Explanatory Note
As previously disclosed, on August 11, 2019, Sanchez Energy Corporation (“SN”) and certain of its subsidiaries, consisting of SN Palmetto, LLC, SN Marquis LLC, SN Cotulla Assets, LLC, SN Operating, LLC, SN TMS, LLC, SN Catarina, LLC, Rockin L Ranch Company, LLC, SN Payables, LLC, SN EF Maverick, LLC (“SN Maverick”) and SN UR Holdings, LLC (collectively with SN, the “Debtors”), filed voluntary petitions for reorganization under Chapter 11 of the U.S. Bankruptcy Code (the “Bankruptcy Code”) in the U.S. Bankruptcy Court for the Southern District of Texas (the “Bankruptcy Court”). The Debtors’ Chapter 11 cases are jointly administered under the caption In re Sanchez Energy Corporation, Case No. 19-34508.
On April 30, 2020, the Bankruptcy Court entered the Order Approving Disclosure Statement and Confirming Second Amended Joint Chapter 11 Plan of Reorganization of Sanchez Energy Corporation and Its Debtor Affiliates, which approved and confirmed the Second Amended Joint Chapter 11 Plan of Reorganization of Sanchez Energy Corporation and Its Debtor Affiliates (as amended, modified or supplemented from time to time, the “Plan”). The effective date of the Plan (the “Effective Date”) will occur as soon as all conditions precedent to the Plan have been satisfied.
Item 1.01Entry into a Material Definitive Agreement
On June 14, 2020, Sanchez Midstream Partners LP (the “Partnership”) and Sanchez Midstream Partners GP LLC, the sole general partner of the Partnership (the “General Partner”), (A) each entered into, (B) caused and approved the Partnership’s wholly-owned subsidiaries Catarina Midstream LLC (“Catarina Midstream”) and Seco Pipeline, LLC (“Seco Pipeline”) entering into, and (C) approved Carnero G&P LLC (“Carnero G&P”), a joint-venture in which the Partnership owns a fifty percent (50%) interest, entering into, in each case, that certain Amendment Agreement (the “Amendment”) with the Debtors, SP Holdings, LLC, the sole member of the General Partner (“SP Holdings”), and TPL SouthTex Processing Company LP (“Targa”, and collectively with each of the Partnership, the General Partner, Caterina Midstream, Seco Pipeline, Carnero G&P, the Debtors and SP Holdings, the “Parties”, and each a “Party”) to amend that certain Settlement Agreement (the “Settlement Agreement”) previously entered into by and among the Parties on June 6, 2020 (the “Settlement Agreement”). A summary of the terms of the Amendment is set forth below.
Pursuant to the Amendment, among other things, (i) effective as of the date in which the Bankruptcy Court enters into an order that is reasonably acceptable to the Parties pursuant to Rule 9019 of the Federal Rules of Bankruptcy Procedure approving the Settlement Agreement, each of the Carnero Agreements (as defined in the Settlement Agreement) and the Catarina Gathering Agreement (as defined in the Settlement Agreement) will be deemed assumed or otherwise ratified for all purposes under the Plan (but not amended by the applicable agreements contemplated by the Settlement Agreement) and (ii) effective as of the Closing Date (as defined in the Settlement Agreement), each of the Carnero Agreements and the Catarina Gathering Agreement will be amended by the applicable agreements contemplated by the Settlement Agreement, and the terms of the Carnero Agreements and the Catarina Gathering Agreement, as amended by the applicable agreement contemplated by the Settlement Agreement, will automatically be effective as of the Closing Date.
