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Independent Hits ‘Turning Point’ in Eagle Ford Program
Houston-based Sanchez Energy Corp.’s proved reserves grew by 125% to 15 million boe during the first half of the year, up from 6.7 million boe at the end of last year, the company said. The company has about 95,000 acres in the Eagle Ford Shale.
“We have positioned Sanchez Energy as a unique pure-play growth story within the Eagle Ford oil trend…” said CEO Tony Sanchez. “The second quarter saw a substantial increase in operational activity and marked a turning point in our drilling program with development operations under way in all three of our project areas [Palmetto, Maverick and Marquis].
“While we are pleased with the results of the quarter, we experienced challenges common to the start-up of a drilling program, and we anticipate the full benefit of more sustained production from the completed wells in our Palmetto and Maverick areas and the initial production from the first two completed wells at Marquis to be realized in the third and fourth quarters.”
Eighty-seven percent of Sanchez Energy’s proved reserves at June 30 were oil-weighted, and 91% of the company’s proved reserves were classified as proved undeveloped as compared to 86% at Dec. 31. The present value of the future net revenues of Sanchez Energy’s proved reserves at June 30 was $308.9 million as compared to $152.4 million at Dec. 31, the company said.
The company’s mid-year reserves report identified 9.8 million boe of probable reserves and 4.0 million boe of possible reserves, for total 3P reserves of 28.8 million boe. The majority of the 3P reserves are within its 9,500 net acres in the Palmetto area in Gonzales County, TX, the company said.
Sanchez Energy has internally estimated that it has 800-1,200 net unrisked Eagle Ford drilling locations across its 95,000 net acre position (using 120- to 80-acre well spacing) targeting a total resource potential of 250-380 million boe.
The company’s estimated net production exit rate at June 30 was 1,200 boe/d, of which approximately 90% was oil, which represents a 50% increase over March 31 estimated net production exit rate of 800 boe/dd.
At the end of June the company had five wells waiting on completion. There are two rigs currently running: one in the Palmetto area and one in the Marquis area, with an additional rig to be added to the Palmetto area in August. Production is expected to continue growing in the third and fourth quarters as the company executes the remainder of its 2012 drilling plan and adds the five wells currently waiting on first production, it said. Sanchez Energy reaffirmed its 2012 production exit rate guidance range of 4,000-5,000 boe/d.
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