Sanchez Energy Corporation, a fast growing independent oil and gas company targeting the liquids-rich Eagle Ford Shale, Pearsall Shale, Austin Chalk, and Buda Limestone, today announced its 2013 capital budget and guidance for selected 2013 operating and financial metrics.
2013 total capital expenditure program of approximately $347 million, including approximately $327 million for drilling and completion activities
Expect to drill and complete approximately 46 gross (33.5 net) wells in 2013
2013 year-end estimated production exit rate of 8,500 to 9,500 BOE/d, an increase of 100% over 2012 year-end production exit rate of 4,500 BOE/d
Expect to significantly increase drilling and completion activity in the Palmetto and Marquis areas
Performing multiple tighter density well tests to better understand optimal spacing between wells, including a five well 40-acre pilot in the Palmetto area and several 60-acre well pilots in the Marquis area
Drilling the majority of wells on multi-well pads to further gain operational efficiencies, including reduced rig mobilization time and costs in addition to shared production and completion facilities
Focused on infrastructure build-out to relieve takeaway capacity constraints in the Palmetto and Marquis areas, thus capturing optimal flow volumes and minimizing gas flaring while wells are being hooked up to sales
Tony Sanchez III, President and Chief Executive Officer said, "We are excited about accelerating the development of our Marquis area, which is proving to be highly productive and a significant source of value for the Company where well performance is steadily improving and cost efficiencies are being realized. The Prost B#1H averaged 808 BOE/d for the first 60 days, a significant improvement over the Prost #1H and #2H, as we have refined our completion techniques and as a result are witnessing substantially improved oil flow rates and reservoir pressure maintenance. As shown in the table below, we are allocating a larger percentage of our total capital budget to our Marquis area than we did last year. Over 90% of our capital budget is targeted toward drilling and completing wells and over 90% of that amount is focused on the Palmetto and Marquis areas."
Mr. Sanchez continued that "as we execute our 2013 drilling plan, we expect reserves, production, and cash flow to steadily increase as we continue to expand our development program while focusing on drilling and completion efficiencies. Our 2013 year-end exit rate production guidance of 8,500 to 9,500 BOE/d is approximately double the 4,500 BOE/d exit rate that we achieved in 2012. Our expectations are to fully fund this growth through a combination of cash on hand, operating cash flow, and borrowings under our credit facilities. As the Company's reserves and base level of cash flow increase, we expect there to be a commensurate increase in our borrowing capacity."
2013 Capital Program and Operating Plans
Sanchez Energy's 2013 capital program calls for total spending of approximately $347 million to drill 46 gross (33.5 net) wells and to fund production facilities and related expenditures, additional acreage acquisition, and seismic expenditures. Over 90% of the capital program will be allocated towards drilling and completing wells in the Company's three projects areas.
2013 Operating and Financial Guidance
Sanchez Energy's 2012 year-end production exit rate was 4,500 BOE/d, and Sanchez Energy's 2013 year-end estimated production exit rate range is forecasted to be between 8,500 and 9,500 BOE/d.
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