HOUSTON, TX–(Marketwired – January 25, 2016) – –(Marketwired)–January 25, 2016–Sanchez Energy Corporation (NYSE: SN) (“Sanchez Energy,” the “Company,” “we,” “our,” “us,” or similar terms), today announced that it has amended the terms under its $1.5 billion first lien revolving credit facility, effective immediately. The amendment allows for the incurrence of second lien debt not to exceed $400 million plus any principal representing payment of interest in kind. The borrowing base is reduced from $500 million to $425 million while the elected commitment remains at $300 million. The Company has no balance drawn on this facility and therefore believes that it has significant headroom under its 2.25x senior secured leverage covenant.
Gleeson Van Riet, Sanchez Energy’s Chief Financial Officer, reported, “This amendment is expected to provide the Company with additional financial flexibility and increases our available financing and liability management options. Although the borrowing base was lowered to $425 million, we have decided to maintain our $300 million elected commitment amount knowing we have the ability to access the higher borrowing base upon compliance with certain conditions. We believe that the Company’s liquidity remains strong with a cash position on December 31, 2015 of $435 million in addition to this completely undrawn bank credit facility. We expect to fully fund our 2016 upstream capital program of $200 million to $250 million through cash on hand and cash flow from operations without plans to draw down on the Company’s revolving credit facility and would expect to enter 2017 with a positive cash balance.”
“We believe that our fourth quarter of 2015 operational results were strong as disclosed in our press release and Analyst & Investor Day Presentation last week, and we currently estimate that we will not recognize any impairments for the fourth quarter of 2015. We expect to announce our fourth quarter and full year 2015 earnings on February 25, 2016.”
The Company reported internally estimated proved reserves at December 31, 2015 are expected to range from 120-130 million barrels of oil equivalent (“MMBOE”), an approximately seven percent decrease from the proved reserves at December 31, 2014 of 134.8 MMBOE. The Company’s proved reserves at December 31, 2014 were prepared by Ryder Scott Company, L.P., the Company’s independent petroleum engineers (“Ryder Scott”). Ryder Scott has not completed the final report of proved reserves for the year ended December 31, 2015, and results may differ from our internally estimated range. The results for 2015 proved reserves will be filed on the Annual Report on Form 10-K for the year ended December 31, 2015.
ABOUT SANCHEZ ENERGY CORPORATION
Sanchez Energy Corporation is an independent exploration and production company focused on the acquisition and development of unconventional oil resources in the onshore U.S. Gulf Coast, with a current focus on the Eagle Ford Shale in South Texas where we have assembled approximately 200,000 net acres, and the Tuscaloosa Marine Shale. For more information about Sanchez Energy Corporation, please visit our website: www.sanchezenergycorp.com.