HOUSTON, Jan. 19 (UPI) -- Even with a strong production record for the fourth quarter, U.S. shale player Sanchez Energy said Tuesday it would cut spending by about $50 million.
Sanchez entered 2015 with plans to cut spending by about 60 percent compared with fourth quarter 2014. Strong production trends in the United States and weakened global demand pushed crude oil prices down from highs about $100 per barrel in mid-2014, leading to a slump below $30 per barrel in the current market.
Despite the pressure from lower spending and even lower crude oil prices, Sanchez said output for the fourth quarter of 2015 of around 58,000 barrels of oil equivalent per day beat its expectations by more than 10 percent.
Production from the fourth quarter was 32 percent higher year-on-year. Full-year 2015 output was 72 percent higher than for all of 2014.
President and CEO Tony Sanchez said in a statement that strong production figures meant his company could pull back spending by about $50 million from 2015 levels to around $225 million.
"Our 2016 upstream capital budget is expected to maintain production roughly equal to that of 2015," he said in a statement.
Upstream refers to the exploration and production side of the energy sector.
Much of the focus for Sanchez is in the Catarina section of the Eagle Ford shale reserve area in Texas. Sanchez in October received about $345 million in cash for the sale of its midstream, or transportation, assets in the western section of the shale basin.