Sanchez Energy Reports Huge Losses

Company Increased Production 164%
Sanchez Energy Q2 Report

Sanchez Energy Q2 Report

Sanchez Energy Corp. reported second quarter losses of half a billion dollars and is looking to its Eagle Ford operations to turn things around.

Related: Sanchez Energy Reports Strong Q1

Sanchez is continuing to position itself to withstand a prolonged low commodity pricing by taking a conservative approach to their planning; cost reductions, improve drilling efficiencies and strong well performance

In their Q2 earning call, they reported a total production of 4,907 thousand barrels of oil equivalent (“MBOE”), a 164% increase over the second quarter 2014 he company announced it has reduced 2015 capital spending estimate by $50 million or approximately 8% and now plan to spend between $550 million and $600 million.

Tony Sanchez, III, President and Chief Executive Officer of Sanchez Energy, commentedwe have positioned the company to both thrive and grow in a $40 to $50 oil price environment. Improvement in our cost structure and production performance has allowed us to do more with less”

The Company’s Eagle Ford development plan remains primarily focused on Catarina, where the Company plans to average four gross (3.5 net) rigs over the course of 2015. Other Eagle Ford highlights include:

  • We are currently ahead of schedule on our development program in the Eagle Ford. In Catarina we exceeded our first annual 50-well drilling commitment by drilling 68 wells, which allows us to bank 18 wells toward the next annual commitment period that ends in June of 2016.
  • In the process of completing our first pad in North Western Catarina,
  • Bought 35 gross wells online during the quarter
  • Currently has 565 gross producing wells with 32 gross wells in various stages of completion

Read more at sanchezenergycorp.com

Sanchez Energy Strong in the Eagle Ford

Company Volumes at All-Time Highs
Sanchez Q2 Report

Sanchez Q2 Report

Sanchez Energy, focusing its development in the Eagle Ford, stands out in the midst of a sea of suffering oil & gas producers.

The crude price slump has taken its toll on a number of producers who have not been able to adjust enough to stay afloat. Six producers have filed bankruptcy since the first the year; American Eagle Energy, Quicksilver Resources, BPZ Resources, Sabine Oil & Gas, WBH Energy and Walter Energy. Analysts are warning that this is just the tip of the iceberg and many are forecasting bankruptcies will increase later in the year.

Related: Sabine Files Chapter 11

In the midst of the uncertainty, Sanchez is having a really good year. A few weeks after releasing a strong Q1 report, the company’s second quarter earnings show that current volumes are the highest in the company’s history.

Tony Sanchez, III, President and Chief Executive Officer of Sanchez Energy, commented: “During the second quarter 2015, we had success on a number of fronts.Estimated production for the second quarter 2015 averaged approximately 53,920 BOE/D. As a result of operational efficiencies, we are now able to drill and complete wells at a faster pace and at lower costs. Our innovative procurement strategy and continued focus on cost reduction has enabled us to drive capital costs down and deliver average well costs under $4.5 million per well in Catarina during the second quarter.”

Q2 Highlights:

  • Record production of 4,907 thousand barrels of oil equivalent (“MBOE”) during the second quarter 2015 for average production of 53,920 barrels of oil equivalent per day (“BOE/D”)
  • Shorter drilling times and strong production from recent wells put on production at Catarina.
  • Current production is approximately 53,000 BOE/D.
  • The two most recent two-well pads at South-Central Catarina have averaged 24-hour initial production rates between 1,400 and 1,800 BOE/D
  • Increasing its full year 2015 production range to 44,000-48,000 BOE/D.
  • 32 wells required to be drilled before June 30, 2016
  • Decreased well costs from $6.5 million per well to below $4.5 million

In May, Sanchez announced that Gleeson Van Riet has been named Senior Vice President and Chief Financial Officer of the company. Van Riet is replacing Mike Long, who retired on April 30, 2015.

Read more at sanchezenergycorp.com

Sanchez Energy Reports Strong Q1

60% Production from Eagle Ford's Catarina
Sanchez Energy Released 2015 Q1

Sanchez Energy Released 2015 Q1

Sanchez Energy announced a strong start to 2015 during it’s conference call last week, reporting they have reached new milestones for production and cost structures.

For the first quarter of 2015, Sanchez saw record production averaging 45,217 barrels of oil equivalent per day during the quarter and reported they are currently producing approximately 50,000 barrels per day. Completed well costs in all of regions of the company’s Eagle Ford operations (Catarina, Marquis and Cotulla/Wycross) are below $5.0 million, and are anywhere from 30% to 40% below costs from Q4’14.

A huge factor in Sanchez growth and success in the Eagle Ford is due to their acquisition of 106,000 acres in Catarina, TX from Dutch Shell last year. Catarina accounted for 60% of the company’s production in Q1’15.

Read more: Sanchez Nearly Doubles Eagle Ford Acreage in $639 Million Deal

Christopher D. Heinson – Chief Operating Officer and Senior Vice President talks about their success: “At the time of our IPO in December of 2011, we had production of approximately 600 barrels of oil equivalent per day. Since that time, through a combination of organic growth and strategic acquisitions, we have now grown production to approximately 50,000 barrels of oil equivalent per day and at our current pace, have well over a decade of high return drilling opportunities in our inventory.”

Q1 Eagle Ford Highlights

  • Record production averaging approximately 45,217 BOE/D
  • Executed and closed the sale of escalating working interests in 59 producing wellbores in the non-operated Palmetto Field for aggregate consideration of approximately $85 million
  • Catarina: Exceeded our first annual 50 well drilling commitment, by drilling 54 wells.
  • Catarina: successfully appraised three distinct and productive benches
  • Well costs trending down across assets, and we are now drilling and completing wells at Catarina,Cotulla, and Marquis at a cost that is approximately 30 to 40% below well costs realized in the fourth quarter 2014, with drilling and completion costs at Catarina now trending below $4.5 million.

Read more at sanchezenergycorp.com

Sanchez Energy CFO Steps Down

Michael G Long to Retire April 30th
Sanchez CFO Steps Down

Sanchez CFO Steps Down

Michael G. Long, the Executive Vice President and CFO of Sanchez Energy plans to step down from his position within the next 45 days.

This news came one week after the company reported record revenues and production for 2014. After Monday’s announcement, Sanchez stock fell -7.05%. Related: Sanchez Energy Ends Year Strong

Long joined Sanchez in 2008 and helped take the company public in 2011.

Tony Sanchez, III, President and Chief Executive Officer of Sanchez Energy, commented, “Mike has contributed significantly to the formation, management and growth of Sanchez Energy since its IPO in 2011. Today the company is well positioned to continue its track record of success with strong liquidity, a solid capital structure and an asset base with an attractive and deep inventory. Mike has had a long and successful career dedicated to the energy industry, and we wish him and his family all the best as he plans this next phase of his life.”

While the company searches for a permanent replacement, Gleeson Van Riet will serve as interim co-CFO, effective immediately. Van Riet is the senior vice president of capital markets and investor relations

Sanchez Energy is heavily invested in the Eagle Ford play. Since its latest acquisition in June 30, 2014, the company holds approximately 226,00 acres in the Eagle Ford with operations in various stages of development.

Related: Sanchez Nearly Doubles Eagle Ford Acreage

Find out more at sanchezenergy.com

 

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 Reduces 2015 Capex by 60%

Company Will Cut Rig Count in Eagle Ford
sanchez reduces eagle ford rigs

2015 Sanchez Energy Capital Plan | click to enlarge

As oil prices hit new lows, Eagle Ford producers are scrambling to revise budget projections for 2015.

On January 7th, Sanchez Energy joined other companies who are forced to update 2015 capex projections from just two months ago. The company reports that the initial 2015 estimate of $1.15 billion will be slashed almost 60% to $400 – $450 million.

Related: Matador Reduces Eagle Ford Rigs in 2015

Related: ConocoPhillips Announces Capex Reduction in 2015

Tony Sanchez, III, President and Chief Executive Officer of Sanchez Energy, responded to the announcement by saying that due to “the deteriorating commodity price environment, Sanchez Energy has elected to further reduce its 2015 capital plan. Our 2015 drilling plan calls for us to move from 8 gross (7 net) rigs across our Eagle Ford position and 1 gross and net rig in the TMS in the fourth quarter of 2014 to 4 gross (3.5 net) rigs focusing on Catarina and Palmetto in the Eagle Ford and .25 gross and net rigs in the TMS. This represents an approximately 60% reduction in average rig count from fourth quarter 2014 to 2015.”

Despite the drastic cuts, the report predicts that the company will maintain 2014 Q4 production numbers. It is also expected that oil production will continue to rise in 2015 and should average 40,000 to 44,000 barrels a day.

Read complete report at sanchezenergycorp.com

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