UPDATE: Miller Tabak Initiates Coverage on Approach Resources with Buy Rating, $30 PT on Permian Basin Development

In a report published Wednesday, Miller Tabak analyst Adam Michael initiated coverage on

with a Buy rating and $30.00 price target. In the report, Miller Tabak noted, “Approach Resources has the largest contiguous acreage position in the southern Midland Basin of any small cap exploration and production company with over 100,000 acres prospective for multiple pay horizons. The company estimates it has over 2,000 horizontal drilling locations in its inventory and over 1 Billion BOE of unrisked gross resource potential. Approach is also one of the lowest cost operators in the Permian as investment in infrastructure and other cost reduction initiatives has allowed it to drive horizontal well costs down to $5.5 Million per well. Approach anticipates much of the 2013 production ramp to be backend loaded as a result of a shift to pad drilling and temporary takeaway issues in 1H that have since been resolved. We are initiating coverage on Approach Resources with a Buy rating and a $30 price target.” Approach Resources closed on Tuesday at $25.65.