Replies to post #229 on Sanchez Energy Corp. (fka SNECQ)

[benfrankledger]

$SN Sanchez is a heavily leveraged company that has limited room for error as it works toward refinancing its upcoming unsecured debt maturities.

If Sanchez was on track to deliver on its March 2017 production expectations, it would likely be able to refinance its debt and would probably be worth double digits.

However, Sanchez has encountered various problems that have led it to massively reduce 2018 production guidance (down 20% since March 2017) with oil production down even more. This has more than cancelled out the benefit of improving oil prices for Sanchez and has left it in a very challenging position with respect to refinancing its unsecured notes.

I don't have much confidence at the moment that Sanchez can reach the production levels it needs, and with a price dip in oil likely after production surges they are likely to be further squeezed. Watching this one as a potential short but also will buy good news for short term horizon.