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Investor Day – Sanchez Energy Corp

Sanchez Energy Corp · Jan 23, 2017 · 96 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. Investor Day – Sanchez Energy Corp – slide 1
    Results Driven. Manufacturing Focused. SN Analyst & Investor Day January 23, 2017 January 23, 2017 www.sanchezenergycorp.com
  2. Investor Day – Sanchez Energy Corp – slide 2
    2017 Analyst Day Agenda Time Topic Presenter 9:00 a.m. 9:25 a.m. Executive Summary Tony Sanchez, III, CEO Eduardo Sanchez, President 9:25 a.m. 9:45 a.m. Competitive Advantages Eduardo Sanchez, President Sections 12 Chris Heinson,…
  3. Investor Day – Sanchez Energy Corp – slide 3
    Sanchez Energy: Transformation in 2016 2.3 Billion Comanche Acquisition Will acquire 300 MMBoe of proved reserves and 67,000 Boe/d in the Eagle Ford Along with Blackstone, agreed to acquire Anadarkos Eagle Ford acreage Factory…
  4. Investor Day – Sanchez Energy Corp – slide 4
    Leads to Creation of Shareholder Value 3 yr. Projected Production CAGR Results in the ability to deliver Over 30% both free cash flow and production growth EBITDA Projected to More Than Double by 2018 Improves the balance…
  5. Investor Day – Sanchez Energy Corp – slide 5
    Eagle Ford Shale Focusing on Western Part of the Play Western Eagle Ford is roughly Western Eagle Ford MultiBench Formation 7,000 square miles within the oil Large Play to dry gas window with Multiple At least 4 distinct benches…
  6. Investor Day – Sanchez Energy Corp – slide 6
    Sanchez Energy Building Asset Base in 2016 YE 2015: 200,000 Net Eagle Ford Acres Through a series of strategic initiatives, Sanchez Energy is now one of the largest operators in the basin, focused on multiplebench development in…
  7. Investor Day – Sanchez Energy Corp – slide 7
    Comanche Acquisition Compliments Strength of Asset Base Inventory of over 4,000 High Rate of Return Net Drilling Locations Maverick Net Drilling Locations 1,000 3Stream EUR (MBoe) 350 Est. Capital Cost (MM) 3.0 IRR (%)* 6080%…
  8. Investor Day – Sanchez Energy Corp – slide 8
    And Drives Strong Net Asset Value Location Summary Net Producing + Net Engineered Net Contingent Total Net Undrilled Total Net Area DUC Wells Locations(1) Locations(2) Wells Locations Comanche 392 832 162 994 1,386 Catarina 333…
  9. Investor Day – Sanchez Energy Corp – slide 9
    Sanchez Energy Transformation Snapshot Proved Reserves SN Production 350 340 90,000 80,000 300 2017 Focus on Converting 80,000 PUDs & PDNP to PDP 70,000 250 60,000 52,524 53,000 190 (MMBoe) 200 50,000 Boe/d 150 135…
  10. Investor Day – Sanchez Energy Corp – slide 10
    Comanche Acquisition Adjacent to SNs Core Acreage 33.5 MBoe/d Net to SN 36% oil / 34% NGLs Over 900 MM in NPV10 Value from PDP and PDNP (DUCs), net to SN 132 Drilled Uncompleted Wells (DUCs) derisk nearterm development and…
  11. Investor Day – Sanchez Energy Corp – slide 11
    Strategic Joint Venture Facilitates Comanche Acquisition Repeatable Structure Matches Cash Flow with Appropriate Financing Blackstone Sanchez Energy Energy Partners NonRecourse Unrestricted Subsidiary NonRecourse RBL…
  12. Investor Day – Sanchez Energy Corp – slide 12
    Focus on Integration and Scalability Many Aspects Of The Comanche Acquisition Are Strategically Similar To The Acquisition Of Catarina Acquisition Comparison Catarina Acquisition Comanche Acquisition Acquisition Value Buildup PDP…
  13. Investor Day – Sanchez Energy Corp – slide 13
    Catarina Case Study Proven Scalability Quick Production Ramp At Catarina Expect The Same Level of Success at Comanche 70,000 Shell 65,000 SN2014 22 DUCs contribute to rapid execution SN2015 60,000 SN2016 55,000 50,000…
  14. Investor Day – Sanchez Energy Corp – slide 14
    2016 Western Eagle Ford Lease Program Adds 110,000 Net Acres Maverick Leasing Program: MAVERICK Leased an additional 65,000 net acres of high quality drilling inventory in Western Eagle Ford oil play. Javelina Leasing…
  15. Investor Day – Sanchez Energy Corp – slide 15
    SPP Relationship Provides Optionality and Liquidity SN Margin Increases as Additional Midstream Infrastructure Comes OnLine Carnero Gathering Carnero Gathering Line reduced SNs transportation fees Line Raptor Gas Raptor Gas…
  16. Investor Day – Sanchez Energy Corp – slide 16
    SPP Midstream Relationship Western Eagle Ford Focus Results in Synergies Through SPPs Midstream Asset Base 17 2017 Sanchez Energy Corporation
  17. Investor Day – Sanchez Energy Corp – slide 17
    Sanchez Energy: Summary Highlights Manufacturing Well costs have decreased greater than 60% since the end of 2014 Approach to Asset Development Over 4,000 net drilling locations with wellhead rate of returns in excess of 50%…
  18. Investor Day – Sanchez Energy Corp – slide 18
    Production and Cash Flow Highlights 19 2017 Sanchez Energy Corporation
  19. Investor Day – Sanchez Energy Corp – slide 19
    Sanchez Energy Positioned for Significant Growth Comanche Provides Significant Production Growth While Operating Within Cash Flow in the Next 1218 Months 1,400 120 1,200 100 1,000 Capital Spending (Million) Production…
  20. Investor Day – Sanchez Energy Corp – slide 20
    2017 Capital Guidance 2017 Capital Budget Eagle Ford Operated Capital Catarina Maverick Rigs Net Wells (MM) Comanche Comanche DUC Catarina 1.5 53 160 170 Palmetto Land/Infrastructure/G&G Maverick 1 35 100 110 23% Comanche 3.5…
  21. Investor Day – Sanchez Energy Corp – slide 21
    Asset Base Expected to Yield Sustainable Cash Flow Growth Comanche Expected to Deliver Production Growth While Internally Funding CapEx in 2018 SN Free Cash Flow (MM)* SN + Comanche Free Cash Flow (MM)* 150 150 100 Cash Flow…
  22. Investor Day – Sanchez Energy Corp – slide 22
    And Strengthens the Balance Sheet Production Growth and Free Cash Flow Expected to Reduce Leverage Ratios Significantly Over the Next Two Years SN Leverage SN + Comanche Leverage 5.0x 5.0x 4.0x 4.0x 3.0x 3.0x 2.0x 2.0x…
  23. Investor Day – Sanchez Energy Corp – slide 23
    Sanchez Energy: Competitive Advantages 1. MultiBench Development 2. Sustainable Cost Structure Competitive Advantages Asset Detail Financial Strategy 24 2017 Sanchez Energy Corporation
  24. Investor Day – Sanchez Energy Corp – slide 24
    1. MultiBench Development 25 2017 Sanchez Energy Corporation
  25. Investor Day – Sanchez Energy Corp – slide 25
    1 Western Eagle Ford Supports MultiBench Development Total Eagle Ford Thickness Eagle Ford Well Density Western Eagle Ford Western Eagle Ford MultiBench Development Across Western Eagle Ford Lower, Middle and Upper Eagle…
  26. Investor Day – Sanchez Energy Corp – slide 26
    1 Targeting Strategy in the Western Eagle Ford The Western Eagle Ford Is Unique in that the Thickness and Mineralogy Provide for a MultiBench Development Strategy TARGET BENCH DEVELOPMENT ZONE Brittleness AUSTIN CHALK E…
  27. Investor Day – Sanchez Energy Corp – slide 27
    1 Current Extent of MultiBench Development Sanchez Now Has a Western Eagle Ford Position of Approximately 335,000 Surface Net Acres, Over 1,000,000 Effective Net Acres, and Over 4,000 Net Drilling Locations 28 2017 Sanchez…
  28. Investor Day – Sanchez Energy Corp – slide 28
    1 Sanchez is a Leader in Existing MultiBench Development MultiBench Development of Existing Sanchez Assets Catarina Drilled Wells in Middle & Upper Eagle Ford 60 Number of Wells Drilled 50 40 30 20 10 0 2014 2015…
  29. Investor Day – Sanchez Energy Corp – slide 29
    1 Regional Extension of Stacked Targeting All Three Benches in Catarina Thicken Towards the Northwest Lower, Middle, and Upper Eagle Ford targets proven at Catarina Quality of the Middle and Upper Eagle Ford increases through the…
  30. Investor Day – Sanchez Energy Corp – slide 30
    1 Drilling Inventory Breakeven Analysis 2,657 Total Net Engineered Locations Average Estimated Breakeven Price 35/Bbl 600 48 Net Locations Breakeven Oil Price 500 40 WTI Breakeven Oil Price 10% IRR Net Engineered Drilling…
  31. Investor Day – Sanchez Energy Corp – slide 31
    2. Sustainable Cost Structure 32 2017 Sanchez Energy Corporation
  32. Investor Day – Sanchez Energy Corp – slide 32
    2 Sustainable Low Cost Position BasinCentric Operations Unit Based Contiguous acreage with active service support Initial consideration (processes being restricted) Dense activities providing levelloaded services Disciplined approach…
  33. Investor Day – Sanchez Energy Corp – slide 33
    2 SN Cost Structure Comparison to Eagle Ford Peers Average Lateral Length 9,000 9.0 Eagle Ford Company Disclosed Drilling and Completions Cost 8,000 8.0 7,000 7.0 6,000 6.0 Average Lateral Length (Ft) 5,000 5.0…
  34. Investor Day – Sanchez Energy Corp – slide 34
    2 Centralized Project Management OPERATIONAL SUPPORT SYSTEM Task management with professional accountability and crossfunctional collaboration Scalability: streamlined systems for business intelligence and resource…
  35. Investor Day – Sanchez Energy Corp – slide 35
    2 Specialization Within Operations PROJECT PROJECT ENGINEER 1 ENGINEER 2 Competitive Benefits 20112013 WSM WSM 1 2 PAD PAD Project Management Alignment 1 2 Task Knowledge Acceleration PROJECT PROJECT PROJECT Wellsite…
  36. Investor Day – Sanchez Energy Corp – slide 36
    2 Concentrated Acreage Position Acreage Position Within a 50 Mile Radius Provides SN a Competitive Advantage Concentrated Acreage Leads to Synergies of Scale Cost savings from moving rigs and equipment Shared resources for…
  37. Investor Day – Sanchez Energy Corp – slide 37
    2 Process Optimization LineManagement Approach Subdivide well into smaller (and smaller) segments Construct granular approach to reviewing performances Focus on flat and nonproductive times Maximize parallel activities…
  38. Investor Day – Sanchez Energy Corp – slide 38
    2 Selective DeBundling & Efficiency Contributes to Sustainability PreDirect Sourcing Direct Sourcing Completion Chemicals SN Crew Only Vendor Completion Services Vendor Acid Vendor Logistics SN Vendor Sand Vendor…
  39. Investor Day – Sanchez Energy Corp – slide 39
    2 Manufacturing Efficiency Driven by Scale 2013 2015 2017 Operations Scale Operations Scale Operations Scale 100,000+ Eagle Ford Gross Acres 200,000+ Eagle Ford Gross Acres 585,000+ Eagle Ford Gross Acres 9,100 Average Boe/d…
  40. Investor Day – Sanchez Energy Corp – slide 40
    2 Drilling Cost Reduction Durability 46% of Drilling Services Contracted Through 2017 Term Contracted 2.0 1.8 1.7 Market Rate 1.6 1.6 0.4MM Efficiency 1.4 Savings 1.3 1.2 Inflation Risk: 1.0 MM 1.0 23% of Current…
  41. Investor Day – Sanchez Energy Corp – slide 41
    2 Completions Cost Reduction Durability 67% of Completion Services Contracted Through 2017 2.5 Term Contracted 2.3 Market Rate 2.0 0.8MM Efficiency Savings 1.7 1.5 1.5 MM Inflation Risk: 0.7 0.5 13% of Current…
  42. Investor Day – Sanchez Energy Corp – slide 42
    2 Sensitivity & Sustainability Catarina South Central Well Economics Oil Price (/Bbl) 55 65 75 Gas Price (/MMBtu) 3.00 3.25 3.50 Estimated Well Costs 3.2MM 3.8MM 4.3MM F&D (/Boe) 2.80 3.33 3.77 NPV 4,026M 5,283M…
  43. Investor Day – Sanchez Energy Corp – slide 43
    Sanchez Energy: Asset Detail 3. Asset Detail o Comanche o Catarina o Maverick o Javelina Competitive Advantages Asset Detail Financial Strategy 44 2017 Sanchez Energy Corporation
  44. Investor Day – Sanchez Energy Corp – slide 44
    3 Western Eagle Ford Assets MAVERICK COMANCHE CATARINA JAVELINA 45 2017 Sanchez Energy Corporation
  45. Investor Day – Sanchez Energy Corp – slide 45
    Comanche 46 2017 Sanchez Energy Corporation
  46. Investor Day – Sanchez Energy Corp – slide 46
    3 Comanche Asset Development Transformative Acquisition Results in Addition of 2.6 Billion in Net Asset Value Total Net EF 61,000 Acreage 1,000 Net Locations Locations Average EUR 625 MBoe Average IRR 70100%+ 5 Average…
  47. Investor Day – Sanchez Energy Corp – slide 47
    3 Completion Enhancements Unlocking Increased Type Curves Impact of Completion Design on Catarina Well Results 2016 Completion 2015 Completion Cumulative Boe Pre2014 Completion Producing Days Pre2014 Completions…
  48. Investor Day – Sanchez Energy Corp – slide 48
    3 Extensive Field Infrastructure Ready for Development Extensive Field Gathering and Water Infrastructure Throughout Comanche 3rd Party Gathering System Comanche Water Infrastructure Comanche Acreage Identified for further…
  49. Investor Day – Sanchez Energy Corp – slide 49
    3 Western Eagle Ford Stacked Development There Has Been Significant Development of the MEF and UEF Across Western Eagle Ford SN Leading the Way With Stacked Development in Catarina Upper Eagle Ford Thickness Upper Eagle Ford…
  50. Investor Day – Sanchez Energy Corp – slide 50
    3 MultiBench Development Potential at Comanche TARGET BENCH DEVELOPMENT ZONE FUTURE DEVELOPMENT LOCATIONS Brittleness AUSTIN CHALK E LOWER AUSTIN 8501,200 CHALK UPPER EAGLE 1,700 UPPER EAGLE FORD A FORD UPPER EAGLE…
  51. Investor Day – Sanchez Energy Corp – slide 51
    3 Comanche: Area 3 Asset Development Area 3 Total Acreage 100,000 Gross Acres Gross Locations 2,000+ Locations Average WI/NRI 24%/18% Average IRR 71% Average EUR 633 MBoe *Price Deck: Price Deck: 12/30/16 Strip; Assumes NGL…
  52. Investor Day – Sanchez Energy Corp – slide 52
    3 Comanche: Area 3 Overview 2017 Activity In Area 3 Comanche Area 3 IP (Bbl/d) 520 Oil Net Capital 80MM Initial Decline (%) 78.0% Oil EUR (MBbl) 258 Drilling of 61 Gross Development Wells IP (Mcf/d) 2,487 Completions of 40…
  53. Investor Day – Sanchez Energy Corp – slide 53
    3 Comanche: Area 3 Well Economics Oil Price (/Bbl) 55 65 75 Gas Price (/MMBtu) 3.00 3.25 3.50 Estimated Well Costs 3.2MM 3.8MM 4.3MM F&D (/Boe) 5.06 6.00 6.79 NPV 2,968 4,010 5,149 IRR 66% 76% 92% NGL Price…
  54. Investor Day – Sanchez Energy Corp – slide 54
    3 Comanche: Area 5 Asset Development Area 5 Total Acreage 50,000 Gross Acres Gross Locations 600+ Locations Average WI/NRI 25%/19% Average IRR 100%+ Average EUR 607 MBoe *Price Deck: Price Deck: 12.30.16 Strip; Assumes NGL…
  55. Investor Day – Sanchez Energy Corp – slide 55
    3 Comanche: Area 5 Overview 2017 Activity In Area 5 Comanche Area 5 IP (Bbl/d) 740 Oil Net Capital 55MM Initial Decline (%) 77.0% Oil EUR (MBbl) 413 Drilling of 51 Gross Development Wells Completions of 20 Gross Development…
  56. Investor Day – Sanchez Energy Corp – slide 56
    3 Comanche: Area 5 Well Economics Oil Price (/Bbl) 55 65 75 Gas Price (/MMBtu) 3.00 3.25 3.50 Estimated Well Costs 3.2MM 3.8MM 4.3MM F&D (/Boe) 5.27 6.26 7.08 NPV 5,020 6,480 8,035 IRR 100%+ 100%+ 100%+ NGL Price…
  57. Investor Day – Sanchez Energy Corp – slide 57
    3 Regional Correlation to Appraisal Areas 1/2/7 A Comanche Area 2 Maverick Area A UEF UEF UEF MEF MEF MEF LEF LEF LEF A Areas 1, 2, & 7 are on trend at similar presentday depths & subsurface…
  58. Investor Day – Sanchez Energy Corp – slide 58
    3 Comanche Development Plan 2017 DUC Production Schedule DUCs In Focus for 2017 5060 Acquired 132 gross Lower Eagle Ford Shale drilled but 60 uncompleted wells 50 of DUCs Turned to Sales Over 40% of 2017s Comanche capital…
  59. Investor Day – Sanchez Energy Corp – slide 59
    Catarina 60 2017 Sanchez Energy Corporation
  60. Investor Day – Sanchez Energy Corp – slide 60
    3 Catarina Asset Development Significant Expansion of South Central and Western Stacked Inventory Total Gross 106,000 Acreage 1,400+ Net Locations Locations 600 1,150 Average EUR MBoe Average IRR 45100%+ Average…
  61. Investor Day – Sanchez Energy Corp – slide 61
    3 Maximizing Catarina Hydrocarbon Recovery SN 2016 Development & Appraisal Resulted in Significantly Increased Value Western Western South Central Eastern Development Vertical Integration Appraisal Exploration Potential…
  62. Investor Day – Sanchez Energy Corp – slide 62
    3 Catarina South Central Asset Development Focus on Development Row Cropping With Step Out Appraisal South Central Catarina Total Acreage 25,000 Gross Acres Gross Locations 200+ Locations Average WI/NRI 100%/75% Average IRR…
  63. Investor Day – Sanchez Energy Corp – slide 63
    3 South Central Catarina SC CATARINA IP (BBl/d) 420 Oil Initial Decline (%) 78% Oil EUR (MBbl) 236 IP (Mcf/d) 4,300 Gas Initial Decline (%) 68% Gas Rate (MCFD) Gas EUR (MMcf) 2,874 NGL Yield (Bbl/MMcf) 119…
  64. Investor Day – Sanchez Energy Corp – slide 64
    3 South Central Delineation & Expansion South Central Appraisal & Inventory Growth 3D Seismic Spectral Decomposition 3D Seismic Spectral Decomposition 3D Seismic Spectral Decomposition 2017 Appraisal Activity 2016 Appraisal…
  65. Investor Day – Sanchez Energy Corp – slide 65
    3 2016 Catarina Appraisal Results Piloncillo E33 (Pilot + 4 MEF laterals) Highest IP rate pad brought online to date (1,5001,800 Boe/d per well) Exceeds south central type curve Piloncillo A25 (Pilot + 3 UEF/MEF laterals)…
  66. Investor Day – Sanchez Energy Corp – slide 66
    3 South Central Catarina Well Economics Oil Price (/Bbl) 55 65 75 Gas Price (/MMBtu) 3.00 3.25 3.50 Estimated Well Costs 3.2MM 3.8MM 4.3MM F&D (/Boe) 2.80 3.33 3.77 NPV 4,026M 5,283M 6,640M IRR 86% 95% 100%+ NGL…
  67. Investor Day – Sanchez Energy Corp – slide 67
    3 Western Catarina MultiBench Development Focus On Stacked UEF MEF Row Cropping Development Following Successful 201516 Appraisal West Stack West Western Catarina Total Acreage 30,000 Gross Acres Gross Locations 700…
  68. Investor Day – Sanchez Energy Corp – slide 68
    3 Western Catarina Development Stacked development focused in the Lower and Middle Eagle Ford Significant amount of additional high rate of return drilling inventory remaining Successful infill and stepout drilling program to…
  69. Investor Day – Sanchez Energy Corp – slide 69
    3 Western Catarina Stacked Development WEST STACKED CATARINA Catarina is now being developed exclusively through stacked IP (Bbl/d) 375 development in Northwest Catarina Oil Initial Decline (%) 77.0% Oil EUR (MBbl) 214 300…
  70. Investor Day – Sanchez Energy Corp – slide 70
    3 Western Stacked Development Catarina Well Economics Oil Price (/Bbl) 55 65 75 Gas Price (/MMBtu) 3.00 3.25 3.50 Estimated Well Costs 3.2MM 3.8MM 4.3MM F&D (/Boe) 5.21 6.19 7.00 NPV 1,932M 2,655M 3,480M IRR 41% 46%…
  71. Investor Day – Sanchez Energy Corp – slide 71
    3 Resulting Impact of Catarina Asset Development Catarina Development Potential Total Drilling EUR Average Breakeven Price Undeveloped Locations (Per Well) Asset Value At Acquisition* 162 450 MBoe 75 150 MM Current 1,400+ 600…
  72. Investor Day – Sanchez Energy Corp – slide 72
    Maverick 73 2017 Sanchez Energy Corporation
  73. Investor Day – Sanchez Energy Corp – slide 73
    3 Maverick Asset Leasing & Development Added Over 750 Total Net Drilling Locations Total Gross Acreage 100,000 1,000 Net Locations Locations Average EUR 350 MBoe Average IRR 6080% Average NPV10 (M) 3,371 Net Asset Value…
  74. Investor Day – Sanchez Energy Corp – slide 74
    3 Maverick Inventory Growth Current View of Engineered Locations 65,000 net acres leased in 2016 518 drilling locations (single zone LEF) identified at 75 acre spacing More than 1,000 net locations when stacking used in…
  75. Investor Day – Sanchez Energy Corp – slide 75
    3 Unlocking Maverick Updip Oil Play Eagle Ford Thickness Eagle Ford Thickness Combination of targeting, completion design and lift has effectively unlocked large updip oil resource in the Western Eagle Ford of Zavala and Dimmit…
  76. Investor Day – Sanchez Energy Corp – slide 76
    3 Maverick Organic Stacked Zone Growth Eagle Ford high oil saturation unlocked through targeting & completion design Stacking success at Catarina directly applicable to Maverick oily acreage AC LEF/MEF/UEF stack in flow…
  77. Investor Day – Sanchez Energy Corp – slide 77
    3 Maverick Regional 2017 Maverick development activity 35 net wells at 750 ft inzone spacing 2016 appraisal focused on double and triple stacking Eagle Ford target intervals 500+ well inventory for single zone LEF; nearly…
  78. Investor Day – Sanchez Energy Corp – slide 78
    3 Maverick Well Economics Oil Price (/Bbl) 55 65 75 Gas Price (/MMBtu) 3.00 3.25 3.50 Estimated Well Costs 3.0MM 3.6MM 4.1MM F&D (/Boe) 8.57 10.29 11.71 NPV 3,139M 3,994 4,951M IRR 74% 77% 83% NGL Price Assumption =…
  79. Investor Day – Sanchez Energy Corp – slide 79
    Javelina 80 2017 Sanchez Energy Corporation
  80. Investor Day – Sanchez Energy Corp – slide 80
    3 Javelina Leasing Significant Eagle Ford Dry Gas Optionality Total Net Acreage 45,000 300 Net Locations Locations Average EUR 12 Bcfe 600 Net Asset Value Million *Price Deck: Price Deck: 12.30.16 Strip;…
  81. Investor Day – Sanchez Energy Corp – slide 81
    3 Javelina Eagle Ford Downdip Gas Javelina Gas Play encompasses proven Eagle Ford downdip areas in Webb & LaSalle Counties A Accumulated 45,000 acres through organic leasing in 2016 Proven Lower Eagle Ford Shale with Upper…
  82. Investor Day – Sanchez Energy Corp – slide 82
    Sanchez Energy: Financial Strategy 4. Financial Strategy Competitive Advantages Asset Detail Financial Strategy 83 2017 Sanchez Energy Corporation
  83. Investor Day – Sanchez Energy Corp – slide 83
    4 Financial Strategy Maintain Adequate Liquidity Monetized noncore assets to build liquidity No near term debt maturities Achieve Upside Through Balanced Commodity Mix Continue Active Hedge Program to DeRisk Cash Flows…
  84. Investor Day – Sanchez Energy Corp – slide 84
    4 Maintain Adequate Liquidity YearEnd 2016 Cash Balance of Approximately 500 Million 300 Million Undrawn Revolver At Restricted Subsidiaries 350 million borrowing base New nonrecourse senior revolver planned for Comanche…
  85. Investor Day – Sanchez Energy Corp – slide 85
    4 Monetize NonCore Assets to Build Liquidity 2015 Asset Sales to SPP Provided 430 Million in Cash Carnero Gathering JV Interest Sold to SPP in 2016 for 44.4 Million in Total Consideration* 37.0 million in cash 7.4 million in…
  86. Investor Day – Sanchez Energy Corp – slide 86
    4 Extended Debt Maturity Runway No Bonds Maturing Until 2021 Revolver Currently Undrawn Robust Covenant Headroom High yield has no financial maintenance covenants Maintenance covenants under existing revolver are: 1.0x Current…
  87. Investor Day – Sanchez Energy Corp – slide 87
    4 Achieve Upside Through Blended Commodity Mix NGL Discount to WTI Expected to Shrink Multiple ethane crackers expected to come online starting in 2017 Growing propane exports Natural Gas Strategically located near export lines to…
  88. Investor Day – Sanchez Energy Corp – slide 88
    4 Continue Active Hedging Program to DeRisk Cash Flow Protect capital budget and guarantee a certain level of cash flows through the hedging program Lock in attractive rates of return by opportunistic hedging Consistent hedging…
  89. Investor Day – Sanchez Energy Corp – slide 89
    4 Focus on Remaining a Low Cost Leader SNs Low Cost Leadership Improves Margins and Supports the Companys Capital Program 50.00 Cash G&A LOE Taxes Interest & Dividends 45.06 45.00 4.78 41.46 Total Cash Operating Cost Per…
  90. Investor Day – Sanchez Energy Corp – slide 90
    4 2017 Production and Cost Guidance (1) Guidance FY 2017 FY 2018 Production Volumes: Oil (Bbls/d) 29,250 30,750 39,200 41,160 NGLs (Bbls/d) 23,010 24,190 28,800 30,240 Natural Gas (Mcf/d) 154,440 162,360 192,000 201,600 Barrel…
  91. Investor Day – Sanchez Energy Corp – slide 91
    4 Roadmap To Financial Strength SN Leverage SN + Comanche Leverage 5.0x 5.0x 4.0x 4.0x 3.0x 3.0x 2.0x 2.0x 1.0x 1.0x 2017E 2018E 2019E 2017E 2018E 2019E STRIP* 65/3.50 STRIP* 65/3.50 LongTerm Outlook EBITDA…
  92. Investor Day – Sanchez Energy Corp – slide 92
    4 Financial Strategy = Roadmap to Financial Strength Maintain Adequate Liquidity Monetize noncore assets to build liquidity No near term debt maturities Achieve Upside Through Balanced Commodity Mix Continue Active Hedge…
  93. Investor Day – Sanchez Energy Corp – slide 93
    Summary 94 2017 Sanchez Energy Corporation
  94. Investor Day – Sanchez Energy Corp – slide 94
    Execution Focused in 2017 Manufacturing Efficiency Capacity to Integrate Successful Track Record of Driven by Scale Acquisition Acquisition Integration Key Components to 2017 Operating Strategy Integrate Acquired Assets…
  95. Investor Day – Sanchez Energy Corp – slide 95
    Appendix 96 2017 Sanchez Energy Corporation
  96. Investor Day – Sanchez Energy Corp – slide 96
    Detailed Hedge Position Crude Oil Hedges Daily Volume Natural Gas Hedges Type of Daily Volume Quarter Contract Bbls/d Floor Price Ceiling Price Quarter Type of Contract MMBtus/d Swap Price Swaps 5,000 51.70 Swaps 120 3.07 Collars…

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