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INVESTOR PRESENTATION – Approach Resources, Inc.

Approach Resources, Inc. · Aug 1, 2012 · 24 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
    AUGUST 2012 INVESTOR PRESENTATION APPROACH RESOURCES INC.
  2. INVESTOR PRESENTATION – Approach Resources, Inc. – slide 2
    Company Overview AREX OVERVIEW ASSET OVERVIEW Enterprise value 1.0 BN High quality reserve base 83.7 MMBoe proved reserves, 64% Oil & NGLs 99% Permian Basin Permian core operating area 166,000 gross (146,000 net) acres 500+…
  3. INVESTOR PRESENTATION – Approach Resources, Inc. – slide 3
    AREX 2Q12 Highlights Oil growth key contributor to total production growth Production totaled 7.7 MBoe/d, up 16% and 7% over 2Q11 and 1Q12, respectively Oil growth up 120% over 2Q11 and 20% over 1Q12 Oil growth key contributor to…
  4. INVESTOR PRESENTATION – Approach Resources, Inc. – slide 4
    Quarterly Liquids Production 2Q12 LIQUIDS PRODUCTION 2Q12 Liquids production up 33% over 2Q11 65% total production volumes 2Q12 Oil production up 120% over 2Q11 28% total production volumes 5,000 66 64 4,000 62 3,000 60 58…
  5. INVESTOR PRESENTATION – Approach Resources, Inc. – slide 5
    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 MY'12 2004 2005 2006 2007 2008 2009 2010…
  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 166,000 gross (146,000 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 Reagan Irion Pangea West 17,000 gross acres Crockett Schleicher 2 horizontal pilot wells with encouraging results 2 horizontal wells waiting on completion 3D Seismic planning underway Targeting…
  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 Potential Locations 500 10 Gross Resource 225 MMBoe 0 Potential…
  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 Potential Locations 1,825 10 Gross Resource 200+ MMBoe…
  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 Potential Locations 190 20 10 Gross Resource…
  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 Potential…
  19. INVESTOR PRESENTATION – Approach Resources, Inc. – slide 19
    Creating Value Through Growth Concentrated geographic footprint in the Southern Midland Basin Strong growth track record at competitive costs Detailed technical evaluation led to discovery of significant growth potential in the…
  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 5.50 6.50 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
    Financial Strength 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…
  24. INVESTOR PRESENTATION – Approach Resources, Inc. – slide 24
    Contact Information MEGAN P. HAYS Manager, Investor Relations & Corporate Communications 817.989.9000 x 2108 mhaysapproachresources.com www.approachresources.com

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