Sanchez Energy adds up its Eagle Ford barrels: 34 million

Sanchez Energy's Prost well in the Marquis area in Fayette County in the Eagle Ford Shale. (Sanchez Energy)

Sanchez Energy’s Prost well in the Marquis area in Fayette County in the Eagle Ford Shale. (Sanchez Energy)

The Houston-based Sanchez Energy Corp. said in a recent call with analysts that it thinks it will soon have about 34 million barrels of proven reserves in the Eagle Ford Shale.

That number includes the company’s own acreage in the South Texas oil and gas field, as well as acreage near Cotulla that it’s in the process of purchasing.

Sanchez focuses on the liquids-rich area of the Eagle Ford. It has about 94,000 acres in Gonzales, Zavala, Frio, Fayette, Lavaca, Atascosa, Webb and Dewitt counties.

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Here are some details from the company’s recent first-quarter call with analysts:

Sanchez owns the rights to drill to all depths on most of its acreage. Other payzones besides the Eagle Ford include the Buda Limestone, Austin Chalk and Pearsall Shale formations.

Sanchez has 33.5 net wells in the Eagle Ford (after working-interest partners and mineral owners are paid) and at the end of the first quarter was making between 8,500 and 9,500 barrels of oil per day. (Overall, Sanchez has 49 producing wells with six wells in various stages of completion. It is partnered with Marathon Oil on some of its wells in the “Palmetto” area, which it considers some of the best Eagle Ford rocks that are out there).

The company also expects to close this quarter on the purchase of the Hess Eagle Ford acreage in the Cotulla area, which will add another 4,000 to 5,000 barrels of oil equivalent per day of production.

Sanchez Energy’s Eagle Ford acreage.

Sanchez Energy’s Eagle Ford acreage.

That purchase will add about 40,000 acres, which the company says is in the thickest part of the Pearsall Shale. Mike Long, CFO and senior vice president, told analysts, “So I think we’ve taken a pretty big step in that direction when it comes to setting ourselves up for benefiting from the Pearsall, should it be a play that, that becomes commercial in large quantities.”

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Post-Hess purchase, Sanchez will have 100 producing wells in the region.

Sanchez has three drilling rigs operating in South Texas.

Sanchez also considers itself the publicly-traded company with the most exposure to the Eagle Ford boom. “We believe this acreage position ranks us as the public company with the greatest exposure to this trend, based upon net acres per $1 million of enterprise value,” CEO Tony Sanchez III said.

You can read the transcript of the company’s call with analysts here on Seeking Alpha.