HOUSTON, March 01, 2017 (GLOBE NEWSWIRE) — Sanchez Energy Corporation (NYSE:SN) (“Sanchez Energy” or the “Company”), today announced the closing of the previously announced acquisition of working interests in approximately 318,000 gross operated acres in the Western Eagle Ford from Anadarko Petroleum Corporation (NYSE:APC) (“Anadarko”) through a 50/50 partnership involving wholly-owned subsidiaries of the Company and with Blackstone Energy Partners (“Blackstone”) (the “Comanche Transaction”). After purchase price adjustments associated with net cash flows from July 1, 2016 (the effective date of the transaction), which totaled approximately $200 million, the 50/50 partnership paid approximately $2.1 billion ($1.05 billion net to Sanchez Energy) to close the transaction, which includes proved reserves of approximately 300 million barrels of oil equivalent (“MMBoe”) (approximately 150 MMBoe net to Sanchez Energy).
Commenting on the Comanche Transaction, Tony Sanchez, III, Chief Executive Officer of Sanchez Energy said, “With the closing of the Comanche Transaction, the Company’s operated Eagle Ford position is now approximately 585,000 gross acres (335,000 net to Sanchez Energy). The contiguous nature of the acquired acreage relative to our Catarina asset creates an opportunity for significant operational and cost synergies. Our initial focus for the asset will be on completing the 132 gross drilled but uncompleted (“DUC”) wells on the acreage, which we believe will allow for immediate and rapid production growth over the next 12 months. The closing of this transaction increases our total net proved reserves to approximately 340 MMBoe, which represents an increase of approximately 78 percent from our year-end 2016 reserves. With the current development plan, we expect full year 2018 net production to be in excess of 100,000 Boe per day, double our average production rate for 2016. Importantly, we view this transaction as a key step toward deleveraging the Company’s balance sheet and anticipate that this strong production growth and reduced leverage will enable us to deliver significant value to our shareholders in the coming years.”
NON-RECOURSE FINANCING AND LIQUIDITY UPDATE
In conjunction with closing the Comanche Transaction, the Company closed the previously announced financing at its newly formed, unrestricted subsidiary SN EF UnSub, LP (“UnSub”), which included $500 million in proceeds from the issuance of non-convertible perpetual preferred equity to funds managed by GSO Capital Partners LP (“GSO”) and borrowings under a new revolving credit facility (non-recourse to Sanchez Energy) (the “UnSub Credit Facility”) totaling approximately $173.5 million. The UnSub Credit Facility, which was led by JPMorgan Chase Bank, N.A. as administrative agent and Citigroup Global Markets Inc., involves a syndicate of 16 lenders, including nine financial institutions that are not in the existing Sanchez Energy credit facility. The UnSub Credit Facility is secured by the assets of UnSub and has an initial borrowing base of $330 million, which is subject to semi-annual redetermination.
Upon closing the Comanche Transaction, the Company maintained total liquidity of approximately $602 million, which includes borrowing capacity of $457 million under its credit facilities and approximately $145 million in cash and cash equivalents.
COMANCHE HEDGING UPDATE
Consistent with its strategy of hedging a high percentage of anticipated production, the Company has hedged approximately 80% of the oil and natural gas volumes from the proved developed producing reserves of the acquired Comanche assets with swaps at prices of $55.85 per Bbl and $3.26 per MMBtu from April 2017 through September 2018, and $53.52 per Bbl and $2.82 per MMBtu from October 2018 through March 2020.
ABOUT SANCHEZ ENERGY CORPORATION
Sanchez Energy Corporation (NYSE:SN) is an independent exploration and production company focused on the acquisition and development of U.S. onshore unconventional oil and natural gas resources, with a current focus on the Eagle Ford Shale in South Texas where we have assembled over 335,000 net acres. For more information about Sanchez Energy Corporation, please visit our website: www.sanchezenergycorp.com.