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
 -  AWI Offers Alternative to Conventional... (Aug 25)
 -  Maersk to Lay Off Portion of Houston W... (Aug 21)
 -  Petroleum Engineers See Highest Increa... (Aug 21)
 -  Lower Tertiary Trend Remains Focus of ... (Aug 20)
 -  New Model Needed for Oil, Gas Data Com... (Aug 15)
Most Popular Articles
From the Career Center
Jobs that may interest you
Lean Manufacturing Leader
Expertise: Process Management
Location: Houston, TX
 
Sales Account Executives- 2 openings
Expertise: Business Development, Sales and Marketing, Technical Sales
Location: Houston, TX
 
Outside Sales - VFD
Expertise: Business Development, Sales and Marketing, Technical Sales
Location: Webster, TX
 
search for more jobs