Sanchez Energy Ends Year Strong

2015 Spending Focuses on Eagle Ford's Catarina
Sanchez Energy Eagle Ford Acreage Map

Sanchez Energy Eagle Ford Acreage Map | Click to Enlarge

This week, Sanchez Energy announced fourth quarter and full year results for 2014 and updated the company’s capital spending plan for the new year.

In spite of dropping crude prices throughout the fall months, Sanchez reported fourth quarter revenues that were up 33% over the same period in 2013 and hit a record $172.5 million. The company also reported record production production averaging of 43,897 BOE/D.

Sanchez Energy has approximately 226,000 net acres in the Eagle Ford Shale in South Texas and includes 106,0000 acres in Catalina that were purchased in May 2014. This Dimmitt County property has proved to be a smart investment and is responsible for much of the company’s 2014 success.

Tony Sanchez, III, President and Chief Executive Officer of Sanchez Energy, commented: “Throughout the past year, we achieved significant production and reserves growth through both the transformative acquisition of the Catarina asset as well as the ongoing development of our legacy Eagle Ford assets. Revenues, production, and proved reserves all more than doubled in 2014”

Related: Sanchez Energy Reports Record Revenue in Q2 2014

Looking to 2015, Sanchez re-affirmed its capital plan at $600 – $650 million with production expected to average 40,000 to 44,000 BOE/DThe company will continue to focus on the Catarina property that continues to produce high rates of returns even in this lower commodity price environment. Company executives expect Catarina to produce the same high returns for the next 10 years.

Read the full report at sanchezenergycorp.com

Sanchez Nearly Doubles Eagle Ford Acreage in $639 Million Deal with Shell

Deal Includes 106,000 Net Eagle Ford Acres
Dimmit County Eagle Ford Shale Map

Dimmit County, TX

Houston-based Sanchez Energy Corporation announced in May of 2014 that it has entered a deal with Royal Dutch Shell subsidiaries in the Eagle Ford to purchase 106,000 net acres for $639-million. The acquisition increases Sanchez’s total net Eagle Ford acreage to 226,000, and adds 60 MMBOE of proved reserves, nearly doubling the company’s acreage position and proved reserves in the play.

During the first-quarter, the acquired assets had production of 24,000 boe/d (60% liquids). Sanchez estimates there are at least four years of drilling inventory from 200 “de-risked” wells in the new acreage, which extend across Dimmit, La Salle and Webb Counties.

CEO Tony Sanchez III, said, “the addition of this asset includes at least 200 identified drilling locations and up to 800 additional potential locations that can be added through our planned appraisal work on the rest of the asset and will take us to a total of almost 3,000 potential drilling locations. The estimated 200 de-risked ready-to-drill locations will provide at least four years of drilling inventory at a 50-well-per-year pace. We expect that this drilling activity will generate well-level rates of return in excess of 35% – 50%.”

This most recent acquisition is the largest for Sanchez in a string of acreage deals beginning early last year. In March of 2013, the company purchased 43,000 net acres in Dimmit, Frio, La Salle, and Zavala counties from Hess Corporation for $265-million. At that time, the acquisition from Hess also doubled the size of the company. In June of 2013, Sanchez stuck another deal for Eagle Ford acreage, acquiring 10,300 net acres in Fayette, Lavaca, and Gonzales counties for $28.8-million.

Read more: Sanchez-Hess Reach Eagle Ford Deal for $265 Million

Read more: ZaZa Selling Eagle Ford Assets to Sanchez Energy For $28.8 Million

Shell Exiting the Eagle Ford

In September of 2013, Shell announced it had plans to sell 106,000 acres in the Eagle Ford. The oil giant, unlike many other companies in the Eagle Ford, didn’t meet its internal targets for size and profitability in the play. With the divestiture of its primary Eagle Ford assets, Shell retains 147,000 acres of non-operated leases in Maverick County.

Read more: Shell’s Eagle Ford Acreage is For Sale

The acquisition is expected to close in the second quarter of 2014, with an effective date of January 1, 2014.

Read more at SanchezEnergyCorp.com

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