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4Q and Full Year 2017 – Approach Resources, Inc.

Approach Resources, Inc. · Mar 9, 2018 · 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. 4Q and Full Year 2017 – Approach Resources, Inc. – slide 1
    Fourth Quarter & Full-Year 2017 Results MARCH 9, 2018
  2. 4Q and Full Year 2017 – Approach Resources, Inc. – slide 2
    Solid foundation for long-term value APPROACH RESOURCES OVERVIEW ASSET OVERVIEW Enterprise value 656 MM1 High-quality reserve base 181.5 MMBoe proved reserves2 60% liquids, 28% oil 582.2 MM PV-10 (non-GAAP) at NYMEX strip3…
  3. 4Q and Full Year 2017 – Approach Resources, Inc. – slide 3
    Recent catalysts and execution focused on value creation - provide momentum in 2018 and beyond GenX frac design driving well performance, type curve increased 37% to 700 MBoe Increased YE 2017 proved reserves by 16% Extension of…
  4. 4Q and Full Year 2017 – Approach Resources, Inc. – slide 4
    GenX frac design driving well performance, new AREX type curve 700 MBoe Fourth Quarter and Full Year 2017 Results March 9, 2018 5
  5. 4Q and Full Year 2017 – Approach Resources, Inc. – slide 5
    2017 Completions All wells normalized to a 7,500 lateral and for operational downtime
  6. 4Q and Full Year 2017 – Approach Resources, Inc. – slide 6
  7. 4Q and Full Year 2017 – Approach Resources, Inc. – slide 7
    Centralized infrastructure drives capital and operating efficiencies Receipt Point Reagan Irion PANGEA WEST PW Receipt Point Crockett Schleicher DCP Tap PW BLK 50 Receipt Point CS 1 Compressor 228HA Receipt 204HA Point…
  8. 4Q and Full Year 2017 – Approach Resources, Inc. – slide 8
    Full-year 2017 operating and financial highlights Operating Highlights Financial Highlights Drilled 13 HZ wells, completed 9 HZ Strengthened balance sheet and wells reduced long-term debt by 127.1 million 10 HZ wells waiting…
  9. 4Q and Full Year 2017 – Approach Resources, Inc. – slide 9
    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 4.23 4.00 0.79 0.62 0.67 Pumpers &…
  10. 4Q and Full Year 2017 – Approach Resources, Inc. – slide 10
    Approach continues to achieve one of the lowest cost structures in the Permian Basin AREX D&C Historical Track Record ( MM) Well cost EUR 50% reduction in well cost and 55% improvement in EUR since 2011 800 10 8.6 9 700 700 8…
  11. 4Q and Full Year 2017 – Approach Resources, Inc. – slide 11
    The business is anchored by long-lived, low-cost proved reserve base Year-end 2017 proved reserves totaled 181.5 MMBoe Reserve replacement ratio of 748% of produced reserves1 Total proved reserves up 16% YoY, proved PV-10 (non-GAAP)…
  12. 4Q and Full Year 2017 – Approach Resources, Inc. – slide 12
    AREX is benefiting from commodity price appreciation across all product streams Change in unhedged realized prices ( per Boe) 2017 Production Commodity Mix 60.00 26% 39% 50.00 40.00 35% Oil NGLs Natural Gas 30.00 2017…
  13. 4Q and Full Year 2017 – Approach Resources, Inc. – slide 13
    Cost reductions and improvement in commodity prices are translating into expanding profit margins Profit margin per Boe 35.00 30.00 26.71 26.71 Realized 25.67 Realized 24.36 Realized Price Price Hedged Price 24.14…
  14. 4Q and Full Year 2017 – Approach Resources, Inc. – slide 14
    Balance sheet detail AREX Liquidity and Capitalization AREX Capitalization as of 12/31/2017 ( MM) Interest coverage ratio of 2.7x, above minimum 1.5x Cash 0.0 covenant requirement Credit Facility 289.3 7.0% Senior Notes due 2021…
  15. 4Q and Full Year 2017 – Approach Resources, Inc. – slide 15
    Current hedge summary Commodity and Period Contract Type Volume Transacted Contract Price Crude Oil January 2018 December 2018 Swap 300 Bbls/day 50.00/Bbl January 2018 March 2018 Collar 1,000 Bbls/day 50.00/Bbl - 55.05/Bbl…
  16. 4Q and Full Year 2017 – Approach Resources, Inc. – slide 16
    Production and expense guidance Annual Guidance Production Guidance: Oil Production (MBbls) 1,150 1,250 NGLs (MBbls) 1,450 1,550 Natural Gas (MMcf) 9,600 10,200 Total 4,200 4,500 Cash operating costs (per Boe): Lease…
  17. 4Q and Full Year 2017 – Approach Resources, Inc. – slide 17
    Summary Concentrated geographic footprint in Permian Basin oil/liquids-rich play 149,000 net, primarily contiguous acres, 100% operated Stable leasehold, majority of acreage is HBP Balanced commodity mix allows AREX to benefit from…
  18. 4Q and Full Year 2017 – Approach Resources, Inc. – slide 18
    Appendix
  19. 4Q and Full Year 2017 – Approach Resources, Inc. – slide 19
    Adjusted net loss (unaudited) The amounts included in the calculation of adjusted net loss and adjusted net loss per diluted share below were computed in accordance with GAAP. We believe adjusted net loss and adjusted net loss per…
  20. 4Q and Full Year 2017 – Approach Resources, Inc. – slide 20
    EBITDAX (unaudited) We define EBITDAX as net income (loss), plus (1) exploration expense, (2) depletion, depreciation and amortization expense, (3) share-based compensation expense, (4) non-cash fair value (gain) loss on derivatives, (5)…
  21. 4Q and Full Year 2017 – Approach Resources, Inc. – slide 21
    Unhedged cash margin (unaudited) We define unhedged cash margin as revenue, less cash operating expenses. We define cash operating expenses as operating expenses, excluding (1) exploration expense, (2) depletion, depreciation and…
  22. 4Q and Full Year 2017 – Approach Resources, Inc. – slide 22
    PV-10 (unaudited) The present value of our proved reserves, discounted at 10% (PV-10), was estimated at 521 million at December 31, 2017, and was calculated based on the first-of-the-month, twelve-month average prices for oil, NGLs and…

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