FORT WORTH, Texas--(BUSINESS WIRE)--
Approach Resources Inc. (NASDAQ: AREX) (“Approach” or the
“Company”) today reported results for third quarter 2014. Highlights for
third quarter 2014 include:
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Production was 1,306 MBoe, or 14.2 MBoe/d, a 61% increase over the
prior-year quarter
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Revenues were $68.1 million, a 54% increase over the prior-year quarter
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Net income was $22.4 million, or $0.57 per diluted share
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Adjusted net income was $10.5 million, or $0.27 per diluted share
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EBITDAX was a quarterly record of $50.7 million, or $1.29 per diluted
share, and up 60% over the prior-year quarter
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Borrowing base increased to $600 million effective November 4, a 33%
increase
-
New Elliott well expands development of our eastern acreage
Adjusted net income and EBITDAX are non-GAAP measures. See
“Supplemental Non-GAAP Financial and Other Measures” below for our
definitions and reconciliations of adjusted net income and EBITDAX to
net income.
Management Comment
J. Ross Craft
, Approach’s Chairman, Chief Executive Officer and
President, commented, “In the third quarter of 2014, Approach reported
its seventh consecutive quarter of record EBITDAX. So far this year, we
have completed 51 wells in our drilling program and are on track to
achieve a 45% production growth rate.
“As discussed on prior earnings calls and as shown on slide 5 of our
presentation, gas and NGLs are clearly outperforming our original
expectations, and therefore allow us to achieve significantly higher
reserves recovery. In the meantime, we continue to grow our oil
production and have increased net oil volumes from our horizontal
Wolfcamp wells by 83% compared to the prior-year quarter. Highlights for
the third quarter are summarized in the presentation posted on our
website.
“We are closely monitoring the macro environment in the crude oil
markets. Our Company is well positioned to withstand prolonged weakness
in crude oil prices, given our sizeable core acreage position that is
largely held by production, as well as our low cost structure, strong
hedge book, low leverage metrics and solid liquidity position.”
Third Quarter 2014 Results
Production for third quarter 2014 totaled 1,306 MBoe (14.2 MBoe/d),
compared to production of 812 MBoe (8.8 MBoe/d) in third quarter 2013, a
61% increase. Oil production for third quarter 2014 increased 61% to 507
MBbls (5.5 MBbls/d), compared to 314 MBbls (3.4 MBbls/d) for the
prior-year period. Production for third quarter 2014 was 69% liquids and
31% natural gas.
Net income for third quarter 2014 was $22.4 million, or $0.57 per
diluted share, on revenues of $68.1 million. This compares to a net
income for third quarter 2013 of $0.5 million, or $0.01 per diluted
share, on revenues of $44.2 million. Third quarter 2014 revenues
increased $23.9 million due to an increase in production ($27 million)
offset by a decrease in average realized price ($3.1 million). Net
income for third quarter 2014 included an unrealized gain on commodity
derivatives of $18.8 million, a realized loss on commodity derivatives
of $0.8 million and a refund from the state of Texas for production
taxes of $1 million.
Excluding the unrealized loss on commodity derivatives and related
income taxes, adjusted net income (non-GAAP) for third quarter 2014 was
$10.5 million, or $0.27 per diluted share, compared to $2.8 million, or
$0.07 per diluted share, for third quarter 2013. EBITDAX (non-GAAP) for
third quarter 2014 was $50.7 million, or $1.29 per diluted share,
compared to $31.6 million, or $0.81 per diluted share, for third quarter
2013. See “Supplemental Non-GAAP Financial and Other Measures” below for
our definitions and reconciliations of adjusted net income and EBITDAX
to net income.
Our average realized commodity price for third quarter 2014, before the
effect of commodity derivatives, was $52.17 per Boe. Our average
realized price, including the effect of commodity derivatives, was
$51.59 per Boe for third quarter 2014.
Lease operating expense averaged $5.87 per Boe for third quarter 2014,
down 5% from second quarter 2014. Production and ad valorem taxes
averaged $2.55 per Boe, or 4.9% of oil, NGL and gas sales. Exploration
costs were $0.68 per Boe. Cash general and administrative expense
averaged $4.37 per Boe. Depletion, depreciation and amortization expense
averaged $19.88 per Boe. Interest expense totaled $5.4 million.
Operations Update
During third quarter 2014, we drilled 18 horizontal wells and completed
16 horizontal wells. We have reverted back to our proven completion
design with well production in line with historical results. Wells
completed since our last operations update targeting the Wolfcamp B and
C zones produced an average initial 24-hour rate of 746 Boe/d (67% oil
and 85% liquids), normalizing one short lateral well.
In addition, two wells targeting the Wolfcamp A zone in our University
area produced an average initial 24-hour rate of 235 Boe/d (72% oil and
88% liquids). The combined, peak 30-day production of these wells was
14,083 Boe.
In east Project Pangea, we targeted the Wolfcamp C bench on our Elliott
lease. The initial 24-hour rate for the Elliott well was 806 Boe/d (63%
oil and 83% liquids). This well is substantially better than any
existing horizontal Wolfcamp wells in the vicinity based on available
initial production data. This well has performed similarly to our wells
in the University and Baker areas and significantly expands development
of the horizontal Wolfcamp on our eastern acreage.
Capital expenditures incurred during third quarter 2014 totaled $104.9
million and included $94 million for drilling and completion activities,
$8.5 million for infrastructure projects, $1.5 million for acreage
acquisitions and extensions and $0.9 million for buildings and other
equipment.
2014 Outlook Update
We have updated some components of our 2014 guidance, taking into
account results achieved year to date. The guidance is forward-looking
information that is subject to a number of risks and uncertainties, many
of which are beyond the Company’s control.
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Prior 2014
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Current 2014
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Guidance
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Guidance
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Operating costs and expenses (per Boe):
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Lease operating
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$5.00 – 6.00
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$6.00 – 6.75
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Production and ad valorem taxes (% of oil and gas revenues)
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7.25%
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6.5%
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Depletion, depreciation and amortization
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$22.00 – 24.00
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$21.00 – 23.00
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Liquidity Update
At September 30, 2014, we had a $1 billion revolving credit facility
with a $450 million borrowing base and $89.5 million of outstanding
borrowings. At September 30, 2014, our liquidity and long-term
debt-to-capital ratio were approximately $362 million and 31.3%,
respectively. Please refer to “Supplemental Non-GAAP Financial and Other
Measures” below for our definitions of liquidity and long-term
debt-to-capital ratio.
The lenders under our revolving credit facility recently completed their
semi-annual borrowing base redetermination, resulting in an increase in
the borrowing base to $600 million from $450 million effective November
4, 2014. We have elected to leave the aggregate commitment amount from
the bank group unchanged at $450 million.
We enter into commodity derivatives positions to manage our exposure to
commodity price fluctuations. Please refer to the “Unaudited Commodity
Derivatives Information” table below for a detailed summary of our
derivatives positions at October 1, 2014.
Conference Call Information and Summary Presentation
The Company will host a conference call on Thursday, November 6, 2014,
at 10:00 a.m. Central Time (11:00 a.m. Eastern Time) to discuss
financial and operational results for third quarter 2014. The conference
call may be accessed via the Company’s website at www.approachresources.com
or by phone:
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Dial in:
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(877) 201-0168
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Intl. dial in:
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(647) 788-4901
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Passcode:
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Approach / 18516543
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A replay of the call will be available on the Company’s website or by
dialing (855) 859-2056 (passcode: 18516543).
In addition, a third quarter 2014 summary presentation is available on
the Company’s website.
About Approach Resources
Approach Resources Inc. is an independent energy company focused on the
exploration, development, production and acquisition of unconventional
oil and gas reserves in the Midland Basin of the greater Permian Basin
in West Texas. 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.
Forward-Looking and Cautionary Statements
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. These statements are based on certain assumptions made
by the Company based on management’s experience, perception of
historical trends and technical analyses, current conditions,
anticipated future developments and other factors believed to be
appropriate and reasonable by management. When used in this press
release, the words “will,” “potential,” “believe,” “estimate,” “intend,”
“expect,” “may,” “should,” “anticipate,” “could,” “plan,” “predict,”
“project,” “profile,” “model” or their negatives, other similar
expressions or the statements that include those words, are intended to
identify forward-looking statements, although not all forward-looking
statements contain such identifying words. 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 the Company’s 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.
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UNAUDITED RESULTS OF OPERATIONS
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Three Months Ended
September 30,
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Nine Months Ended
September 30,
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2014
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2013
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2014
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2013
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Revenues (in thousands):
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Oil
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$
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47,194
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$
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31,708
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$
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140,509
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$87,551
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NGLs
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11,628
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7,231
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33,486
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19,682
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Gas
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9,302
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5,257
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29,464
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15,504
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Total oil, NGL and gas sales
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68,124
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44,196
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203,459
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122,737
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Realized loss on commodity derivatives
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(764
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)
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(840
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)
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(5,423
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)
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(1,247
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)
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Total oil, NGL and gas sales including derivative impact
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$
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67,360
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$
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43,356
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$
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198,036
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$121,490
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Production:
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Oil (MBbls)
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507
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314
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1,482
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969
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NGLs (MBbls)
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392
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242
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1,057
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682
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Gas (MMcf)
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2,445
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1,538
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6,727
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4,393
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Total (MBoe)
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1,306
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812
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3,659
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2,383
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Total (MBoe/d)
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14.2
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8.8
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13.4
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8.7
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Average prices:
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Oil (per Bbl)
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$
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93.14
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$
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101.02
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$
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94.84
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$90.39
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NGLs (per Bbl)
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29.70
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29.87
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31.69
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28.84
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Gas (per Mcf)
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3.80
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3.42
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4.38
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3.53
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Total (per Boe)
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$
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52.17
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$
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54.41
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$
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55.60
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$51.50
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Realized loss on commodity derivatives (per Boe)
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(0.58
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)
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(1.03
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)
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(1.49
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)
|
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(0.52
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)
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Total including derivative impact (per Boe)
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$
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51.59
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$
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53.38
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$
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54.11
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$50.98
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Costs and expenses (per Boe):
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Lease operating
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$
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5.87
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$
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5.38
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$
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6.41
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$5.77
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Production and ad valorem taxes
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2.55
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3.90
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3.40
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3.69
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Exploration
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0.68
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1.47
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|
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0.98
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0.84
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General and administrative(1)
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5.88
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7.60
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6.45
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7.47
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Depletion, depreciation and amortization
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19.88
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23.91
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21.35
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23.06
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(1) Below is a summary of general and administrative expense:
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General and administrative – cash component
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$
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4.37
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$
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5.63
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$
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4.89
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$
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5.21
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General and administrative – noncash component
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1.51
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1.97
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1.56
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2.26
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APPROACH RESOURCES INC. AND SUBSIDIARIES
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UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS
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(In thousands, except shares and per-share amounts)
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Three Months Ended
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Nine Months Ended
|
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|
|
September 30,
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September 30,
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|
|
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2014
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2013
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2014
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2013
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REVENUES:
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Oil, NGL and gas sales
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$
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68,124
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$
|
44,196
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$
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203,459
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$
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122,737
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EXPENSES:
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Lease operating
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7,665
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4,370
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23,462
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13,746
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Production and ad valorem taxes
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3,335
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|
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|
3,167
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|
12,429
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8,791
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Exploration
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|
891
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|
1,193
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3,595
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|
2,010
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General and administrative
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7,675
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6,171
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|
23,612
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17,810
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Depletion, depreciation and amortization
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25,959
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|
19,413
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|
|
|
78,138
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|
|
|
54,951
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Total expenses
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|
45,525
|
|
|
|
34,314
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|
|
|
141,236
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97,308
|
|
|
|
|
|
|
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OPERATING INCOME
|
|
|
22,599
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|
|
|
9,882
|
|
|
|
62,223
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|
|
|
25,429
|
|
|
|
|
|
|
|
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OTHER:
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|
|
|
|
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Interest expense, net
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|
|
(5,442
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)
|
|
|
(5,179
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)
|
|
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(15,936
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)
|
|
|
(8,859
|
)
|
|
Equity in income (losses) of investee
|
|
|
—
|
|
|
|
340
|
|
|
|
(186
|
)
|
|
|
160
|
|
|
Realized loss on commodity derivatives
|
|
|
(764
|
)
|
|
|
(840
|
)
|
|
|
(5,423
|
)
|
|
|
(1,247
|
)
|
|
Unrealized gain (loss) on commodity derivatives
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|
|
18,810
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|
|
|
(3,438
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)
|
|
|
5,206
|
|
|
|
(3,248
|
)
|
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Other expense
|
|
|
—
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|
|
|
—
|
|
|
|
(109
|
)
|
|
|
—
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INCOME BEFORE INCOME TAX PROVISION
|
|
|
35,203
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|
|
|
765
|
|
|
|
45,775
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|
|
|
12,235
|
|
|
INCOME TAX PROVISION
|
|
|
12,756
|
|
|
|
270
|
|
|
|
16,590
|
|
|
|
4,300
|
|
|
|
|
|
|
|
|
|
|
|
|
NET INCOME
|
|
$
|
22,447
|
|
|
$
|
495
|
|
|
$
|
29,185
|
|
|
$
|
7,935
|
|
|
|
|
|
|
|
|
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|
|
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EARNINGS PER SHARE:
|
|
|
|
|
|
|
|
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Basic
|
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$
|
0.57
|
|
|
$
|
0.01
|
|
|
$
|
0.74
|
|
|
$
|
0.20
|
|
|
Diluted
|
|
$
|
0.57
|
|
|
$
|
0.01
|
|
|
$
|
0.74
|
|
|
$
|
0.20
|
|
|
|
|
|
|
|
|
|
|
|
|
WEIGHTED AVERAGE SHARES OUTSTANDING:
|
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|
|
|
|
|
|
|
|
Basic
|
|
|
39,363,441
|
|
|
|
39,011,555
|
|
|
|
39,325,552
|
|
|
|
38,980,971
|
|
|
Diluted
|
|
|
39,379,779
|
|
|
|
39,032,813
|
|
|
|
39,340,961
|
|
|
|
39,002,731
|
|
|
|
|
|
|
|
|
UNAUDITED SELECTED FINANCIAL DATA
|
|
|
|
|
|
|
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Unaudited Consolidated Balance Sheet Data
|
|
September 30,
|
|
December 31,
|
|
(in thousands)
|
|
|
2014
|
|
|
2013
|
|
Cash and cash equivalents
|
|
$
|
1,634
|
|
$
|
58,761
|
|
Restricted cash
|
|
|
—
|
|
|
7,350
|
|
Other current assets
|
|
|
24,024
|
|
|
24,302
|
|
Property and equipment, net, successful efforts method
|
|
|
1,266,304
|
|
|
1,047,030
|
|
Other assets
|
|
|
10,206
|
|
|
8,041
|
|
Total assets
|
|
$
|
1,302,168
|
|
$
|
1,145,484
|
|
|
|
|
|
|
|
Current liabilities
|
|
$
|
101,903
|
|
$
|
84,441
|
|
Long-term debt(1)
|
|
|
339,500
|
|
|
250,000
|
|
Other long-term liabilities
|
|
|
115,679
|
|
|
100,548
|
|
Stockholders’ equity
|
|
|
745,086
|
|
|
710,495
|
|
Total liabilities and stockholders’ equity
|
|
$
|
1,302,168
|
|
$
|
1,145,484
|
|
|
|
(1) Long-term debt at September 30, 2014, and December 31, 2013,
includes $250 million in 7% senior notes. In addition, we had $89.5
million in outstanding borrowings under our revolving credit facility as
of September 30, 2014.
|
|
|
|
|
Unaudited Consolidated Cash Flow Data
|
|
Nine Months Ended September 30,
|
|
(in thousands)
|
|
|
2014
|
|
|
|
2013
|
|
|
Net cash provided (used) by:
|
|
|
|
|
|
Operating activities
|
|
$
|
148,230
|
|
|
$
|
118,996
|
|
|
Investing activities
|
|
$
|
(292,630
|
)
|
|
$
|
(230,187
|
)
|
|
Financing activities
|
|
$
|
87,273
|
|
|
$
|
135,913
|
|
|
|
|
|
|
|
|
|
|
UNAUDITED COMMODITY DERIVATIVES INFORMATION
|
|
AS OF OCTOBER 1, 2014
|
|
|
|
|
|
|
|
|
|
Commodity and Period
|
|
Contract Type
|
|
Volume Transacted
|
|
Contract Price
|
|
Crude Oil
|
|
|
|
|
|
|
|
October 2014 – December 2014
|
|
Collar
|
|
550 Bbls/d
|
|
$90.00/Bbl - $105.50/Bbl
|
|
October 2014 – December 2014
|
|
Collar
|
|
950 Bbls/d
|
|
$85.05/Bbl - $95.05/Bbl
|
|
October 2014 – December 2014
|
|
Collar
|
|
2,000 Bbls/d
|
|
$89.00/Bbl - $98.85/Bbl
|
|
October 2014 – March 2015
|
|
Collar
|
|
1,500 Bbls/d
|
|
$85.00/Bbl - $95.30/Bbl
|
|
January 2015 – December 2015
|
|
Collar
|
|
1,600 Bbls/d
|
|
$84.00/Bbl - $91.00/Bbl
|
|
January 2015 – December 2015
|
|
Collar
|
|
1,000 Bbls/d
|
|
$90.00/Bbl - $102.50/Bbl
|
|
January 2015 – December 2015
|
|
Three-Way Collar
|
|
500 Bbls/d
|
|
$75.00/Bbl - $84.00/Bbl - $94.00/Bbl
|
|
January 2015 – December 2015
|
|
Three-Way Collar
|
|
500 Bbls/d
|
|
$75.00/Bbl - $84.00/Bbl - $95.00/Bbl
|
|
|
|
|
|
|
|
|
|
Natural Gas Liquids
|
|
|
|
|
|
|
|
Propane
|
|
|
|
|
|
|
|
October 2014 – December 2014
|
|
Swap
|
|
500 Bbls/d
|
|
$41.16/Bbl
|
|
Natural Gasoline
|
|
|
|
|
|
|
|
October 2014 – December 2014
|
|
Swap
|
|
175 Bbls/d
|
|
$83.37/Bbl
|
|
|
|
|
|
|
|
|
|
Natural Gas
|
|
|
|
|
|
|
|
October 2014 – December 2014
|
|
Swap
|
|
360,000 MMBtu/month
|
|
$4.18/MMBtu
|
|
October 2014 – December 2014
|
|
Swap
|
|
35,000 MMBtu/month
|
|
$4.29/MMBtu
|
|
October 2014 – December 2014
|
|
Swap
|
|
160,000 MMBtu/month
|
|
$4.40/MMBtu
|
|
October 2014 – June 2015
|
|
Collar
|
|
80,000 MMBtu/month
|
|
$4.00/MMBtu - $4.74/MMBtu
|
|
January 2015 – December 2015
|
|
Swap
|
|
200,000 MMBtu/month
|
|
$4.10/MMBtu
|
|
January 2015 – December 2015
|
|
Collar
|
|
130,000 MMBtu/month
|
|
$4.00/MMBtu - $4.25/MMBtu
|
|
|
|
|
|
|
|
|
Supplemental Non-GAAP Financial and Other Measures
This release contains certain financial measures that are non-GAAP
measures. We have provided reconciliations below of the non-GAAP
financial measures to the most directly comparable GAAP financial
measures and on the Non-GAAP Financials page in the Investor Relations
section of our website at www.approachresources.com.
Adjusted Net Income
This release contains the non-GAAP financial measures adjusted net
income and adjusted net income per diluted share, which excludes an
unrealized (gain) loss on commodity derivatives and related income tax
effect. The amounts included in the calculation of adjusted net income
and adjusted net income per diluted share below were computed in
accordance with GAAP. We believe adjusted net income and adjusted net
income per diluted share are useful to investors because they provide
readers with a more meaningful measure of our profitability before
recording certain items whose timing or amount cannot be reasonably
determined. 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.
The table below provides a reconciliation of adjusted net income and
adjusted net income per diluted share to net income for the three and
nine months ended September 30, 2014 and 2013 (in thousands, except
per-share amounts).
|
|
|
|
|
|
|
|
|
Three Months Ended
September 30,
|
|
Nine Months Ended
September 30,
|
|
|
|
|
2014
|
|
|
|
2013
|
|
|
|
2014
|
|
|
|
2013
|
|
|
Net income
|
|
$
|
22,447
|
|
|
$
|
495
|
|
|
$
|
29,185
|
|
|
$
|
7,935
|
|
|
Adjustments for certain items:
|
|
|
|
|
|
|
|
|
|
Unrealized (gain) loss on commodity derivatives
|
|
|
(18,810
|
)
|
|
|
3,438
|
|
|
|
(5,206
|
)
|
|
|
3,248
|
|
|
Related income tax effect
|
|
|
6,816
|
|
|
|
(1,169
|
)
|
|
|
1,886
|
|
|
|
(1,104
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted net income
|
|
$
|
10,453
|
|
|
$
|
2,764
|
|
|
$
|
25,865
|
|
|
$
|
10,079
|
|
|
Adjusted net income per diluted share
|
|
$
|
0.27
|
|
|
$
|
0.07
|
|
|
$
|
0.66
|
|
|
$
|
0.26
|
|
|
|
|
|
|
|
|
|
|
|
EBITDAX
We define EBITDAX as net income, plus (1) exploration expense, (2)
depletion, depreciation and amortization expense, (3) share-based
compensation expense, (4) unrealized (gain) loss on commodity
derivatives, (5) interest expense, net, and (6) income tax provision.
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 table below provides a reconciliation of EBITDAX and EBITDAX per
diluted share to net income for the three and nine months ended
September 30, 2014 and 2013 (in thousands, except per-share amounts).
|
|
|
|
|
|
|
|
|
Three Months Ended
September 30,
|
|
Nine Months Ended
September 30,
|
|
|
|
|
2014
|
|
|
|
2013
|
|
|
2014
|
|
|
|
2013
|
|
Net income
|
|
$
|
22,447
|
|
|
$
|
495
|
|
$
|
29,185
|
|
|
$
|
7,935
|
|
Exploration
|
|
|
891
|
|
|
|
1,193
|
|
|
3,595
|
|
|
|
2,010
|
|
Depletion, depreciation and amortization
|
|
|
25,959
|
|
|
|
19,413
|
|
|
78,138
|
|
|
|
54,951
|
|
Share-based compensation
|
|
|
1,965
|
|
|
|
1,599
|
|
|
5,726
|
|
|
|
5,389
|
|
Unrealized (gain) loss on commodity derivatives
|
|
|
(18,810
|
)
|
|
|
3,438
|
|
|
(5,206
|
)
|
|
|
3,248
|
|
Interest expense, net
|
|
|
5,442
|
|
|
|
5,179
|
|
|
15,936
|
|
|
|
8,859
|
|
Income tax provision
|
|
|
12,756
|
|
|
|
270
|
|
|
16,590
|
|
|
|
4,300
|
|
|
|
|
|
|
|
|
|
|
|
EBITDAX
|
|
$
|
50,650
|
|
|
$
|
31,587
|
|
$
|
143,964
|
|
|
$
|
86,692
|
|
EBITDAX per diluted share
|
|
$
|
1.29
|
|
|
$
|
0.81
|
|
$
|
3.66
|
|
|
$
|
2.22
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liquidity
Liquidity is calculated by adding the net funds available under our
revolving credit facility and cash and cash equivalents. We use
liquidity as an indicator of the Company’s ability to fund development
and exploration activities. However, this measurement has limitations.
This measurement can vary from year-to-year for the Company and can vary
among companies based on what is or is not included in the measurement
on a company’s financial statements. This measurement 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 table below summarizes our liquidity at September 30, 2014 (in
thousands).
|
|
|
|
|
|
|
Liquidity at
September 30, 2014
|
|
Borrowing base
|
|
$
|
450,000
|
|
|
Cash and cash equivalents
|
|
|
1,634
|
|
|
Credit facility – outstanding borrowings
|
|
|
(89,500
|
)
|
|
Outstanding letters of credit
|
|
|
(325
|
)
|
|
Liquidity
|
|
$
|
361,809
|
|
|
|
|
|
|
|
Long-Term Debt-to-Capital
Long-term debt-to-capital ratio is calculated by dividing long-term debt
(GAAP) by the sum of total stockholders’ equity (GAAP) and long-term
debt (GAAP). We use the long-term debt-to-capital ratio as a measurement
of our overall financial leverage. However, this ratio has limitations.
This ratio can vary from year-to-year for the Company and can vary among
companies based on what is or is not included in the ratio on a
company’s financial statements. This ratio 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 table below summarizes our long-term debt-to-capital ratio at
September 30, 2014, and December 31, 2013 (in thousands).
|
|
|
|
|
|
|
|
|
September 30, 2014
|
|
December 31, 2013
|
|
Long-term debt(1)
|
|
$
|
339,500
|
|
|
$
|
250,000
|
|
|
Total stockholders’ equity
|
|
|
745,086
|
|
|
|
710,495
|
|
|
|
|
$
|
1,084,586
|
|
|
$
|
960,495
|
|
|
|
|
|
|
|
|
Long-term debt-to-capital
|
|
|
31.3
|
%
|
|
|
26.0
|
%
|
|
|
|
|
|
|
(1) Long-term debt at September 30, 2014, and December 31, 2013,
includes $250 million in 7% senior notes. In addition, we had $89.5
million in outstanding borrowings under our revolving credit facility as
of September 30, 2014.
Source: Approach Resources Inc.