HOUSTON, April 23 (UPI) -- U.S. shale explorer Sanchez Energy said it will be sustainable in the low crude oil market as output soars as a result of efficient drilling operations.
Sanchez said daily production during the first quarter of 2015 averaged 45,217 barrels of oil equivalent per day, a 141 percent increase year-on-year and beyond its initial expectations of around 44,000 boe per day.
The company in January said it was responding to deteriorating market conditions by cutting its 2015 capital spending plan to a range of $600 million to $650 million. In its Wednesday statement, the company said spending would range on the lower end of that spectrum.
President and Chief Executive Officer Tony Sanchez III said production success came through operational efficiencies, largely in the Eagle Ford shale basin in Texas.
"With our commitment to continuous improvement, we believe that our efficiency gains are systemic, and we anticipate that we will be able to sustain lower operating costs and maintain a competitive advantage in the basins in which we operate even as commodity prices begin to recover," he said in a statement.
A so-called Beige Book from the Dallas Federal Reserve said last week rig counts and the demand for oil services in Texas, the No. 1 oil producer in the nation, were on the decline. While most firms surveyed by the bank said they'd be able to weather the storm, the slump should continue through the year.
Sanchez said production for full-year 2015 is expected to average on the upper end of the 44,000 boe per day range.
The company's capital plan for 2015 was based on oil priced at $60 per barrel. West Texas Intermediate, the U.S. benchmark, was priced Thursday at $55.95 per barrel.
