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2Q 2017 Earnings Update – Sanchez Energy Corp

Sanchez Energy Corp · Aug 9, 2017 · 39 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. 2Q 2017 Earnings Update – Sanchez Energy Corp – slide 1
    Results Driven. Manufacturing Focused. Corporate Presentation August 2017 January 23, 2017 www.sanchezenergycorp.com
  2. 2Q 2017 Earnings Update – Sanchez Energy Corp – slide 2
    Sanchez Energy Overview Market Cap(1) 375 MM Eagle Ford Shale Enterprise Value 3,000 MM (1) Net Acreage: 356,000 (2) Avg. 2Q 2017 Production: 73,300 Boe/d Dominant Western Eagle Ford Acreage Position Over 4,000 net drilling…
  3. 2Q 2017 Earnings Update – Sanchez Energy Corp – slide 3
    Sanchez Energy: Transformation in 2016 2.3 Billion Comanche Acquisition Acquired 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. 2Q 2017 Earnings Update – Sanchez Energy Corp – slide 4
    Leads to Creation of Shareholder Value 3 yr. Projected Production CAGR Results in the ability to deliver Over 20% both free cash flow and production growth EBITDA Projected to More Than Double by 2018 Improves the balance sheet…
  5. 2Q 2017 Earnings Update – Sanchez Energy Corp – slide 5
    Sanchez Energy Growing Asset Base 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 multiple-bench development in the…
  6. 2Q 2017 Earnings Update – Sanchez Energy Corp – slide 6
    Sanchez Energy Transformation Snapshot Proved Reserves SN Production 350 343 90,000 80,000 300 2017 Focus on 80,000 Converting PUDs & PDNP 70,000 250 to PDP 60,000 52,524 53,504 193 (MMBoe) 200 50,000 135 Boe/d 150…
  7. 2Q 2017 Earnings Update – Sanchez Energy Corp – slide 7
    Large Inventory of High Rate of Return Locations Inventory of over 4,000 High Rate of Return Net Drilling Locations Maverick Net Drilling Locations 1,000 3-Stream EUR (MBoe) 350 Est. Capital Cost (MM) 3.0 IRR (%)* 60-80%…
  8. 2Q 2017 Earnings Update – Sanchez Energy Corp – slide 8
    Strong Net Asset Value Location Summary Net Producing + Net Engineered Net Contingent Total Net Undrilled Total Net Area (1) (2) DUC Wells Locations Locations Wells Locations Comanche 392 832 162 994 1,386 Catarina 333 846 626…
  9. 2Q 2017 Earnings Update – Sanchez Energy Corp – slide 9
    Operations and Asset Development A Process Driven Manufacturing Approach 10 2017 Sanchez Energy Corporation
  10. 2Q 2017 Earnings Update – Sanchez Energy Corp – slide 10
    Multi-Bench Development Total Eagle Ford Thickness Eagle Ford Well Density Western Eagle Ford Western Eagle Ford Multi-Bench Development Across Western Eagle Ford Lower, Middle and Upper Eagle Ford Shale with upside in…
  11. 2Q 2017 Earnings Update – Sanchez Energy Corp – slide 11
    Multi-Bench Development Potential TARGET BENCH DEVELOPMENT ZONE FUTURE GROSS DEVELOPMENT LOCATIONS AUSTIN CHALK E LOWER AUSTIN Brittleness 1,000-1,500 CHALK UPPER EAGLE 2,000-3,000 UPPER EAGLE FORD A FORD UPPER EAGLE…
  12. 2Q 2017 Earnings Update – Sanchez Energy Corp – slide 12
    Completion Enhancements Increasing Type Curves Impact of Completion Design on Catarina Well Results(1) 2016 Completion 1,000 Mboe 2015 Completion Cumulative Boe 700 Mboe Pre-2014 Completion 450 Mboe Producing…
  13. 2Q 2017 Earnings Update – Sanchez Energy Corp – slide 13
    South Central Development E33 Pad Continues to Outperform South Central Type Curve E-33 step out pad continues to outperform and is tracking 20% above the current South Central Type Curve Fourteen new wells had a per well 30-day…
  14. 2Q 2017 Earnings Update – Sanchez Energy Corp – slide 14
    Cost Structure Compared 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 (MM)…
  15. 2Q 2017 Earnings Update – Sanchez Energy Corp – slide 15
    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…
  16. 2Q 2017 Earnings Update – Sanchez Energy Corp – slide 16
    Comanche Activity Update Focused on Integration Sanchezs Comanche asset team has been meeting since January Began vendor negotiations in January to get in front of service cost inflation DUC Focused Operations Expect to complete…
  17. 2Q 2017 Earnings Update – Sanchez Energy Corp – slide 17
    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…
  18. 2Q 2017 Earnings Update – Sanchez Energy Corp – slide 18
    Extensive Field Infrastructure Extensive Field Gathering and Water Infrastructure Throughout Comanche 3rd Party Gathering System Comanche Water Infrastructure Comanche Acreage Identified for further Infrastructure Buildout Gas…
  19. 2Q 2017 Earnings Update – Sanchez Energy Corp – slide 19
    SNMP Midstream Relationship Western Eagle Ford Focus Results in Synergies Through SNMPs Midstream Asset Base 20 2017 Sanchez Energy Corporation
  20. 2Q 2017 Earnings Update – Sanchez Energy Corp – slide 20
    Financial Highlights 21 2017 Sanchez Energy Corporation
  21. 2Q 2017 Earnings Update – Sanchez Energy Corp – slide 21
    Financial Strategy Maintain Adequate Liquidity Monetized non-core assets to build liquidity No near term debt maturities Achieve Upside Through Balanced Commodity Mix Continue Active Hedge Program to De-Risk Cash Flows…
  22. 2Q 2017 Earnings Update – Sanchez Energy Corp – slide 22
    Maturity Profile No Bonds Maturing Until 2021 Robust Covenant Headroom High yield has no financial maintenance covenants Maintenance covenants under existing SN revolver are: 1.0x Current Ratio 2.0x Net First Lien Debt/LTM EBITDA…
  23. 2Q 2017 Earnings Update – Sanchez Energy Corp – slide 23
    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…
  24. 2Q 2017 Earnings Update – Sanchez Energy Corp – slide 24
    Focus on Remaining a Low Cost Leader SNs Low Cost Leadership Improves Margins and Supports the Companys Capital Program 50 Cash G&A LOE Taxes Interest & Dividends 45.06 45 4.78 41.46 40 4.72 9.37 Total Cash Operating Cost…
  25. 2Q 2017 Earnings Update – Sanchez Energy Corp – slide 25
    Sanchez Energy: Summary Highlights Dominate Western Closed 2.3 billion acquisition in the Western Eagle Ford Eagle Ford Acreage Position Leased 110,000 net acres in Maverick and Javelina areas Relentless Focus on Well costs have…
  26. 2Q 2017 Earnings Update – Sanchez Energy Corp – slide 26
    Appendix 27 2017 Sanchez Energy Corporation
  27. 2Q 2017 Earnings Update – Sanchez Energy Corp – slide 27
    2017 Production and Cost Guidance Guidance (1) 3Q 2017 4Q 2017 Production Volumes: Oil (Bbls/d) 22,000 - 24,000 29,000 - 31,000 NGLs (Bbls/d) 22,000 - 24,000 23,000 - 25,000 Natural Gas (Mcf/d) 156,000 - 160,000 166,000 - 170,000…
  28. 2Q 2017 Earnings Update – Sanchez Energy Corp – slide 28
    Comanche Acquisition Adjacent to SNs Core Acreage 33.5 MBoe/d Net to SN 36% oil / 34% NGLs Over 900 MM in NPV-10 Value from PDP and PDNP (DUCs), net to SN 132 Drilled Uncompleted Wells (DUCs) de-risk near-term development and cash…
  29. 2Q 2017 Earnings Update – Sanchez Energy Corp – slide 29
    Strategic JV Facilitated Comanche Acquisition Repeatable Structure Matches Cash Flow with Appropriate Financing Blackstone Sanchez Energy Corporation Energy Partners Non-Recourse Unrestricted Subsidiary Non-Recourse RBL Gavilan…
  30. 2Q 2017 Earnings Update – Sanchez Energy Corp – slide 30
    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. 2Q 2017 Earnings Update – Sanchez Energy Corp – slide 31
    Detailed SN Hedge Position Crude Oil Hedges Natural Gas Hedges Type of Daily Volume Daily Volume Quarter Contract Bbls/d Floor Price Ceiling Price Quarter Type of Contract MMBtus/d Swap Price Swaps 13,000 51.27 Swaps 126,000 3.09…
  32. 2Q 2017 Earnings Update – Sanchez Energy Corp – slide 32
    Detailed UnSub Hedge Position Crude Oil Hedges Natural Gas Hedges Type of Daily Volume Daily Volume Quarter Contract Bbls/d Floor Price Ceiling Price Quarter Type of Contract MMBtus/d Swap Price Swaps 6,750 55.85 Swaps 40,000 3.26…
  33. 2Q 2017 Earnings Update – Sanchez Energy Corp – slide 33
    Capitalization Summary Revolving credit facility for SN (due 2019) 350 million borrowing base with an elected commitment of 300 million and an interest rate of LIBOR + 2.00% - 3.00% Financial Maintenance Covenants: Maximum Net First…
  34. 2Q 2017 Earnings Update – Sanchez Energy Corp – slide 34
    2016 Catarina Appraisal Results Piloncillo E33 (Pilot + 4 MEF laterals) Highest IP rate pad brought online to date (1,500-1,800 Boe/d per well) Exceeds south central type curve Piloncillo A25 (Pilot + 3 UEF/MEF laterals)…
  35. 2Q 2017 Earnings Update – Sanchez Energy Corp – slide 35
    Leader in Existing Multi-Bench Development Multi-Bench 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 2016 2017E…
  36. 2Q 2017 Earnings Update – Sanchez Energy Corp – slide 36
    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 step-out drilling program to date…
  37. 2Q 2017 Earnings Update – Sanchez Energy Corp – slide 37
    Comanche: Area 3 Overview 2017 Activity In Area 3 Comanche Area 3 IP (Bbl/d) 520 Net Capital 80MM Initial Decline (%) 78.0% Oil Oil EUR (MBbl) 258 Drilling of 61 Gross Development Wells IP (Mcf/d) 2,487 Completions of 40…
  38. 2Q 2017 Earnings Update – Sanchez Energy Corp – slide 38
    Comanche: Area 5 Overview 2017 Activity In Area 5 Comanche Area 5 IP (Bbl/d) 740 Net Capital 55MM Initial Decline (%) 77.0% Oil Oil EUR (MBbl) 413 Drilling of 51 Gross Development Wells Completions of 20 Gross Development…
  39. 2Q 2017 Earnings Update – Sanchez Energy Corp – slide 39
    Maverick Regional 2017 Maverick development activity 35 net wells at 750 ft in-zone spacing 2016 appraisal focused on double and triple stacking Eagle Ford target intervals 500+ well inventory for single zone LEF; nearly doubles…

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