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Corresp

     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

December 14, 2005

Via overnight courier and
facsimile

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

Dear Mr. Schwall:

               This
letter is written in response to your two sets of separate correspondence, both dated
December 6, 2005, to Arena Resources, Inc. (“Arena” or the “Company”)
and the comments of the SEC staff contained therein. For purposes of clarity, our
responses to the first comment letter we received are set forth below under the heading
“Form 10-KSB”, and our responses to the second comment letter we received are
set forth below under the heading “Reserve Report”. In both instances our
responses are numbered to correspond to the paragraphs contained in the respective
December 6 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), with all changes marked
thereon in response to the SEC staff comments of December 6. 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 – with respect to which we have previously
responded to the staff’s prior comments) until such time as we have confirmed with
the staff that the proposed changes are responsive.

United States Securities
and Exchange Commission

December 14, 2005

Page 2

Form 10-KSB

General

     1.
          This correspondence (with the exception of the reserve report noted in response
          no. 1 under “Reserve Report”, below), as well as our prior
          correspondence dated November 22, 2005 (responding to the staff’s November
          17, 2005 comment letter, which was originally manually submitted), have been
          submitted via EDGAR.

     2.
          Throughout the Form 10-KSB the Company has either now included a description of
          computational disclosure either immediately preceding or following applicable
          metrics or, in some cases, deleted the metrics. See, for example, pages 7,
          15-16, 19 and 24-27. These changes also provide consistency between the
          calculations contained in the narrative summaries and the Company’s
          financial statement presentation.

     3.
          The Company has attempted to recharacterize all narrative disclosures in the
          Form 10-KSB to correspond to terms as used in its financial statements. See, for
          example, the changes made in narrative disclosures on pages 19 and 24-27.

Stock-based Employee
Compensation, page 49

     4.
          The Company believes it meets the requirements of paragraph 17 of FASB 123. In
          the Company’s previous response, it considered the phrase “date
          earned” to be synonymous with “date of grant.” Please consider
          this revision to the Company’s prior response in that the Company has
          valued and does value its stock options and awards on the date of grant. The
          prior response was meant to refer to FASB 123 paragraph 17, which defines the
          grant date as “[t]he date at which an employer and an employee have a
          mutual understanding of the terms of a stock-based compensation award.”
          Please see the response to comment 5 below, where the notes to the financial
          statements have been modified to state the accounting policy for accounting for
          stock-based compensation issued to non-employees, and that the compensation is
          based on the grant date market value of the Company’s common stock.

     5.
          The Company has added in Note 1 to its financial statements a disclosure
          regarding its policy on stock-based compensation issued to non-employees. See
          page 52. See also the addition to Note 6 on page 59.

     6.
          The Company believes that the critical requirements of a non-compensatory stock
          plan, as discussed in Appendix B of APB 25 paragraph 4 and 5, are clearly
          defined in APB 25 paragraph 7.

United States Securities
and Exchange Commission

December 14, 2005

Page 3

               From
the Staff’s December 6, 2005 comments, it appears the provisions of sub clause “c” of
APB 25 paragraph 7 elicit the most concern. This clause states, “[T]he time
permitted for exercise of an option or purchase right is limited to a reasonable period.” Although
accounting standards do not define a “reasonable time period,” the options
issued under the Company’s option plan have a five-year graded vesting, meaning
one-fifth of the options vest annually. Under the plan, the committee responsible for
granting options has the authority to accelerate the vesting of all or a portion of any
options previously granted (provided that such option has been issued for at least one
year). Under principle-based accounting standards, management believes that this
five-year graded vesting period is a reasonable period of time to enable the Company’s
employees to invest in the Company.

               Although
FAS 123, paragraphs 233 through 237, discuss the basis for conclusions regarding
broad-based plans under FAS 123, it restates two conclusions regarding whether plans
under Opinion 25 are non-compensatory. First, it states that a five-year term is
acceptable if other conditions are met: “Opinion 25, paragraph 7, considers
broad-based plans that meet certain specified criteria to be noncompensatory, with no
compensation cost recognized even if the purchase price is less than the price of the
underlying stock at the measurement date.” Second, it states that for the plan to be
non-compensatory,

“[T]he
term of the option cannot exceed 5 years from the grant date if the purchase price is 85
percent or more of the market price at the exercise date. If the purchase price can turn
out to be less than 85 percent of the stock price at exercise, the term of the option
cannot exceed 27 months from the grant date. For example, 27 months is the maximum term of
a look-back option in which the purchase price equals the lower of 85 percent of the stock
price at the grant date or at the exercise date.”

               In
the Company’s situation, the purchase price was not lower than but was equal to 85
percent of the stock price at the grant date. The Company therefore has concluded that
the options granted qualify as non-compensatory.

               At
the date the options were granted, the Company’s reasons for having the options vest
ratably over five years included: (1) placing less burden, both from a financial and a
tax standpoint, on the option-holders by having the options vest and be exercisable over
a period of time, as opposed to immediately; (2) the Company considered its funding needs
as it was growing and determined that it had adequate available sources of capital during
its property acquisition phase, and the additional capital provided from the exercise of
the options would be more beneficial to the Company in later years when the Company is
developing its acquired properties; (3) vesting the options over a reasonable period
would be looked upon more favorably by the existing shareholders than if all of the
options were fully vested at the date of grant; and (4) a more positive impact on the
Company’s stock price was anticipated if shares are issued upon exercise of the
options under the plan gradually, rather than a potential depressive effect on the price
if all option shares entered the market at once.

               In
evaluating the amount of the discount from the market price granted to employees under
the Company’s plan, the Company determined, regardless of the criteria of APB 25
paragraph 7 at the date the options were granted, that the 15% discount from the market
price on the date the options were granted qualified the options as non-compensatory,
based upon FIN 44 paragraphs 26-27 which state:

United States Securities
and Exchange Commission

December 14, 2005

Page 4

“Question
7—In determining whether a plan is non-compensatory, may the stock price at the date
of grant of a stock option be used as the basis for determining whether “the discount
from the market price of the stock is no greater than would be reasonable in an offer of
stock to stockholders or others”? Interpretation—Yes. A noncompensatory plan may
be in the form of a stock option with an exercise price that is fixed at the date of
grant. Provided that the exercise price on the grant date of the option is no less than 85
percent of the stock price on that date, the discount is considered reasonable for
purposes of determining whether the plan is noncompensatory.”

               Finally,
in response to the staff’s comment, upon termination of employment, an optionee has
30 days in which to exercise all vested options. All unvested options at the date of
termination are forfeited.

               Should
the staff determine, despite the Company’s analysis as set forth above, that the
options were compensatory, the following is the quantitative impact the recognition of
the related compensation expense would have on the Company’s after-tax net income
over the period the options vest:

               2003
- $140,254 or 17% of net income
               2004 - $125,581 or 5% of net income

                        2005 - $74,394 or 1% of net income through September 30, 2005

               We
do not consider the amounts for 2004 and forward to be material with respect to the
financial statements. Although the effect of the options may have been quantitatively
material to the 2003 financial statements, the notes to the financial statements disclose
the pro forma effect the options would have had if the options had been valued at fair
value under FAS 123. Accordingly, this information has been provided, and investors have
had the use of that presentation and analysis in evaluating the impact of the options
granted under the plan, and as a result, the Company does not believe the impact would
have been qualitatively material to the investment decision of stockholders. Further,
management has concluded that, if the staff were to determine the options were
compensatory, adjustment to the financial statements should not be required.

Reserve Report

     1.
          Due to the nature of the Company’s December 31, 2004 reserve report, it is
          not capable of being submitted via EDGAR, and is submitted in paper format only.
          The Company has provided a copy of the reserve report directly to Mr. Murphy of
          the engineering staff, by separate correspondence.

United States Securities
and Exchange Commission

December 14, 2005

Page 5

     2.
          Set forth below is an analysis prepared by the Company’s engineering staff
          which discloses the pre-purchase reserve estimates for the two properties
          acquired by the Company in fiscal 2004, comparing those estimates to the
          reserves as reported on the Company’s 10-KSB for the year ended December
          31, 2004, and providing an explanation of differences. Please note that although
          the staff’s comment also requested a comparison between the Company’s
          pre-purchase reserve estimates, the reserves reported on the Form 10-KSB
          and the sellers’ reserve estimates for these properties, the sellers
          did not provide the Company with any estimates of reserves that such sellers may
          have prepared for these properties.

  PROPERTY
     PRE-PURCHASE ESTIMATE
REMAINING NET RESERVES
     2004 10-KSB REPORT
REMAINING NET RESERVES

     OIL (BBL)
     GAS (MCF)
     OIL (BBL)
     GAS (MCF)

     EAST HOBBS SAN ANDRES UNIT

     Proved Developed Producing
     953,357
     1,293,999
     1,682,555
     1,682,555

     Proved Developed Non Producing
     492,070
     1,932,984
     326,902
     250,734

     Proved Undeveloped Primary
     1,482,124
     574,552
     896,066
     687,282

     Proved Undeveloped Secondary
     2,939,581
     835,365
     2,933,344
     880,003

               TOTAL ALL RESERVES
     5,867,132
     4,636,900
     5,838,867
     3,500,574

     FUHRMAN MASCHO

     Proved Developed Producing
     1,148,548
     394,047
     1,300,063
     403,779

     Proved Undeveloped Primary
     4,874,046
     3,136,299
     4,874,046
     1,409,617

               TOTAL ALL RESERVES
     6,022,594
     3,530,346
     6,174,109
     1,813,396

Explanation Regarding
East Hobbs San Andres Unit

               The
Company acquired the East Hobbs San Andres Unit on May 7, 2004. The Company prepared a
pre-purchase reserves estimate but the seller did not prepare a reserves estimate (or, at
least did not provide to the Company its internal reserves estimate in connection with
the sale).

               The
reserves reported on the Company’s 10-KSB for the year ended December 31, 2004,
differ from the Company’s estimated pre-purchase reserves as a result of the Company’s
development expenditures from the time of acquisition through December 31, 2004. During
such period, the Company drilled six PUD wells and washed down an existing wellbore, for
a total of seven PUD completions. The Company also completed PDNP zones in six wells
between the acquisition date and the end of 2004. The $2,230,415 development expenditure
increased proved developed producing reserves to 1,682,555 bbl and 1,682,555 mcf,
compared to the pre-purchase estimates of 953,357 bbl and 1,293,999 mcf. Proved developed
non-producing reserves included in the Company’s 10-KSB at December 31, 2004, were
326,902 bbl and 250,734 mcf, compared to pre-purchase estimates of 492,070 bbl and
1,932,984 mcf. The differences are due to the completion of PDNP reserves in six wells in
2004 and the resulting performance of those wells.

United States Securities
and Exchange Commission

December 14, 2005

Page 6

               Proved
undeveloped primary reserves included in the Company’s 2004 10-KSB were 896,066 bbl
and 687,282 mcf, compared to the pre-purchase estimate of 1,482,124 bbl and 574,552 mcf.
The differences are due to the drilling of six PUD wells and washing down another well,
for a total of seven PUD completions in 2004. The decrease in proved undeveloped primary
reserves reflects the reclassification of such reserves to proved developed producing as
a result of the performance of the seven PUD wells.

Explanation Regarding
Fuhrman Mascho

               The
Company acquired the Fuhrman Mascho properties on December 1, 2004. While the Company
prepared a pre-purchase reserves estimate, the sellers either did not prepare such
estimates, or did not provide to the Company any internal reserves estimates which may
have been prepared by such sellers.

               The
reserves reported in the Company’s Form 10-KSB for the period ended December 31,
2004 and its pre-purchase reserves estimates are slightly different for the proved
developed producing reserves category. The Company’s 10-KSB includes reserves of
1,300,063 bbl and 403,779 mcf, compared to pre-purchase estimates of 1,148,548 bbl and
394,047 mcf. The differences are due to changes in decline curve analyses prepared by the
Company’s i