The sale of assets in the Eagle Ford shale increases liquidity and the value of shareholders, the head of Sanchez Energy said.
The company said it took $103 million in cash for its Javelina prospect in the Eagle Ford shale basin in Texas. CEO Tony Sanchez III said the sale, to an undisclosed buyer, will close in the third quarter and drive an effort to stimulate his company's value.
"This transaction accelerates the value of the asset, while building our liquidity and providing value to our shareholders," he said in a statement.
The company said it leased out around 70,000 acres in the Eagle Ford over the last 18 months, a move it said indicated the value of its portfolio.
Sanchez is one of the larger operators in the Eagle Ford shale basin in Texas and added more than 300,000 acres to its portfolio through a March acquisition from rival shale player Anadarko Petroleum.
With those assets now entrenched in its portfolio, Sanchez reported the second quarter production of around 6.7 million barrels of oil equivalent was 43 percent higher than the first quarter. Revenue for the second quarter increased over the first by 31 percent to $175.7 million.
The estimated ultimate recovery per well from the Javelina reservoir was between 1.5 and 2.5 million barrels of oil equivalent. No drilling was planned in the area for 2017, though 265 targets were identified.
July figures from the Federal Reserve Bank of Dallas show Eagle Ford production increased 3.1 percent to 1.35 million barrels per day.
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