Sanchez Energy Corp. exited bankruptcy as a privately held corporation with a clean balance sheet as well as a new moniker and CEO.
In a late release on June 30, the Houston-based company said following completion of its financial restructuring it will now operate as Mesquite Energy Inc. The company’s ties to the Sanchez name dates back to the founding of Sanchez Oil & Gas Corp. by father and son—A. R. Sanchez Sr. and A. R. Sanchez Jr.—in 1972.
Additionally, Tony Sanchez III, son of A. R. Sanchez Jr., will no longer be at the helm of the company. He had served as Sanchez Energy’s CEO since its formation.
Formed in 2011, Sanchez Energy focused on the Eagle Ford Shale in South Texas, where it held 472,000 gross leasehold acres. The independent E&P also had acreage in the Tuscaloosa Marine Shale in Mississippi and Louisiana, according to its website.
However, saddled with debt and struggling to turn a profit, Sanchez Energy filed for bankruptcy in August 2019. In total, the company had approximately $2.3 billion in debt, which the reorganization successfully eliminated, according to the release on June 30.
Sanchez Energy had not reported an annual profit since 2013. A majority of the company’s debt, though, had been the result of a $2.3 billion acquisition of Eagle Ford Shale properties from Anadarko Petroleum in 2017 through a partnership with The Blackstone Group LP.
Blackstone Group’s Eagle Ford Shale Venture Files for Bankruptcy
Cameron W. George, who has served as Sanchez Energy CFO since 2018, will tack on the role of interim CEO to his responsibilities. He joined the company in 2016 after previously leading the finance team at Linn Energy LLC.
“We are excited to begin our new chapter as Mesquite Energy, a simpler and leaner company, guided by our core principles of cost discipline and production efficiency to create long-term value for our stakeholders,” George said in a statement on June 30. “With a clean balance sheet and substantial repositioning of our cost structure, we have taken the hard but necessary steps to become profitable in this low commodity price environment.”
According to the release, Mesquite Energy will remain focused on the development and production of properties in the Eagle Ford Shale in South Texas.
The company’s board of directors will comprise of: Nathan H. Van Duzer, managing director of special situations at Fidelity Investments; Wilson B. Handler, partner in the natural resources group at Apollo Global Management Inc.; and Harry F. Quarls, who currently serves as a director for Rosehill Resources and chairman of the board for Key Energy Services and Sunrise Oil & Gas.
Moelis & Co. was the company’s financial adviser for the restructuring. Additionally, Akin Gump Strauss Hauer & Feld LLP and Jackson Walker LLP served as the company’s legal counsel and Alvarez & Marsal was its restructuring adviser.
EIA Chops Price Forecasts for Oil, Gas
2023-01-11 - Weakened U.S. and global economies, and higher production, will lead to a 10.6% cut for WTI and 9.8% reduction for Henry Hub natural gas this year, according to the Energy Information Administration.
Wave of New LNG Export Plants Threatens to Knock Gas Prices
2023-03-14 - "When you hear people say 'there is no way we will overbuild this,' that's when things get over-built," said Alan Armstrong, CEO of U.S. gas pipeline operator Williams Cos., which supplies gas to LNG exporters.
Shell LNG Outlook Highlights Risks to US Gas Market
2023-02-28 - Shell Plc said the rising role for U.S. supply in the global LNG market will increase exposure to U.S. gas market risks, the European energy major announced in its LNG Outlook 2023.
Haynesville, Permian to Lead Natural Gas Production Growth in April
2023-03-20 - Despite recent price volatility, natural gas output from key regions including the Permian and Haynesville is expected to grow from March to April, according to the Energy Information Administration.
TotalEnergies Enters New Oman LNG Contact, Begins Onshore Production
2023-01-23 - TotalEnergies hopes its operations in Oman will contribute to the energy transition.