Sanchez Production Partners (SPP) Prices 8.82M Common Units Offering

November 17, 2016 6:53 AM EST

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Sanchez Production Partners LP (NYSE: SPP) announced the pricing of its previously announced underwritten public offering of 6,550,802 common units representing limited partner interests in SPP at a public offering price of $11.00 per common unit and a separate, concurrent private placement of 2,272,727 common units to Sanchez Energy Corporation (NYSE: SN) at a price of $11.00 per common unit. In addition, SPP has granted the underwriters of the offering a 30-day option to purchase up to an additional 982,620 common units at the public offering price. SPP intends to use the net proceeds received in connection with the offering, together with borrowings of approximately $28 million under the Partnership’s credit facility, as follows: (i) approximately $80 million to acquire a 50% equity interest in Carnero Processing, LLC (“Carnero Processing”) from Sanchez Energy; and (ii) approximately $24.9 million to pay the purchase price, after normal and customary adjustments, for certain wellbores and escalating working interests and other production assets that SPP intends to acquire from Sanchez Energy. The Partnership intends to use approximately $25 million from the private placement to repay borrowings outstanding under the Partnership’s credit facility (including borrowings that may result from the Partnership’s letters of credit, if any). The offering and private placement are expected to close on Nov. 22, 2016, subject to customary closing conditions. The private placement is exempt from registration under the Securities Act of 1933 pursuant to Section 4(a)(2) thereof.

Citigroup, RBC Capital Markets, BofA Merrill Lynch and Johnson Rice & Company L.L.C. are acting as the joint book-running managers for the offering and Johnson Rice & Company L.L.C. is acting as the structuring agent for the offering. Seaport Global Securities, Stephens Inc. and Tudor, Pickering, Holt & Co. are acting as the co-managers for the offering.



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