Sanchez Energy reduces margin by 75 bps, increases borrowing base

By Wendy Van Sickle

Columbus, Ohio, May 15 – Sanchez Energy Corp. non-guarantor subsidiary SN EF UnSub, LP entered into an amendment to its first-lien credit agreement dated March 1, 2017 on Friday that increased the borrowing base and reduced the applicable margin, among other things, according to an 8-K filing with the Securities and Exchange Commission.

Specifically, the borrowing base was increased by $50 million to $380 million, with the next redetermination to be Oct. 1.

The applicable margin above Libor was reduced to a range of 200 basis points to 300 bps from a range of 275 bps to 375 bps.

Additionally, the proven reserves minimum collateral requirement was reduced to 85% of the net present value of SN UnSub’s proven reserves discounted at a rate of 9%. Previously, the requirement was 90% of the net present value of SN UnSub’s proven reserves discounted at a rate of 9%.

Also, the net total debt to consolidated EBTIDAX ratio was increased to 3 times from 2.75 times.

About $168 million is outstanding under the credit agreement with JPMorgan Chase Bank, NA as administrative agent.

Sanchez is an oil and natural gas exploration and production company based in Houston.

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