Sanchez Energy raises commitments for borrowing base under revolver

By Susanna Moon

Chicago, Feb. 21 - Sanchez Energy Corp. said it received commitments to boost its borrowing base under its $250 million first-lien revolving credit facility to $95 million from $27.5 million.

Sanchez also drew the $50 million from its second-lien facility on Jan. 31, the expiration date for the commitments, according to a company press release.

That leaves the company with $50 million of outstanding debt and about $95 million of cash on hand.

There is no usage under the company's revolving credit facility, the release noted.

"Our strong reserve growth and increased percentage of proved developed reserves has allowed a significant expansion of our available borrowing base under our revolving credit facility," Michael G. Long, the company's senior vice president and chief financial officer, said in the release.

"The combined cash on hand and credit capacity substantially addresses our currently anticipated funding needs to meet our planned 2013 capital program. Our drilling schedule for the first half of 2013 is largely targeting proved undeveloped locations, which we expect will result in further expansions to our borrowing base in the not too distant future."

The company's second-lien credit agreement remains unchanged, the release noted.

Revolver, term loan details

The company entered into a $250 million first-lien revolving credit facility and a $250 million second-lien term loan facility on Nov. 16, as reported before.

Capital One, NA was the administrative agent, lead arranger and bookrunner of the first-lien facility, and Macquarie Bank Ltd. was the administrative agent, lead arranger and bookrunner of the second-lien facility.

The first-lien revolving credit facility matures Nov. 16, 2015 and had an initial borrowing base of $27.5 million, subject to periodic redeterminations.

Interest for the revolver was Libor plus 250 basis points to 300 bps, depending on the utilization of the borrowing base. The commitment fee ranged from 37.5 bps to 75 bps, also depending on usage.

The second-lien credit agreement provided for an initial commitment of $50 million.

The term loan matures May 16, 2016 and was priced at Libor plus 850 bps.

Sanchez is a Houston-based oil and natural gas exploration and development company.

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