APPROACH RESOURCES INC. (AREX, Financial) filed Quarterly Report for the period ended 2012-09-30.
Approach Resources, Inc. has a market cap of $1 billion; its shares were traded at around $25.09 with a P/E ratio of 47.3 and P/S ratio of 9.3.
Severance and production taxes. Our severance and production taxes increased $235,000, or 17%, to $1.7 million for the three months ended September 30, 2012, from $1.4 million for the three months ended September 30, 2011. The increase in severance and production taxes was primarily due to higher oil, NGL and gas sales. Severance and production taxes were approximately 5.0% and 5.1% of oil, NGL and gas sales for the respective periods.
Oil, NGL and gas sales. Oil, NGL and gas sales increased $16.3 million, or 21%, to $93.6 million for the nine months ended September 30, 2012, from $77.3 million for the nine months ended September 30, 2011. Of the $16.3 million increase in oil, NGL and gas sales, approximately $34.4 million was attributable to an increase in production volumes, offset by an $18.1 million decrease in oil, NGL and gas prices.
Net income. Net income for the nine months ended September 30, 2012, was $7.2 million, or $0.21 per diluted share, compared to net income of $16.5 million, or $0.58 per diluted share, for the nine months ended September 30, 2011. Net income for the nine months ended September 30, 2012, included an unrealized gain on commodity derivatives of $2.6 million and a realized gain on commodity derivatives of $300,000. Net income in the 2012 period was negatively impacted by higher depletion, depreciation and amortization, lease operating and general and administrative expenses, which were partially offset by higher revenues for the nine months ended September 30, 2012.
Severance and production taxes. Our severance and production taxes increased $444,000, or 11%, to $4.7 million for the nine months ended September 30, 2012, from $4.2 million for the nine months ended September 30, 2011. The increase in severance and production taxes was primarily due to an increase in oil, NGL and gas sales between the two periods. Severance and production taxes were approximately 5.0% and 5.5% of oil, NGL and gas sales for the respective periods. The decrease in severance and production taxes as a percentage of oil, NGL and gas sales is due to the increase in oil sales, as oil sales are taxed at a lower rate. For the remainder of 2012, we expect severance and production taxes as a percent of oil, NGL and gas sales will remain relatively consistent compared to the severance and production taxes for the nine months ended September 30, 2012.
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Approach Resources, Inc. has a market cap of $1 billion; its shares were traded at around $25.09 with a P/E ratio of 47.3 and P/S ratio of 9.3.
Highlight of Business Operations:
Oil, NGL and gas sales. Oil, NGL and gas sales increased $5.1 million, or 18%, for the three months ended September 30, 2012, to $33 million, from $28 million for the three months ended September 30, 2011. Of the $5.1 million increase in oil, NGL and gas sales, approximately $11.5 million was attributable to an increase in production volumes, offset by a $6.4 million decrease in oil, NGL and gas prices. Subject to commodity prices and future curtailments, we expect our oil, NGL and gas sales to increase during the remainder of 2012 due to increased production volumes from our drilling program in the Permian Basin.Severance and production taxes. Our severance and production taxes increased $235,000, or 17%, to $1.7 million for the three months ended September 30, 2012, from $1.4 million for the three months ended September 30, 2011. The increase in severance and production taxes was primarily due to higher oil, NGL and gas sales. Severance and production taxes were approximately 5.0% and 5.1% of oil, NGL and gas sales for the respective periods.
Oil, NGL and gas sales. Oil, NGL and gas sales increased $16.3 million, or 21%, to $93.6 million for the nine months ended September 30, 2012, from $77.3 million for the nine months ended September 30, 2011. Of the $16.3 million increase in oil, NGL and gas sales, approximately $34.4 million was attributable to an increase in production volumes, offset by an $18.1 million decrease in oil, NGL and gas prices.
Net income. Net income for the nine months ended September 30, 2012, was $7.2 million, or $0.21 per diluted share, compared to net income of $16.5 million, or $0.58 per diluted share, for the nine months ended September 30, 2011. Net income for the nine months ended September 30, 2012, included an unrealized gain on commodity derivatives of $2.6 million and a realized gain on commodity derivatives of $300,000. Net income in the 2012 period was negatively impacted by higher depletion, depreciation and amortization, lease operating and general and administrative expenses, which were partially offset by higher revenues for the nine months ended September 30, 2012.
Severance and production taxes. Our severance and production taxes increased $444,000, or 11%, to $4.7 million for the nine months ended September 30, 2012, from $4.2 million for the nine months ended September 30, 2011. The increase in severance and production taxes was primarily due to an increase in oil, NGL and gas sales between the two periods. Severance and production taxes were approximately 5.0% and 5.5% of oil, NGL and gas sales for the respective periods. The decrease in severance and production taxes as a percentage of oil, NGL and gas sales is due to the increase in oil sales, as oil sales are taxed at a lower rate. For the remainder of 2012, we expect severance and production taxes as a percent of oil, NGL and gas sales will remain relatively consistent compared to the severance and production taxes for the nine months ended September 30, 2012.
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