Sanchez Energy to snap up more Eagle Ford Shale assets

Houston-based Sanchez Energy Corp. is again expanding its Eagle Ford Shale position with a deal to buy 3,600 net acres in South Texas for $220 million in cash.

The deal, announced Monday, will boost Sanchez Energy’s daily production in the fourth quarter by 2,000 barrels of oil per day, a 15 percent bump over its current 13,500 barrels per day, according to regulatory filings.

The young exploration and production company expects to take over Denver-based Rock Oil Co.’s assets in McMullen County after the deal closes at the end of the third quarter.

A focus on the Eagle Ford is top of mind in the company’s C-suite, as about 98 percent of its investments will go to the booming South Texas region this year.

Eagle Ford frenzy: Drilling permit applications soar in Texas

The land in the Rock Oil deal is roughly 2.6 percent of the size of Sanchez Energy’s total stake in the Eagle Ford, a 140,000-net-acre position. Oil makes up 81 percent of the proved reserves on the new acreage, and natural gas liquids are about 8 percent.

In the same announcement, Sanchez Energy laid out its investment plans for next year: $700 million in capital expenditures, the company said, will be almost entirely devoted to drilling and completion activities in the Eagle Ford.

“We believe this capital plan along with our high quality asset mix will enable us to double our total annual production volumes from 2013 to 2014,” said Tony Sanchez, president and chief executive of Sanchez Energy, in a written statement.

Also on FuelFix:

Life on the Shale