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Approach Resources Inc. Reports Second Quarter 2012 Results

Liquidity and Commodity Derivatives Update

At June 30, 2012, we had a $300 million revolving credit agreement with a $270 million borrowing base and $145.4 million outstanding. At June 30, 2012, our liquidity and long-term debt-to-capital ratio were $124.7 million and 23.2%, respectively. See “Supplemental Non-GAAP Financial and Other Measures” below for our calculation of “liquidity” and “long-term debt-to-capital ratio.”

We enter into commodity derivatives positions to reduce the risk of commodity price fluctuations. Please refer to the “Unaudited Commodity Derivatives Information” table below for a detailed summary of the Company’s current derivatives positions.

Capital Expenditures and Guidance Update

Costs incurred during second quarter 2012 totaled $70.3 million, and included $65.1 million for exploration and development drilling, $4.6 million for infrastructure projects and $600,000 for acreage acquisitions. The table below sets forth the Company’s current production and operating costs and expenses guidance for 2012. The guidance is forward-looking information that is subject to a number of risks and uncertainties, many of which are beyond the Company’s control.
Prior 2012 Current 2012
  Guidance       Guidance
Total (MBoe) 2,900 – 3,100 2,900 – 3,100
Percent oil and NGLs 65% 65%
Operating costs and expenses (per Boe):
Lease operating $ 4.50 – 5.50 $ 5.50 – 6.50
Severance and production taxes $ 2.50 – 4.00 $ 2.50 – 4.00
Exploration $ 4.00 – 5.00 $ 4.00 – 5.00
General and administrative $ 6.00 – 7.00 $ 7.00 – 8.00
Depletion, depreciation and amortization $ 12.00 – 15.00 $ 15.00 – 18.00
Capital expenditures (in millions) Approximately $260 Approximately $260

Second Quarter 2012 Conference Call

Approach will host a conference call on Friday, August 3, 2012, at 10:00 a.m. Central Time (11:00 a.m. Eastern Time) to discuss second quarter 2012 financial and operating results. The conference call can be accessed by dialing (800) 573-4754 (U.S. domestic) or (617) 224-4325 (International). Additionally, the conference call will be broadcast live over the internet and can be accessed through the Investor Relations section of the Company’s website, The webcast will be archived for replay on the Company’s website until November 2, 2012.

In addition, the Company will host a telephone replay of the call, which will be available for one week. U.S. callers may access the telephone replay by dialing (888) 286-8010 and international callers may dial (617) 801-6888. The passcode is 97967148.

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