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.
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.
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.
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