Sanchez Energy announces a strong first quarter for their Eagle Ford operations.
Related: Sanchez Ends 2015 Strong
During a first quarter earnings call, executives credited process improvements and efficiency gains with lower costs and strong production in the first quarter of 2016. The company finished the quarter with about $362 million in cash and $300 million that is available for future borrowing.
While many producers in the oil and gas industry are struggling to stay afloat, Sanchez Energy Corporation has been able to position itself for strength during this difficult time. Their minimal debt gives them considerable financial flexibilities for moving forward.
Sanchez continues to focus on the development and competitive practices in the Eagle Ford to drive operations.
“CEO Tony Sanchez commented, “We currently have two rigs running in Eagle Ford and expect to reduce to one rig towards the end of the second quarter. Due to efficiency gains in drilling and completions, we expect there is a chance production may come online a bit earlier than originally expected. Assuming this trend continues, it will likely result in a portion of third quarter and fourth quarter production being realized in the second quarter.”
First quarter highlights include:
- Total production of 5.1 million barrels of oil equivalent ("MMBoe") during the first quarter 2016, up approximately 26% over the first quarter 2015
- Average production of approximately 56,500 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 first quarter 2016 by over 8.5%
- Revenues of $79.8 million (approximately $133 million inclusive of hedge settlements) and Adjusted EBITDA (a non-GAAP financial measure) of $64.6 million
- Average drilling and completion costs during the first quarter 2016 of $3.3 million per well atCatarina and $3.4 million per well at Cotulla, with the Company's best wells coming in at approximately $3.0 million per well in both areas
- South-Central Catarina wells continue to exceed expectations, with average 30-day rates of greater than 1,300 Boe/d from all South-Central wells the Company has brought on-line to date
- The Company has met its 50 well annual drilling commitment at Catarina for the period July 2015 through June 2016 and has banked 13 wells toward the 50 well annual drilling commitment for the period July 2016 through June 2017
- The Carnero Pipeline, constructed by Sanchez Energy's joint venture with a subsidiary of Targa Resources Corp. (NYSE: TRGP) ("Targa"), went in-service in March 2016 and now transports the majority of Catarina gas volumes