Actionable news
All posts from Actionable news

Sanchez Energy Announces First Quarter 2016 Operating Results

The following excerpt is from the company's SEC filing.

Achieving Well Costs of Approximately $3.0 Million as 56.5 MBOE/D of Production Exceeds Guidance


(Marketwired)April 20, 2016Sanchez Energy Corporation (NYSE: SN) (Sanchez Energy or the Company), today announced operating results for the first quarter 2016. Highlights include:

Process improvements and efficiency gains continue to drive savings in Sanchez Energys average well costs, with some wells coming in at approximately $3.0 million during the first quarter 2016

Production of 5.1 million barrels of oil equivalent reported by Sanchez Energy for average production of a pproximately 56,500 barrels of oil equivalent per day (BOE/D) during the first quarter 2016

Better than expected production during the first quarter 2016 realized after strong early results in South-Central Catarina, as well as continued strength in Sanchez Energys base production

The Carnero Pipeline, constructed by Sanchez Energys 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 to a cryogenic gas plant owned by the joint venture


We continue to build on our strong operating performance in 2016, said Tony Sanchez, III, Chief Executive Officer of Sanchez Energy. During the first quarter, we once again achieved excellent production results and, at approximately 56,500 BOE/D, exceeded the high end of our guidance by over 8.5%. Process improvements and efficiency gains continue to result in reductions in our average well costs, with some wells coming in at approximately $3.0 million during the first quarter 2016. With these results, we believe we are now drilling and completing wells at some of the lowest cost levels reported in unconventional oil and gas development. Importantly, the combination of strong production and lower costs has allowed us to achieve positive returns on our capital program, even in todays more challenging commodity price environment, which provides us with a key competitive advantage relative to our peers. As previously noted, nearly all of our recent well cost reductions are attributable to process and design improvements and are expected to be sustainable, even in a rising commodity price environment.

At Catarina, we continue to shift our focus to the South-Central region of the ranch, which is proving to be a more productive area of development than we originally anticipated. During the first quarter 2016, we brought 11 new development wells on-line in South-Central Catarina. Early results from these wells have confirmed our geologic interpretation and are significantly exceeding results seen in the Western region of Catarina, which was the primary reason we successfully exceeded production guidance this quarter. We continue to optimize our artificial lift program at Catarina through investment in widespread automation and advanced well surveillance at the ranch. Our enhanced well design and maintenance programs have also resulted in reduced failure rates and better plant run times, resulting in lower down-time.

With respect to our midstream strategy,

the Carnero Pipeline constructed by our joint venture with Targa went in-service in March 2016 and now transports the majority of Catarina gas volumes to a cryogenic gas plant owned by the joint venture. The joint venture continues construction of a new cryogenic natural gas processing plan in La Salle County, Texas. Once complete, the project is expected to provide a path to improved yields, lower processing fees, and significant marketing benefits to Sanchez Energy.


During the first quarter of 2016, the Company spud 19 gross (19 net) wells, and completed 19 gross (17 net) wells.

Drilling and completion costs at Catarina during the first quarter 2016 averaged approximately $3.3 million per well and continue to trend downward, with some wells coming in at approximately $3.0 million during the quarter. At Cotulla, well costs during the first quarter 2016 averaged approximately $3.4 million per well, with recent results also coming in at approximately $3.0 million per well.

At Catarina, drilling durations (spud to total depth) are now consistently coming in at approximately eight days per well. Similarly, at Cotulla, drilling durations have continued to decline, with recent wells coming in at approximately six days per well.

During the first quarter 2016, the Company brought 11 wells on-line in South-Central Catarina. While the wells are still in the early stages of flowback, rates and pressures have performed in line with expectations. At Cotulla, the Company brought four wells on-line at the end of the first quarter 2016. The wells are still in the early stages of flowback, but are performing in line with expectations. The Company expects to bring two additional wells on-line at Cotulla during the second quarter 2016.

The Company is currently running two rigs and expects to reduce drilling operations to one rig by the end of the second quarter 2016. In accordance with the Companys 2016 capital plan, approximately 70% of 2016 capital spending is expected during the first half of the year.

As of March 31, 2016, the Company had 640 gross (522 net) producing wells with 17 gross (15.5 net) wells in various stages of completion, as detailed in the following table:

Project Area

Producing Wells

Wells Waiting/




Cotulla / Wycross


TMS / Other


The Companys estimated total production for the first quarter 2016 was approximately 56,500 BOE/D, which represents an increase of approximately 25% over first quarter 2015 production. The Companys first quarter 2016 production exceeded the high end of the Companys production guidance for the quarter, which ranged from 48,000 to 52,000 BOE/D, by over 8.5%. The Companys production mix during the first quarter of 2016 consisted of approximately 32% oil, 35% natural gas, and 33% natural gas liquids (NGLs). Total production volumes are summarized in the following table:

Q1 2016

Q1 2015

% Change

Q4 2015

Total Production Volumes

Oil (Mbbl)

Gas (Mmcf)



NGL (Mbbl)

Total (MBOE)

Average Daily Production Volumes

Oil (Bbl/day)




Gas (Mcf/day)




NGL (Bbl/day)




Total BOE/Day





Sanchez Energy Corporation is an independent exploration and production company focused on the acquisition and development of unconventional oil and natural gas resources in the onshore U.S. Gulf Coast, with a current focus on the Eagle Ford Shale in South Texas where we have assembled approximately 200,000 net acres, and the Tuscaloosa Marine Shale. For more information about Sanchez Energy Corporation, please visit our website:


This press release contains, and our officers and representatives may from time to time make, forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements, other than statements of historical facts, included in this press release that address activities, events or developments that Sanchez Energy expects, believes or anticipates will or may occur in the future are forward-looking statements, including statements relating to estimates of our future production, revenues, operational and commercial benefits of the joint venture with Targa, our strategy and plans, our view of the market, and our well drilling plans. These statements are based on certain assumptions made by the Company based on managements experience, perception of historical trends and technical analyses, current conditions, anticipated future developments and other factors believed to be appropriate and reasonable by management. When used in this press release, the words will, potential, believe, estimate, intend, expect, may, should, anticipate, could, plan, predict, project, profile, model, strategy, future, or their negatives, other similar expressions or the statements that include those words, are intended to identify forward-looking statements, although not all forward-looking statements contain such identifying words.

Such statements are subject to a number of assumptions, risks and uncertainties, many of which are beyond the control of Sanchez Energy, which may cause actual results to differ materially from those implied or expressed by the forward-looking statements, including, but not limited to failure of acquired assets to produce as anticipated, failure or delays on the part of our joint venture partners, failure to continue to produce oil and gas at historical rates, costs of operations, delays, and any other difficulties related to producing oil or gas, the price of oil or gas, marketing and sales of produced oil and gas, estimates made in evaluating reserves, competition, general economic conditions and the ability to manage our growth, our expectations regarding our future liquidity, our expectations regarding the results of our efforts to improve the efficiency of our operations to reduce our costs and other factors described in Sanchez Energys most recent Annual Report on Form 10-K and any updates to those risk factors set forth in Sanchez Energys Quarterly Reports on Form 10-Q. Further information on such assumptions, risks and uncertainties is available in Sanchez Energys filings with the U.S. Securities and Exchange Commission (the SEC). Sanchez Energys filings with the SEC are available on our website at and on the SECs website at In light of these risks, uncertainties and assumptions, the events anticipated by Sanchez Energys forward-looking statements may not occur, and, if any of such events do occur, Sanchez Energy may not have correctly anticipated the timing of their occurrence or the extent of their impact on its actual results. Accordingly, you should not place any undue reliance on any of Sanchez Energys forward-looking statements. Any forward-looking statement speaks only as of the date on which such statement is made and Sanchez Energy undertakes no obligation to correct or update any forward-looking statement, whether as a result of new information, future events or otherwise, except as required by applicable law.

Company contact:

Garrick (Rick) Hill

Interim Chief Financial Officer

(877) 847-0009

The above information was disclosed in a filing to the SEC. To see the filing, click here.

To receive a free e-mail notification whenever Sanchez Energy Corporation makes a similar move, sign up!

Other recent filings from the company include the following:

Sanchez Energy Corporation's Interim CFO just declared owning 12,812 shares of Sanchez Energy Corporation - April 19, 2016
Sanchez Energy Corporation's Senior VP and CAO just picked up 36,000 shares - April 19, 2016
Sanchez Energy Corporation's Senior Vice President -- COO just picked up 200,000 shares - April 19, 2016