- Estimated capital spending of
$180 millionin 2015
- Projected year-over-year production growth of 10% to 14% in 2015
- Estimated operating cash flow to exceed capital expenditures by 4Q 2015
- New Baker well continues to expand development of eastern Pangea
- Projected 2015 oil volumes 64% hedged at a weighted average floor price of
Approach's Chairman and CEO
"Commodity price volatility is not new to our industry. In 2008, crude oil prices fell 76% and natural gas prices dropped 61% from their peak levels that year. Due to the sharp decline in commodity pricing, in 2009 we decided not to renew rig contracts and focused on reducing costs, operating within cash flow and paying down debt, all of which we accomplished. Over the last several months, crude oil has fallen by more than 40% from a high of over
2015 Capital Budget and Production Forecast
The Company's capital budget for 2015 is
We expect 2015 production to be between 5,450 to 5,650 MBoe. This represents a 10% to 14% increase over our 2014 production guidance of 4,950 MBoe, which we are on track to meet. Based on our current drilling plans, we expect oil and liquids volumes to be approximately 41% and 70%, respectively, of total 2015 production. Additionally, we expect oil and liquids volumes from our horizontal Wolfcamp wells to be approximately 48% and 73%, respectively. Our current drilling plan assumes we will drill 20, and complete 34, horizontal Wolfcamp wells in 2015.
Since our last operations update, we have completed a Wolfcamp C-bench well in our East Baker area with a 24-hour IP rate of 827 Boe/d and a 70% oil cut. The 30-day peak rate for this well was 620 Boe/d with a 64% oil cut. Together with the Elliott C-bench well that we announced last month, the East Baker C-bench well continues to expand our development of the horizontal Wolfcamp on our eastern acreage.
Commodity Derivatives Update
We enter into commodity derivatives positions to reduce the risk of commodity price fluctuations. For 2015, approximately 64% of forecasted oil production and 43% of forecasted natural gas production are hedged at weighted average floor prices of
Forward-Looking and Cautionary Statements
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 operating and financial results of the Company, including capital expenditures, operating cash flow and production guidance discussed herein. 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," "forecast," "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
Approach Resources Inc.
Sergei Krylov, 817.989.9000
Executive Vice President & Chief Financial Officer