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Sanchez Energy Announces Third Quarter 2015 Operating Results

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

Production of 52.8 MBOE/D Exceeds Top End of Guidance Range

Resulting from Increased Well Performance and Efficiency Gains


(Marketwired)October 22, 2015Sanchez Energy Corporation (NYSE: SN) (Sanchez Energy or the Company), today announced operating results for the third quarter 2015. Highlights from operations include:

Production of 4,862 thousand barrels of oil equivalent (MBOE) during the third quarter 2015 for average production of 52,844 barrels of oil equivalent per day (BOE/D) driven by continued outperformance of Catarina wells

The Company received appr oximately $345 million in cash with the close of the Western Catarina Midstream Divestiture, with annual lease operating costs expected to rise approximately $0.75 per barrel of oil equivalent over previous guidance as a result of the transaction

The Companys joint venture (JV) with Targa Resources

Partners LP (NYSE:NGLS) (Targa)

to construct a cryogenic processing plant expected to have initial capacity of 200 million cubic feet per day (MMcfd) and associated high pressure gathering pipelines near Sanchez Energys Catarina asset in the Eagle Ford Shale is expected to provide a path to improved yields, lower processing fees, and significant marketing benefits


During the third quarter 2015, we continued to realize operational success driven by strong production and declining well costs, said Tony Sanchez, III, Chief Executive Officer of Sanchez Energy. Production for the third quarter 2015 averaged approximately 52,844 BOE/D, exceeding the high end of our guidance range of 46,000 to 50,000 BOE/D. A comprehensive optimization of our drilling and completion practices, along with direct sourcing strategy has resulted in cost savings of approximately 50% of our total well cost relative to third quarter 2014. Extensive changes have been made to our processes and systems with essentially no change to our well design. As a result, our production remains strong and we have developed the financial flexibility needed to successfully manage a two-rig program in todays more challenging commodity price environment.

During the third quarter 2015, we expanded our focus beyond upstream exploration and production and into the midstream space. Our midstream strategy targets transactions that are aimed at enhancing the returns on our development drilling while leveraging higher midstream valuations to raise capital at a discount to midstream opportunities. To that end, the Company announced and subsequently closed a divestiture of certain midstream assets in Western Catarina, which added approximately $345 million in cash to the balance sheet earlier this month. In conjunction with the divestiture, the Company entered into a long-term, fixed price gathering

agreement with Sanchez Production Partners LP (NYSE: SPP). After taking into account the cost savings realized year to date, we expect the transaction will result in a slight increase of annual lease operating costs of approximately $0.75 per BOE over previous guidance.

We also recently announced a JV with Targa to build a cryogenic gas processing plant...