Sanchez Energy (NYSE:SN) ended regular trading as one of the very few energy producers whose stock price held firmly higher through a miserable session, as its plan to sell certain Eagle Ford Shale midstream assets to Sanchez Production Partners (NYSEMKT:SPP) for $345M is seen as solving its liquidity problems.
SN also confirmed it expects Q3 average production likely will meet or exceed the high end of its previous guidance of 46K-50K boe/day; the company also remains confident it can build a 20-30 well bank toward its 50 wells/year drilling commencement at Catarina at its current rig count.
Northland Capital maintains its Outperform rating and $12 price target on SN, believing the proceeds from the asset sale will strengthen SN's liquidity position and set up the company for opportunistic acquisitions; even though SN previously discussed the possible sale of midstream assets, the move's value capture is "meaningfully positive" and underappreciated by the market.
Purely My Own Opinion. Do Your Own Due Diligence.
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