Sanchez Energy Corp., Houston, will buy South Texas Eagle Ford shale properties and acreage from Hess Corp. for $265 million cash.
Sanchez Energy will run a single rig on the liquids-rich spread while it assesses the full potential. It will focus on Eagle Ford development initially but noted that other operators are pursuing the Buda limestone and Pearsall shale that may provide Sanchez Energy with potential growth opportunities.
The acquisition involves assets with high working interests in 43,000 net acres in Dimmit, Frio, LaSalle, and Zavala counties. Closing is set for the second quarter of 2013, retroactive to Mar. 1.
The properties are producing 4,500 b/d of oil equivalent, 72% oil, from an estimated 13.4 million boe of proved reserves. Before the transaction, Sanchez Energy’s production averaged 3,800 boe/d in the first 2 months of 2013. The acquisition increases the company’s 2012 yearend proved reserves by 63% and increases proved developed reserves 178% to 10.3 million boe.
The deal also increases Sanchez Energy’s producing well count to 84 gross producing wells from 30 and hikes its net acreage in the Eagle Ford to 138,000 acres.
Sanchez Energy said the transaction grows production at $59,000/flowing boe/d and adds proved reserves at $19.70/boe.
The company, in connection with the transaction, has secured commitments for $325 million in debt financing and expects to access the capital markets in the near term, subject to market conditions and other factors.