||||||
Development
costs incurred during the year
|
107,237,470 | 190,631,820 | 113,109,335 | |||||||||
Sales
of oil and gas produced, net of production costs
|
(110,697,316 | ) | (190,374,853 | ) | (82,949,751 | ) | ||||||
Accretion
of discount
|
48,058,341 | 131,684,244 | 69,291,660 | |||||||||
Net
changes in price and production costs
|
619,543,318 | (1,526,963,575 | ) | 592,749,069 | ||||||||
Net
change in estimated future development costs
|
6,550,757 | (22,637,628 | ) | (111,175,136 | ) | |||||||
Revision
of previous quantity estimates
|
(447,110,784 | ) | 293,723,576 | (7,424,163 | ) | |||||||
Revision
of estimated timing of cash flows
|
(35,543,586 | ) | (409,158,356 | ) | (62,546,312 | ) | ||||||
Net
change in income taxes
|
(176,306,219 | ) | 546,907,269 | (402,996,351 | ) | |||||||
End
of the Year
|
$ | 754,233,757 | $ | 460,686,910 | $ | 1,276,166,354 |