Sanchez Energy Ends 2012 With 200% Plus Production Growth

Sanchez Energy Eagle Ford Shale Map
Sanchez Energy Eagle Ford Shale Map

Sanchez Energy ended 2012 with production of approximately 4,500 boe/d. That's a 233% increase over year-end 2011 and over 150% growth from the third quarter of 2012. Proved reserves were estimated at 21.2 million boe.

The company also released well results from its most recent wells:

  • The Prost B #1H, in the Marquis Area, produced 1,114 boe in the first 24 hours and 936 boe/d over the first 30 days (14/64ths choke)
  • The Barnhardt #15, in the Palmetto area, produced 3,139 in the first 24 hours on a 32/64ths choke, but was later restricted to a 16/64ths choke

Tony Sanchez III, CEO said, "Tighter well-spacing tests in each of our project areas is expected to result in a material increase of our net identified Eagle Ford drilling locations, proved reserves, and net resource potential, which is currently based on 80 to 120 acre well spacing. In the Palmetto area, we are drilling the third well of a 5-well, 40 acre spacing pilot on the southern part of the Barnhart ranch. In Marquis we are also drilling a 60 acre spacing test in the western Prost area. Our assets also hold potential from the Buda Limestone, Austin Chalk, and Pearsall Shale formations that provide additional upside opportunities. We foresee drilling and testing additional formations in the second half of 2013 to further understand the potential of our existing acreage."

The company's 2013 capital budget will be announced in February after the company's board meeting.

Sanchez Energy Fayette & Lavaca County Eagle Ford Wells Produce 1,000+ boe/d

Sanchez Energy Eagle Ford Shale Map
Sanchez Energy Eagle Ford Shale Map

Sanchez Energy's Fayette and Lavaca County acreage just got a nice boost. The company reported two wells that produced more than 1,000 boe/d each. The Prost #1H and the Prost #2H were drilled with approximately 5,500 ft laterals and completed with 14 and 17 frac stages.  Production was comprised of 90% 43 degree API crude and 10% 1,400 BTU gas. Oil is what you want in the current commodity price market. Even better, it's oil that is less than 50 degrees API. That makes it more attractive for Gulf Coast refineries. You can read more about prices in a previous Eagle Ford Oil Price article.

Sanchez Energy's Marquis Area

The company refers to its ~51,000 acres in Fayette and Lavaca County as the Marquis Area. Assuming an acreage spacing of 80-120 acres per well, the area has potential for 420-630 future drilling locations. Those locations are estimated to hold resource potential of 140 million to 210 million barrels of oil equivalent from the Eagle Ford.

The Sante #1H is currently being drilled and the rig will move back to the Prost area, within the Marquis Area, afterward. The company will construct central gathering and production lines in the Prost area in order to handle the future development of as many as 32 wells.

Other Horizons Provide Upside Opportunity

The 210 mmboe of potential reserves is purely attributable to the Eagle Ford Shale. Sanchez believes there is also significant potential in the Austin Chalk, Pearsall Shale, and Buda Limestone.

I haven't been able to locate the two wells in the RRC GIS tool. If you know the exact location of these two wells, please share in the comment section below.