STONE ENERGY CORPORATION (NYSE:SGY) Files An 8-K Entry into a Material Definitive Agreement

Item1.01.

Purchase and Sale Agreement

As previously disclosed, on October20, 2016, Stone Energy
Corporation (Stone or the Company) entered into a purchase and
sale agreement (as amended on December9, 2016, the
Tug Hill PSA) with TH Exploration III,
LLC, an affiliate of Tug Hill, Inc. (Tug
Hill). to the terms of the Tug Hill PSA, Stone
agreed to sell all of its approximately 86,000 net acres in the
Appalachia regions of Pennsylvania and West Virginia
(collectively, the Properties) to Tug
Hill for $360 million in cash, subject to customary purchase
price adjustments. Stone entered into the Tug Hill PSA in
conjunction with previously announced comprehensive balance sheet
restructuring efforts that include the execution of a
restructuring support agreement, as amended, (the AR
RSA), to support a restructuring on the terms of a
pre-packaged plan of reorganization as described therein (the
Plan).

On December14, 2016, Stone and its domestic subsidiaries filed
voluntary petitions under chapter 11 of title 11 of the United
States Code (the Bankruptcy Code) in
the United States Bankruptcy Court for the Southern District of
Texas (the Bankruptcy Court). to
Bankruptcy Court orders dated January11, 2017 and January31,
2017, two additional bidders were allowed to participate in
competitive bidding on the Properties.

On January18, 2017, the Bankruptcy Court approved certain bidding
procedures (the Bidding Procedures) in
connection with the sale of the Properties. In accordance with
the Bidding Procedures, on February8, 2017, Stone conducted an
auction for the sale of the Properties and upon conclusion
selected the final bid submitted by EQT Corporation, through its
wholly-owned subsidiary EQT Production Company, with a final
purchase price of $527 million in cash, subject to customary
purchase price adjustments and approval by the Bankruptcy Court,
with an upward adjustment to the purchase price of up to $16
million in an amount equal to certain downward adjustments (the
Purchase Price), as the prevailing bid
(the Prevailing Purchaser). Further, in
accordance with the Bidding Procedures, American Petroleum
Partners Operating, LLC, who submitted a bid including a final
purchase price of $526 million in cash and otherwise on the same
terms as the bid of the Prevailing Purchaser, was selected as the
back-up bidder (the Back-up Bidder).

On February 9, 2017, the Company entered into a purchase and sale
agreement (the EQT PSA) with the
Prevailing Purchaser, reflecting the terms of the prevailing bid.
The following description of the EQT PSA is qualified by
reference to the text of such agreement, a copy of which is filed
herewith as Exhibit 10.1 and is incorporated herein by reference.

Under the EQT PSA, the sale of the Properties has an effective
date of June1, 2016. The EQT PSA contains customary
representations, warranties and covenants. From and after the
closing of the sale of the Properties, the Company and the
Prevailing Purchaser, respectively, have agreed to indemnify each
other and their respective affiliates against certain losses
resulting from any breach of their representations, warranties or
covenants contained in the EQT PSA, subject to certain customary
limitations and survival periods. Additionally, from and after
closing of the sale of the Properties, the Company has agreed to
indemnify the Prevailing Purchaser for certain identified
retained liabilities related to the Properties, subject to
certain survival periods, and the Prevailing Purchaser has agreed
to indemnify the Company for certain assumed obligations related
to the Properties.

The EQT PSA may be terminated, subject to certain exceptions,
(i)upon mutual written consent, (ii)if the closing has not
occurred by March1, 2017, (iii)for certain material breaches of
representations and warranties or covenants that remain uncured,
and (iv)upon the occurrence of certain other events specified in
the EQT PSA.

At the close of the sale of the Properties, the Tug Hill PSA will
terminate, and the Company will use a portion of the Purchase
Price to pay Tug Hill a break-up fee of $10.8 million and
reimburse Tug Hill for $1.85 million of its expenses.

On February10, 2017, the Bankruptcy Court entered a sale order
approving the sale of the Properties to the Prevailing Purchaser
in accordance with Section363(f) of the Bankruptcy Code. The
parties expect to close the sale of the Properties by February28,
2017, subject to customary closing conditions.

Cautionary Note Regarding Forward-Looking Statements

Certain statements in this Current Report on Form 8-K are
forward-looking and are based upon the Companys current belief as
to the outcome and timing of future events. All statements, other
than statements of historical facts, that address activities that
the Company plans, expects, believes, projects, estimates or
anticipates will, should or may occur in the future are
forward-looking statements. Important factors that could cause
actual results to differ materially from those in the
forward-looking statements herein include, but are not limited
to, the ability to consummate the sale of the Properties as
contemplated by the EQT PSA; risks associated with third party
motions in any bankruptcy case, which may interfere with the
ability to confirm and consummate a plan of reorganization;
potential adverse effects on the Companys liquidity or results of
operations; increased costs to execute the reorganization;
effects on the market price of the Companys common stock and on
the Companys ability to access the capital markets; and the risk
factors and known trends and uncertainties as described in the
Companys Annual Report on Form 10-K, Quarterly Reports on Form
10-Q and Current Reports on Form 8-K as filed with the SEC. For a
more detailed discussion of risk factors, please see Part I,
Item1A, Risk Factors of the Companys most recent Annual Report on
Form 10-K and Part II, Item1A of the Companys Quarterly Reports
on Form 10-Q for the periods ended March31, 2016, June30, 2016
and September 30, 2016, respectively. Should one or more of these
risks or uncertainties occur, or should underlying assumptions
prove incorrect, the Companys actual results and plans could
differ materially from those expressed in the forward-looking
statements. The Company assumes no obligation and expressly
disclaims any duty to update the information contained herein
except as required by law.

(d) Exhibits.

About STONE ENERGY CORPORATION (NYSE:SGY)

Stone Energy Corporation is an independent oil and natural gas company. The Company is engaged in the acquisition, exploration, exploitation, development and operation of oil and gas properties. The Company operates in the Gulf of Mexico (GOM) basin. It has leveraged its operations in the GOM conventional shelf and has its reserve base in the prolific basins of the GOM deep water, Gulf Coast deep gas, and the Marcellus and Utica shales in Appalachia. Its estimated proved oil and natural gas reserves are over 60 million barrels of oil equivalents (MMBoe) or 340 billion cubic feet equivalent (Bcfe). Over 95 MMBoe or 570 Bcfe of its estimated proved reserves are revised downward. It has made investments in seismic data and leasehold interests, and has geological, geophysical, engineering and operational operations in deep water arena to evaluate potential exploration, development and acquisition opportunities. It holds over two deep water platforms, producing reserves and various leases.

STONE ENERGY CORPORATION (NYSE:SGY) Recent Trading Information

STONE ENERGY CORPORATION (NYSE:SGY) closed its last trading session down -0.04 at 7.24 with 728,408 shares trading hands.