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January 2016 Analyst Day – Sanchez Energy Corp

Sanchez Energy Corp · Jan 20, 2016 · 95 slides

Investor presentation from the Shale Experts oil & gas presentation and slide database. Every page is imaged and its text indexed for search across operators, plays, basins and time.

Slides

  1. January 2016 Analyst Day – Sanchez Energy Corp – slide 1
    Results Driven. Manufacturing Focused. SN Analyst & Investor Day January 20, 2016 www.sanchezenergycorp.com
  2. January 2016 Analyst Day – Sanchez Energy Corp – slide 2
    Agenda INTERNAL USE ONLY Time Topic Presenter 9:00 am 9:15 am Executive Summary Tony Sanchez, III, CEO 9:15 am 9:45 am Competitive Advantages Tony Sanchez, lll, CEO Sections 1-5 Chris Heinson, SVP, COO 9:45 am 9:50 am Q&A 9:50…
  3. January 2016 Analyst Day – Sanchez Energy Corp – slide 3
    Eagle Ford Shale Position INTERNAL USE ONLY SN Position Summary (12/31/15) Net Acres 200,000 FY15 Production (Boe/d)(1) 52,500 Operated Rigs 2 Non-Operated Rigs 0 Gross Producing Wells 621 Marquis Palmetto Maverick…
  4. January 2016 Analyst Day – Sanchez Energy Corp – slide 4
    Sanchez Energy: Overview & Highlights INTERNAL USE ONLY 200,000 net acres throughout the Eagle Ford shale with 3,000+ drilling locations Strong Asset Base Increased average EURs by over 40% from 2014 (1) 2015 Production of 52,500…
  5. January 2016 Analyst Day – Sanchez Energy Corp – slide 5
    2016 Capital and Production Update INTERNAL USE ONLY Focus on high rate of return drilling areas and continued delineation of the Cotulla and Catarina areas of the Eagle Ford SN expects to execute a 2016 capital plan between 200 - 250…
  6. January 2016 Analyst Day – Sanchez Energy Corp – slide 6
    Sustained Success: The Path Forward INTERNAL USE ONLY Competitive Strategy & Results Advantage Execution Balance Sheet Strength 1 & Runway of Liquidity 2 SPP Relationship 6 Vision & Strategy Sustainability in a down cycle & 3…
  7. January 2016 Analyst Day – Sanchez Energy Corp – slide 7
    Sanchez Energy: Competitive Advantage Competitive Strategy & Results Advantage Execution Balance Sheet Strength & 1 Runway of Liquidity 6 Vision & Strategy 8 Sustainability in a down cycle & INTERNAL USE ONLY high sensitivity to a…
  8. January 2016 Analyst Day – Sanchez Energy Corp – slide 8
    Conservative Financial Strategy 1 INTERNAL USE ONLY SN has worked diligently to bolster liquidity and ensure development funding for the foreseeable future(1) 2016 capital program expected to be fully funded with FCF and cash on…
  9. January 2016 Analyst Day – Sanchez Energy Corp – slide 9
    Extended Debt Maturity Runway 1 INTERNAL USE ONLY No bonds maturing for the next 5 years Bank revolver currently undrawn Robust covenant headroom High Yield has no financial maintenance covenants Revolver financial maintenance…
  10. January 2016 Analyst Day – Sanchez Energy Corp – slide 10
    1 Hedge Peer Comparison INTERNAL USE ONLY 2016 % of Oil/Gas Production Hedged Oil Gas 120% 100% % Production Hedged 80% 60% 40% 20% 0% 11 Note: * Source: Citi High Yield Report December 2, 2015 **…
  11. January 2016 Analyst Day – Sanchez Energy Corp – slide 11
    1 Hedging Effect on 2016 Revenue INTERNAL USE ONLY SN 2016 Revenue Commodity Price Sensitivity SN 2016 % Hedged Revenue Robust hedging expected to mitigate 2016 revenue expected to be the potential impact of commodity comprised of…
  12. January 2016 Analyst Day – Sanchez Energy Corp – slide 12
    Strategic Financing SN/SPP Relationship 2 INTERNAL USE ONLY Raised 430MM in cash during 2015 by selling assets to SPP Sale of 1,000 Boe/d to SPP structured so that the working interest conveyed to SPP Palmetto Escalating increases…
  13. January 2016 Analyst Day – Sanchez Energy Corp – slide 13
    Execution in 2015 Contributing to Liquidity 2 INTERNAL USE ONLY SN has created a strategic relationship with SPP that is expected to provide a potential alternative from traditional debt and equity markets to raise capital 2012 2013…
  14. January 2016 Analyst Day – Sanchez Energy Corp – slide 14
    EWI Structure - Closing the Working Capital Gap 2 INTERNAL USE ONLY The EWI structure allows for the creation of a flat production profile that is expected to be attractive to be MLP Buyers This enables SN to potentially divest the…
  15. January 2016 Analyst Day – Sanchez Energy Corp – slide 15
    Accelerating Cash Returns in a Drilling Program 2 INTERNAL USE ONLY The two cases below are intended to show the power of cash flow acceleration through the EWI structure Standard Development Case - assumes a typical well owned for the…
  16. January 2016 Analyst Day – Sanchez Energy Corp – slide 16
    Re-Investing Accelerated Cash Flows 2 INTERNAL USE ONLY Cumulative cash flows earned through the re-investment of EWI proceeds are expected to be significantly higher than keeping the original well through its life The two cases below…
  17. January 2016 Analyst Day – Sanchez Energy Corp – slide 17
    Strong Asset Base for Future Growth 3 INTERNAL USE ONLY Location Summary Net Producing Net Engineered Net Contingent Total Net Undrilled Total Net Area (1) (2) Wells Locations Locations Wells Locations Catarina 264 808 580 1,388…
  18. January 2016 Analyst Day – Sanchez Energy Corp – slide 18
    2016 Focus on High Rate of Return Areas 3 INTERNAL USE ONLY SN 2016 Development is expected to largely focus on the three areas below; Cotulla and South Central Catarina are newly emerging areas, providing outstanding returns, that…
  19. January 2016 Analyst Day – Sanchez Energy Corp – slide 19
    Drilling Inventory Breakeven Analysis 3 INTERNAL USE ONLY 1,175 Total Net Engineered Locations Average Estimated Breakeven Price 40/bbl 700 60 600 50 Breakeven Oi Price 10% IRR (WTI) Net Engineered Drilling Locations…
  20. January 2016 Analyst Day – Sanchez Energy Corp – slide 20
    Low Cost Structure Built for Sustainability 4 INTERNAL USE ONLY Focus on de-bundled sourcing & resource management has resulted in cost savings of 55% across our asset base during 2015 Rapid execution with sustainable results 80%…
  21. January 2016 Analyst Day – Sanchez Energy Corp – slide 21
    Well Costs in a Rising Price Environment 4 INTERNAL USE ONLY Due to the nature of the cost savings that have been achieved, we anticipate that nearly 50% of our achieved cost savings are sustainable in a higher price environment…
  22. January 2016 Analyst Day – Sanchez Energy Corp – slide 22
    Cost Structure as Compared to Eagle Ford Peers 4 INTERNAL USE ONLY 9,000 10.0 Eagle Ford Company Disclosed Drilling and Completions Cost Average Lateral Length 8,000 9.0 7,000 8.0 Average Lateral Length (Ft) 6,000…
  23. January 2016 Analyst Day – Sanchez Energy Corp – slide 23
    Midstream Strategy 5 INTERNAL USE ONLY SNs midstream strategy is centered around improving netbacks and market optionality; deriving value through strategic ventures; and maintaining flexibility for future monetization of midstream…
  24. January 2016 Analyst Day – Sanchez Energy Corp – slide 24
    Western Catarina Midstream Transaction 5 INTERNAL USE ONLY Western Catarina Midstream Sanchez Energy Corporation Seller (SN) and its subsidiary SN Catarina, LLC Sanchez Production Partners LP Buyer (SPP) Sale Price 345…
  25. January 2016 Analyst Day – Sanchez Energy Corp – slide 25
    Raptor Gas Plant and Takeaway Pipeline 5 INTERNAL USE ONLY Raptor Gas Plant and Takeaway Pipeline SN Investment 115 Million SN Ownership 50% Capacity 200 260 MMcf/d Min. Volume Commitment (Years 1-5) 125 MMcf/d (gross)…
  26. January 2016 Analyst Day – Sanchez Energy Corp – slide 26
    Raptor Gas Plant Additional Marketing Advantages 5 INTERNAL USE ONLY Investment in the Raptor Gas Plant expected to increase cash flow by 15 Million annually due to gathering and processing fee reductions and improved plant…
  27. January 2016 Analyst Day – Sanchez Energy Corp – slide 27
    Questions INTERNAL USE ONLY 28 2016 Sanchez Energy Corporation Analyst and Investor Day - 1/20/16
  28. January 2016 Analyst Day – Sanchez Energy Corp – slide 28
    Sanchez Energy: Execution Competitive Strategy & Results Advantage Execution Balance Sheet Strength Sustainability in a down cycle & 1 & Runway of Liquidity 6 Vision & Strategy 8 INTERNAL USE ONLY high sensitivity to a rebound 2…
  29. January 2016 Analyst Day – Sanchez Energy Corp – slide 29
    Forward Looking Vision & Strategy 6 INTERNAL USE ONLY Planning for a Low Commodity Price Environment Organic We are planning for a lower for longer scenario Growth We believe that maintaining cash on hand in the current…
  30. January 2016 Analyst Day – Sanchez Energy Corp – slide 30
    Strategic Leasing & Asset Development 6 INTERNAL USE ONLY Continued focus on asset development identified a legacy area of SNs Eagle Ford position that was previously underdeveloped and now represents nearly 1 Billion in Net Present…
  31. January 2016 Analyst Day – Sanchez Energy Corp – slide 31
    Acquisition Strategy 6 INTERNAL USE ONLY SNs strategy is to selectively acquire unconventional assets that possess the qualities that will allow us to take advantage of our low cost and efficient operations to extract maximum value…
  32. January 2016 Analyst Day – Sanchez Energy Corp – slide 32
    Catarina Acquisition Case Study 6 INTERNAL USE ONLY Even with a significant reduction in commodity prices SN has created an asset with a value 3.6x greater than the investment made thus far Catarina Production Growth(1) 50 40…
  33. January 2016 Analyst Day – Sanchez Energy Corp – slide 33
    Reduction in 2016 Upstream Capital Guidance 7 INTERNAL USE ONLY 2016 Capital Program represents a 60% planned reduction in spending as compared to 2015 while expected to maintain flat production 2016 CAPITAL BUDGET Eagle Ford…
  34. January 2016 Analyst Day – Sanchez Energy Corp – slide 34
    Sanchez Energy: Results Competitive Strategy & Results Advantage Execution Balance Sheet Strength Sustainability in a 1 & Runway of Liquidity 6 Vision & Strategy 8 down cycle & INTERNAL USE ONLY high sensitivity to 2 SPP…
  35. January 2016 Analyst Day – Sanchez Energy Corp – slide 35
    Strategy of Maintaining Cash on Hand 8 INTERNAL USE ONLY Base Case 2 Rig Plan Assumptions: 50 Wells Drilled In Catarina per Year Production (Mboe/d) 15 Wells Drilled In Cotulla per Year 200 - 250 Million in Capital Spending…
  36. January 2016 Analyst Day – Sanchez Energy Corp – slide 36
    Flexible Operations Provides Ability to Accelerate 8 INTERNAL USE ONLY Base Case 2 Rig Plan Accelerated Case 4 Rig Plan Assumptions: 75 Wells Drilled In Catarina per Production (Mboe/d) Year 30 Wells Drilled In Cotulla per…
  37. January 2016 Analyst Day – Sanchez Energy Corp – slide 37
    EWI Structure Provides Strategic Liquidity Source 8 INTERNAL USE ONLY Base Case 2 Rig Plan Accelerated Case + EWIs Assumptions: 75 Wells Drilled In Catarina per Year Production (Mboe/d) 30 Wells Drilled In Cotulla per Year…
  38. January 2016 Analyst Day – Sanchez Energy Corp – slide 38
    Execution of Vision and Strategy 8 INTERNAL USE ONLY Base Case 2 Rig Plan Accelerated Case 4 Rig Plan Accelerated Case + EWIs Production (Mboe/d) Free Cash Flow(1) (MM) Cash on Hand (MM) 12/01/15 Strip 39 * Price Deck:…
  39. January 2016 Analyst Day – Sanchez Energy Corp – slide 39
    Questions INTERNAL USE ONLY 40 2016 Sanchez Energy Corporation Analyst and Investor Day - 1/20/16
  40. January 2016 Analyst Day – Sanchez Energy Corp – slide 40
    Operations & Cost Structure Technical and Process and Manufacturing Extensive Consistent Data Driven Commercial Systems Focus Experience Results Effectiveness Oriented INTERNAL USE ONLY 41 2016 Sanchez Energy Corporation…
  41. January 2016 Analyst Day – Sanchez Energy Corp – slide 41
    Sustainable Low Cost Position INTERNAL USE ONLY Sustainable cost leadership is something we believe is not just consistent with our commercial culture, but is indeed demanded by it Basin-Centric Operations Basin-Centric Contiguous…
  42. January 2016 Analyst Day – Sanchez Energy Corp – slide 42
    2015 Cost Reduction Process and Results INTERNAL USE ONLY SN employs a de-bundled sourcing strategy combined with discretionary resource management to accelerate a sustainable and competitive cost structure Strategy Drives…
  43. January 2016 Analyst Day – Sanchez Energy Corp – slide 43
    Direct Sourcing Advantages INTERNAL USE ONLY Completion Example: Direct Sourcing Commodities Pre-Direct Sourcing Direct Sourcing SN Frac Services- HHP & Crew only Chemicals Vendor Frac Services Acid Logistics Vendor Vendor…
  44. January 2016 Analyst Day – Sanchez Energy Corp – slide 44
    Manufacturing Process Advantages INTERNAL USE ONLY PROJECT PROJECT ENGINEER 1 ENGINEER 2 ASSEMBLY LINE BENEFITS WSM WSM 1 2 PAD PAD Project management 2011-2013 1 2 alignment Well-site management PROJECT ENGINEER 1…
  45. January 2016 Analyst Day – Sanchez Energy Corp – slide 45
    Cost Execution - Catarina INTERNAL USE ONLY 7.4 MM Lift 15% Facilities Sustainable Half of Process & Design Savings 2015 Cost Savings are Drilling expected 12% to be Sustainable Unit Cost Sustainable Savings 3.5M 28% Unit Cost…
  46. January 2016 Analyst Day – Sanchez Energy Corp – slide 46
    Retained Savings - Catarina INTERNAL USE ONLY Dumb Iron Water Transfer 15% Reduced NPT Frac Stacks Optimized Flat Zipper Manifolds Sustainable Times Half of Process & SIMOPS & Other Flowback Service Tanks 2015 Cost Design…
  47. January 2016 Analyst Day – Sanchez Energy Corp – slide 47
    Drilling Optimizations - Catarina INTERNAL USE ONLY Quality and Efficiency Drilling Total Cost Reduction of non-productive & flat times 3.0 Spud to TD (15…
  48. January 2016 Analyst Day – Sanchez Energy Corp – slide 48
    Completion Optimizations - Catarina INTERNAL USE ONLY Quality and Efficiency Average Completion Cost per Stage Reduction of non-productive time 6 Cost Increased stages per day by 50% with no 200 Total Completion Cost (MM) 5…
  49. January 2016 Analyst Day – Sanchez Energy Corp – slide 49
    Cost Structure Enhances Investment Opportunities INTERNAL USE ONLY Catarina Cotulla Drilling Completions Facilities Drilling Completions Facilities 10.0 10.0 8.0 8.0 6.0 6.0 (MM) (MM) 4.0 4.0 2.0 2.0 0.0 0.0…
  50. January 2016 Analyst Day – Sanchez Energy Corp – slide 50
    Asset Development INTERNAL USE ONLY 51 2016 Sanchez Energy Corporation Analyst and Investor Day - 1/20/16
  51. January 2016 Analyst Day – Sanchez Energy Corp – slide 51
    Eagle Ford Shale Position INTERNAL USE ONLY SN Position Summary (12/31/15) Net Acres 200,000 FY15 Production (Boe/d)(1) 52,500 Operated Rigs 2 Non-Operated Rigs 0 Gross Producing Wells 621 Marquis Palmetto Maverick…
  52. January 2016 Analyst Day – Sanchez Energy Corp – slide 52
    Asset Development Delivering Strong Results INTERNAL USE ONLY Production Growth (Boe/d) : CAGR from 1Q12: 213% 70,000 Key Acquisitions Shell 639 million 60,000 50,000 Key Acquisitions Wycross 230 million 40,000…
  53. January 2016 Analyst Day – Sanchez Energy Corp – slide 53
    Catarina Asset INTERNAL USE ONLY Catarina Operational Update (12/31/15) Total Net Acres 106,000 Average Operated Working Interest 100% Average Net Revenue Interest 75% Planned Well Spacing (Acres) 30 - 100 Net Identified Drilling…
  54. January 2016 Analyst Day – Sanchez Energy Corp – slide 54
    Catarina Overview INTERNAL USE ONLY Upper Eagle Ford 150+ Potential Locations 7 wells in stacked pilots drilled to date High oil yields of 250 Bbl/MMcf Middle Eagle Ford 500+ potential Locations Large Stacked Pay…
  55. January 2016 Analyst Day – Sanchez Energy Corp – slide 55
    Maximizing Catarina Hydrocarbon Recovery INTERNAL USE ONLY SN Development & Appraisal Plan Results in Potential for Significantly Increased Value Western Western South Central Eastern Development Vertical Appraisal Exploration…
  56. January 2016 Analyst Day – Sanchez Energy Corp – slide 56
    Western Catarina Well Results INTERNAL USE ONLY SN operated Lower Eagle Ford (LEF) and Middle Eagle Ford (MEF) wells in Catarina have continued to exhibit strong performance and have sustained rates above original LEF Type Curve SN…
  57. January 2016 Analyst Day – Sanchez Energy Corp – slide 57
    Western Catarina Completions INTERNAL USE ONLY SN has realized strong production results as compared to offset wells results in Catarina e.g. Piloncillo D20 pad as depicted below was drilled by the previous operator and completed by…
  58. January 2016 Analyst Day – Sanchez Energy Corp – slide 58
    Western Catarina Tight Target Tolerance INTERNAL USE ONLY AC Application of extensive well pre-planning via 3D seismic, 600 32 Upper EF 106 pilot wells & static model Middle EF 130 Lower EF 300 Target windows of 15 feet allows…
  59. January 2016 Analyst Day – Sanchez Energy Corp – slide 59
    Western Catarina Development INTERNAL USE ONLY Mix of LEF & MEF infill locations depending upon prior well penetration Stacking in LEF and MEF for step outs Increase in type curve from 600 Mboe to 750 Mboe Eastern limit being…
  60. January 2016 Analyst Day – Sanchez Energy Corp – slide 60
    Vertical Expansion of Catarina Development INTERNAL USE ONLY Upper Eagle Ford (UEF) 150+ potential locations 7 wells in stacked pilots drilled to date High oil yields of 250 Bbl/MMcf Gray out M and L 61 2016 Sanchez…
  61. January 2016 Analyst Day – Sanchez Energy Corp – slide 61
    Upper Eagle Ford Vertical Growth INTERNAL USE ONLY High oil yields, with comparable gas rates to MEF Recent IPs: 500 Bbl/d, 2,000 Mcf/d 150+ location inventory Expansion into central area UEF IP (Bbl/d) 500 Oil Initial…
  62. January 2016 Analyst Day – Sanchez Energy Corp – slide 62
    South Central Appraisal Success INTERNAL USE ONLY Data Driven South Central Appraisal & Development At Acquisition SN Appraisal SN Development Plan 63 2016 Sanchez Energy Corporation Analyst and Investor Day - 1/20/16
  63. January 2016 Analyst Day – Sanchez Energy Corp – slide 63
    South Central Catarina INTERNAL USE ONLY Excellent rates and projected EURs Unvalued at acquisition Stacking in LEF to MEF Southern rim transition from West to East Catarina Q4 2015 / 2016 Appraisal and Development Focus 200+…
  64. January 2016 Analyst Day – Sanchez Energy Corp – slide 64
    South Central Catarina Well Economics INTERNAL USE ONLY WTI Oil Price (/Bbl) 45 55 65 33% IRR 61% IRR 96% IRR 2.50 HH Gas Price( /Mcf) 1,375M NPV 3,143M NPV 4,364M NPV 53% IRR 81%IRR 100%+ IRR 3.50 2,489M NPV 3,623M…
  65. January 2016 Analyst Day – Sanchez Energy Corp – slide 65
    Eastern Catarina Lower Eagle Ford Appraisal INTERNAL USE ONLY 6 wells drilled and completed to date (stacked LEF) C5 PAD C5 wells outperforming area offset wells; flat decline after 9 months Evaluating well performance, targeting,…
  66. January 2016 Analyst Day – Sanchez Energy Corp – slide 66
    Continuous Location Growth INTERNAL USE ONLY Catarina Development Potential(3) Engineered(1) Contingent(2) Total At Acquisition 162 0 162 9/30/15 808 580 1,388 28 Years of Drilling Inventory at 50 Wells Per Year EXPLORATION…
  67. January 2016 Analyst Day – Sanchez Energy Corp – slide 67
    Cotulla Asset INTERNAL USE ONLY Cotulla Operational Update (12/31/15) Total Net Acres 51,000 Average Operated Working Interest 88% Average Net Revenue Interest 66% Planned Well Spacing (Acres) 40 75 Net Identified Drilling Locations 300…
  68. January 2016 Analyst Day – Sanchez Energy Corp – slide 68
    Cotulla Area Development & Appraisal INTERNAL USE ONLY Focus on Northern Play Area Drilled 3 new producers in 2014 Drilled 6 new producers in 2015 40 - 50 Million Capex (15 wells) anticipated in 2016 for further appraisal and…
  69. January 2016 Analyst Day – Sanchez Energy Corp – slide 69
    Eagle Ford Paleogeography Key to Cotulla INTERNAL USE ONLY EAGLE FORD ISOPACH 70 2016 Sanchez Energy Corporation Analyst and Investor Day - 1/20/16
  70. January 2016 Analyst Day – Sanchez Energy Corp – slide 70
    Maverick Regional INTERNAL USE ONLY Eagle Ford high porosity & oil saturation unlocked through completion design 2016 Appraisal focus 150+ well inventory MAVERICK IP (Bbl/d) 473 Oil Initial Decline (%) 68.5% Maverick Type…
  71. January 2016 Analyst Day – Sanchez Energy Corp – slide 71
    Maverick Well Economics INTERNAL USE ONLY WTI Oil Price (/Bbl) 45 55 65 47% IRR 83% IRR 100%+ IRR 2.50 HH Gas Price( /Mcf) 1,843M NPV 3,418M NPV 4,992M NPV 47% IRR 84% IRR 100%+ IRR 3.50 1,870M NPV 3,439M NPV 5,020M…
  72. January 2016 Analyst Day – Sanchez Energy Corp – slide 72
    Wycross INTERNAL USE ONLY Eagle Ford high porosity & oil saturation Stagger infill at 40 acre spacing 50+ location inventory WYCROSS IP (Bbl/d) 850 Oil Initial Decline (%) 84.5% Oil EUR (Mbbl) 314 Wycross Type Curve…
  73. January 2016 Analyst Day – Sanchez Energy Corp – slide 73
    Palmetto Asset INTERNAL USE ONLY Palmetto Operational Update (12/31/15) Total Net Acres 8,500 Average Working Interest 50% Average Net Revenue Interest 37.5% Planned Well Spacing (Acres) 50 Net Identified Drilling Locations 150 250…
  74. January 2016 Analyst Day – Sanchez Energy Corp – slide 74
    Palmetto INTERNAL USE ONLY Non-operated partner with Marathon Oil 4 well LEF UEF staggered completion in 1Q 2016 4 additional wells planned for 2016 175+ location inventory PALMETTO IP (Bbl/d) 700 Palmetto Type Curve…
  75. January 2016 Analyst Day – Sanchez Energy Corp – slide 75
    Marquis Asset INTERNAL USE ONLY Marquis Operational Update (12/31/15) Total Net Acres 34,000 Average Operated Working Interest 100% Average Net Revenue Interest 75% Planned Well Spacing (Acres) 75 100 Net Identified Drilling Locations…
  76. January 2016 Analyst Day – Sanchez Energy Corp – slide 76
    Marquis INTERNAL USE ONLY Preparing 60 acre stacking pilot in LEF - UEF 3 casing string design throughout majority of area Well costs from 3.7MM to 4.2MM 150+ well location inventory MARQUIS IP (Bbl/d) 1,030 Oil Initial…
  77. January 2016 Analyst Day – Sanchez Energy Corp – slide 77
    Questions INTERNAL USE ONLY 78 2016 Sanchez Energy Corporation Analyst and Investor Day - 1/20/16
  78. January 2016 Analyst Day – Sanchez Energy Corp – slide 78
    Financial Review INTERNAL USE ONLY 79 2016 Sanchez Energy Corporation Analyst and Investor Day - 1/20/16
  79. January 2016 Analyst Day – Sanchez Energy Corp – slide 79
    Investor Focus Changes During Downturn INTERNAL USE ONLY Summer 2014 Winter 2015 ALL ABOUT INCOME STATEMENT ALL ABOUT BALANCE SHEET AND GROWTH AND STAYING POWER How fast can you grow Liquidity, Liquidity, Liquidity How quickly…
  80. January 2016 Analyst Day – Sanchez Energy Corp – slide 80
    Futures Curve Not Always the Best at Predicting Prices INTERNAL USE ONLY You cant predict. You can prepare. 150 130 110 WTI Crude Oil Price (/Bbl) 90 70 50 30 WTI Spot Actuals WTI Forward Strip…
  81. January 2016 Analyst Day – Sanchez Energy Corp – slide 81
    Financial Strategy Through the Cycle INTERNAL USE ONLY Up Cycle Down Cycle Overfund with cheaper capital Maintain core liquidity Long-term financing Maintain multiple sources of financing and ensure significant covenant…
  82. January 2016 Analyst Day – Sanchez Energy Corp – slide 82
    Financing Acquisitions for the Long Term INTERNAL USE ONLY SN financed acquisitions and drilling expenditures with more permanent capital to match asset duration while maintaining untapped borrowing base for additional liquidity…
  83. January 2016 Analyst Day – Sanchez Energy Corp – slide 83
    Extended Debt Maturity Runway INTERNAL USE ONLY No bonds maturing for the next 5 years Bank revolver currently undrawn Robust covenant headroom High Yield has no financial maintenance covenants Revolver financial maintenance…
  84. January 2016 Analyst Day – Sanchez Energy Corp – slide 84
    2016 Guidance Summary INTERNAL USE ONLY Expected 2016 production to range between 48,000 and 52,000 Boe/d and expected 1Q16 production to range between 48,000 and 52,000 Boe/d Subsequent quarterly production will fluctuate due to…
  85. January 2016 Analyst Day – Sanchez Energy Corp – slide 85
    2016 Detailed Production Expense Guidance INTERNAL USE ONLY SN received 345 Million in cash when the Western Catarina Midstream sale / leaseback closed in October 2015 As part of that transaction, SN recognized an estimated 75…
  86. January 2016 Analyst Day – Sanchez Energy Corp – slide 86
    NOL Rights Plan INTERNAL USE ONLY SN had a 657 million Net Operating Loss as of 9/30/15 Valuable asset since NOL can offset future income taxes Significant changes in equity ownership could trigger IRS limitations on future NOL usage…
  87. January 2016 Analyst Day – Sanchez Energy Corp – slide 87
    Oil Prices and Energy Capital Markets are Cyclical INTERNAL USE ONLY 88 2016 Sanchez Energy Corporation Analyst and Investor Day - 1/20/16
  88. January 2016 Analyst Day – Sanchez Energy Corp – slide 88
    Summary INTERNAL USE ONLY 89 2016 Sanchez Energy Corporation Analyst and Investor Day - 1/20/16
  89. January 2016 Analyst Day – Sanchez Energy Corp – slide 89
    Sustained Success: The Path Forward INTERNAL USE ONLY Competitive Strategy & Results Advantage Execution Balance Sheet Strength 1 & Runway of Liquidity 2 SPP Relationship 6 Vision & Strategy Sustainability in a down cycle & 3…
  90. January 2016 Analyst Day – Sanchez Energy Corp – slide 90
    Questions INTERNAL USE ONLY 91 2016 Sanchez Energy Corporation Analyst and Investor Day - 1/20/16
  91. January 2016 Analyst Day – Sanchez Energy Corp – slide 91
    Appendix INTERNAL USE ONLY 92 2016 Sanchez Energy Corporation Analyst and Investor Day - 1/20/16
  92. January 2016 Analyst Day – Sanchez Energy Corp – slide 92
    Capitalization Summary INTERNAL USE ONLY Revolving credit facility (due June 2019) 500 million borrowing base with an elected commitment of 300 million and an interest rate of LIBOR + 1.50% - 2.50% as of 12/31/15 Financial…
  93. January 2016 Analyst Day – Sanchez Energy Corp – slide 93
    Summary Terms: Revolving Credit Facility INTERNAL USE ONLY Borrower Sanchez Energy Corporation All existing and future direct and indirect domestic subsidiaries except for designated unrestricted Guarantors subsidiaries 1.5…
  94. January 2016 Analyst Day – Sanchez Energy Corp – slide 94
    Summary Terms: Convertible Preferred INTERNAL USE ONLY SNs Convertible Preferred Issues have Many Important Equity-Like Features Both the Series A and Series B Convertible Preferred issues have the following key equity-like features,…
  95. January 2016 Analyst Day – Sanchez Energy Corp – slide 95
    Hedge Summary As Of 12/31/15 INTERNAL USE ONLY Hedge Summary as of 12/31/2015 Daily Volume Commodity Instrument Period (Bbls / MMBtu) Average Price Oil Swaps January 1 - December 31, 2016 7,000 70.11 WTI Swap Oil Puts January 1…

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