sanchez reduces eagle ford rigs
As oil prices hit new lows, Eagle Ford producers are scrambling to revise budget projections for 2015.
On January 7th, Sanchez Energy joined other companies who are forced to update 2015 capex projections from just two months ago. The company reports that the initial 2015 estimate of $1.15 billion will be slashed almost 60% to $400 - $450 million.
“Due to ‘the deteriorating commodity price environment, Sanchez Energy has elected to further reduce its 2015 capital plan. Our 2015 drilling plan calls for us to move from 8 gross (7 net) rigs across our Eagle Ford position and 1 gross and net rig in the TMS in the fourth quarter of 2014 to 4 gross (3.5 net) rigs focusing on Catarina and Palmetto in the Eagle Ford and .25 gross and net rigs in the TMS. This represents an approximately 60% reduction in average rig count from fourth quarter 2014 to 2015.’”
Despite the drastic cuts, the report predicts that the company will maintain 2014 Q4 production numbers. It is also expected that oil production will continue to rise in 2015 and should average 40,000 to 44,000 barrels a day.
Read complete report at sanchezenergycorp.com