Item 1.01 Entry into a Material Definitive Agreement

As previously disclosed, on August 11, 2019 (the "Petition Date"), Sanchez Energy Corporation (the "Company") and certain of its subsidiaries (collectively, the "Debtors") filed voluntary petitions for reorganization (the "Bankruptcy Petitions") under chapter 11 of the United States Bankruptcy Code (the "Chapter 11 Cases") in the United States Bankruptcy Court for the Southern District of Texas (the "Bankruptcy Court").

In connection with the Bankruptcy Petitions, the Debtors filed a motion seeking, among other things, interim and final approval of debtor-in-possession financing on terms and conditions set forth in a proposed Senior Secured Debtor-in-Possession Term Loan Credit Agreement (as amended from time to time, the "Original DIP Facility") among the Company, as borrower, the financial institutions or other entities from time to time parties thereto as lenders (the "Initial DIP Lenders") and Wilmington Savings Fund Society, FSB, as administrative agent and collateral agent (the "DIP Agent"). The Initial DIP Lenders included holders (the "Secured Noteholders") of the Company's prepetition 7.25% Senior Secured First Lien Notes due 2023 (the "7.25% Senior Secured Notes") or affiliates of such Secured Noteholders.

The Bankruptcy Court entered an order (the "Interim DIP Order") approving the Debtors' entry into the Original DIP Facility on an interim basis effective as of August 16, 2019, and on August 19, 2019, the Company borrowed an initial $50 million under the Original DIP Facility (the "Initial Borrowing"). At a hearing held on January 22, 2020, the Bankruptcy Court entered the final order (the "Final DIP Order") approving the Debtors' entry into the Amended and Restated Senior Secured Debtor-in-Possession Term Loan Credit Agreement among the Company, as borrower, the Initial DIP Lenders, additional financial institutions party thereto (together with the Initial DIP Lenders, the "DIP Lenders") and the DIP Agent (the "DIP Facility"), which agreement was subsequently executed on January 28, 2020.

The DIP Facility, as approved by the Bankruptcy Court in the Final DIP Order, contains the following material terms:

· a senior secured priming superpriority debtor-in-possession term loan facility


   in an aggregate principal amount of up to $200 million, consisting of (i) a new
   money, multiple draw term loan facility in the principal amount of $150 million
   (the "New Money DIP Loans"), $50 million of which was borrowed by the Debtors
   in the Initial Borrowing; and (ii) a refinancing term loan in the principal
   amount of $50 million (the "Roll-Up Loans" and, together with the New Money DIP
   Loans, the "DIP Loans") offered, in exchange for a portion of their 7.25%
   Senior Secured Notes, pro rata to all Secured Noteholders providing New Money
   DIP Loans;

· borrowings under the (i) New Money DIP Loans bear interest at a rate per annum


   equal to adjusted LIBOR (subject to a 2% floor) plus 8.00%, and (ii) Roll-Up
   Loans bear interest at the non-default rate of the 7.25% Senior Secured Notes
   of 7.25% per annum;

· the Company is required to pay the DIP Lenders (i) a 1.00% fee on the New Money


   DIP Loans payable upon the Debtors' emergence from the Chapter 11 Cases and
   (ii) a 0.5% per annum commitment fee on undrawn New Money DIP Loans payable
   monthly;

· the maturity of the DIP Facility is May 11, 2020, subject to certain potential


   automatic extensions to June 1, 2020 and June 30, 2020, in each case as set
   forth in the DIP Facility;

· the proceeds of the New Money DIP Loans may be used for: (i) transaction costs,


   fees and expenses; (ii) working capital and general corporate purposes; (iii)
   bankruptcy-related costs and expenses (including restructuring fees and
   adequate protection payments); (iv) refinancing all amounts existing under the
   Company's prepetition first-out senior secured working capital and letter of
   credit facility (the "Prepetition Credit Agreement"); and (v) paying all
   amounts required in connection with the unwinding, novation or termination of
   hedging obligations;

· the Company is required to use a portion of the proceeds from the DIP Facility


   to take the following actions: (i) to pay off all $7.9 million of borrowings
   and an additional $17.1 million in reimbursement obligations with respect to a
   letter of credit, issued prior to the Petition Date, under the Prepetition
   Credit Agreement, which was drawn by the beneficiary thereof after the Petition
   Date, in each case plus accrued and unpaid interest; and (ii) to pay, as
   adequate protection, the approximately $18.1 million in interest that would
   have been due on August 15, 2019 under the indenture for the 7.25% Senior
   Secured Notes, and the Company is required, as adequate protection, to continue
   to make the semi-annual interest payments as they come due under the indenture
   for the 7.25% Senior Secured Notes during the Chapter 11 Cases;

· the obligations of the Company under the DIP Facility, including the payment in


   full of all borrowed amounts and observance and performance of all covenants,
   are guaranteed by the Company's subsidiary Debtors (the "Guarantors") pursuant
   to the Amended and Restated Guaranty, dated as of January 28, 2020, among the
   DIP Agent and the Guarantors;

· the Debtors' Chapter 11 Cases are subject to certain milestones, including (i)


   the filing of a plan of reorganization providing for payment in full in cash of
   the DIP Loans and the related disclosure statement no later than March 9, 2020
   and (ii) the entry of an order approving the disclosure statement no later than
   April 13, 2020; and

· the DIP Facility provides for certain customary covenants applicable to the


   Company, including covenants requiring (i) minimum liquidity in an amount of
   $15 million, subject to certain exclusions; (ii) compliance with an approved
   operating debtor-in-possession budget (the "DIP Budget"), subject to permitted
   variance of 15%, tested on a rolling 4-week basis on aggregate operating
   disbursements excluding certain professional fees, DIP Facility interest and
   fees and adequate protection payments; and (iii) delivery of a rolling 13-week
   operating cash flow forecast updated every four weeks and a weekly DIP Budget
   variance report.

With the closing of the DIP Facility, the Company is able to access the remaining $100 million in principal amount of New Money DIP Loans in accordance with the terms of the DIP Facility. On January 31, 2020, the Company used approximately $26 million from the proceeds of the Initial Borrowing to pay off the Prepetition Credit Agreement in full, which terminated as of such date.

The foregoing description of the DIP Facility does not purport to be complete and is qualified in its entirety by reference to the final, executed DIP Facility, as approved by the Final DIP Order, each of which may be accessed at no charge at https://cases.primeclerk.com/sanchezenergy/.

Item 1.02 Termination of a Material Definitive Agreement

The information included in Item 1.01 of this Form 8-K regarding the Prepetition Credit Agreement is incorporated in this Item 1.02 by reference.

Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant

The information included in Item 1.01 of this Form 8-K regarding the DIP Facility is incorporated in this Item 2.03 by reference.

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