HOUSTON, Jan. 15, 2014 /PRNewswire/ -- Sanchez Energy Corporation (NYSE: SN), a rapidly growing independent oil and gas company targeting the on-shore U.S. Gulf Coast oil resource plays with a current focus on the Eagle Ford Shale and the Tuscaloosa Marine Shale, today provided an update on its 2014 capital plan and a summary of its 2014 guidance.
- 2014 capital plan of approximately $650 to $700 million, allocated roughly 95% to the drilling and completing of approximately 70 net wells with the remainder allocated to facilities, leasing and seismic. Approximately 90% of the estimated drilling and completion capital is allocated to our ongoing development of the Eagle Ford Shale.
- Estimated 2014 average production rate range of 21,000 to 23,000 BOE/D which represents over 100% growth compared to 2013 through the continuation and expansion of development drilling across our Eagle Ford asset base with a production stream that is approximately 75% oil, 11% NGL's and 14% natural gas.
- 2014 capital plan is expected to be fully funded from a combination of internally generated cash flow, cash on hand and modest borrowings under our credit facility.
Tony Sanchez III, President and Chief Executive Officer, stated, "All of our core Eagle Ford positions are performing at or above our expectations and are in full scale development mode. We made tremendous strides last year strategically and operationally. Our focus in 2014 is to sustain the momentum generated from our successful transformation into a manufacturing focused resource exploiter. That means strict attention to reducing costs, improving efficiencies and meeting our targets. We plan to focus more of our capital spending on our operated assets in 2014 where we can directly control the pace and timing of our activities. Less than 25% of our total production is planned to come from non-operated properties, down from over 35% in 2013. The vast majority or our operations and expected results will come from our low risk Eagle Ford development activities. We are not forecasting any material production from our step-out activities in Tuscaloosa Marine Shale ("TMS") this year, however, we remain excited about the potential that could start to be developed in the TMS. Successful execution of our 2014 capital plan is expected to result in significant year over year production growth. Our estimated average production rate for 2014 is a range of 21,000 to 23,000 BOE/D and an overall year over year total production increase in excess of 100%.
"We plan to initiate our drilling activities in the TMS in 2014 and have allocated approximately 10% of our operating capital to this rapidly emerging play. Our drilling will be a combination of operated and non-operated wells, with our first operated well expected to spud in the first half of 2014. We expect the substantial increase in TMS industry activity during 2014 to positively influence the well cost structure and overall knowledge of the play."
2014 Operating and Financial Guidance
The following table provides a summary of Sanchez Energy's operating and financial guidance for 2014:
Production Guidance (BOE/D)
Full Year 2014 Average
Full Year 2014 Operating Cost and Expense Guidance ($/BOE)
Oil and natural gas production expenses
Production and ad valorem taxes
Approximately 50% of expected 2014 oil production is hedged at an average swap and/or floor price of $94 per barrel and approximately 50% of expected 2014 natural gas production is hedged at an average swap and/or floor price of $4.15 per mmbtu.
As of December 31, 2013, the Company had 46,464,879 shares of common stock outstanding. Assuming full conversion of both series of Preferred Stock, the Company would have 63,956,379 shares outstanding.
About Sanchez Energy Corporation
Sanchez Energy Corporation is an independent exploration and production company focused on the acquisition and development of unconventional oil resources in the onshore U.S. Gulf Coast, with a current focus on the Eagle Ford Shale where we have assembled approximately 125,000 net acres. The Company also has approximately 40,000 net acres targeting the Tuscaloosa Marine Shale. 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 Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. 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, including statements relating to the funding of our capital budget and the allocation of our capital, our ability to exploit our resources successfully and grow our production and reserves, anticipated industry activity in the areas in which we operate, successfully closing any announced acquisitions, the anticipated benefits of such acquisitions, any planned takeover of operations, future down-spacing and movement to pad drilling to further reduce costs and to produce additional upside potential and other aspects of any proposed acquisitions. 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, the words "will," "potential," "believe," "estimate," "intend," "expect," "may," "should," "anticipate," "could," "plan," "predict," "project," "profile," "model," "strategy," "future," or their negatives, other similar expressions or the statements that include these words, are intended to identify forward-looking statements, although not all forward-looking statements contain such identifying words.
Such statements are subject to a number of assumptions, risks and uncertainties, many of which are beyond the control of Sanchez Energy, and which may cause actual results to differ materially from those implied or expressed by such forward-looking statements, including, but not limited to, the risk that our assets will not produce as anticipated, the risk that we will fail to successfully integrate any acquired assets, the risks that we will not continue to produce oil and gas at our historical rates, that our costs of operations will be materially different than anticipated, that we will encounter delays or other difficulties related to producing oil or gas, that the price of oil or gas will be different than our expectations, that we will encounter unforeseen difficulties in the marketing and sales of produced oil and gas, that estimates made in evaluating our reserves will be erroneous as well as risks and uncertainties related to competition, general economic conditions and our ability to manage and continue our growth and all of the other assumptions, risks and uncertainties described in Sanchez Energy's Annual Report for the fiscal year ended December 31, 2012 and any updates to those risk factors set forth in Sanchez Energy's Quarterly Reports on Form 10-Q. Further information on such assumptions, risks and uncertainties is available in Sanchez Energy's filings with the Securities and Exchange Commission ("SEC"). Sanchez Energy's filings with the 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 occur, 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.
Michael G. Long
Executive Vice President and Chief Financial Officer
Sanchez Energy Corporation
Gleeson Van Riet
SVP, Capital Markets & IR
Sanchez Energy Corporation
SOURCE Sanchez Energy Corporation