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DUG PERMIAN BASIN – Approach Resources, Inc.

Approach Resources, Inc. · May 21, 2014 · 19 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. DUG PERMIAN BASIN – Approach Resources, Inc. – slide 1
    Building Momentum: Multi-Bench and Pad Development in the Southern Midland Basin DUG PERMIAN BASIN J. ROSS CRAFT PRESIDENT & CHIEF EXECUTIVE OFFICER
  2. DUG PERMIAN BASIN – Approach Resources, Inc. – slide 2
    Wolfcamp oil shale play activity overview N = 1,809 Note: Data sourced from company news releases/IR presentations, public databases, DrillingInfo and IHS. 2
  3. DUG PERMIAN BASIN – Approach Resources, Inc. – slide 3
    Wolfcamp oil shale play S Midland Basin Wolfcamp HZ Oil Shale Play was discovered in the S Midland Basin Well IPs range from several hundred Boe to 3,000 Boe/d and EURs range from 350 to 750 MBoe Ham 1825H Ham 1802H Lane Trust C/E 42…
  4. DUG PERMIAN BASIN – Approach Resources, Inc. – slide 4
    Successful transition to an oil and liquids-rich Permian producer Approachs story 12,000 Beginning Large Scale Development of Wolfcamp Oil Shale Play 10,000 Commercializing Wolfcamp Oil Shale Discovery 8,000 70 Announcing…
  5. DUG PERMIAN BASIN – Approach Resources, Inc. – slide 5
    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 162,000 gross (144,000 net) acres 1+…
  6. DUG PERMIAN BASIN – Approach Resources, Inc. – slide 6
    Long history of operating in Midland Basin WELLS DRILLED TO DATE Drilled more than 750 wells 140 14 in Midland Basin since 122 2004 120 12 One of the first-movers in 100 94 10 the HZ Wolfcamp play with 87 88 longest…
  7. DUG PERMIAN BASIN – Approach Resources, Inc. – slide 7
    Strong track record of reserve and production growth RESERVE GROWTH PRODUCTION GROWTH 120 10.0 9.0 100 8.0 CAGR 31% CAGR 34% 7.0 80 6.0 60 5.0 4.0 40 3.0 2.0 20 1.0 MMBoe MBoe/d 0 0.0 2004 2005 2006…
  8. DUG PERMIAN BASIN – Approach Resources, Inc. – slide 8
    Wolfcamp shale oil play WIDESPREAD, THICK, CONSISTENT & REPEATABLE 8
  9. DUG PERMIAN BASIN – Approach Resources, Inc. – slide 9
    AREX Wolfcamp activity STRATIGRAPHIC UNIT Reagan Irion Clearfork/Spraberry PANGEA WEST Crockett Schleicher Dean 1Q14 Activity included: Stacked A/C completion A Wolfcamp B NORTH & CENTRAL C PANGEA 1Q14 Activity included:…
  10. DUG PERMIAN BASIN – Approach Resources, Inc. – slide 10
    AREX HZ Wolfcamp well performance AREX HZ WOLFCAMP (BOE/D) 800 Production Data from 700 AREX C Bench Wells (4) Production Data from 600 AREX A Bench Wells (8) 500 Production Data from Daily Production (Boe including…
  11. DUG PERMIAN BASIN – Approach Resources, Inc. – slide 11
    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…
  12. DUG PERMIAN BASIN – Approach Resources, Inc. – slide 12
    Evaluating water infrastructure Key factors for Approach in determining to install large-scale water infrastructure system: Large, primarily contiguous acreage position Delineation of Wolfcamp shale across acreage position and…
  13. DUG PERMIAN BASIN – Approach Resources, Inc. – slide 13
    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…
  14. DUG PERMIAN BASIN – Approach Resources, Inc. – slide 14
    Low cost operator OPERATIONAL EFFICIENCY COMPETITIVE LOE (FY13 LOE/Boe) Expect to drill 20 to 24 HZ wells per rig in 16.00 14.00 2014 vs. prior estimate of 10 to 12 HZ wells 14.00 12.20 per rig 12.00 10.43 11.00 Avg. 8.96/Boe…
  15. DUG PERMIAN BASIN – Approach Resources, Inc. – slide 15
    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 Potential…
  16. DUG PERMIAN BASIN – Approach Resources, Inc. – slide 16
    Key takeaways Wolfcamp HZ oil shale play has expanded to more than 10 counties since discovered in Crockett and Irion Counties in 2010 More than 1,800 HZ Wolfcamp wells have been drilled across the Midland Basin Nearly 80% of the…
  17. DUG PERMIAN BASIN – Approach Resources, Inc. – slide 17
    Appendix
  18. DUG PERMIAN BASIN – Approach Resources, Inc. – slide 18
    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…
  19. DUG PERMIAN BASIN – Approach Resources, Inc. – slide 19
    Thank you

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