FORM 10-KSB

               SECURITIES AND EXCHANGE COMMISSION
                     WASHINGTON, D.C. 20549


MARK ONE

   X      ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES     EXCHANGE OF 1934

     FOR THE FISCAL YEAR ENDED DECEMBER 31, 2000
                               or
          TRANSITION REPORT pursuant to section 13 or 15(d) of
     the securities exchange act of 1934

     FOR THE TRANSITION PERIOD FROM N/A TO N/A

                COMMISSION FILE NUMBER: 333-46164

                      ARENA RESOURCES, INC.
                      ---------------------
     (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

              NEVADA                         73-1596109
     ------------------------          ----------------------
     (STATE OF INCORPORATION)             (I.R.S. EMPLOYER
                                       IDENTIFICATION NUMBER)


     4920 SOUTH LEWIS STREET, SUITE 107
     TULSA, OKLAHOMA                         74105
     ---------------                         --------
     ADDRESS OF PRINCIPAL                    ZIP CODE
     EXECUTIVE OFFICES

Registrant's telephone number, including area code: (918) 747-6060


                                      Name of each exchange on
Title of each class                          which registered
-------------------                   ------------------------
Common - $0.001 Par Value                        None

Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark whether the Registration (1) has filed all
reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that the Registrant was required to
file such reports), and (2) has been subject to such filing
requirements for the past 90 days.  YES   X     NO   (Initial
filing)

As of March 1, 2001, the aggregate market value of the common
voting stock held by non-affiliates of the Registrant, computed
by reference to the recent Initial Public Offering price of
$0.25/share, would be approximately $200,000.  The company has no
current trading market.

As of March 1, 2001, the Registrant had outstanding 3,400,000
shares of common stock ($0.001 par value)

<PAGE>

                        TABLE OF CONTENTS

                              PART I
                                                            Page

ITEM 1    BUSINESS                                           3

ITEM 2    PROPERTIES                                        11

ITEM 3    LEGAL PROCEEDINGS                                 15

ITEM 4    SUBMISSION OF MATTERS TO A VOTE OF SECURITY
           HOLDERS                                          15

                             PART II

ITEM 5    MARKET FOR REGISTRANT'S COMMON EQUITY             15

ITEM 6    SELECTED FINANCIAL DATA                           16

ITEM 7    MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
          CONDITION AND RESULTS OF OPERATIONS               16

ITEM 8    FINANCIAL STATEMENTS AND SUPPLEMENTAL DATA        18

ITEM 9    CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
          ON ACCOUNTING AND FINANCIAL DISCLOSURES           18

                            PART III

ITEM 10   DIRECTORS AND EXECUTIVE OFFICERS OF REGISTRANT    18

ITEM 11   EXECUTIVE COMPENSATION                            20

ITEM 12   SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
          AND MANAGEMENT                                    21

ITEM 13   CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS    21

                             PART IV

ITEM 14   EXHIBITS, FINANCIAL STATEMENTS AND SCHEDULES AND
          REPORTS ON FORM 8-K                               23

          SIGNATURES                                        24

<PAGE>

                             PART I

                        Item 1.  BUSINESS

     Forward-looking statements in this Report, including without
limitation, statements relating to the Company's plans,
strategies, objectives, expectations, projections, intentions,
anticipations and adequacy of resources, are made pursuant to the
safe harbor provisions of the Private Securities Litigation
Reform Act of 1995.  Investors are cautioned that such forward-
looking statements while made in good faith involve risks and
uncertainties; including, without limitation to, the following:
(i) the company's plans, strategies, objectives, expectations and
intentions are subject to change at any time at the discretion of
the company; (ii) the company's plans and results of operations
will be affected by the company's ability to manage its growth
and inventory (iii) other risks and uncertainties which may be
indicated from time to time in the company's filings with the
Securities and Exchange Commission.  Neither the Securities and
Exchange Commission nor any other regulatory body takes any
position as to the accuracy of forward looking statements.

 GENERAL DESCRIPTION OF COMPANY AND BUSINESS

     Arena Resources, Inc., hereafter "Arena" or "the company,"
was incorporated in Nevada on August 31, 2000.  The company
completed an initial Public Offering pursuant to an SB-1
registration of its securities on February 16, 2001 raising gross
proceeds of $200,000.  The company is involved in oil and gas
acquisition and development.  Its initial operations are in the
State of Oklahoma.  The principal office of the company is
located at 4920 South Lewis Street, Suite 107, Tulsa, Oklahoma.
The telephone number is (918) 474-6060.

     The present assets of Arena consist of a 40% carried working
interest in a shut-in gas well on the Spears lease in McIntosh
County, Oklahoma, and an equivalent interest in two drill sites
on adjacent leases.  A carried working interest means that Mr.
Rochford and Mr. McCabe will pay for drilling and completion
expenses on the two drill sites and the anticipated workover of
the Spears well.  These leases are more particularly described
beginning on page 11 of this Report.

         In February 2001 Arena closed its initial public
offering (IPO) by selling 800,000 shares at $0.25/share to 29
California residents raising gross proceeds of $200,000. This IPO
is more particularly described at page 10 of this Report.

        Arena is about to commence an initial private placement
offering to accredited investors to attempt to raise between
$500,000 and $3,500,000 for drilling and completion, as well as
additional acquisitions.  No assurance this offering can be
closed is made or implied. The intended  terms of this offering
and use of proceeds is more fully described at page 9 of this
Report.

     The company has been listed with Standard & Poor's as of
February 26, 2001.


(A) REVENUES, COSTS AND TAXES

     All revenues, if any, and costs from oil and gas wells will
be accrued as income or costs to Arena, not the shareholders.
Shareholders will not incur any liability or assessments as a
shareholder.  In like manner, typical anticipated tax benefits in
an oil or gas program such as write-offs for drilling and
completion costs and percentage or cost depletion will accrue
directly to Arena and not to Shareholders.

(B) OPERATING AGREEMENT

     The day-to-day operations of the leases are governed by an
operating agreement between the owner/operator of the leases, Tri-
State Energy Corporation, with Arena and other non-operators.
The operator under this agreement is charged with day-to-day
operations, as well as making drilling, completion and workover
decisions, but subject to the pro rata financial participation by
the non-operations, such as Arena.    While Tri-State has a
contractual relationship with the gas purchaser, ONEOK Energy
Marketing and Trading Company, which in turn contracts with the
gas gatherer, Enogex; Arena does not have any contract with these
companies and looks solely to its operating agreement with Tri-
State as generally described in this Report.

     The essential elements of the operating agreement for the
three leases is outlined as follows:

 .    Arena's share of standard total monthly operating expenses,
     40%, are estimated to be approximately $1,000 per completed
     well.  The operating agreement also provides for the payment
     of Arena's 30% net revenue interest.

 .    If a non-operator, like Arena, does not participate in
     drilling and completion expenses agreed upon by the operator
     and a majority of the non-operators, then Arena would
     receive a penalty equal to five times the amount of the
     assessment to be deducted from its future net revenue
     interest.

 .    The Operating Agreement is concurrent with production from
     the subject leases, unless terminated for cause or upon
     notice.

 .    The operator may expend up to $25,000 without getting
     consent of the non-operators and pay third party claims up
     to $11,000 without this consent.

(C) GATHERER AND PURCHASER

     Gas produced in the lease areas is gathered in the field by
a gathering/transport company which charges a transportation
charge to deliver the gas to a principal pipeline purchaser.  The
present gatherer is Enogex.

     The current net price paid is approximately $4.50 to $5.25
per thousand cubic feet of gas (MCF).  The gas is currently
purchased by ONEOK Energy Marketing and Trading Company LP. ONEOK
pays the operator, Tri-State, which then distributes our share of
net revenue to Arena.

(D) RESERVE ESTIMATES

     The following table summarizes the existing net gas
properties held by Arena showing  both estimated proven developed
and proven non-developed reserves with estimated recoverable
natural gas revenues from those reserves expressed in increments
of a thousand cubic feet (MCF).  Proven developed reserves are
proven reserves upon which there is actual production:

Current              Current Proven        Estimated Net Cash
Proven Developed     Undeveloped Reserves  Flow At
Reserves                                   Current Prices
                                           Discounted
                                           at 10% to Present
                                           Value
-----------------    -------------------   ------------------
60,034 MCF           418,229 MCF           $1,096,866

     A common method by which oil and gas companies production
potential is expressed is  to compare the interests which an oil
and gas production company has in existing wells, regardless of
how small that interest may be, by designating each such interest
as a gross well and then to aggregate that percentage of interest
in the various "gross wells" until a total percentage is derived
up to one hundred percent of interest in a comparable well, which
is described as a "net well."  Using this analysis, the company
presently has a potential interest in three "gross wells" to be
developed and a ninety percent anticipated "net well" interest,
as its net revenue interest in each well to be completed would be
thirty percent.

     The independent mineral report upon which the foregoing
analysis of existing interest is derived has not been attached as
an exhibit to this Report, but has been filed as part of the
earlier SB-1 registration materials of Arena.  Arena does not
warrant or guarantee the accuracy or completeness of the results
contained in such independent reserve report prepared for the
company, and any such mineral report should be considered as an
estimate rather than an actual determination of recoverable and
potential reserves.

(E) COMPETITIVE FACTORS

     Current competitive factors in the domestic oil and gas
industry are unique.  The actual price range of crude oil is
largely established by major international producers.   Pricing
for natural gas is more regional.   Because domestic demand for
oil and gas exceeds supply, there is little risk that all current
production will not be sold at relatively fixed prices.  To this
extent Arena does not see itself as directly competitive with
other producers, nor is there any significant risk that the
company could not sell all production at current prices with a
reasonable profit margin.  The risk of domestic overproduction at
current prices is almost non existent.  The primary competitive
risks would come from falling international prices which could
render current production uneconomical.

     Secondarily, Arena is presently committed to use the
services of the existing gatherer in its present areas of
anticipated production.  This gives to such gatherer certain
short term relative monopolistic powers to set gathering and
transportation costs, because obtaining the services of an
alternative gathering company would require substantial
additional costs since an alternative gatherer would be required
to lay new pipeline and obtain new rights of way in the lease.

     It is also significant that more favorable prices can
usually be negotiated for larger quantities of oil and/or gas
product, such that Arena views itself as having a price
disadvantage to larger producers.   Large producers also have a
competitive advantage to the extent they can devote substantially
more resources to acquiring prime leases and completing
production.  They also have more geological and engineering
experts and resources to better find and develop prospects.

(F) NUMBER OF PERSONS EMPLOYED

     Both Mr. Lloyd T. Rochford and Mr. Stanley McCabe will
actively continue in management on a full time basis for the
company.  Mr. Rochford presently serves the company as its
president and chief executive officer (CEO).  Mr. McCabe is the
chief financial officer (CFO), secretary and treasurer.  Both Mr.
Rochford and Mr. McCabe are currently involved full-time in start-
up and acquisition efforts for Arena. Mr. Rochford and Mr. McCabe
have not to date received any compensation.  Arena will pay Mr.
Rochford and Mr. McCabe for their continuing executive services
in the event there are subsequent net revenues or potentially
from the Private Placement proceeds on a to be negotiated bases.

     Arena may use a portion of funds from the anticipated
Private Placement to pay salaries, though no final decision has
been made regarding this subject.  Any salaries paid from the
anticipated Private Placement would be prospective only from any
close of the Private Placement.  No prior salaries have or will
be paid; however, accrued compensation expenses have been applied
in determining Mr. Rochfords' and Mr. McCabes' equity positions
in the amount of $100,000.  No proceeds of the IPO have been or
will be used to pay salaries.  No salaries have  been determined
or paid to management and the parties have simply agreed to
negotiate the future salaries on a good faith basis.

     Arena agreed to pay general costs, such as travel and
communications, and to repay Mr. Rochford and Mr. McCabe advanced
third party costs directly related to the organizational and
selling efforts by the company, such as expert fees, required to
complete its initial public offering and to continue operations.
Payment of these amounts are more fully described under the Use
of Proceeds section for the IPO at page 10 of this Report.

     Until such time as revenues are realized or proceeds of the
Private Placement in sufficient quantities are raised to pay
regular compensation, the two officers designated above have
indicated a willingness to continue on a full-time basis to serve
the company indefinitely.  However, it should be realized that
the company has no fixed compensation contract with either party
and either party could terminate services to the company at any
time.

     In the event that Arena realizes subsequent revenues, it may
consider retaining other employees or experts on a full or part-
time basis as it deems appropriate.  Arena would consider
employing  the services of a CFO, office manager, field
geologist, and well completion supervisor in the event of
sufficient revenues.  The geologist and well completion
supervisor may be retained on either a part-time salary or
independent contract basis as Arena would subsequently deem most
appropriate in the future.  Arena would also probably consider
hiring a full-time secretary or office manager as the development
of Arena would justify, along with other as yet undetermined
office workers or personnel.

(G) ENVIRONMENTAL COMPLIANCE AND RISKS

     Oil and gas production is a highly regulated activity which
is subject to significant environmental and conservation
regulations both on a federal and state level.  Historically,
most of the environmental regulation of oil and gas production
has been left to state regulatory boards or agencies in those
jurisdictions where there is significant gas and oil production,
with limited direct regulation by such federal agencies such as
the Environmental Protection Agency.  However, while the company
believes this generally to be the case for its intended
production activities in Oklahoma, it should be noticed that
there are various Environmental Protection Agency regulations
which would govern significant spills, blow-outs, or uncontrolled
emissions.

     In Oklahoma specific oil and gas regulations exist related
to the drilling, completion and operation of wells, as well as
disposal of waste oil.  There are also procedures incident to the
plugging and abandonment of dry holes or other non-operational
wells, all as governed by the Oklahoma Corporations Commission,
Oil and Gas Division.

     Compliance with these regulations may constitute a
significant cost and effort for Arena.  No specific accounting
for environmental compliance has been maintained or projected by
Arena to date.  Arena does not presently know of any
environmental demands, claims, or adverse actions, litigation or
administrative proceedings in which it or the acquired properties
are involved or subject relevant to or arising out of its
predecessor operations.

     In the event of a breach of environmental regulations, these
environmental regulatory agencies have a broad range of
alternative or cumulative remedies to include: ordering a clean
up of any spills or waste material and restoration of the soil or
water to conditions existing prior to the environmental
violation; fines; or enjoining further drilling, completion or
production activities.  In certain egregious situations the
agencies may also pursue criminal remedies against the company or
its principals.

(H) DISTINCTIVE CHARACTERISTICS OF ISSUER'S BUSINESS AND INDUSTRY

     There are certain special or distinctive characteristics of
this issuer's business which should be understood.  While some of
these characteristics have been earlier discussed or alluded to,
we are summarizing below the more significant of these factors:

 .    The company has had no significant revenues or income to
     date and has occurred a net loss of ($110,423) from
     inception in March, 2000 to December 31, 2000.  Based upon
     the foregoing, there is a substantial doubt about the
     company's ability to continue as a going concern.

 .    Oil and gas production is a highly regulated industry.  The
     Oklahoma Corporate Commission, Oil and Gas Division, as well
     as similar regulatory agencies in other states, impose
     limitations on the number of wells per geographic area and
     also may regulate the amount of production from wells in a
     formation or given conservation area.

 .    Environmental issues, including disposal of drilling fluids
     and chemicals, waste oil, surface contamination are
     regulated by the Oklahoma Commission, and similar agencies
     in other states; and, secondarily, by the Federal
     Environmental Protection Agency, EPA.  Typically the EPA
     does not impose specific standards or regulations unless
     there is a significant environmental contamination.

 .    Any drilling and completion of a well must be considered
     high risk due to the danger a well may be drilled and
     completed at substantial cost only to be determined to be a
     dry hole or non-commercial well.

 .    The pricing for oil and gas has historically been extremely
     volatile and these price changes could render, in a short
     period, an otherwise commercially successful well non-
     commercial and require it to be shut-in.  Additionally,
     there are risks to production including casing or formation
     collapses, blow-outs, flooding, silting, as well as
     equipment failures.

 .    Arena will be dependent upon a third party operator to
     initiate drilling of the initial two well sites in the
     company by approximately the end of the 1st quarter of 2001
     and for Messrs. McCabe and Rochford to pay Arena's share of
     there costs, neither of which can be assured or warranted.

 .    The exact structure of Arena's future oil and gas
     acquisition and operating activities is not and cannot be
     determined prior to the close of the anticipated Private
     Placement Offering, though Arena will continue with the
     drilling and completion of its two initial drill sites in
     all events and will observe its general undertakings as to
     the type and nature of intended acquisitions.

(I) MANAGEMENT'S CURRENT PLANS

     Arena has received an oral undertaking from the Operator for
the Spears and adjacent leases that at least one of the projected
two wells will most likely be commenced by approximately the end
of the 1st quarter of 2001.  After the initial two wells are
drilled, the Spears well would be brought back on line after a
workover completing the Upper Booch formation in the Spears well,
and after the lease of a compressor for these wells.  It is
anticipated that revenues from the anticipated wells would make
the company self sustaining within that period, unless the wells
are dry holes or non-commercial.

     Management plans to use proceeds of the IPO to acquire
proven non-operating properties to be developed through
subsequent financing efforts of the anticipated Private
Placement.  No reasonable projection of drilling and completion
of additional wells to be completed, if at all, can be made at
this time because Arena is not certain of when additional
properties will be acquired with IPO proceeds, or when the
Private Placement may close.

     There is also a possibility that Arena may elect to use the
proceeds of the IPO to alternatively acquire producing acreage or
to invest in the drilling and completion of one or more wells.
As the economic factors upon which these alternative development
decisions must be made changes on an almost daily basis for small
independent oil and gas producers, such as Arena, it is
impossible to make economic forecasts as to the ultimate
structure of Arena's oil and gas program or the exact use of
proceeds within the over-all parameters outlined earlier.  It is,
however, anticipated that all proceeds from the IPO will be
expended within six months from February 16, 2001.  It is
anticipated, though not warranted, the company will be self
sustaining from revenue, during the six month period based upon
the reasonable probability the initial three leases will be
commercially completed.

(J) CURRENT ACTIVITIES

     As indicated previously, Arena has not engaged in the
acquisition of additional oil and gas interests to date
subsequent to the initial three leases and drill sites described
above, though it is actively reviewing potential acquisitions.
As of the date of this report drilling had not commenced in the
two initial drill sites, but the company still projects the
drilling and completion, as well as the workover of the Spears
lease, will be commenced by approximately the end of March, 2001
or first part of April, 2001. As indicated previously, this is a
carried  interest to Arena such that the cost of drilling and
completion to the point of initial production, if any, will be
paid ( "carried") by the principal shareholders in the company,
Mr. Rochford and Mr. McCabe.

     From the $200,000 in gross proceeds of the IPO, Arena has
expended approximately $3l,000 in repaying loans and advances
from Mr. Rochford and Mr. McCabe for organizational and offering
costs, and has expended an additional approximate $10,000 in
direct operating and offering costs, leaving net proceeds of
approximately $159,000.  These proceeds are intended primarily
for acquisition purposes, though management may employ net
proceeds for operational expenses and drilling and completion in
the operation of management discretion. Management is actively
engaged at the present time in discussion with various potential
third party vendors from whom such oil and gas interests may be
acquired and will subsequently report any such acquisition and
notify shareholders through required reports filed under the
Securities and Exchange Act.

     Arena anticipates commencing within the next 30 days a
substantial Accredited Private Placement Offering.  It is
anticipated that the minimum offering would be $500,000 and the
maximum offering would be $3,500,000.  This Offering would remain
open through an estimated outside date of June 30, 2001, though
management will reserve the right to extend such anticipated
closing date.  The Private Placement will be conducted as a self
underwriting by management of Arena and it is anticipated that
most of the private placement offering proceeds will be raised in
California, though sales may occur in other jurisdictions.  No
warranty or assurance can be given or implied that the company
will commence such offering or will be successful in raising the
minimum offering.

     While the exact terms of the anticipated Private Placement
have not been written or determined, it is presently anticipated
that the offering will involve convertible preferred debentures
to be sold only to accredited investors at an estimated offering
price of $1.75 per debenture unit, with each unit convertible to
common stock upon terms to be determined at a one-to-one ratio.
Management anticipates the debentures will pay interest at 10%
simple annual interest.  As noted above, Arena anticipates a June
30th closing, but will reserve certain extension rights.

     A substantial portion of the anticipated proceeds from the
Private Placement, if raised, would be used to pay for drilling
and completion activities with an approximate equal portion
allocated to additional lease properties to be acquired by Arena.

     Arena most likely will not be able to acquire positions in
substantial oil and gas properties without employing some of the
anticipated capital from the Private Placement Offering as the
maximum available net proceeds of approximately $159,000 from the
IPO provides a very limited acquisition fund.  Moreover, if the
company is not successful in completing the Private Placement
there would be no other immediate source of revenue or capital
for the drilling, completion and development of the anticipated
oil and gas interest to be acquired using the net proceeds of the
IPO.

(K) MAJOR CUSTOMERS

     As indicated previously, Arena  presently sells all of its
gas production through the operator of the existing leases, Tri-
State Energy Corporation.  It is understood that Tri-State sells
the actual production to ONEOK Energy, Marketing and Trading
Company with Enogex being the gas gatherer.  It should be
understood, however, that Arena has no direct contractual
obligation or relationship with any of these parties other than
the operator and is obligated to sell its gas through the
operator to such parties as may be designated by the operator.

     If Arena is successful in its efforts to raise additional
funding and to complete further additional wells management
anticipates, it will develop independent relationships with
various gas and oil purchasers which will be subsequently
reported.

(L) FINANCIAL INFORMATION ABOUT INDUSTRY SEGMENTS

     Since the company has not derived any significant revenue to
date it cannot report on revenues or income from industry
segments. Management of Arena hopes, however, that the primary
revenues to the company for the foreseeable future will be from
natural gas production rather that oil production.  In all
events, Arena will report on production by industry segments and
geographic areas as such revenues are derived.

(M) DESCRIPTION OF OFFICE LEASE PROPERTY

     In addition to the described oil and gas properties, Arena
has rental office space, equipment and facilities.  At present,
it leases office space at 4920 South Lewis, Suite 107, Tulsa,
Oklahoma.  As of October 1, 2000, this lease consists of
approximately 671square feet of office space and is leased by the
company for $ 460.00 per month including all standard office
equipment and furnishings, and including its telephone system.
All lease payments through December 31, 2000 were made by a
shareholder and are included in the services and the use of
office space contributed by shareholders.

     The current facilities are believed adequate for the initial
operation of Arena.

     Arena does not presently own any oil or gas production
equipment such a pump jacks, pipe or compressors.

(N) REPORT ON INITIAL PUBLIC FINANCING

     The company completed its initial public financing by
employing an SB-1 Registration which became effective January 12,
2001 and which was closed as a minimum offering on February 16,
2001.  The company sold 800,000 shares at $.25/share to twenty-
nine California residents raising $200,000 in gross proceeds.
The offering was also qualified as a public offering in
California, though California will not allow secondary trading of
the securities sold in that jurisdiction because of the start-up
nature of Arena and due to its limited capitalization. California
also required certain net worth requirements of the public
investors to insure their sophistication and ability to bear the
risks of investment.

     Pursuant to the provision of SEC Rule 463 and Item 701 of
Regulation S-K, the company reports that other than the payment
of offering costs of approximately $10,000, and reimbursed
advanced costs to management of approximately $31,000, it has
not, to date, utilized or expended any of the net proceeds of the
offering as of the filing date of this Report.  As stated in its
SB-1 Registration, the company primarily intends to employ the
net proceeds to acquire additional oil and gas leases, with an
initial emphasis, if possible, on acquiring proven undeveloped
reserves in or around Oklahoma.  However, management may use net
proceeds for operational costs and drilling and completion in its
discretion.   While Arena has not yet made any such acquisitions
from the IPO proceeds, management is actively engaged in
discussion with various third party potential vendors to acquire
suitable oil and gas interests and would intend to report any
significant acquisition on form 8-K, or other periodic reports
and to provide notice to shareholders.

                      Item 2.   PROPERTIES

     Arena Resources, Inc. as incorporated on August 31, 2000 is
concurrently managed by its two principal shareholders, Mr. Lloyd
T. Rochford and Mr. Stanley McCabe.  Mr. Charles Crawford, an
affiliate, is the third Director.  Messrs. Rochford and McCabe
each received 1,300,000 shares of Arena for their cash
contribution of $67,384 from which proceeds Arena purchased the
three initial lease interests for approximately $61,174.  Mr.
Rochford and Mr. McCabe also entered into the commitment to
"carry" any drilling and completion of initial wells on each of
the three leases acquired.  This carried interest obligation,
based upon projected drilling and completion costs and including
a workover of the Spears well, is valued at approximately
$134,000.  The obligation of Messrs. Rochford and McCabe to carry
these costs is not, however, limited by the estimate of $134,000.
Mr. McCabe and Mr. Rochford have undertaken to pay whatever
actual drilling and completion costs are incurred on the initial
three leases.  In like manner, their shares in Arena wouold not
be reduced if drilling and completion costs are less.  These
initial contributions are more particularly described as part of
the audited financial statements as attached and in the
subsequent description of the leases.

     As an accounting matter, the contributed properties are
deemed to have been acquired in March, 2000 by Mr. McCabe and Mr.
Rochford acting as a joint venturers and subsequently contributed
to Arena in September, 2000.  As a result, the accounting basis
for the properties is valued from the date of initial acquisition
by the joint venture and the limited production reflected in the
financial statements is only for this predecessor entity.

     There is no current production from the Arena forty percent
carried working interest in the Spears lease subsequent to its
contribution, nor from the two additional carried drill sites in
Muskogee County, Oklahoma.  There was minimal production from the
well on the Spears lease (approximately $2,000 in net revenue to
the predecessor venture), in April of 2000 when this well was
tested.  This well has been shut-in from 1997 because of
declining production.   The operator did not want to lease a
compressor for one well until the workover on the Spears well is
completed. Management hopes the Spears lease well will be put on
line when and if the two gas wells are completed in the adjacent
leases and the workover on the Spears completed, as well as the
anticipated completion of the two adjacent wells.   Management
presently hopes that the Spears lease, as well as completion of
the two additional adjacent drill sites, would primarily produce,
if the anticipated two new wells are commercial as well as the
Spears workover, natural gas production and not crude oil
production.  Arena intends to currently emphasize natural gas
production, but may buy primarily oil producing properties if
economically advantageous.  It is further noted that sometimes
wells drilled and completed primarily for anticipated natural gas
production also produce commercial quantities of crude oil, and
oil wells usually produce some natural gas, sometimes in
recoverable quantities.

     The terms of the Spears, Casey and Wallace leases are each
summarized below.  Arena is current on these lease obligations
and intends to hold these leases by future production.  The
leases were acquired by Arena in September, 2000.  To date, Arena
or its predecessors have paid a total of $61,174 as lease costs,
but anticipate no future lease payment will be required as the
leases are anticipated to be held by production. There are no
existing or anticipated subleases.  The leases are subject to a
25% royalty payment to unrelated parties.  Arena retains 40% of
the remaining working interest, or a 30% net revenue interest.

     The essential terms, together with acquisition basis, for
the three leases is summarized below:

Spears Lease -

          (a)  The Spears lease was assigned to
          Arena on September 15, 2000, for approximately
          $33,000 from the initial capital contributions by
          Messrs. Rochford and McCabe;

          (b)  The Spears gas well has been shut-in since 1997,
          except for a brief test period in April, 2000 when
          approximately $2,000 in net revenues was generated to
          the predecessor joint venture of Arena.

          (c)  The lease is currently held by production for which Arena
          is paying a shut-in royalty payment of $1.00/acre per year, or
          $160/year.  "Held by Production" is a term used to mean that a
          mineral lease is deemed to be held and rental payments made when
          the lessor is receiving his agreed upon monthly production
          percentage payment, rather than a fixed cash payment for the
          lease.  As in this case, when there is a completed commercial
          well that is shut-in, the lease is still technically held by
          production, but the lessees pay a "shut-in"  royalty in lieu of
          actual production.  With the Spears lease that shut-in royalty
          payment by Arena is $160/year.  Arena has kept this payment
          current.

Wallace Lease -

          (a)  The Wallace lease was assigned to Arena as an
          initial acquisition on September 7, 2000.  It was
          valued at its predecessor cost basis of $20/acre,
          or $3,200.

          (b)  The lease may be held for a three year term
          without production  commencing April 4, 2000.

          (c)  The lease is paid up to January 1, 2001.  As of
          that date there will     commence an annual lease
          payment of $1.00/acre until held by production.

Casey Lease -

          (a)  The Casey lease is a one year lease from
          April, 2000 which is paid up.

          (b)  The lease was initially acquired by the Arena
          predecessor for $25/acre, $4,000.

          (c)  It is intended the well will be held by production.

     In the existing Spears lease, Arena has a forty percent
carried working interest.  This means that Arena has a forty
percent interest in total production after it pays its pro rata
share, forty percent, of operating costs, but before royalty
payments to the mineral interest owner.  As used in this Report
total production is the total recoverable amount of product
produced from an oil or gas well, usually expressed in quantity
(barrels for oil; thousand cubic feet "MCF" for gas) or dollar
amount of production.  Royalty payments are a portion of the
total production (usually 5-25%) paid directly to the landowner,
and sometimes others, from the net cash proceeds of production
after extraction taxes, but before charging any costs.  The
mineral interest owner is usually the person who ultimately owns
the oil and gas and is usually the "lessor" or person creating
the lease.  The mineral interest owner usually retains a royalty
interest.

     Arena estimates its potential net revenue interest, which it
retains after the payment of royalty interest, would be
approximately thirty percent.  This is derived by taking total
production, 100%, subtracting the royalty 25%, then multiplying
the remaining net revenue interest, 75%, by Arena's working
interest share, 40%, thus yielding a 30% net mineral revenue or
net revenue interest.  A net revenue interest  is a term which
defines the actual revenues which a working interest holder will
obtain from a given lease after payment of its pro rata share of
production costs and after royalty payments.  Because the
interest of Arena is "carried," Arena is not required to pay any
of the anticipated workover costs to complete another formation
in the Spears well or the drilling and completion costs
anticipated for the adjacent Casey and Wallace leases.   Workover
costs are costs that sometimes occur to keep a well in production
or increase production after it has operated for a period of
time.  It is intended that approximately $8,000 will be expended
to complete the Upper Booch formation in the Spears Well as part
of the carried  work-over costs.  Arena does not have the
authority or legal capacity to direct the drilling and completion
of additional wells or any workover and must rely upon the
operator to initiate such actions.  Further, Arena has no
contractual basis to enforce the undertaking of Mr. McCabe and
Mr. Rochford to carry the contributed properties and pay the
carried costs.

     As used in this report "formation" is the underground
geological structure which is believed to hold the natural gas or
crude oil to be produced by the well.  These formations are often
sand or limestone.  Various physical or chemical applications are
applied to the formation after it is penetrated to induce
production.  Target geological formations to which the well is
drilled and completed are typically described by proper names.
The principal gas production formations on the Spears and
adjacent leases would be the Atoka, Booch and Upper Booch
formations.

     It is anticipated that the operator of the Spears lease
intends to reactivate the Spears gas well after completion of the
Upper Booch formation and upon the drilling and completion of one
or more additional commercial wells on the adjacent leases and
the installation of a compressor unit for production purposes for
all three wells.  A compressor is a device used on a gas well to
pressurize the gas produced to the pipeline standards required by
the gatherer.   Arena has been informed, but cannot warrant, that
all three wells will be on line by approximately the end of the
1st quarter of 2001.   Arena would then be required to
participate in any cost of the compressor and other equipment
directly related to production after drilling and completion of
any additional wells, or the workover of the existing Spears
well.  Initially Arena has been informed that its pro rata costs
of participating in the compressor and other initial production
costs for the anticipated three wells would be approximately
$3,000 per month.  Costs include estimated costs of approximately
$0.24/MCF for fuel, transportation and compressor costs and
approximately $0.10/MCF for pumper and miscellaneous costs.  It
is anticipated, though not warranted, these costs will be paid
from revenues.

     It is not possible to presently estimate all anticipated
production costs for the existing well, or the two other gas
wells anticipated to be drilled on the additional adjacent
leases.  Historically, commercial gas wells in this area drilled
to the anticipated formation depth of approximately 2,000 feet
have not required significant operating expenditures and have
usually been positive net revenue producers from the time of
completion.   The current approximate drilling and completion
cost of a gas well to the Atoka and Booch formations to be paid
by Arena would be approximately $58,000 per well.  The completion
of the Upper Booch formation in the Spears well is estimated at
$8,000.  There is estimated another approximate $12,000 in
completion costs for all three wells.  These amounts will be paid
by Messrs. McCabe and Rochford as their commitment to carry the
assigned working interest in these leases.  Mr. McCabe and Mr.
Rochford in their predecessor partnership have expended
approximately $33,000 for the shut-in Spears well and estimate to
incur approximately $10,000 for workover costs on this well,
including opening the new formation.  No formal third party
estimates of these costs, sometimes called AFE's, are available
or anticipated.  It should also be noted that the foregoing are
estimates only and the undertaking of Mr. McCabe and Mr. Rochford
to carry these obligations exist whatever the actual costs.

     Until and unless the existing well or other wells are
brought online, Arena will not have any revenues from its present
reserves or anticipated reserves.

     The present intent of Arena is to use the net  proceeds of
the recently completed IPO, approximately $159,000, to acquire
additional proven reserves with drill site locations. However,
Arena may elect to use proceeds, in the exercise of sound
business discretion by management, to acquire working interests,
whether "carried" or "uncarried," in new currently producing
properties.  Further, if appropriate opportunities avail
themselves, Arena reserves the right to engage in drilling and
completion participation in proven reserves with proceeds.  The
exact allocation of proceeds between these various oil and gas
alternatives is not presently determined.  Further, no assurance
can be given in any manner that Arena will be successful in
subsequent efforts through its Private Placement to raise
additional capital for  anticipated drilling and completion of
production properties.

                     Item 3.  LEGAL ROCEEDINGS

     There are no legal actions or claims in which the company is
engaged.

  Item 4.   SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

     The company did not hold a shareholders meeting in 2000,
thus there was no vote of securities holders in 2000.  The
company anticipates holding its initial annual shareholder
meeting in the late Summer or early Fall, 2001.

                             Part II

 Item 5.  MARKET FOR REGISTRANT'S COMMON AND RELATED STOCKHOLDER
                             MATTERS

     To date the company has not established any trading market
for its sharers, though it has requested ACAP Financial of Salt
Lake City, Utah to request a symbol and initial trading
authorization on the NASD Electronic Bulletin Board.  The company
will subsequently report any commencement of trading as a
significant event.  Arena does not know and can make no
representation as to any initial trading range, if any.

                Item 6.  SELECTED FINANCIAL DATA

     The following constitutes only a selected summary of
significant accounting information and is qualified in its
entirety by reference to the complete audited Financial
Statements attached hereto and incorporated, including the notes
thereto.

Initial Fiscal Year Ended December 31, 2000 from Inception on
August 31, 2000:

                                             December 31, 2000
                                             -----------------
          Operations
             Oil and Gas                         $   2,424
             Other Revenues                              0
          Expenses                                 112,847
             Net Income (loss)                    (110,423)
             Per Common Share                        (0.04)
          Working Capital                          159,000*
          Liabilities                               47,399
          Total Assets                             104,365
          Stockholders' Equity                      56,966
          Dividends Per Share                         NONE

      *Since the close of Arena's initial IPO in February, 2001,
 the company has approximately $159,000 in working capital
 reserves reflected in the foregoing summary as of December 31,
 2000, but not included in the December 31, 2000 audited
 Financials.  Moreover, the foregoing does not reflect in any
 manner the Private Placement Offering which Arena intends to
 commence in the near future, as described above.

              Item 7.  MANAGEMENT'S DISCUSSION AND
                 ANALYSIS OF FINANCIAL CONDITION

      This  Form 10-K includes "forward-looking" statements about
future financial results, future business  changes  and other events
that have not  yet  occurred. For  example, statements like we "expect,"
we "anticipate" or  we "believe"  are forward-looking statements.
Investors  should  be aware  that  actual  results  may  differ
materially  from   our expressed  expectations because of risks and
uncertainties  about the  future.  We will not necessarily update the
information  in this Form10-K in any forward-looking statement later
turns out to be  inaccurate.  Details about risks affecting various
aspects of our business are discussed throughout this Form 10-K. Investors
should read all of these risks carefully.

RESULTS OF OPERATIONS

     Arena, exclusive of very limited predecessor test production
($8,000) in revenues, does not have any revenues or net income to
date.   Its  anticipation of future revenues is  contingent  upon
various  factors previously discussed, principally the completion
of  the  initial  three  wells and the  closing  of  the  Private
Placement.  In particular, it is not anticipated that Arena would
realize  any  significant revenues or income  from  oil  and  gas
properties  to  be acquired with proceeds of the recently  closed
IPO,  unless it arranges additional financing to create  drilling
and  completion  funding for the company by it's present  pending
Private  Placement.  As a result, the success of  Arena  is  also
partially  dependent  upon the subsequent success  of  additional
financing  being raised, which factor constitutes  a  significant
additional risk to purchasers of Arena's stock.

      A very limited amount of production revenue income from the
Spears  well  reflected in the financial statements  due  to  the
test  production  by the predecessor venture  consisting  of  Mr.
McCabe  and  Mr.  Rochford in April, 2000.  This test  period  of
approximately  one  month  generated  total  gross  revenues   of
approximately  $8,000 of which the net revenue  interest  to  the
predecessor  was  approximately  $2,000.   In  like  manner,  the
predecessor  cost  basis of the leases is  established  from  the
March acquisition date.

     The valuation of the oil and gas reserves placed into Arena
by management for shares were based upon a discounted current
estimated market value through a reserve report, even though such
properties are valued for accounting purposes on a predecessor
cost basis.  This valuation is more fully discussed under the
auditor's footnotes in the attached and incorporated audited
Financial Statements.  It is difficult to actually value the
present assets placed into Arena, notwithstanding the existence
of an independent petroleum reserve report.  The reserve report
should be considered only as estimates of potential value of
recoverable reserves and not as an assurance and warranty that
the company will realize either cash flow or gains from those
resources, even assuming maximum sustained production.

     As outlined under current operations, Arena has just
completed its initial public offering which has generated
approximately $159,000 in net proceeds which is anticipated to be
primarily employed to obtain additional oil and gas developmental
acreage.  This acreage may not be developed, however, unless the
company is successful in selling its current Private Placement
Offering of between $500,000 to $3,500,000 as more particularly
described under present operations.

     The initial capital assets contributed to Arena were
supplied by its two existing shareholders. In contributing these
assets there was no independent board of directors or
shareholders to determine the reasonable valuation of the cash,
oil and gas properties and related interest contributed for the
sharehold interest obtained by the founders and initial
shareholders.  For the initial 1,300,000 shares acquired by both
Mr. McCabe and Mr. Rochford, each contributed $33,694.50 in cash
and a carried working interest obligation worth approximately
$134,000.  From the cash contribution, the company acquired the
three lease properties at a basis of approximately $61,174.  The
contributed cash increased both shareholders' equity in Arena.
The prior uncompensated services of Messrs. McCabe and Rochford
have been valued at $100,000 for accounting purposes and carried
as additional paid in capital.

     Anyone acquiring shares in Arena will assume the risk that
there is no present revenue, that the economic viability of the
company is partially dependent upon subsequent financing which
cannot be warranted, and that even if subsequent financing is
obtained there may not be sufficient funds to adequately develop
or operate oil and gas properties and to produce product in
sufficient amounts or quantities to justify an economic return to
investors.  Moreover, there is always the risk that oil and gas
prices could adversely change in a dramatic fashion independently
of any efforts or control by Arena.  Finally, there is the
ongoing risk and concern that costs of operations, as well as
drilling and completion risks, may substantially exceed any
present estimates and render such future anticipated economic
endeavors unsuccessful.

CAPITAL RESOURCES AND LIQUIDITY

     At present the company has two sources of potential working
capital.  The first is the undertaking of its two principal
officers to pay for ("carry") the drilling and completion of the
two initial drill sites (Casey and Wallace leases) and the
workover on the Spears lease.  This undertaking is not
guaranteed, but has a value of approximately $134,000.  The
second capital resource of Arena is the approximate $159,000 of
net proceeds from Arena's IPO to the be used for subsequent
acquisition of oil and gas interests.

     In all events, for Arena to achieve sustained viability and
growth it will almost certainly need additional capital.  At
present the only contemplated source of additional capital is the
current Private Placement effort of the company to raise $500,000
to $3,500,000 in gross proceeds.  No assurance or warranty that
such Private Placement will be sold is made or implied.  The
company has no other capital commitments.

      Item 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

     Information required by this item appears in the
Consolidated Audited Financial Statements and Auditors Report for
Arena for the year ending December 31, 2000 as listed under Item
14.

   Item 9.   CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
               ACCOUNTING AND FINANCIAL DISCLOSURE

     None.

                            PART III

               Item 10.  DIRECTORS, EXECUTIVE OFFICERS AND
                      SIGNIFICANT EMPLOYEES

     Following this table is a brief biographical description for
each of the management principals with a brief description of
their business experience and present relationship to Arena,
together with all required relevant disclosures for the past five
years.  Following the biographical information for the directors
and officers is a remuneration table showing current compensation
and following this table is a security ownership table showing
security ownership of the principal officers and directors, as
well as those holding 5% or more of the issued and outstanding
stock.




        NAME                POSITION          CURRENT TERM OF
                                                  OFFICE
---------------------  -----------------   ---------------------
Mr. Lloyd "Tim"        Director/CEO/       Appointed in
Rochford               President           Organizational
                                           Minutes - September,
                                           2000. Will serve as
                                           director until first
                                           annual meeting, not
                                           yet set.  Will serve
                                           as an officer without
                                           term/contract
                                           pursuant to leave of
                                           the Board of Directors
                                           on deferred
                                           compensation basis.

 Mr. Stanley McCabe   Director/Treasurer/  Appointed in
                      Secretary            Organizational
                      CFO/Accounting       Minutes - September,
                      Officer              2000. Will serve as
                                           Director until first
                                           annual meeting, not
                                           yet set.  Will serve
                                           as an officer without
                                           term/contract
                                           pursuant to leave of
                                           the Board of Directors on
                                           deferred compensation basis.

Mr. Charles Crawford  Director             Appointed in Organizational
                                           Minutes - September, 2000.
                                           Will serve as Director until
                                           first annual meeting, not
                                           yet set.

BACKGROUND

MR. LLOYD "TIM" ROCHFORD - DIRECTOR , CEO/PRESIDENT
Age: 54

     Mr. Rochford has been active as an individual consultant and
entrepreneur in the oil and gas industry since 1973.  In this
capacity, he has primarily been engaged in the organization and
funding of private oil and gas drilling and completion projects
and ventures within the mid continent region of the United
States.  Mr. Rochford continues to be active on an independent
basis in oil and gas consulting, funding, and prospect
origination.

     In 1989 Mr. Rochford was co-founder, director and CEO of a
small public company known as Magnum Petroleum, Inc. ("Magnum")
which is listed on the American Stock Exchange.  Subsequently,
Magnum acquired Hunter Resources, Inc. in August, 1995.  Mr.
Rochford served as Chairman of the Board of the combined
companies from August, 1995 - June, 1997.  Since July, 1997, Mr.
Rochford has primarily devoted his time and efforts to individual
oil and gas acquisition and development prior to his commitment
to participate in Arena Resources.  In 1982, Mr. Rochford was co-
founder of Dana Niguel Bank, a publicly held California bank
operation and served as a director until 1994.  Mr. Rochford
currently serves as a director for E-Vantage Solutions, Inc., a
public company.  Mr. Rochford resigned as an officer/director of
New Systems, Inc. a small public company, effective December 31,
2000.  Mr. Rochford attended various college level courses in
business from 1967-1970 in California.

MR. STANLEY McCABE  - DIRECTOR/SECRETARY/TREASURER/CFO
ACCOUNTING OFFICER
Age: 68

     From 1979 to 1995, Mr. McCabe was involved in Stanton
Energy, Inc., a Tulsa, Oklahoma natural resource company
specializing in contract drilling and operation of oil and gas
wells.  From 1990 to 1995, he was Chairman and CEO of that
company.  In 1990, Mr. McCabe also became a co-founder and
subsequent officer and director of Magnum Petroleum, Inc., along
with Mr. Rochford as previously discussed.  Subsequently, Mr.
McCabe served as a director of Magnum Hunter Resources, Inc.,
through December, 1996.  Since January, 1997, Mr. McCabe has been
involved as an independent investor and developer of oil and
other natural resource companies.

     Mr. McCabe attended college courses at the University of
Maryland, primarily in business in 1961-1962.

MR. CHARLES CRAWFORD - DIRECTOR
Age: 48

     For the past twenty-five years from 1975 to present, Mr.
Crawford has served as an independent oil and gas exploration
consultant to various private and public oil and gas companies
within the United States.  He has acted as a consultant to such
firms as Texaco Corporation, Phillips Petroleum, Mid-Continent
and Energy as well as other regional and national companies
primarily acting in the mid-continent area.

     Mr. Crawford is not presently affiliated with any private or
public companies other that his participation on the board of
directors with Arena.

     Mr. Crawford received a Masters Degree in geology from Miami
University of Ohio, in 1976.  Mr. Crawford will serve the company
on an as needed basis as an outside director.

      Further, it is anticipated that if Arena is successful in
generating revenues, it will attempt to hire  one or more other
officers and employees to supply administrative and marketing
services.  As a result, the following chart only includes the
current management, with reservation of salaries to other
officers pending revenues.

                Item 11.  EXECUTIVE COMPENSATION

     To date the Board has not fixed any rate of compensation for
management.  Mr. McCabe and Mr. Rochford have agreed to defer
requests for compensation until Arena begins receiving revenues
from anticipated production or possibly from the intended Private
Placement Offering.  At that time, a reasonable salary will be
authorized for each officer.  Obviously if revenues or proceeds
are not achieved within a reasonable time, either Mr. Rochford,
Mr. McCabe or both may discontinue serving the company on a full
time basis.

     Additionally, there are no present stock incentives or
option plans in place.

Item 12.  SECURITY OWNERSHIP OF MANAGEMENT AND CERTAIN BENEFICIAL
                             OWNERS

SHARES OWNED BY MANAGEMENT AND CERTAIN SECURITY HOLDERS

     The following table includes all shares issued to a
director, officer or 5% or greater shareholder.  There are no
created or issued stock options or other stock rights in Arena at
the present time:

Title or         Name of Owner         Amount       Percent of
Class                                  owned           Class
-------------  ------------------  --------------  ---------------
Common Stock   Lloyd T. Rochford       1,300,000         38%

Common Stock   Stanley McCabe          1,300,000         38%

Common Stock   All                     2,600,000         76%
               Officers/Directors
               as a Group

     All other issued shares (800,000) are owned by the 29
shareholders investing in the IPO.   Further, the company has not
issued or adopted any form of warrants or option rights or any
plan for options or warrants.  It is anticipated that in the
event of the successful completion of the Private Placement, the
Board of Directors may authorize and approve a standard incentive
stock option plan.

    Item 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

     There are certain transactions related to Arena which are
not deemed to be "arms-length" transactions.  That is, the
parties on both sides of the contract or agreement have
substantial relationships or common interests.  All such material
transactions are believed to be disclosed in this section.

     1.  The initial capital assets contributed to Arena were
supplied by its two existing shareholders. In contributing these
assets there was no independent board of directors or
shareholders to determine the reasonable valuation of the cash,
oil and gas properties and related interest for the sharehold
interest obtained by the founders and initial shareholders.  For
the initial 1,300,000 shares acquired by both Mr. McCabe and Mr.
Rochford, each contributed $33,694.50 in cash and a carried
working interest obligation worth approximately $134,000.  Of the
cash contributed, $61,174 was employed to acquire the three
initial leases.  The contributed cash increased both
shareholders' equity in Arena. The estimated future development
costs to Messrs. McCabe and Rochford of $134,000 were estimated
by independent engineers and have been accounted for as an
estimated receivable from stockholders in the accompanying
financial statements.  Any person purchasing Arena stock should
consider the lack of independent valuation and review of the
assets contributed by the principal shareholders for their
relative sharehold interest.  In all events, such contribution to
the corporation cannot be considered an independent or arms-
length transaction.  In like manner, the two initial shareholders
will most likely be in a control shareholder position, even after
the completion of the anticipated Private Placement, to determine
their initial salaries and any amount of deferred compensation
and these actions will not constitute an independent transaction
and should be considered as a potential risk factor.

     2.   Even if the anticipated Private Placement is fully
sold, the management group, as described above, may continue in
control and would essentially be in a position to dictate
salaries, distributions, and other interests as to all
shareholders.  While there is a general common law as well as
statutory obligation placed upon management of Arena to act in
the best interest of all shareholders, any person acquiring Arena
stock should consider that their minority shareholder status
imposes a certain risk of not being in a position to influence or
affect the direction of the company.

     3.   There exists a potential conflict that both Mr.
Rochford and Mr. McCabe will continue to pursue individually
various oil and gas interests for their accounts.  As officers
and directors, Mr. Rochford and Mr. McCabe have a fiduciary duty
to make appropriate oil and gas opportunities first available to
Arena.  As a result, a certain potential conflict exists between
their pursuit of individual oil and gas interests and the duty
owed to Arena.  The company believes it has resolved this
potential conflict through the understanding by current
management to make all appropriate and feasible oil or gas
opportunities first available to the company.  However, each
shareholder should consider such potential conflict as a risk
factor.  Further, Mr. Rochford and Mr. McCabe have individually
undertaken to carry the drilling and completion costs on the two
drill sites in the Casey No. 1 and the Wallace No. 1 leases, as
well as the workover on the Spears well.  Mr. McCabe and Mr.
Rochford will pay actual costs regardless of the estimated cost
valuation of $134,000.  Arena then becomes dependent upon their
financial capacity as well as willingness to honor this
commitment.  There are no written commitments or undertakings
between Arena or Messrs. McCabe and Rochford on either of the
matters discussed in this paragraph.   While the company
considers the undertakings as an enforceable agreement, such
undertaking may be difficult to legally enforce.

                            Part IV

       Item 14.  EXHIBITS, FINANCIAL STATEMENT SCHEDULES,
                    AND REPORTS ON FORM  8-K

  1.     Financial Statements:  See attached Index to Financial
       Statements, Financial Statement and Supplemental Information as
       referenced in Part II, Item 8.


  2.   Reports on Form 8-K:

       None

  3.   Exhibit Index:

     3.1   Articles of Incorporation of Registrant.  Earlier
           filed and incorporated as part of SB-1 Registration
           Statement.

      3.2  By-Laws of Registrant.  Earlier filed and incorporated as
           part of SB-1 Registration Statement.

 10.0  Material Agreement.

     10.1  Operating Agreement.  Earlier filed and incorporated as part
           of SB-1 Registration Statement.

     10.2  Reserve Report. Earlier filed and incorporated as part of SB-1
           Registration Statement.

 23.0  Consents.

     23.1  Consent of Auditors.  Earlier filed and incorporated as part of
           SB-1 Registration Statement.

     23.2  Opinion of Counsel In Re Legality. Earlier filed and incorporated
           as part of SB-1 Registration Statement.



                           SIGNATURES

     Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, the Registrant has duly caused
this report to be signed on behalf by the undersigned, thereunto
duly authorized.

                                   REGISTRANT:

                                   ARENA RESOURCES, INC.


Date:     March 12, 200l           By: /s/ Lloyd T. Rochford
                                   ---------------------------------
                                   Mr. Lloyd T. Rochford, President,
                                   Chief Executive Officer

Date:     March 12, 2001           By: /s/ Stanley McCabe
                                   ---------------------------------
                                   Mr. Stanley McCabe
                                   Chief Financial and Accounting Officer

     Pursuant to the requirements of the Securities Exchange Act
of 1934, this report has been signed below by the following
persons on behalf of the Registrant and in the capacities and on
the date indicated.

Date:     March 12, 200l           By: /s/ Lloyd T. Rochford
                                   ---------------------------------
                                   Mr. Lloyd T. Rochford,
                                   President/Director

Date:     March 12, 2001           By: /s/ Stanley McCabe
                                   --------------------------------
                                   Mr. Stanley McCabe
                                   Director

Date:     March 12, 2001           By: /s/ Charles Crawford
                                   --------------------------------
                                   Mr. Charles Crawford
                                   Director

<PAGE>

                      ARENA RESOURCES, INC.
                  (A Development Stage Company)

                        TABLE OF CONTENTS


                                                                  Page

Report of Independent Certified Public Accountants                F-2

Balance Sheet - December 31, 2000                                 F-3

Statement of Operations for the period from March 3, 2000
  (Date of Inception) through December 31, 2000                   F-4

Statement of Stockholders' Equity for the period from March 3,
2000
 (Date of Inception) through December 31, 2000                    F-5

Statement of Cash Flows for the period from March 3, 2000
  (Date of Inception) through December 31, 2000                   F-6

Notes to Financial Statements                                     F-7

Supplemental Information on Oil and Gas Producing Activities      F-11

                                F-1


HANSEN, BARNETT & MAXWELL
  A Professional Corporation
 CERTIFIED PUBLIC ACCOUNTANTS

                                                     (801) 532-2200
Member of AICPA Division of Firms                   Fax (801) 532-7944
      Member of SECPS                          345 East Broadway, Suite 200
Member of Summit International Associates     Salt Lake City, Utah 84111-2693


       REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS


To the Board of Directors and the Stockholders
Arena Resources, Inc.

We have audited the balance sheet of Arena Resources, Inc. (a
development stage company) as of December 31, 2000, and the
related statements of operations, stockholders' equity and cash
flows for the period from March 3, 2000 (date of inception)
through December 31, 2000. These financial statements are the
responsibility of the Company's management. Our responsibility is
to express an opinion on these financial statements based on our
audit.

We conducted our audit in accordance with auditing standards
generally accepted in the United States. Those standards require
that we plan and perform the audit to obtain reasonable assurance
about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial
statements.  An audit also includes assessing the accounting
principles used and significant estimates made by management, as
well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our
opinion.

In our opinion the financial statements referred to above present
fairly, in all material respects, the financial position of Arena
Resources, Inc. as of December 31, 2000, and the results of its
operations and its cash flows for the period from March 3, 2000
(date of inception) through December 31, 2000, in conformity with
accounting principles generally accepted in the United States.

The accompanying financial statements have been prepared assuming
that the Company will continue as a going concern. The Company is
a development stage enterprise engaged in the exploration and
development of oil and gas properties and the production and sale
of oil and gas. As discussed in Note 1 to the financial
statements, the Company's operating loss since inception and the
deficit accumulated during the development stage raise
substantial doubt about its ability to continue as a going
concern. Management's plans concerning these matters are also
described in Note 1. The financial statements do not include any
adjustments that might result from the outcome of this
uncertainty.

                                   /s/ Hansen, Barnett & Maxwell
                                   ------------------------------
                                   HANSEN, BARNETT & MAXWELL

Salt Lake City, Utah
February 8, 2001

                                F-2

                         ARENA RESOURCES, INC.
                     (A Development Stage Company)
                             BALANCE SHEET
                           DECEMBER 31, 2000


                                ASSETS

Current Assets
     Cash                                                  $  18,329

Oil and Gas Properties, Using Full Cost Accounting
     Properties subject to amortization                       61,174
     Less: Accumulated depletion                                (263)
                                                           ---------
     Net Oil and Gas Properties                               60,911
                                                           ---------
Deferred Offering Costs                                       25,125
                                                           ---------
Total Assets                                               $ 104,365
                                                           =========

                 LIABILITIES AND STOCKHOLDERS' EQUITY

Current Liabilities
     Revenue distribution payable                          $   3,241
     Loans from stockholders                                  25,000
     Accrued offering costs                                   19,158
                                                           ---------
     Total Current Liabilities                                47,399
                                                           ---------
Stockholders' Equity
     Preferred stock - par value $0.001 par share;
      10,000,000 shares authorized; no shares issued
      or outstanding                                               -
     Common stock - par value $0.001 per share;
      100,000,000 shares authorized; 2,600,000 shares
      issued and outstanding                                   2,600
     Additional paid-in capital                              298,789
     Estimated receivable from stockholders                 (134,000)
     Deficit accumulated during the development stage       (110,423)
                                                           ---------
     Total Stockholders' Equity                               56,966
                                                           ---------
Total Liabilities and Stockholders' Equity                 $ 104,365
                                                           =========
The accompanying notes are an integral part of these financial statements.

                                F-3

                         ARENA RESOURCES, INC.
                     (A Development Stage Company)
                        STATEMENT OF OPERATIONS
         FOR THE PERIOD FROM MARCH 3, 2000 (DATE OF INCEPTION)
                       THROUGH DECEMBER 31, 2000


Gas Revenues                                               $    2,424
                                                           ----------
Costs and Operating Expenses
  Gas production costs                                            263
  Depletion                                                       263
  General and administrative expense                          112,321
                                                           ----------
     Total Costs and Operating Expenses                       112,847
                                                           ----------
Net Loss                                                   $ (110,423)
                                                           ==========
Basic and Diluted Loss Per Common Share                    $    (0.04)
                                                           ==========
Weighted Average Number of Common
 Shares Used in Per Share Calculation                       2,600,000
                                                           ==========

The accompanying notes are an integral part of these financial statements.

                                F-4

                         ARENA RESOURCES, INC.
                     (A Development Stage Company)
                   STATEMENT OF STOCKHOLDERS' EQUITY
         FOR THE PERIOD FROM MARCH 3, 2000 (DATE OF INCEPTION)
                       THROUGH DECEMBER 31, 2000
<TABLE>
<CAPTION>
                                                                                             Deficit
                                                                                Estimated  Accumulated
                                                 Common Stock       Additional  Receivable  During the    Total
                                            ----------------------   Paid-in      From     Development  Stockholders'
                                              Shares      Amount     Capital   Stockholders'  Stage       Equity
                                            ----------  ----------  ----------  ----------  ----------  ----------
<S>                                        <C>         <C>         <C>         <C>         <C>         <C>
Balance - March 3, 2000 (Date
 of inception)                                       -  $        -  $        -  $        -  $        -  $        -

Services and use of office space
 contributed by officers, no shares
 issued, March 3, 2000 through
 December 31, 2000                                   -           -     100,000           -           -     100,000

Common stock issued for $67,389
  in cash and a receivable for a carried
  interest in gas properties, March 3,
  2000 through August 31, 2000
  - $0.08 per share                          2,600,000       2,600     198,789    (134,000)          -      67,389

Net loss                                             -           -           -           -    (110,423)   (110,423)
                                            ----------  ----------  ----------  ----------  ----------  ----------

Balance - December 31, 2000                  2,600,000  $    2,600  $  298,789  $ (134,000) $ (110,423) $   56,966
                                            ==========  ==========  ==========  ==========  ==========  ==========
</TABLE>
The accompanying notes are an integral part of these financial statements.

                                F-5

                        ARENA RESOURCES, INC.
                    (A Development Stage Company)
                       STATEMENT OF CASH FLOWS
          FOR THE PERIOD MARCH 3, 2000 (DATE OF INCEPTION)
                      THROUGH DECEMBER 31, 2000


Cash Flows From Operating Activities
 Net loss                                                     $ (110,423)
 Adjustments to reconcile net loss to net cash used in
  operating activities:
   Services and use of office space contributed by officers      100,000
   Depletion                                                         263
   Changes in operating assets and liabilities:
     Increase in revenue distribution payable                      3,241
                                                              ----------
   Net Cash Used in Operating Activities                          (6,919)
                                                              ----------
Cash Flows from Investing Activities
 Capital expenditures                                            (61,174)
                                                              ----------
   Net Cash Used in Investing Activities                         (61,174)
                                                              ----------
Cash Flows from Financing Activities
 Proceeds from loan from stockholders                             25,000
 Offering costs paid                                              (5,967)
 Proceeds from issuance of common stock                           67,389
                                                              ----------
   Net Cash Provided by Financing Activities                      86,422
                                                              ----------
Net Increase in Cash                                              18,329

Cash at Beginning of Period                                            -
                                                              ----------
Cash at End of Period                                         $   18,329
                                                              ==========

The accompanying notes are an integral part of these financial statements.

                                F-6

                      ARENA RESOURCES, INC.
                  (A Development Stage Company)
                NOTES TO THE FINANCIAL STATEMENTS

NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Organization - Arena Resources, Inc. (the Company) began
operations as an unincorporated joint venture on March 3, 2000.
Thereafter, the joint venture acquired an interest in oil and gas
properties in Oklahoma. On August 31, 2000, the joint venture was
incorporated under the laws of the State of Nevada. On that date,
the assets of the joint venture, which consisted primarily of the
property interests, net of the liabilities of the joint venture,
were transferred to the corporation in exchange for the issuance
of 2,600,000 shares of common stock. The joint venture was owned
100% by Stanley McCabe and Lloyd T. Rochford as was the
corporation after the transfer.

The reorganization of the joint venture into the corporation was
a transfer between enterprises under common control and the
assets and liabilities transferred were recorded by the
corporation at their historical cost to the joint venture.  In
addition, the accompanying financial statements have been
restated to reflect the shares of common stock issued in the
reorganization as though they had been issued on the dates
capital contributions were received from the owners of the joint
venture. Accordingly, the accompanying financial statements
include the operations of the joint venture from its formation on
March 3, 2000 through August 31, 2000.

Nature of Operations - The Company owns interests in oil and gas
properties located in Oklahoma. The Company is engaged primarily
in the acquisition, exploration, development, and production of
oil and gas properties and the production and sale of oil and gas.

Use of Estimates - The preparation of financial statement in
conformity with generally accepted accounting principles requires
management to make estimates and assumptions that affect the
reported amounts of assets and liabilities, disclosure of
contingent assets and liabilities and the reported amounts of
revenues and expenses during the reporting period. Actual results
could differ from those estimates. The amount recorded as
estimated receivable from stockholders is based on a current
estimate by a petroleum engineer of the Company's carried
interest in the cost to work over one well and to drill and
complete two wells on the Company's properties. These estimated
costs are subject to change in the near term.

Offering Costs - The company deferred direct and incremental
costs associated with the public offering of its common stock.
The deferred costs will be recognized as a reduction of the
proceeds from the offering when the proceeds are realized.

Business Condition - The accompanying financial statements have
been prepared on a going concern basis, which contemplates the
realization of assets and the satisfaction of liabilities in the
normal course of business. As shown in the financial statements
for the period from March 3, 2000 (date of inception) through
December 31, 2000, the Company earned only nominal revenue and
incurred a net loss of $110,423. The lack of operations and the
loss from operations raise substantial doubt about the Company's
ability to continue as a going concern for a reasonable period of
time. The financial statements do not include any adjustments
relating to the recoverability and classification of recorded
assets or the amount and classification of liabilities which
might be necessary should the Company be unable to continue as a
going concern. The Company's continuation as a going concern is
dependent upon its ability to generate sufficient cash flows to

                                F-7

meet its obligations on a timely basis, to obtain additional
financing as may be required, and ultimately to attain successful
operations. The Company's management intends to raise additional
equity capital for operations and to begin production of its gas
properties. There is no assurance additional capital will be
obtained.

Oil and Gas Properties - The full cost method of accounting is
used for oil and gas properties. Under this method, all costs
associated with acquisition, exploration, and development of oil
and gas properties and capitalized. Costs capitalized include
acquisition costs, geological and geophysical expenditures, lease
rentals on undeveloped properties and costs of drilling and
equipping productive and non-productive wells. Drilling costs
include directly related overhead costs. Capitalized costs are
categorized either as being subject to amortization or not
subject to amortization. There were no capitalized internal costs
during the period from March 3, 2000 (date of inception) through
December 31, 2000.

All capitalized costs of oil and gas properties, including the
estimated future costs to develop proved reserves and estimated
future costs of site restoration, are amortized on the unit-of-
production method using estimates of proved reserves as
determined by independent engineers. Investments in unproved
properties and major development projects are not amortized until
proved reserves associated with the projects can be determined or
until impairment occurs. If the results of an assessment indicate
that the properties are impaired, the amount of the impairment is
added to the capitalized costs to be amortized. Depletion expense
for the period from March 3, 2000 through December 31, 2000, was
$263, based on depletion at the rate of $0.42 per thousand cubic
of gas.

In addition, the capitalized costs are subject to a "ceiling
test," which basically limits such costs to the aggregate of the
"estimated present value," discounted at a 10-percent interest
rate of future net revenues from proved reserves, based on
current economic and operating conditions, plus the lower of cost
or fair market value of unproved properties.

None of the properties acquired were producing or had any
operating activities during the two years prior to their
acquisition by the Company. Accordingly, neither pro forma
information nor audited financial information pertaining to the
properties prior to the Company's acquisition of the properties
is presented.

Basic and Diluted Loss Per Share -Basic loss per common share is
computed by dividing net loss by the weighted-average number of
common shares outstanding during the period. Diluted loss per
share is calculated to give effect to potentially issuable common
shares except during loss periods when those potentially issuable
common shares would decrease the loss per share.  There were no
potentially issuable common shares  which were excluded from the
calculation of diluted loss per common share.

                                F-8

NOTE 2 - LOAN FROM STOCKHOLDERS

On August 29, 2000, two stockholders loaned the Company $25,000
to finance its short-term operations. The Company and the
stockholders have mutually agreed that the loan will be paid back
from the proceeds of the Company's planned equity financing with
no interest incurred. The loan was not memorialized with a
promissory note.

NOTE 3 - STOCKHOLDERS' EQUITY

The Company is authorized to issue 100,000,000 common shares,
with a par value of $0.001 per share, and 10,000,000 Class A
preferred shares, with a par value of $0.001 per share. The
rights of the Class A preferred shares may be established by the
Board of Directors. If issued, the Class A preferred shares shall
be non-voting and will be entitled to priority over the common
shares in the payment of dividends and in liquidation.

From March 3, 2000 through August 31, 2000, the owners of the
Company, while it was a joint venture, contributed $67,389 in
cash to the joint venture and contributed a carried interest in
gas property. Upon its incorporation on August 31, 2000, the
Company issued 2,600,000 shares of common stock in exchange for
the capital contributions previously made to the joint venture
and for the commitment by the shareholders to pay the Company's
40% share of the costs to work over one well and drill and
complete two wells on the Company's property. The estimated
future development costs to the Company's shareholders of
$134,000 was estimated by an independent engineer and has been
accounted for as an estimated receivable from stockholders. Any
changes to the estimated future development costs will be
reflected in the financial statements as changes to both the
estimated receivable from stockholders and additional paid-in
capital. In addition, if the work is never completed, the
estimated receivable from stockholders and the corresponding
additional paid-in capital will be eliminated. There is no
deadline for the work to be completed; however, management
anticipates that the work will be complete by June 30, 2001.

During the period from March 3, 2000 (date of inception) through
December 31, 2000, the officers/stockholders of the Company
contributed services and the use of office space to the Company
with an estimated value of $100,000.

NOTE 4 - RELATED PARTY TRANSACTIONS

As discussed in Note 3, there was an estimated receivable from
stockholders in the amount of $134,000 at December 31, 2000.

As discussed in Note 2, two stockholders loaned the Company
$25,000. The loan is short-term with no due date and no interest
rate.

                                F-9

NOTE 5 - INCOME TAXES

The Company has paid no federal or state income taxes since its
incorporation. As of December 31, 2000, the Company had net
operating loss carry forwards for federal income tax reporting
purposes of $46,763 which, if unused, will expire in  2020. The
tax effect of the operating loss carry forwards at December 31,
2000, is as follows:

       Operating loss carry forwards             $  17,443
       Valuation allowance                         (17,443)
                                                 ---------
       Total Deferred Tax Assets                 $       -
                                                 =========

The following is a reconciliation of the income tax computed
using the federal statutory rate to the provision for income
taxes:

       Tax at federal statutory rate (34%)       $ (37,544)
	 State benefit, net of federal tax            (3,644)
       Loss during joint venture phase allocable
	   to partners in joint venture               23,745
       Change in valuation allowance                17,443
                                                 ---------
       Provision for Income Taxes                $       -
                                                 =========

NOTE 6 - OPERATING LEASE

On October 1, 2000, the Company entered into a one-year operating
lease agreement for office space. Under terms of the lease, the
Company pays $460 per month through October 1, 2001, at which
time it has the option to renew the lease for an additional year.
All payments through December 31, 2000, were made by a
shareholder and are included in the services and the use of
office space contributed by shareholders, and resulted in $1,380
of lease expense during the period March 3, 2000 through December
31, 2000. The future minimum lease payments under the operating
lease agreement as of December 31, 2000 consist of $4,140 due
during the year ending December 31, 2001.

NOTE 7 - SUBSEQUENT EVENT

Effective January 12, 2001, the Securities and Exchange
Commission approved an initial public offering of the Company's
common stock. The offering was completed during January 2001. The
proceeds from the offering totaled $200,000, before offering
costs, and were received upon the issuance of 800,000 shares of
common stock.

Capitalized Costs Relating to Oil and Gas Producing Activities at
December 31, 2000:

  Proved gas properties                           $ 61,174
  Less accumulated depletion                          (263)
                                                  --------
     Net Capitalized Costs                        $ 60,911
                                                  ========

Costs Incurred in Oil and Gas Producing Activities for the Period
from March 3, 2000 through December 31, 2000

  Acquisition of proved properties                $ 61,174
                                                  ========

Results of Operations for Oil and Gas Producing Activities for
the Period from March 3, 2000 through December 31, 2000

  Gas revenues                                    $  2,424
  Production costs                                    (263)
  Depletion                                           (263)
                                                  --------
     Results of Oil and Gas Producing Operations  $  1,898
                                                  ========

Reserve  Information  -  The following estimates  of  proved  and
proved  developed  reserve  quantities and  related  standardized
measure  of discounted net cash flow are estimates only,  and  do
not purport to reflect realizable values or fair market values of
the  Company's  reserves.  The Company  emphasizes  that  reserve
estimates  are  inherently imprecise and that  estimates  of  new
discoveries  are more imprecise than those of producing  oil  gas
properties. Accordingly, these estimates are expected  to  change
as  future  information becomes available. All of  the  Company's
reserves are located in the United States.

Proved  reserves are estimated reserves of crude  oil  (including
condensate   and   natural  gas  liquids)  that  geological   and
engineering  data  demonstrate with reasonable  certainty  to  be
recoverable in future years from known reservoirs under  existing
economic and operating conditions. Proved developed reserves  are
those expected to be recovered through existing wells, equipment,
and operating methods.

The  standardized measure of discounted future net cash flows  is
computed by applying period-end prices of oil (with consideration
of  price  changes  only  to the extent provided  by  contractual
arrangements)  to the estimated future production of  proved  oil
reserves,  less estimated future expenditures (based on  year-end
costs)  to  be  incurred in developing and producing  the  proved
reserves,  less  estimated future income tax expenses  (based  on
year-end  statutory tax rates, with consideration of  future  tax
rates already legislated) to be incurred on pretax net cash flows
less  tax  basis  of  the properties and available  credits,  and
assuming  continuation  of  existing  economic  conditions.   The
estimated future net cash flows are then discounted using a  rate
of  10  percent  a year to reflect the estimated  timing  of  the
future cash flows.

                                F-12

                       ARENA RESOURCES, INC.
                  (A Development Stage Company)
   SUPPLEMENTAL INFORMATION ON OIL AND GAS PRODUCING ACTIVITIES
                          (UNAUDITED)

                                                              Gas
                                                             (MCF)
                                                           ----------
Proved Developed and Undeveloped Reserves
  Balance - March 3, 2000                                           -
  Purchases of minerals in place                              478,909
  Production                                                     (646)
                                                           ----------
     Balance - December 31, 2000                              478,263
                                                           ==========
Proved Developed Reserves
  March 3, 2000                                                     -
                                                           ==========
  December 31, 2000                                            60,034
                                                           ==========

Standardized Measure of Discounted Future Net Cash Flows
 at December 31, 2000
  Future cash inflows                                      $1,984,790
  Future production and development costs                    (457,684)
  Future income tax expenses                                 (498,506)
                                                           ----------
  Future Net Cash Flows                                     1,028,600

  10% annual discount for estimated timing of cash flows     (285,148)
                                                           ----------
  Standardized Measures of Discounted Future Net Cash Flows
   Relating to Proved Oil and Gas Reserves                 $  743,452
                                                           ==========

The  following  are  the  principal  sources  of  change  in  the
standardized  measure of discounted future net cash flows  during
the period from March 3, 2000 through December 31, 2000:

  Purchase of minerals in place                            $1,037,889
  Sales of gas produced, net of production costs               (2,161)
  Net changes in prices and production costs                   28,886
  Change in estimated timing of cash flows                    (48,964)
  Accretion of discount                                        88,113
  Net change in income taxes                                 (360,311)
                                                           ----------
  Net Change During the Period                             $  743,452
                                                           ==========

                                F-12