2009 Drilling Activity and Guidance Update
The Company has resumed drilling and currently is operating two rigs in Cinco Terry. During the fourth quarter of 2009, the Company plans to drill 11 gross (5.5 net) wells in Cinco Terry. We also have begun our previously announced 3-D seismic operations in Cinco Terry. We plan to move one rig into Ozona Northeast in
The table below sets forth the Company's revised 2009 financial and operational guidance. Guidance for lease operating, severance and production taxes and depletion, depreciation and amortization expenses is unchanged from prior guidance. The 2009 guidance is forward-looking information that is subject to a number of risks and uncertainties, many of which are beyond the Company's control, as further described later in this press release.
2009 2009 Current Previous Guidance Guidance ---------------- --------------- Production: Total (MMcfe) 8,700 - 9,000 8,700 - 9,400 Operating costs and expenses: Lease operating expense (per Mcfe) $ 0.85 - 0.95 $ 0.85 - 0.95 Severance and production taxes (percent of oil and gas sales) 5% - 6% 5% - 6% General and administrative (per Mcfe) $ 1.00 - 1.10 $ 0.90 - 1.00 Depletion, depreciation and amortization (per Mcfe) $ 2.50 - 3.00 $ 2.50 - 3.00
2010 Capital Budget and Guidance
The Company's Board of Directors has approved a 2010 capital budget for exploration and development expenditures of up to
The Company intends to fund 2010 capital expenditures, excluding any acquisitions, primarily out of internally-generated cash flows and, as necessary, borrowings under its credit facility. We anticipate allocating a substantial portion of the capital budget to our core areas of operation in
Estimated Projected Number of Wells Allocation Drilled & (in thousands) Completed ---------------- --------------- Area of Operation
West TexasOzona Northeast $ 25,600 36 Cinco Terry 19,950 48 Exploratory 3,075 9 Lease acquisition, geological and geophysical 4,375 -- ---------------- --------------- Total capital expenditures $ 53,000 93 ================ ===============
The table below sets forth the Company's 2010 financial and operational guidance. The 2010 guidance is forward-looking information that is subject to a number of risks and uncertainties, many of which are beyond the Company's control, as further described later in this press release.
2010 Current Guidance --------------- Production: Total (MMcfe) 8,900 - 9,400 Operating costs and expenses: Lease operating expense (per Mcfe)
$ 0.85 - 0.95Severance and production taxes (percent of oil and gas sales) 5% - 6% General and administrative (per Mcfe) $ 1.05 - 1.15Depletion, depreciation and amortization (per Mcfe) $ 2.50 - 3.00
Forward-Looking Statements 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 the expectations of plans, strategies, objectives and anticipated financial and operating results of the Company, including as to the Company's expected 2009 and 2010 production and operating costs and expenses guidance, capital expenditures (including, without limitation, the amount, location and category of such expenditures), the Company's drilling program, internally-generated cash flow and financial and operational guidance. 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
Approach Resources Inc. J. Ross Craft, President and CEO Steven P. Smart, Executive Vice President and CFO J. Curtis Henderson, Executive Vice President and General Counsel Megan P. Brown, Investor Relations and Corporate Communications(817) 989-9000