SANCHEZ ENERGY CORPORATION (OTCMKTS:SNZYP) Files An 8-K Entry into a Material Definitive AgreementItem 1.01. Entry into a Material Definitive Agreement.
On February7, 2018, Sanchez Energy Corporation (the“Company”) entered into a purchase agreement (the“Purchase Agreement”), by and among the Company, the subsidiary guarantors named therein (the“Guarantors”) and Citigroup Global Markets Inc., as representative of the several initial purchasers named therein (collectively, the“Initial Purchasers”), providing for the offer and sale (the “Offering”) of $500 million aggregate principal amount of 7.25% senior secured first lien notes due 2023 (the“Notes”) at an offering price equal to 98.973% of par. The issuance and sale of the Notes is expected to close on February14, 2018.
The Company will receive net proceeds of approximately $483 million (after deducting the Initial Purchasers’ discounts and estimated offering expenses) from the sale of the Notes. The Company intends to use the net proceeds from the Notes offering to repay approximately $95 million in total outstanding borrowings, and accrued interest and fees, under its and its restricted subsidiaries’ revolving credit facility and for general corporate purposes.
The Notes are being offered and sold to the Initial Purchasers in a private placement exempt from the registration requirements of the Securities Act of 1933, as amended (the“Securities Act”). The Notes are being offered by the Initial Purchasers to qualified institutional buyers in reliance on Rule144A under the Securities Act and to non-U.S. persons outside the United States in reliance on Regulation S under the Securities Act.
The Purchase Agreement contains customary representations, warranties and agreements of the parties and customary conditions to closing, obligations of the parties and termination provisions. The Company and Guarantors have agreed to indemnify the Initial Purchasers against certain liabilities, including liabilities under the Securities Act, or to contribute to payments the Initial Purchasers may be required to make because of any of those liabilities.
The Purchase Agreement contains representations, warranties and other provisions that were made or agreed to, among other things, to provide the parties thereto with specified rights and obligations and to allocate risk among them. Accordingly, the Purchase Agreement should not be relied upon as constituting a description of the state of affairs of any of the parties thereto or their affiliates at the time it was entered into or otherwise.
The foregoing description of the Purchase Agreement is not complete and is qualified in its entirety by reference to the full text of the Purchase Agreement, a copy of which is filed as Exhibit10.1 to this Current Report on Form8-K and is incorporated into this Item 1.01 by reference.
The Initial Purchasers and their affiliates have provided, and may provide in the future, investment banking, commercial banking and other financial services for the Company or its affiliates in the ordinary course of business, for which they have received and will receive customary fees and compensation. Certain of the Initial Purchasers and/or their affiliates are acting, or will act, as lenders under the Company’s various credit facilities, as applicable, and may receive a portion of the net proceeds from the Offering. Further, certain of the Initial Purchasers and/or their affiliates are acting, and will continue to act, as sales agents under an equity distribution agreement dated May25, 2017 with the Company to which the Company may sell from time to time through such sales agents shares of common stock having an aggregate offering price of up to $75 million. In addition, certain of the Initial Purchasers have received compensation in connection with the structuring of the Offering.
This Current Report on Form8-K includes forward-looking statements as defined under federal law. Although the Company believes that its expectations are based upon reasonable assumptions, no assurance can be given that the Company’s goals will be achieved, including statements regarding its ability to close the Notes offering and to use the net proceeds from the Notes offering as indicated above. Actual results may vary materially. The Company undertakes no obligation to publicly update or revise any forward-looking statement.
Item 1.01. Other Events.
On February7, 2018, the Company announced that it had priced the offering of Notes described in Item 1.01 of this Current Report on Form8-K. A copy of the press release is filed as Exhibit99.1 to this Current Report on Form8-K and is incorporated into this Item 1.01 by reference.