SN Stock and Debt offering

[dan_s]

This morning, Sanchez Energy (SN) launched two significant public offerings:
•A ~$200 million common stock offering (5,000,000 shares plus an additional 750,000 "green shoe" shares; yesterday's closing price for the stock was $34.71 per share). The offering represents less than 10% increase in the number of the company's shares.
•A concurrent $700 million debt offering (of senior unsecured notes due 2023).

Sanchez intends to use the proceeds from these financings to fund its recently announced Catarina acquisition; to repay borrowings under its credit facility; and for general corporate purposes.

http://seekingalpha.com/article/2263473 ... k-synopsis

[dan_s]

Sanchez Energy (SN): An updated Net Income & Cash Flow Forecast model has been posted under the Sweet 16 Tab.

My Fair Value Estimate is now $50.40/share (including the new stock offering).

First Call's Price Target is $37.94/share. I can tell that a lot of the forecasts submitted to First Call do not include the acquisition from Shell that I am assuming will close on June 30. Many analysts will not include a deal like this in their forecasts until it closes.

It is important to note that Sanchez production will double to over 40,000 boepd (~63% crude oil) when the deal closes.

It may take awhile for the Wall Street gang to figure this out. Q3 will be the first quarter that includes the full impact of the deal and that report will not be out until early November.