American Standard Energy Corp Reports 1,728% Quarterly Revenue Growth.

SCOTTSDALE, Ariz., Nov. 15, 2011 /PRNewswire/ -- American Standard Energy Corp. (the "Company") (OTCBB: ASEN), today reported revenue of $2.99 million for the third quarter of 2011, an increase of 1,728% compared to $0.16 million in revenues for the third quarter of 2010.  The Company produced 20,649 barrels of oil and 183,356 mcf of natural gas for the third quarter of 2011.  Average BOEPD was 577 for the quarter, compared to 32 BOEPD for third quarter of 2010, excluding the impact of prior quarter estimates.  The Company's exit rate for the quarter was 791 BEOPD, excluding two net new Permian Basin wells in completion at quarter end.

Operational Highlights:

Total quarterly production increased 19.8% percent rise during the third quarter of 2011 compared to the second quarter of 2011, excluding the impact of prior period estimates.  The Company delivered 1,724% percent production growth in the third quarter of 2011 versus the third quarter of 2010. For the first nine months of 2011, year-over-year production increased 1,513% percent.  The primary source of production growth during 2011 has been the acquisition of a large number of Permian Basin wells, as well as the acquisition of North Dakota leaseholds under development.  In addition to these acquisitions, the Company has seen rapid development in its existing leaseholds with exposure to the Bakken and Three Forks formations in the Williston Basin.

"We are pleased with our rapid growth rates year to date, driven primarily by our ability to acquire low-cost, low-risk, oil-rich production in the Permian Basin to fund our investment in high-growth, unconventional drilling activities in the Williston Basin," said Scott Feldhacker, Chief Executive Officer. "For the past year, the Company has focused on assembling the highest quality acreage in the Permian Basin, Eagle Ford, and Williston Basin."

Feldhacker continued, "We are also looking forward to the full production of our Eagle Ford assets, which we anticipate will begin full production in the next two quarters. We believe that the production growth potential of our assets will serve the Company well as we drive future growth through unconventional drilling activities in these oil-rich basins.  Meanwhile, we continue to pursue new acquisition and drilling opportunities to extend our growth."

Drilling Activity:

In the Permian Basin, the Company launched a drilling program with Cambrian Management early in the third quarter of 2011.  The Company spud 9 gross (9 net) wells in Andrews, Reagan, Crockett and Schleicher Counties during the third quarter of 2011.  Two of these wells began completion in late September.  

The Company's strategy for drilling in the Permian Basin is twofold.  First, in many counties, the Company has Wolfberry drilling locations using vertical drilling, focused on low-risk development to enhance daily production and expand our reserve base.  In Crockett and Schleicher Counties, the Company is drilling to hold all depths by production.  This acreage is in close proximity to successful unconventional drilling activities in the Wolfcamp shale by several large operators, most notably EOG Resources, Pioneer Natural Resources, El Paso Corporation, and Approach Resources.  The Company expects to drill 16 wells in the Permian Basin across these four counties by year-end.  Completions are being scheduled through the first quarter of 2012.

In total, the Company had 60 gross (39.2 net) wells in the Permian Basin at the end of the third quarter of 2011. Average daily production for the quarter in the Permian Basin was 522 BOEPD.  This figure excludes any potential accrued production from two new wells completed at the end of September.  The Company has subsequently completed three additional wells, two Wolfberry wells in Andrews, and one Wolfberry well in Reagan, with additional frac dates set in November and December.

Richard Macqueen, President said, "We are optimistic for our drilling prospects in both our Andrews and Reagan Wolfberry activities, as well as our drilling to the south in the Wolfcamp shale in Crockett and Schleicher.  Based on the well logs and completion information available to date, we believe these incremental wells will play a large role in the Company's growth over the next two quarters."

In the Williston Basin, the Company saw increased drilling and completion activities on its non-operated leaseholds.  Most notably, the majority of wells participated in during the first two quarters of 2011 were completed, driving the Company's exit rate for oil-rich production in this play to 269 BOEPD at end of the third quarter of 2011.  The Company now has 79 gross, (1.26) net Bakken wells producing.

In the Eagle Ford, the Company continued to invest in an aggressive drilling program with Cheyenne Petroleum.  The Company has participated in 13 gross (1.3 net) Eagle Ford wells, with 7 now completed and ready for full production.  The Company is approximately half way into a 30 well program with Cheyenne Petroleum to develop 12,000 gross acres in the oil and condensate-rich area of north La Salle County and southern Frio County.  The average 24-hour peak production rate across the first five completed wells was 1189 BOEPD during the third quarter of 2011.  The Company anticipates these wells will begin full production in the fourth quarter or early in 2012.

Subsequent Events:

In the Permian Basin, the Company has now spud 15 gross (15 net) Permian Basin wells, 14 of which have pipe on bottom and are in various stages of completion.  Seven of these wells are in Andrews County and three are in Reagan County focused on the Wolfberry. Three of these wells are in Crockett, and the remaining two are in Schleicher focused on holding Wolfcamp shale drilling opportunities by production.  Three wells have been completed in Andrews, one is in the process of being completed in Reagan, and all five wells in Crockett and Schleicher are being scheduled for completion over the next two quarters.

In the Eagle Ford, the Company has elected to participate in the ZCW 2H, the fourteenth well in a 30 well drilling program with Cheyenne Petroleum.  Cheyenne Petroleum has also notified the minority working interest partners of its intent to install 7 low pressure production facilities and 2 high pressure production facilities to accommodate the full production of all wells completed to date under this area of mutual interest in La Salle and Frio Counties in the fourth quarter of 2011.

Financing and Liquidity Activities:

The Company was also active in raising capital to fund development and growth initiatives during the third quarter of 2011.  The Company closed on $13.0 million from an equity private placement completed in July 2011, bringing total equity raised in 2011 to $48.6 million.  The Company also closed a $300 million senior secured debt facility with Macquarie Bank Ltd.  Initial borrowings drawn at closing were $12.0 million.  The Company has since submitted a $6 million draw request for drilling expenditures in the Williston Basin.  The Company also anticipates recapitalizing additional expenditures made in the Eagle Ford and Permian Basin once the respective wells generate sufficient production data for Macquarie to utilize in the underwriting process.

Scott Mahoney, CFO said, "The Company has made meaningful investments in both low-risk conventional drilling in the Permian Basin and unconventional drilling in the Williston Basin and Eagle Ford over the past year.  We are now beginning to see the impact of that investment as our wells begin to come on line at scale.  We are pleased with the progress made year to date, but we continue to be very focused on driving incremental growth in the coming quarters.  Through our relationship with Macquarie, we are focused on prudently utilizing our access to non-dilutive capital to build the fundamentals of the Company and position the Company for continued growth in 2012 and beyond."

Growth Summary:

Comparative Period Reconciliation:

Historically, the XOG Group owned greater than 50% of the Company.  As a result, the Company was historically accounted for under common control with the XOG Group.  Consequently, any acquisitions made by the Company from the XOG Group through July 15, 2011 were accounted for under carve-out financial accounting standards.  Under these standards, historical financial statements of the Company were recast to incorporate the revenues, expenses, and other historical information related to the assets acquired from the XOG Group.

To facilitate the accurate comparison of the Company's current financial performance to prior periods, the following table details revenue and production statistics for the three and nine months ended September 30, 2011 compared to both the respective original filing periods in 2010, and the recast financial statements for the respective periods in 2010.

About American Standard Energy:

American Standard Energy Corp. is a non-operated exploration and production company based in Scottsdale, Arizona.  The Company's primary focus is balanced between the Permian and the Bakken and Eagle Ford oil shale resource prospects in the continental United States.  The Company currently controls approximately 40,100 net acres in the following three primary prospect areas:

• 174,000 gross (32,400 net) acres targeting the Bakken/Three Forks in North Dakota;
• 10,775 gross (6,500 net) acres targeting the Permian formation in West Texas; and
• 12,000 gross (1,200 net) acres targeting a specific Eagle Ford prospect in South Texas.

Safe Harbor:

Except for the historical information contained herein, this press release contains forward-looking statements regarding future events and the Company's future results that are subject to the safe harbors created under the Securities Act of 1933 (the "Securities Act") and the Securities Exchange Act of 1934 (the "Exchange Act").  All statements other than statements of historical facts included in this report regarding the Company's financial position, business strategy, plans and objectives of management for future operations, industry conditions, and indebtedness covenant compliance are forward-looking statements.  When used in this report, forward-looking statements are generally accompanied by terms or phrases such as "estimate," "project," "predict," "believe," "expect," "anticipate," "target," "plan," "intend," "seek," "goal," "will," "should," "may" or other words and similar expressions that convey the uncertainty of future events or outcomes.  Items contemplating or making assumptions about, actual or potential future sales, market size, collaborations, and trends or operating results also constitute such forward-looking statements.

Forward-looking statements involve inherent risks and uncertainties, and important factors (many of which are beyond the Company's control) that could cause actual results to differ materially from those set forth in the forward-looking statements, including the following: oil and gas prices, the Company's ability to raise capital, general economic or industry conditions nationally and/or in the communities in which the Company conducts business, changes in the interest rate environment, legislation or regulatory requirements, conditions of the securities markets, changes in accounting principles, policies or guidelines, financial or political instability, acts of war or terrorism, other economic, competitive, governmental, regulatory and technical factors affecting the Company's operations, products, services and prices.

The Company has based these forward-looking statements on its current expectations and assumptions about future events. While the Company's management considers these expectations and assumptions to be reasonable, they are inherently subject to significant business, economic, competitive, regulatory and other risks, contingencies and uncertainties, most of which are difficult to predict and many of which are beyond the Company's control.

SOURCE American Standard Energy Corp.