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Horizontal Drilling in the Southern Midland Basin – Approach Resources, Inc.

Approach Resources, Inc. · Mar 18, 2013 · 22 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. Horizontal Drilling in the Southern Midland Basin – Approach Resources, Inc. – slide 1
    Horizontal Drilling in the Southern Midland Basin KEYS TO MAXIMIZING THE RESOURCE POTENTIAL OF THE WOLFCAMP OIL SHALE PLAY
  2. Horizontal Drilling in the Southern Midland Basin – Approach Resources, Inc. – slide 2
    Company Overview AREX OVERVIEW ASSET OVERVIEW Enterprise value 1.1 BN High quality reserve base 95.5 MMBoe proved reserves 99% Permian Basin Permian core operating area 167,000 gross (148,000 net) acres 1+ BnBoe gross, unrisked…
  3. Horizontal Drilling in the Southern Midland Basin – Approach Resources, Inc. – slide 3
    Reserve Growth RESERVE GROWTH OIL RESERVE GROWTH Strong HZ Wolfcamp Results; 120 40 Prepare for Large-Scale Development 100 35 30 80 25 Began HZ 60 20 Wolfcamp Pilot Program 40 15 10 Announced 20 Launched Vertical…
  4. Horizontal Drilling in the Southern Midland Basin – Approach Resources, Inc. – slide 4
    Production Growth PRODUCTION GROWTH OIL PRODUCTION GROWTH 9.0 1200 8.0 1000 7.0 6.0 800 5.0 600 4.0 3.0 400 2.0 200 1.0 0.0 0 2004 2005 2006 2007 2008 2009 2010 2011 2012 2009 2010 2011 2012 Natural Gas (MBoe/d) Oil & NGLs…
  5. Horizontal Drilling in the Southern Midland Basin – Approach Resources, Inc. – slide 5
    AREX Wolfcamp Oil Shale Resource Play Large, primarily contiguous acreage position Oil-rich, multiple pay zones 167,000 gross (148,000 net) acres Low acreage cost 500 per acre HZ Wolfcamp resource potential up 300%+ 940+ MMBoe…
  6. Horizontal Drilling in the Southern Midland Basin – Approach Resources, Inc. – slide 6
    Wolfcamp Oil Shale Could Be One of The Largest Oil Discoveries in US 1,000,000 acres 215,000 acres 7 billion barrel equivalent recoverable Approximately size of Prudhoe Bay assuming 75% of 1 million acres Wolfcamp oil Field, which is…
  7. Horizontal Drilling in the Southern Midland Basin – Approach Resources, Inc. – slide 7
    Wolfcamp Oil Shale Play WOLFCAMP SHALE WIDESPREAD, THICK, CONSISTENT & REPEATABLE 8
  8. Horizontal Drilling in the Southern Midland Basin – Approach Resources, Inc. – slide 8
    Wolfcamp World Class Source Rock with Desirable Shale Properties Good Richness Fair Poor Excellent TOC (%) 210…
  9. Horizontal Drilling in the Southern Midland Basin – Approach Resources, Inc. – slide 9
    Storage Space for Oil & Gas in the Wolfcamp Shale Open / partially open fractures Healed fractures IMAGE LOG from lateral section of horizontal well 10
  10. Horizontal Drilling in the Southern Midland Basin – Approach Resources, Inc. – slide 10
    Misconception vs. Facts Misconception: Wells are gassier as the play moves southward Gassier wells are historical Canyon, Strawn and Ellenburger wells The Wolfcamp Shale is located in peak oil and early wet gas window. Wolfcamp…
  11. Horizontal Drilling in the Southern Midland Basin – Approach Resources, Inc. – slide 11
    Wolfcamp Stacked Pay Zones HZ TARGETS & RESOURCE POTENTIAL AREX Baker A 112 LLD OHMM DPHI BVW 0.2 20 200 2,000 0.3 -0.1 0.2 0 GR API MSFL OHMM NPHI Free Hydrocarbon 0 200 0.2 20 200 2,000 0.3 -0.1 0.2 0 HZ WOLFCAMP Wolfcamp…
  12. Horizontal Drilling in the Southern Midland Basin – Approach Resources, Inc. – slide 12
    Wolfcamp A - Microseismic Data Map View Frac Width 500 600 X-Section View Looking West Frac Height 300 350 13
  13. Horizontal Drilling in the Southern Midland Basin – Approach Resources, Inc. – slide 13
    Wolfcamp B - Microseismic Data Map View Frac Width 500 600 X-Section View Looking West Frac Height 300 350 14
  14. Horizontal Drilling in the Southern Midland Basin – Approach Resources, Inc. – slide 14
    Wolfcamp C - Microseismic Data Map View Frac Width 500 600 X-Section View Looking West Frac Height 300 350 15
  15. Horizontal Drilling in the Southern Midland Basin – Approach Resources, Inc. – slide 15
    Multiple Lateral Stacking - Potential Scenarios X-section View (heel to toe) 16
  16. Horizontal Drilling in the Southern Midland Basin – Approach Resources, Inc. – slide 16
    Multiple Lateral Stacking Effective Frac Volumes X-section View (heel to toe) Allows maximum volumes of shale reservoir to be fraced 17
  17. Horizontal Drilling in the Southern Midland Basin – Approach Resources, Inc. – slide 17
    Preferred Development Scenarios Preferred Development to Maximize Section 1 Recovery Factor & Minimize Surface Damage Section 2 Section 3 18
  18. Horizontal Drilling in the Southern Midland Basin – Approach Resources, Inc. – slide 18
    AREX HZ Wolfcamp Activity Reagan Irion U 50 A 603HA Pangea West U 50 A 601HC Crockett Schleicher PW 6533H PW 6507H 18,000 gross acres PW 6601H Pad drilling with A/B and A/C stacked laterals 3-D Seismic acquisition completed.…
  19. Horizontal Drilling in the Southern Midland Basin – Approach Resources, Inc. – slide 19
    HZ Wolfcamp Well Performance CONTINUED STRONG WELLS RESULTS TRACKING ABOVE THE TYPE CURVE 1,200 B Bench Wells A Bench Wells 1,100 45 A 701H 45 F 2303H PW 6601H 45 D 902H 45 F 2304H PW 6602H 45 C 803H 45 A 703H 45 D 905H 1,000 45 B…
  20. Horizontal Drilling in the Southern Midland Basin – Approach Resources, Inc. – slide 20
    AREX HZ Wolfcamp Economics Horizontal BTAX IRR SENSITIVITIES Play Type Wolfcamp 80 Avg. EUR (gross) 450 MBoe 70 60 Targeted Well Cost 5.5 MM 50 IRR (%) 40 Potential Locations 2,096 30 20 Gross Resource 940+ MMBoe 10…
  21. Horizontal Drilling in the Southern Midland Basin – Approach Resources, Inc. – slide 21
    Infrastructure for Large-Scale Development Reagan Irion Pangea Crockett Schleicher West North & Central Pangea Reducing D&C Cost to 5.5 MM or lower South Pangea Reducing LOE Minimizing truck traffic and surface disturbance…
  22. Horizontal Drilling in the Southern Midland Basin – Approach Resources, Inc. – slide 22
    Summary THE WOLFCAMP IS a world class source rock located in peak oil generation and early gas generation window THE WOLFCAMP HAS storage space, including matrix porosity, natural fractures, and organic materials mineral…

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