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November 2017 Water Forum Presentation – Approach Resources, Inc.

Approach Resources, Inc. · Nov 6, 2017 · 23 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. November 2017 Water Forum Presentation – Approach Resources, Inc. – slide 1
    Sustainability of Wolfcamp Development Water Recycling and Maximizing Infrastructure J. Ross Craft Chairman and Chief Executive Officer Approach Resources Inc. Executive Oil Conference Water Forum November 6, 2017
  2. November 2017 Water Forum Presentation – Approach Resources, Inc. – slide 2
    Solid foundation for long-term value APPROACH RESOURCES OVERVIEW ASSET OVERVIEW Enterprise value 600 MM1 High-quality reserve base2 165.5 MMBoe proved reserves 62% liquids, 31% oil Permian Basin core operating area 124,000…
  3. November 2017 Water Forum Presentation – Approach Resources, Inc. – slide 3
    Bolt-0n acquisition highlights Transaction Overview Current production of approximately 550 Boe/d (48% oil) Total acreage post acquisition with existing field infrastructure and facilities 166,625 gross (150,140 net)(1) Estimated PDP…
  4. November 2017 Water Forum Presentation – Approach Resources, Inc. – slide 4
    Long history of operating in Midland Basin WELLS DRILLED TO DATE 140 Drilled more than 750 wells in Midland Basin since 2004 120 116 564 Vertical gas wells & 187 Horizontal oil wells 100 91 One of the first-movers in the 81…
  5. November 2017 Water Forum Presentation – Approach Resources, Inc. – slide 5
    Approach continues to achieve one of the lowest cost structures in the Permian Basin AREX D&C Historical Track Record ( MM) 9.0 8.6 8.0 54% reduction since 2011 7.0 7.0 6.56 6.0 5.8 5.5 5.0 4.5 4.02 4.0 3.5 3.0…
  6. November 2017 Water Forum Presentation – Approach Resources, Inc. – slide 6
    LOE cost reductions driven by water handling infrastructure and field-level operating efficiencies AREX LOE Historical Track Record (/Boe) 7.00 6.48 6.00 0.99 5.24 5.00 0.95 1.69 4.24 4.05 4.00 0.79 0.62 Pumpers & 0.71…
  7. November 2017 Water Forum Presentation – Approach Resources, Inc. – slide 7
    Results outperform type curve Executive Oil Conference Water Forum November 6, 2017 8
  8. November 2017 Water Forum Presentation – Approach Resources, Inc. – slide 8
    Approach asset base is unique due to low capital intensity Executive Oil Conference Water Forum November 6, 2017 9
  9. November 2017 Water Forum Presentation – Approach Resources, Inc. – slide 9
    Strategic midstream asset Receipt Point Reagan Irion PW Receipt Point Crockett Schleicher DCP Tap PW BLK 50 Receipt Point CS 1 Compressor 228HA Receipt 204HA Point PW LACT PW Receipt Point NORTH & CENTRAL…
  10. November 2017 Water Forum Presentation – Approach Resources, Inc. – slide 10
    Midland Basin significant shortage of frac water supply 450 400 350 Mining Water Allocated (MMBbls) 300 Potential Water Needed for Wolfcamp Development Wolfcamp oil shale Water (MMBbls) development using 250 mining…
  11. November 2017 Water Forum Presentation – Approach Resources, Inc. – slide 11
    Midland Basin significant cost for sourcing, transporting & disposing frac water Water Sourcing Well 4-5 per barrel 1,200,000 - 1,500,000 (2012 early 2015) per well Lease Road Road damage Local Highway Air pollution…
  12. November 2017 Water Forum Presentation – Approach Resources, Inc. – slide 12
    Produced / flowback water quality Can produced / flowback water be used for fracing after processing 4.0 Total dissolved solids (TDS) Relative Fluid Sensitivity for Wolfcamp Will not impede gelling hydration Well 1 - 20% Clay Well 2…
  13. November 2017 Water Forum Presentation – Approach Resources, Inc. – slide 13
    AREX flowback and produced water recycle facility Designed one of the highest industry KPI for water treatment Bacteria Sulfates Heavy metals Fines Best practice for water conservation and improving water use efficiency…
  14. November 2017 Water Forum Presentation – Approach Resources, Inc. – slide 14
    AREX flowback and produced water recycle facility Flowback / Produced Water 32,000 32,000 BBL BBL 20 Treated Flowback & Produced Frac Water Supply Line Treated Treated Water Water Tank Tank 8 Low Chloride Treated Frac…
  15. November 2017 Water Forum Presentation – Approach Resources, Inc. – slide 15
    AREX water recycling facility successfully implemented Started up in March 2015 Ramped up during April 2015 Recycled up to 100% of AREX daily flowback/produced water volumes More than 2.2 million barrels of water treated 30,000 More…
  16. November 2017 Water Forum Presentation – Approach Resources, Inc. – slide 16
    Significant cost saving for using recycled water for fracing Cost for recycled water Flowback / Producing Well 0.50 - 0.80 per barrel Waste Water Cost saving for using recycled water & existing infrastructures 0.05 - 0.10 3.20 -…
  17. November 2017 Water Forum Presentation – Approach Resources, Inc. – slide 17
    Well pads serviced by centralized compressor and shared gas lift system efficient and significant cost saving Wells 500 ft CPF 1 CPF 2 CPF 3 CPF 4 CPF 5 CPF 6 CPF 7 CPF 8 CPF 9 CPF 10 Low Pressure Low Pressure Gathering…
  18. November 2017 Water Forum Presentation – Approach Resources, Inc. – slide 18
    Approach asset base is unique due to low capital intensity Executive Oil Conference Water Forum November 6, 2017 19
  19. November 2017 Water Forum Presentation – Approach Resources, Inc. – slide 19
    Approach gas lift infrastructure may lead to higher well recovery Wells with Positive Production Impact Recent pilot test BLK 45 Injection Wells indicates that gas can be North reinjected back into the producing wells to increase…
  20. November 2017 Water Forum Presentation – Approach Resources, Inc. – slide 20
    Approach pilot test results - 29 well injection study Lease: Blk. 45 North Total BOE Injection Gas 10,000 18,000 8 of the 21 wells were temporarily converted to injectors during Hurricane Harvey downtime. 124 MMcf of field gas…
  21. November 2017 Water Forum Presentation – Approach Resources, Inc. – slide 21
    Approach pilot test results - 31 well injection study Lease: Blk. 45 South Total BOE Injected Gas Volume 10,000 14,000 8 of the 23 wells were temporarily converted to injectors during Hurricane Harvey downtime. 129 MMcf of gas…
  22. November 2017 Water Forum Presentation – Approach Resources, Inc. – slide 22
    Approach pilot test results - 15 well injection study Lease: Baker South Total BOE Gas Injection 10,000 12,000 5 of the 10 wells were temporarily converted to injectors during Hurricane Harvey downtime. 44 MMcf of field gas was…
  23. November 2017 Water Forum Presentation – Approach Resources, Inc. – slide 23
    Summary An estimated 20 billion barrels of water is required to develop this significant discovery. However, water availability is limited in the Midland Basin due to 1) limited rainfall, 2) high evaporation rate, 3) low reservoir…

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