Sanchez Energy Corporation (SN) (“Sanchez Energy” or the “Company”) announced today that it has received commitments from its lending group to change the borrowing base under its $1.5 billion first lien revolving credit facility from $650 million to $550 million with an unchanged elected commitment of $300 million, effective immediately. This borrowing base change reflects the effect of the recently announced sale of certain assets in the Eagle Ford shale for $85 million. In addition, the existing net total debt covenant of 4.0x was replaced with a senior secured leverage covenant of 2.25x and a total interest coverage covenant of 2.25x.
Michael G. Long, Sanchez Energy’s Executive Vice President and Chief Financial Officer, reported, “Our new approved $550 million borrowing base takes into account our reserve growth since our last redetermination, slightly offset by the change in bank credit price decks and the sale of certain assets to Sanchez Production Partners, LP. We continue to have no usage of the bank credit facility nor do we currently project needing to draw under the facility in 2015. We have decided to maintain our elected $300 million commitment amount, knowing we have the ability to access the much higher approved borrowing base. The Company’s liquidity remains strong with a cash position in excess of $330 million, post the asset sale, and a completely unused bank credit facility. We expect to fully fund our 2015 capital program through cash and cash equivalents on hand and cash flow from operations without drawing down on the Company’s revolving credit facility and would expect to enter 2016 with a positive cash balance.”
About Sanchez Energy Corporation
Sanchez Energy Corporation is an independent exploration and production company focused on the acquisition and development of unconventional resources in the onshore U.S. Gulf Coast with a current focus on the Eagle Ford Shale in South Texas where it has assembled approximately 226,000 net acres, and the Tuscaloosa Marine Shale. For more information about Sanchez Energy Corporation, please visit its website: www.sanchezenergycorp.com
Forward Looking Statements
This press release contains, and our officers and representatives may from time to time make, forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. All statements, other than statements of historical facts, included in this press release that address activities, events or developments that Sanchez Energy expects, believes or anticipates will or may occur in the future are forward-looking statements, including statements related to our production and well results. These statements are based on certain assumptions made by the company based on management’s experience, perception of historical trends and technical analyses, current conditions, anticipated future developments and other factors believed to be appropriate and reasonable by management. When used in this press release, the words “will,” “potential,” “believe,” “estimate,” “intend,” “expect,” “may,” “should,” “anticipate,” “could,” “plan,” “predict,” “project,” “profile,” “model,” “strategy,” “future,” or their negatives, other similar expressions or the statements that include those words, are intended to identify forward-looking statements, although not all forward-looking statements contain such identifying words.