Sanchez Energy (SN) Produces 4.7M Barrels in Q3

October 26, 2016 4:45 PM EDT

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Sanchez Energy Corporation (NYSE: SN) announces third quarter operating results.

Third quarter 2016 production of approximately 4.7 million barrels of oil equivalent (“MMBoe”), or approximately 51,500 barrels of oil equivalent per day (“Boe/d”), was at the high end of Company’s 50,000 to 52,000 Boe/d guidance for the quarter;

  • New generation of completion design that involves tighter cluster spacing and increased fluid and proppant loading being tested in the Upper and Middle Eagle Ford, with additional tests planned in the Lower Eagle Ford at both Catarina and Cotulla starting in the fourth quarter 2016;
  • Through optimized process and design efficiencies, average cost per well during the third quarter was $3.0 million, over a 25 percent savings compared to the third quarter 2015;
  • Some of the most recent pads at Catarina and Cotulla came in below $2.8 million per well;
  • The Company’s 50 percent interest in Carnero Gathering, LLC (“Carnero Gathering”) was sold during the third quarter 2016 to Sanchez Production Partners LP (NYSE: SPP) (“SPP”) for a cash payment of approximately $37 million and the assumption by SPP of remaining Carnero Gathering capital commitments, estimated to be $7.4 million (the “Carnero Gathering Transaction”);
  • The Company recently executed a definitive agreement to sell its 50 percent interest in Carnero Processing, LLC (“Carnero Processing”) to SPP for an estimated cash payment of $47.7 million and the assumption by SPP of remaining capital commitments to Carnero Processing, estimated to be approximately $32.3 million (the “Carnero Processing Transaction”);
  • The Company recently executed a definitive agreement to sell certain non-core producing oil and gas assets, located in South Texas, to SPP for total consideration of approximately $27 million (the “Production Asset Transaction”);
  • On Oct. 24, 2016 the Company executed a definitive agreement with Carrizo Oil & Gas, Inc. (Nasdaq: CRZO) (“Carrizo”) to sell approximately 15,000 net acres and approximately 3,000 Boe/d of non-core Eagle Ford Shale production for $181 million in cash, subject to normal and customary closing adjustments; and
  • The asset sales are expected to enhance the Company’s already strong liquidity position which, as of the end of the third quarter 2016, totaled approximately $629 million.

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