Sanchez Energy's Reserves Near 60 Million Barrels - Production Surges in Q4

January 28, 2014 R.T. Dukes

Sanchez Energy's proved reserves are up 178% from a little more than 20 million boe at year-end 2012 to 58.9 million boe at December 31, 2013.

Reserves increased as a result of successful development in the Eagle Ford and multiple acquisitions during 2013.

In the fourth quarter alone, Sanchez grew Eagle Ford production 60% over the third quarter to 18,810 boe/d. More impressively, the company increased production year over year by 905%.

Also read:Sanchez Energy Plans to Spend $600 Million in the Eagle Ford in 2014

[ic-l]A total 32 net wells were brought online in the fourth quarter 15 additional wells are in some stage of drilling and completion.

A strong fourth quarter puts the company is a great position to reach the high end or outperform guidance of 21,000-23,000 boe/d in 2014. Contributions from the Tuscaloosa are not accounted for in guidance, so success there will only increase the likelihood of the company outperforming guidance.

“2013 was a transformative year for the Company. Our production and reserves grew tremendously as a result of successfully executing our 2013 capital plan and completing several acquisitions.”

— Tony Sanchez, III, CEO

Sanchez Energy was busy in 2013. The company made several acquisitions to supplement its acreage in the Eagle Ford and stepped out of the play for the first time by acquiring acreage in the Tuscaloosa Marine Shale.

A few highlights from 2013 include:

March 2013 - Sanchez Acquires Hess' Eagle Ford Assets for $265 Million
July 2013 - ZaZa Sells Eagle Ford Assets to Sanchez Energy for $28.8 Million
August 2013 - Sanchez Energy Pays $78 Million to Acquire 40,000 Net Acres in the Tuscaloosa Marine Shale
September 2013 - Sanchez Energy Acquires Rock Oil's Eagle Ford Properties for $220 Million
October 2013 - Sanchez Energy Increases Q3 2013 Production Seven Fold Over Q3 2012

Drilling in 2014 will be focused on operated properties and the company is moving forward with development at 40-acre spacing in the Cotulla, Palmetto, and Wycross areas.

Read the full operational update at sanchezenergycorp.com

Sanchez Energy Expects Eagle Ford Development Spending to Near $600 Million

January 15, 2014 R.T. Dukes

Sanchez Energy has set its capital budget for 2014 at $650-700 million.

Approximately 95% ($617-665 million) will be spent on drilling and completing wells and 90% of that ($556-599 million) will be spent in the Eagle Ford.

Sanchez expects to double production in 2014 and average 21,000-23,000 boe/d.

“All of our core Eagle Ford positions are performing at or above our expectations and are in full scale development mode. We made tremendous strides last year strategically and operationally.”

— Tony Sanchez III, President and Chief Executive Officer

Sanchez acquired Tuscaloosa Marine Shale (TMS) acreage in 2013, but the play is not expected to materially contribute to the company's bottom line in 2014. Sanchez will spend approximately $65 million drilling exploration wells in the TMS this year.

Read the full press release at sanchezenergycorp.com

Sanchez Energy Increases Eagle Ford Production Seven Fold Over 2012

October 28, 2013 R.T. Dukes

Sanchez Energygrew production to to 11,774 boe/d in the third quarter. That's more than 50% growth since the second quarter. Even more impressively, the company has grown production 710% since the third quarter of 2012.

Don't expect production growth to slow in the fourth quarter. The company has six rigs running, 19 wells in various stages of completion, and expects production of 15,000-17,000 boe/d in the final quarter of the year.

“We continue to achieve significant production growth as we are now in full development mode in each of our Eagle Ford project areas, utilizing pad drilling to drive cost and time efficiencies throughout our operations.”

— Tony Sanchez III, CEO

Strong growth at the end of 2013 will set the company up well for 2014. Sanchez now expects to double 2013 production with a 2014 exit rate of of 22,000-26,000 boe/d.

Sanchez Energy is an Eagle Ford focused operator with more than 140,000 net acres in the play and a drilling inventory of more than 1,700 wells.

The company did venture out of the Eagle Ford with a recent acquisition of 40,000 net acres targeting the Tuscaloosa Marine Shale (TMS). The TMS is an Eagle Ford equivalent formation found in Louisiana and Mississippi.

Read the full operations update at sanchezenergycorp.com

Goodrich Increases 2014 Budget by 50% & Is Shifting to the Tuscaloosa Marine Shale

October 16, 2013 R.T. Dukes

Goodrich Petroleum Eagle Ford and Pearsall Activity Map

Goodrich Petroleum will spend 44% or $100 million of the company's $255 million budget in 2013 in the Eagle Ford. That will change in 2014 when the company will spend just $30 million in the play.

The company plans to spend almost 50% more on development in 2014, but almost 75% or $300 million of the company's $375 million budget will be spent in the Tuscaloosa Marine Shale (TMS).

The Eagle Ford has helped drive an increase in oil production, but Goodrich only controls 45,000 gross (32,000 net) acres in the play. In the TMS, Goodrich controls more than 300,000 net acres across Louisiana and Mississippi. The shear size of the company's position makes the potential much greater.

Read the company's full release regarding its 2014 budget at goodrichpetroleum.com

Goodrich Petroleum Allocates ~65% of 2013 Budget to the Eagle Ford

January 8, 2013 R.T. Dukes

Goodrich Petroleum has planned for a capital budget of $175-$200 million in 2013. Of that, $115-137 million will be spent to drill 24-28 gross (16-19 net) wells targeting the Eagle Ford. The rest of the company's budget will be spent between the Haynesville Shale and Tuscaloosa Marine Shale plays.

Production growth will be mute as the company goes full force into its liquids producing plays. Natural gas volumes will decline and oil volumes are expected to roughly offset the decrease.

The top of guidance at $200 million is $50 million less than the company spent in 2012. Natural gas prices are taking a toll on budget in natural gas focused companies.

GDP Eagle Ford Operations Update

Average drilling days per well deceased by 40 percent sequentially in the quarter to 11 days for an average 6,000 foot lateral. Gross well costs for 2013 are projected to average $7.0 – $7.5 million for an average 6,000 foot lateral, which incorporates the lower well costs due to the faster drilling and cycle times achieved in the second half of 2012, as well as the reduced pressure pumping agreements in place for 2013. The Company currently plans to spud its initial Pearsall Shale test well in the first quarter.