Sanchez Energy Corp. (NYSE: SN) added two new Eagle Ford areas by leasing 110,000 net acres in 2016, which will serve as competitive companion pieces to its pending $2.3 billion acquisition from Anadarko Petroleum Corp. (NYSE: APC) .

The company put a $1.6 billion value on the leased acreage in its Maverick area, which specifically targets the Western Eagle Ford—and a new dry gas area called Javelina.

In an investor call Jan. 23, executives said the company has been “quietly living” in the Maverick area.

The company’s confidence in the Maverick is such that 2017 capex for new wells will outstrip even its recent blockbuster Comanche deal with Anadarko.

The Western Eagle Ford has been largely ignored by the industry in the past few years, but Sanchez Energy said its current completion designs are yielding strong well results. The company is also taking advantage of the areas large, contiguous ranches in Zavala and Dimmit counties, Texas.

“Over the last 12 months, the company has taken a series of strategic initiatives to expand its acreage and asset development position in the Eagle Ford Shale,” CEO Tony Sanchez said. “In addition to the pending Comanche transaction, the company organically leased approximately 110,000 net acres in the Western Eagle Ford.”

The company’s acreage has ballooned about 68% to 335,000 net acres since 2015. In 2016, production averaged 53,350 barrels of oil equivalent per day (boe/d), which exceeded the high end of its guidance by 2.6%. Average well costs fell 15% during the year to about $3 million.

The Anadarko acquisition and leasing efforts add about 2,000 drilling locations as well as cost savings opportunities. Sanchez plans to run six rigs in 2017 and drill 141 wells.

“This will also enable further strides in our strategy to drive manufacturing efficiencies in unconventional resource development,” Sanchez said of the leasing efforts.

The Maverick

The Maverick area is among “the best return areas” in the play, Seaport Global Securities said in a Jan. 23 note.

The Western Eagle Ford is likely the best area to target stacked development, with an emphasis on the Middle Eagle Ford, Sanchez executives said. That’s what led to the leasing efforts in the Maverick, the company said.

Tony Sanchez said the Maverick area was bypassed by the industry, but with the right application of technology, the area produces a high percentage of oil and low water and gas.

He said the company developed the area because, as a wildcatter at heart, “What I’ve learned over the years is what I don’t know.”

Six wells have been brought online in the Maverick area with results exceeding previously disclosed 30-day IP rates by up to 15%.

“With current well costs and our Maverick type curve, these wells are showing returns of nearly 80% at current strip pricing. We are very pleased with the results at Maverick and, as a result, plan to split development capital in the Western Eagle Ford during 2017 between Maverick, Catarina and the pending Comanche acquisition.”

Sanchez teamed up with Blackstone Energy Partners to buy the 155,000-acre Comanche position from Anadarko, which produces 67 M boe/d.

Maverick Area Leasing 2016 Sanchez Energy, chart

The deal includes 132 gross drilled but uncompleted (DUC) Lower Eagle Ford wells. About 40% of capex spent in the area will be to complete the DUCs at an average cost of $1.7 million per well. The company’s rig program is largely focused on the Comanche acreage.

The Javelina

The Javelina acreage leased by the company is thought to have “proven Lower Eagle Ford Shale with Upper Eagle Ford” upside value. The acreage also offers “synergies” with Sanchez’s Eagle Ford operations and midstream expansion efforts.

Midstream has been an easily accessible source of cash for the company.

In 2016, the company divested $300 million of midstream assets and noncore Eagle Ford acreage, largely to its subsidiary, Sanchez Production Partners LP (NYSE MKT: SPP). The divestitures also reduced Sanchez’s future capital commitments by nearly $32 million.

In 2015, the company sold $430 million in assets to SPP.

At the midpoint of its guidance, Sanchez expects to produce 91.5 Mboe/d and spend $450 million in capex in 2017.

The company exited 2016 with about $800 million in liquidity, including $500 million cash.

Darren Barbee can be reached at dbarbee@hartenergy.com.