By February 29, 2016 Read More →

Sanchez Energy loses $1.5 billion in 2015, says ‘balance sheet remains strong’

Catarina wells are now over 40% more productive than when Sanchez Energy acquired them

Texas-based Sanchez Energy Corporation says it lost $1.5 billion in 2015 despite achieving record oil production and cutting capital expenditures by over a third compared to 2014.

“2015 was a strong year for Sanchez Energy despite the most challenging commodity environment we have faced as a company,” said CEO Tony Sanchez, III.

“The company’s cash position was aided by several key divestitures with Sanchez Production Partners which generated approximately $430 million in cash proceeds without needing to issue additional equity or debt. Our balance sheet remains strong and we are well prepared to weather a prolonged down cycle.”

Sanchez EnergyHIGHLIGHTS FOR Q4 2015

  • Record production of 5.3 million barrels of oil equivalent (“MMBoe”)
  • Record quarterly average daily production of 58,115 barrels of oil equivalent per day (“Boe/d”)
  • Better than expected production results were driven by Catarina production of 46,030 Boe/d, the highest quarterly production level recorded to date from the asset, as well as strong performance from new wells in the Cotulla area
  • Average quarterly well costs at Catarina of $3.5 million per well and wells are 40 percent more productive since first acquired
  • $435 million cash balance at year-end 2015 and $735 million in total liquidity
  • Closed the Western Catarina Midstream Divestiture for approximately $345 million in cash
  • Entered a joint venture with Targa Resources Partners LP (“Targa”) to construct a cryogenic processing plant and high pressure gathering pipeline near Catarina, which is expected to provide a path to improved yields, lower processing fees, and significant marketing benefits
3 Months Ended 12 Months Ended
Dec. 31, Dec. 31,
2015 2014 2015 2014
(in thousands, except per share amounts)
Oil sales $ 63,417 $ 124,403 $ 307,971 $ 538,887
Natural gas liquids sales 20,409 23,071 69,011 66,989
Natural gas sales 25,706 25,017 98,797 60,188
Total revenues 109,532 172,491 475,779 666,064
Oil and natural gas production expenses 46,362 29,378 156,528 93,581
Production and ad valorem taxes 6,859 8,626 26,870 37,787
Depreciation, depletion, amortization and accretion 48,031 112,800 344,572 338,097
Impairment of oil and natural gas properties 213,821 1,365,000 213,821
General and administrative (inclusive of stock-based compensation expense of ($1,093) and ($13,045), respectively, for the three months ended December 31, 2015 and 2014, and $14,831 and $12,843, respectively, for the year ended December 31, 2015 and 2014) 14,870 2,693 74,160 63,692
Total operating costs and expenses 116,122 367,318 1,967,130 746,978
Operating loss     (6,590 )     (194,827 )     (1,491,351 )     (80,914 )


  • Record annual production of 19.2 MMBoe for an average annual production rate of 52,560 Boe/d, an increase of 72% over 2014 production
  • Record oil production averaging 19,629 barrels per day (“Bbl/d”)
  • Upstream capital expenditures including accruals of $545 million in 2015 compared to $867 million in 2014, a reduction of approximately 37% over 2014
  • $155 million mark-to-market value of hedging position at year-end 2015 corresponding to hedge contracts covering approximately 82% of expected 2016 revenues, and $189 million current mark-to-market value of hedge position as of February 24, 2016
  • Completed the 50-well annual drilling commitment at Catarina for the period July 1, 2015 through June 30, 2016, which provides the Company with significant operational and financial flexibility in 2016 and 2017, as up to 30 wells drilled in excess of the minimum commitment can be carried forward to the next annual period
  • 2015 year-end proved reserves are approximately 128 MMBoe, with a PV-10, a non-GAAP measure of $594 million

inside-enduralloy-pipeReducing tubing wear, extend well run-times with EndurAlloy™ – J55 production tubing with boron diffused into substrate to create extra hard interior surface.



During the fourth quarter of 2015, the company spud 14 gross wells (13.5 net) wells, and completed 29 gross wells (29 net wells). At Catarina, Q4 2015 development was focused primarily in Western and South-Central Catarina with well costs in Q4 2015 averaging approximately $3.5 million per well.

On Jan. 1, the company completed the 50 well annual drilling commitment at Catarina for the year ending on June 30. Also, the company has the flexibility to accrue (or bank) up to 30 wells for the following annual drilling commitment.

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