Sanchez Energy to Increase Upstream Spending

Company to Drop One Eagel Ford Rig by End of Year
Sanchez Energy Q2

Sanchez Energy 2016 Q2

Sanchez Energy Corp. reported excellent production returns for the second quarter of 2016 and announced plans to increase upstream capital spending to between $250 million to $300 million.

Related: Sanchez Midstream Deal Worth $44 Million

During a second quarter earnings call, Sanchez’ CEO Tony Sanchez credited their results to competitive well costs, record production and improvements in the commodity price environment.

Sanchez continues to experience great results from their Eagle Ford operations including drill costs of below $3 million for wells at both Catarina and Cotulla.

Sanchez commented “The commodities or the company’s Eagle Ford development plan remains focused on Catarina, where in conjunction with the uptick and spending plan under our updated capital plan, the company is currently running three rigs and expects to maintain an activity set of two rigs for remainder of the year.

Second quarter highlights include:

  • Plans to increase its 2016 upstream capital spending by up to $50 million, to a range of between $250 million to $300 million
  • Total production of 5.1 million barrels of oil equivalent (“MMBoe”) during the second quarter 2016, up approximately 4% over the second quarter 2015
  • Average production of approximately 55,900 barrels of oil equivalent per day (“Boe/d”), which exceeded the high end of the Company’s guidance of 48,000 to 52,000 Boe/d for the second quarter 2016 by over 7%
  • Average drilling and completion costs between $3-3.3 million per well
  • Revenues of approximately $111 million (up approximately 39% over Q1)
  • $146 million in revenue
  • Adjusted EBITDA of approximately $79.6 million (up 23% over Q1)

In July, Sanchez Production Partners (SPP) initiated a transaction with Sanchez Energy to acquire 50% interest in Carnero Gathering, LLC. The company expects that the $44 million deal will increase their midstream revenue and adjusted EBITDA to approximately $7 million.

 

Read more at sanchezenergy.com

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Elizabeth Alford

Elizabeth Alford

Elizabeth Alford writes on significant news developments in the Eagle Ford oil and gas play taking place across South TX. She is a freelance writer with an extensive communications, PR, and staff writing background.
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