Sanchez Energy cuts capital spending plan as costs drop

Sanchez Energy (SN) lowers expected 2014 capital spending to $600M-$650M from $650M-$700M due to significant decreases in drilling and completions costs and efficiency improvements.

SN says it expects 90% of its wells to be on multi-well pads in 2014, up from 75% in 2013 and resulting in a 40% decrease in drilling time from spud to total depth and a 35% increase in average footage drilled per day.

SN also says it has doubled the number of frac stages pumped per day on average, and expects services costs to continue to decline due to the use of zipper fracs on multi-well pads.

FY 2014 production guidance and well count remains unchanged; current production is ~19.5K boe/day.

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