Obligation Approacha Resources Inc. 7% ( US03834AAA16 ) en USD

Approacha Resources Inc.

100 % ▲

Etats-unis

US03834AAA16 ( en USD )

7% par an ( paiement semestriel ) - Obligation en défaut, paiements suspendus

14/06/2021 - Obligation échue

Prospectus brochure de l'obligation Approach Resources Inc US03834AAA16 en USD 7%, échue

2 000 USD

85 240 000 USD

03834AAA1

N/A

Approach Resources Inc. était une société américaine d'exploration et de production de pétrole et de gaz de schiste, principalement active dans le bassin permien du Texas, avant sa fusion avec Callon Petroleum en 2021.

L'Obligation émise par Approacha Resources Inc. ( Etats-unis ) , en USD, avec le code ISIN US03834AAA16, paye un coupon de 7% par an.
Le paiement des coupons est semestriel et la maturité de l'Obligation est le 14/06/2021

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CALCULATION OF REGISTRATION FEE

Proposed
maximum
Amount
Title of each class of securities
aggregate offering
of registration
to be registered

price

fee(1)
7.00% Senior Notes due 2021

$250,000,000

$34,100
Guarantees of Senior Notes

(2)

None
Total

$250,000,000

$34,100

(1) The filing fee, calculated in accordance with Rule 457(r), has been transmitted to the SEC in connection with the securities offered from
Registration Statement File No. 333-174318 by means of this prospectus supplement.
(2) No separate consideration wil be received for such guarantees. Pursuant to Rule 457(n) under the Securities Act, no registration fee is required
with respect to such guarantees.
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Filed pursuant to Rule 424(b)(5)
SEC File No. 333-174318

Prospectus supplement
(To prospectus, dated May 18, 2011)

$250,000,000
7.00% Senior Notes due 2021
Interest payable June 15 and December 15
Issue price: 100.00%
We are offering $250,000,000 aggregate principal amount of our 7.00% Senior Notes due 2021 (the "notes"). The notes wil mature on June 15, 2021.
Interest wil accrue from June 11, 2013, and the first interest payment date wil be December 15, 2013.
We may redeem some or al of the notes at any time on or after June 15, 2016 at the redemption prices set forth herein, plus accrued and unpaid
interest, if any, to the date of redemption. We may also redeem up to 35% of the notes using the proceeds of certain equity offerings completed before
June 15, 2016. In addition, at any time prior to June 15, 2016, we may redeem some or all of the notes at a price equal to 100% of the principal
amount, plus accrued and unpaid interest, if any, to the redemption date, plus a "make-whole" premium. If we sel certain of our assets or experience
specific kinds of changes in control, we must offer to purchase the notes.
The notes wil be guaranteed, jointly and several y, by certain of our existing and future domestic subsidiaries. The notes and guarantees wil be our
senior unsecured obligations and wil rank equal y in right of payment to all of our existing and future senior debt and senior in right of payment to al of
our existing and future subordinated debt. The guarantees wil rank equally in right of payment with all of our subsidiary guarantors' existing and future
senior debt and senior in right of payment to al of our subsidiary guarantors' existing and future subordinated debt. The notes and guarantees wil be
effectively subordinated to any of our and the guarantors' existing and future secured debt, including our senior secured credit facility, to the extent of
the value of the assets securing such debt. In addition, the notes and guarantees wil be structural y subordinated to the liabilities and preferred stock of
our non-guarantor subsidiaries.
Investing in the notes involves risks. See "Risk factors" beginning on page S-15 of this prospectus supplement.

Per note
Total

Public offering price(1)

100.00% $ 250,000,000
Underwriting discount

2.25%

$
5,625,000
Proceeds, before expenses, to us(1)

97.75%

$ 244,375,000

(1) Plus accrued interest, if any, from June 11, 2013.
Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined if
this prospectus supplement or the accompanying prospectus is truthful or complete. Any representation to the contrary is a criminal offense.
The notes wil not be listed on any securities exchange. Currently, there is no public market for the notes. We expect delivery of the notes wil be made
to investors in book-entry form only through the facilities of The Depository Trust Company for the accounts of its participants, including Clearstream
Banking S.A., and Euroclear Bank S.A./N.V., as operator of the Euroclear System, on or about June 11, 2013.

Joint book-running managers

J.P. Morgan

RBC Capital Markets

KeyBanc Capital Markets

Co-Managers

Wells Fargo Securities
BofA Merrill Lynch

Scotiabank

Tudor, Pickering, Holt & Co.
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In making your investment decision, you should rely only on the information contained in this prospectus supplement and the
accompanying prospectus. We and the underwriters have not authorized anyone to provide you with any other information. If you receive
any other information, you should not rely on it. We and the underwriters are offering to sell the notes only in places where offers and sales
are permitted. You should not assume that the information contained in this prospectus supplement and the accompanying prospectus is
accurate as of any date other than the date on the front cover of this prospectus supplement and the front cover of the accompanying
prospectus, respectively, or that the information contained in any document incorporated by reference is accurate as of any date other than
the date of the document incorporated by reference.
Table of contents

Page

Page
About this prospectus supplement

S-i

Business

S-62

Where you can find more information

S-i

Management

S-87

Non-GAAP financial measures

S-iv
Description of other indebtedness

S-91

Market, ranking, industry data and forecasts

S-iv
Description of notes

S-93

Cautionary statement regarding forward-looking statements

S-iv
Material U.S. federal income tax considerations

S-158
Summary

S-1

Underwriting; Conflicts of interest

S-164
Risk factors

S-15
Legal matters

S-168
Ratio of earnings to fixed charges

S-34
Experts

S-168
Use of proceeds

S-35
Glossary and selected abbreviations

S-169
Capitalization

S-36
Supplemental Non-GAAP financial and other measures

S-175
Selected historical consolidated financial information

S-37
Index to consolidated financial statements

F-1

Management's discussion and analysis of financial condition
S-39
and results of operations

Prospectus

About this prospectus
Description of capital stock

1

6

Approach Resources Inc.
Description of depositary shares

1

11
The subsidiary guarantors
Description of warrants

1

14
Where you can find more information
Description of rights

2

15
Cautionary statement regarding forward-looking statements
Description of debt securities

3

16
Risk factors
Plan of distribution

5

29
Ratios of earnings to fixed charges
Legal matters

5

31
Use of proceeds
Experts

5

31

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About this prospectus supplement
This document is in two parts. The first part is the prospectus supplement and the documents incorporated by reference herein, which
describes the specific terms of this offering of the notes. The second part is the accompanying prospectus, which gives more general
information, some of which may not apply to the notes or this offering. If the information relating to the offering varies between the
prospectus supplement and the accompanying prospectus, you should rely on the information in this prospectus supplement.
You should rely only on the information contained in or incorporated by reference into this prospectus supplement, the accompanying
prospectus and any related free writing prospectus. We have not authorized anyone to provide you with additional or different information.
If anyone provides you with different or inconsistent information, you should not rely on it. This prospectus supplement and the
accompanying prospectus are not an offer to sell or the solicitation of an offer to buy any securities other than the securities to which they
relate and are not an offer to sell or the solicitation of an offer to buy securities in any jurisdiction to any person to whom it is unlawful to
make an offer or solicitation in that jurisdiction. You should not assume that the information contained in this prospectus supplement is
accurate as of any date other than the date on the front cover of this prospectus supplement, or that the information contained in any
document incorporated by reference is accurate as of any date other than the date of the document incorporated by reference, regardless
of the time of delivery of this prospectus supplement or any sale of a security.
In this prospectus supplement, the "Company," "we," "us," "our" or "ours" refer to Approach Resources Inc. and its subsidiaries, unless
we state otherwise or the context indicates otherwise, and the term "Subsidiary Guarantor" refers to a guarantor of the notes.
Trademarks, service marks and copyrights
We have a registered service mark for "Approach Resources Inc." Other products, services and company names mentioned in this prospectus
supplement and the accompanying prospectus are the service marks/trademarks of their respective owners.
Where you can find more information
We file annual, quarterly and current reports and other information (File No. 001-33801) with the Securities and Exchange Commission, which we refer
to as the "SEC," pursuant to the Securities Exchange Act of 1934, as amended, which we refer to as the "Exchange Act." You may read and copy any
documents that are filed at the SEC's public reference room at 100 F Street, N.E., Washington, D.C. 20549. You may also obtain copies of these
documents at prescribed rates from the public reference section of the SEC at its Washington address. Please cal the SEC at 1-800-SEC-0330 for
further information.
Our filings are also available to the public through the SEC's website at http://www.sec.gov.
The SEC al ows us to "incorporate by reference" information that we file with it, which means that we can disclose important information to you by
referring you to documents previously filed with the SEC. The information incorporated by reference is an important part of this prospectus

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supplement, and the information that we later file with the SEC wil automatical y update and supersede this information. The fol owing documents we
have filed with the SEC pursuant to the Exchange Act are incorporated herein by reference:

· our Annual Report on Form 10-K for the year ended December 31, 2012;

· our Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2013;

· our Current Reports on Form 8-K filed on May 3, 2013 and May 31, 2013; and

· our Definitive Proxy Statement on Schedule 14A filed on April 24, 2013 (those parts incorporated by reference in our Annual Report on Form 10-K
for the year ended December 31, 2012).
These reports contain important information about us, our financial condition and our results of operations.
Al future documents filed pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act (excluding any information furnished pursuant to
Item 2.02 or Item 7.01 on any Current Report on Form 8-K) before the termination of each offering under this prospectus supplement shal be deemed
to be incorporated in this prospectus supplement by reference and to be a part hereof from the date of filing of such documents. Any statement
contained herein, or in a document incorporated or deemed to be incorporated by reference herein, shal be deemed to be modified or superseded for
purposes of this prospectus supplement to the extent that a statement contained herein or in any subsequently filed document that also is or is deemed
to be incorporated by reference herein, modifies or supersedes such statement. Any such statement so modified or superseded shal not be deemed,
except as so modified or superseded, to constitute a part of this prospectus supplement.
You may request a copy of these filings at no cost by writing or telephoning us at the fol owing address or telephone number:
Approach Resources Inc.
One Ridgmar Centre
6500 West Freeway, Suite 800
Fort Worth, Texas 76116
Attention: Executive Vice President and General Counsel
(817) 989-9000
We also maintain a website at http://www.approachresources.com. The information on our website is not part of this prospectus supplement or the
accompanying prospectus, and you should rely only on the information contained in this prospectus supplement, the accompanying prospectus and in
the documents incorporated by reference when making a decision as to whether to buy the notes offered hereby.

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Non-GAAP financial measures
The SEC has issued rules to regulate the use in filings with the SEC of "non-GAAP financial measures," such as "EBITDAX," "PV-10" and "dril -bit F&D"
that are derived on the basis of methodologies other than in accordance with GAAP. Our presentation of these non-GAAP financial measures may not
be comparable to those of other companies.
For a presentation of net income as calculated under GAAP and a reconciliation to our EBITDAX, see "Summary--Summary condensed consolidated
financial data--Reconciliation of EBITDAX to net income (loss)."
See "Supplemental Non-GAAP Financial and Other Measures" for (i) a reconciliation of PV-10 to the Standardized Measure, and (i ) our calculation of
dril -bit F&D and reconciliation to the information required by paragraphs 11 and 21 of ASC 932-235.
Market, ranking, industry data and forecasts
This prospectus supplement and the accompanying prospectus include market share, ranking, industry data and forecasts that we obtained from
industry publications and surveys, public filings and internal company sources. Industry publications, surveys and forecasts general y state that the
information contained therein has been obtained from sources believed to be reliable, but there can be no assurance as to the accuracy or
completeness of such information included in this prospectus supplement and the accompanying prospectus. We have not independently verified any of
the data from third-party sources, nor have we ascertained the underlying economic assumptions relied upon therein. Statements as to our market
position and ranking are based on market data currently available to us, management's estimates and assumptions we have made regarding the size of
our markets within our industry. While we are not aware of any misstatements regarding our industry data presented herein, our estimates involve risks
and uncertainties and are subject to change based on various factors, including those discussed under the heading "Risk factors" in this prospectus
supplement and the accompanying prospectus. Neither we nor the underwriters can guarantee the accuracy or completeness of such third-party
information contained in this prospectus supplement and the accompanying prospectus.
Cautionary statement regarding forward-looking statements
Various statements contained in or incorporated by reference into this prospectus supplement and the accompanying prospectus, including those that
express a belief, expectation or intention, as wel as those that are not statements of historical fact, are forward-looking statements within the meaning
of Section 27A of the Securities Act of 1933, as amended, which we refer to as the "Securities Act," and Section 21E of the Exchange Act. The
forward-looking statements may include projections and estimates concerning the timing and success of specific projects, typical wel economics and
our future reserves, production, revenues, cost, income, capital spending, 3-D seismic, interpretations and results and obtaining permits and regulatory
approvals. When we use the words "wil ," "believe," "intend," "expect," "may," "should," "anticipate," "could," "estimate," "plan," "predict," "project,"
"potential" or their negatives, other similar expressions or the statements that include those words, are intended to identify forward-looking statements,
although not all forward-looking statements contain such identifying words.

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These forward-looking statements are largely based on our expectations, which reflect estimates and assumptions made by our management. These
estimates and assumptions reflect our best judgment based on currently known market conditions and other factors. Although we believe such
estimates and assumptions to be reasonable, they are inherently uncertain and involve a number of risks and uncertainties that are beyond our control.
In addition, management's assumptions about future events may prove to be inaccurate. We caution al readers that the forward-looking statements
contained in this prospectus supplement and the accompanying prospectus are not guarantees of future performance, and we cannot assure any
reader that such statements wil be realized or the forward-looking events and circumstances wil occur. Actual results may differ material y from those
anticipated or implied in the forward-looking statements due to the known material factors detailed below and discussed in our Annual Report on Form
10-K for the year ended December 31, 2012, our Quarterly Report on Form 10-Q for the period ended March 31, 2013, and our subsequent SEC
filings. Al forward-looking statements contained in this prospectus supplement speak only as of the date of this prospectus supplement, and al
forward-looking statements incorporated by reference into this prospectus supplement speak only as of the dates such statements were issued. We
disclaim any obligation to publicly update or revise any forward-looking statements as a result of new information, future events or otherwise, unless
required by law. These cautionary statements qualify all forward-looking statements attributable to us, or persons acting on our behalf. The risks,
contingencies and uncertainties relate to, among other matters, the fol owing:

· uncertainties in dril ing, exploring for and producing oil and gas;

· uncertainty of commodity prices in oil, NGLs and gas;

· overall United States and global economic and financial market conditions;

· domestic and foreign demand and supply for oil, NGLs, gas and the products derived from such hydrocarbons;

· our inability to obtain additional financing necessary to fund our operations and capital expenditures and to meet our other obligations;

· the effects of government regulation and permitting and other legal requirements, including laws or regulations that could restrict or prohibit hydraulic
fracturing;

· disruption of credit and capital markets;

· our financial position;

· our cash flows and liquidity;

· disruptions to, capacity constraints in or other limitations on the pipeline systems that deliver our oil, NGLs and gas and other processing and
transportation considerations;

· marketing of oil, NGLs and gas;

· high costs, shortages, delivery delays or unavailability of dril ing and completion equipment, materials, labor or other services;

· competition in the oil and gas industry;

· uncertainty regarding our future operating results;

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· interpretation of 3-D seismic data;

· replacing our oil, NGL and gas reserves;

· our ability to retain and attract key personnel;

· our business strategy, including our ability to recover oil, NGLs and gas in place associated with our Wolfcamp oil shale resource play in the Permian
Basin;

· development of our current asset base or property acquisitions;

· estimated quantities of oil, NGL and gas reserves;

· plans objectives, expectations and intentions contained in this prospectus supplement, the accompanying prospectus and the documents we
incorporate herein by reference that are not historical; and

· the other risks described in this prospectus supplement, the accompanying prospectus and the documents we incorporate herein by reference.
Certain figures included in this prospectus supplement and the accompanying prospectus have been subject to rounding adjustments. Accordingly,
figures shown as totals in certain tables may not sum due to rounding.

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Summary
This summary highlights selected information contained elsewhere in this prospectus supplement, the accompanying prospectus and the
documents we incorporate by reference. It does not contain all of the information you should consider before making an investment decision.
You should read the entire prospectus supplement, the accompanying prospectus, the documents incorporated by reference and the other
documents to which we refer for a more complete understanding of our business and this offering. Please read the section entitled "Risk factors"
beginning on page S-15 of this prospectus supplement and additional information contained in our Annual Report on Form 10-K for the year
ended December 31, 2012, and our Quarterly Report on Form 10-Q for the period ended March 31, 2013, which are incorporated by reference
in this prospectus supplement, for more information about known material factors you should consider before investing in the notes offered
hereby. The estimate of our proved reserves as of December 31, 2012, included in this prospectus supplement is based on the reserve report
prepared by DeGolyer and MacNaughton, our independent petroleum engineers, which report is filed as an exhibit to our Annual Report on
Form 10-K for the year ended December 31, 2012, and is incorporated herein by reference. If you are not familiar with the oil and gas terms or
abbreviations used in this prospectus supplement and the accompanying prospectus, please refer to the definitions of these terms and
abbreviations under the caption "Glossary and selected abbreviations."
Our company
Approach Resources Inc. is an independent energy company engaged in the exploration, development, production and acquisition of oil and gas
properties. We focus on oil and gas reserves in oil shale and tight gas sands in the southern Midland Basin of the greater Permian Basin in West
Texas, where we lease approximately 148,000 net acres. This acreage provides us with a multi-year inventory of horizontal and vertical drilling
opportunities. Our dril ing targets include the Clearfork, Wolfcamp shale, Canyon Sands, Strawn and El enburger zones. We sometimes refer to the
Clearfork and Wolfcamp zones together as the "Wolffork," and our development project in the Permian Basin as "Project Pangea," which includes
the northwestern portion of Project Pangea that we refer to as "Pangea West."
Since our inception, we have grown production and reserves primarily through our dril ing program. Our reserves and production compounded
annual growth rates since 2004 have been 32% and 35%, respectively. As of March 31, 2013, we had working and net revenue interests of
approximately 100% and 76%, respectively, across Project Pangea and Pangea West, and owned interests in approximately 667 wel s. As the
operator of all of our estimated proved reserves and production, we have a high degree of control over capital expenditures and other operating
matters. In addition, our management and technical team have a proven track record of finding and developing reserves through advanced dril ing
and completion techniques. Driven primarily by our results in the Wolfcamp shale, our year-end 2012 proved reserves of 95.5 MMBoe were made
up of 69% oil and NGLs (39% oil) and our production for first quarter 2013 was made up of 69% oil and NGLs (41% oil). For the twelve months
ended December 31, 2012, we generated revenues, net income and EBITDAX (non-GAAP) of $128.9 mil ion, $6.4 mil ion and $83 mil ion,
respectively. For a reconciliation of EBITDAX to net income (loss), see "--Summary condensed consolidated financial data--Reconciliation of
EBITDAX to net income (loss)."

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