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Houston-based energy cos. to swap Eagle Ford shale assets for $181M

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Written y Jack Witthaus

Click HERE to Read the Article by the Publisher.


A Houston-based energy company is selling assets in southern Texas to another Bayou City-based firm.

Sanchez Energy Corp. (NYSE: SN) is selling about $181 million of non-core assets in the Eagle Ford shale region to Carrizo Oil & Gas Inc. (Nasdaq: CRZO), according to press releases from the companies. The approximately 15,000-acre transaction is expected to close in mid-December.

The assets produce about 3,000 barrels of oil equivalent per day from 112 gross wells.

Carrizo plans to fund the acquisition with proceeds from a separately announced public offering of 6 million shares of common stock. The move reinforces Carrizo Oil & Gas’ active strategy in the Eagle Ford, according to the San Antonio Business Journal, a sister paper of the Houston Business Journal. So far this year, Carrizo has filed for 84 drilling permits for wells on its leases in Atascosa, Frio and La Salle counties, the San Antonio Business Journal reports.

“We are pleased to announce this bolt-on acquisition in the Eagle Ford Shale, as it increases our acreage position in the play by more than 15 percent and expands our core inventory in it by approximately 10 percent, with additional upside possible from a combination of infill drilling and multizone development,” Chip Johnson IV, Carrizo’s president and CEO, said in a release. “A number of the acquired properties are also contiguous with our core acreage position, which should allow us to capitalize on efficiencies such as the ability to drill longer lateral wells from our existing leasehold.”

Sanchez Energy said in a release that the move allows the company more financial flexibility.

“Proceeds from the transaction, which is expected to close in the fourth quarter 2016, are expected to enhance the company’s already strong liquidity position which, as of the end of the third quarter 2016, totaled approximately $629 million, consisting of approximately $329 million in cash and cash equivalents and an undrawn bank credit facility with an elected commitment amount of $300 million,” Sanchez Energy CEO Tony Sanchez III said in a release.

Sanchez Energy named Howard Thill as CFO and executive vice president effective Oct. 10. Previously, he’d served as senior vice president of communications and investor relations at Oklahoma-based Devon Energy Corp. (NYSE: DVN).

In March, Gleeson Van Riet stepped down as CFO of Sanchez Energy for personal reasons after serving in the position for less than a year. Garrick Hill was named interim co-CFO at the time.

Carrizo’s CEO Chip Johnson won HBJ’s “Outstanding CEO of a medium-sized company” award in 2016.


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Written y Jack Witthaus

Click HERE to Read the Article by the Publisher.

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