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Ohio Utica Shale

Sanchez Energy buys Eagle Ford land from Royal Dutch Shell

By Bob Downing Published: May 22, 2014

From Sanchez Energy on Wednesday:


Sanchez Energy Doubles Proved Reserves And Production With Acquisition Of 106,000 Contiguous Net Acres In The Eagle Ford Trend Of South Texas
$639 Million Acquisition Will Add Approximately 60 MMBOE Of Proved Reserves To The Company's Asset Base; Average First Quarter 2014 Production Of 24,000 BOE/D

HOUSTON, May 21, 2014 /PRNewswire/ -- Sanchez Energy Corporation (NYSE: SN), today announced a definitive agreement with an effective date of January 1, 2014 to purchase operated assets to be named Catarina in the Eagle Ford trend of South Texas from wholly-owned subsidiaries of Royal Dutch Shell plc for approximately $639 million in cash, subject to usual and customary closing adjustments. The assets, consisting of 60 MMBOE of proved reserves and 24,000 BOE/D of average first quarter 2014 production (60% liquids), are located on approximately 106,000 net acres in Dimmit, LaSalle, and Webb Counties, Texas. This additional acreage is expected to bring the total Company position in the Eagle Ford to approximately 226,000 acres with up to 3,000 potential drilling locations and average first quarter 2014 pro forma production of approximately 42,800 BOE/D.


  • Acquisition is expected to provide multi-year inventory of 200 identified low-risk and high-rate-of-return drilling locations and up to 800 additional potential locations to be added pending planned appraisal drilling, bringing the total pro forma potential drilling locations to almost 3,000 wells for the Company
  • 200 identified drilling locations expected to generate returns in excess of 35% - 50%
  • Expected near term production growth, post-closing, from 22 wells that are drilled to total depth and cased but not yet completed and 27 wells that have been drilled with surface casing set
  • Production on the acquired assets during the first quarter of 2014 was comprised of 60% liquids
  • Immediately accretive to earnings and cash flow per share
  • Attractive acquisition value metrics of approximately $10.65 per BOE based on year-end 2013 reserves and $32,000 per BOE/D based upon estimated May 2014 production of 20,000 BOE/D
  • Pro forma production increases by approximately 24,000 BOE/D over the Company's 18,800 BOE/D average rate for first quarter of 2014 for a total of 42,800 BOE/D. Current estimated Catarina production rate of 20,000 BOE/D
  • Pro forma total proved reserves increase by approximately 60 MMBOE, an increase of over 100% to year-end 2013 proved reserves of 59 MMBOE for a total of 119 MMBOE of proved reserves
    • Proved developed reserves increase by 36 MMBOE
  • Producing assets complemented with significant supporting production and midstream infrastructure
  • The acquired assets are expected to generate a substantial amount of near term cash flow and fully fund their drilling and completion activities in 2015, with only a modest outspend in 2014
  • Fully financed by $950 million committed debt financing, conditioned upon closing of the acquisition and other closing conditions, including execution and delivery of definitive documents
  • The Company will host a conference call on May 22 to discuss the transaction using a presentation posted on its website:



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