Sanchez Energy Corporation (SN), a fast growing independent oil and gas company with a 95,000 net acre position in the liquids-rich Eagle Ford Shale in Texas, announced that it has closed the private placement of $150 million of its 4.875% Cumulative Perpetual Convertible Preferred Stock, Series A (which includes $25 million from the exercise of the initial purchasers' overallotment option). Net proceeds from the offering were approximately $144.6 million, including the exercised overallotment option. Net proceeds are being used to fund the Company's capital expenditures, with a focus on accelerating its drilling program across all of its operating areas in the Eagle Ford, and for general corporate purposes.
Tony Sanchez, III, President and Chief Executive Officer, said, "Our recently closed $150 million convertible preferred offering, combined with our future cash flow from operations and modest debt from our anticipated credit facilities, provides the liquidity to continue executing and accelerating our drilling plans in 2012 and 2013."
Mr. Sanchez continued: "With each of our three major project areas in the Eagle Ford trend materially de-risked, we have approximately 800 to 1,200 net identified potential drilling locations. Our production has grown more than 90% from 1,200 BOE/d at the end of June to over 2,300 BOE/d at the end of August, and as we begin more developmental-type drilling programs in our three areas, we reaffirm our expected 2012 production exit rate to be between 4,000 and 5,000 BOE/d."