By Morey Stettner, For Investor’s Business Daily
In May, Sanchez Energy (NYSE:SN) announced an agreement to acquire oil and gas assets located on about 106,000 acres in South Texas. Sanchez Energy paid roughly $639 million in cash to Royal Dutch Shell for the assets.
“We view it as a positive transaction that accomplishes several goals for Sanchez,” said Eric Otto, an analyst at CLSA Americas in New York City. “Most of all, it brings them size and scale that enables them to take it to the next level.”
Otto adds that Sanchez Energy acquired the reserves at a fair price. And the land is part of the Eagle Ford Shale, where the Houston-based company already has extensive operations.
Sanchez Energy, an independent exploration and production company, went public in December 2011. The company is associated with Sanchez Oil and Gas, a private firm that has participated in and managed the drilling of over 900 wells since 1972.