Institutions and banks- 2014 capital expenditures of $393.5 million ---1) Long-term debt at March 31, 2015, is comprised of $250 million in 7% senior notes and $210 million outstanding under our senior secured credit facility. Long-term debt at December 31, 2014 is comprised of $250 million in 7% senior notes and $150 million outstanding under our senior secured credit facility. Operations Update ---
During first quarter 2015, we drilled eight, and completed 13, horizontal Wolfcamp wells. Seven wells targeted the Wolfcamp B bench and six wells targeted the Wolfcamp C bench. A total of 11 wells were turned to sales during the quarter including five located on our University lease and six located on our Baker lease. Of the wells completed since our year-end operations update, the average initial 24-hour rate for wells turned online during first quarter 2015 was 723 Boe/d (56% oil). At quarter-end, eight wells were waiting on completion.
Costs incurred during first quarter 2015 totaled $74.6 million and included $68.2 million for drilling and completion activities, $6 million for infrastructure projects and equipment, and $0.4 million for lease extensions.
At March 31, 2015, we had a $1 billion senior secured credit facility in place, with aggregate lender commitments of $450 million and borrowing base of $600 million. In April, our lenders reaffirmed the commitment amount of $450 million, while reducing the borrowing base to $525 million. At March 31, 2015, our liquidity and long-term debt-to-capital ratio were approximately $240 million and 37.4%, respectively.
• Investors have so far failed to pay much attention to the earnings improvements the company has managed to achieve over the last quarter. Turning toward the future, the fact that the stock has come down in price over the past year should not necessarily be interpreted as a negative; it could be one of the factors that may help make the stock attractive down the road. Down over 80% AREX could have a very nice bounce to a more realistic level. Approach’s Chairman and CEO Ross Craft commented, “We believe Approach is very well-positioned to endure a period of low crude oil prices, given our peer-leading drilling and completion costs, strong balance sheet, balanced commodity mix and hedges in place. WHY shorts are wrong - ,1) a number of technical indicators show that the market could be presenting an opportunity to enter crude oil on the long side. Including the coiled RSI and over sold s RSI , still up from up 30% from bottom, , 2) Fundamentals, bank support and strong assets.... extraordinary book value.... Great opportunity to own quality-cheap 3) Downgrades and analyst begging for cheap shares with simple cases, lies and over analyzing irrelevant variables. This is further confirmed by bearish extremes in sentiment and we now have positive seasonality maintenance and cleaning in the sector. 4) Historic patterns now fitting chart patterns of retrenchments and gains, same old market cycles 5) normal risk/reward evaluation not seen in good blue chip companies 6) people are overlooking hedges and dividend 6) shorts covering for fuel 6) overstated bear case for storage and companies balance sheets of assets 7) Macro events worldwide like middle east problems supply chains 8) Economies getting better world wide eventually 9) rig counts shutting down, capx spending down will create a need 10) war in 5 countries
Management is solid The 30% shorts can shove the 3 cent loss in the worst climate every right up their over sold short position. FORT WORTH, Texas--(BUSINESS WIRE)-- Approach Resources Inc. (NASDAQ: AREX) today reported results for first quarter 2015. Highlights for first quarter 2015 include:
Production was 14.3 MBoe/d, a 21% increase over the prior-year quarter
EBITDAX was $33.4 million, or $0.83 per diluted share
Per unit cash operating expenses decreased 27% from the prior-year period
Adjusted net loss was $1.3 million, or $0.03 per diluted share
Average IP for horizontal Wolfcamp wells in first quarter 2015 was 723 Boe/d (56% oil)
Lenders reaffirmed credit facility commitment amount of $450 million effective April 15
The bear raid this last week was effective but to trash management is wrong. Shorts are pushing 30% as they load their short positions. This will change eventually . I think soon and add. What don't they understand about how the stock performs with normal oil levels. The whole industry is suffering and to blame one company is not right.
Return on Assets (ttm): 4.59%
Return on Equity (ttm): 6.13%
Revenue (ttm): 229.90M
Revenue Per Share (ttm): 5.80
Qtrly Revenue Growth (yoy): -46.20%
Gross Profit (ttm): 225.83M
EBITDA (ttm)6: 205.77M
Net Income Avl to Common (ttm): 45.52M
Diluted EPS (ttm): 1.14
Qtrly Earnings Growth (yoy): N/A
Total Cash (mrq): 294.00K
Total Cash Per Share (mrq): 0.01
Total Debt (mrq): 460.00M
Total Debt/Equity (mrq): 59.83
Current Ratio (mrq): 0.56
Book Value Per Share (mrq): 19.15
That was the biggest bunch of #$%^&*() I have ever read. It shows somebody left on the sidelines begging for a better buy in. The stock has fell and you may get your way. Talking about a balance sheet that increases assets year over year as bad is lame as your peers suggest. 774,327 this year, last year 710,495, and 2013it was 633,468 The Talk of institutions not backing this and understanding the stock is blatant crazy. Institutions have 121 % of the stock to offset the screwball shorts. To even not address the down cycle and all companies in the same boat is biased BS. Its easy to trash down industries but to suggest wrong doing is poor judgment using hindsight.
Even if it takes a year to 18 months it is going to be a great return. There are many of these plays near historic lows. ISIS is expanding to a point the world will react. ISIS oil is right around the corner.
I think its coiled right now. The stock must have been hit by a short raid to keep it dropping. Its ready for a 15% up day. Yesterday the whole industry got hit and it provided for good entry today. These stocks can frighten anybody. OIL trades like 2% a day some times. I think it will be up 2% today.
What will they do as the oil prices return to a more normal level? Do they really believe oil wont bounce back? Institutions own 86% of this stock. They are counting on the retail longs being frightened on the bottom. They will burn.
ASSET BASE- Resolute’s producing assets are Aneth Field in the Paradox Basin of Utah and Hilight Field in the Powder River Basin of Wyoming, and in the Permian Basin of West Texas. Resolute produced 13,500 equivalent barrels of oil per day in Q1 2015, approximately 72% of which was crude oil. we have shored up our financial position such that we have adequate liquidity to sustain the business, we have top-tier hard assets in the ground, and we have a top-tier team in place. We now can turn our attention to playing offense with the many options that are available to us. In 2015 we will also continue to explore other ways to de-lever our balance sheet, including pursuing non-core asset sales and considering joint ventures to drill wells on the Company’s acreage.
Upon returning to a normalized commodity price environment, our business strategies would return to strategies substantially similar to those that we have pursued over the last several years. ANETH FIELD -Aneth Field, a giant legacy oil field in southeast Utah, holds 73% of our net proved reserves as of December 31, 2014, and accounted for 49% of our production during 2014, averaging 6,287 equivalent barrels of oil (“Boe”) per day, of which 98% was oil.
Aneth Field was discovered in 1956 and developed by Texaco, Superior, Phillips and Shell. Aneth Field is a classic "giant" oil field with original oil in place esitmated to be approximately 1.5 billion barrels. Resolute has identified several areas in which field enhancements are possible, including additional CO2 flooding, workovers and infrastructure upgrades. Resolute has a 62% working interest in the Aneth Unit, a 68% WI in the McElmo Creek Unit and a 59% WI in the Ratherford Unit
Resolute acquired its Wyoming producing properties in 2008, located in Hilight Field in the Powder River Basin about 20 miles south of Gillette, Wyoming. Resolute operates three federal units of Hilight Field: Jayson Unit, Grady Unit and Central Hilight Unit. SEC reserves in Hilight as of year-end 2014 are approximately 28% oil, 24% NGL, 48% natural gas.
All of the production from the Wyoming properties comes from conventional reservoirs. Resolute operates all of these properties, with per-well working interest averaging approximately 94%.
In addition to the existing production resource, Resolute has been investigating uphole opportunities, including:
• A Mowry formation recompletion program. Eleven Mowry wells in Hilight Field were recompleted as of March 31, 2015
• A 3D seismic program over Hilight Field to better understand the potential for Muddy formation infills, Mowry formation completions, and reserves and production from the uphole Turner and Niobrara formations
• A horizontal exploratory test of the Mowry shale in the Big Horn Basin on 31,700 net acres owned by Resolute.
Resolute controls approximately 21,200 gross (13,200 net) acres, prospective primarily for Wolfbone production. In the Midland Basin, we own leasehold covering approximately 11,800 net acres with infill drilling and uphole recompletion potential.
Resolute placed 4 gross (2.0 net) wells on production during the first quarter, bringing its total producing well count to 225 gross (185.1 net).
PERMIAN BASIN properties are located in Reeves, Howard and Martin counties, in the Permian Basin of West Texas. Resolute controls approximately 21,200 gross (13,200 net) acres, prospective primarily for Wolfbone production. In the Midland Basin, we own leasehold covering approximately 11,800 net acres with infill drilling and uphole recompletion potential. Delaware Basin Project. The Delaware Basin project area includes approximately 21,200 gross (13,200 net) acres. The primary objective in this area is the Wolfcamp formation. Midland Basin Project. The Midland Basin project area includes approximately 10,000 gross (7,800 net) acres. Northwest Shelf Project. In 2012 we acquired assets in Lea County, New Mexico, in Denton, Gladiola and South Knowles fields, which are legacy conventional oil fields that produce from fractured carbonate reservoirs and cover 4,700 gross acres in which we hold an approximate 85% working interest, all held by production. Our interest in Denton Field, the largest of the three fields, consists of 2,900 gross acres, all of which are held by production. Approximately 1.0 MMBoe of proved reserves are associated with our Denton Field interests. We believe that growth potential and upside may exist from activities such as deepening existing wells and infill drilling from 40-acre to 20-acre spacing. In 2013 we completed a three-dimensional (“3D”) seismic shoot across Denton Field which will provide further insight into the development opportunities that may exist in this area. We are the operator of the Lea County assets.
In the conference call, Sutton said, “We have stress tested our project economics, and even at $70 per barrel, these projects warrant continued investment.” The company has hedged 6.6 MBOEPD (about 45% of the Q3’14 exit rate) for 2015 at an average strike price of $87/barrel. A consistent cash flow source with Permian upside. The Aneth Field provides Resolute a reliable production flow and the company has just begun its operations in the Permian. In the conference call, management said 75% of production is sourced from low decline assets (mostly Aneth Field), meaning the majority of capital can be invested in growth projects. The company indicated its 2015 capital allocation would “lean” towards the Permian, which currently provides the most compelling economics of REN’s drilling projects. Capital One Securities set a price target of $6.50 and Wells Fargo Securities affirmed its “Buy” rating on Resolute. Wells Fargo also placed an “Outperform” tag on REN, defined by the group as “The stock appears attractively valued, and we believe the stock’s total return will exceed that of the market over the next 12 months.” The Term Loan Facility will mature on the date that is six months after the maturity of the Company's existing senior revolving credit facility (the "Credit Facility"), but in no event later than November 1, 2019. Our ability to add value with modest capital outlays is a tribute to the quality of our asset base. All of our significant properties have development opportunities that remain economic in the current commodity price environment. Those include more than 450 gross horizontal wells in the Permian and Powder River basins. The developing horizontal plays continue to become more valuable as additional zones are being drilled or delineated by ourselves and other operators.
“The low decline rates and numerous tertiary recovery projects in Aneth Field are also a part of that strong asset base. In Aneth Field we have economic projects that could add more than 30 million net barrels to our reserves. Our long lived, low decline fields are particularly supportive during low commodity price periods. In fact, production has increased during the year with minimal growth capital. Looking at all this potential, we feel confident we have the right assets for significant future growth.”
Book Value Per Share (mrq): 7.22
% Held by Institutions1: 96.10%
Short % of Float (as of Nov 28, 2014)3 15% : Now 8%
52-Week Change3: -84.70%
Company has a lot of hedges that will burn off over two years so think sell off is overdone (even now). The shorts should be running. I Expect oil prices will move up to $80 at some point in the next two years and the stock will move up as prices recover. Two year price Target is $ 5 (close to 3X if you buy at $1.5). Not a bad return as the company is backed by institutions that will not sell here. They bought much higher will the prospects of their fields. Now they have some breathing room to develop for higher oil. The shorts have manipulated the oil industry as the oversold temporary positions brought in people shorting at 20 to 50% on some stocks… I feel this stock was brought down as part of the whole Industry , good and bad. .. Now the shorts must cover their positions as most the shares are in secure institutional ownership hands and solid investors retirement funds ( like mine) . . It’s a typical cycle and the financing will cushion the next few years to let management perform. If anything the industry is innovative and changing with lower ways to produce, pumps, chemicals, fracking, OIL/Water lines, infrastructures and delivery networks. Companies are running their cheaper and greatest producing wells and high margin rigs are not used tell oil rebounds. Many companies can make money at 70 dollar oil. UN heard of just a couple years ago. The company is in the driver’s seat as oil rebounds. Their 2015 production is 74% hedged at 86.4 a barrel and their 2016 oil production is at 80.42 a barrel. The company is prepared…. The hedges have a significant value not prices into the 1.6 PPS….. Secondly as oil prices weakened the company immediately took steps to shore –up their liquidity. They completed a 150 million second lien loan. Following the close of the loan the company has approximately 92 in borrowing base available. Drilling cost have come down and WolfCamp cam in a lot cheaper than estimated. The company has guided for flat production , preserve capital, and to pay some debt down. 2015 capital expenditures will be funded with internally generated cash flows.
New drilling techniques using many wells in a area ,GE, pumps, pipes:water/oil, statoil, bring break even down to 60 bucks a barrel. Pumps shut off and on as needed. Old ad hock rigs and distribution are out the window. Big and small can use innovative methods. Its a new day for oil and the middle east don't control the USA.
Its BS about not making money under 80 dollars...... Most figure in all kinds of cspx and spending...... Most put in extra R and D.... Buying property, machinery and the writing off of ewuiptment........ Its closer to 65 and 70 were they break even...... They don't run the expensive wells....... They all can re hedge......the beats are you talking like clowns is the best sign of a good rally
Barron's said many are profitable and will expand over 70 dollars....
Many are not profitable because of expansion ,,capx only..... They expand over 70 $$$$... Some Barron's piece said male mony at 65$$$$$$$.... Every company is different but most have scaled down to their profitable wells.......Barron's Monday edition