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Investor Presentation – Approach Resources, Inc.

Approach Resources, Inc. · Jun 1, 2012 · 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. Investor Presentation – Approach Resources, Inc. – slide 1
    JUNE 2012 INVESTOR PRESENTATION APPROACH RESOURCES INC.
  2. Investor Presentation – Approach Resources, Inc. – slide 2
    Company Overview AREX OVERVIEW ASSET OVERVIEW Enterprise value 1.1 BN High quality reserve base 77 MMBoe proved reserves, 61% Oil & NGLs 99% Permian Basin Permian core operating area 165,700 gross (145,000 net) acres 500+…
  3. Investor Presentation – Approach Resources, Inc. – slide 3
    AREX Highlights Concentrated geographic footprint in the Southern Midland Basin Strong growth track record at competitive costs Significant growth potential from Wolfcamp / Wolffork oil shale resource play Capital discipline…
  4. Investor Presentation – Approach Resources, Inc. – slide 4
    Track Record of Reserve and Production Growth RESERVE GROWTH PRODUCTION GROWTH 90 7.0 80 6.0 70 5.0 60 50 4.0 40 3.0 30 2.0 20 1.0 10 0 0.0 2004 2005 2006 2007 2008 2009 2010 2011 2004 2005 2006 2007 2008 2009 2010 2011…
  5. Investor Presentation – Approach Resources, Inc. – slide 5
    Low-Cost Operator 3-YR AVERAGE F&D COSTS (/BOE) 1Q12 LIFTING COSTS (/BOE) 24 24 20.71 19.89 20.06 17.91 18 18 16.24 15.64 15.79 15.88 14.38 13.47 13.32 12.90 12 12 8.87 8.20 6 6 0 0 AREX Peer 1 Peer 2…
  6. Investor Presentation – Approach Resources, Inc. – slide 6
    2012 Capital Program 2012 PROGRAM OVERVIEW Acreage Infrastructure & Equipment Horizontal Wolfcamp 2 horizontal rigs Horizontal Wolfcamp Beginning development program of B zone 1% 12% Testing A & C zones Vertical Clearfork &…
  7. Investor Presentation – Approach Resources, Inc. – slide 7
    Infrastructure & Equipment Projects PROJECTS BENEFITS Securing water supply Facilitate large-scale field development Testing non-potable water and Reduce fresh water use recycling flowback water Reduce water costs Purchasing and…
  8. Investor Presentation – Approach Resources, Inc. – slide 8
    AREX Wolfcamp Play Favorably Located in the S. Midland Basin Wolfcamp / Wolffork Oil Shale Resource Play 9
  9. Investor Presentation – Approach Resources, Inc. – slide 9
    Wolfcamp Oil Shale Play Widespread, Thick, Consistent & Repeatable 10
  10. Investor Presentation – Approach Resources, Inc. – slide 10
    AREX Wolfcamp Oil Shale Resource Play Large, primarily contiguous acreage position Liquids-rich, multiple pay zones 165,700 gross (145,000 net) acres Low acreage cost 500 per acre 500+ MMBoe gross, unrisked resource potential…
  11. Investor Presentation – Approach Resources, Inc. – slide 11
    AREX Wolfcamp Play Activity Map 12
  12. Investor Presentation – Approach Resources, Inc. – slide 12
    Horizontal Wolfcamp Economics Horizontal BTAX IRR SENSITIVITIES Play Type Wolfcamp 60 50 Avg. EUR 450 MBoe 40 IRR (%) Targeted Well Cost 5.5 MM 30 20 F&D 12.22/Boe 10 Potential Locations 500 0 350 400 450 500 550…
  13. Investor Presentation – Approach Resources, Inc. – slide 13
    Distribution of IP Rates Horizontal Wolfcamp Wells WOLFCAMP OIL SHALE RESOURCE PLAY SOUTHERN MIDLAND BASIN Available Data = 65 HZ Wells P50 504 BOEPD Probability of Occurrence (%) 1% Majority Completed Last 12 Months…
  14. Investor Presentation – Approach Resources, Inc. – slide 14
    Horizontal Wolfcamp Type Curve IP 694 BOEPD Month 15
  15. Investor Presentation – Approach Resources, Inc. – slide 15
    Horizontal Wolfcamp Targets POTENTIAL HORIZONTAL WOLFCAMP TARGETS STRATIGRAPHIC SYSTEM UNIT Clearfork/Spraberry WOLFCAMP A Pilot Permian Dean Wolfcamp Transitioning to Canyon WOLFCAMP B Development Pennsylvanian Strawn…
  16. Investor Presentation – Approach Resources, Inc. – slide 16
    Vertical Clearfork & Wolfcamp (Wolffork) Economics Vertical BTAX IRR SENSITIVITIES Play Type Wolffork 40 Avg. EUR 110 MBoe 30 Targeted Well Cost 1.2 MM IRR (%) 20 F&D 10.91/Boe 10 Potential Locations 1,825 0 Gross…
  17. Investor Presentation – Approach Resources, Inc. – slide 17
    Vertical Wolffork Recompletion Economics Vertical BTAX IRR SENSITIVITIES Play Type Wolffork Recompletion 70 60 Avg. EUR 93 MBoe 50 IRR (%) Targeted Well Cost 0.75 MM 40 30 F&D 8.06/Boe 20 Potential Locations 190 10 0…
  18. Investor Presentation – Approach Resources, Inc. – slide 18
    AREX Drilling Targets & Resource Potential Horizontal Vertical Vertical Wolffork Vertical Canyon PLAY TYPE Wolfcamp Wolffork Recompletion Wolffork EUR (MBoe) 450 110 93 193 Targeted well cost ( MM) 5.5 1.2 0.75 1.5 F&D ( MM) 12.22…
  19. Investor Presentation – Approach Resources, Inc. – slide 19
    Creating Value Through Growth Strong growth track record at competitive costs Detailed technical evaluation led to discovery of significant growth potential in the Wolfcamp / Wolffork oil shale resource play Rigorous pilot…
  20. Investor Presentation – Approach Resources, Inc. – slide 20
    Financial Framework NON-GAAP RECONCILIATIONS
  21. Investor Presentation – Approach Resources, Inc. – slide 21
    2012 Operating and Financial Guidance 2012 GUIDANCE 2012 Guidance Production Total (MBoe) 2,900 - 3,100 Percent Oil & NGLs 65% Operating costs and expenses (/per Boe) Lease operating 4.50 5.50 Severance and production taxes…
  22. Investor Presentation – Approach Resources, Inc. – slide 22
    Hedge Position CURRENT HEDGE POSITION Commodity and Time Period Type Volume Price Crude Oil 2012 Collar 700 Bbls/d 85.00/Bbl - 97.50/Bbl 2012 Collar 500 Bbls/d 90.00/Bbl - 106.10/Bbl 2013 Collar 650 Bbls/d 90.00/Bbl -…
  23. Investor Presentation – Approach Resources, Inc. – slide 23
    Liquidity (unaudited) Liquidity 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…
  24. Investor Presentation – Approach Resources, Inc. – slide 24
    F&D Costs Reconciliation (unaudited) We believe that providing measures of finding and 2011 Reserve summary (MBoe) 3-Year reserve summary (MBoe) development, or F&D, cost is useful to assist an evaluation of how much it costs the…
  25. Investor Presentation – Approach Resources, Inc. – slide 25
    Contact Information MEGAN P. HAYS Manager, Investor Relations & Corporate Communications 817.989.9000 x 2108 mhaysapproachresources.com www.approachresources.com

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