8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 OR 15(d) of The

Securities Exchange Act of 1934

Date of Report (Date of earliest event reported)

April 15, 2013

APPROACH RESOURCES INC.

(Exact name of registrant as specified in its charter)

Delaware	001-33801	51-0424817
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)
One Ridgmar Centre 6500 West Freeway, Suite 800 Fort Worth, Texas		76116
(Address of principal executive offices)		(Zip Code)

(817) 989-9000

(Registrant’s telephone number, including area code)

Not Applicable

(Former name or former address, if changed since last report.)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.02 Results of Operations and Financial Condition.

On April 15, 2013, Approach Resources Inc. (the “Company”) issued a press release announcing estimated first quarter 2013 production (the “Press Release”). A copy of the Press Release is furnished herewith as Exhibit 99.1.

Item 7.01 Regulation FD Disclosure.

On April 15, 2013, the Company issued the Press Release discussed above in Item 2.02 of this current report on Form 8-K. A copy of the Press Release is furnished herewith as Exhibit 99.1.

In addition, on April 15, 2013, the Company posted a new presentation titled “IPAA’s Oil & Gas Investment Symposium” under the “Investor Relations – Presentations” section of the Company’s website, www.approachresources.com. For the benefit of all investors, the presentation is attached hereto as Exhibit 99.2.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits.

Exhibit No.	Description
99.1	Press Release dated April 15, 2013
99.2	IPAA’s Oil & Gas Investment Symposium presentation

In accordance with General Instruction B.2 of Form 8-K, the information in this current report on Form 8-K, including the attached exhibits, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference into any registration statement or other filing under the Securities Act of 1933, as amended, or the Exchange Act, except as otherwise expressly stated in such filing.

2

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

APPROACH RESOURCES INC.
By:	/s/ J. Curtis Henderson
	J. Curtis Henderson
	Executive Vice President and General Counsel

Date: April 15, 2013

3

EXHIBIT INDEX

Exhibit No.	Description
99.1	Press Release dated April 15, 2013
99.2	IPAA’s Oil & Gas Investment Symposium presentation

4

EX-99.1

Exhibit 99.1

News Release

For Immediate Release

April 15, 2013

Approach Resources Inc.

Announces Preliminary Production for First Quarter 2013 and

Schedules First Quarter 2013 Conference Call for

Friday, May 3, 2013

Fort Worth, Texas, April 15, 2013—Approach Resources Inc. (NASDAQ: AREX) today announced preliminary production for first quarter 2013 of 754 MBoe (8.4 MBoe/d), compared to 654 MBoe (7.2 MBoe/d) produced in first quarter 2012, a 15% increase. Estimated oil production for first quarter 2013 increased 63% to 310 MBbls, compared to 191 MBbls produced in first quarter 2012. Estimated production for first quarter 2013 was 41% oil, 28% NGLs and 31% natural gas, compared to 29% oil, 33% NGLs and 38% natural gas in first quarter 2012.

As previously reported, estimated production for first quarter 2013 was impacted by a third-party NGL fractionation facility repair and maintenance, decreasing our average volumes by approximately 6.1 MBoe/d beginning the second week in March. As of April 6, 2013, substantially all production was back online. Turnaround activity for NGL fractionators along the Gulf Coast typically occurs during the spring season. We currently do not expect further downtime as a result of this activity, but will provide an update if conditions change.

Beginning April 3, 2013, we began flowing oil down our joint venture pipeline, which is a 38-mile pipeline primarily in Crockett and Reagan counties. We expect that the oil pipeline will enable the Company to efficiently transport our crude oil production to market, reduce our transportation differential and provide optionality for accessing markets with superior price realizations.

Conference Call Scheduled for May 3, 2013

Approach will host a conference call on Friday, May 3, 2013, at 10:00 a.m. Central Time (11:00 a.m. Eastern Time) to discuss first quarter 2013 financial and operating results. The Company plans to issue first quarter 2013 results after market close on Thursday, May 2, 2013.

To participate in the conference call, domestic participants should dial (866) 783-2138 and international participants should dial (857) 350-1597 approximately 15 minutes before the scheduled conference time. To access the simultaneous webcast of the conference call, please visit the Calendar of Events page under the Investor Relations section of the Company’s website, www.approachresources.com, 15 minutes before the scheduled conference time to register for the webcast and install any necessary software. The webcast will be archived for replay on the Company’s website until August 1, 2013.

In addition, the Company will host a telephone replay of the call, which will be available for one week. U.S. callers may access the telephone replay by dialing (888) 286-8010 and international callers may dial (617) 801-6888. The passcode is 12626307.

INVESTOR CONTACT   Megan P. Hays mhays@approachresources.com 817.989.9000 APPROACH RESOURCES INC.   One Ridgmar Centre 6500 West Freeway, Suite 800 Fort Worth, Texas 76116 www.approachresources.com

Approach Resources Inc. is an independent oil and gas company with core operations, production and reserves located in the Permian Basin in West Texas. The Company targets multiple oil and liquids-rich formations in the Permian Basin, where the Company operates approximately 148,000 net acres. The Company’s estimated proved reserves as of December 31, 2012, total 95.5 million Boe, comprised of 39% oil, 30% NGLs and 31% natural gas. For more information about the Company, please visit www.approachresources.com. Please note that the Company routinely posts important information about the Company under the Investor Relations section of its 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 of the Company, including production, volume and impact of production curtailment, transporting oil by pipeline, transportation differential and market access. 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 Securities and Exchange Commission (“SEC”) filings. The Company’s SEC filings are available on its website at www.approachresources.com. Any forward-looking statement speaks only as of the date on which such statement is made, and the Company undertakes no obligation to correct or update any forward-looking statement, whether as a result of new information, future events or otherwise, except as required by applicable law.

Information in this release regarding production is preliminary and unaudited. Final results will be provided in our quarterly report on Form 10-Q for the three months ended March 31, 2013, to be filed on or before May 10, 2013.

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 SEC on February 28, 2013.

2

EX-99.2

Approach Resources Inc.

IPAA’S OIL & GAS INVESTMENT SYMPOSIUM

NEW YORK

APRIL 15, 2013

Exhibit 99.2

2

Company Overview

•

Enterprise value $1.1 BN

•

High quality reserve base

95.5 MMBoe proved reserves

99% Permian Basin

•

Permian core operating area

•

2013 Capital program of $260 MM

3

AREX OVERVIEW

ASSET OVERVIEW

Notes:

Proved

reserves

and

acreage

as

of

12/31/2012.

All

Boe

and

Mcfe

calculations

are

based

on

a

6

to

1

conversion

ratio.

Enterprise

value

is

equal

to

market capitalization using the closing share price of $24.75 per share on 4/8/2013, plus net debt as of 12/31/2012.

167,000 gross (148,000 net) acres

1+ BnBoe gross, unrisked resource

potential

2,000+ Identified HZ drilling locations

targeting the Wolfcamp oil shale play

Running 3 HZ rigs in the Wolfcamp shale

play

Targeting 30%+ production growth

Reserve Growth

4

RESERVE GROWTH

OIL RESERVE GROWTH

•

YE’12 reserves up 24% YoY

•

Replaced 1,346% of reserves at a drill-bit F&D

cost of $7.45/Boe

•

60.1 MMBoe proved reserves booked to

Wolffork/Wolfcamp oil shale play

•

Strong organic reserve growth driven by oil

from HZ Wolfcamp shale

•

Oil reserves up 7x

since YE’09

•

Oil reserves up 106%

YoY

PD Oil reserves up 60%

YoY

Notes: See “F&D Costs Reconciliation”

slide in appendix.

Production Growth

5

PRODUCTION GROWTH

OIL PRODUCTION GROWTH

3.6 MMBoe –

3.9 MMBoe in 2013

2013E Production mix ~70% liquids

•

Strong organic production growth driven by

oil from horizontal Wolfcamp shale

•

Oil production up 3x

since 2009

•

Oil production up 101%

over 2011

•

2012 production increased 24% YoY

•

Targeting 30%+ production growth in 2013

Low-Cost Operator

Notes:

Peers

include

CXO,

FANG,

KOG,

LPI,

OAS,

PXD,

ROSE

and

SM.

Data

based

on

SEC

filings

for

twelve

months

ending

December

31,

2012.

3-YR AVERAGE F&D COSTS ($/Boe)

LEASE OPERATING EXPENSE ($/Boe)

6

AREX Wolfcamp Oil Shale Resource Play

7

ACTIVE PARTICIPANTS IN THE PLAY

Large, primarily contiguous acreage position

Oil-rich, multiple pay zones

167,000 gross (148,000 net) acres

Low acreage cost ~$500 per acre

940+ MMBoe gross, unrisked resource potential

2,096 Identified HZ Wolfcamp locations targeting

the Wolfcamp A, B & C

Plan to drill ~ 35 to 40 HZ wells with 3 rigs

Testing “stacked-wellbore”

development and

tighter well spacing

Decrease well costs and increase efficiencies

when field infrastructure projects are completed

Source: Rig data from Schlumberger and Iberia.

HZ Wolfcamp resource potential up 300%+

2013 Operations

Broad industry participation de-risking play

50+ HZ Wolfcamp rigs as of April 2013

AREX Drilling Locations, Targets & Resource Potential

8

Notes: Potential locations based on 120-acre spacing for HZ Wolfcamp, 20-acre spacing for Vertical Wolffork, 20 to 40-acre spacing for Vertical Wolffork

Recompletions and 40-acre spacing for Vertical Canyon Wolffork. No Wolfcamp or Wolffork locations assigned to south Project Pangea. 

TARGET

DRLLING

DEPTH (FT.)

EUR

(MBoe)

IDENTIFIED

LOCATIONS

GROSS RESOURCE

POTENTIAL

(MBoe)

Horizontal

Wolfcamp

Wolfcamp A

7,000+

(lateral length)

450

703

316,350

Wolfcamp B

7,000+

(lateral length)

450

690

310,500

Wolfcamp C

7,000+

(lateral length)

450

703

316,350

Total HZ

2,096

943,200

Vertical

Wolffork

Recompletions,

Wolffork & Canyon

Wolffork

< 7,500 to

< 8,500

93 to 193

887

124,594

1.1 BnBoe Total Gross Resource Potential

Multiple Decades of HZ Drilling Inventory

Wolfcamp Oil Shale Play

9

WOLFCAMP SHALE –

WIDESPREAD, THICK, CONSISTENT & REPEATABLE

Horizontal Wolfcamp –

82% of IP is Oil

10

Sutton

Source: Publicly available regulatory filings, company presentations.

Misconception vs. Facts

11

Misconception: Wells are

gassier as the play moves

southward

•

Gassier wells are historical

Canyon, Strawn and

Ellenburger wells

•

The Wolfcamp Shale is located

in peak oil and early wet gas

window. Wolfcamp wells are

expected to produce

approximately 58% oil and

~80% liquids over the

production life, supported by

core data, initial production data

and EUR forecast

AREX HZ Wolfcamp Activity

12

Notes: Acreage as of 12/31/2012.

Pangea West

North & Central Pangea

South Pangea

•

18,000 gross acres

•

Pad drilling with A/B and A/C “stacked”

laterals

Schleicher

Crockett

Irion

Reagan

•

3-D seismic interpretation

completed

•

Drilling HZ pilot well

•

59,000 gross acres

•

Continuing completion

design improvement

•

90,000 gross acres

•

Pad drilling with A/B and A/C “stacked”

laterals

•

North Pangea infrastructure in place in 2Q’13

Sutton

54-9 1

54-2 1

54-9 2

54-12 1

54-15 1

54-15 2

54-16 3

55-21 2

54-19 3

54-8 1

54-13 1

56-6 1

56-15 1

PW 6601H

PW 6602H

CT L 1801

54-13 2

54-20 2

54-20 1

55-21 3

56-14 1

PW 6507H

Chandler 4403

Childress 603

Childress G 1008

Lauffer 1306

Davidson 3406

Bailey 315

CT B 1601

CT M 901H

Baker B 203

CT B 1303

45 C 803H ST

42-11 2R

45 E 1101H

Baker C 1201

45 A 701H

45 B 2401H

45 F 2303H

CT B 1308

42-23 9

Baker A 114

West 2308

42-23 11

42-14 10

42 A 2101H

42-15 2

42 B 1001H

45 D 902H

CT A 807

45 A 703H

45 B 2402H

CT J 1001

CT G 1001

CT H 1001

West A 2210

42-11 3

CT J 1003H

42 C 101H

CT H 1002

CT G 701H

45 B 2403H

45 D 905H

45 A 704H

CT K 1901

CT K 1902

45 D 904H

45 E 1102H

Baker B 207H

Baker B 206H

CT H 1004H

U 50 A 601HC

PW 6533H

PW 6535H

45 F 2304H

45 A 706H

45A 708H

45A 710H

45A 712H

Elliott 2002HB

CT M 902

•

3-D Seismic acquisition completed.

Data processing in progress

•

Targeting HZ pilot well in 2Q’13

U 50 A 603HA

HZ Wolfcamp Well Performance

13

Time (Days)

CONTINUED STRONG WELLS RESULTS –

TRACKING ABOVE THE TYPE CURVE

Microseismic Data –

Wolfcamp A & B

15

MAP VIEW

X-SECTION VIEW (LOOKING WEST)

16

Microseismic Data –

Wolfcamp C

MAP VIEW

X-SECTION VIEW (LOOKING WEST)

17

Multiple Lateral Stacking –

Effective Frac Volumes

CHEVRON STACKING DEVELOPMENT PATTERN

AREX HZ Wolfcamp Economics

18

Notes: Identified locations based on multi-bench development and 120-acre spacing for HZ Wolfcamp.  No locations assigned to south Project Pangea.

HZ Wolfcamp Economics assume NYMEX-Henry Hub strip and NGL price based on 40% of WTI.

Play Type

Horizontal

Wolfcamp

Avg. EUR (gross)

450 MBoe

Targeted Well Cost

$5.5 MM

Potential Locations

2,096

Gross Resource

Potential

940+ MMBoe

BTAX IRR SENSITIVITIES

•

Horizontal drilling improves recoveries

and returns

•

Multiple, stacked horizontal targets

•

7,000’+ lateral length

•

~80% of EUR made up of oil and NGLs

(58% OIL)

•

3 HZ rigs running in Project Pangea /

Pangea West

Infrastructure for Large-Scale  Development

19

•

Reducing D&C Cost to $5.5 MM or lower

•

Reducing LOE

•

Minimizing truck traffic and surface

disturbance

•

Increasing project profit margin

Pangea

West

South

Pangea

Schleicher

Crockett

Irion

Reagan

Sutton

North & Central

Pangea

Infrastructure & Equipment Projects

20

•

Safely and securely transport water across Project Pangea and Pangea West

•

Reduce time and money spent on water hauling and disposal and truck traffic

•

Expected savings from water transfer equipment ~$0.1 MM/HZ well

•

Expected savings from SWD system ~$0.45 MM/HZ well

•

Expected company-wide LOE savings ±$0.4 MM per month

•

Replace rental equipment and contractors with Company-owned and operated

equipment and personnel; reduce money spent on flowback operations

•

Expected savings from flowback equipment ~$0.1 MM/HZ well

•

Expected LOE savings from gas lift system $6,300/HZ per month

•

Facilitate large-scale field development

•

Reduce fresh water use and water costs

•

Expected savings from non-potable water source ~$0.45 MM/HZ well

•

Efficiently transport crude oil to market and reduce inventory

•

Reduce oil transportation differential to an estimated $2.50/Bbl –

$4.00/Bbl

Purchasing and installing water

transfer equipment

Drilling and/or converting SWD

wells

Purchasing and installing flowback

equipment

Securing water supply

Testing non-potable water and

recycling flowback water

Installing crude takeaway lines

Purchased oil hauling trucks

BENEFITS

Infrastructure and equipment projects are key to large-scale field development

and to reducing D&C costs as well as LOE cost

PROJECTS

Creating Value Through Growth

•

Concentrated geographic footprint in the Midland Basin

•

Strong growth track record at competitive costs

•

Detailed technical evaluation led to discovery of growth potential in the

Wolfcamp oil shale resource play

•

Rigorous pilot program de-risked ~107,000 gross acres

•

2013 Focus

21

Hitting $5.5 MM HZ well cost target in 2Q’13

Testing multi-bench “stacked”

laterals and tighter well

spacing

Transition to full-field development

Financial Information

NON-GAAP RECONCILIATIONS

2013 Capital Budget

•

2013 Capital budget $260 MM, approx. 90% for HZ Wolfcamp

•

3 HZ rigs in the Wolfcamp shale

•

Targeting 30%+ production growth

Key takeaways:

23

•

Targeting Wolfcamp A, B and C

•

Testing “stacked”

lateral development concept

•

2013 Production guidance 3.6 MMBoe –

3.9 MMBoe

•

2013E Production mix 70% liquids

2013 capital program provides flexibility to develop Wolfcamp oil shale and monitor commodity

prices and service costs

Increase in oil production drives expected increase in cash flow

$280 MM borrowing base strengthens liquidity

2013 Operating and Financial Guidance

24

2013 GUIDANCE

2013 Guidance

Production

Total (MBoe)

3,600 –

3,900

Percent Oil & NGLs

70%

Operating costs and expenses ($/per Boe)

Lease operating

$

7.00 –

8.00

Production and ad valorem taxes

$

3.00 –

4.50

Exploration

$

2.00 –

3.00

General and administrative

$

7.00 –

8.50

Depletion, depreciation and amortization

$

20.00 –

24.00

Capital expenditures ($MM)

Approximately $260

Hedge Position

25

CURRENT HEDGE POSITION

Commodity and Time Period

Type

Volume

Price

Crude Oil

2013

Collar

650 Bbls/d

$90.00/Bbl -

$105.80/Bbl

2013

Collar

450 Bbls/d

$90.00/Bbl -

$101.45/Bbl

February 2013 –

December 2013

Collar

1,200 Bbls/d

$90.35/Bbl -

$100.35/Bbl

2014

Collar

550 Bbls/d

$90.00/Bbl -

$105.50/Bbl

Crude Oil Basis Differential (Midland/Cushing)

March 2013 –

December 2013

Swap

2,300 Bbls/d

$1.10/Bbl

Natural Gas

2013

Swap

200,000 MMBtu/month

$3.54/MMBtu

2013

Swap

190,000 MMBtu/month

$3.80/MMBtu

May 2013 –

December 2013

Collar

100,000 MMBtu/month

$4.00/MMBtu -

$4.36/MMBtu

2014

Swap

360,000 MMBtu/month

$4.18/MMBtu

53% of FY’13 oil hedged at $90.17/Bbl x $102.19/Bbl

81% of FY’13 gas hedged at weighted average floor of $3.72/MMBtu

•

Prudent hedging program protects cash flow and returns as well as capital budget activities

Conservative Financial Strategy & Capitalization

26

CAPITALIZATION &

PERFORMANCE

METRICS

(1) Liquidity calculated as the sum of current borrowing base and cash and cash equivalents less long-term debt and unused letters of credit. Unused

letters of credit currently total $325,000.

EBITDAX (unaudited)

27

We

define

EBITDAX

as

net

income,

plus

(1)

exploration

expense,

(2)

impairment

expense,

(3)

depletion,

depreciation

and

amortization

expense,

(4)

share-

based

compensation

expense,

(5)

unrealized

(gain)

loss

on

commodity

derivatives,

(6)

gain

on

sale

of

oil

and

gas

properties,

(7)

interest

expense

and

(8)

income

taxes.

EBITDAX

is

not

a

measure

of

net

income

or

cash

flow

as

determined

by

GAAP.

The

amounts

included

in

the

calculation

of

EBITDAX

were

computed

in

accordance

with

GAAP.

EBITDAX

is

presented

herein

and

reconciled

to

the

GAAP

measure

of

net

income

because

of

its

wide

acceptance

by

the

investment

community

as

a

financial

indicator

of

a

company's

ability

to

internally

fund

development

and

exploration

activities.

This

measure

is

provided

in

addition

to,

and

not

as

an

alternative

for,

and

should

be

read

in

conjunction

with,

the

information

contained

in

our

financial

statements

prepared

in

accordance

with

GAAP

(including

the

notes),

included

in

our

SEC

filings

and

posted

on

our

website.

The

following

table

provides

a

reconciliation

of

EBITDAX

to

net

income

for

the

three

months

and

year

ended

December

31,

2012

and

2011,

respectively

(in

thousands,

except

per-share

amounts).

(in thousands, except per-share amounts)

Year Ended

December 31,

2012

2011

Net income

$

6,384

$

7,242

Exploration

4,550

9,546

Impairment

—

18,476

Depletion, depreciation and amortization

60,381

32,475

Share-based compensation

7,465

4,683

Unrealized (gain) loss on commodity derivatives

(3,874)

347

Gain on sale of oil & gas properties

—

(248)

Interest expense, net

4,737

3,402

Income tax provision

3,338

3,488

EBITDAX

$

82,981

$

79,411

EBITDAX per diluted share

$

2.37

$

2.72

F&D Costs Reconciliation (unaudited)

28

We believe that providing measures of finding and development,

or F&D, cost is useful to assist an evaluation of how much it costs

the Company, on a per Boe basis, to add proved reserves.

However, these measures are provided in addition to, and not as

an alternative for, and should be read in conjunction with, the

information contained in our financial statements prepared in

accordance with GAAP (including the notes), included in our 

SEC filings and posted on our website. Due to various factors,

including timing differences, F&D costs do not necessarily reflect

precisely the costs associated with particular reserves. For

example, exploration costs may be recorded in periods before the

periods in which related increases in reserves are recorded and

development costs may be recorded in periods after the periods

in which related increases in reserves are recorded. In addition,

changes in commodity prices can affect the magnitude of

recorded increases (or decreases) in reserves independent of the

related costs of such increases.

As a result of the above factors and various factors that could

materially affect the timing and amounts of future increases in

reserves and the timing and amounts of future costs, including

factors disclosed in our filings with the SEC, we cannot assure

you that the Company’s future F&D costs will not differ materially

from those set forth above.  Further, the methods we use to

calculate F&D costs may differ significantly from methods used

by other companies to compute similar measures. As a result, our

F&D costs may not be comparable to similar measures provided

by other companies.

The following tables reflect the reconciliation of our estimated

finding and development costs to the information required by

paragraphs 11 and 21 of ASC 932-235.

2012 Reserve summary (MBoe)

Balance –

12/31/2011

76,975

Extensions  & discoveries

38,861

Revisions

(17,469)

Production

(2,888)

Balance –

12/31/2012

95,479

Cost summary ($M)

Acquisition costs

$

7,742

Exploration costs

4,550

Development costs

285,039

Total

297,331

Finding & development costs ($/Boe)

All-in F&D costs

$

13.90

Drill-bit F&D cost

$

7.45

Reserve replacement ratio (%)

Extensions & discoveries (MBoe)

38,861

2012 Production (MBoe)

(2,888)

Reserve replacement

1,346%

3-Year Reserve summary (MBoe)

Balance –

12/31/2009

36,488

Extensions  & discoveries

68,182

Purchases

12,456

Revisions

(14,866)

Production

(6,781)

Balance –

12/31/2012

95,479

Cost summary ($M)

Acquisition costs

$

131,189

Exploration costs

17,415

Development costs

524,476

Total

673,080

Finding & development costs ($/Boe)

3-YR All-in F&D costs

$

10.23

3-YR Drill-bit F&D cost

$

7.95

Reserve replacement ratio (%)

Extensions & discoveries (MBoe)

68,182

3-YR Production (MBoe)

(6,781)

Reserve replacement

1,005%

Contact

Information

MEGAN P. HAYS

Manager, Investor Relations & Corporate Communications

817.989.9000 x2108

mhays@approachresources.com

www.approachresources.com