Proved Reserves Update
Estimated proved reserves at June 30, 2012, were 83.7 MMBoe, an increase of 9% and 25% over year-end 2011 and mid-year 2011 proved reserves, respectively. Oil proved reserves at June 30, 2012, were 23.5 MMBbls, an increase of 30% and 132% over year-end 2011 and mid-year 2011 oil proved reserves, respectively. The Company’s proved reserves were 28% oil, 36% NGLs and 36% natural gas at June 30, 2012, compared to 23% oil, 38% NGLs and 39% natural gas at year-end 2011. Reserve growth for the first half of 2012 was driven by the Company’s drilling program in Project Pangea targeting the Wolfcamp oil shale and the Wolffork formations.
The standardized after-tax measure of discounted future net cash flows (the “Standardized Measure”) for our proved reserves at June 30, 2012, was $447.9 million. The pre-tax present value of our proved reserves discounted at 10% (“PV-10”), was estimated at $755.2 million. Proved reserves volumes and PV-10 were prepared using prices of $90.13 per Bbl of oil, $50.07 per Bbl of NGLs and $3.36 per Mcf of natural gas. See “Supplemental Non-GAAP Measure” below for our definition of PV-10 and reconciliation to the Standardized Measure.
Approach’s President and CEO, J. Ross Craft, commented, “Our oil production surged in the second quarter to its highest level in our history, jumping 120% year-over-year as a result of our horizontal development drilling in the Wolfcamp oil shale. Oil and NGLs now represent 65% of our production mix and 64% of our reserve mix, which is a dramatic turnaround from just three years ago, when our primary product was natural gas. Beginning in the second half of the year, we expect to realize the benefit of adding a second horizontal rig in the southern Midland Basin.”
Approach Resources Inc.
is an independent oil and gas company with core operations, production and reserves located in the Permian Basin in West Texas. The Company targets multiple oil and liquids-rich formations in the Permian Basin, where the Company operates approximately 146,000 net acres. The Company’s estimated proved reserves as of June 30, 2012, total 83.7 million barrels of oil equivalent, made up of 64% oil and NGLs and 36% natural gas. For more information about the Company, please visit
. Please note that the Company routinely posts important information about the Company under the Investor Relations section of its website.
This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. All statements, other than statements of historical facts, included in this press release that address activities, events or developments that the Company expects, believes or anticipates will or may occur in the future are forward-looking statements. Without limiting the generality of the foregoing, forward-looking statements contained in this press release specifically include expectations of anticipated financial and operating results of the Company, including production, realized prices and capital expenditures. These statements are based on certain assumptions made by the Company based on management’s experience and perception of historical trends, current conditions, anticipated future developments and other factors believed to be appropriate. Such statements are subject to a number of assumptions, risks and uncertainties, many of which are beyond the control of the Company, which may cause actual results to differ materially from those implied or expressed by the forward-looking statements. Further information on such assumptions, risks and uncertainties is available in the Company’s Securities and Exchange Commission (“SEC”) filings.
The Company’s SEC filings are available on its website at
Any forward-looking statement speaks only as of the date on which such statement is made, and the Company undertakes no obligation to correct or update any forward-looking statement, whether as a result of new information, future events or otherwise, except as required by applicable law.
Information in this release regarding production, realized commodity prices and capital expenditures is preliminary and unaudited.
Final results will be provided in our quarterly report on Form 10-Q for the three and six months ended June 30, 2012, to be filed on or before August 9, 2012.
For a glossary of oil and gas terms and abbreviations used in this release, please see our Annual Report on Form 10-K filed with the SEC on March 12, 2012.
Supplemental Non-GAAP Measure
This release contains a financial measure that is a non-GAAP measure. We have provided the reconciliation below of the non-GAAP financial measure to the most directly comparable GAAP financial measure and on the Non-GAAP Financial Information page in the Investor Relations section of our website at
The present value of our proved reserves, discounted at 10% (“PV-10”), was estimated at $755.2 million at June 30, 2012, and was calculated based on the first-of-the-month, 12-month average prices for oil, NGLs and gas, of $90.13 per Bbl of oil, $50.07 per Bbl of NGLs and $3.36 per Mcf of natural gas, respectively.