Sanchez Energy trims spending plans for 2018

Nov. 3 (UPI) -- U.S. shale player Sanchez Energy said that it expects to cut spending next year, after reporting a record-setting rate of production in the third quarter.

"As 2017 draws to a close, we expect capital spending to be between $525 million and $550 million for the full year," CEO Tony Sanchez III said in a statement. "We anticipate that 2018 capital spending will be $75 million to $100 million less than 2017."

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. The company said third quarter production increased 43 percent over the same period last year and reached a record rate of around 80,000 barrels of oil equivalent in the early part of the fourth quarter in part because of increased activity in the Eagle Ford shale.

The Eagle Ford shale basin was in the path of Hurricane Harvey, which swept over most of Texas in early September. The company said it suspended some operations because of the storm, but production was relatively spared. In an update on operations after Harvey dissipated, Sanchez said production was around 75,000 barrels of oil per day, in line with its expectations for the third quarter.

Sanchez raised around $100 million in cash from the sale of non-core assets in the Eagle Ford in the third quarter. The company's average cost per barrel of oil and natural gas production, meanwhile, was up 29 percent from the same period last year.

Of the seven shale basins monitored by the U.S. Energy Information Administration, the forecast for Eagle Ford oil production is the second lowest after Haynesville, which is largely a natural gas basin. The EIA said Eagle Ford production should be around 1.2 million barrels per day this month a gain of less than 1 percent from October. Production from the Permian shale, largely situated in Texas, is expected to increase by about 2 percent for a November average of 2.6 million barrels per day.

Sanchez spent all but 6 percent of its total capital expenditures in the third quarter on drilling-related activities.