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Why Crude Oil Is an Essential Component of SN’s Production Mix

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Sanchez Energy’s oil production

Crude oil (OIL) represented 32% of Sanchez Energy’s (SN) total production in 2Q16. Its share as a percentage of Sanchez’s total production has fallen significantly since 2Q14, at which point it was ~73%. Between 3Q15 and 2Q16, SN’s crude oil production averaged ~33%.

The above graph shows that while SN’s total production has risen considerably since 2Q14, oil’s share in SN’s total production has fallen.

Interestingly, SN’s oil revenue is greater than its NGLs (natural gas liquids) and natural gas revenues combined. Its oil revenue in 2Q16 was ~$65.8 million, while its NGLs and natural gas revenues were ~$22 million and $23 million, respectively.

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