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IPAA Oil & Gas Investment Symposium – Approach Resources, Inc.

Approach Resources, Inc. · Apr 16, 2012 · 26 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. IPAA Oil & Gas Investment Symposium – Approach Resources, Inc. – slide 1
    IPAA Oil & Gas Investment Symposium New York APRIL 16, 2012
  2. IPAA Oil & Gas Investment Symposium – Approach Resources, Inc. – slide 2
    Company Overview AREX OVERVIEW ASSET OVERVIEW Enterprise value 1.3 BN High quality reserve base 77 MMBoe proved reserves 99% Permian Basin 61% Oil & NGLs Permian core operating area 165,700 gross (145,000 net) acres 7.1 MBoe/d…
  3. IPAA Oil & Gas Investment Symposium – Approach Resources, Inc. – slide 3
    2011 A Transformational Year for AREX THEN2010 NOW2011 ACCOMPLISHMENTS 50.7 MMBoe proved reserves 77 MMBoe proved reserves (+52% YoY) Growth 4.3 MBoe/d daily production 6.4 MBoe/d daily production (+50% YoY) 101,900 net acres in…
  4. IPAA Oil & Gas Investment Symposium – 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 10 1.0 0 0.0 2004 2005 2006 2007 2008 2009 2010 2011 2004 2005 2006 2007 2008 2009 2010…
  5. IPAA Oil & Gas Investment Symposium – Approach Resources, Inc. – slide 5
    Low-Cost Operator 3-YR AVERAGE F&D COSTS (/BOE) 2011 LIFTING COSTS (/BOE) 24 24 20.81 19.89 20.06 18.78 17.91 18 18 17.35 15.64 15.78 14.20 13.47 12.90 13.10 12 12 8.20 8.18 6 6 0 0 AREX Peer 1 Peer 2…
  6. IPAA Oil & Gas Investment Symposium – Approach Resources, Inc. – slide 6
    AREX Wolffork Play Favorably Located in the S. Midland Basin Winkler Midland Ector Sterling Coke Glasscock Midland Basin Upton Eastern Reagan Delaware Ward Shelf Basin Crane Irion Tom Green Central Basin Platform…
  7. IPAA Oil & Gas Investment Symposium – Approach Resources, Inc. – slide 7
    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…
  8. IPAA Oil & Gas Investment Symposium – Approach Resources, Inc. – slide 8
    AREX Wolffork Oil Shale Resource Play Large, primarily contiguous acreage DVN APA position REAGAN IRION UPTON 120 th UT Lease Sale Liquids-rich, multiple pay zones EP 5,580 / AC 165,700 gross (145,000 net) acres PXD EOG Low…
  9. IPAA Oil & Gas Investment Symposium – Approach Resources, Inc. – slide 9
    AREX Wolffork Play Activity Map Reagan Irion Pangea West Crockett Schleicher 17,000 gross acres 3-D seismic planning underway 3-D seismic completed Continuing vertical Wolffork development Expect to drill horizontal well in 1Q12 45…
  10. IPAA Oil & Gas Investment Symposium – Approach Resources, Inc. – slide 10
    Horizontal Wolfcamp Well Performance 24-HOUR INITIAL PRODUCING RATES B ZONE 1,400 1,200 1,000 Avg. IP 926 BOEPD BOEPD 800 600 400 Avg. IP 299 BOEPD 200 0 CT M 901H U 42 21 1H CT G 701H U 45 A 701H U 45 D…
  11. IPAA Oil & Gas Investment Symposium – Approach Resources, Inc. – slide 11
    Horizontal Wolfcamp Well Performance AVG. 30 DAY RATES B ZONE 700 600 Avg. 30-Day Rate 548 BOEPD 500 BOEPD 400 300 Avg. 30-Day Rate 207 BOEPD 200 100 0 CT M 901H U 42 21 1H CT G 701H U 45 A 701H U 45 D…
  12. IPAA Oil & Gas Investment Symposium – 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. IPAA Oil & Gas Investment Symposium – Approach Resources, Inc. – slide 13
    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…
  14. IPAA Oil & Gas Investment Symposium – Approach Resources, Inc. – slide 14
    Vertical 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 Resource 100 105 110 115…
  15. IPAA Oil & Gas Investment Symposium – Approach Resources, Inc. – slide 15
    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…
  16. IPAA Oil & Gas Investment Symposium – Approach Resources, Inc. – slide 16
    AREX Wolffork 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 (…
  17. IPAA Oil & Gas Investment Symposium – Approach Resources, Inc. – slide 17
    Key Investor Highlights Concentrated geographic footprint focused on West Texas Midland Basin oil/liquids-rich play 145,000 net, primarily contiguous acres, 100% operated More than 595 wells drilled since 2004, with a 93%+ success…
  18. IPAA Oil & Gas Investment Symposium – Approach Resources, Inc. – slide 18
    Financial Framework NON-GAAP RECONCILIATIONS
  19. IPAA Oil & Gas Investment Symposium – Approach Resources, Inc. – slide 19
    2012 Capital Budget 2012 PROGRAM 2012 Capital budget 190 MM 2 horizontal rigs, 1 vertical rig and 2 to 4 recompletions per month targeting the Wolffork oil shale Targeting 20%+ production growth 2012 production guidance 2,800 MBoe…
  20. IPAA Oil & Gas Investment Symposium – Approach Resources, Inc. – slide 20
    2012 Operating and Financial Guidance 2012 GUIDANCE 2012 Guidance Production Total (MBoe) 2,800- 3,000 Percent Oil & NGLs 65% Operating costs and expenses (/per Boe) Lease operating 4.50 5.50 Severance and production taxes…
  21. IPAA Oil & Gas Investment Symposium – Approach Resources, Inc. – slide 21
    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 -…
  22. IPAA Oil & Gas Investment Symposium – Approach Resources, Inc. – slide 22
    Adjusted Net Income Reconciliation (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…
  23. IPAA Oil & Gas Investment Symposium – Approach Resources, Inc. – slide 23
    EBITDAX Reconciliation (unaudited) We define EBITDAX as net income, plus (1) exploration expense, (2) impairment expense, (3) depletion, depreciation and amortization expense, (4) share-based compensation expense, (5) unrealized loss…
  24. IPAA Oil & Gas Investment Symposium – Approach Resources, Inc. – slide 24
    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…
  25. IPAA Oil & Gas Investment Symposium – Approach Resources, Inc. – slide 25
    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…
  26. IPAA Oil & Gas Investment Symposium – Approach Resources, Inc. – slide 26
    Contact Information MEGAN P. HAYS Manager, Investor Relations & Corporate Communications 817.989.9000 x 2108 mhaysapproachresources.com www.approachresources.com

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