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| 8-K - FORM 8-K - Sanchez Energy Corp | d304804d8k.htm |
 Sanchez Energy Corporation
Corporate Presentation
February 2012
Exhibit 99.1 |
 This presentation contains forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933 and Section
21E of the Securities Exchange Act of 1934. All statements, other than statements of historical facts, included in
this presentation that address activities, events or developments that
the Company expects, believes or anticipates will or may occur
in the future are forward-looking statements. Without limiting the generality of the foregoing, forward-looking
statements contained in this presentation specifically include the
expectations of plans, strategies, objectives and anticipated
financial and operating results of the Company, including the Company's
drilling program, production, derivative instruments, capital
expenditure levels and other guidance included in this presentation. These statements are based on
certain assumptions made by the Company based on management's
experience and perception of historical trends, current
conditions, anticipated future developments and other factors believed
to be appropriate. Such statements are subject to a number of
assumptions, risks and uncertainties, many of which are beyond the control of the Company, which may cause
actual results to differ materially from those implied or expressed by
the forward-looking statements. These include, but are not
limited to, changes in oil and natural gas prices, weather and environmental conditions, the timing of planned capital
expenditures, availability of acquisitions, uncertainties in estimating
proved reserves and forecasting production results, operational
factors affecting the commencement or maintenance of producing
wells, the condition of the capital markets generally, as well
as the Company's ability to access them, the proximity to and capacity of transportation facilities, and
uncertainties regarding environmental regulations or litigation and
other legal or regulatory developments affecting the Company's
business and other important factors that could cause actual results to differ materially from those projected as
described in the Company's reports filed with the SEC.
Any forward-looking statement speaks only as of the date on which
such statement is made and the Company undertakes no obligation
to correct or update any forward-looking statement, whether as a result of new information, future events or
otherwise, except as required by applicable law.
References to quantities of oil or natural gas may include amounts that
the Company believes will ultimately be produced but
that
are
not
yet
classified
as
“proved
reserves”
under
SEC
definitions.
Forward-Looking Statements
2 |
 Sanchez Energy Corporation Overview
3
Financial Summary
Reserves And Resource Potential
Eagle Ford Acreage And Drilling Inventory
Production
1.
Management estimates based on ~120 acre spacing on the undeveloped
portion of our acreage. Eagle Ford Acres
~91,000
Eagle Ford Net Unrisked Drilling Locations
(1)
~750
Proved Reserves (MMBoe)
6.7
Oil % of Proved Reserves
84%
Undeveloped % of Proved Reserves
86%
Resource Potential (MMBoe)
~250
9 Months Ended 9/30/11 (Boe/d)
431
2011 Exit Rate (Boe/d)
1,350
2012E Exit Rate (Boe/d)
4,000 - 5,000
Market Capitalization ($MM)
~$650
Enterprise Value ($MM)
~$580
Debt / Enterprise Value
0% |
 High growth oil and gas producer with significant exposure to
lower-risk drilling opportunities in the Eagle Ford Shale
trend of South Texas, one of the fastest growing shale plays in North America
~91,000 net acre position in oil portion of the Eagle Ford
Expect to aggressively grow undeveloped acreage position at attractive
per acre valuations Sanchez Group has a proven track record of
identifying, acquiring, and executing large drilling programs ~40
years of operations
Sanchez
has
been
in
the
oil
and
gas
business
since
1972,
drilled
or
participated
in
over
900
wells,
invested
over
$1 billion in South Texas, and cultivated long-standing
relationships with surface and mineral rights owners in the
Eagle Ford Access to significant technological database
including 3D seismic, 2D seismic, and well logs Near-term
growth leveraged to oil and liquids projects Large
inventory
of
identified
lower
risk,
higher
return
drilling
opportunities
2012
capital
budget:
$136
–
$154
million
for
drilling
and
completions
of
16.5
net
Eagle
Ford
wells
plus
facilities, leasing, and seismic
Transforms
valuation
proposition
through
conversion
of
resource
to
production,
reserves,
and
cash
flow
Majority of Eagle Ford leases have full depth rights and we believe
are prospective for the Buda Limestone, Austin Chalk, and
Pearsall Shale formations, among others ~1,200 net acre position
in the core of the Haynesville Shale ~82,000 net acres
in
northern
Montana
prospective
for
the
Heath,
Three
Forks,
and
Bakken
Shales
Pure Play Eagle Ford
Company
Proven Track Record
Provides Platform for
Growth
Aggressive 2012
Growth Plan
Additional Upside
Summary Highlights
4
Volatile oil window (Gonzales, Fayette, & Lavaca Counties)
Black oil window (Zavala, Frio, & Atascosa Counties)
–
– |
 Directly involved in the energy business for over 12 years
Integral in identifying prospective areas and implementing leasing and
drilling programs in the Eagle Ford and other oil producing
plays Extensive experience drilling a broad range of
conventional and unconventional wells Prior experience includes
JP Morgan Investment Banking (Mergers & Acquisitions) and Zix
Corporation, a Dallas based public technology firm where he continues
to serve on the Board of Directors
MBA, Harvard University; BBA Georgetown University (dual major in
Accounting and Finance, minor in Economics)
SVP and CFO of Edge Petroleum Corporation for 12 years; IPO and
capital markets experience VP Finance at W&T Offshore, a
public E&P company (1996-1997) 17 years of oil & gas
(commercial and investment) banking experience MS (Economics);
University of Illinois 30
years
of
successful
experience
in
oil
and
gas
exploration
and
development
Generated and drilled numerous prospects in the Gulf of Mexico and
along the Gulf Coast Onshore Exploration experience in the
Cretaceous Carbonates along the Texas Gulf Coast Managed
successful exploration programs for over 14 years BS Geology,
Geophysics and Petroleum Engineering Minor; The University of Texas at Austin 1981
Graduate level coursework; University Texas at Dallas 1983
Managing Partner of Garcia Hamilton & Associates, L.P. since
2002 Prior experience includes Smith Graham & Company (Chief
Investment Officer), Cisneros Asset Management (President), and
Salomon Brothers (mortgage-backed securities) BA Economics;
Yale University Tony Sanchez III
Founder, Chairman & CEO
Michael G. Long
SVP & CFO
Management and Directors
5
Patrick Talamas
SVP of Geoscience
Gilbert Garcia
Director |
 ~26,400 net acres
–
Zavala and Frio Counties, Texas –
Black oil window
2012 drilling plans
–
4.0 net operated wells:
$22 –
$28 million
Sanchez Energy Corporation Overview
~91,000 net acres in the Eagle Ford
–
3 primary project areas
–
Large contiguous blocks drive
efficiencies
Drilling inventory
(1)
–
~750
net unrisked Eagle Ford
locations
2012 drilling program
–
$126 –
$144 million to drill 16.5
net Eagle Ford wells
Positioned to expand core Eagle
Ford acreage position
–
~40 year relationships with
mineral and surface owners should
allow for rapid acreage growth
Maverick
1.
Management estimates based on ~120 acre spacing on the undeveloped
portion of our acreage. ~9,400 net acres
–
Gonzales County, Texas –
Volatile
oil window
2012 drilling plans
–
6.5 net wells:
$52 –
$58 million
Company Overview
Eagle Ford Shale Area Map
Palmetto
~54,900 net acres
–
~48,600 net in SW Fayette & NE
Lavaca Counties, Texas –
Volatile
oil window
–
~6,300 net in Atascosa, Webb, and
DeWitt Counties, Texas
2012 drilling plans
–
6.0 net operated wells:
$52 –
$58 million
Marquis
6 |
 Oil-Weighted Reserve & Production Growth
7
Reserves & Potential (MMBoe)
(1)
Average Daily Net Production (Boe/d)
Proved Reserves: 6.7 MMBoe (12/31/11)
1.
Per Ryder Scott as of 12/31/11. 3P reserves principally include the
Palmetto area. 2.
Per management estimates.
3.
Exit rate for last day of 2011. |
 Multi-Year Inventory & 2012 Drilling Program
During
2012
Sanchez
anticipates
spending
$126
–
$144
million
to
drill
23
gross
(16.5
net)
wells
Sanchez
has
identified
a
multi-year
drilling
inventory
of
~750
total
net
unrisked
locations
in
the
Eagle
Ford
–
Additional upside identified in the Austin Chalk and Buda Limestone
formations 9
Eagle
Ford
wells
currently
producing:
7
from
the
Eagle
Ford;
2
from
dual-completions
in
the
Austin
Chalk
and
Buda Limestone
1
additional
vertical
Eagle
Ford
well
awaiting
completion
with
first
production
expected
in
February
2012
Other 2012 capital spending of ~$10 million for facilities, leasing, and
seismic 8
1.
Total identified drilling locations are calculated using ~120 acre
spacing. Net
Net
Unrisked
Planned
Project Area
Acres
Locations
(1)
Net Wells
Eagle Ford
Palmetto
9,416
75
6.5
$52
-
$58
Marquis
54,868
457
6.0
52
-
58
Maverick
26,410
218
4.0
22
-
28
Total Eagle Ford
90,694
750
16.5
$126
-
$144
2012E
($MM)
Drilling Budget |
 Eagle Ford Overview
9 |
 10
Eagle Ford Structure Map |
 11
Eagle Ford Cross Section |
 Maverick Area Natural Fracturing
12 |
 Eagle Ford Shale Overview Map
(1)
13
1.
Transaction information based on Management estimates.
|
 Operational Overview
14 |
 Eagle
Ford
Shale
–
Palmetto
Area
~9,400 net acres in Gonzales County
–
50% / 50% area of mutual interest with Marathon
–
~50% W.I.
–
~75 net identified unrisked locations / ~27
MMBoe
of
unrisked
potential
(1)
–
Exploring down spacing from 120 to 80 acres,
which will increase net identified unrisked
locations to 115 from 75
2012 drilling program
–
$52 –
$58 million committed to Palmetto
–
6.5 net wells planned in Palmetto
15
Palmetto Area Overview
Sensitivity Case Assumptions
(2)
Average
Type
Curve
/
Development
Economics
(2)
Undiscounted Payback and IRR
(2)
1.
Management estimates.
2.
Sensitivity cases, type curves, undiscounted paybacks, and IRRs are
management estimates and are derived from operating experience, offset operator activity, and other published industry information.
3.
At $90 oil.
High
Base
Low
Gross Well Cost ($MM)
$8.5
$8.5
$8.5
24H IP (Boe/d)
1,388
1,125
871
Initial Decline (% / Year)
75%
75%
75%
B-Factor
1.0
1.0
1.0
EUR (MBoe)
750
600
450
PV-10 ($MM)
(3)
$14.0
$9.6
$5.3 |
 Eagle
Ford
Shale
–
Marquis
Area
~54,900 net acres
–
~48,600 net acres in Southwest Fayette & Northeast
Lavaca Counties
–
~6,300 net acres in Atascosa, Webb, and DeWitt
Counties
–
100% W.I. / 100% Operated
–
~457 net identified unrisked locations / ~154 MMBoe
of unrisked potential
(1)
2012 drilling program
–
$52 -
$58 million committed to Marquis
–
6.0 net wells planned in Marquis Area
Marquis Area Overview
Sensitivity Case Assumptions
(2)
Average
Type
Curve
/
Development
Economics
(2)
Undiscounted Payback and IRR
(2)
1.
Management estimates.
2.
Sensitivity cases, type curves, undiscounted paybacks, and IRRs are
management estimates and are derived from operating experience, offset operator activity, and other published industry information.
3.
Reflects well costs under a continuous development program; initial test
wells may have higher costs. 4.
At $90 oil.
High
Base
Low
Gross Well Cost ($MM)
(3)
$7.5
$7.5
$7.5
24H IP (Boe/d)
1,200
1,000
800
Initial Decline (% / Year)
83%
83%
83%
B-Factor
1.3
1.3
1.3
EUR (MBoe)
550
450
350
PV-10 ($MM)
(4)
$9.0
$6.4
$3.3
16 |
 Marquis Area Activity
17 |
 Eagle Ford Shale –
Maverick Area
18
Maverick Area Overview
~26,400 net acres in Zavala and Frio
Counties
–
~80% W.I. / 100% operated
–
~218 net identified unrisked locations / ~58
MMBoe of unrisked potential
(1)
2012 drilling program
–
$22 -
$28 million committed to Maverick
–
4.0 net wells planned in Maverick Area
Sensitivity Case Assumptions
(2)
Average
Type
Curve
/
Development
Economics
(2)
Undiscounted Payback and IRR
(2)
1.
Management estimates.
2.
Sensitivity cases, type curves, undiscounted paybacks, and IRRs are
management estimates and are derived from operating experience, offset operator activity, and other published industry information.
3.
At $90 oil.
High
Base
Low
Gross Well Cost ($MM)
$6.0
$6.0
$6.0
24H IP (Bbl/d)
600
500
400
Initial Decline (% / Year)
72%
74%
77%
B-Factor
1.3
1.3
1.3
EUR (MBoe)
450
350
250
PV-10 ($MM)
(1)
$9.1
$5.8
$2.3 |
 Maverick Area Activity
19 |
 High growth oil and gas producer with significant exposure to
lower-risk drilling opportunities in the Eagle Ford Shale
trend of South Texas, one of the fastest growing shale plays in North America
~91,000 net acre position in oil portion of the Eagle Ford
Expect to aggressively grow undeveloped acreage position at attractive
per acre valuations Sanchez Group has a proven track record of
identifying, acquiring, and executing large drilling programs ~40
years of operations
Sanchez
has
been
in
the
oil
and
gas
business
since
1972,
drilled
or
participated
in
over
900
wells,
invested
over
$1 billion in South Texas, and cultivated long-standing
relationships with surface and mineral rights owners in the
Eagle Ford Access to significant technological database
including 3D seismic, 2D seismic, and well logs Near-term
growth leveraged to oil and liquids projects Large
inventory
of
identified
lower
risk,
higher
return
drilling
opportunities
2012
capital
budget:
$136
–
$154
million
for
drilling
and
completions
of
16.5
net
Eagle
Ford
wells
plus
facilities, leasing, and seismic
Transforms
valuation
proposition
through
conversion
of
resource
to
production,
reserves,
and
cash
flow
Majority of Eagle Ford leases have full depth rights and we believe
are prospective for the Buda Limestone, Austin Chalk, and
Pearsall Shale formations, among others ~1,200 net acre position
in the core of the Haynesville Shale ~82,000 net
acres
in
northern
Montana
prospective
for
the
Heath,
Three
Forks,
and
Bakken
Shales
Pure Play Eagle Ford
Company
Proven Track Record
Provides Platform for
Growth
Aggressive 2012
Growth Plan
Additional Upside
Summary Highlights
20
Volatile oil window (Gonzales, Fayette, & Lavaca Counties)
Black oil window (Zavala, Frio, & Atascosa Counties)
–
– |
 Appendix
21 |
 Haynesville Shale and Northern Montana
~1,200 net acres primarily in Natchitoches Parish
–
22% -
25% non-operated W.I.
–
14 net identified unrisked locations
Operated by Chesapeake
2012 drilling program
–
Do not plan on spending additional capital in the near-term
22
Haynesville Area Overview
Heath,
Three
Forks,
and
Bakken
–
Northern
Montana
Area
Overview
82,000 net acres in Lewis & Clark, Meagher, and Cascade Counties,
Montana Prospective for the Heath, Three Forks, and Bakken
Shales Five year lease terms with option to extend an additional
five years for $10 per acre 2012 drilling program
–
Do not plan on spending additional capital in this area as we will
allow industry activity to de-risk the play |