of oil equivalent ("MMBOE") of net resource potential based on 80 acre
well spacing. While the Palmetto area wells are currently planned on 80
acre well spacing, the Company plans to test 60 acre well spacing and,
potentially, 40 acre well spacing.
-- For reference, the Barnhart #5 had a 24-hour initial production rate of 1,467 BOE/d on a 14/64-inch choke and a 5,991 foot lateral with a 17-stage fracture stimulation. The Barnhart #6 had a 24-hour initial production rate of 1,420 BOE/d on a 14/64-inch choke and a 5,998 foot lateral with an 18-stage fracture stimulation. The Company is now targeting at least 7,000 foot laterals, which would accommodate for a higher number of potential frack stages.
Marquis Area -- Fayette and Lavaca Counties:
The Company's initial plan was to drill a total of six gross and net horizontal wells in its Marquis area in 2012. The Company now expects to be able to spud three additional wells this year for a total of nine gross and net horizontal wells in 2012. A rig is expected to remain and drill continuously in the Prost area of Marquis, where the Company estimates it has up to 32 additional development locations, while 3-D seismic is acquired and interpreted during the first half of 2013. Central production and gas gathering lines are also planned to be constructed to facilitate an expanded development program.
-- The Sante A #1H (W.I. 100%), the Company's third operated horizontal well in the Marquis area, has been drilled and cased with a 6,020 foot lateral and is undergoing completion. The rig that drilled the Sante A #1H has moved back to the Prost area and has started drilling the Prost B #1H. An additional five wells are expected to be spud by the end of 2012.
-- The Prost #1H had a 24-hour initial production rate of 1,120 BOE/d on a 22/64-inch choke and had a 5,537 foot lateral with a 14-stage fracture stimulation. The Prost #2H had a 24-hour initial production rate of 1,369 BOE/d on a 22/64-inch choke and a 5,500 foot lateral with a 17-stage fracture stimulation. The Company is now drilling new wells with a targeted 6,500 - 7,500 foot lateral, which are expected to accommodate substantially more frack stages.
-- With the Prost #1H and #2H substantially de-risking the approximately 51,000 net acres in its core Fayette and Lavaca County areas of Marquis, the Company estimates it has 420 to 630 net identified potential drilling locations with a net resource potential of 140 to 210 MMBOE using a range of 120 to 80 acre well spacing.
Maverick Area -- Zavala and Frio Counties:
As the Maverick area is now largely de-risked, the Company expects to drill horizontal wells continuously throughout 2013 where the Company has 235 to 350 net identified potential drilling locations with 60 to 90 MMBOE of net resource potential using a range of 120 to 80 acre well spacing.
-- The Maverick area's initial 2012 drilling plan for five gross and net wells has been completed, and the drilled wells have demonstrated continuously improving results due to progressive changes in completion practices and tighter well spacing. After reviewing well results from the Mark & Sandra #2H (W.I. 100%), which had a 24-hour initial production rate of 931 BOE/d (~97% oil), and after reviewing the previous vertical well results, the Company plans to drill three additional horizontal offset wells to the Mark & Sandra #2H and one to two additional vertical wells for a total of up to 10 gross and net wells in 2012.
-- The Company expects that the drilling plan for the remainder of 2012 and 2013 will entail sequentially tighter horizontal well spacing.
Well Status Update:
The table below provides a status update on the Company's recently drilled wells:
Well Area Working Interest Status
---- ---- ---------------- ------
Barnhart #9 Palmetto 50% Producing
Ward E #1 Palmetto 50% Completing
Barnhart #14 Palmetto 50% Waiting on completion
Barnhart #15 Palmetto 50% Waiting on completion
Barnhart #18 Palmetto 50% Drilling
Barnhart A #1 Palmetto 50% Drilling
Sante A #1H Marquis 100% Completing
Prost B #1H Marquis 100% Drilling
Cautionary Note to U.S. Investors
The SEC permits oil and gas companies, in their filings with the SEC, to disclose only proved, probable and possible reserves. We use certain terms in this press release, such as total resource potential and other variations of the foregoing terms that the SEC's guidelines strictly prohibit us from including in filings with the SEC. U.S. Investors are urged to consider closely the reserves disclosures in our filings with the SEC available on our website at www.sanchezenergycorp.com and the SEC's website at www.sec.gov. You can also obtain this information from the SEC by calling its general information line at 1-800-SEC-0330.
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