Sanchez Energy Corp joins the ranks of other shale producers who are doing whatever is necessary to survive in this downturn.
Related: Sanchez Energy Reports Huge Losses
In a press release today, Sanchez confirmed that it is selling approximately 150 miles of midstream gathering lines and associated midstream infrastructure in the Eagle Ford in order to gain much-needed cash. Sanchez Production Partners will acquire and operate the assets concentrated in four gathering and processing facilities. Both firms are run by the private Sanchez Oil & Gas Corp.
The sale is expected to close next month and will bring Sanchez $618 million cash on hand, which they will use to buy assets, lease more property and accelerate drilling. The company anticipates that this agreement will result in an increase in lease operating expense of approximately $1.95 per barrel of oil equivalent.
Many Eagle Ford producers are selling assets and making deals in order to survive. Just last week, U.S. oil producer, Alta Mesa Holdings, announced it will exit from the Eagle Ford by selling Alta Mesa Eagle, LLC to EnerVest for $125 million.
Sanchez Energy CEO Tony Sanchez III said the company may sell other Eagle Ford assets as needed.
“We anticipate that we will see additional opportunities to accelerate returns through midstream and other asset monetization strategies like the one announced today.”
Read the press release at sanchezenergycorp.com