uploads///structure overview

A Look at Sanchez Production Partners’ Liquidity



SPP’s liquidity

After a debt repayment scheduled for November 23, 2016, Sanchez Production Partners (SPP) anticipates having $148 million in debt outstanding under its credit facility. The credit facility has a borrowing base of $205.1 million and outgoing letters of credit totaling ~$15 million related to the funding of remaining capital commitments to Carnero Processing and Carnero Gathering LLC.

SPP projects pro forma liquidity on November 23, 2016, of ~$53.1 million. This liquidity includes projected borrowing capacity net of outstanding letters of credit plus cash and cash equivalents after the scheduled debt repayment.

The reserve-based lending component of SPP’s borrowing base is scheduled for redetermination in 4Q16, and the midstream component of the borrowing base is scheduled for redetermination during 1Q17.

Article continues below advertisement

Public offering

Sanchez Production Partners partly raised funds for the acquisitions we discussed in the previous parts of this series from a public offering of ~6.5 million common units at an offering price of $11 per unit and a private placement of ~2.3 million common units to Sanchez Energy (SN).


In October 2016, Sanchez Production Partners increased its 3Q16 distributions to $0.4246 per unit. This total represented a fourth consecutive 1.5% increase in distributions. SPP paid an initial quarterly distribution of $0.40 per unit in November 2015.


More From Market Realist