This small energy company has become a pure play on the Eagle Ford shale region.
Opportunity is knocking with Sanchez Energy (SN). This little company, call it the son of EOG Resources (EOG), just filed 8 million shares so it could buy more assets in the Eagle Ford region, which has the most bountiful shale in this country.
Sanchez bought Hess's (HES) assets in Eagle Ford when Hess decided to focus on the Bakken Oil Formation. It bought those for $265 million in March. These new assets, the Wycross assets, are almost all oil. They, cost $220 million and they immediately boosted Sanchez's production a significant amount. This one is the one to watch. It shrewdly is not borrowing money, it's doing it all with equity.
In interviews, CEO Tony Sanchez has said he loved his overlooked status when they bought the Hess properties. No one is thinking about this $800 million company whose stock is up 32% this year. Big mistake. It has become a pure play on the Eagle Ford and it is a natural to be snapped up a year from now by a company such as Statoil (STO) or Cimarex (XEC) to boost assets. Sanchez may be the most exciting unheard play on this shale.
You have to get in on this deal. It will raise numbers further and allow more analyst coverage, which is meager right now.
Sanchez, the football player, may never get in again. Sanchez, the oil play, is a starter right now.