FORT WORTH, Texas--(BUSINESS WIRE)--Jul. 27, 2012--
- Total production up 16% to 7.7 MBoe/d
- Oil production increases 120% to 230 MBbls, and total liquids production increases 33% to 453 MBbls
- Total proved reserves up 9% to 83.7 MMBoe
- Oil proved reserves increase 30% to 23.5 MMBbls, and total liquids proved reserves increase 13% to 53.4 MMBoe
Estimated second quarter 2012 production totaled 702 MBoe (7.7 MBoe/d), compared to 608 MBoe (6.7 MBoe/d) produced in second quarter 2011, a 16% increase. Estimated second quarter 2012 production increased 7%, compared to first quarter 2012 production of 654 MBoe (7.2 MBoe/d). Estimated oil production for second quarter 2012 increased 120% to 230 MBbls, compared to 104 MBbls produced in second quarter 2011, and increased 20% compared to first quarter 2012 oil production of 191 MBbls. Estimated production for second quarter 2012 was 33% oil, 32% NGLs and 35% natural gas, compared to 17% oil, 39% NGLs and 44% natural gas in second quarter 2011.
Preliminary, average realized prices for second quarter 2012, before the effect of commodity derivatives, were
Preliminary, unaudited estimates of capital expenditures during second quarter 2012 totaled
Proved Reserves Update
Estimated proved reserves at
The standardized after-tax measure of discounted future net cash flows (the "Standardized Measure") for our proved reserves at
Approach's President and CEO,
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 of the Company, including production, realized prices and capital expenditures. These statements are based on certain assumptions made by the Company based on management's experience and perception of historical trends, current conditions, anticipated future developments and other factors believed to be appropriate. 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
Information in this release regarding production, realized commodity prices and capital expenditures is preliminary and unaudited. Final results will be provided in our quarterly report on Form 10-Q for the three and six months ended
For a glossary of oil and gas terms and abbreviations used in this release, please see our Annual Report on Form 10-K filed with the
Supplemental Non-GAAP Measure
This release contains a financial measure that is a non-GAAP measure. We have provided the reconciliation below of the non-GAAP financial measure to the most directly comparable GAAP financial measure and on the Non-GAAP Financial Information page in the Investor Relations section of our website at www.approachresources.com.
The present value of our proved reserves, discounted at 10% ("PV-10"), was estimated at
PV-10 is our estimate of the present value of future net revenues from proved oil and gas reserves after deducting estimated production and ad valorem taxes, future capital costs and operating expenses, but before deducting any estimates of future income taxes. The estimated future net revenues are discounted at an annual rate of 10% to determine their "present value." We believe PV-10 to be an important measure for evaluating the relative significance of our oil and gas properties and that the presentation of the non-GAAP financial measure of PV-10 provides useful information to investors because it is widely used by professional analysts and investors in evaluating oil and gas companies. Because there are many unique factors that can impact an individual company when estimating the amount of future income taxes to be paid, we believe the use of a pre-tax measure is valuable for evaluating the Company. We believe that PV-10 is a financial measure routinely used and calculated similarly by other companies in the oil and gas industry.
The following table reconciles PV-10 to our standardized measure of discounted future net cash flows, the most directly comparable measure calculated and presented in accordance with GAAP. PV-10 should not be considered as an alternative to the standardized measure as computed under GAAP.
|(in thousands)||June 30, 2012|
|Less income taxes:|
|Undiscounted future income taxes||(664,979||)|
|10% discount factor||357,682|
|Future discounted income taxes||(307,297||)|
|Standardized measure of discounted future net cash flows||$||447,936|
Approach Resources Inc.
Megan P. Hays, 817.989.9000
Manager, Investor Relations & Corporate Communications