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April 2018 Investor Presentation – Approach Resources, Inc.

Approach Resources, Inc. · Apr 9, 2018 · 24 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. April 2018 Investor Presentation – Approach Resources, Inc. – slide 1
    Oil & Gas Investment Symposium New York APRIL 9, 2018
  2. April 2018 Investor Presentation – 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 WOLFCAMP SHALE RESOURCES PLAY 60% liquids, 28% oil 582.2 MM PV-10…
  3. April 2018 Investor Presentation – Approach Resources, Inc. – slide 3
    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)…
  4. April 2018 Investor Presentation – Approach Resources, Inc. – slide 4
    Strong track record of efficiently managing through price cycles Production Growth Reserve Growth 16.0 200 180 14.0 160 12.0 140 10.0 120 MBOE MMBOE 8.0 100 80 6.0 60 4.0 40 2.0 20 0.0 0 NG Liquid NG…
  5. April 2018 Investor Presentation – Approach Resources, Inc. – slide 5
    2017 Highlights 29% +37% Decrease in Increase in Type-Curve Enhanced Completion Techniques Net Debt to EBITDA 2Nd Qtr. 2015 2017 wells tracking or above 700 MBOE TC +44% +16% Increase in operating cash flow PDP Reserve Growth…
  6. April 2018 Investor Presentation – Approach Resources, Inc. – slide 6
    Enhanced Completion Techniques results in a 37% improvement in well EURs 2Q 2015 4Q 2017 (36 Wolfcamp A, B & C Wells) All wells normalized to 7,500 lateral and for operation downtime Oil & Gas Investment Symposium April 9,…
  7. April 2018 Investor Presentation – Approach Resources, Inc. – slide 7
    AREX is benefiting from commodity price appreciation 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 unhedged cash margin1 was 20.00…
  8. April 2018 Investor Presentation – Approach Resources, Inc. – slide 8
    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 Realized Price Price 24.36 Hedged Price 24.14…
  9. April 2018 Investor Presentation – Approach Resources, Inc. – slide 9
    Oil & Gas Investment Symposium April 9, 2018 10
  10. April 2018 Investor Presentation – Approach Resources, Inc. – slide 10
    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…
  11. April 2018 Investor Presentation – Approach Resources, Inc. – slide 11
    Approach continues to achieve one of the lowest cost structures in the Permian Basin AREX D&C Historical Track Record ( MM) Well cost Type Curve 800 10.0 50% reduction in well cost and 55% improvement in EUR since 2011 8.6 +700…
  12. April 2018 Investor Presentation – Approach Resources, Inc. – slide 12
    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…
  13. April 2018 Investor Presentation – Approach Resources, Inc. – slide 13
    2018 operational activity forecast 1 2018 Completion Schedule 2018 Guidance Highlights 8 2018 organic oil growth of 8% YoY at midpoint of guidance 7 Efficient drilling program utilizes average 6 lateral length of 7,500 Spud…
  14. April 2018 Investor Presentation – Approach Resources, Inc. – slide 14
    Resilient asset in lower, volatile price environment Asset Characteristics Value in Portfolio Low-decline base Stable source of operating cash flow Flexible development options Scalable growth in response to higher commodity price…
  15. April 2018 Investor Presentation – Approach Resources, Inc. – slide 15
    Investment Highlights Concentrated geographic footprint in Large scale infrastructure system results in Permian Basin liquids-rich play, 100% sustainable low cost operating expense & operated 149,000 net acres, 181.5 industry leading D&C…
  16. April 2018 Investor Presentation – Approach Resources, Inc. – slide 16
    Appendix
  17. April 2018 Investor Presentation – Approach Resources, Inc. – slide 17
    2018 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…
  18. April 2018 Investor Presentation – Approach Resources, Inc. – slide 18
    Balance sheet detail at December 31, 2017 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%…
  19. April 2018 Investor Presentation – Approach Resources, Inc. – slide 19
    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…
  20. April 2018 Investor Presentation – Approach Resources, Inc. – slide 20
    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…
  21. April 2018 Investor Presentation – Approach Resources, Inc. – slide 21
    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)…
  22. April 2018 Investor Presentation – Approach Resources, Inc. – slide 22
    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…
  23. April 2018 Investor Presentation – Approach Resources, Inc. – slide 23
    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…
  24. April 2018 Investor Presentation – Approach Resources, Inc. – slide 24
    Contact information SUZANNE OGLE Vice President Investor Relations & Corporate Communication 817.989.9000 irapproachresources.com www.approachresources.com

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