FORT WORTH, Texas--(BUSINESS WIRE)-- Approach Resources Inc.(NASDAQ: AREX) today announced that it has completed the scheduled semiannual borrowing base redetermination of its revolving credit facility, and as a result, the bank group has set the lender commitment amount and borrowing base at $450 million. Under the terms of the credit agreement, the bank group redetermines the borrowing base semiannually using the banks' estimates of reserves and future oil and gas prices. The next borrowing base redetermination is scheduled to occur by April 1, 2016. At September 24, 2015, Approach had $276 million outstanding under its revolving credit facility, resulting in liquidity of $177 million.
Sergei Krylov, Approach's Executive Vice President and Chief Financial Officer, commented, "Despite significant volatility in commodity prices, we've been able to maintain our credit facility commitments unchanged for the past 17 months. This most recent reaffirmation of lender commitments at $450 million is a testament to the continued productivity improvements and cost reduction initiatives that have been the focus of the entire Approach team. We appreciate the support from our banking group and look forward to working with them on our future growth initiatives."
About Approach Resources
Approach Resources Inc. is an independent energy company focused on the exploration, development, production and acquisition of unconventional oil and 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.
Supplemental Non-GAAP Financial and Other Measures
Liquidity (non-GAAP) is calculated by adding the net funds available under our revolving credit facility and cash and cash equivalents. We use liquidity as an indicator of the Company's ability to fund development and exploration activities. However, this measurement has limitations. This measurement can vary from year-to-year for the Company and can vary among companies based on what is or is not included in the measurement on a company's financial statements. This measurement is provided in addition to, and not as an alternative for, and should be read in conjunction with, the information contained in our financial statements prepared in accordance with GAAP (including the notes), included in our SEC filings.
The table below summarizes our liquidity at September 24, 2015 (in thousands).
| || |
September 24, 2015
| Borrowing base || $ || 450,000 |
| Cash and cash equivalents || 3,276 |
| Senior secured credit facility – outstanding borrowings || (276,000 || ) |
| Outstanding letters of credit || || (325 || ) |
|Liquidity || $ || 176,951 || |
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Source: Approach Resources Inc.