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Press Release


Sanchez Energy Announces 2012 Capital Budget and 2012 Guidance

HOUSTON, Feb. 14, 2012 /PRNewswire/ -- Sanchez Energy Corporation (NYSE: SN) today announced its capital budget and operating plans for 2012 as well as an initiation of guidance for selected 2012 operating and financial metrics.

2012 Capital Spending and Operating Plans

Sanchez Energy's 2012 capital budget calls for total spending of approximately $136 to $154 million.  The 2012 plan calls for the drilling of 23 gross (16.5 net) wells, investing in central production facilities and related expenditures, leasing additional acreage in its core areas and the shooting of 3-D seismic in support of the company's drilling programs in the volatile and black oil windows of the Eagle Ford Shale trend of south Texas.  The majority of the year's capital plan will be focused on drilling and completing wells, at $126 to $144 million, and is expected to be allocated by area as follows:

  • Palmetto area – 13 gross (6.5 net) wells at a capital cost of $52 to $58 million, with the first well expected to spud in late March
  • Marquis area – 6 gross/net wells at a capital cost of $52 to $58 million, with the first well expected to spud in early March
  • Maverick area – 4 gross/net wells at a capital cost of $22 to $28 million, with the first well expected to spud in late February

The company expects to spend approximately $10 million on central production facilities and related infrastructure, leasing and seismic in support of its drilling program during 2012.

2012 Operating and Financial Guidance

Sanchez exited 2011 producing an average 1,350 barrels of oil equivalent per day (BOEPD).  In the following table, Sanchez provides its operating and financial guidance for 2012.

Metrics                        

Range             

 

 

Production (BOE/D)

 

      Full Year 2012 (avg. BOEPD)      

2,000 - 2,400

      Expected 2012 exit rate (BOEPD)   

4,000 - 5,000

Full Year Financial

 

      LOE ($/MM)              

$5.0 to $ 5.5

      G&A ($/MM)              

$7.0 to $ 8.0

      Production Taxes (% of Revenue)    

7.0% to 7.5%

Management Comments

Tony Sanchez, III, Chairman and Chief Executive Officer of Sanchez Energy, said: "Sanchez Energy's capital spending program for 2012 is heavily weighted toward the drilling of wells and should move us steadily toward our goal of converting our extensive undeveloped acreage position into proven reserves, growing our production base and generating cash flow.  We expect to be able to fund this capital program with the proceeds from our recent initial public offering, our increasing cash flow and a modest amount of debt.  The impact of our drilling activities, which will commence during the first and second quarters of 2012, should be evident in our reported production volumes throughout the second half of the year with an expected 2012 production exit rate in excess of 4,000 barrels of oil equivalent per day."

Forward Looking Statements

This press release contains 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. 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," or their negatives, other similar expressions or the statements that include those 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, which may cause actual results to differ materially from those implied or expressed by the forward-looking statements, including but not limited to, the continued production of oil and gas at historical rates, costs of operations, delays, and any other difficulties related to producing oil or gas, the price of oil or gas, marketing and sales of produced oil and gas, estimates made in evaluating reserves, competition, general economic conditions and the ability to manage and continue growth.  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.  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 use certain terms in this press release, such as total 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.

Company contact:
Michael G. Long
Senior Vice President and Chief Financial Officer
Sanchez Energy Corporation
(713) 783-8000

SOURCE Sanchez Energy Corporation