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 Oil & Gas Timeline
Sanchez Oil & Gas Timeline (Source: Sanchez Oil & Gas Corp.)

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.

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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.

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