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Water hits the bottom line

During a quarterly earnings conference call with analysts on March 5, in a presentation peppered with phrases like “accretive bolt-on acquisition” and…

During a quarterly earnings conference call with analysts on March 5, in a presentation peppered with phrases like “accretive bolt-on acquisition” and “commodity price appreciation”, the CEO of Approach Resources, Ron Carter, highlighted a 54% drop in the cost to handle produced water.

Once an unmentioned and unwanted byproduct, produced water was cited as a contributor to the bottom line. Carter explained that because they used produced water for fracking, they reduced their cost for water handling from an already low $1.60 per barrel (benchmarked in 2015) to $0.42 per barrel.

Approach Resources has invested in water infrastructure, both piping and a central water recycling plant, to move and treat produced water for reuse. Contiguous holdings and water volume drove them to invest. Evidently, they are paying off.

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