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Johnson Rice 2017 Energy Conference – Sanchez Energy Corp

Sanchez Energy Corp · Sep 27, 2017 · 38 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. Johnson Rice 2017 Energy Conference – Sanchez Energy Corp – slide 1
    Results Driven. Manufacturing Focused. Corporate Presentation September 2017 January 23, 2017 www.sanchezenergycorp.com
  2. Johnson Rice 2017 Energy Conference – Sanchez Energy Corp – slide 2
    Sanchez Energy Overview Market Cap(1) 350 MM Eagle Ford Shale Enterprise Value 3,000 MM (1) Net Eagle Ford Acreage: 286,000 (2) Avg. 2Q 2017 Production: 73,300 Boe/d Dominant Western Eagle Ford Acreage Position Approximately…
  3. Johnson Rice 2017 Energy Conference – Sanchez Energy Corp – slide 3
    Sanchez Energy: 2017 Accomplishments Fully Integrated 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 Applying…
  4. Johnson Rice 2017 Energy Conference – Sanchez Energy Corp – slide 4
    Sanchez Energy Transformation Snapshot Proved Reserves SN Production 350 343 80,000 2017 Focus on 70,000 70,000 300 Converting PUDs & PDNP 60,000 250 to PDP 53,504 52,524 193 50,000 (MMBoe) 200 40,000 135 Boe/d…
  5. Johnson Rice 2017 Energy Conference – Sanchez Energy Corp – slide 5
    Large Inventory of High Rate of Return Locations Inventory of approximately 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%…
  6. Johnson Rice 2017 Energy Conference – Sanchez Energy Corp – slide 6
    Operations and Asset Development A Process Driven Manufacturing Approach 7 2017 Sanchez Energy Corporation
  7. Johnson Rice 2017 Energy Conference – Sanchez Energy Corp – slide 7
    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 Austin…
  8. Johnson Rice 2017 Energy Conference – Sanchez Energy Corp – slide 8
    Comanche Multi-Bench Drilling Spacing TARGET BENCH Brittleness AUSTIN CHALK EAGLE FORD UPPER UPPER EAGLE FORD A 600 UPPER EAGLE FORD B FRAC BARRIER EAGLE FORD MIDDLE UPPER EAGLE 600 FORD C LOWER EAGLE FORD…
  9. Johnson Rice 2017 Energy Conference – Sanchez Energy Corp – slide 9
    Comanche Eagle Ford Stacked Development AUSTIN CHALK UPPER EAGLE FORD A UPPER EAGLE FORD B UPPER EAGLE DE-Risked LEF Stacked Development FORD C SN LEF Stacked Development LOWER EAGLE SN Upper Development FORD A…
  10. Johnson Rice 2017 Energy Conference – Sanchez Energy Corp – slide 10
    Comanche and Offset Well Results Moro Creek 2401H Stumberg-King 4H Blakeway 1 C DIM 2H Ritchie Farms W. 135H Protege Murphy Chesapeake EP Energy IP-30: 1,351 Boe/d IP-30: 1,143 Boe/d IP-30: 2,198 Boe/d IP-30: 1,322 Boe/d Lateral:…
  11. Johnson Rice 2017 Energy Conference – Sanchez Energy Corp – slide 11
    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…
  12. Johnson Rice 2017 Energy Conference – Sanchez Energy Corp – slide 12
    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…
  13. Johnson Rice 2017 Energy Conference – Sanchez Energy Corp – slide 13
    Cost Structure Compared to Eagle Ford Peers Average Lateral Length 9,000 9.0 Eagle Ford Company Disclosed 2016 D&C Cost (MM) 8,000 8.0 7,000 7.0 6,000 6.0 Average Lateral Length (Ft) 5,000 5.0 4,000 4.0 3,000…
  14. Johnson Rice 2017 Energy Conference – Sanchez Energy Corp – slide 14
    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…
  15. Johnson Rice 2017 Energy Conference – Sanchez Energy Corp – slide 15
    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…
  16. Johnson Rice 2017 Energy Conference – Sanchez Energy Corp – slide 16
    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…
  17. Johnson Rice 2017 Energy Conference – Sanchez Energy Corp – slide 17
    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…
  18. Johnson Rice 2017 Energy Conference – Sanchez Energy Corp – slide 18
    SNMP Midstream Relationship Western Eagle Ford Focus Results in Synergies Through SNMPs Midstream Asset Base 19 2017 Sanchez Energy Corporation
  19. Johnson Rice 2017 Energy Conference – Sanchez Energy Corp – slide 19
    Financial Highlights 20 2017 Sanchez Energy Corporation
  20. Johnson Rice 2017 Energy Conference – Sanchez Energy Corp – slide 20
    Financial Strategy Improve Liquidity Through Additional Potential Divestitures Comanche water delivery system Palmetto position Achieve Upside Through Balanced Commodity Mix Improvement to NGL pricing protects against WTI pull…
  21. Johnson Rice 2017 Energy Conference – Sanchez Energy Corp – slide 21
    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…
  22. Johnson Rice 2017 Energy Conference – Sanchez Energy Corp – slide 22
    Active Hedging Program Helps Mitigate Price Volatility Significant hedge position guarantees base level of cash flows Oil Hedges Oil Hedged (Bbls/d) Swaption 25,000 55.11 52.03 52.65 52.58 52.51 51.78 20,000 15,000 Bbls/d…
  23. Johnson Rice 2017 Energy Conference – Sanchez Energy Corp – slide 23
    Sanchez Energy: Summary Highlights Dominate Western Closed 2.3 billion acquisition in the Western Eagle Ford Eagle Ford Acreage Position Approximately 286,000 net Eagle Ford acres Relentless Focus on Well costs have decreased…
  24. Johnson Rice 2017 Energy Conference – Sanchez Energy Corp – slide 24
    Appendix 25 2017 Sanchez Energy Corporation
  25. Johnson Rice 2017 Energy Conference – Sanchez Energy Corp – slide 25
    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…
  26. Johnson Rice 2017 Energy Conference – Sanchez Energy Corp – slide 26
    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…
  27. Johnson Rice 2017 Energy Conference – Sanchez Energy Corp – slide 27
    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 5 (DUCs) de-risk near-term development and…
  28. Johnson Rice 2017 Energy Conference – Sanchez Energy Corp – slide 28
    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…
  29. Johnson Rice 2017 Energy Conference – Sanchez Energy Corp – slide 29
    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…
  30. Johnson Rice 2017 Energy Conference – Sanchez Energy Corp – slide 30
    Detailed SN Restricted Subsidiary 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…
  31. Johnson Rice 2017 Energy Conference – Sanchez Energy Corp – slide 31
    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…
  32. Johnson Rice 2017 Energy Conference – Sanchez Energy Corp – slide 32
    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…
  33. Johnson Rice 2017 Energy Conference – Sanchez Energy Corp – slide 33
    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…
  34. Johnson Rice 2017 Energy Conference – 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. Johnson Rice 2017 Energy Conference – Sanchez Energy Corp – slide 35
    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…
  36. Johnson Rice 2017 Energy Conference – Sanchez Energy Corp – slide 36
    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…
  37. Johnson Rice 2017 Energy Conference – Sanchez Energy Corp – slide 37
    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…
  38. Johnson Rice 2017 Energy Conference – Sanchez Energy Corp – slide 38
    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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