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Sanchez Energy Corporation Announces Full Exercise Of Over-Allotment Option For Previously Announced Private Offering Of 4.875% Cumulative Perpetual Convertible Preferred Stock, Series A

HOUSTON, Sept. 14, 2012 /PRNewswire/ -- Sanchez Energy Corporation (NYSE: SN) today announced that the initial purchasers of a previously announced private placement of the Company's 4.875% Cumulative Perpetual Convertible Preferred Stock, Series A, have exercised in full their option to purchase an additional 500,000 shares, bringing the size of the transaction to an aggregate of 3,000,000 shares. Aggregate net proceeds of the offering are expected to be approximately $144.6 million. As previously announced, the Company intends to use the net proceeds from this offering to fund its capital expenditures, and, in particular, to accelerate its drilling program across all of its operating areas, for its other operating expenses, and for general corporate purposes.

The Company expects to close the placement of all 3,000,000 shares on Monday, September 17, 2012, subject to customary closing conditions.

The annual dividend on each share of convertible preferred stock is $2.4375 and is payable quarterly, in arrears, on January 1, April 1, July 1 and October 1 of each year, commencing on January 1, 2013, when, as and if declared by the Company's board of directors.  Dividends may be paid in cash or, under certain conditions, common stock or a combination thereof at the Company's election.

Each share of convertible preferred stock has a liquidation preference of $50 per share, plus accumulated but unpaid dividends, and is convertible, at the holder's option at any time into shares of the Company's common stock based on an initial conversion rate of 2.3250 shares of common stock for each share of convertible preferred stock.  The conversion rate will be subject to certain customary adjustments, but no payment or adjustment for accumulated but unpaid dividends will be made upon conversion.  The convertible preferred stock may not be redeemed by the Company; however, the Company may, at any time on or after October 5, 2017, elect to cause all outstanding shares of convertible preferred stock to be automatically converted subject to certain conditions.

The securities (including the convertible preferred stock, the shares of common stock into which the convertible preferred stock is convertible and the dividends payable on the convertible preferred stock in shares of common stock, if any) have not been registered under the Securities Act of 1933, as amended (the "Securities Act"), or any state securities laws, and unless so registered, may not be offered or sold in the United States except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and applicable state securities laws. The Company plans to offer and issue the convertible preferred stock only to qualified institutional buyers pursuant to Rule 144A under the Securities Act.

This press release does not constitute an offer to sell or a solicitation of an offer to buy any securities, nor shall there be any sale of these securities in any state or jurisdiction in which such an offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction.

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