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Sanchez Provides Eagle Ford Shale Operations Update

Source: www.gulfoilandgas.com 10/29/2012, Location: North America

Sanchez Energy Corporation, a fast growing independent oil and gas company with a 95,000 net acre position targeting the liquids-rich Eagle Ford Shale, Pearsall Shale, Austin Chalk, and Buda Limestone, today provided a drilling and production update on the Company's third quarter production and operating activities.

Sanchez Energy's estimated net production exit rate at September 30, 2012 was approximately 1,700 barrels of oil equivalent (BOE) per day, of which approximately 86% was oil. This rate represents a 42% increase over June 30, 2012 estimated net production exit rate of 1,200 BOE/d and an increase of over 350% from the same period a year ago. Production is expected to significantly increase during the fourth quarter as the Company executes the remainder of its 2012 drilling plan and adds seven wells already drilled and currently waiting on completion. Sanchez Energy reaffirms its 2012 production exit rate guidance range of 4,000 to 5,000 BOE/d.

Tony Sanchez, III, President and Chief Executive Officer, said, "We are executing our accelerated drilling program with two rigs currently drilling in each of our three major project areas after closing our $150 million convertible preferred equity offering. As we continue more development-type drilling in each project area and bring online wells currently waiting on completion, we expect to rapidly grow our production from its base of 1,700 BOE/d at the end of September. We are also testing tighter spacing in each of our areas, which may allow us to materially increase our 800 to 1,200 net identified potential drilling locations and our 250 to 380 million barrels of oil equivalent net resource potential based on 80 to 120 acre well spacing."

Operations and Well Status Update
There are two rigs running in the Palmetto area, two rigs running in the Marquis area, and two rigs running in the Maverick area.

Palmetto Area Gonzalez County:
Sanchez Energy has nine producing wells, one well in initial flow back, two wells undergoing completion, two wells waiting on completion, and two wells currently drilling in its Palmetto area. Plans are to continuously employ two drilling rigs, which are expected to spud a total of 16 gross (8 net) wells in 2012 in this area.

- The Barnhart #9 well (W.I. 50%, 17 frack stages), in the central part of the Palmetto area, was drilled to a measured depth of 16,260 feet (lateral length of 5,813 feet) and placed on production August 11, 2012 at a 24-hour initial rate of 760 BOE/d.

- The Ward E #1 well (W.I. 50%, 17 frack stages), in the northern part of the Palmetto area, was drilled to a measured depth of 14,057 feet (lateral length of 4,307 feet) and is currently in the initial stages of its flow back process.

- The Barnhart #14 and #15 (both W.I. 50%) are currently being fracture stimulated. The Barnhart #14 was drilled with a lateral length of 7,176 feet and is expected to be fracked with 25 stages. The Barnhart #15 was drilled with a lateral length of 7,424 feet and is expected to be fracked with 26 stages. These wells are adjacent to the Barnhart #5 and #6, which had 24-hour initial production rates of 1,467 BOE/d and 1,420 BOE/d, respectively.

- The Barnhart #18 (W.I. 50%), in the southern portion of the Palmetto area, was drilled to a measured depth of 16,478 feet (lateral length of 4,965 feet) and is currently waiting on completion.

- The Barnhart #19 (W.I. 50%) is currently being drilled from the same pad location as the Barnhart #18. Both wells will be fracture stimulated once drilling operations on this pad are complete. The anticipated lateral length for this well is 5,400 feet.

- The Barnhart A #1 (W.I. 50%), also located in the southern portion of the Palmetto area was drilled to a measured depth of 16,788 feet (lateral length of 4,708 feet) and is currently waiting on completion.

- The Barnhart A #2 (W.I. 50%) is currently being drilled from the same pad location as the Barnhart A#1. Both wells will be fracture stimulated once drilling operations on this pad are complete. The anticipated lateral length for this well is 6,200 feet.

- The Company expects to drill a five-well pilot program (Barnhart #23, #24, #25, C #1, and C #4, all 50% W.I.) from a single pad to test 40-acre well spacing in its southern portion of the Palmetto area. Additionally, the Barnhart #23, #25, and C #1 will be part of a micro-seismic program to gather timely information on completions that can be applied across the Palmetto area. The micro-seismic program will provide subsurface information for seismic attribute analysis to better understand the reservoir and its production capabilities and profile.

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