Approach Resources Inc. (“Approach” or the “Company”)
(NASDAQ:AREX), has scheduled an earnings call to discuss third
quarter results of operations for November 3, 2017. The
Company also provided an update on recent well results and updated
estimates for third quarter and full year 2017. The Company
remains on track to deliver full-year production volumes consistent
with the lower end of previously announced guidance, despite
impacts from Hurricane Harvey, while capital spending is expected
to be below the lower end, and 20% below the midpoint, of prior
guidance.
The Company completed two wells in the third quarter. Both
wells are outperforming a 700 MBoe type curve, normalized to a
7,500 feet lateral. Both wells were completed on the
Company’s University Lands acreage, with 180 feet stage spacing and
approximately 2,000 pounds of sand per perforated lateral foot.
Extreme weather and flooding caused by Hurricane Harvey, and the
resulting pipeline and fractionation constraints, caused our
midstream operator to shut in or curtail natural gas and NGL
volumes at multiple processing plants in the Permian Basin,
including the plants that normally take delivery of Approach’s gas
and NGLs. These impacts, along with subsequent line pressure
limitations, caused Approach to curtail or shut in production in
some of its wells during the third quarter.
Through the benefit of our infrastructure system and dedicated
team members in the field, we were able to significantly mitigate
the effect of the shut-ins, curtailment and higher line pressure by
using our existing gas lift system in our horizontal well
corridors, allowing us to continue to produce oil from certain
wells, rerouting gas to open sales lines where possible and
actively managing oil inventory storage levels.
As a result, the impact to third quarter production was limited
to approximately 47,000 Boe, or approximately 500 Boe/d.
Approach has returned to producing at pre-hurricane rates, and now
estimates third quarter production to be approximately 11.5 MBoe/d,
compared to previous guidance of 11.8-12.0 MBoe/d. Without the
impact of Harvey, we estimate third quarter production would have
been 12.0 MBoe/d.
Ross Craft, Chairman and Chief Executive Officer, commented,
“Despite the effects of Hurricane Harvey on our short-term
production, we continue to be pleased with our well performance and
cost controls. Two new completions this quarter are
outperforming a 700 MBoe type curve. When normalized for the
impact of Harvey and subsequent line pressure restrictions,
production for the third quarter was tracking at the high end of
prior guidance. In addition, we continue to maintain a
disciplined approach to capital management with a focus on aligning
capital expenditures as closely as possible with cash flows.
In that light, we elected to defer completion of several wells
until first quarter 2018. We now expect 2017 capex to be $47
million – $49 million, or 20% below the midpoint of our prior
guidance.”
After production curtailments, shut-ins and deferral of
completions, the Company still expects to achieve full-year
production of 4,150 – 4,300 MBoe, which is in line with the lower
end of prior guidance.
Furthermore, the Company has been able to continue to control
operating costs, and is lowering the midpoint of full year guidance
for lease operating expense by 6%. Full year 2017 lease
operating expense is now estimated at $4.00 – $4.50 per Boe.
The table below summarizes full year 2017
adjusted guidance.
|
|
|
Full Year 2017 Adjusted Guidance |
Production |
|
Oil (MBbls) |
1,090
– 1,155 |
NGLs (MBbls) |
1,440
– 1,480 |
Natural Gas (MMcf) |
9,720
– 9,990 |
Total (MBoe) |
4,150
– 4,300 |
|
|
Cash operating costs (per Boe) |
|
Lease operating |
$4.00
- $4.50 |
Production and ad valorem taxes |
8.5%
of oil & gas revenue |
Cash general and administrative |
$4.50
- $5.00 |
|
|
Non-cash operating costs (per Boe) |
|
Non-cash general and administrative |
$1.00
- $1.25 |
Exploration |
$0.75
- $1.00 |
Depletion, depreciation & amortization |
$17.00
- $18.00 |
|
|
Capital expenditures (in millions) |
$47 -
$49 |
Conference Call Information and Summary
Presentation:
The Company plans to announce third quarter 2017 financial and
operational results on Wednesday, November 1, 2017, after the close
of trading. In addition, the Company will host a conference
call on Thursday, November 2, 2017, at 10:00 AM CT (11:00 AM ET) to
discuss third quarter 2017 financial and operating results.
Those wishing to listen to the conference call, may do so by
visiting the Events and Presentations page under the Investor
Relations section of the Company’s website,
www.approachresources.com, or by phone:
Conference ID |
93356938 |
Participant Toll-Free
Dial-In Number: |
(844)
884-9950 |
Participant
International Dial-In Number: |
(661)
378-9660 |
|
A replay of
the call will be available on the Company’s website or by
dialing: |
|
Replay Toll-Free |
(855)
859-2056 |
Replay
International: |
(404)
537-3406 |
Conference ID: |
933656938 |
In addition, a third quarter 2017 summary presentation will be
available on the Company’s website.
About Approach Resources
Approach Resources Inc. is an independent
energy company focused on the exploration, development, production
and acquisition of unconventional oil and natural gas reserves in
the Midland Basin of the greater Permian Basin in West Texas.
For more information about the Company, please visit
www.approachresources.com. 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. These statements
are based on certain assumptions made by the Company based on
management’s experience, perception of historical trends and
technical analyses, current conditions, anticipated future
developments and other factors believed to be appropriate and
reasonable by management. When used in this press release, the
words “will,” “potential,” “believe,” “estimate,” “intend,”
“expect,” “may,” “should,” “anticipate,” “could,” “plan,”
“predict,” “project,” “profile,” “model” or their negatives, other
similar expressions or the statements that include those words, are
intended to identify forward-looking statements, although not all
forward-looking statements contain such identifying words. 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
the Company’s website at www.approachresources.com. 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.
INVESTOR CONTACTSuzanne OgleVice President – Investor Relations & Corporate Communicationsir@approachresources.com817.989.9000 APPROACH RESOURCES INC.One Ridgmar Centre6500 West Freeway, Suite 800Fort Worth, Texas 76116www.approachresources.com
Approach Resources (NASDAQ:AREX)
Historical Stock Chart
From Apr 2024 to May 2024
Approach Resources (NASDAQ:AREX)
Historical Stock Chart
From May 2023 to May 2024