Sanchez Energy Corp. (NYSE: SN) announced Nov. 20 that is has received commitments from its lending group to increase its available borrowing base under its $1.5 billion first lien revolving credit facility.
The borrowing base will be increased to $650 million from $362.5 million with an elected commitment of $300 million, effective immediately.
"We have significantly expanded our available borrowing base under our revolving credit facility as a result of strong reserve growth through the drillbit and acquisition activity as well as through converting proved undeveloped and probable reserves into proved developed reserves," said Michael G. Long, Sanchez executive vice president and CFO, in a statement.
Houston's Sanchez has decided to maintain its elected $300 million commitment amount, knowing it has immediate ability to access the much higher approved borrowing base, he said.
Long said the company's liquidity, as of Sept. 30, was about $900 million, consisting of $600 million of cash and cash equivalents plus the $300 million elected commitment. The company now has strong financial flexibility and the option to further enhance its liquidity if needed by electing the full $650 million borrowing base, increasing its liquidity to more than $1.2 billion.
"We expect to fully fund our 2015 capital program through cash and cash equivalents on hand and cash flow from operations without drawing down on the company's revolving credit facility, assuming average oil prices of $80 per barrel and natural gas prices of $3.75 per million British thermal units," he said.
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