Sanchez Energy Corp. (NYSE: SN) detailed first-quarter 2015 operations and production on April 22. During the quarter, 45,217 barrels of oil equivalent per day (boe/d) was produced. This was a 141% increase over first-quarter 2014’s production, and the initial guidance was exceeded by about 40 Mboe/d.
For the rest of the year, average production should be between 40 Mboe/d and 44 Mboe/d.
The majority of the drilling and completions budget—more than 90%--will focus on Catarina in the Eagle Ford. Well costs there currently are below $4.5 million, Sanchez said. The 2015 capex ranges between $600 million and $650 million. Of that amount, $560 million to $600 million will spud 75 net wells and complete 88 net wells. The remaining $40 million to $50 million will fund midstream, leasing, and other needs. More than 90% of the capex will be used to drill and complete wells, Sanchez said.
At Catarina, there are three vertical zones being targeted for stacked development in the Lower, Middle and Upper Eagle Ford. Results from the first stacked development location, a 10-well pad in Western Catarina, exceeded initial expectations and the wells are performing above the Lower Eagle Ford type curve. For overall operations, there are currently 544 gross producing wells, and 24 gross wells are being completed.
There is a spudder rig in Catarina that is saving about $150,000 per well, the company added. In Eastern Catarina, results are improving. On three different pads, six wells were drilled since 2014, and performance on each pad has improved. Sanchez plans to put an additional two-well pad on production in Central Catarina’s southern area during second-quarter 2015.
In the Cotulla/Wycross and Marquis areas, there have been cost savings throughout the first quarter. The most recent five-well pad was drilled and completed for $4.3 million per well, including well site facilities and an estimate for the initial lift application. In Marquis, a three-well pad was completed for about $1.5 million per well. Sanchez said it can drill and complete new wells at Marquis for about $5 million each.
Houston-based Sanchez Energy Corp. operates in the Tuscaloosa Marine and Eagle Ford shales.
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