Sanchez Energy Raises Eagle Ford Production Guidance

June 3, 2013 R.T. Dukes

Sanchez Energy has raised it's Eagle Ford production exit rate guidance to 15,000-17,000 boe/d for 2013. Capital expenditures have also been revised to $475 million compared to $347 million previously.

The big increase is due to the purchase of 43,000 net acres from Hess. The deal closed on May 31, 2013, with a price tag of ~$280 million. Read more about the deal in the article: Sanchez - Hess Reach Eagle Ford Deal For $265 Million

Over 90% of the $475 million capital budget will be spent drilling and completing 65 gross (46.7 net) wells. Ten of those wells will be directed at the newly acquired Cotulla assets.

Tony Sanchez III, President and Chief Executive Officer of Sanchez Energy, commented: "As a result of the closing of our Cotulla asset acquisition and an updated review of our operational opportunities, we have increased our 2013 capital program and activity levels.

Sanchez is also increasing its development plans in the Palmetto area in Gonzales County, TX, after realizing better well results than expected. A total of 9 gross (4.5 net) more wells will be drilled in the area. That brings the total number of planned wells in the Palmetto area to 34 gross (17 net) this year.

Sanchez will run three rigs in the Palmetto area in the second half of the year.

Read the full press release at sanchezenergycorp.com

Sanchez Energy Ends 2012 With 200% Plus Production Growth

January 22, 2013 R.T. Dukes

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 Eagle Ford Reserves Hit 15 mmboe - Vertical Well Tests Coming

July 19, 2012 R.T. Dukes

Sanchez Energy's Eagle Ford reserves have grown by 125% since the end of 2011. The company reported 15 million barrels of proved reserves with 87% being attributable to oil. An internal estimate pegs total resource potential at more than 250 mmboe from 800-1,200 wells.

Sanchez has approximately 95,000 acres stretched across portions of the black oil and volatile oil windows of the Eagle Ford. The company's prize asset is its 9,400 acres in the Palmetto area of Gonzales County. Sanchez has two rigs running in the Eagle Ford and plans for an additional rig in the Palmetto area in August. The company just completed a seismic study in the Palmetto area and has started a development program that will include 8-9 gross wells in the second half of 2012.

Current Eagle Ford production is 1,200 boe/d, with guidance is for 4,000-5,000 boe/d by the end of 2012. In addition to the Palmetto area, watch for vertical well results from the company's Maverick Area in Zavala and Frio counties. A vertical well test performed similarly to horizontal wells (264 boe/d IP) in the area and the company plans to test an additional 3-4 vertical wells. There's a possibility vertical wells will provide competitive initial production rates at much lower wells costs.

Find additional detail on individual well results at sanchezenergycorp.com