Spun out of privately held Sanchez Oil and Gas back in 2011, Sanchez Energy (SN) could be one of the best pure plays on the Eagle Ford. The majority of the small-cap energy producer’s assets are 95,000 net acres in the prolific shale formation, and that acreage is really beginning to pay off.
Production at Sanchez’s wells grew an astonishing 320% over last year during the first quarter of this year. Overall, since being spun out in 2011, production has surged from less than 1,000 barrels per day to between 8,000 and 10,000 b/d by the end of 2013. More importantly, that production is 75% liquids and shale oil. This could help explain why Sanchez’s revenues have also leaped by triple digits during the same time frame.
With undeveloped land in the Woodbine of East Texas and the Montana portion of the Bakken, as well as 82,000 acres in the Haynesville, Sanchez is poised to continue growing quite rapidly.
SN shares currently trade at less than 10 times next year’s expected earnings.