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Q3 2016 Earnings Call – Sanchez Energy Corp

Sanchez Energy Corp · Nov 7, 2016 · 29 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. Q3 2016 Earnings Call – Sanchez Energy Corp – slide 1
    Results Driven. Manufacturing Focused. Corporate Presentation November 2016 www.sanchezenergycorp.com
  2. Q3 2016 Earnings Call – Sanchez Energy Corp – slide 2
    Sanchez Energy Overview Eagle Ford Shale Market Cap (1) 400 MM (1) Enterprise Value 2,100 MM Net Acreage: 200,000 acres (2) 1P Reserves: 128 MMBoe (3) Avg. 3Q 2016 Production: 51,500 Boe/d Positioned to thrive in a period of…
  3. Q3 2016 Earnings Call – Sanchez Energy Corp – slide 3
    Eagle Ford Shale Position SN Position Summary(1) Net Acres 200,000 2Q16 Avg. Production (Boe/d) 51,500 Operated Rigs 3 Non-Operated Rigs 0 Gross Producing Wells 676 Marquis Palmetto M averick W y cross A l exander R…
  4. Q3 2016 Earnings Call – Sanchez Energy Corp – slide 4
    Transformational Growth At IPO Today (12/31/11) (9/30/16) Production 609 Boe/d 85x 51,500 Boe/d(1) 6.7 MMBoe 19x 128 MMBoe(2) Proved Reserves 14% PD 51% PD(2) PV-10 152 million 3.9x 594 million(2) LTM Revenue 15 million 28x…
  5. Q3 2016 Earnings Call – Sanchez Energy Corp – slide 5
    Delivering Strong Results Reserves by Category (12/31/15) Reserves by Product Mix (12/31/15) CAGR from 2011: 109% 160 PD PUD 140 135 128 NGL 28.8% 120 100 52% Oil 40.6% 49% 80 Gas 30.6% 60 59 40 58% 48% 51% 20 21 7 82% 42% 0 86%…
  6. Q3 2016 Earnings Call – Sanchez Energy Corp – slide 6
    2016 Upstream Capital Guidance 2016 CAPITAL BUDGET Eagle Ford Operated Rigs Net Wells Capital (MM) 15% Catarina 1.5 49 150 - 160…
  7. Q3 2016 Earnings Call – Sanchez Energy Corp – slide 7
    2016 Guidance Summary Expected 4Q 2016 production to range between 50,000 and 52,000 Boe/d Subsequent quarterly production may fluctuate due to the effects of pad drilling (typical pad size will vary between 5 and 10 wells per pad)…
  8. Q3 2016 Earnings Call – Sanchez Energy Corp – slide 8
    Operations A Manufacturing Transformation 2016 Sanchez Energy Corporation
  9. Q3 2016 Earnings Call – Sanchez Energy Corp – slide 9
    Low Cost Operator With Sustained Cost Reductions Total Cash Operating Cost Including Interest & Preferred Dividends (/Boe) Cash G&A LOE Taxes Interest & Dividends 50.00 45.06 45.00 41.46 4.78 40.00 4.72 35.00 9.37 4.53 31.40…
  10. Q3 2016 Earnings Call – Sanchez Energy Corp – slide 10
    2016 Capital and Production Update Focus on high rate of return drilling areas and continued delineation of the Catarina and Cotulla areas of the Eagle Ford SN now expects to execute a 2016 capital plan between 250 million and 300…
  11. Q3 2016 Earnings Call – Sanchez Energy Corp – slide 11
    Cost Structure as Compared to Eagle Ford Peers 9,000 10.0 Eagle Ford Company Disclosed Drilling and Completions Cost (MM) Average Lateral Length 8,000 9.0 7,000 8.0 Average Lateral Length (Ft) 6,000 7.0 5,000 6.0…
  12. Q3 2016 Earnings Call – Sanchez Energy Corp – slide 12
    Cost Structure Enhances Investment Opportunities 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 Previous 2014 1Q15…
  13. Q3 2016 Earnings Call – Sanchez Energy Corp – slide 13
    Asset Development 2016 Sanchez Energy Corporation
  14. Q3 2016 Earnings Call – Sanchez Energy Corp – slide 14
    2016 Focus on High Rate of Return Areas 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 were not valued by SN…
  15. Q3 2016 Earnings Call – Sanchez Energy Corp – slide 15
    Catarina Overview Upper Eagle Ford 350+ Potential Locations 13 wells in stacked pilots drilled to date High oil yields of 250 Bbl/MMcf Middle Eagle Ford 500+ potential Locations Large Stacked Pay Application South-Central…
  16. Q3 2016 Earnings Call – Sanchez Energy Corp – slide 16
    Catarina Well Results Actual results continue to outperform Ryder Scott PUD curves PUD curves are still conservative to allow for variation in results and future upwards technical revisions Results consist of 78 wells in Western…
  17. Q3 2016 Earnings Call – Sanchez Energy Corp – slide 17
    Western Catarina Development 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 extended into Central…
  18. Q3 2016 Earnings Call – Sanchez Energy Corp – slide 18
    South Central Catarina 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+ location inventory SC…
  19. Q3 2016 Earnings Call – Sanchez Energy Corp – slide 19
    Maverick Regional 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 Curve Oil EUR…
  20. Q3 2016 Earnings Call – Sanchez Energy Corp – slide 20
    Financial Highlights 2016 Sanchez Energy Corporation
  21. Q3 2016 Earnings Call – Sanchez Energy Corp – slide 21
    Conservative Financial Strategy SN has worked diligently to bolster liquidity and ensure development funding for the foreseeable future 2016 capital program expected to be fully funded with FCF and cash on hand with no reliance on…
  22. Q3 2016 Earnings Call – Sanchez Energy Corp – slide 22
    Extended Debt Maturity Runway No bonds maturing until 2021 Revolving credit facility currently undrawn Robust covenant headroom High Yield has no financial maintenance covenants Revolving credit facility financial maintenance…
  23. Q3 2016 Earnings Call – Sanchez Energy Corp – slide 23
    Hedge Peer Comparison 2016 % of Oil/Gas Production Hedged Oil Gas 120% 100% % Production Hedged 80% 60% 40% 20% 0% 24 Note: * Source: Citi High Yield Report December 2, 2015 ** Peers include BCEI, CRK,…
  24. Q3 2016 Earnings Call – Sanchez Energy Corp – slide 24
    Summary & Highlights Over 200,000 net acres throughout the Eagle Ford shale with 3,000+ net drilling locations Strong Asset Base Increased average EURs by over 40% from 2014 3Q 2016 production of 51,500 Boe/d, at the high end of…
  25. Q3 2016 Earnings Call – Sanchez Energy Corp – slide 25
    Appendix 2016 Sanchez Energy Corporation
  26. Q3 2016 Earnings Call – Sanchez Energy Corp – slide 26
    NOL Rights Plan SN had a 765 million Net Operating Loss as of 12/31/15 Valuable asset since NOL can offset future income taxes Significant changes in equity ownership could trigger IRS limitations on future NOL usage Particularly…
  27. Q3 2016 Earnings Call – Sanchez Energy Corp – slide 27
    Capitalization Summary Revolving credit facility (due June 2019) 350 million borrowing base with an elected commitment of 300 million and an interest rate of LIBOR + 2.00% - 3.00% as of 6/30/16 Financial Maintenance Covenants:…
  28. Q3 2016 Earnings Call – Sanchez Energy Corp – slide 28
    2016 Detailed Production Expense Guidance 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 million deferred gain…
  29. Q3 2016 Earnings Call – Sanchez Energy Corp – slide 29
    NonGAAP Reconciliation and Measures Reconciliation of Net Income (Loss) To Reconciliation of PV-10 To Adjusted EBITDA (M) Standardized Measure (MM) Twelve Months Ended Year Ended December 31, 9/30/16 12/31/11 2015 2011 Net income…

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