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2Q 2014 Results – Approach Resources, Inc.

Approach Resources, Inc. · Aug 5, 2014 · 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. 2Q 2014 Results – Approach Resources, Inc. – slide 1
    Second Quarter 2014 Results AUGUST 4, 2014
  2. 2Q 2014 Results – Approach Resources, Inc. – slide 2
    Company overview AREX OVERVIEW ASSET OVERVIEW Enterprise value 1.1 BN High-quality reserve base 115 MMBoe proved reserves 1.1 BN proved PV-10 99% Permian Basin Permian core operating area 160,000 gross (138,000 net) acres 1+…
  3. 2Q 2014 Results – Approach Resources, Inc. – slide 3
    2Q14 Key highlights 2Q14 HIGHLIGHTS 2Q14 SUMMARY RESULTS Drilled and completed 16 HZ wells Production (MBoe/d) 14.1 % Oil 41% Maintained best-in-class HZ well costs, % Total liquids 70% while further de-risking stacked wellbore…
  4. 2Q 2014 Results – Approach Resources, Inc. – slide 4
    2Q14 Operating highlights OPERATING HIGHLIGHTS Delivering Total production 14.1 MBoe/d (up 19% QoQ) Production Oil production 5.8 Mbbl/d (up 15% QoQ) Growth Oil differential of (4.79)/Bbl Maximizing HZ well costs continue to…
  5. 2Q 2014 Results – Approach Resources, Inc. – slide 5
    AREX Wolfcamp activity STRATIGRAPHIC UNIT Reagan Irion Clearfork/Spraberry PANGEA WEST Crockett Schleicher Dean 2Q14 Activity included: Stacked A/C completion A Wolfcamp B NORTH & CENTRAL C PANGEA 2Q14 Activity included:…
  6. 2Q 2014 Results – Approach Resources, Inc. – slide 6
    AREX HZ Wolfcamp Well Performance AREX HZ WOLFCAMP (BOE/D) 800 Daily Production (BOE including NGLs) Production Data from 700 AREX C Bench Wells (10) Production Data from 600 AREX A Bench Wells (10) 500 Production Data…
  7. 2Q 2014 Results – Approach Resources, Inc. – slide 7
    Production and expense guidance 2014 Guidance Production Total (MBoe) 4,950 Oil (MBbls) 2,050 2,200 Percent total liquids 70% Operating costs and expenses (per Boe) Lease operating 5.00 - 6.00 Production and ad valorem taxes…
  8. 2Q 2014 Results – Approach Resources, Inc. – slide 8
    2Q14 Financial highlights FINANCIAL HIGHLIGHTS Revenues of 73.4 MM (up 74% YoY) Increasing Net income of 3.8 MM, or 0.10 per diluted share Revenues Adjusted net income (non-GAAP) of 8.7 MM, or 0.22 per diluted share Record…
  9. 2Q 2014 Results – Approach Resources, Inc. – slide 9
    Strong, simple balance sheet As of FINANCIAL RESULTS (MM) June 30, 2014 Summary Balance Sheet Cash and Cash Equivalents 0.4 Credit Facility 46.0 Senior Notes 250.0 Total Long-Term Debt 296.0 Shareholders Equity 720.8 Total Book…
  10. 2Q 2014 Results – Approach Resources, Inc. – slide 10
    Current hedge position Commodity & Period Contract Type Volume Contract Price Crude Oil July 2014 December 2014 Collar 550 Bbls/d 90.00/Bbl - 105.50/Bbl July 2014 December 2014 Collar 950 Bbls/d 85.05/Bbl - 95.05/Bbl July 2014…
  11. 2Q 2014 Results – Approach Resources, Inc. – slide 11
    Appendix
  12. 2Q 2014 Results – Approach Resources, Inc. – slide 12
    AREX Wolfcamp shale oil resource play PERMIAN CORE OPERATING AREA REAGAN PXD APA IRION DVN Large, primarily contiguous acreage position UPTON EOG ENDURING Oil-rich, multiple pay zones EOG / ENDURING PXD DVN 160,000 gross…
  13. 2Q 2014 Results – Approach Resources, Inc. – slide 13
    Efficiency-driven transition to two-bench pad development TRANSITION FROM SINGLE-BENCH TO TWO-BENCH DEVELOPMENT 2011 2013: SINGLE-BENCH CURRENT: TWO-BENCH DEVELOPMENT DEVELOPMENT Map view Reduces time between spud to…
  14. 2Q 2014 Results – Approach Resources, Inc. – slide 14
    AREX HZ Wolfcamp economics Horizontal BTAX IRR SENSITIVITIES Play Type Wolfcamp 80 70 Avg. EUR (gross) 450 MBoe 60 Targeted Well Cost 5.5 MM 50 IRR (%) 40 Potential Locations 2,000 30 20 Gross Resource 1 Bn 10…
  15. 2Q 2014 Results – Approach Resources, Inc. – slide 15
    Infrastructure for large-scale development Reagan Irion Pangea Crockett Schleicher West 50-Mile Oil Pipeline 100,000 Bbls/d Capacity North & Central Pangea Reducing D&C cost South Reducing LOE Pangea Increasing project…
  16. 2Q 2014 Results – Approach Resources, Inc. – slide 16
    Key field infrastructure & equipment systems INFRASTRUCTURE BENEFITS Non-potable water source wells Facilitate large-scale field development Water recycling systems Reduce fresh water use and water costs Safely and securely…
  17. 2Q 2014 Results – Approach Resources, Inc. – slide 17
    Adjusted net income (unaudited) 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…
  18. 2Q 2014 Results – Approach Resources, Inc. – slide 18
    EBITDAX (unaudited) EBITDAX (UNAUDITED) The amounts included in the calculation of EBITDAX were computed in accordance with GAAP. EBITDAX is not a measure of net income or cash flow as determined by GAAP. EBITDAX is presented herein and…
  19. 2Q 2014 Results – Approach Resources, Inc. – slide 19
    PV-10 (unaudited) PV-10 (UNAUDITED) The present value of our proved reserves, discounted at 10% (PV-10), was estimated at 1.1 billion at December 31, 2013, and was calculated based on the first-of-the-month, twelve-month average prices…
  20. 2Q 2014 Results – 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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