Approach Resources (AREX) Tops Q3 EPS by 4c, Revenues Beat
Approach Resources (NASDAQ: AREX) reported Q3 EPS of ($0.04), $0.04 better than the analyst estimate of ($0.08). Revenue for the quarter came in at $32.56 million versus the consensus estimate of $29.64 million.
- Drilled six wells and completed two horizontal Wolfcamp wells
- Production of 1,043 MBoe or 11.3 MBoe/day
- Revenues of $32.6 million, a 27% increase over prior year quarter
- Generated $4.5 million of operating income
- Net loss was $4.3 million or $0.05 per diluted share, and adjusted net loss (non-GAAP) was $4.2 million or $0.04 per diluted share
- Generated $16.5 million of EBITDAX (non-GAAP), a 19% increase over prior year quarter
- Improved unhedged cash margin per Boe (non-GAAP) to $18.88 per Boe, 40% over the prior year quarter
Management Comment
Ross Craft, Approach’s Chairman and CEO, commented, “I am pleased with our execution during the first nine months of the year relative to commodity prices and basin dynamics. This quarter we delivered revenue, earnings and EBITDAX growth. The strengthened price in oil and NGLs and expiration of legacy hedges, combined with a disciplined focus on controlling costs, drove $4.5 million of operating income. We drilled six horizontal wells, fulfilling our 2018 drilling program ahead of schedule. In addition, we completed two wells in the second half of the quarter and maintained our industry leading drilling and completion cost average of $4.6 million per well.
“Despite improved oil and NGL prices, the extreme WAHA natural gas price discount in the Permian Basin has persisted. In light of this, we elected to defer several third quarter completions and reschedule planned fourth quarter completions. We understand that the market often demands production growth under any circumstances, but we believe growth for the sake of growth is shortsighted. We have a healthy inventory of drilled but uncompleted wells, positioning us to accelerate activity in 2019, when we expect the basin gas differentials to improve. In the meantime, we will stay focused on delivering a strengthened balance sheet and on disciplined and profitable execution.”
For earnings history and earnings-related data on Approach Resources (AREX) click here.