Approach Resources Inc. Reports Temporary Shut-in of Ozona Northeast Production; Downstream NGL Facility Shut Down Due to Hurricane Ike
FORT WORTH, Texas, Sept. 15, 2008 (GLOBE NEWSWIRE) — Approach Resources Inc. (Nasdaq:AREX) (the “Company”) today reported that an estimated 17.3 million cubic feet equivalent per day (“MMcfe/d”) of natural gas, net to the Company, was shut in from the Company’s Ozona Northeast field as of September 11, 2008. The shut-in was caused when Chevron Phillips Chemical Company’s natural gas liquids (“NGLs”) and fractionation facility at the Sweeny complex, located approximately 65 miles southwest of Houston, was shut down in preparation for Hurricane Ike. The Company sells its raw natural gas from Ozona Northeast to a third party, which processes the natural gas and transports the natural gas liquids to the Sweeny complex to process the NGLs. The Company’s third-party gas purchaser has informed the Company that, while the NGL facility at the Sweeny complex is shut down, the buyer will be unable to take the Company’s raw natural gas. Other potential third-party purchasers of the Company’s natural gas from Ozona Northeast have informed the Company that they also are currently unable to take the Company’s natural gas.
ConocoPhillips, the operating partner of the refinery located at the Sweeny complex, has stated that following Hurricane Ike’s landfall, the refinery has power and is commencing safe and systematic restart operations. However, the Company does not know when Chevron Phillips’ NGL facility at the Sweeny complex will commence operations. As a result, the Company does not currently have an estimate of how long its Ozona Northeast production will remain shut in as a result of the disruption to the NGL facility at the Sweeny complex.
As previously reported, production from the Company’s Ozona Northeast field was shut in over the equivalent of approximately three calendar days from August 28 through August 31, 2008, due to a rupture in a third-party pipeline.
As soon as practical after the extent of current shut-in is determined, the Company will assess its current annual production guidance of 8.5 to 9.0 billion cubic feet of natural gas equivalent, and determine whether it will revise its guidance downward.
Forward-Looking Statements 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 the volume and potential impact of shut-in production. 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. Other risks inherent in the Company’s business are detailed in its Forms 10-K and 10-Q and other filings with the Securities and Exchange Commission. 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.
About Approach Resources Inc.
Approach Resources Inc. is an independent energy company engaged in the exploration, development, production and acquisition of unconventional natural gas and oil properties in the United States and British Columbia. The Company focuses on natural gas and oil reserves in tight sands and shale. The Company operates or holds leases in Texas, Kentucky and New Mexico and has a non-operating interest in British Columbia. For more information about the Company, please visit www.approachresources.com.
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CONTACT: Approach Resources Inc. J. Ross Craft, President and CEO Steven P. Smart, Executive Vice President and CFO J. Curtis Henderson, Executive Vice President and General Counsel Megan P. Brown, Analyst - Investor Relations & Corporate Communications (817) 989-9000