Approach Resources Inc. has declared its 2011 capital budget and guidance.

The Company's 2011 capital budget is $100 million and assumes commodity prices average $84 per Bbl of oil, $35 per Bbl of NGLs and $4.20 per Mcf of natural gas. Substantially all of the 2011 budget is allocated to the Company's Wolffork oil resource play in the Permian Basin. The 2011 budget includes operating:

• One rig to drill approximately 11 gross (7 net) horizontal wells targeting the Wolfcamp Shale, • One rig to drill approximately 19 gross (19 net) vertical wells targeting the Clearfork, Wolfcamp (referred to together as the 'Wolffork') and Canyon Sands, • One rig to drill approximately 26 gross (16 net) vertical wells targeting the Canyon Sands, which the Company expects to recomplete up hole in the Wolffork in 2012, and • One workover rig to recomplete 10 gross (10 net) wells in the Wolffork. The 2011 capital budget also includes $7 million for lease extensions and renewals across the Company's 98,000 net acres in the Permian.

The Company's 2011 capital budget is subject to change depending upon a number of factors, including additional data on the Company's Wolffork oil resource play, results of Wolfcamp Shale and Wolffork drilling and recompletions, economic and industry conditions at the time of drilling, prevailing and anticipated prices for oil, gas and NGLs, the availability of sufficient capital resources for drilling prospects, the Company's financial results and the availability of lease extensions and renewals on reasonable terms.

J. Ross Craft, the Company's President and CEO, said, 'After months of detailed technical study and encouraging results from our initial pilot program, we are excited about beginning the delineation and development of our Wolffork oil resource play in earnest. We plan to drill a mixture of horizontal Wolfcamp and vertical Wolffork/Canyon wells, and recomplete the Wolffork from existing wellbores, over our 98,000 net acres in the Permian Basin. We estimate that the three-rig program plus recompletions will grow production volumes 25% and increase liquids production to 53% oil and NGLs. I expect the 2011 drilling and recompletion plan to be the start of successive years of production and reserve growth at reasonable finding, development and lifting costs, which is our preferred means for delivering value to our stockholders in the future.'

Tags: Approach Resources Inc.