Sanchez Energy Corporation declared that the company and certain of its subsidiaries have voluntarily filed for restructuring under Chapter No.11 of the U.S. Bankruptcy Code in the U.S. Bankruptcy Court for the Southern District of Texas. The choice to make this voluntary filing follows an exhaustive overview of strategic alternatives to align its capital structure with the continued low commodity price surroundings and Sanchez Energy intends to use this process to radically reduce its indebtedness and supply the financial flexibility to place for future success. The company has liquidity, comprised of cash on hand and $175 million in new dedicated financing as described beneath, to function in the ordinary course and intends to interact with its commercial counterparties as usual. Non-recourse subsidiary SN EF UnSub, L.P. and certain other unrestricted subsidiaries of the company are not included in these Chapter No.11 proceedings.
Sanchez Power has received commitments from sure of its senior lenders for $175 million in new financing, of which $25 million might be used to repay borrowings and exchange a letter of credit score at present outstanding under the corporate’s current revolving credit facility and, together with cash on hand and cash flow generated by ongoing operations, help the business and fund continued capital investment throughout the restructuring course of.
As part of Chapter No.11 submitting, the company has filed several customary motions with the Court to authorize the corporate to pay certain pre-petition obligations. Amongst other things, these motions search authorization for Sanchez Energy to proceed to operate within the regular course of business without interruption to its relationships with its royalty interest owners and working interest and joint billing partners, among others.