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Eagle Ford Operator Files for Bankruptcy

Share Print Bookmark    |    Monday,August 12,2019

Sanchez Energy Corp. has filed for bankruptcy.

This comes about a month after the company skipped out on an interest payment amidst discussions of a possible investment from Apollo Global Management. Ultimately, no investment was ever announced.

The Company has significant liquidity, comprised of cash on hand and $175 million in new committed financing as described below, to operate in the normal course and intends to interact with its commercial counterparties as usual.

Tony Sanchez, III, president and chief executive officer of Sanchez Energy, said: "Sanchez Energy has assembled a high-quality asset base and has substantial liquidity to continue operating safely and efficiently, while we maintain productive relationships with our business partners and midstream counterparties. Over the last year, we have taken proactive steps to address the challenging oil and natural gas price environment, including stabilizing our production profile, improving our capital efficiency and reducing our overall cost structure. Undergoing a financial restructuring through a voluntary process represents the next phase for Sanchez Energy, as we work with our creditors on a plan to right-size our balance sheet, further invest in our assets and generate long-term value for our stakeholders. We remain committed to operating in the normal course, and I would like to thank our team of talented employees for their continued dedication to the Company. I am confident in the future of Sanchez Energy.”

Sanchez Energy has received commitments from certain of its senior lenders for $175 million in new financing, of which $25 million will be used to repay borrowings and replace a letter of credit currently outstanding under the Company’s existing revolving credit facility and, along with cash on hand and cash flow generated by ongoing operations, support the business and fund continued capital investment throughout the restructuring process.

In connection with the restructuring, Sanchez Energy is represented by Moelis & Co. as financial advisor, Akin Gump Strauss Hauer & Feld LLP and Jackson Walker LLP as legal counsel and Alvarez & Marsal as restructuring advisor.