Wunderlich Securities recently raised the price target for Approach Resources Inc. (AREX:NASDAQ) by $3 to $41, to reflect updates the company made to its mid-year reserves estimate of 66.8 million barrels of oil equivalent (mmboe).
Wunderlich said that about $32 of the target is due to proved reserves, with the rest being unevenly split between probable and possible resources. The brokerage firm continues to rate the Fort Worth, Texas-based company a BUY.
Approach also announced results from the Wolfcamp play in Texas’ Permian basin. The company revised its count to 1,230 horizontal drilling locations in Wolfcamp, up from 500.
Wunderlich said that all told, the horizontal and vertical plays could result in 528 mmboe of gross resource upside – eight times its current resource estimate.
Approach has drilled seven wells in the Wolfcamp play, and four are completed. Two more are expected to be finished by mid-August and their results will be known in November.
Approach closed on Thursday, August 4, at $20.72.