Approach Resources Inc. (NASDAQ: AREX) (together with its
subsidiaries, “Approach” or the “Company”) today announced a definitive
agreement to sell its interest in an oil pipeline system in the southern
Midland Basin for cash proceeds to Approach of $108 million, before
taxes and subject to customary post-closing conditions, adjustments and
escrows.
Approach, together with its partner in Wildcat Permian Services LLC
(“Wildcat”), entered into an Equity Purchase Agreement (the “Agreement”)
with affiliates of JP Energy Development LP (together, “JP Energy”),
under which JP Energy will acquire all of the equity interests in
Wildcat for a purchase price of $210 million, subject to customary
post-closing conditions, adjustments and escrows. The transaction is
expected to close in late third quarter or early fourth quarter 2013.
Wildcat owns and operates an oil pipeline system consisting of
approximately 50 miles of high-pressure, steel pipeline in Crockett and
Reagan Counties, Texas, with throughput capacity of 100,000 Bbls/d,
truck terminal and LACT bay facilities, multiple receipt points and
40,000 Bbls of crude oil storage. In connection with the acquisition of
Wildcat, JP Energy and Approach will enter into a revised crude oil
purchase agreement under which JP Energy will purchase and transport the
Company’s crude oil production from Crockett and Schleicher Counties,
Texas.
J. Ross Craft, the Company’s President and CEO, commented, “The sale of
our oil pipeline provides a strong return on our initial investment,
further strengthens our liquidity position and continues to provide firm
crude oil takeaway from our core operating area. We appreciate the hard
work and dedication of the Wildcat team, and look forward to our new
partnership with JP Energy and their management team. We believe that JP
Energy’s broad, crude oil midstream, transportation and logistics
expertise will help us continue to unlock the potential of our Wolfcamp
shale oil play.”
Barclays served as financial advisor to Wildcat Permian Services LLC.
Approach Resources Inc. is an independent oil and gas company
with core operations, production and reserves located in the Permian
Basin in West Texas. The Company targets multiple oil and liquids-rich
formations in the Permian Basin, where the Company operates
approximately 152,000 net acres. 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.
JP Energy Development LP is a crude oil midstream company that
purchases, gathers, transports, blends, stores and markets crude oil for
producers and refiners in the Mid-Continent area, and the company
currently moves approximately 40,000 Bbls/d of crude oil. JP Energy
Development owns approximately 70 crude oil transports, 23 truck
injection stations, approximately 70 MBbls of crude oil storage and over
200 miles of crude oil pipelines. JP Energy Development is an affiliate
of JP Energy Partners LP. JP Energy Development and JP Energy Partners
are supported by equity commitments from ArcLight Capital Partners, LLC.
Additional information about JP Energy Development and JP Energy
Partners can be found at www.jpenergypartners.com.
Wildcat Permian Services LLC is a 50% owned subsidiary of Wildcat
Midstream Holdings LLC. Wildcat Midstream Holdings is an oil and gas
infrastructure development company owned by Liberty Energy, Highstar
Capital and management. In addition to its ownership interest in Wildcat
Permian Services LLC, Wildcat Midstream Holdings currently owns and
operates a state-of-the-art cryogenic processing facility in North
Louisiana with a design capacity of 140 MMcf/d and 400 gpm of amine
treating.
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 closing the transaction described herein. 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.
For a glossary of oil and gas terms and abbreviations used in this
release, please see our Annual Report on Form 10-K filed with the SEC on
February 28, 2013.
Copyright Business Wire 2013