Sanchez Energy Corp. (NYSE: SN) has received commitments from its lending group to increase its available borrowing base under its $1.5 billion first lien revolving credit facility from $362.5 million to $650 million with an elected commitment of $300 million, effective immediately.
Michael G. Long, Sanchez Energy's executive vice president and CFO, reported, "We have significantly expanded our available borrowing base under our revolving credit facility as a result of strong reserve growth through the drill-bit and acquisition activity, as well as through converting proved undeveloped and probable reserves into proved developed reserves. The available amount has increased from $362.5 million to $650 million. We have decided to maintain our elected $300 million commitment amount, knowing we have immediate ability to access the much higher approved borrowing base.”
Long noted that the company's liquidity, as of Sept. 30, was $900 million, consisting of $600 million of cash and cash equivalents plus the $300 million elected commitment. “We have strong financial flexibility and have the option to further enhance our liquidity if needed by electing the full $650 million borrowing base, increasing our liquidity to over $1.2 billion,” he said. “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, assuming average oil prices of $80 per barrel and natural gas prices of $3.75 per MMBtu."