Current SN Stock Info

Sanchez Energy Corporation (ticker: SN) released year-end 2017 proved reserves and operating results for the fourth quarter and full year 2017.


  • Proved reserves increased by 88% during the year to approximately 363 MMBoe, with a reserve replacement ratio of roughly 762% in 2017
  • Fourth quarter 2017 production of nearly 7.5 MMBoe, or 81,977 BOEPD
    • The company’s production mix during the fourth quarter 2017 consisted of approximately 34% oil, 34% natural gas liquids and 32% natural gas
  • Full year 2017 production was approximately 25.7 MMBoe, or 70,320 BOEPD
Sanchez Energy Grows Proved Reserves by 88%, Sets Production Record

Sanchez Energy Overview, Feb. 2018

“Sanchez Energy showed strong reserve growth last year, with an 88 percent increase in the company’s proved reserves,” said CEO Tony Sanchez. “Through our acquisition of the Comanche properties and subsequent drilling success, the company’s proved reserves increased to a record 363 MMBoe at year-end.

“Importantly, we achieved a reserve replacement ratio of 762 percent in 2017, in large part due to the expansion of the step-out area from Western Catarina into Central Catarina and identification of a second Lower Eagle Ford target in Comanche.

“Despite weather-related operational challenges in September and October of last year, the company delivered solid production during the fourth quarter 2017 of almost 82,000 BOEPD, the midpoint of our guidance and brought 64 gross Comanche wells on-line during the quarter.  At Briscoe Catarina South, in Comanche Area 3, we successfully completed a four-zone stack development test of 17 wells during the quarter.

“The wells showed average 30-day initial production rates of approximately 1,252 BOEPD from two Lower Eagle Ford zones and 675 BOEPD from two Upper Eagle Ford zones. At Chupadera Ranch, in Comanche Area 7, our initial Lower Eagle Ford A and B appraisal wells exceeded our estimates with an average 30-day initial production rate of approximately 640 BOEPD.  We believe this appraisal confirms the existence of two viable drilling zones, which helps de-risk approximately 100 wells in an area of Comanche that was not highly valued at the time of acquisition.

“Additionally, during the fourth quarter 2017 we began receiving positive results from tests involving a new tight cluster completion design.  During the quarter we brought a total of 9 wells on-line from three pads in Area 5 utilizing the tight cluster design.  The test wells are currently producing 30-60 percent more than offset wells completed with our standard design.  On the pad with the longest production history, the Briscoe Cochina West Ranch 84H and 85H wells have an average per well 30-day initial production rate of approximately 1,060 BOEPD, which is roughly a 50 percent increase to the offset wells which used the standard design.

“Although we are far from finished with completion testing, the results from the tight cluster completion design appear to be significant.  We intend to continue to test the tight cluster completion design across other assets and areas of Comanche, in addition to other completion designs that seek to further optimize performance by adjusting frac fluids and other design parameters.

“With our continuing focus on financial discipline and delivering a sustainable business model of organic production growth while spending within cash flow, we have budgeted $420 million to $470 million in capital spending in 2018, which is a reduction of roughly $100 million at the midpoint of guidance when compared to last year.  Despite this reduced spending, we have a very active drilling campaign with an operated rig count of seven rigs and four completion spreads.  We remain on pace to reach production of approximately 90,000 BOEPD within the first half of 2018,” Sanchez.

Operations update

During the fourth quarter 2017, the company spud 38 gross (14.3 net) wells and completed 80 gross (35.6 net) wells.

During the fourth quarter 2017, the company brought on-line 64 wells at Comanche, 8 wells at Catarina and 13 wells at Maverick.  As of June 30, 2017, the company had maximized the allowable 30 well drilling bank at Catarina that can be applied towards its current annual drilling commitment period, which extends from July 1, 2017 to June 30, 2018.

As of Dec. 31, 2017, the company had drilled an additional 10 wells towards its annual 50 well drilling commitment for the one-year drilling period ending June 30, 2018, resulting in 40 wells in total towards the annual 50 well drilling commitment.

As of Dec. 31, 2017, the company had 2,165 gross (861.6 net) producing wells with 78 gross wells in various stages of completion.

Sanchez Energy Grows Proved Reserves by 88%, Sets Production Record

Sanchez Energy Production Growth and 2017-18 CapEx, Feb. 2018

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