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Approach Resources Inc.
(NASDAQ: AREX) today reported results for second quarter 2012. Highlights for second quarter 2012 include:
Production of 702 MBoe (7.7 MBoe/d), an increase of 16% over second quarter 2011 and 7% over first quarter 2012
Net income of $7.9 million, or $0.23 per share
Adjusted net income (non-GAAP) of $1.6 million, or $0.05 per share
EBITDAX (non-GAAP) of $20.1 million, or $0.60 per share
Second Quarter 2012 Financial Results
Second quarter 2012 production totaled 702 MBoe (7.7 MBoe/d), compared to 608 MBoe (6.7 MBoe/d) produced in second quarter 2011, a 16% increase. Estimated second quarter 2012 production increased 7%, compared to first quarter 2012 production of 654 MBoe (7.2 MBoe/d). Oil production for second quarter 2012 increased 120% to 230 MBbls, compared to 104 MBbls produced in second quarter 2011, and increased 20% compared to first quarter 2012 oil production of 191 MBbls. Second quarter 2012 production was 33% oil, 32% NGLs and 35% natural gas, compared to 17% oil, 39% NGLs and 44% natural gas in second quarter 2011.
Net income for second quarter 2012 was $7.9 million, or $0.23 per diluted share, on revenues of $29.9 million. This compares to net income for second quarter 2011 of $8 million, or $0.28 per diluted share, on revenues of $29.1 million. Net income for second quarter 2012 included an unrealized gain on commodity derivatives of $9.4 million and a realized gain on commodity derivatives of $361,000. The decline in net income and net income per diluted share was driven by lower commodity price realizations and higher operating expenses, partially offset by higher production.
Excluding the unrealized gain on commodity derivatives and related income taxes, adjusted net income (non-GAAP) for second quarter 2012 was $1.6 million, or $0.05 per diluted share, compared to $6.5 million, or $0.23 per diluted share, for second quarter 2011. See “Supplemental Non-GAAP Financial and Other Measures” below for our reconciliation of adjusted net income to net income.