Sanchez Energy Corporation

$SN - NYSE - Energy
0 LAST
0 CHANGE $
0 CHANGE %
loader
ON 1
WATCHLISTS

COMMUNIQUÉ DETAILS

Up 0 0 Down
Sanchez Energy Announces 2013 Capital Budget and Guidance

HOUSTON, Feb. 4, 2013 /PRNewswire/ -- Sanchez Energy Corporation (NYSE: SN), a fast growing independent oil and gas company targeting the liquids-rich Eagle Ford Shale, Pearsall Shale, Austin Chalk, and Buda Limestone, today announced its 2013 capital budget and guidance for selected 2013 operating and financial metrics.

Summary Highlights

  • 2013 total capital expenditure program of approximately $347 million, including approximately $327 million for drilling and completion activities
  • Expect to drill and complete approximately 46 gross (33.5 net) wells in 2013
  • 2013 year-end estimated production exit rate of 8,500 to 9,500 BOE/d, an increase of 100% over 2012 year-end production exit rate of 4,500 BOE/d
  • Expect to significantly increase drilling and completion activity in the Palmetto and Marquis areas
  • Performing multiple tighter density well tests to better understand optimal spacing between wells, including a five well 40-acre pilot in the Palmetto area and several 60-acre well pilots in the Marquis area
  • Drilling the majority of wells on multi-well pads to further gain operational efficiencies, including reduced rig mobilization time and costs in addition to shared production and completion facilities
  • Focused on infrastructure build-out to relieve takeaway capacity constraints in the Palmetto and Marquis areas, thus capturing optimal flow volumes and minimizing gas flaring while wells are being hooked up to sales

Management Comments

Tony Sanchez III, President and Chief Executive Officer said, "We are excited about accelerating the development of our Marquis area, which is proving to be highly productive and a significant source of value for the Company where well performance is steadily improving and cost efficiencies are being realized. The Prost B#1H averaged 808 BOE/d for the first 60 days, a significant improvement over the Prost #1H and #2H, as we have refined our completion techniques and as a result are witnessing substantially improved oil flow rates and reservoir pressure maintenance. As shown in the table below, we are allocating a larger percentage of our total capital budget to our Marquis area than we did last year. Over 90% of our capital budget is targeted toward drilling and completing wells and over 90% of that amount is focused on the Palmetto and Marquis areas."

Mr. Sanchez continued that "as we execute our 2013 drilling plan, we expect reserves, production, and cash flow to steadily increase as we continue to expand our development program while focusing on drilling and completion efficiencies. Our 2013 year-end exit rate production guidance of 8,500 to 9,500 BOE/d is approximately double the 4,500 BOE/d exit rate that we achieved in 2012. Our expectations are to fully fund this growth through a combination of cash on hand, operating cash flow, and borrowings under our credit facilities. As the Company's reserves and base level of cash flow increase, we expect there to be a commensurate increase in our borrowing capacity."

2013 Capital Program and Operating Plans

Sanchez Energy's 2013 capital program calls for total spending of approximately $347 million to drill 46 gross (33.5 net) wells and to fund production facilities and related expenditures, additional acreage acquisition, and seismic expenditures. Over 90% of the capital program will be allocated towards drilling and completing wells in the Company's three projects areas, as outlined below:

Project Area


Planned Gross Wells


Planned Net Wells


Drilling Budget ( $MM )

Palmetto


25


12.5


$125

Marquis


19


19.0


190

Maverick


2


2.0


12

Total Eagle Ford


46


33.5


$327

Facilities, Leasing, & Seismic






20

Total Capital Program






$347

2013 Operating and Financial Guidance

Sanchez Energy's 2012 year-end production exit rate was 4,500 BOE/d, and Sanchez Energy's 2013 year-end estimated production exit rate range is forecasted to be between 8,500 and 9,500 BOE/d. The following table provides the Company's operating and financial guidance for 2013:

Metrics


Range






Production Guidance (BOE/d)





   2013 Year-End Exit Rate


8,500

9,500

   Full Year 2013 Average


5,500

6,500






Full Year 2013 Financial Guidance





   Lease Operating Expense ($/BOE)


$6.50

$7.50

   G&A, Excluding Stock-Based Compensation ($/BOE)


$5.00

$6.00

   Production & Ad Valorem Taxes (% of Revenue)


6.5%

7.0%

Hedge Summary

The following table lists the Company's hedges for 2013 and 2014:

Commodity


Instrument


Period


Daily Volume (Bbls)


Price

Oil


Put Option


2013


1,000


Long $95 WTI Put /





Jan – Dec




Short $75 WTI Put










Oil


Swap


2013


500


$97.10 WTI Swap





Jan - Dec














Oil


Swap


2013


1,000


$88.90 WTI Swap





Jan - Dec














Oil


Put Option


2013


1,000


Long $90 WTI Put /





July – Dec




Short $75 WTI Put










Oil


3-Way


2014


1,500


Short $102.25 WTI Call /



Costless Collar


Jan - Dec




Long $85 WTI Put /

Short $65 WTI Put

About Sanchez Energy Corporation

Sanchez Energy Corporation is a Houston, Texas based growth oriented independent exploration and production company currently focused on the prolific Eagle Ford Shale trend of south Texas.  The company has approximately 95,000 net acres targeting the liquids-rich Eagle Ford Shale, Pearsall Shale, Austin Chalk, and Buda Limestone. For more information about Sanchez Energy Corporation, please visit our website:  www.sanchezenergycorp.com

Forward Looking Statements

This press release contains, and our officers and representatives may from time to time make, "forward-looking statements" within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995.  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.  These statements are based on certain assumptions made by the company based on management's 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, words such as "will," "potential," "believe," "estimate," "intend," "expect," "may," "should," "anticipate," "could," "plan," "predict," "project," "profile," "model," "strategy," "future" or their negatives or the statements that include these words, are intended to identify forward-looking statements, although not all forward-looking statements contain such identifying words.  In particular, statements, express or implied, concerning Sanchez Energy's future operating results and returns or Sanchez Energy's ability to replace or increase reserves, increase production, generate income or cash flows are forward-looking statements.  Forward-looking statements are not guarantees of performance.  Although Sanchez Energy believes that the expectations reflected in its forward-looking statements are reasonable and are based on reasonable assumptions, no assurance can be given that these assumptions are accurate or that any of these expectations will be achieved (in full or at all) or will prove to have been correct.

Sanchez Energy's forward-looking 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, the successful execution of business and financial strategies, replacement and growth of reserves, the continued production of oil and gas at historical rates, accuracy of reserve estimates, costs of operations, delays, and any other difficulties related to producing oil or gas, the price of oil or gas, successful execution of hedging strategies, access to credit and capital markets, competition, general economic conditions, the impact of regulatory policies and the ability to manage and continue growth and other factors described in Sanchez Energy's Annual Report for the fiscal year ended December 31, 2011 and any updates to those risk factors set forth in Sanchez Energy's Quarterly Reports on Form 10-Q.  Sanchez Energy's filings with the Securities and Exchange Commission ("SEC") are available on its website at www.sanchezenergycorp.com and on the SEC's website at www.sec.gov.  In light of these risks, uncertainties and assumptions, the events anticipated by Sanchez Energy's forward-looking statements may not occur, and, if any of such events do, 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 Energy's 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.

Cautionary Note to U.S. Investors

The SEC permits oil and gas companies, in their filings with the SEC, to disclose only proved, probable and possible reserves.  We may use certain terms in our press releases, such as net resource potential and other variations of the foregoing terms that the SEC's guidelines strictly prohibit us from including in filings with the SEC.  U.S. Investors are urged to consider closely the reserves disclosures in our filings with the SEC available on our website at www.sanchezenergycorp.com and the SEC's website at www.sec.gov.  You can also obtain this information from the SEC by calling its general information line at 1-800-SEC-0330.

Company contact:
Michael G. Long
Senior Vice President and Chief Financial Officer
Sanchez Energy Corporation
(713) 783-8000

SOURCE Sanchez Energy Corporation

SHARE THIS: Twitter StockTwits LinkedIn Google Plus SHORT URL: http://bdvt.co/bfbV

SIGN IN TO BOARDVOTE

FORGOT PASSWORD?