UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 
 FORM 10-Q/A
 Amendment No. 2
 (Mark One)
 þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the quarterly period ended March 31, 2009
 OR
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the transition period from  to
 Commission file number: 001-33801
 
 APPROACH RESOURCES INC.
  
 Delaware
    
    51-0424817(State or other jurisdiction of 
incorporation or organization)
    
    (I.R.S. employer
identification number)One Ridgmar Centre 
6500 W. Freeway, Suite 800Fort Worth, Texas
    
    76116(Address of principal executive offices)
    
    (Zip Code)
 (Registrants telephone number, including area code)
 
 þ o
 o o
  Large accelerated filer o
    
    Accelerated filer þ
    
    Non-accelerated filer o(Do not check if a smaller reporting
company)
    
    Smaller reporting company o
 o þ




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Explanatory Note




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##### 



PART I  FINANCIAL INFORMATION
 Item 1.
    
    Financial statements.
 APPROACH RESOURCES INC.
UNAUDITED CONSOLIDATED BALANCE SHEETS
(In thousands, except shares and per-share amounts)
 March 31,
    
    December 31,2009
    
    2008ASSETSCURRENT ASSETS:Cash and cash equivalents
    
    $
    502
    
    
    $
    4,077Accounts receivable:Joint interest owners
    
    
    10,060
    
    
    
    16,228Oil and gas sales
    
    
    3,120
    
    
    
    5,936Unrealized gain on commodity derivatives
    
    
    10,487
    
    
    
    8,017Prepaid expenses and other current assets
    
    
    887
    
    
    
    579Total current assets
    
    
    25,056
    
    
    
    34,837PROPERTIES AND EQUIPMENT:Oil and gas properties, at cost, using the successful efforts method of accounting
    
    
    375,991
    
    
    
    362,805Furniture, fixtures and equipment
    
    
    1,135
    
    
    
    977377,126
    
    
    
    363,782Less accumulated depletion, depreciation and amortization
    
    
    (67,281
    )
    
    
    (60,378
    )Net properties and equipment
    
    
    309,845
    
    
    
    303,404Total assets
    
    $
    334,901
    
    
    $
    338,241LIABILITIES AND STOCKHOLDERS EQUITYCURRENT LIABILITIES:Accounts payable
    
    $
    8,355
    
    
    $
    13,564Oil and gas sales payable
    
    
    3,196
    
    
    
    4,631Accrued liabilities
    
    
    9,161
    
    
    
    12,580Total current liabilities
    
    
    20,712
    
    
    
    30,775NON-CURRENT LIABILITIES:Long-term debt
    
    
    47,717
    
    
    
    43,537Unrealized loss on commodity derivatives
    
    
    325
    
    
    
    Deferred income taxes
    
    
    36,520
    
    
    
    35,891Asset retirement obligations
    
    
    4,304
    
    
    
    4,225Total liabilities
    
    
    109,578
    
    
    
    114,428COMMITMENTS AND CONTINGENCIESSTOCKHOLDERS EQUITY :Preferred stock, $0.01 par value, 10,000,000 shares authorized none outstanding
    
    
    
    
    
    
    Common stock, $0.01 par value, 90,000,000 shares authorized, 20,777,342 and
20,715,357 issued and 20,731,429 and 20,680,584 outstanding, respectively
    
    
    207
    
    
    
    207Additional paid-in capital
    
    
    168,028
    
    
    
    167,349Retained earnings
    
    
    57,621
    
    
    
    56,753Accumulated other comprehensive loss
    
    
    (533
    )
    
    
    (496
    )Total stockholders equity
    
    
    225,323
    
    
    
    223,813Total liabilities and stockholders equity
    
    $
    334,901
    
    
    $
    338,241
 See accompanying notes to these consolidated financial statements.
 1




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##### 



APPROACH RESOURCES INC. AND SUBSIDIARIES
UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except shares and per-share amounts)
 Three Months EndedMarch 31,2009
    
    
    2008REVENUES:Oil and gas sales
    
    $
    10,065
    
    
    $
    19,018EXPENSES:Lease operating
    
    
    2,369
    
    
    
    1,397Severance and production taxes
    
    
    430
    
    
    
    753Exploration
    
    
    
    
    
    
    491General and administrative
    
    
    2,810
    
    
    
    1,946Depletion, depreciation and amortization
    
    
    6,948
    
    
    
    5,216Total expenses
    
    
    12,557
    
    
    
    9,803OPERATING (LOSS) INCOME
    
    
    (2,492
    )
    
    
    9,215OTHER:Interest expense, net
    
    
    (445
    )
    
    
    (148
    )Realized gain on commodity derivatives
    
    
    3,181
    
    
    
    61Unrealized gain (loss) on commodity derivatives
    
    
    2,145
    
    
    
    (4,879
    )INCOME BEFORE INCOME TAX PROVISION
    
    
    2,389
    
    
    
    4,249INCOME TAX PROVISION
    
    
    1,521
    
    
    
    1,487NET INCOME
    
    $
    868
    
    
    $
    2,762EARNINGS PER SHARE:Basic
    
    $
    0.04
    
    
    $
    0.13Diluted
    
    $
    0.04
    
    
    $
    0.13WEIGHTED AVERAGE SHARES OUTSTANDING:Basic
    
    
    20,760,124
    
    
    
    20,622,746Diluted
    
    
    20,866,449
    
    
    
    20,757,513
 See accompanying notes to these consolidated financial statements.
 2




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##### 



APPROACH RESOURCES INC. AND SUBSIDIARIES
UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
 Three Months EndedMarch 31,2009
    
    
    2008OPERATING ACTIVITIES:Net income
    
    $
    868
    
    
    $
    2,762Adjustments to reconcile net income to cash provided
by operating activities:Depletion, depreciation and amortization
    
    
    6,948
    
    
    
    5,216Unrealized (gain) loss on commodity derivatives
    
    
    (2,145
    )
    
    
    4,879Exploration expense
    
    
    
    
    
    
    491Share-based compensation expense
    
    
    679
    
    
    
    226Deferred income taxes
    
    
    649
    
    
    
    1,259Changes in operating assets and liabilities:Accounts receivable
    
    
    8,984
    
    
    
    (5,215
    )Prepaid expenses and other assets
    
    
    (308
    )
    
    
    (448
    )Accounts payable
    
    
    (5,209
    )
    
    
    (2,391
    )Oil and gas sales payable
    
    
    (1,435
    )
    
    
    1,583Accrued liabilities
    
    
    (3,419
    )
    
    
    (3,499
    )Cash provided by operating activities
    
    
    5,612
    
    
    
    4,863INVESTING ACTIVITIES:Additions to oil and gas properties
    
    
    (13,205
    )
    
    
    (15,509
    )Additions to other property and equipment, net
    
    
    (158
    )
    
    
    (97
    )Cash used in investing activities
    
    
    (13,363
    )
    
    
    (15,606
    )FINANCING ACTIVITIES:Borrowings under credit facility
    
    
    28,780
    
    
    
    13,790Repayment of amounts outstanding under credit facility
    
    
    (24,600
    )
    
    
    (6,500
    )Cash provided by financing activities
    
    
    4,180
    
    
    
    7,290CHANGE IN CASH AND CASH EQUIVALENTS
    
    
    (3,571
    )
    
    
    (3,453
    )EFFECT OF FOREIGN CURRENCY TRANSLATION ON CASH AND CASH
EQUIVALENTS
    
    
    (4
    )
    
    
    4CASH AND CASH EQUIVALENTS, beginning of period
    
    $
    4,077
    
    
    $
    4,785CASH AND CASH EQUIVALENTS, end of period
    
    $
    502
    
    
    $
    1,336SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:Cash paid for interest
    
    $
    360
    
    
    $
    221
 See accompanying notes to these consolidated financial statements.
 3




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##### 



APPROACH RESOURCES INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(In thousands)
 Three Months EndedMarch 31,2009
    
    2008Net income
    
    $
    868
    
    
    $
    2,762Other comprehensive (loss) income:Foreign currency translation, net related income tax
    
    
    (37
    )
    
    
    30Total comprehensive income
    
    $
    831
    
    
    $
    2,792
 See accompanying notes to these consolidated financial statements.
 4




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##### 



APPROACH RESOURCES INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2009
(Unaudited)
 1. Summary of significant accounting policies
 Organization and nature of operations
  Consolidation, basis of presentation and significant estimates
   Derivative instruments and commodity derivative activities
 Disclosures
about Derivative Instruments and Hedging Activities, an amendment of FASB Statement 133
 5




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##### 



APPROACH RESOURCES INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2009
(Unaudited)
 Earnings per common share
  Three Months Ended March 31, 2009Income (numerator)
    
    Shares (denominator)
    
    Per-share amountBasic earnings per share:Net income
    
    $
    868
    
    
    
    20,760,124
    
    
    $
    0.04Effect of dilutive securities:Share-based compensation,
treasury method
    
    
    
    
    
    
    106,325Net income plus assumed conversions
    
    $
    868
    
    
    
    20,866,449
    
    
    $
    0.04Three Months Ended March 31, 2008Income (numerator)
    
    Shares (denominator)
    
    Per-share amountBasic earnings per share:Net income
    
    $
    2,762
    
    
    
    20,622,746
    
    
    $
    0.13Effect of dilutive securities:Share-based compensation,
treasury method
    
    
    
    
    
    
    134,767Net income plus assumed conversions
    
    $
    2,762
    
    
    
    20,757,513
    
    
    $
    0.13
 2. Revolving credit facility
     6




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APPROACH RESOURCES INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2009
(Unaudited)
   
    
    require maintenance of a minimum modified ratio of current assets to current liabilities
of 1.0 to 1.0,
 
    
    require maintenance of a debt to EBITDAX ratio of 3.5 to 1.0 or less, and
 
    
    restrict cash dividends and other restricted payments, transactions with affiliates,
incurrence of other debt, consolidations and mergers, the level of operating leases, assets
sales, investments in other entities and liens on properties.
    3. Income taxes
  4. Derivatives
  Volume (MMBtu)
    
    $/MMBtuPeriod
    
    Monthly
    
    Total
    
    Floor
    
    Ceiling
    
    FixedNYMEX  Henry HubCostless collars 2009
    
    
    180,000
    
    
    
    1,620,000
    
    
    $
    7.50
    
    
    $
    10.50Costless collars 2009
    
    
    130,000
    
    
    
    1,170,000
    
    
    $
    8.50
    
    
    $
    11.70Fixed price swaps 2nd  4th quarter 2009
    
    
    150,000
    
    
    
    1,350,000
    
    
    
    
    
    
    
    
    
    
    $
    4.50WAHA differentialFixed price swaps 2009
    
    
    200,000
    
    
    
    1,800,000
    
    
    
    
    
    
    
    
    
    
    $
    (0.61
    )Fixed price swaps 3rd quarter 2009
    
    
    300,000
    
    
    
    900,000
    
    
    
    
    
    
    
    
    
    
    $
    (0.58
    )Fixed price swaps 2010
    
    
    415,000
    
    
    
    4,980,000
    
    
    
    
    
    
    
    
    
    
    $
    (0.71
    )
 7




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##### 



APPROACH RESOURCES INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2009
(Unaudited)
  Asset Derivatives
    
    Liability DerivativesBalance Sheet
    
    
    
    
    
    
    
    
    
    Balance SheetLocation
    
    Fair Value
    
    Location
    
    Fair ValueMarch 31,
    
    December 31,
    
    
    
    
    
    March 31,
    
    December 31,2009
    
    2008
    
    
    
    
    
    2009
    
    2008Derivatives not
designated as
hedging instruments
under SFAS 133Commodity derivatives
    
    Unrealized gain on commodity derivates
    
    $
    10,487
    
    
    $
    8,017
    
    
    Unrealized loss on commodity derivates
    
    $
    325
    
    
    $
    The following summarizes the change in the fair value of our commodity derivatives (in
thousands):Asset DerivativesIncome StatementLocation
    
    
    Fair ValueThree Months EndedMarch 31,2009
    
    2008Derivatives not
designated as
hedging instruments
under SFAS 133Commodity derivatives
    
    Unrealized gain (loss) on commodity derivates
    
    $
    2,145
    
    
    $
    (4,879
    )Realized gain on commodity derivatives
    
    
    3,181
    
    
    
    61$
    5,326
    
    
    $
    (4,818
    )
  Volume (MMBtu)
    
    $/MMBtuPeriod
    
    Monthly
    
    Total
    
    FixedNYMEX  Henry HubFixed price swaps 2010
    
    
    150,000
    
    
    
    1,800,000
    
    
    $
    5.85WAHA differentialFixed price swaps May and June 2009
    
    
    300,000
    
    
    
    600,000
    
    
    $
    (0.67
    )
  8




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APPROACH RESOURCES INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2009
(Unaudited)
    
    
    Level 1  Quoted prices are available in active markets for identical assets or
liabilities as of the reporting date. At March 31, 2009, we had no Level 1 measurements.
 
    
    Level 2  Pricing inputs are other than quoted prices in active markets included in
Level 1, which are either directly or indirectly observable as of the reporting date. Level
2 includes those financial instruments that are valued using models or other valuation
methodologies. These models are primarily industry-standard models that consider various
assumptions, including quoted forward prices for commodities, time value, volatility
factors and current market and contractual prices for the underlying instruments, as well
as other relevant economic measures. Our derivatives, which consist primarily of commodity
swaps and collars, are valued using commodity market data which is derived by combining raw
inputs and quantitative models and processes to generate forward curves. Where observable
inputs are available, directly or indirectly, for substantially the full term of the asset
or liability, the instrument is categorized in Level 2. At March 31, 2009, our commodity
derivatives were valued using Level 2 measurements.
 
    
    Level 3  Pricing inputs include significant inputs that are generally less observable
from objective sources. These inputs may be used with internally developed methodologies
that result in managements best estimate of fair value. At March 31, 2009, our Level 3
measurements were limited to our asset retirement obligation.
 9




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Item 2. Managements discussion and analysis of financial condition and results of operations.
  Cautionary statement regarding forward-looking statements
   
    
    global economic and financial market conditions,
    
    our business strategy,
    
    estimated quantities of oil and gas reserves,
    
    uncertainty of commodity prices in oil and gas,
    
    continued disruption of credit and capital markets,
    
    our financial position,
    
    our cash flow and liquidity,
 10




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
    
    replacing our oil and gas reserves,
    
    our inability to retain and attract key personnel,
    
    uncertainty regarding our future operating results,
    
    uncertainties in exploring for and producing oil and gas,
    
    high costs, shortages, delivery delays or unavailability of drilling rigs, equipment, labor
or other services,
    
    disruptions to, capacity constraints in or other limitations on the pipeline systems which
deliver our gas and other processing and transportation considerations,
    
    our inability to obtain additional financing necessary to fund our operations and capital
expenditures and to meet our other obligations,
    
    competition in the oil and gas industry,
    
    marketing of oil, gas and natural gas liquids,
    
    exploitation of our current asset base or property acquisitions,
    
    the effects of government regulation and permitting and other legal requirements,
    
    plans, objectives, expectations and intentions contained in this report that are not historical,
and
    
    other factors discussed in our Annual Report on Form 10-K for the year ended December 31,
2008 filed with the SEC on March 13, 2009 and in this Quarterly Report on Form 10-Q.
 Overview
    11




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12




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Results of operations
 Three Months EndedMarch 31,2009
    
    2008Revenues (in thousands):Gas
    
    $
    6,610
    
    
    $
    14,872Oil
    
    
    2,028
    
    
    
    3,085NGLs
    
    
    1,427
    
    
    
    1,061Total oil and gas sales
    
    
    10,065
    
    
    
    19,018Realized gain on commodity derivatives
    
    
    3,181
    
    
    
    61Total oil and gas sales including derivative impact
    
    $
    13,246
    
    
    $
    19,079Production:Gas (MMcf)
    
    
    1,770
    
    
    
    1,666Oil (MBbls)
    
    
    59
    
    
    
    32NGLs (MBbls)
    
    
    68
    
    
    
    21Total (MMcfe)
    
    
    2,532
    
    
    
    1,979Total (MMcfe/d)
    
    
    28.13
    
    
    
    21.75Average prices:Gas (per Mcf)
    
    $
    3.73
    
    
    $
    8.93Oil (per Bbl)
    
    
    34.37
    
    
    
    97.91NGLs (per Bbl)
    
    
    20.99
    
    
    
    50.95Total (per Mcfe)
    
    $
    3.98
    
    
    $
    9.61Realized gain on commodity derivatives (per Mcfe)
    
    
    1.26
    
    
    
    0.03Total including derivative impact (per Mcfe)
    
    $
    5.24
    
    
    $
    9.64Costs and expenses (per Mcfe):Lease operating
    
    $
    0.94
    
    
    $
    0.71Severance and production taxes
    
    
    0.17
    
    
    
    0.38Exploration
    
    
    
    
    
    
    0.25General and administrative
    
    
    1.11
    
    
    
    0.98Depletion, depreciation and amortization
    
    
    2.74
    
    
    
    2.64
 
 Bbl.
    
    One stock tank barrel, of 42 U.S. gallons liquid volume, used herein to reference oil,
condensate or NGLs.MBbl.
    
    Thousand barrels of oil, condensate or NGLs.Mcf.
    
    Thousand cubic feet of natural gas.Mcfe.
    
    Thousand cubic feet equivalent, determined using the ratio of six Mcf of natural gas to one
Bbl of oil, condensate or NGLs.MMcf.
    
    Million cubic feet of natural gas.MMcfe.
    
    Million cubic feet equivalent, determined using the ratio of six Mcf of natural gas to one
Bbl of oil, condensate or NGLs.NGLs.
    
    Natural gas liquids./d.
    
    Per day when used with volumetric units or dollars. 13




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##### 



Three months ended March 31, 2009 compared to three months ended March 31, 2008
 Oil and gas production.
 Oil and gas sales.
 Commodity derivative activities
 Lease operating expense.
 14




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##### 



Three Months EndedMarch 31,2009
    
    
    2008
    
    
    Change
    
    
    % ChangeCompression and gas treating
    
    $
    0.37
    
    
    $
    0.17
    
    
    $
    0.20
    
    
    
    117.6
    %Ad valorem taxes
    
    
    0.24
    
    
    
    0.15
    
    
    
    0.09
    
    
    
    60.0Pumpers and supervision
    
    
    0.14
    
    
    
    0.14
    
    
    
    
    
    
    
    Water hauling, insurance and other
    
    
    0.10
    
    
    
    0.14
    
    
    
    (0.04
    )
    
    
    (28.6
    )Well repairs and maintenance
    
    
    0.08
    
    
    
    0.05
    
    
    
    0.03
    
    
    
    60.0Workovers
    
    
    0.01
    
    
    
    0.06
    
    
    
    (0.05
    )
    
    
    (83.3
    )Total
    
    $
    0.94
    
    
    $
    0.71
    
    
    $
    0.23
    
    
    
    32.4
    %
 Severance and production taxes
 Exploration
 General and administrative
 Three Months EndedMarch 31,2009
    
    
    2008
    
    
    Change
    
    
    %$MM
    
    
    Mcfe
    
    
    $MM
    
    
    Mcfe
    
    
    $MM
    
    
    Mcfe
    
    
    ChangeSalaries and benefits
    
    $
    1.1
    
    
    $
    0.42
    
    
    $
    0.8
    
    
    $
    0.39
    
    
    $
    0.3
    
    
    $
    0.03
    
    
    
    7.7
    %Share-based compensation
    
    
    0.7
    
    
    
    0.29
    
    
    
    0.2
    
    
    
    0.11
    
    
    
    0.5
    
    
    
    0.18
    
    
    
    163.6Professional fees
    
    
    0.4
    
    
    
    0.17
    
    
    
    0.5
    
    
    
    0.23
    
    
    
    (0.1
    )
    
    
    (0.06
    )
    
    
    (26.1
    )Other
    
    
    0.6
    
    
    
    0.23
    
    
    
    0.4
    
    
    
    0.25
    
    
    
    0.2
    
    
    
    (0.02
    )
    
    
    (8.0
    )Total
    
    $
    2.8
    
    
    $
    1.11
    
    
    $
    1.9
    
    
    $
    0.98
    
    
    $
    0.9
    
    
    $
    0.13
    
    
    
    13.3
    %
 Depletion, depreciation and amortization.
 15




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##### 



Interest expense, net.
 Income taxes.
 Liquidity and capital resources
    Three Months EndedMarch 31,2009
    
    
    2008Cash flows provided by operating activities
    
    $
    5,612
    
    
    $
    4,863Cash flows used in investing activities
    
    
    (13,363
    )
    
    
    (15,606
    )Cash flows provided by financing activities
    
    
    4,180
    
    
    
    7,290Effect of Canadian exchange rate
    
    
    (4
    )
    
    
    4Net (decrease) increase in cash and cash equivalents
    
    $
    (3,575
    )
    
    $
    (3,449
    )
 Operating activities
  16




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##### 



Investing activities
  Capital expenditures for 2009
   Financing activities
    17




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##### 



Revolving credit facility
     
    
    require maintenance of a minimum modified ratio of current assets to current liabilities
of 1.0 to 1.0,
    
    require maintenance of a debt to EBITDAX ratio of 3.5 to 1.0 or less, and
    
    restrict cash dividends and other restricted payments, transactions with affiliates,
incurrence of other debt, consolidations and mergers, the level of operating leases, assets
sales, investments in other entities and liens on properties.
     18




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##### 



Contractual obligations
  Off-balance sheet arrangements
 
 Item 3. Quantitative and qualitative disclosures about market risk.
  Commodity price risk
   19




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##### 



Volume (MMBtu)
    
    $/MMBtuPeriod
    
    Monthly
    
    Total
    
    Floor
    
    Ceiling
    
    FixedNYMEX  Henry HubCostless collars 2009
    
    
    180,000
    
    
    
    1,620,000
    
    
    $
    7.50
    
    
    $
    10.50Costless collars 2009
    
    
    130,000
    
    
    
    1,170,000
    
    
    $
    8.50
    
    
    $
    11.70Fixed price swaps 2nd  4th quarter 2009
    
    
    150,000
    
    
    
    1,350,000
    
    
    
    
    
    
    
    
    
    
    $
    4.50Fixed price swaps 2010
    
    
    150,000
    
    
    
    1,800,000
    
    
    
    
    
    
    
    
    
    
    $
    5.85WAHA differentialFixed price swaps 2009
    
    
    200,000
    
    
    
    1,800,000
    
    
    
    
    
    
    
    
    
    
    $
    (0.61
    )Fixed price swaps May and June 2009
    
    
    300,000
    
    
    
    600,000
    
    
    
    
    
    
    
    
    
    
    $
    (0.67
    )Fixed price swaps 3rd quarter 2009
    
    
    300,000
    
    
    
    900,000
    
    
    
    
    
    
    
    
    
    
    $
    (0.58
    )Fixed price swaps 2010
    
    
    415,000
    
    
    
    4,980,000
    
    
    
    
    
    
    
    
    
    
    $
    (0.71
    )
   Item 4. Controls and procedures.
 Evaluation of disclosure controls and procedures
   20




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Internal control over financial reporting
  Limitations inherent in all controls
  21




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PART II  OTHER INFORMATION
 Item 1. Legal proceedings.
  Item 1A. Risk factors.
 www.sec.gov www.approachresources.com
 Item 2. Unregistered sales of equity securities and use of proceeds.
  Item 3. Defaults upon senior securities.
  Item 4. Submission of matters to a vote of security holders.
  Item 5. Other information.
  Item 6. Exhibits.
  22




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##### 



SIGNATURES
  APPROACH RESOURCES INC.By:
    /s/ J. Ross CraftJ. Ross CraftPresident and Chief Executive Officer
(Principal Executive Officer)By:
    /s/ Steven P. SmartSteven P. SmartExecutive Vice President and Chief Financial Officer
(Principal Financial and Chief Accounting Officer)




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##### 



Index to Exhibits
 ExhibitNumber
    
    Description of Exhibit3.1
    
    Restated Certificate of Incorporation of Approach Resources
Inc. (filed as Exhibit 3.1 to the Companys Quarterly Report on
Form 10-Q filed December 13, 2007 and incorporated herein by
reference).3.2
    
    Restated Bylaws of Approach Resources Inc. (filed as Exhibit
3.2 to the Companys Quarterly Report on Form 10-Q filed
December 13, 2007 and incorporated herein by reference).4.1
    
    Specimen Common Stock Certificate (filed as Exhibit 4.1 to the
Companys Registration Statement on Form S-1/A filed October
18, 2007 (File No. 333-144512) and incorporated herein by
reference).10.1
    
    Form of Indemnity Agreement between Approach Resources Inc. and
each of its directors and officers (filed as Exhibit 10.1 to
the Companys Registration Statement on Form S-1/A filed
September 13, 2007 (File No. 333-144512) and incorporated
herein by reference).10.2
    
    First Amendment to Form of Indemnity Agreement between Approach
Resources Inc. and each of its directors and officers (filed as
Exhibit 10.5 to the Companys Current Report on Form 8-K filed
December 31, 2008 and incorporated herein by reference).10.3
    
    Employment Agreement by and between Approach Resources Inc. and
J. Ross Craft dated January 1, 2003 (filed as Exhibit 10.3 to
the Companys Registration Statement on Form S-1 filed July 12,
2007 and incorporated herein by reference).10.4
    
    First Amendment to Employment Agreement by and between Approach
Resources Inc. and J. Ross Craft dated December 31, 2008 (filed
as Exhibit 10.2 to the Companys Current Report on Form 8-K
filed December 31, 2008 and incorporated herein by reference).10.5
    
    Employment Agreement by and between Approach Resources Inc. and
Steven P. Smart dated January 1, 2003 (filed as Exhibit 10.4 to
the Companys Registration Statement on Form S-1 filed July 12,
2007 and incorporated herein by reference).10.6
    
    First Amendment to Employment Agreement by and between Approach
Resources Inc. and Steven P. Smart dated December 31, 2008
(filed as Exhibit 10.3 to the Companys Current Report on Form
8-K filed December 31, 2008 and incorporated herein by
reference).10.7
    
    Employment Agreement by and between Approach Resources Inc. and
Glenn W. Reed dated January 1, 2003 (filed as Exhibit 10.5 to
the Companys Registration Statement on Form S-1 filed July 12,
2007 and incorporated herein by reference).10.8
    
    First Amendment to Employment Agreement by and between Approach
Resources Inc. and Glenn W. Reed dated December 31, 2008 (filed
as Exhibit 10.4 to the Companys Current Report on Form 8-K
filed December 31, 2008 and incorporated herein by reference).10.9
    
    Approach Resources Inc. 2007 Stock Incentive Plan, effective as
of June 28, 2007 (filed as Exhibit 10.6 to the Companys
Registration Statement on Form S-1 filed July 12, 2007 and
incorporated herein by reference).




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##### 



ExhibitNumber
    
    Description of Exhibit10.10
    
    First Amendment dated December 31, 2008 to Approach Resources
Inc. 2007 Stock Incentive Plan, effective as of June 28, 2007
(filed as Exhibit 10.1 to the Companys Current Report on Form
8-K filed December 31, 2008 and incorporated herein by
reference).10.11
    
    Form of Business Opportunities Agreement among Approach
Resources Inc. and the other signatories thereto (filed as
Exhibit 10.11 to the Companys Registration Statement on Form
S-1/A filed October 18, 2007 (File No. 333-144512) and
incorporated herein by reference).10.12
    
    Form of Option Agreement under 2003 Stock Option Plan (filed as
Exhibit 10.12 to the Companys Registration Statement on Form
S-1 filed July 12, 2007 and incorporated herein by reference).10.13
    
    Restricted Stock Award Agreement by and between Approach
Resources Inc. and J. Curtis Henderson dated March 14, 2007
(filed as Exhibit 10.13 to the Companys Registration Statement
on Form S-1 filed July 12, 2007 and incorporated herein by
reference).10.14
    
    Form of Summary of Stock Option Grant under Approach Resources
Inc. 2007 Stock Incentive Plan (filed as Exhibit 10.14 to the
Companys Registration Statement on Form S-1/A filed October
18, 2007 (File No. 333-144512) and incorporated herein by
reference).10.15
    
    Form of Stock Award Agreement under Approach Resources Inc.
2007 Stock Incentive Plan (filed as Exhibit 10.10 to the
Companys Quarterly Report on Form 10-Q filed November 6, 2008
and incorporated herein by reference).10.16
    
    Registration Rights Agreement dated as of November 14, 2007, by
and among Approach Resources Inc. and investors identified
therein (filed as Exhibit 10.1 to the Companys Current Report
on Form 8-K/A filed December 3, 2007 and incorporated herein by
reference).10.17
    
    Gas Purchase Contract dated May 1, 2004 between Ozona Pipeline
Energy Company, as Buyer, and Approach Resources I, L.P. and
certain other parties identified therein (filed as Exhibit
10.18 to the Companys Registration Statement on Form S-1/A
filed September 13, 2007 (File No. 333-144512) and incorporated
herein by reference).10.18
    
    Agreement Regarding Gas Purchase Contract dated May 26, 2006
between Ozona Pipeline Energy Company, as Buyer, and Approach
Resources I, L.P. and certain other parties identified therein
(filed as Exhibit 10.19 to the Companys Registration Statement
on Form S-1/A filed September 13, 2007 (File No. 333-144512)
and incorporated herein by reference).10.19
    
    Carry and Earning Agreement dated July 13, 2007 by and between
EnCana Oil & Gas (USA) (filed as Exhibit 10.22 to the Companys
Registration Statement on Form S-1/A filed September 13, 2007
(File No. 333-144512) and incorporated herein by reference).10.20
    
    Oil & Gas Lease dated February 27, 2007 between the lessors
identified therein and Approach Oil & Gas Inc., as successor to
Lynx Production Company, Inc. (filed as Exhibit 10.23 to the
Companys Registration Statement on Form S-1/A filed September
13, 2007 (File No. 333-144512) and incorporated herein by
reference).10.21
    
    Specimen Oil and Gas Lease for Boomerang prospect between
lessors and Approach Oil & Gas Inc., as successor to The Keeton
Group, LLC, as lessee (filed as Exhibit 10.24 to the Companys
Registration Statement on Form S-1/A filed September 13, 2007
(File No. 333-144512) and incorporated herein by reference).




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##### 



ExhibitNumber
    
    Description of Exhibit10.22
    
    Lease Crude Oil Purchase Agreement dated May 1, 2004 by and
between ConocoPhillips and Approach Operating LLC (filed as
Exhibit 10.26 to the Companys Registration Statement on Form
S-1/A filed October 18, 2007 (File No. 333-144512) and
incorporated herein by reference).10.23
    
    Gas Purchase Agreement dated as of November 21, 2007 between
WTG Benedum Joint Venture, as Buyer, and Approach Oil & Gas
Inc. and Approach Operating, LLC, as Seller (filed as Exhibit
10.1 to the Companys Current Report on Form 8-K filed November
28, 2007 and incorporated herein by reference).10.24
    
    $200,000,000 Revolving Credit Agreement dated as of January 18,
2008 among Approach Resources Inc., as borrower, The Frost
National Bank, as administrative agent and lender, and the
financial institutions named therein (filed as Exhibit 10.1 to
the Companys Current Report on Form 8-K filed January 25, 2008
and incorporated herein by reference).10.25
    
    Amendment dated February 19, 2008 to Credit Agreement among
Approach Resources Inc., as borrower, The Frost National Bank,
as administrative agent and lender, JPMorgan Chase Bank, NA, as
lender, and Approach Oil & Gas Inc., Approach Oil & Gas
(Canada) Inc. and Approach Resources I, LP, as guarantors,
dated as of January 18, 2008 (filed as Exhibit 10.1 to the
Companys Current Report on Form 8-K filed February 22, 2008
and incorporated herein by reference).10.26
    
    Amendment dated May 6, 2008 to Credit Agreement among Approach
Resources Inc., as borrower, The Frost National Bank, as
administrative agent and lender, JPMorgan Chase Bank, NA, as
lender, and Approach Oil & Gas Inc., Approach Oil & Gas
(Canada) Inc. and Approach Resources I, LP, as guarantors,
dated as of January 18, 2008 (filed as Exhibit 99.1 to the
Companys Current Report on Form 8-K filed August 28, 2008 and
incorporated herein by reference).10.27
    
    Amendment dated August 26, 2008 to Credit Agreement among
Approach Resources Inc., as borrower, The Frost National Bank,
as administrative agent and lender, JPMorgan Chase Bank, NA,
Fortis Capital Corp. and KeyBank National Association, as
lenders, and Approach Oil & Gas Inc., Approach Oil & Gas
(Canada) Inc. and Approach Resources I, LP, as guarantors,
dated as of January 18, 2008 (filed as Exhibit 10.1 to the
Companys Current Report on Form 8-K filed August 28, 2008 and
incorporated herein by reference).10.28
    
    Amendment dated April 8, 2009 to Credit Agreement among
Approach Resources Inc., as borrower, The Frost National Bank,
as administrative agent and lender, JPMorgan Chase Bank, NA,
Fortis Capital Corp. and KeyBank National Association, as
lenders, and Approach Oil & Gas Inc., Approach Oil & Gas
(Canada) Inc. and Approach Resources I, LP, as guarantors,
dated as of January 18, 2008 (filed as Exhibit 10.1 to the
Companys Current Report on Form 8-K filed April 16, 2009 and
incorporated herein by reference).31.1*
    
    Certification by the President and Chief Executive Officer
Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.31.2*
    
    Certification by the Chief Financial Officer Pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002.32.1*
    
    Certification by the President and Chief Executive Officer
Pursuant to 18 U.S.C. Section 1350, as adopted Pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002.32.2*
    
    Certification by the Chief Financial Officer Pursuant to U.S.C.
Section 1350, as adopted Pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002.
 
 *
    
    Filed herewith.
    
    Denotes management contract or compensatory plan or arrangement.