Sanchez Production Partners LP (NYSEMKT:SPP) Files An 8-K Entry into a Material Definitive Agreement
Item 1.01 Entry into a Material Definitive
Agreement.
Underwriting Agreement
On November16, 2016, Sanchez Production Partners LP (the
Partnership) entered into an Underwriting Agreement (the
Underwriting Agreement) with Citigroup Global Markets Inc. and
RBC Capital Markets, LLC as representatives of the several
underwriters named in Schedule I thereto (the Underwriters),
providing for the public offering and sale (the Offering) by the
Partnership of 6,550,802 common units representing limited
partner interests in the Partnership (the Units), at a price to
the public of $11.00 per common unit. to the Underwriting
Agreement, the Partnership granted the Underwriters a 30-day
option to purchase up to an additional 982,620 common units from
the Partnership.
The material terms of the Offering are described in the
prospectus, dated November16, 2016 (the Prospectus), filed by the
Partnership with the Securities and Exchange Commission (the
Commission) on November17, 2016 to Rule424(b)(4)under the
Securities Act of 1933, as amended (the Securities Act). The
Units to be sold in the Offering were registered under the
Securities Act to a Registration Statement on FormS-1 (File
No.333-213219), which was declared effective by the Commission on
November16, 2016.
The Underwriting Agreement contains customary representations,
warranties and agreements of the Partnership and customary
conditions to closing, obligations of the parties and termination
provisions. The Partnership has agreed to indemnify the
Underwriters against certain liabilities, including liabilities
under the Securities Act, or to contribute to payments the
Underwriters may be required to make because of any of those
liabilities.
The foregoing description of the Underwriting Agreement does not
purport to be complete and is qualified in its entirety by
reference to the full text of the Underwriting Agreement, which
is filed as Exhibit1.1 hereto and incorporated herein by
reference.
Purchase Agreement
On November16, 2016, the Partnership entered into a Common Unit
Purchase Agreement (the Purchase Agreement) with SN UR Holdings,
LLC (the Purchaser), a wholly-owned subsidiary of Sanchez Energy
Corporation (Sanchez Energy), providing for the issuance and sale
by the Partnership in a private placement exempt from
registration to Section4(2)of the Securities Act (the Private
Placement) of 2,272,727 common units representing limited partner
interests in the Partnership (the Privately Placed Units), at a
price of $11.00 per common unit.
The Purchase Agreement contains customary representations,
warranties and agreements of the Partnership and customary
conditions to closing, obligations of the parties and termination
provisions. In addition, the closing of the Purchase Agreement is
conditioned on the Partnership consummating the Offering and the
acquisitions contemplated by the purchase agreements filed as
Exhibits 2.1 and 2.2 to the Partnerships Form8-K filed with the
Commission on October7, 2016. The Partnership has agreed to
indemnify the Purchaser against certain liabilities, including
liabilities under the Securities Act, or to contribute to
payments the Purchaser may be required to make because of any
of those liabilities.
The foregoing description of the Purchase Agreement does not
purport to be complete and is qualified in its entirety by
reference to the full text of the Purchase Agreement, which is
filed as Exhibit10.1 hereto and incorporated herein by
reference.
Registration Rights Agreement
In connection with the Purchase Agreement, on November22, 2016,
the Partnership entered into a Registration Rights Agreement
(the Registration Rights Agreement) with the Purchaser to which
the Partnership granted to the Purchaser certain registration
rights related to the Privately Placed Units. Under the
Registration Rights Agreement, the Partnership granted the
Purchaser demand registration rights with respect to the
preparation and filing with the Commission of one or more
registration statements for the purpose of registering the
resale of the Privately Placed Units.
The Partnership also agreed, among other things, to indemnify
and hold harmless the Purchaser and its controlling persons and
their respective officers, directors, members, partners,
agents, brokers, investment advisors and employees from and
against all losses of the Purchaser incident to the
Partnerships obligations under the Registration Rights
Agreement, including certain liabilities under the Securities
Act. The Purchaser has agreed to indemnify and hold harmless
the Partnership and its controlling persons and their
respective directors, officers, agents and employees from and
against all losses that may be based upon written information
furnished by the Purchaser to the Partnership for inclusion in
a registration statement to the Registration Rights Agreement
or the Purchasers improper use of a prospectus, including
certain liabilities under the Securities Act.
The foregoing description of the Registration Rights Agreement
does not purport to be complete and is qualified in its
entirety by reference to such document, which is filed as
Exhibit4.1 hereto and incorporated herein by reference.
Other Information
The Underwriters and their affiliates have performed investment
and commercial banking and advisory services for the
Partnership and its affiliates from time to time for which they
have received customary fees and expenses. The Underwriters and
their affiliates may, from time to time, engage in transactions
with and perform services for the Partnership in the ordinary
course of their business. Affiliates of certain of the
Underwriters are lenders under the Partnerships credit facility
and accordingly, will receive a portion of the net proceeds
from the Private Placement resulting from the repayment of
indebtedness with the use of proceeds therefrom. In addition,
Johnson Rice Company, L.L.C. has represented the audit
committee of Sanchez Energy in connection with its recent sale
to the Partnership of the 50% interest in Carnero Gathering,
LLC.
Antonio R. Sanchez,III is Sanchez Energys Chief Executive
Officer and is a member of the board of directors of both
Sanchez Energy and of the general partner of the Partnership.
Sanchez Oil and Gas Corporation (SOG) is a private company that
provides certain services to both Sanchez Energy and the
Partnership. Antonio R. Sanchez,Jr., the father of Antonio R.
Sanchez,III, is a member of the board of directors of Sanchez
Energy and both are officers and directors of SOG. Patricio D.
Sanchez, the son of Antonio R. Sanchez,Jr. and brother of
Antonio R. Sanchez,III, is an Executive Vice President of
Sanchez Energy, an officer of SOG and an officer and director
of the general partner of the Partnership. Eduardo A. Sanchez,
the son of Antonio R. Sanchez,Jr. and brother of Antonio R.
Sanchez,III and Patricio D. Sanchez, is Sanchez Energys
President and a director of the general partner of the
Partnership. Antonio R. Sanchez,Jr., Antonio R. Sanchez,III,
Patricio D. Sanchez and Eduardo A. Sanchez all directly or
indirectly own certain equity interests in Sanchez Energy, the
Partnership, the Partnerships general partner and SOG.
Item 3.02 Unregistered Sales of Equity
Securities.
The description of the Private Placement contained in Item 1.01
is hereby incorporated by reference.
Item 7.01 Regulation FD
Disclosure.
On November22, 2016, the Partnership closed the Offering and
Private Placement described in Item 1.01, which description is
incorporated herein by reference.
The information included in this Item 7.01 shall not be deemed
to be filed for purposes of Section18 of the Securities
Exchange Act of 1934, as amended (the Exchange Act), or
otherwise subject to the liabilities of that section, or
incorporated by reference into any filing under the Securities
Act, or the Exchange Act.
Item 9.01 Financial Statements and
Exhibits.
(d) Exhibits.
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ExhibitNo. |
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Exhibit |
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1.1 |
Underwriting Agreement, dated November16, 2016, between |
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4.1 |
Registration Rights Agreement, dated November22, 2016, |
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10. |
Purchase Agreement, dated November16, 2016, between |
* The exhibits and schedules to the these agreements have been
omitted from this filing to Item 601(b)(2)of Regulation S-K.
The Partnership will furnish copies of such omitted exhibits
and schedules to the Securities and Exchange Commission upon
request. Descriptions of such exhibits and schedules are set
forth on the table of contents of the respective agreements.
to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its
behalf by the undersigned hereunto duly authorized.
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SANCHEZ PRODUCTION PARTNERS LP |
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By: Sanchez Production Partners GP LLC, itsgeneralpartner |
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Date: November22, 2016 |
By: |
/s/ Charles C. Ward |
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Charles C. Ward |
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Chief Financial Officer |
ExhibitIndex
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ExhibitNo. |
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Exhibit |
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1.1 |
Underwriting Agreement, dated November16, 2016, between |
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4.1 |
Registration Rights Agreement, dated November22, 2016, |
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10. |
Purchase Agreement, dated November16, 2016, between |
* The exhibits and schedules to the these agreements have been
omitted from this filing
About Sanchez Production Partners LP (NYSEMKT:SPP)
Sanchez Production Partners LP, formerly Sanchez Production Partners LLC, is focused on the acquisition, development, ownership and operation of midstream and other energy producing assets. The Company operates through two segments: the exploration and production of oil and natural gas, and the midstream business, which includes the Catarina gathering system. The Exploration and Production segment explores for and produces crude oil and natural gas. The Midstream segment operates the gathering, processing and transportation of crude oil, natural gas liquids (NGLs) and natural gas. The exploration and production business includes oil and natural gas reserves located in the Eagle Ford Shale in South Texas and in other areas of Texas and Louisiana, as well as properties in the Mid-Continent region. The Company’s total estimated proved reserves total over 11.6 million barrels of oil equivalent (MMBoe). It owns approximately 1,992 net producing wells. Sanchez Production Partners LP (NYSEMKT:SPP) Recent Trading Information
Sanchez Production Partners LP (NYSEMKT:SPP) closed its last trading session up +0.05 at 11.05 with 284,694 shares trading hands.
