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Corresp

The following correspondence was previously delivered via overnight courier to the SEC Staff on November
22, 2005

     LAW OFFICES

     JOHNSON, JONES, DORNBLASER, COFFMAN & SHORB

     A PROFESSIONAL CORPORATION

     W. THOMAS COFFMAN
     2200 BANK OF AMERICA CENTER
     TELEPHONE

     KENNETH E. DORNBLASER

     (918) 584-6644

     JOHN B. JOHNSON, JR.
     15 W. SIXTH STREET

     C. ROBERT JONES

     FAX

     RANDY R. SHORB
     TULSA, OKLAHOMA 74119
     (918) 584-6645

     E. ANDREW JOHNSON

     E MAIL

     JESSE N. BOMER

     kdornblaser@jjdcs.com

     RICHARD D. JONES, Of Counsel

     PAUL KINGSOLVER, Of Counsel

     DIANA CLARK, Of Counsel

November 22, 2005

Via overnight courier

Mr. H. Roger Schwall

c/o Ms. Melinda Kramer

100 F. St. N.E.

Mail Stop 7010

United States Securities and Exchange Commission

Washington, D.C. 20549

         Re:

Arena Resources, Inc.- Form S-3 File No. 333-127741

                  Amendment No. 1 to Form 10-KSB for the year ended 12/31/04 File No. 1-31657

                  Form 10-Q for quarter ended 9/30/05 File No. 1-31657

Dear Mr. Schwall:

               This
letter is written in response to your correspondence of November 17, 2005 to Arena
Resources, Inc. (“Arena” or the “Company”) and the comments of the SEC
staff contained therein. Our responses are numbered below to correspond to the paragraphs
contained in your November 17 letter. We have enclosed a redlined copy of Arena’s
proposed Amendment No. 2 to its Annual Report on Form 10-KSB (year ended 12/31/04) and
Amendment No. 1 to its Quarterly Report on Form 10-Q (quarter ended 9/30/05), with all
changes marked thereon in response to the SEC staff comments. Please note that it is the
Company’s intent to defer actually filing Amendment No. 2 to its 10-KSB and Amendment
No. 1 to its Form 10-Q until such time as we have confirmed with the staff that the
proposed changes are responsive to the staff’s comments.

Form 10-KSB for the
year ended December 31, 2004.

General

     1.
          Your first comment references Item 10(a)(1)(iv) of Regulation S-B. Since this
          specific subclause refers to parent-subsidiary situations, and Arena has no
          parent corporation, we assume your reference it to the ability of Arena to
          qualify as a small business corporation under Item 10 in general.

United States Securities and Exchange Commission

November 22, 2005

Page 2

               It
is our understanding that Arena qualifies to file its Annual Report for the year ended
December 31, 2004 as a small business filer (i.e., utilizing Form 10-KSB) based upon Item
10(a) of Regulation S-B, by reason of the following. Arena has never had revenues equal to
or greater than $25,000,000. Therefore, Arena’s status as a small business issuer has
essentially been governed by the “public float” requirement contained in Item
10a. At December 31, 2002, the public float of Arena’s common stock held by
non-affiliates was $17,718,538, determined on the basis of 3,851,856 shares of outstanding
common stock held by non-affiliates on December 31, 2002, multiplied by $4.60, which was
the highest closing price of the common stock during the 60 day period preceding the end
of such fiscal year.

               At
December 31, 2003, the public float of Arena’s common stock held by non-affiliates
was $28,864,572, determined on the basis of 4,731,897 shares of outstanding common stock
held by non-affiliates on December 31, 2003, multiplied by $6.10, which was the highest
closing price of the common stock during the 60 day period preceding the end of such
fiscal year.

               At
December 31, 2004, the public float of Arena’s common stock held by non-affiliates
was $60,674,821, determined on the basis of 6,902,710 shares of outstanding common stock
held by non-affiliates on December 31, 2004, multiplied by $8.79, which was the highest
closing price of the common stock during the 60 day period preceding the end of such
fiscal year.

               In
accordance with Item 10a.2.iii., once an issuer exceeds the public float limit at the end
of two consecutive years, it will no longer be considered a small business. Therefore, as
of December 31, 2004, Arena had exceeded the public float limit for two consecutive years.
However, Item 10a.2.v. provides “The determination made for a reporting company at
the end of its fiscal year governs all reports relating to the next fiscal year. An issuer
may not change from one category to another with respect to its reports under the Exchange
Act for a single fiscal year”. Arena’s interpretation of Item 10a. in its
entirety is that Arena is still required to file its Annual Report for the fiscal year
ended December 31, 2004 as a small business issuer, and that all reports relating to
fiscal 2005 and thereafter must be filed as a non-small business issuer.

               Our
office further confirmed this interpretation of Item 10 in a telephone conference with
Kevin O’Neal, an attorney with the Small Business Policy Division of the SEC on
January 14, 2005. Our office contacted Mr. O’Neal for two purposes. The first was to
clarify whether the “public float” calculation should include shares held by
non-affiliates that were “restricted shares” and not freely tradeable (which Mr.
O’Neal, confirmed should be included in the calculation). The second purpose was to
confirm our interpretation of Item 10a.2.v., and Mr. O’Neal provided such
confirmation, stating that Arena should file its Annual Report for December 31, 2004 in
“SB format”, and that all future filings under the 1934 Act should be made as a
“regular” issuer. Following this understanding, Arena filed the Annual Report
for the year ended December 31, 2004 utilizing Form 10-KSB, and has filed its quarterly
reports commencing as of the end of the quarter ended March 31, 2005 utilizing Form 10-Q
(as opposed to Form 10-QSB).

United States Securities and Exchange Commission

November 22, 2005

Page 3

     2.
          We have included the Standard Measure of Discounted Cash Flow in the tables and
          in other locations throughout the Form 10-KSB wherever the PV-10 value is
          presented, in a manner which we believe is of “equal or greater
          importance” to the PV-10 values. We have also added an explanation
          regarding the reasons for our use of “PV-10 values” and a description
          of the reconciliation of the PV-10 values to the Standardized Measure of
          Discounted Cash Flow. This explanation is found on page 2 of Amendment No. 2 to
          Form 10-KSB.

     3.
          SFAS 19, paragraph 38, states, in part, “Many properties contain both oil
          and gas reserves. In those cases, the oil and gas reserves and the oil and gas
          produced shall be converted to a common unit of measure on the basis of their
          approximate relative energy content.” The common unit used by the Company
          is “barrels of oil equivalent” or “Boe”. Acquisition and
          drilling costs “per Boe” is calculated by dividing the net capitalized
          costs, computed in accordance with SFAS 69, paragraph 7, as shown “under
          “Capitalized Costs Relating to Oil and Gas Producing Activities” on
          page 61, by the Company’s reserves in Boe. As a result of the revisions to
          the capitalized costs relating to oil and gas producing activities presented on
          page 61 in response to Comments 11 through 13 below, the acquisition and
          drilling costs per Boe has also changed, using the same calculation (see pages 5
          and 19). When acquisition and drilling costs per Boe is first used on page 5,
          the Form 10-KSB has been revised to define Boe and to describe how acquisition
          and drilling costs per Boe are determined.

Cost Information, page 15

     4.
          We have revised the “Cost Information” table (now on page 16) and the
          “Supplemental Information on Oil and Gas Producing Activities” table
          on page 61 (both of which relate to capitalized costs) to delete line items that
          did not comply with SFAS 69.

Financial Statements

Note 1 Organization and
Summary of Significant Accounting Policies, page 48

Oil and Gas Properties, page
48

     5.
          Supplementally, the Company’s calculation of the full cost ceiling test is
          done in accordance with Rule 4-10(c)(4) of Regulation S-X and is computed based
          on the present value of estimated future revenues less estimated future
          expenditures to be incurred in developing and producing the proved reserves plus
          the lower of cost or fair market value of unproved properties. In preparing the
          Company’s disclosures of this policy, it has previously followed the AICPA
          Audit and Accounting Guide, Audits of Entities with Oil and Gas Producing
          Activities, Exhibit A-4, which presents disclosures of the full cost ceiling
          test by reference to “future net revenues from proved reserves”
          without stating that those net revenues are net of estimated future
          expenditures. However, the Company has revised the notes to the annual financial
          statements to disclose that the full cost ceiling test is based on the present
          value of estimated future net revenues less estimated future expenditures to be
          incurred in developing and producing the proved reserves. (See Note 1, on page
          49).

United States Securities and Exchange Commission

November 22, 2005

Page 4

     6.
          The Company has added disclosures on page 28 of amendment No. 2 to its Form
          10-KSB under “New Accounting Policies”, disclosing the impact of the
          adoption of SFAS No. 143 on its full cost accounting. In addition, the notes to
          the annual financial statements have been revised to disclose the impact of
          adopting SFAS No. 143 on the computation of the full cost ceiling test, in
          accordance with SAB No. 106. That disclosure states that the future cash
          outflows associated with settling the asset retirement obligations that have
          been accrued on the balance sheet have been excluded from the
          computation of the present value of estimated future net revenues for purposes
          of the full cost ceiling calculation. (See Notes 1 and 5 on pages 49 and 56).

Stock-based Employee
Compensation, page 49

     7.
          Stock-based compensation to non-employees is accounted for based on the closing
          price of the stock on the day the compensation is earned (not necessarily the
          same as the date issued). There have been two exceptions. In one instance,
          pursuant to a contract, the shares of common stock issued were based on an
          averaged price. (See, the stock issued to The Research Works, Inc., as noted in
          the table below which is included in our response to Comment 8). In the second
          instance, in connection with the Company’s acquisition of the East Hobbs
          property, it used a discounted stock price to value the stock issued as a
          “finder’s fee”. (See, the stock issued to Tyler Energy Consulting
          in 2005, in the table included in our response to Comment 8). The purpose of
          this discount was to not overstate the value of an asset (and, correspondingly,
          the value of “Properties Subject to Amortization”). The discount
          amounted to a $35,600 (the difference between $6.00 at date of issuance, and the
          $5.11 price used, or $0.89, multiplied by 40,000 shares issued). This causes a
          slight decrease in depletion, but by an immaterial amount ($374 for 2004). This
          equates to .01% of net income for the year ended December 31, 2004. The effect
          on depletion going forward would also be insignificant as the difference would
          be amortized over the 30-plus years of the current reserve life.

Note 6,
Stockholders’ Equity, page 55

     8.
          Set forth below is a schedule of all common shares issued for services for the
          periods presented in the Company’s financial statements. The appropriate
          measurement date and quoted market price is indicated in the schedule, with all
          issuance prices, other than the issuance to The Research Works, Inc. and Tyler
          Energy Consulting (as noted), being the closing price on the date earned.

United States Securities and Exchange Commission

November 22, 2005

Page 5

2003 Issuances:

     Recipient
     Shares
     Date earned
     Price
on date
of issue
     Price
used

     Triangle Energy
     10,000
     04/29/03
     $5.20
     $5.20
     Seven Rivers Queen acquisition

     The Research Works, Inc.*
     12,727
     05/12/03
     $5.50
     $5.50
     Contracted services

     * # of shares issued to equal $70,000 based upon average price of five days preceding date of agreement,
May 12, 2003

     SmallCap Marketing
     1,120
     04/10/03
     $4.50
     $4.50
     Contracted services

     Triangle Energy
     15,000
     07/02/03
     $5.80
     $5.80
     Beals acquisition

     Tyler Energy Consulting
     25,000
     10/15/03
     $5.64
     $5.64
     North Benson Queen acquisition

     Tyler Energy Consulting
     7,000
     10/01/03
     $5.65
     $5.65
     West San Andres acquisition

     Total 2003 issuances for services
     70,847

2004 Issuances:

     Recipient
     Shares
     Date earned
     Price
on date
of issue
     Price
used

     Tyler Energy Consulting**
     15,000
     08/27/04
     $6.00
     $5.11
     East Hobbs acquisition

     ** discounted share price of $35,600;
see discussion in Comment 7 above

     Tyler Energy Consulting**
     25,000
     09/14/04
     $5.99
     $5.11
     East Hobbs acquisition

     ** discounted share price of $35,600;
see discussion in Comment 7 above.

     Petro Consultants
     5,000
     10/20/04
     $6.90
     $6.90
     Gibraltar acquisition

     KM Financial
     30,000
     11/15/04
     $7.00
     $7.00
     Fuhrman Mascho acquisition

     Total 2004 issuances for services (all
related to property acquisitions)
     75,000

     9.
          SFAS No. 133, paragraph 11 states in part: “Notwithstanding the conditions
          of paragraphs 6–10, the reporting entity shall not consider the following
          contracts to be derivative instruments for purposes of this Statement: (a)
          Contracts issued or held by that reporting entity that are both (1) indexed to
          its own stock and (2) classified in stockholders’ equity in its statement
          of financial position”. Based on the above and due to the fact that the
          call options relate to the Company’s own common stock and is a part of
          permanent equity, the Company does not believe that SFAS 133 applies.

United States Securities and Exchange Commission

November 22, 2005

Page 6

               The
value of the call options was accounted for as a reduction of the total acquisition cost
of the Fuhrman Mascho properties, because the call options relate directly to the common
stock issued as partial consideration for the property interests acquired in the Fuhrman
Mascho acquisition. The Company relied upon FASB 141, which states that when acquiring a
company (as the acquisition of the Fuhrman Mascho properties is treated) the total fair
value of all items exchanged is attributable to the asset received. In this case, the
primary asset received was the Fuhrman Mascho properties. Therefore, the value of all
assets and securities (including put and call options) exchanged in the transaction to
acquire the Fuhrman Mascho properties was accounted for as part of the acquisition price.

Note 7, Employee Stock
Options, page 56

     10.
          All stock options which have been g