þ | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
o | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Delaware | 51-0424817 | |
(State or other jurisdiction of | (I.R.S. employer | |
incorporation or organization) | identification number) | |
One Ridgmar Centre | ||
6500 W. Freeway, Suite 800 | ||
Fort Worth, Texas | 76116 | |
(Address of principal executive offices) | (Zip Code) |
Large accelerated filer o | Accelerated filer o | Non-accelerated filer þ | Smaller reporting company o | |||
(Do not check if a smaller reporting company) |
September 30, | December 31, | |||||||
2008 | 2007 | |||||||
ASSETS
|
||||||||
|
||||||||
CURRENT ASSETS:
|
||||||||
Cash and cash equivalents
|
$ | 1,626 | $ | 4,785 | ||||
Accounts receivable:
|
||||||||
Joint interest owners
|
9,814 | 5,272 | ||||||
Oil and gas sales
|
9,852 | 5,524 | ||||||
Unrealized gain on commodity derivatives
|
4,537 | 793 | ||||||
Prepaid expenses and other current assets
|
254 | 432 | ||||||
|
||||||||
Total current assets
|
26,083 | 16,806 | ||||||
PROPERTIES AND EQUIPMENT:
|
||||||||
Oil and gas properties, at cost, using the successful efforts method of accounting
|
338,743 | 267,246 | ||||||
Furniture, fixtures and equipment
|
890 | 433 | ||||||
|
||||||||
|
339,633 | 267,679 | ||||||
Less accumulated depletion, depreciation and amortization
|
(53,082 | ) | (36,860 | ) | ||||
|
||||||||
Net properties and equipment
|
286,551 | 230,819 | ||||||
INVESTMENT
|
917 | 917 | ||||||
UNREALIZED GAIN ON COMMODITY DERIVATIVES
|
391 | 75 | ||||||
OTHER ASSETS
|
1 | 109 | ||||||
|
||||||||
Total assets
|
$ | 313,943 | $ | 248,726 | ||||
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||||||||
|
||||||||
LIABILITIES AND STOCKHOLDERS EQUITY
|
||||||||
CURRENT LIABILITIES:
|
||||||||
Accounts payable
|
$ | 4,341 | $ | 5,459 | ||||
Oil and gas sales payable
|
8,365 | 1,794 | ||||||
Accrued liabilities
|
15,716 | 14,764 | ||||||
|
||||||||
Total current liabilities
|
28,422 | 22,017 | ||||||
NON-CURRENT LIABILITIES:
|
||||||||
Long-term debt
|
23,528 | | ||||||
Deferred income taxes
|
36,917 | 26,342 | ||||||
Asset retirement obligations
|
695 | 548 | ||||||
|
||||||||
Total liabilities
|
89,562 | 48,907 | ||||||
COMMITMENTS AND CONTINGENCIES
|
||||||||
STOCKHOLDERS EQUITY :
|
||||||||
Preferred stock, $0.01 par value, 10,000,000 shares authorized, none outstanding
|
| | ||||||
Common stock, $0.01 par value, 90,000,000 shares authorized, 20,683,605 and
20,622,746 shares issued and 20,651,591 and 20,622,746 shares outstanding,
respectively
|
207 | 206 | ||||||
Additional paid-in capital
|
167,037 | 166,141 | ||||||
Retained earnings
|
56,905 | 33,367 | ||||||
Accumulated other comprehensive income
|
232 | 105 | ||||||
|
||||||||
Total stockholders equity
|
224,381 | 199,819 | ||||||
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||||||||
Total liabilities and stockholders equity
|
$ | 313,943 | $ | 248,726 | ||||
|
1
2
3
Three Months Ended | Nine Months Ended | |||||||
September 30, 2008 | September 30, 2008 | |||||||
Net income
|
$ | 19,848 | $ | 23,538 | ||||
Other comprehensive income:
|
||||||||
Foreign currency translation adjustments
|
188 | 127 | ||||||
|
||||||||
Comprehensive income
|
$ | 20,036 | $ | 23,665 | ||||
|
4
Three Months Ended September 30, 2008 | ||||||||||||
Income (numerator) | Shares (denominator) | Per-share amount | ||||||||||
Basic earnings per share:
|
||||||||||||
Net income
|
$ | 19,848 | 20,651,591 | $ | 0.96 | |||||||
Effect of dilutive securities:
|
||||||||||||
Stock options, treasury method
|
| 172,214 | ||||||||||
Non-vested restricted shares
|
| 28,043 | ||||||||||
Net income plus assumed conversions
|
$ | 19,848 | 20,851,848 | $ | 0.95 | |||||||
Three Months Ended September 30, 2007 | ||||||||||||
Income (numerator) | Shares (denominator) | Per-share amount | ||||||||||
Basic earnings per share:
|
||||||||||||
Net income
|
$ | 2,093 | 9,538,883 | $ | 0.22 | |||||||
Effect of dilutive securities:
|
||||||||||||
Share-based compensation,
treasury method
|
| 208,514 | ||||||||||
Non-vested restricted shares
|
| 63,750 | ||||||||||
Convertible debt, if-converted
method
(1)
|
227 | 1,825,797 | ||||||||||
Net income plus assumed conversions
|
$ | 2,320 | 11,636,944 | $ | 0.20 | |||||||
Nine Months Ended September 30, 2008 | ||||||||||||
Income (numerator) | Shares (denominator) | Per-share amount | ||||||||||
Basic earnings per share:
|
||||||||||||
Net income
|
$ | 23,538 | 20,640,327 | $ | 1.14 | |||||||
Effect of dilutive securities:
|
||||||||||||
Stock options, treasury method
|
| 184,769 | ||||||||||
Non-vested restricted shares
|
| 12,070 | ||||||||||
Net income plus assumed conversions
|
$ | 23,538 | 20,837,166 | $ | 1.13 | |||||||
Nine Months Ended September 30, 2007 | ||||||||||||
Income (numerator) | Shares (denominator) | Per-share amount | ||||||||||
Basic earnings per share:
|
||||||||||||
Net income
|
$ | 4,502 | 9,507,449 | $ | 0.47 | |||||||
Effect of dilutive securities:
|
||||||||||||
Share-based compensation, treasury
method
|
| 235,893 | ||||||||||
Non-vested restricted shares
|
| 63,750 | ||||||||||
Convertible debt, if-converted
method
(1)
|
242 | 1,825,797 | ||||||||||
Net income plus assumed conversions
|
$ | 4,744 | 11,632,889 | $ | 0.41 | |||||||
(1) | Upon the consummation of our initial public offering in November 2007, the convertible debt was converted into shares of common stock. |
5
6
7
Period | Volume (MMBtu) | $/MMBtu | ||||||||||||||||||
Monthly | Total | Floor | Ceiling | Fixed | ||||||||||||||||
NYMEX Henry Hub
|
||||||||||||||||||||
Costless collars 2008
|
173,000 | 520,000 | $ | 7.50 | $ | 11.45 | ||||||||||||||
Costless collars 2008
|
200,000 | 600,000 | $ | 9.00 | $ | 12.20 | ||||||||||||||
Costless collars 2009
|
180,000 | 2,160,000 | $ | 7.50 | $ | 10.50 | ||||||||||||||
Costless collars 2009
|
130,000 | 1,560,000 | $ | 8.50 | $ | 11.70 | ||||||||||||||
Fixed price swaps
|
||||||||||||||||||||
4
th
quarter 2008
|
100,000 | 300,000 | $ | 8.63 | ||||||||||||||||
WAHA differential
|
||||||||||||||||||||
Fixed price swaps 2008
|
173,000 | 520,000 | (0.69 | ) | ||||||||||||||||
Fixed price swaps 2008
|
100,000 | 300,000 | (0.67 | ) | ||||||||||||||||
Fixed price swaps 2009
|
200,000 | 2,400,000 | (0.61 | ) |
8
| Level 1 Quoted prices are available in active markets for identical assets or liabilities as of the reporting date. At September 30, 2008, we had no Level 1 measurements. | ||
| Level 2 Pricing inputs are other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable as of the reporting date. Level 2 includes those financial instruments that are valued using models or other valuation methodologies. These models are primarily industry-standard models that consider various assumptions, including quoted forward prices for commodities, time value, volatility factors and current market and contractual prices for the underlying instruments, as well as other relevant economic measures. Our derivatives, which consist primarily of commodity swaps and collars, are valued using commodity market data which is derived by combining raw inputs and quantitative models and processes to generate forward curves. Where observable inputs are available, directly or indirectly, for substantially the full term of the asset or liability, the instrument is categorized in Level 2. At September 30, 2008, our commodity derivatives were valued using Level 2 measurements. | ||
| Level 3 Pricing inputs include significant inputs that are generally less observable from objective sources. These inputs may be used with internally developed methodologies that result in managements best estimate of fair value. At September 30, 2008, our Level 3 measurements were limited to our asset retirement obligation. |
Shares | ||||
subject to | ||||
stock | ||||
options | ||||
Outstanding at January 1, 2008
|
479,991 | |||
Granted
|
74,345 | |||
Exercised
|
(28,845 | ) | ||
Canceled
|
(40,600 | ) | ||
|
||||
|
||||
Outstanding at September 30, 2008
|
484,891 | |||
|
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
global economic and financial market conditions,
our business strategy,
estimated quantities of gas and oil reserves,
uncertainty of commodity prices in oil and gas,
continued disruption of credit and capital markets, such as the events that occurred during
the third quarter of 2008,
our financial position,
Table of Contents
our cash flow and liquidity,
replacing our gas and oil reserves,
our inability to retain and attract key personnel,
uncertainty regarding our future operating results,
uncertainties in exploring for and producing gas and oil,
high costs, shortages, delivery delays or unavailability of drilling rigs, equipment, labor
or other services,
disruptions to, capacity constraints in or other limitations on the pipeline systems which
deliver our gas and other processing and transportation considerations,
our inability to obtain additional financing necessary to
fund our operations and capital expenditures and to meet our other obligations,
competition in the oil and gas industry,
marketing of gas and oil,
exploitation or property acquisitions,
technology,
the effects of government regulation and permitting and other legal requirements,
plans, objectives, expectations and intentions contained in this report that are not historical,
and
other factors discussed in our Annual Report on Form 10-K for the year ended December 31,
2007 filed with the SEC on March 28, 2008 and in this Quarterly Report on Form 10-Q.
Table of Contents
Ozona Northeast (Wolfcamp, Canyon Sands, Strawn and Ellenburger)
Cinco Terry (Wolfcamp, Canyon Sands and Ellenburger)
North Bald Prairie (Cotton Valley Sands, Bossier Sands, Bossier Shale
and Cotton Valley Lime)
Montney tight gas and Doig Shale
El Vado East (Mancos Shale)
Boomerang (New Albany Shale)
Table of Contents
Table of Contents
Three Months Ended
Nine Months Ended
September 30,
September 30,
2008
2007
2008
2007
$
14,456
$
7,194
$
47,900
$
24,110
5,973
1,010
13,223
3,075
1,586
89
4,054
189
22,015
8,293
65,177
27,374
(195
)
1,079
(676
)
3,323
$
21,820
$
9,372
$
64,501
$
30,697
1,588
1,135
4,927
3,511
54
14
120
50
28
2
75
5
2,080
1,232
6,097
3,840
$
9.10
$
6.34
$
9.72
$
6.87
110.61
72.14
110.19
61.50
56.64
44.50
54.05
37.80
$
10.58
$
6.73
$
10.69
$
7.13
(0.09
)
0.88
(0.11
)
0.86
$
10.49
$
7.61
$
10.58
$
7.99
$
0.89
$
0.62
$
0.84
$
0.72
0.47
0.32
0.47
0.30
0.24
0.16
0.92
1.12
0.93
1.07
2.41
2.52
2.67
2.40
Table of Contents
Table of Contents
Table of Contents
Table of Contents
Nine Months Ended
September 30,
(in thousands)
2008
2007
$
45,896
$
20,294
(72,670
)
(32,445
)
23,625
24,996
(10
)
$
(3,159
)
$
12,845
Table of Contents
Estimated Year Ended
Actual Through
December 31, 2008
September 30, 2008
(in thousands)
$
37,500
$
22,304
11,500
20,200
14,648
14,400
14,894
3,000
2,951
92
1,800
290
2,366
3,100
3,168
$
80,000
$
72,213
Table of Contents
Table of Contents
We cannot predict with certainty the impact to us of any further disruption in the credit
environment or guarantee that the lenders under our revolving credit facility will not decrease our
borrowing base in the future.
Table of Contents
Period
Volume (MMBtu)
$/MMBtu
Monthly
Total
Floor
Ceiling
Fixed
173,000
520,000
$
7.50
$
11.45
200,000
600,000
$
9.00
$
12.20
180,000
2,160,000
$
7.50
$
10.50
130,000
1,560,000
$
8.50
$
11.70
100,000
300,000
$
8.63
173,000
520,000
(0.69
)
100,000
300,000
(0.67
)
200,000
2,400,000
(0.61
)
Table of Contents
Table of Contents
the level of domestic and foreign consumer demand for gas and oil,
domestic and foreign supply of gas and oil,
overall United States and global economic conditions,
price and quantity of foreign imports,
commodity processing, gathering and transportation availability and the availability of
refining capacity,
domestic and foreign governmental regulations,
political conditions in or affecting other gas producing and oil producing countries,
the ability of the members of the Organization of Petroleum Exporting Countries to agree to
and maintain oil price and production controls,
weather conditions, including unseasonably warm winter weather,
technological advances affecting gas and oil consumption, and
price and availability of alternative fuels.
Table of Contents
Table of Contents
Table of Contents
APPROACH RESOURCES INC.
By:
/s/ J. Ross Craft
J. Ross Craft
President and Chief Executive Officer
Table of Contents
Exhibit
Number
Exhibit
Restated Certificate of Incorporation of Approach
Resources Inc. (filed as Exhibit 3.1 to the Companys
Quarterly Report on Form 10-Q filed December 13, 2007
and incorporated herein by reference).
Restated Bylaws of Approach Resources Inc. (filed as
Exhibit 3.2 to the Companys Quarterly Report on
Form 10-Q filed December 13, 2007 and incorporated
herein by reference).
Specimen Common Stock Certificate (filed as Exhibit
4.1 to the Companys Registration Statement on Form
S-1/A filed October 18, 2007 (File No. 333-144512) and
incorporated herein by reference).
Form of Indemnity Agreement between Approach Resources
Inc. and each of its directors and officers (filed as
Exhibit 10.1 to the Companys Registration Statement
on Form S-1/A filed September 13, 2007 (File No.
333-144512) and incorporated herein by reference).
Employment Agreement by and between Approach Resources
Inc. and J. Ross Craft dated January 1, 2003 (filed as
Exhibit 10.3 to the Companys Registration Statement
on Form S-1 filed July 12, 2007 and incorporated
herein by reference).
Employment Agreement by and between Approach Resources
Inc. and Steven P. Smart dated January 1, 2003 (filed
as Exhibit 10.4 to the Companys Registration
Statement on Form S-1 filed July 12, 2007 and
incorporated herein by reference).
Employment Agreement by and between Approach Resources
Inc. and Glenn W. Reed dated January 1, 2003 (filed as
Exhibit 10.5 to the Companys Registration Statement
on Form S-1 filed July 12, 2007 and incorporated
herein by reference).
Approach Resources Inc. 2007 Stock Incentive Plan,
effective as of June 28, 2007 (filed as Exhibit 10.6
to the Companys Registration Statement on Form S-1
filed July 12, 2007 and incorporated herein by
reference).
Form of Business Opportunities Agreement among
Approach Resources Inc. and the other signatories
thereto (filed as Exhibit 10.11 to the Companys
Registration Statement on Form S-1/A filed October 18,
2007 (File No. 333-144512) and incorporated herein by
reference).
Form of Option Agreement under 2003 Stock Option Plan
(filed as Exhibit 10.12 to the Companys Registration
Statement on Form S-1 filed July 12, 2007 and
incorporated herein by reference).
Restricted Stock Award Agreement by and between
Approach Resources Inc. and J. Curtis Henderson dated
March 14, 2007 (filed as Exhibit 10.13 to the
Companys Registration Statement on Form S-1 filed
July 12, 2007 and incorporated herein by reference).
Table of Contents
Exhibit
Number
Exhibit
Form of Summary of Stock Option Grant under Approach
Resources Inc. 2007 Stock Incentive Plan (filed as
Exhibit 10.14 to the Companys Registration Statement
on Form S-1/A filed October 18, 2007 (File No.
333-144512) and incorporated herein by reference).
Form of Stock Award Agreement under Approach Resources
Inc. 2007 Stock Incentive Plan.
Registration Rights Agreement dated as of November 14,
2007, by and among Approach Resources Inc. and
investors identified therein (filed as Exhibit 10.1 to
the Companys Current Report on Form 8-K/A filed
December 3, 2007 and incorporated herein by
reference).
Gas Purchase Contract dated May 1, 2004 between Ozona
Pipeline Energy Company, as Buyer, and Approach
Resources I, L.P. and certain other parties identified
therein (filed as Exhibit 10.18 to the Companys
Registration Statement on Form S-1/A filed September
13, 2007 (File No. 333-144512) and incorporated herein
by reference).
Agreement Regarding Gas Purchase Contract dated May
26, 2006 between Ozona Pipeline Energy Company, as
Buyer, and Approach Resources I, L.P. and certain
other parties identified therein (filed as Exhibit
10.19 to the Companys Registration Statement on Form
S-1/A filed September 13, 2007 (File No. 333-144512)
and incorporated herein by reference).
Carry and Earning Agreement dated July 13, 2007 by and
between EnCana Oil & Gas (USA) (filed as Exhibit 10.22
to the Companys Registration Statement on Form S-1/A
filed September 13, 2007 (File No. 333-144512) and
incorporated herein by reference).
Oil & Gas Lease dated February 27, 2007 between the
lessors identified therein and Approach Oil & Gas
Inc., as successor to Lynx Production Company, Inc.
(filed as Exhibit 10.23 to the Companys Registration
Statement on Form S-1/A filed September 13, 2007 (File
No. 333-144512) and incorporated herein by reference).
Specimen Oil and Gas Lease for Boomerang prospect
between lessors and Approach Oil & Gas Inc., as
successor to The Keeton Group, LLC, as lessee (filed
as Exhibit 10.24 to the Companys Registration
Statement on Form S-1/A filed September 13, 2007 (File
No. 333-144512) and incorporated herein by reference).
Lease Crude Oil Purchase Agreement dated May 1, 2004
by and between ConocoPhillips and Approach Operating
LLC (filed as Exhibit 10.26 to the Companys
Registration Statement on Form S-1/A filed October 18,
2007 (File No. 333-144512) and incorporated herein by
reference).
Gas Purchase Agreement dated as of November 21, 2007
between WTG Benedum Joint Venture, as Buyer, and
Approach Oil & Gas Inc. and Approach Operating, LLC,
as Seller (filed as Exhibit 10.1 to the Companys
Current Report on Form 8-K filed November 28, 2007 and
incorporated herein by reference).
Table of Contents
Exhibit
Number
Exhibit
$200,000,000 Revolving Credit Agreement dated as of
January 18, 2008 among Approach Resources Inc., as
borrower, The Frost National Bank, as administrative
agent and lender, and the financial institutions named
therein (filed as Exhibit 10.1 to the Companys
Current Report on Form 8-K filed January 18, 2008 and
incorporated herein by reference).
Amendment dated February 19, 2008 to Credit Agreement
among Approach Resources Inc., as borrower, The Frost
National Bank, as administrative agent and lender,
JPMorgan Chase Bank, NA, as lender, and Approach Oil &
Gas Inc., Approach Oil & Gas (Canada) Inc. and
Approach Resources I, LP, as guarantors, dated as of
January 18, 2008 (filed as Exhibit 10.1 to the
Companys Current Report on Form 8-K filed February
22, 2008 and incorporated herein by reference).
Amendment dated May 6, 2008 to Credit Agreement among
Approach Resources Inc., as borrower, The Frost
National Bank, as administrative agent and lender,
JPMorgan Chase Bank, NA, as lender, and Approach Oil &
Gas Inc., Approach Oil & Gas (Canada) Inc. and
Approach Resources I, LP, as guarantors, dated as of
January 18, 2008 (filed as Exhibit 99.1 to the
Companys Current Report on Form 8-K filed August 28,
2008 and incorporated herein by reference).
Amendment dated August 26, 2008 to Credit Agreement
among Approach Resources Inc., as borrower, The Frost
National Bank, as administrative agent and lender,
JPMorgan Chase Bank, NA, Fortis Capital Corp. and
KeyBank National Association, as lenders, and Approach
Oil & Gas Inc., Approach Oil & Gas (Canada) Inc. and
Approach Resources I, LP, as guarantors, dated as of
January 18, 2008 (filed as Exhibit 10.1 to the
Companys Current Report on Form 8-K filed August 28,
2008 and incorporated herein by reference).
Certification of Chief Executive Officer pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002.
Certification of Chief Financial Officer pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002.
Certification of Chief Executive Officer pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002.
Certification of Chief Financial Officer pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002.
*
Filed herewith
2
3
4
APPROACH RESOURCES INC. | ||||||||
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By: | |||||||
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Name: | |||||||
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Title: | |||||||
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PARTICIPANT | ||||||||
|
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Participant Signature | ||||||||
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Participant Printed Name |
5
|
PARTICIPANT | |||
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|
Participant Signature | |||
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Participant Printed Name |
1. | I have reviewed this quarterly report on Form 10-Q of Approach Resources Inc.; | |
2. | Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report; | |
3. | Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report; | |
4. | The registrants other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)), or for causing such controls and procedures to be established and maintained, for the registrant and have: |
a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared; | ||
b) | [Paragraph omitted in accordance with SEC Release 34-47986]; | ||
c) | Evaluated the effectiveness of the registrants disclosure controls and procedures and presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and | ||
d) | Disclosed in this report any change in the registrants internal control over financial reporting that occurred during the registrants most recent fiscal quarter (the registrants fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrants internal control over financial reporting; and |
5. | The registrants other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrants auditors and the audit committee of the registrants board of directors (or persons performing the equivalent function): |
a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrants ability to record, process, summarize and report financial information; and |
b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrants internal control over financial reporting. |
By: | /s/ J. Ross Craft | |||
J. Ross Craft | ||||
President and Chief Executive Officer | ||||
1. | I have reviewed this quarterly report on Form 10-Q of Approach Resources Inc.; | |
2. | Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report; | |
3. | Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report; | |
4. | The registrants other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)), or for causing such controls and procedures to be established and maintained, for the registrant and have: |
a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared; | ||
b) | [Paragraph omitted in accordance with SEC Release 34-47986]; | ||
c) | Evaluated the effectiveness of the registrants disclosure controls and procedures and presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and | ||
d) | Disclosed in this report any change in the registrants internal control over financial reporting that occurred during the registrants most recent fiscal quarter (the registrants fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrants internal control over financial reporting; and |
5. | The registrants other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrants auditors and the audit committee of the registrants board of directors (or persons performing the equivalent function): |
a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely |
affect the registrants ability to record, process, summarize and report financial information; and | |||
b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrants internal control over financial reporting. |
By: | /s/ Steven P. Smart | |||
Steven P. Smart | ||||
Chief Financial Officer | ||||
(1) | The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and | ||
(2) | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
APPROACH RESOURCES INC.
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By: | /s/ J. Ross Craft | |||
J. Ross Craft, | ||||
President and Chief Executive Officer | ||||
(1) | The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and | ||
(2) | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
APPROACH RESOURCES INC.
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By: | /s/ Steven P. Smart | |||
Steven P. Smart, | ||||
Chief Financial Officer | ||||