Approach Resources Inc. (NASDAQ: AREX) today reported its third quarter 2011 results. Highlights for third quarter 2011, compared to third quarter 2010, include:
- Total production increased 46% to 612 MBoe (6.7 MBoe/d)
- Oil and NGL production increased 148% to 350 MBbls
- Revenues increased 87% to $28 million
- Net income increased 240% to $7.1 million, or $0.25 per diluted share
- Adjusted net income (non-GAAP) increased 160% to $5.9 million, or $0.21 per diluted share
- EBITDAX (non-GAAP) increased 86% to $21.7 million, or $0.76 per diluted share
Production for third quarter 2011 totaled 612 MBoe (6.7 MBoe/d), compared to 418 MBoe (4.5 MBoe/d) in third quarter 2010, a 46% increase over the prior year period. Oil and NGL production for third quarter 2011 increased 148% to 350 MBbls, compared to 141 MBbls produced in third quarter 2010. Production for third quarter 2011 was 57% oil and NGLs and 43% natural gas, compared to 34% oil and NGLs and 66% natural gas in third quarter 2010. Oil and NGL production increased during third quarter 2011 compared to third quarter 2010 due to continued development of the Wolffork oil shale resource play, the acquisition of additional working interest in northern Project Pangea in first quarter 2011 and processing gas in southern Project Pangea beginning in second quarter 2011.
Production for third quarter 2011 was affected by a shortage of oil trucks due to increased industry activity in the Permian Basin. While production in Project Pangea is running as planned, we experienced an oil inventory build of approximately 29,000 barrels through third quarter 2011. We estimate that the inventory build reduced our potential sales volumes by approximately 315 Bbls/d during third quarter 2011. In response to tightness in the Permian oil trucking market, we have ordered four new oil hauling trucks, which we expect to be delivered by year end 2011. In addition, the Company is exploring long-term trucking, pipeline and rail alternatives.
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