Sanchez Energy to Sell 8 Million Shares to Help Fund Eagle Ford Acquisition
Sanchez Energy today announced its intention to acquire an estimated 3,600 net acres of oil-producing land in McMullen County, Texas, for approximately $220 million in cash, and said it will offer 8 million shares of its stock in a public offering to help fund the transaction.
Sanchez currently has approximately 35.3 million shares outstanding. Shares closed Friday at $23.76.
In addition to helping fund its Wycross acquisition focused on the Eagle Ford Shale, proceeds from the public stock offering will be used to pay for Sanchez's 2013 and 2014 capital budget and general corporate purposes, the company said.
Underwriters of the stock offering will be granted a 30-day option to purchase an additional 1.2 million shares.
Based on its stock price of $23.76 at the close of business on Sept. 6, 2013, the stock offering, not including the underwriters' option, would raise approximately $190 million before associated expenses.
Sanchez says the Wycross acquisition will give it estimated net proved reserves of 11.2 MMBOE (81% oil and 8% NGLs), an increase of approximately 25% from the company's mid-year 2013 proved reserves and will add approximately 2,000 BOE/D of production, resulting in an increase of approximately 15% over its current production rate.
The article Sanchez Energy to Sell 8 Million Shares to Help Fund Eagle Ford Acquisition originally appeared on Fool.com.
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