Sanchez Energy Corp

Sanchez Energy Corp terminated the registration of a class of securities, ending its reporting obligation for them.

listing compliance notice

The court confirmed Sanchez's reorganisation plan on 30 April 2020, and it wiped out the shareholders completely: all 102.3 million common shares and both preferred series were cancelled for no distribution, with the reorganised company issued to creditors. The business survived under new ownership; every share bought since the $22 float in 2011 was worth nothing.

bankruptcy or receivership

Sanchez missed the deadline to file a reorganisation plan and its bankruptcy lenders declared a default, accelerating $150 million. Failing on the loan that exists to carry a company through bankruptcy, as oil prices collapsed in the first weeks of the pandemic, is close to the last line of defence.

debt default or forbearance

The bankruptcy financing was restructured and enlarged nearly six months into the case, with the secured noteholders still funding it. A case that was meant to be quick was not going well.

debt financing

Sanchez drew the first $50 million of its bankruptcy loan, with the remaining $125 million dependent on the court's final approval.

debt financing

Sanchez Energy and ten subsidiaries filed for Chapter 11 in Houston, with a $175 million debtor-in-possession loan from the holders of the 2018 secured notes. The company that spent $3 billion buying Eagle Ford acreage between 2013 and 2017 could no longer service what it borrowed to do it.

bankruptcy or receivership

Sanchez Energy Corp's exchange filed to remove a class of its securities from listing.

listing compliance notice

The NYSE began delisting proceedings and suspended trading immediately; Sanchez chose not to appeal. The shares moved to the over-the-counter market, ending the listing that began at $22 in December 2011.

listing compliance notice

A second NYSE breach two weeks after the first: Sanchez's entire market value had fallen below $50 million - against roughly $2 billion of debt.

listing compliance notice

The NYSE warned Sanchez that its shares had averaged under $1 for thirty trading days. Seven years after listing at $22, the stock was worth less than a dollar.

listing compliance notice

Eugene Davis - a professional restructuring director who sits on boards of companies heading into bankruptcy - joined the board with Adam Zylman, and Cameron George took over as interim finance chief. Nine months before the Chapter 11 filing, this appointment is the clearest single signal in the whole record of where Sanchez was going.

director officer appointment

The $500 million secured notes closed. These are the notes whose holders would fund the bankruptcy eighteen months later and end up owning the company.

debt financing

Sanchez agreed to issue $500 million of 7.25% notes secured by a first lien on its assets. Moving from unsecured to secured borrowing is what a company does when unsecured lenders will no longer lend - and it subordinates every existing bondholder in the process.

material agreement

Sanchez sold more LaSalle and Webb County assets, this time to Vitruvian for about $105 million, continuing to sell producing property to service the debt taken on for Comanche.

material agreement

The Comanche acquisition closed, with Blackstone's Gavilan Resources taking the other half. Sanchez now operates a large acreage position it only half owns, alongside a private equity partner whose interests diverge from its own the moment prices disappoint - and it funded its share partly through a subsidiary deliberately held outside its bond covenants.

asset acquisition disposition

Sanchez sold 11.5 million shares at $12.50 to help fund Comanche - a third of the $35.25 it got in 2014, so far more dilution for far less money.

material agreement

Sanchez bet the company: it agreed to buy Anadarko's Comanche Eagle Ford assets - 318,000 gross acres - for $2.275 billion, splitting the cost 50/50 with a Blackstone vehicle and paying its own half partly through an unrestricted subsidiary deliberately placed outside its bond covenants. A deal five times the size of Catarina, done by a company whose borrowing base had just been cut to $350 million.

capital raising announcement

The Cotulla sale to Carrizo delivered about $160.6 million across two closings. Sanchez had paid $280 million for these assets in 2013 and sold them for roughly half that.

asset acquisition disposition

Sanchez agreed to sell the Cotulla assets it bought from Hess in 2013 to Carrizo Oil & Gas - the first sale of a core producing property to a genuine third party, made to raise cash for something much bigger.

material agreement

Sanchez sold its half of the Carnero processing plant to the affiliated partnership for $47.7 million plus $32.3 million of assumed commitments, completing the transfer of its midstream interests out of the company.

material agreement

The seventh credit amendment is where the lenders took control of the cash: account control agreements over every deposit account, a requirement to sweep any cash above $35 million into repayment, and half a point more interest. Sanchez was now being managed to the banks' comfort, not its own.

material agreement

The banks cut Sanchez's borrowing base from $500 million to $425 million as oil bottomed near $30. The first hard reduction in the company's available credit, and it would not be the last.

material agreement

The Catarina midstream sale closed, bringing in $345.8 million from the affiliated partnership. Sanchez keeps operating the system under long-term agreements - it has sold the asset but kept the cost.

asset acquisition disposition

Sanchez agreed to sell its Catarina gathering system to affiliate Sanchez Production Partners for $345.8 million - by far the largest of the related-party sales, and enough cash to matter against the debt taken on in 2014.

material agreement

the New York Stock Exchange certified Sanchez Energy Corp's securities for listing, clearing them to begin trading.

listing compliance notice

Sanchez adopted a shareholder rights plan to stop anyone accumulating enough stock to jeopardise its tax loss carryforwards. Companies only protect loss carryforwards when they have large ones, and only fear accumulation when the shares are cheap - both were now true.

bylaws amendment

The wellbore sale to the affiliated partnership closed for $81.6 million cash plus units in the buyer - real money in the door, from a counterparty Sanchez's own managers also run.

asset acquisition disposition

With prices down and cash needed, Sanchez began selling assets to its own affiliate: partial working interests in 59 Palmetto wellbores went to Sanchez Production Partners, an entity in the same family group, on terms where the buyer's share escalates every year. A related-party sale is the easiest kind to complete, and the hardest for an outside shareholder to judge.

material agreement

A further $300 million was added to the 6.125% notes at a premium, taking that bond to $1.15 billion. This is the last financing Sanchez completed before oil prices collapsed.

debt financing

Sanchez closed the Catarina acquisition and issued $850 million of 6.125% senior notes due 2023 to pay for it. Total borrowings now approach $1.5 billion against a company that listed two and a half years earlier with no debt at all - and Catarina's value depends entirely on oil staying near $100.

asset acquisition disposition

Sanchez sold 5 million shares at $35.25, its highest price ever and 60% above the IPO, to fund Catarina - and Sanchez Oil & Gas and A. R. Sanchez, Jr. sold shares alongside it. Insiders selling into the top of the company's history is worth noting on its own.

material agreement

This filing is typed as an annual meeting report, and the votes are in it - but the substance is that Sanchez agreed to buy Shell's Catarina assets in Dimmit, LaSalle and Webb Counties for about $639 million cash, with 60 million barrels of proved reserves, paying a $51 million deposit. Its largest deal yet, more than twice the Cotulla price.

agm notice

The Wycross acquisition closed at $230.1 million, funded from the September share sale and the note add-on. Sanchez has spent over $500 million on acquisitions in five months.

asset acquisition disposition

Sanchez added $200 million to its 7.75% notes at 96.5 cents on the dollar, taking the bond to $600 million. Equity and debt were both being used to buy the same asset.

debt financing

Sanchez sold 9.6 million shares at $23.00 - a share price back above its IPO level - to help fund the Wycross purchase.

material agreement

Sanchez agreed to buy Rock Oil's Wycross Eagle Ford assets for about $220 million in cash - its third acquisition of the year, three months after closing Cotulla and a month after buying into the Tuscaloosa Marine Shale.

material agreement

Sanchez agreed to buy into the Tuscaloosa Marine Shale alongside its own affiliate, Sanchez Resources - about 40,000 net acres for cash, stock and a three-well drilling carry, ending with half of a 115,000-acre area of mutual interest. A related-party entry into an unproven play, and the only significant move Sanchez ever made outside the Eagle Ford.

capital raising announcement

Sanchez issued $400 million of 7.75% senior notes due 2021 and used the proceeds to clear its revolver. Its first bond, and the start of the unsecured debt that would eventually decide the company's fate.

debt financing

Sanchez completed its first large acquisition - Hess Corporation's Cotulla Eagle Ford assets for $280.4 million - and doubled its revolver to $500 million with RBC to carry it. The company has gone from a 55,000-acre startup to a real Eagle Ford operator inside eighteen months.

asset acquisition disposition

Sanchez's lenders agreed to let it issue more preferred stock, and it placed a second series paying 6.5% to help fund a newly announced Eagle Ford acquisition. The preferred stack is being used as the acquisition currency, and the dividend rate has risen from 4.875% to 6.5% in six months.

capital raising announcement

A. R. Sanchez, Jr. joined the board alongside Alan Jackson, and Joseph DeDominic became chief operating officer. The family patriarch taking a board seat makes explicit what the services agreement already implied about who controls the company.

director officer appointment

Sanchez put its first bank debt in place: a $250 million first lien revolver led by Capital One and a $250 million second lien term loan from Macquarie. Eleven months after listing the company is levered as well as equity-funded.

debt financing

Sanchez raised $150 million selling 3 million convertible preferred shares paying 4.875%. Cheaper than debt and it does not count against the credit facility - the first layer of what became a large preferred stack.

capital raising announcement

The family partnership that seeded the company distributed its 22.1 million shares - 65% of Sanchez Energy - to its own partners for no consideration. Formally a change of control; in substance the Sanchez family's stake simply moved from one pocket to many, and the shares became freely tradeable.

other material event

The structure behind the float: family partnership Sanchez Energy Partners I contributed its Eagle Ford interests, Sanchez paid Ross Exploration about $89 million cash and 909,091 shares for 55,000 net undeveloped acres across five South Texas counties, and it signed a services agreement under which Sanchez Oil & Gas supplies all the people who actually run it. Every element of the later story - family control, external management, acreage bought with fresh capital - is set here.

asset acquisition disposition

Sanchez Energy floated on the NYSE at $22 a share, raising money to develop Eagle Ford acreage contributed by the Sanchez family's private partnership, and appointed Gilbert Garcia as an independent director in the same filing. The company starts life with capital, family control and no employees of its own.

director officer appointment

the New York Stock Exchange certified Sanchez Energy Corp's securities for listing, clearing them to begin trading.

listing compliance notice