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Q2 2015 Results – Approach Resources, Inc.

Approach Resources, Inc. · Aug 5, 2015 · 19 slides

Investor presentation from the Shale Experts oil & gas presentation and slide database. Every page is imaged and its text indexed for search across operators, plays, basins and time.

Slides

  1. Q2 2015 Results – Approach Resources, Inc. – slide 1
    Second Quarter 2015 Results AUGUST 5, 2015
  2. Q2 2015 Results – Approach Resources, Inc. – slide 2
    Company overview AREX OVERVIEW ASSET OVERVIEW Enterprise value 671MM High-quality reserve base 146 MMBoe proved reserves 66% Liquids, 38% oil 1.4 BN proved PV-10 Permian core operating area 143,000 gross (130,000 net) acres 1+…
  3. Q2 2015 Results – Approach Resources, Inc. – slide 3
    2Q15 Key highlights 2Q15 HIGHLIGHTS 2Q15 SUMMARY RESULTS Drilled 9 and completed 10 HZ wells Production (MBoe/d) 15.3 % Oil 36% Continued improvement on already best- % Total liquids 65% in-class HZ well costs Average realized price…
  4. Q2 2015 Results – Approach Resources, Inc. – slide 4
    2Q15 Operating highlights OPERATING HIGHLIGHTS Delivering Total record quarterly production 15.3 MBoe/d (up 8% QoQ) Production Oil production 499 MBbl (up 1% QoQ) Growth Successfully implemented cost reduction initiatives, current…
  5. Q2 2015 Results – Approach Resources, Inc. – slide 5
    2Q15 Financial highlights FINANCIAL HIGHLIGHTS Revenues (pre-hedge) of 38.6 MM, 47.9 MM with hedges Heightened Adjusted net loss (non-GAAP) of 2.8 MM, or 0.07 per diluted share Focus on Cutting Every per-unit cash cost metric has…
  6. Q2 2015 Results – Approach Resources, Inc. – slide 6
    Lowest cost structure in the Permian Basin AREX LOE Historical Track Record (/Boe) Permian Peer LOE (/Boe) 8.00 14.0 13.26 7.36 7.00 6.65 12.0 11.23 6.18 5.87 6.00 5.55 10.0 9.63 9.03 4.97 8.78 5.00 8.14 7.83 7.58 8.0 4.00 6.0…
  7. Q2 2015 Results – Approach Resources, Inc. – slide 7
    AREX Flowback and Produced Water Recycle Facility 32,000 32,000 BBL 20 Treated Flowback & Produced Frac Water Supply Line BBL Treated Treated Water Water 2 MM Bbls flowback and Tank Tank 8 Low Chloride Treated Frac Water…
  8. Q2 2015 Results – Approach Resources, Inc. – slide 8
    Strong, simple balance sheet At June 30, 2015, we had a 1 billion senior secured AREX Liquidity and Capitalization revolving credit facility in place, with aggregate lender AREX Capitalization as of 6/30/2015 ( MM) commitments of 450…
  9. Q2 2015 Results – Approach Resources, Inc. – slide 9
    Valuation and leverage well supported by proved reserve base 12/31/2014 reserve summary prepared by DeGolyer and MacNaughton Replaced 819% of produced reserves at a drill-bit F&D cost of 8.94 per Boe1 Total proved reserves up 27%…
  10. Q2 2015 Results – Approach Resources, Inc. – slide 10
    D&C Cost reductions will significantly improve profitability 70% 4.0MM D&C 60% 4.5MM D&C 5.0MM D&C 50% 40% IRR (%) 30% 20% 10% 0% 40 50 60 70 80 90 Realized Oil Price (/Bbl) Note: HZ Wolfcamp…
  11. Q2 2015 Results – Approach Resources, Inc. – slide 11
    Established infrastructure in place is critical to low cost structure Reagan Irion Pangea Crockett Schleicher West Recently completed water recycling facility 329,000 Bbl Capacity North & Central Pangea South Benefits of…
  12. Q2 2015 Results – Approach Resources, Inc. – slide 12
    Current hedge position Based on the midpoint of updated 2015 guidance, approximately 85% of forecasted 3Q15-4Q15 oil production and 32% of forecasted natural gas production are hedged at weighted average floor prices of 75.93/Bbl and…
  13. Q2 2015 Results – Approach Resources, Inc. – slide 13
    Production and expense guidance Updated 2015 Guidance Production Oil (MBbls) 1,900 1,975 NGLs (MBbls) 1,575 1,625 Natural Gas (MMcf) 11,550 11,700 Total (MBoe) 5,400 5,550 Operating costs and expenses (per Boe) Lease operating…
  14. Q2 2015 Results – Approach Resources, Inc. – slide 14
    Appendix
  15. Q2 2015 Results – Approach Resources, Inc. – slide 15
    Adjusted net (loss) income (unaudited) ADJUSTED NET (LOSS) INCOME (UNAUDITED) The amounts included in the calculation of adjusted net (loss) income and adjusted net (loss) income per diluted share below were computed in accordance with…
  16. Q2 2015 Results – Approach Resources, Inc. – slide 16
    EBITDAX (unaudited) EBITDAX (UNAUDITED) The amounts included in the calculation of EBITDAX were computed in accordance with GAAP. EBITDAX is not a measure of net income or cash flow as determined by GAAP. EBITDAX is presented herein and…
  17. Q2 2015 Results – Approach Resources, Inc. – slide 17
    Cash operating expenses Cash operating expenses We define cash operating expenses as operating expenses, excluding (1) exploration expense, (2) depletion, depreciation and amortization expense and (3) share-based compensation expense.…
  18. Q2 2015 Results – Approach Resources, Inc. – slide 18
    F&D costs (unaudited) All-in finding and development (F&D) costs are calculated by dividing the sum of F&D Cost reconciliation property acquisition costs, exploration costs and development costs for the year by the sum of reserve…
  19. Q2 2015 Results – Approach Resources, Inc. – slide 19
    PV-10 (unaudited) The present value of our proved reserves, discounted at 10% (PV-10), was estimated at 1.4 billion at December 31, 2014, and was calculated based on the first-of-the-month, twelve-month average prices for oil, NGLs and…

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