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Acquired remaining 38% WI in Cinco Terry operating area TX Permian Basin in Crockett County, covering 19,800 net acres, gaining 1,400 BOE/d, 9 MMBOE proved.

Fort Worth, Texas-based Approach Resources Inc. (Nasdaq: AREX) has acquired the remaining 38% working interest in its Cinco Terry operating area in the Permian Basin in Crockett County, Texas, from two non-operating partners for $76 million.

The deal involves a working interest in 19,800 net acres, with estimated proved reserves of 9 million barrels of oil equivalent (61% oil and NGLs; 61% proved developed) and 4.7 MMBOE of estimated unproved reserves. Current production is approximately 1,400 barrels of oil equivalent. Approach's total working and net revenue interests in Cinco Terry are now approximately 100% and 76%, respectively.

Estimates of proved and unproved reserves exclude reserve potential for the company's shallower Wolfcamp shale and Clearfork (Wolffork) zones, and are based on its internal estimates. Approach has reported estimated proved reserves of 50.7 MMBOE as of year-end 2010.

Approach's total acreage position in the Permian Basin now covers approximately 133,000 net acres prospective for one or more of the company's deeper, original targets, including the Canyon sands, Strawn and Ellenburger zones, and the shallower Wolffork zones.

J. Ross Craft, Approach's president and chief executive, says, "With the acquisition of the remaining working interest in Cinco Terry, we have expanded Project Pangea to approximately 133,000 net, primarily contiguous acres. In addition, we have increased our working interest to approximately 100% across this multi-pay, liquids-rich acreage position. During 2011, our focus will be on our Wolffork oil shale resource play, which we believe is present throughout our acreage."

The acquisition was funded with borrowings under the company's revolving credit facility and cash on hand. Approach's borrowing base under its credit facility is $150 million. Pro forma the acquisition, outstanding borrowings under the credit facility were $67 million.