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4Q and FY 2018 Earnings Presentation – Approach Resources, Inc.

Approach Resources, Inc. · Mar 18, 2019 · 20 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 FY 2018 Earnings Presentation – Approach Resources, Inc. – slide 1
    Fourth Quarter & Full-Year 2018 Results MARCH 18, 2019
  2. 4Q and FY 2018 Earnings Presentation – Approach Resources, Inc. – slide 2
    Solid foundation for long-term value APPROACH RESOURCES OVERVIEW ASSET OVERVIEW Enterprise value 469 MM1 High-quality reserve base 180.1 MMBoe proved reserves2 60% liquids, 29% oil 761.8 MM proved PV-10 (non-GAAP) Permian Basin core…
  3. 4Q and FY 2018 Earnings Presentation – Approach Resources, Inc. – slide 3
    Full-year 2018 operating and financial highlights Operations Financial Drilled 6 and completed 9 horizontal Revenue of 114 million, an 8% Wolfcamp wells increase over prior year 7 horizontal Wolfcamp wells waiting Net loss of 19.9…
  4. 4Q and FY 2018 Earnings Presentation – Approach Resources, Inc. – slide 4
    AREX Reserve and NPV History Discovery of Pilot Test and Wolfcamp Development Wolfcamp Play Fourth Quarter and Full Year 2018 Results March 18, 2019 5
  5. 4Q and FY 2018 Earnings Presentation – Approach Resources, Inc. – slide 5
    Focus on leverage improvement due to low commodity prices Total debt to EBITDAX 12.0x 60.00 56.76 52.64 51.67 10.0x 49.56 47.81 9.7x 50.00 44.60 8.0x 40.72 40.00 37.68 6.9x 6.6x 33.23 6.0x 30.00 26.21 4.1x 23.86 4.0x…
  6. 4Q and FY 2018 Earnings Presentation – Approach Resources, Inc. – slide 6
    Approach continues to achieve one of the lowest cost structures in the Permian Basin AREX D&C Historical Track Record ( MM) Well cost EUR 47% reduction in well cost and 56% improvement in EUR since 2011 800 10 8.6 9 700 700 8…
  7. 4Q and FY 2018 Earnings Presentation – Approach Resources, Inc. – slide 7
    The business is anchored by long-lived, low-cost proved reserve base Year-end 2018 proved reserves totaled 180.1 MMBoe Total proved reserves up 46% YoY, proved PV-10 (non-GAAP) of 761.8 million1 Total Proved Reserves Reserves by…
  8. 4Q and FY 2018 Earnings Presentation – Approach Resources, Inc. – slide 8
    - 0.50 1.00 1.50 2.00 2.50 (2.50) (2.00) (1.50) (1.00) (0.50) 1/1/2010 4/1/2010 7/1/2010 10/1/2010 1/1/2011 4/1/2011 7/1/2011 10/1/2011 1/1/2012 4/1/2012 7/1/2012 10/1/2012 1/1/2013 4/1/2013 7/1/2013…
  9. 4Q and FY 2018 Earnings Presentation – Approach Resources, Inc. – slide 9
    Cost reductions and improvement in commodity prices are translating into expanding profit margins Profit margin per Boe 35.00 27.94 Realized 30.00 Price 24.89 Realized Price 26.21 Hedged 25.00 Realized 21.25 Price…
  10. 4Q and FY 2018 Earnings Presentation – Approach Resources, Inc. – slide 10
    Centralized infrastructure drives capital and operating efficiencies Receipt Reagan Point Irion PANGEA WEST PW Receipt Point Crockett Schleicher DCP Tap PW BLK 50 Receipt Point CS 1 Compressor 228HA Receipt 204HA…
  11. 4Q and FY 2018 Earnings Presentation – Approach Resources, Inc. – slide 11
    LOE decline over time 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 5.18 5.00 0.95 0.75 1.69 Pumpers & 4.24 4.23 Supervision…
  12. 4Q and FY 2018 Earnings Presentation – Approach Resources, Inc. – slide 12
    Balance sheet detail AREX Liquidity and Capitalization AREX Capitalization as of 12/31/2018 ( MM) Interest coverage ratio of 2.5x, above minimum 1.75x Cash 0 covenant requirement Credit Facility 300.5 7.0% Senior Notes due 2021…
  13. 4Q and FY 2018 Earnings Presentation – Approach Resources, Inc. – slide 13
    Current hedge summary Commodity and Period Contract Type Volume Contract Price Crude Oil January 2019 December 2019 Collar 500 Bbls/day 65.00/Bbl - 71.00/Bbl NGLs (C2 - Ethane) January 2019 March 2019 Swap 900 Bbls/day…
  14. 4Q and FY 2018 Earnings Presentation – Approach Resources, Inc. – slide 14
    Production and expense guidance Annual Guidance Production Guidance: Oil Production (MBbls) 925 - 975 NGLs (MBbls) 1,250 - 1,350 Natural Gas (MMcf) 8,650 - 8,750 Total 3,600 - 3,800 Cash operating costs (per Boe): Lease…
  15. 4Q and FY 2018 Earnings Presentation – Approach Resources, Inc. – slide 15
    Appendix
  16. 4Q and FY 2018 Earnings Presentation – Approach Resources, Inc. – slide 16
    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…
  17. 4Q and FY 2018 Earnings Presentation – Approach Resources, Inc. – slide 17
    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)…
  18. 4Q and FY 2018 Earnings Presentation – Approach Resources, Inc. – slide 18
    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…
  19. 4Q and FY 2018 Earnings Presentation – Approach Resources, Inc. – slide 19
    PV-10 (unaudited) The present value of our proved reserves, discounted at 10% (PV-10), was estimated at 761.8 million at December 31, 2018, and was calculated based on the first-of-the-month, twelve-month average prices for oil, NGLs and…
  20. 4Q and FY 2018 Earnings Presentation – Approach Resources, Inc. – slide 20
    Contact information SERGEI KRYLOV Executive Vice President & Chief Financial Officer 817.989.9000 irapproachresources.com www.approachresources.com

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