Sanchez Energy Corp. (NYSE: SN) announced June 30 the closing of its acquisition of Eagle Ford Shale assets from wholly owned subsidiaries of Royal Dutch Shell Plc for $553.5 million.
The acquisition adds about 60 million barrels of oil equivalent (MMboe) of proved reserves to Houston's Sanchez.
Sanchez will call the position Catarina. At closing, its position in the Eagle Ford is about 226,000 acres with up to 3,000 potential drilling locations. Average first quarter 2014 pro forma production will be about 42,800 boe/d.
"This strategic acquisition adds significant reserves, production and future resource potential in an area of the Eagle Ford Shale where we have demonstrated an ability to rapidly assimilate and efficiently develop acquired properties," said Tony Sanchez III, president and CEO, in a statement.
The total purchase price of $639 million consideration was $85.5 million lower due to normal an customary closing adjustments. The transaction was funded from cash on hand from a portion of the net proceeds from previously issued $850 million senior unsecured 6.125% notes due 2023. The transaction has an effective date of Jan. 1.
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