Sanchez Energy Sells Non-Core Eagle Ford Shale AssetsSource: www.gulfoilandgas.com 10/24/2016, Location: North America
Sanchez Energy Corporation (Sanchez Energy) has executed a definitive agreement with Carrizo Oil & Gas, Inc. (Nasdaq:CRZO) (Carrizo) to sell certain non-core assets in the Eagle Ford Shale.
- Cash consideration of $181 million upon closing, subject to normal and customary closing adjustments;
- Approximately 15,000 net acres primarily located in La Salle and McMullen Counties, TX;
- Net proved reserves of 6.9 MMBoe (90% developed); and
- Net production of approximately 3,000 barrels of oil equivalent per day (Boe/d) (61% oil) from 112 gross (93 net) wells.
The divestiture of non-core assets is consistent with the Company’s strategy to increase liquidity, improve its balance sheet and focus on growth of the Catarina asset, where Sanchez Energy has already identified over 1,350 high quality drilling locations. The asset package that will be divested is located in the eastern portion of the Cotulla area. With the Company’s recent focus on the Catarina and Maverick areas of its asset base, this strategic divestiture will provide the Company with increased financial flexibility, including the ability to expand its capital allocation in core areas.
“The transaction announced today is further evidence of our dedication to improving our balance sheet while maintaining our focus on core areas of operations,” said Tony Sanchez, III, Chief Executive Officer of Sanchez Energy. “Proceeds from the transaction, which is expected to close in the fourth quarter 2016, are expected to enhance the Company’s already strong liquidity position which, as of the end of the third quarter 2016, totaled approximately $629 million, consisting of approximately $329 million in cash and cash equivalents and an undrawn bank credit facility with an elected commitment amount of $300 million. We continue to pursue accretive asset acquisitions and an organic growth strategy that stems from highly economic wells at today’s commodity price level, our low cost structure and from our extensive inventory of high quality drilling opportunities.”
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