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Sanchez Energy Declares Bankruptcy

Gasoil News - Published on Wed, 14 Aug 2019

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Sanchez Energy Corporation announced that the company and certain of its subsidiaries have voluntarily filed for reorganization under Chapter 11 of the US Bankruptcy Code in the US Bankruptcy Court for the Southern District of Texas. The decision to make this voluntary filing follows an extensive review of strategic alternatives to align its capital structure with the continued low commodity price environment, and Sanchez Energy intends to use this process to substantially reduce its indebtedness and provide the financial flexibility to position for future success. The company has liquidity, comprised of cash on hand and USD 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. Non-recourse subsidiary SN EF UnSub, LP and certain other unrestricted subsidiaries of the Company are not included in these Chapter 11 proceedings.

Sanchez Energy has received commitments from certain of its senior lenders for USD 175 million in new financing, of which USD 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.

As part of the Chapter 11 filing, the company has filed a number of customary motions with the Court to authorize the company to pay certain pre-petition obligations. Among other things, these motions seek authorization for Sanchez Energy to continue to operate in the normal course of business without interruption to its relationships with its royalty interest owners and working interest and joint billing partners, among others.

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Posted By : Rabi Wangkhem on Wed, 14 Aug 2019
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