During the second quarter, Sanchez Energy Corp. exceeded the high end of production guidance and reported its best well to date as it further delineated the south-central region of its Catarina acreage in the Eagle Ford Shale.
Second quarter production was 5.1 million boe, or 55,900 boe/d. Development wells in the south-central Catarina are showing early type curves that are 20-30% better than expected, the Houston-based company said.
"During the second quarter, we once again achieved excellent production results which, at approximately 55,900 boe/d, exceeded the high end of our guidance for the quarter by over 7%," said CEO Tony Sanchez. "Average cost per well during the second quarter came in at approximately $3.3 million, and our continuing focus on process improvements and efficiency gains resulted in several wells coming in below $3.0 million.
"With these results, we believe we have achieved a 'best in class' cost structure for this focus area. At the same time, well performance continues to improve as we test improved completion designs."
During the second quarter, Sanchez spud 17 gross (17 net) wells and completed 17 gross (17 net) wells.
Drilling and completion costs at Catarina averaged $3.3 million per well and continued to trend downward, with some wells coming in below $3.0 million during the quarter, the company said. At Cotulla, well costs during the second quarter 2016 averaged $3.3 million per well, with recent results also coming in below $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, drilling durations at Cotulla continue to decline, with recent wells coming in below six days per well," the company said.
During the second quarter, the company brought 13 wells on line at Catarina. All wells drilled and completed to date by Sanchez in the south-central region of Catarina have average 30-day initial production rates of 1,350 boe/d. At Cotulla, the company brought four wells on line during the quarter. Wells drilled at Cotulla continue to meet expectations, Sanchez said.
As of June 30 Sanchez was running one rig at Catarina and had 657 gross (539 net) producing wells with 16 gross (14.5 net) wells in various stages of completion.
Second quarter production exceeded the high end of guidance, which ranged from 50,000 to 52,000 boe/d, by more than 7%. The production mix consisted of 32% oil, 30% natural gas liquids and 38% natural gas.
"At Catarina, we continue to focus on the south-central region of the ranch," CEO Sanchez said. "During the second quarter 2016, we brought the E33 Pad on-line, marking the first major step out to the north since initiating our focus on south-central Catarina. The E33 Pad consisted of four wells that have been online for approximately 60 days. The wells, which include our best Catarina well to date, had average 30-day initial production rates that range from 1,600 to 1,900 boe/d and show a similar commodity mix to the prior south-central wells, producing 600 b/d of oil and 5,000 Mcf/d of natural gas, on average, over this period. Early results from these wells confirm our geologic interpretation that the fairway extends to the north and west."
Sanchez focuses on the Eagle Ford, where it has 200,000 net acres, and the Tuscaloosa Marine Shale.
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