Sanchez: New approved borrowing base under revolving credit facility

Sanchez Energy Corp. (NYSE: SN) 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 play 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 CFO, said, "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."

Did You Like this Article? Get All the Energy Industry News Delivered to Your Inbox

Subscribe to an email newsletter today at no cost and receive the latest news and information.

 Subscribe Now

Whitepapers

Maximizing Operational Excellence

In a recent survey conducted by PennEnergy Research, 70% of surveyed energy industry professional...

Leveraging the Power of Information in the Energy Industry

Information Governance is about more than compliance. It’s about using your information to drive ...

Reduce Engineering Project Complexity

Engineering document management presents unique and complex challenges. A solution based in Enter...

Revolutionizing Asset Management in the Electric Power Industry

With the arrival of the Industrial Internet of Things, data is growing and becoming more accessib...