Finance & Investing
News Services
Newsletters
Get free industry updates via email.
Daily News
Weekly News
Equipment Updates
Weekly Job Register
Monthly Event Guide
Our privacy
pledge.


advertisement

Sanchez to Acquire Shell's Eagle Ford Stake

change text size

Royal Dutch Shell plc will sell to Sanchez Energy Corp. its interest in Eagle Ford shale assets as the company refocuses its North American portfolio on acreage where it can reach the scale it needs to successfully execute projects.

Houston-based Sanchez will acquire Shell’s 100 percent working interest in approximately 106,000 net acres in Dimmit, LaSalle, and Webb counties in south Texas, which includes approximately 176 operated producing wells and associated field facilities and infrastructure.

The assets include 60 million barrels of oil equivalent of proved reserves. Net production from this acreage in first quarter 2014 was approximately 24,000 barrels of oil equivalent per day (boepd); around 60 percent of this production was crude and natural gas liquids.

The acquisition will boost Sanchez’s position in the Eagle Ford to around 226,000 acres, with up to 3,000 potential drilling locations and average first quarter 2014 pro forma production of about 42,800 boepd, Sanchez said in a May 21 press statement. The pro forma potential drilling locations of nearly 3,000 wells include 200 identified low-risk and high rate of return drilling locations and up to 800 additional potential locations.

Sanchez said the acquisition would be immediately accretive to earnings and cash flow per share.

“This transaction is a catalyst in our strategy to grow through both the drill bit and prudent asset acquisitions,” said Sanchez President and Chief Executive Officer Tony Sanchez III in a May 21 press release.

He added that the 200 de-risked ready to drill locations included in the acquisition will provide at least four years of drilling inventory at a 50-well per year pace. This activity is expected to generate well-level rates of return of more than 35 and 50 percent.


12

View Full Article



Karen Boman has more than 10 years of experience covering the upstream oil and gas sector. Email Karen at kboman@rigzone.com.

WHAT DO YOU THINK?

Post a Comment Generated by readers, the comments included herein do not reflect the views and opinions of Rigzone. All comments are subject to editorial review. Off-topic, inappropriate or insulting comments will be removed.

Related Companies

More from this Author
Karen Boman
Senior Editor | Rigzone.com
 -  Significant Water Recycling Achieved i... (Sep 19)
 -  Unconventional Oil, Gas to Lift US Ene... (Sep 16)
 -  Challenges of the Internet of Things (Sep 5)
 -  Video A Growing Part of Internet of Th... (Sep 4)
 -  Internet of Things Can Increase Effect... (Sep 3)
Most Popular Articles
From the Career Center
Jobs that may interest you
Lease Analyst/Land Technician
Expertise: Lease Analyst
Location: The Woodlands, TX
 
Regional Project Manager
Expertise: Field Service Tech, Fracturing, Project Management
Location: Permian Basin
 
Project Manager - Subsea
Expertise: Mechanical Engineering, Project Management, Subsea Engineering
Location: Houston, TX
 
search for more jobs