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1Q 2013 Results – Approach Resources, Inc.

Approach Resources, Inc. · May 2, 2013 · 25 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. 1Q 2013 Results – Approach Resources, Inc. – slide 1
    Approach Resources Inc. FIRST QUARTER 2013 RESULTS MAY 2, 2013
  2. 1Q 2013 Results – Approach Resources, Inc. – slide 2
    Company Overview AREX OVERVIEW ASSET OVERVIEW Enterprise value 1 BN High quality reserve base 95.5 MMBoe proved reserves 99% Permian Basin Permian core operating area 167,000 gross (148,000 net) acres 1+ BnBoe gross, unrisked…
  3. 1Q 2013 Results – Approach Resources, Inc. – slide 3
    1Q13 Operational Highlights Total production increase to 8.4 MBoe/d ( 15% since 1Q12) Oil growing as a percentage of production ( 63% since 1Q12) Drilled 10 wells and completed 5 HZ wells during 1Q13; completed additional 5 HZ wells…
  4. 1Q 2013 Results – Approach Resources, Inc. – slide 4
    1Q13 Financial Highlights HIGHLIGHTS Revenues of 36.3 MM ( 19% since 1Q12) Growing Revenues Total operating costs and expenses of 41.99/Boe ( 11% since 4Q12) and Lower Costs Net loss of 0.3 MM or 0.01 per diluted share Adjusted net…
  5. 1Q 2013 Results – Approach Resources, Inc. – slide 5
    Oil & Liquids-Weighted Reserves, Production & Revenue YE12 RESERVE MIX BY COMMODITY 1Q13 PRODUCTION MIX BY COMMODITY 31% 31% 39% 41% 95.3 8.4 MMBoe MBoe/d 30% 28% Oil NGLs Gas Oil NGLs Gas 1Q13 REVENUE MIX BY…
  6. 1Q 2013 Results – Approach Resources, Inc. – slide 6
    AREX Wolfcamp Oil Shale Resource Play PERMAIN CORE OPERATING AREA Large, primarily contiguous acreage position Oil-rich, multiple pay zones 167,000 gross (148,000 net) acres Low acreage cost 500 per acre 940+ MMBoe gross, unrisked HZ…
  7. 1Q 2013 Results – Approach Resources, Inc. – slide 7
    Wolfcamp Oil Shale Play WOLFCAMP SHALE WIDESPREAD, THICK, CONSISTENT & REPEATABLE 8
  8. 1Q 2013 Results – Approach Resources, Inc. – slide 8
    HZ Wolfcamp 79% of IP is Oil Source: Publicly available regulatory filings, company presentations. 9
  9. 1Q 2013 Results – Approach Resources, Inc. – slide 9
    Wolfcamp Stacked Pay Zones HZ TARGETS & RESOURCE POTENTIAL AREX Baker A 112 LLD OHMM DPHI BVW 0.2 20 200 2,000 0.3 -0.1 0.2 0 GR API MSFL OHMM NPHI Free Hydrocarbon 0 200 0.2 20 200 2,000 0.3 -0.1 0.2 0 HZ WOLFCAMP Wolfcamp…
  10. 1Q 2013 Results – Approach Resources, Inc. – slide 10
    Multiple Lateral Stacking Effective Frac Volumes CHEVRON STACKING DEVELOPMENT PATTERN X-Section View (heel to toe) 660 A Bench 481 B Bench 481 C Bench Allows maximum volumes of shale reservoir to be fraced 11
  11. 1Q 2013 Results – Approach Resources, Inc. – slide 11
    AREX HZ Wolfcamp Activity Reagan Irion PW 6507H U 50 A 603HA Pangea West Crockett Schleicher 18,000 gross acres PW 6533H PW 6601H Pad drilling with A/B and A/C stacked wellbores PW 6535H PW 6502H 3-D Seismic acquisition…
  12. 1Q 2013 Results – Approach Resources, Inc. – slide 12
    HZ Wolfcamp Well Performance CONTINUED STRONG WELLS RESULTS TRACKING ABOVE THE TYPE CURVE 1,200 B Bench Wells A Bench Wells 1,100 45 A 701H 45 F 2303H PW 6601H 45 D 902H 45 F 2304H PW 6602H 45 C 803H 45 A 703H 1,000 45 B 2401H 45 B…
  13. 1Q 2013 Results – Approach Resources, Inc. – slide 13
    AREX HZ Wolfcamp Economics Horizontal BTAX IRR SENSITIVITIES Play Type Wolfcamp 80 70 Avg. EUR (gross) 450 MBoe 60 50 IRR (%) Targeted Well Cost 5.5 MM 40 30 Potential Locations 2,096 20 Gross Resource 10 940+ MMBoe 0…
  14. 1Q 2013 Results – Approach Resources, Inc. – slide 14
    AREX Drilling Locations, Targets & Resource Potential GROSS DRLLING EUR IDENTIFIED TARGET RESOURCE DEPTH (FT.) (MBoe) LOCATIONS POTENTIAL 7,000+ Wolfcamp A 450 703 316,350 (lateral length) 7,000+ Wolfcamp B 450 690 310,500…
  15. 1Q 2013 Results – Approach Resources, Inc. – slide 15
    Infrastructure for Large-Scale Development Reagan Irion Pangea Crockett Schleicher West North & Central Pangea Reducing D&C Cost to 5.5 MM or lower South Pangea Reducing LOE Minimizing truck traffic and surface disturbance…
  16. 1Q 2013 Results – Approach Resources, Inc. – slide 16
    Infrastructure & Equipment Projects PROJECTS BENEFITS Securing water supply Facilitate large-scale field development Testing non-potable water and Reduce fresh water use and water costs recycling flowback water Expected savings from…
  17. 1Q 2013 Results – Approach Resources, Inc. – slide 17
    Creating Value Through Growth Concentrated geographic footprint in the Midland Basin Strong growth track record at competitive costs Detailed technical evaluation led to discovery of growth potential in the Wolfcamp oil shale…
  18. 1Q 2013 Results – Approach Resources, Inc. – slide 18
    Financial Information NON-GAAP RECONCILIATIONS
  19. 1Q 2013 Results – Approach Resources, Inc. – slide 19
    2013 Capital Budget 2013 Capital budget 260 MM, approx. 90% for HZ Wolfcamp 3 HZ rigs in the Wolfcamp shale Targeting Wolfcamp A, B and C Testing stacked-wellbore development Optimizing well spacing and completion design…
  20. 1Q 2013 Results – Approach Resources, Inc. – slide 20
    2013 Operating and Financial Guidance 2013 GUIDANCE 2Q13 Production guidance 9.3 MBoe/d 9.6 MBoe/d 2013 Guidance Production Total (MBoe) 3,600 3,900 Percent Oil & NGLs 70% Operating costs and expenses (/per Boe) Lease operating…
  21. 1Q 2013 Results – Approach Resources, Inc. – slide 21
    Hedge Position CURRENT HEDGE POSITION Prudent hedging program protects cash flow and returns as well as capital budget activities 53% of FY13 oil hedged at 90.17/Bbl x 102.19/Bbl 81% of FY13 gas hedged at weighted average floor of…
  22. 1Q 2013 Results – Approach Resources, Inc. – slide 22
    Adjusted Net Income (unaudited) The amounts included in the calculation of adjusted net income and adjusted net income per diluted share below were computed in accordance with GAAP. We believe adjusted net income and adjusted net income…
  23. 1Q 2013 Results – Approach Resources, Inc. – slide 23
    EBITDAX (unaudited) We define EBITDAX as net income, plus (1) exploration expense, (2) depletion, depreciation and amortization expense, (3) share-based compensation expense, (4) unrealized loss on commodity derivatives, (5) interest…
  24. 1Q 2013 Results – Approach Resources, Inc. – slide 24
    Liquidity Liquidity (unaudited) is calculated by adding the net funds available under our revolving credit facility and cash and cash equivalents. We use liquidity as an indicator of the Companys ability to fund development and…
  25. 1Q 2013 Results – Approach Resources, Inc. – slide 25
    Contact Information MEGAN P. HAYS Manager, Investor Relations & Corporate Communications 817.989.9000 x2108 mhaysapproachresources.com www.approachresources.com

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