Solids Control Equipments Manufacturer

Home > News > Sanchez Energy to drill in Tuscaloosa marine shale trend

Sanchez Energy to drill in Tuscaloosa marine shale trend

2013-08-09
Sanchez Energy Corp., Houston, said it will become a 50-50 partner with an affiliate with acquisition of 40,000 net undeveloped acres in the emerging Tuscaloosa marine shale (TMS) oil and gas play centered in southern Mississippi.

Sanchez Energy established an area of mutual interest with its SR Acquisition I LLC affiliate under which Sanchez Energy will acquire all of the working interests in the AMI owned by an unaffiliated private equity firm plus part of SR’s working interests.

As a result, Sanchez Energy will own an undivided 50% working interest across the AMI through the TMS formation. The AMI holds rights to 115,000 gross acres and 80,000 net acres.

The acreage is in Wilkinson, Amite, and Pike counties, Miss., to the south in St. Helena and Tangipahoa parishes, La., and to the west in Concordia Parish, La. Consideration is $70 million of cash and 342,760 shares of Sanchez Energy common stock valued at $8.2 million.

Sanchez Energy has further committed, as a part of the total consideration, to carry SR for its 50% working interest in an initial 3 gross (1.5 net) TMS wells to be drilled in the AMI, and at Sanchez Energy’s election it may carry SR in a further 3 gross (1.5 net) TMS wells if it desires to participate in additional drilling within the AMI.

Sanchez Energy cited high-flowing completions by Goodrich Petroleum Corp. and Encana Corp. and declining drilling and completion costs as factors in its decision to enter the TMS play at this juncture.