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Q4 2015 and Full Year – Approach Resources, Inc.

Approach Resources, Inc. · Mar 3, 2016 · 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. Q4 2015 and Full Year – Approach Resources, Inc. – slide 1
    Fourth Quarter & Full-Year 2015 Results MARCH 3, 2016
  2. Q4 2015 and Full Year – Approach Resources, Inc. – slide 2
    Company overview AREX OVERVIEW ASSET OVERVIEW Enterprise value 541MM High-quality reserve base 167 MMBoe proved reserves 63% Liquids, 33% oil 504 MM proved PV-10 (non-GAAP) Permian core operating area 138,000 gross (126,000 net)…
  3. Q4 2015 and Full Year – Approach Resources, Inc. – slide 3
    Fourth quarter and full-year 2015 operating highlights FY 2015 Q4 2015 Drilled 20 HZ wells and completed 28 HZ No D&C activity during the quarter given wells sustained low commodity prices Solid execution Total production 5,532 MBoe…
  4. Q4 2015 and Full Year – Approach Resources, Inc. – slide 4
    The business is anchored by long-lived, low-cost proved reserve base 12/31/2015 reserve summary prepared by DeGolyer and MacNaughton (D&M) Replaced 603% of produced reserves at a drill-bit F&D cost (non-GAAP) of 4.32 per Boe1 Total…
  5. Q4 2015 and Full Year – Approach Resources, Inc. – slide 5
    Fourth quarter and full-year 2015 financial highlights FY 2015 Q4 2015 Revenues of 131.3 MM Revenues of 25.5 MM LOE of 5.24/Boe, a 19% reduction over LOE of 5.44/Boe, 18% reduction over prior year prior year Maximizing Cash G&A of…
  6. Q4 2015 and Full Year – Approach Resources, Inc. – slide 6
    Balance sheet detail At 12/31/2015 we had a 1 billion senior secured revolving AREX Liquidity and Capitalization credit facility in place, with aggregate lender commitments AREX Capitalization as of 12/31/2015 ( MM) and borrowing…
  7. Q4 2015 and Full Year – Approach Resources, Inc. – slide 7
    Lowest cost structure in the Permian Basin AREX LOE Historical Track Record (/Boe) 2015 Permian Peer LOE (/Boe) 8.00 14.0 7.36 12.99 7.00 6.65 12.0 6.18 5.87 6.00 5.55 5.44 10.0 9.51 4.97 5.04 8.84 5.00 7.83 7.71 8.0 7.46 7.34…
  8. Q4 2015 and Full Year – Approach Resources, Inc. – slide 8
    Enhanced completion design drives outperformance from 2015 wells 120,000 100,000 2015 Wolfcamp B&C bench completions Average completed lateral length = 6886' Cumulative Production (Boe) 80,000 60,000 40,000…
  9. Q4 2015 and Full Year – Approach Resources, Inc. – slide 9
    Strong track record of reserve and production growth RESERVE GROWTH PRODUCTION GROWTH MMBoe MBoe/d 180 16.0 160 14.0 140 12.0 120 10.0 100 8.0 80 60 6.0 40 4.0 20 2.0 0 2004 2005 2006 2007 2008 2009 2010 2011 2012…
  10. Q4 2015 and Full Year – Approach Resources, Inc. – slide 10
    Established infrastructure in place is critical to low cost structure Benefits of water recycling Reduce D&C cost Reduce LOE Increase project profit margin Minimize fresh water use, truck traffic and surface disturbance…
  11. Q4 2015 and Full Year – Approach Resources, Inc. – slide 11
    Current hedge position Based on the midpoint of current 2016 guidance, approximately 40% of forecasted oil production and 65% of forecasted natural gas production are hedged at weighted average prices of 51.33/Bbl and 2.60/MMBtu,…
  12. Q4 2015 and Full Year – Approach Resources, Inc. – slide 12
    Production and expense guidance 2016 Guidance Production Oil (MBbls) 1,300 1,400 NGLs (MBbls) 1,440 1,540 Natural Gas (MMcf) 9,600 10,100 Total (MBoe) 4,340 4,625 Cash operating costs (per Boe) Lease operating 5.00 - 6.00…
  13. Q4 2015 and Full Year – Approach Resources, Inc. – slide 13
    Appendix
  14. Q4 2015 and Full Year – Approach Resources, Inc. – slide 14
    AREX Wolfcamp acreage is offset by large operators APA REAGAN PXD ENDEAVOR PXD DVN APA BROADOAK IRION UPTON EAP EOG / EAP EOG HENRY ELEVATION SCHLEICHER DVN AREX AREX EP ENERGY Pangea West DVN AREX AREX EOG APA EP…
  15. Q4 2015 and Full Year – Approach Resources, Inc. – slide 15
    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 GAAP. We believe adjusted net (loss)…
  16. Q4 2015 and Full Year – Approach Resources, Inc. – slide 16
    EBITDAX (unaudited) We define EBITDAX as net (loss) income, plus (1) exploration expense, (2) depletion, depreciation and amortization expense, (3) share-based compensation expense, (4) impairment of oil and gas properties, (5)…
  17. Q4 2015 and Full Year – Approach Resources, Inc. – slide 17
    Cash operating expenses (unaudited) Cash operating expenses We define cash operating expenses as operating expenses, excluding (1) exploration expense, (2) depletion, depreciation and amortization expense, (3) share-based compensation…
  18. Q4 2015 and Full Year – 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. Q4 2015 and Full Year – Approach Resources, Inc. – slide 19
    Contact information SERGEI KRYLOV Executive Vice President & Chief Financial Officer 817.989.9000 irapproachresources.com www.approachresources.com

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