Independent exploration and production company Sanchez Energy $SN reported Q217 earnings before the market Wednesday results below analyst views but lower capex and higher production saw the stock rise 10%.
Independent exploration and production company Sanchez Energy $SN reported Q217 earnings before the market Wednesday results below analyst views but lower capex and higher production saw the stock rise 10%. In July Sanchez said it would cut full year capex by $75 million-$100 million from its original guidance of $500 million. Production was boosted by the acquisition of Anadarko’s assets in the Eagle Ford basin.
Earnings: Net income of $46.3 million compared to $9.7 million during the first quarter of 2017 and Adjusted EBITDA (a non-GAAP financial measure) of approximately $85.1 million during the second quarter 2017, which was up approximately 68 percent when compared to the first quarter 2017. Revenues of $175.7 million, an increase of 31 percent over the first quarter 2017; Adjusted Revenue (a non-GAAP financial measure), inclusive of hedge settlements, was approximately $182.9 million.
- The Company raised approximately $67 million in cash during the second quarter through the sale of its Marquis asset, remaining Cotulla assets, and 10 percent interest in Silver Oak II Gas Processing Facility; and
- As of June 30, 2017, the Company had approximately $560 million in liquidity, with approximately $128 million in cash and cash equivalents and approximately $432 million of combined borrowing capacity under the Company’s two bank credit facilities.
Image: Sanchez Operations
“Driven by the positive impact of the Comanche transaction, our second quarter 2017 Adjusted EBITDA increased more than 68 percent over the prior quarter. We achieved this level of financial performance despite the impact of the large completion trials at Catarina, which did not provide the production response we expected. As we disclosed in our operational update last month, we have returned to our standard well completion design for the 32 Catarina wells that remain in our 2017 development plan, and now expect to reach our production growth expectations of 90,000 Boe/d to 100,000 Boe/d in the first half of 2018. We also anticipate that cash margins will improve throughout the second half of 2017 and into 2018, as increases in production will tend to reduce our costs on a per unit basis.” Said Tony Sanchez, III, Chief Executive Officer of Sanchez Energy
Sanchez Energy Reports 2Q17 Net Production of 73.3 Mboe/d; Rising 42% Q/Q8/9/2017
Sanchez Energy reported second quarter 2017 net production of 73.3 Mboe/d, rising by 41% from first quarter production of 51.8 Mboe/d. The boost was a result of the acquisition of Anadarko’s assets in the Eagle Ford.
Production by Commodity:
– Natural Gas: 162.8 Mmcf/d (+42% Q/Q)
– Crude Oil: 22.8 Mbbl/d (+31% Q/Q)
– Natural Gas Liquids: 23.5 Mbbl/d (+54% Q/Q)
Commodity price realizations Q217, including the impact of hedge settlements
- $47.79 per barrel (“Bbl”) of oil,
- $17.31 per Bbl of NGL,
- $3.16 per thousand cubic feet (“Mcf”) of natural gas.
As of Aug. 9, 2017, the Company’s hedge position consisted of 21,522 barrels of oil per day (“Bbls/d”) and 161,818 million British thermal units of natural gas per day (“MMBtu/d”) for the second half of 2017, 17,521 Bbls/d and 186,881 MMBtu/d in 2018, 8,627 Bbls/d and 48,340 MMBtu/d in 2019 and 4,187 Bbls/d and 25,945 MMBtu/d in the first quarter 2020. Additional information on the Company’s hedge positions by entity can be found in the Sanchez Energy Investor
LIQUIDITY AND CREDIT FACILITY
As of June 30, 2017, the Company had liquidity of approximately $560 million, which consisted of approximately $128 million in cash and cash equivalents, an undrawn Sanchez Energy revolving credit facility with a borrowing base of $350 million and an elected commitment amount of $300 million, and $131.5 million of available capacity under a subsidiary-level revolving credit facility, non-recourse to Sanchez Energy, with a borrowing base of $330 million
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