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Emerging Unconventional Oil and Liquids Rich Gas Targets – Approach Resources, Inc.

Approach Resources, Inc. · Apr 19, 2011 · 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. Emerging Unconventional Oil and Liquids Rich Gas Targets – Approach Resources, Inc. – slide 1
    Emerging Unconventional Oil and Liquids-Rich Gas Targets J. Ross Craft, President & Chief Executive Officer DUG Conference April 19, 2011
  2. Emerging Unconventional Oil and Liquids Rich Gas Targets – Approach Resources, Inc. – slide 2
    Approach Resources A Texas and Permian Focused Company Areas of operation AREX highlights Enterprise value 960 MM 4.7 MBoe/d Q4 2010 production 59.7 MMBoe proved reserves 96% Permian Basin 52% Oil & NGLs 52% Proved developed No…
  3. Emerging Unconventional Oil and Liquids Rich Gas Targets – Approach Resources, Inc. – slide 3
    Approach Resources A Growth Story Reserve growth Production growth 60 7.0 55% Oil & NGLs 51% Oil & NGLs 6.0 50 5.0 40 4.0 30 3.0 20 Proved reserves (MMBoe) 2.0 Production (MBoe/d) 10 1.0 0 0.0 2004…
  4. Emerging Unconventional Oil and Liquids Rich Gas Targets – Approach Resources, Inc. – slide 4
    The Future of the US Domestic Oil and Gas Industry Despite government subsidies, it is still a small percentage of 51% imported from such countries as US energy source Venezuela, Nigeria, Saudi Arabia, Libya National security…
  5. Emerging Unconventional Oil and Liquids Rich Gas Targets – Approach Resources, Inc. – slide 5
    Oil Proved Reserves by Area (2009 US Lower 48) 343 1,058 855 52 17 10 50 66 8 488 20 376 264 2,835 24 802 780 29 252 53 5,496 480 1,000 MMBoe (25% of US Total Proved Reserves) 101 - 1,000 MMBoe 9 11 - 1,00 MMBoe US…
  6. Emerging Unconventional Oil and Liquids Rich Gas Targets – Approach Resources, Inc. – slide 6
    Changes in Oil Proved Reserves by Area (2008 to 2009 US Lower 48) 22 481 65 -1 8 -7 140 -16 12 -6 130 15 3 57 48 -2 -3 1 529 -7 (29% of US Total Reserve Growth) 100 MMBoe 6 1 100 MMBoe No Growth US Total crude…
  7. Emerging Unconventional Oil and Liquids Rich Gas Targets – Approach Resources, Inc. – slide 7
    Distribution of US Lower 48 Oil Fields Ranked in the Top 50 WILLISTON BASIN MICHIGAN BASIN GREEN RIVER UINTA-PICEANCE DENVER BASIN JULESBURG APPALACHIAN Belridge South BASIN BASIN Elk Hills ILLINOIS BASIN ANADARKO…
  8. Emerging Unconventional Oil and Liquids Rich Gas Targets – Approach Resources, Inc. – slide 8
    Permian Basin World Class Petroleum Basin That Keeps Giving Permian Basin 250 miles by 300 miles 1st commercial oil accumulation Northwest (Westbrook) discovered in 1921 Shelf Over 30 billion barrels of oil produced over last 90…
  9. Emerging Unconventional Oil and Liquids Rich Gas Targets – Approach Resources, Inc. – slide 9
    Wolffork Play An Oil Shale Resource Play in Southern Midland Basin System Series Basin Stratigraphic Unit Target Grayburg Guadalupian San Andres Southern Permian Clearfork / Spraberry Shale Midland Basin Leonardian Wolffork Oil…
  10. Emerging Unconventional Oil and Liquids Rich Gas Targets – Approach Resources, Inc. – slide 10
    AREX acreage is favorably located in Southern Midland Basin Wolfberry Well Winkler Midland Ector Sterling Coke Glasscock Midland Basin Wolfberry Play Upton Eastern Delaware Ward Shelf Basin Crane Wolfberry Play Tom Green…
  11. Emerging Unconventional Oil and Liquids Rich Gas Targets – Approach Resources, Inc. – slide 11
    Recent leasing activity in the Wolffork play Large independents and a major enter the Southern Midland Basin through UTs Lease Sale APPROACH ACREAGE EL PASO EOG PIONEER PIONEER CONOCO-PHILLIPS ANGELLE DONOHUE HIGHMOUNT…
  12. Emerging Unconventional Oil and Liquids Rich Gas Targets – Approach Resources, Inc. – slide 12
    Wolffork play recognition Why didnt others recognize the play Crockett County has been viewed as a gassy area when oil and gas price ratio ranges from 16 to 20, operators are pursuing oily plays Almost all published, regional maps…
  13. Emerging Unconventional Oil and Liquids Rich Gas Targets – Approach Resources, Inc. – slide 13
    AREX shale play evaluation process Creating value through detailed technical evaluation TOC Hydrocarbon generating potential R0 - Tmax - TAI Thermal maturity for hydrocarbon generation Shale Rock Properties Storage capacity…
  14. Emerging Unconventional Oil and Liquids Rich Gas Targets – Approach Resources, Inc. – slide 14
    Wolfcamp Shale a world class source rock in oil window Hydrocarbon Generating Potential Thermal Maturity R0 Good - Richness Fair Poor Excellent Baker A112 TOC (%) 2-10…
  15. Emerging Unconventional Oil and Liquids Rich Gas Targets – Approach Resources, Inc. – slide 15
    Storage space for oil and gas in Wolfcamp Shale Backscattered Electron Images Oil and Gas are stored in 3 forms in shale Matrix pore space Fractures Adsorption Core Porosity for Baker A112 12.0 10.9 10.5 10.4 10.1…
  16. Emerging Unconventional Oil and Liquids Rich Gas Targets – Approach Resources, Inc. – slide 16
    Storage space for oil and gas in Wolfcamp Shale cont. Oil and Gas are stored in 3 forms in shale Matrix pore space Core Photo Fractures Adsorption Image Log Numerous fractures can be seen from image log and core These natural…
  17. Emerging Unconventional Oil and Liquids Rich Gas Targets – Approach Resources, Inc. – slide 17
    Storage space for oil and gas in Wolfcamp Shale cont. Oil and Gas are stored in 3 forms in shale Matrix pore space Organic material in shale is not Fractures Adsorption only a source for hydrocarbon generation, but also a storage…
  18. Emerging Unconventional Oil and Liquids Rich Gas Targets – Approach Resources, Inc. – slide 18
    Creating value through detailed technical evaluation of Wolfcamp shale (contd) Hydrocarbon pathway to wellbore Wolfcamp shale components Depth (feet) W E likely high fracture density areas Porosity 4,000 7.0% Carbonate 26.2%…
  19. Emerging Unconventional Oil and Liquids Rich Gas Targets – Approach Resources, Inc. – slide 19
    Regional correlation University 40-13 1H 12.5 miles Baker A 112 Bailey 310 12.8 miles SW Irion Co Cinco Terry Ozona NE DPHI DPHI DPHI 0.3 -0.1 0.3 -0.1 0.3 -0.1 GR API NPHI GR API NPHI GR API NPHI 0 200 0.3 -0.1 0 200 0.3 -0.1 0…
  20. Emerging Unconventional Oil and Liquids Rich Gas Targets – Approach Resources, Inc. – slide 20
    Over 2,500 feet of gross pay in the Wolffork 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 0.2 20 200 2,000 0.3 -0.1 0.2 0 GR API…
  21. Emerging Unconventional Oil and Liquids Rich Gas Targets – Approach Resources, Inc. – slide 21
    Hydrocarbons in place estimate & potential well recovery Vertical well Hydrocarbons in Place / Potential Hydrocarbon Recovery Factor Well Spacing 640 Acre Reservoir Recoverable / Well Formation Oil MMBOE Acre Boe EQUIVALENT…
  22. Emerging Unconventional Oil and Liquids Rich Gas Targets – Approach Resources, Inc. – slide 22
    Technical analysis is supported by early drilling and recompletion results Wolfcamp horizontal (EOG 40-13-1H) Modeled after University 40-13-1H Initial Potential 163 BOE (Gas=37.2 BOE, NGLs=39.8 BOE, Oil=86 BO) Wolfcamp vertical…
  23. Emerging Unconventional Oil and Liquids Rich Gas Targets – Approach Resources, Inc. – slide 23
    Technical analysis is supported by early drilling and recompletion results Wolfcamp horizontal (EP 38-29-1H) Wolfcamp horizontal (EOG 40-14-2H) 4,000 Horizontal; 8 Frac Stages 6,700 Horizontal; 22 Frac Stages Iinitial production…
  24. Emerging Unconventional Oil and Liquids Rich Gas Targets – Approach Resources, Inc. – slide 24
    Oil shale play comparison How does the Wolffork play stack up against other commercial shale oil plays Barnett Oil SHALE Wolffork Bakken Eagle Ford Niobrara Combo BASIN Midland Williston Fort Worth South Texas DJ Basin Late…
  25. Emerging Unconventional Oil and Liquids Rich Gas Targets – Approach Resources, Inc. – slide 25
    Technical evaluation derisks Wolffork play concept Creating value through detailed technical evaluation TOC Hydrocarbon generating potential R0 - Tmax - TAI Thermal maturity for hydrocarbon generation Shale Rock Properties…
  26. Emerging Unconventional Oil and Liquids Rich Gas Targets – Approach Resources, Inc. – slide 26
    Key takeaways The WOLFCAMP Is located in one of the oldest and most prolific basins in the US a world class source rock with significant hydrocarbon-generating potential thermally matured and currently located in peak oil generation…

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