Fort Worth-based Approach Resources earned $495,000, or a penny a share, on $44.2 million in revenues in the third quarter. Earnings were 7 cents a share after adjustments, compared to a consensus estimate of about 6 cents by financial analysts. The company lowered its production outlook, citing the need to shut in wells during fracturing operations nearby and also due to restrictions at a third-party processing plant. Approach's shares (ticker: AREX) were down about 10 percent in early trading.
Approach has a large position in West Texas' Wolfcamp Shale formation. It spent $102 million on capital projects in the third quarter, including $84 million on drilling and completion, and expects to spend about $300 million in 2013. It forecast about $400 million in capital spending in 2014 to drill about 65 net wells. Tim Rezvan, analyst at Stern Agee, in a morning note to clients said the lower production guidance and higher spending estimate were likely to push pressure on the share price. CEO Ross Craft, on a conference call Friday morning , told analysts that they should expect to see occasional shut-ins as the company develops its holdings.
-- Jim Fuquay