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Approach Resources Inc.
(NASDAQ: AREX) today announced preliminary production, commodity price realizations and capital expenditures for first quarter 2012. Estimated first quarter 2012 production totaled 654 MBoe (7.2 MBoe/d), compared to 469 MBoe (5.2 MBoe/d) produced in first quarter 2011, a 39% increase. Estimated oil and NGL production for first quarter 2012 increased 110% to 405 MBbls, compared to 193 MBbls produced in first quarter 2011. Estimated production for first quarter 2012 was 29% oil, 33% NGLs and 38% natural gas, compared to 19% oil, 22% NGLs and 59% natural gas in first quarter 2011.
Preliminary, average realized prices for first quarter 2012, before the effect of commodity derivatives, were $94.39 per Bbl of oil, $42.50 per Bbl of NGLs and $2.35 per Mcf of natural gas, compared to $90.67 per Bbl of oil, $48.04 per Bbl of NGLs and $4.30 per Mcf of natural gas for first quarter 2011. Our preliminary, average realized price, including the effect of commodity derivatives, was $46.10 per Boe for first quarter 2012, compared to $43.45 per Boe for first quarter 2011.
Preliminary, unaudited estimates of capital expenditures during first quarter 2012 totaled $77.6 million, and included $64.8 million for exploration and development drilling, $9.3 million for pipeline and infrastructure projects, 3-D seismic data acquisition and processing and purchase of trucks for crude and water hauling and $3.5 million for acreage acquisitions. During first quarter 2012, we drilled 15 wells and completed 22 wells, including 15 of 18 wells that were waiting on completion at year end 2011. At March 31, 2012, we had 11 wells waiting on completion.
Borrowing Base Increase
Effective April 26, 2012, the lenders to our credit agreement increased our borrowing base to $270 million from $260 million.
“In the first quarter of 2012, we drilled and completed more vertical Wolffork wells than planned and worked down our inventory of wells waiting on completion,” said J. Ross Craft, Approach’s President and Chief Executive Officer. “Our vertical Wolffork wells provide valuable technical information, enable us to satisfy lease commitments and allow us to target the 2,500-feet thick Clearfork, Dean and Wolfcamp zones. We also continue to make significant investments in Project Pangea and Pangea West, including several infrastructure projects to facilitate our future growth. These upfront investments will be key drivers that should enable us to increase crude transport capacity for our growing oil production, reduce drilling and completion costs, decrease fresh water usage and efficiently develop the resource potential beneath our acreage position in the Southern Midland Basin.”