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Saturday, Sep 21
Approach Resources may see 50% upside in sale, Barron's says
- Approach Resources (AREX) owns nearly 152K acres in the Wolfcamp shale (Permian basin) at a cost per acre of $500. Earlier this year, Sinochem paid $17K per acre for similar land. That sounds like a winning equation to Barron's.
- With the help of Cove Street's Eugene Robin, David Englander drills down into the company's prospects, and determines that development costs and comments from CEO Ross Craft indicate the company "is unlikely to remain independent for long."
- With a "solid balance sheet," "plenty of available liquidity," and "good results" from B bench horizontal wells, AREX may fetch a price "in the high 30's," Englander concludes. Shares closed at $24.65 on Friday.