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
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.
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
The table below summarizes full year 2017 adjusted guidance.
|Full Year 2017 Adjusted Guidance|
|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
|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|
In addition, a third quarter 2017 summary presentation will be available on the Company’s 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
Vice President – Investor Relations & Corporate Communications
APPROACH RESOURCES INC.
One Ridgmar Centre
6500 West Freeway, Suite 800
Fort Worth, Texas 76116
Source: Approach Resources Inc