Monday, October 25, 2010

Approach Resources: Permian Basin Update

By Andrea:

Approach Resources Inc. (AREX) recently released an operational update on the Permian Basin:

Approach identified the Wolffork through extensive regional mapping, using 3-D seismic data from over 135,000 acres and well data from over 400 wellbores that we have drilled and completed while targeting the deeper Canyon, Strawn and Ellenburger zones. The Wolffork is comprised of three stacked pay zones, the Clearfork, Dean and Wolfcamp Shale formations. Petrophysical analyses indicate more than 2,500 feet of gross pay from the Wolffork.

Based on log data and whole-core analyses, we believe that the Wolfcamp Shale has total organic carbon content ranging from 2.2% to 7.2%, porosity ranging from 4% to 11% (density porosity ranges from 8% to 15%) and high concentration of natural fractures.

Wolffork Reserve Potential

Approach estimates that, based on whole-core and detailed petrophysical analyses, there is significant potential oil and gas in place attributable to the Wolffork.
Formation Estimated

Oil and Gas In Place /

640 Acres (MMBoe)
Wolfcamp 118.9
Wolfcamp, Dean 125.6
Wolfcamp, Dean, Clearfork 181.7

The Wolfcamp Shale is over 1,000 feet thick and heavily fractured, ideal for horizontal drilling. We estimate 343 MBoe of potential recoverable reserves for a horizontal well targeting the Wolfcamp.

Results from Wolfcamp Shale Pilot Program and Estimated Ultimate Recovery ("EUR")

To date, we have recompleted four wells in the Wolfcamp Shale. All four pilot wells became producers. Based on our regional study, production data from our pilot wells and from adjacent operators, we estimate EURs ranging from 55 MBoe to 83 MBoe for a
Approach Resources Inc. (AREX) recently released an operationa

Wolfcamp recompletion, 90 MBoe to 135 MBoe for a Wolffork recompletion, 204 MBoe to 306 MBoe for a Canyon Wolffork new drill and 354 MBoe to 530 MBoe for a Wolfcamp horizontal well.

Fourth Quarter 2010 Plans

During the fourth quarter of 2010, we plan to further delineate the Wolffork trend across our acreage position. Our Wolffork pilot program for the fourth quarter of 2010 is outlined below.

* Drill one horizontal well, the Cinco Terry "M" 901-H, targeting the Wolfcamp Shale at the end of October 2010. Approach expects to complete the horizontal well during the first quarter of 2011.
* Recomplete the Cinco Terry 1601, targeting the Wolfcamp Shale zone.
* Recomplete two wells in Ozona Northeast, targeting the Wolffork.
* Complete the Baker "C" 1201, targeting the Wolffork and Canyon Sands zones.

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