Approach Resources Inc. Reports Full Year And Fourth Quarter 2012 Results, Announces 2012 Proved Reserves And Increases Horizontal Wolfcamp Shale Drilling Inventory And Resource Potential
2012 Financial Results
Production for 2012 totaled 2,888 MBoe (7.9 MBoe/d), up 24% from 2011. Oil production of 969 MBbls for 2012 increased 101% compared to 2011. Our strong growth in oil production in 2012 was primarily driven by our horizontal drilling and completion activity in the Wolfcamp shale play. Production for 2012 was 34% oil, 31% NGLs and 35% natural gas, compared to 21% oil, 34% NGLs and 45% natural gas in 2011.
Net income for 2012 was $6.4 million, or $0.18 per diluted share, on revenues of $128.9 million. This compares to net income for 2011 of $7.2 million, or $0.25 per diluted share, on revenues of $108.4 million. Full year 2012 revenues increased $20.5 million due to an increase in production volumes ($44.2 million), partially offset by a decrease in oil, NGL and gas prices ($23.7 million). Net income for 2012 included an unrealized gain on commodity derivatives of $3.9 million and a realized loss on commodity derivatives of $108,000. The decline in net income was driven by higher expenses and a realized loss on commodity derivatives, which were partially offset by higher revenues and an unrealized gain on commodity derivatives for 2012.
Excluding the unrealized gain on commodity derivatives and related income tax effect, adjusted net income (non-GAAP) for 2012 was $3.8 million, or $0.11 per diluted share, compared to $19.5 million, or $0.67 per diluted share, for 2011. See “Supplemental Non-GAAP Financial and Other Measures” below for our reconciliation of adjusted net income to net income.EBITDAX (non-GAAP) for 2012 was $83.0 million, or $2.37 per diluted share, compared to $79.4 million, or $2.72 per diluted share, for 2011. See “Supplemental Non-GAAP Financial and Other Measures” below for our reconciliation of EBITDAX to net income. Average realized commodity prices for 2012, before the effect of commodity derivatives, were $84.70 per Bbl of oil, $34.09 per Bbl of NGLs and $2.63 per Mcf of natural gas, compared to $88.18 per Bbl of oil, $51.39 per Bbl of NGLs and $3.92 per Mcf of natural gas for 2011. Our average realized price, including the effect of commodity derivatives, was $44.60 per Boe for 2012, down 7% compared to $47.81 per Boe for 2011.
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