WTI crude oil prices were falling 4.7% to $60.84 Wednesday, and Brent crude oil prices were falling 4.2% to $64.04 a barrel.
Sanchez Energy said that it had liquidity of $1.18 billion consisting or $530 million in cash and $650 million of undrawn, approved revolving credit with a current commitment elected by the company of $300 million as of Dec. 7.
The company recorded current production rates of about 45,000 barrels of oil equivalent a day.
Sanchez Energy's "net debt to pro forma LTM EBITDA was 1.8x which is significantly lower than its most restrictive covenant of 4.0x net debt to LTM EBITDA under its revolving credit facility which is currently not drawn upon," according to the company.
TheStreet Ratings team rates SANCHEZ ENERGY CORP as a Sell with a ratings score of D+. TheStreet Ratings Team has this to say about their recommendation:
"We rate SANCHEZ ENERGY CORP (SN) a SELL. This is driven by a few notable weaknesses, which we believe should have a greater impact than any strengths, and could make it more difficult for investors to achieve positive results compared to most of the stocks we cover. The company's weaknesses can be seen in multiple areas, such as its generally disappointing historical performance in the stock itself and generally high debt management risk."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- SN's stock share price has done very poorly compared to where it was a year ago: Despite any rallies, the net result is that it is down by 65.17%, which is also worse that the performance of the S&P 500 Index. Investors have so far failed to pay much attention to the earnings improvements the company has managed to achieve over the last quarter. Despite the heavy decline in its share price, this stock is still more expensive (when compared to its current earnings) than most other companies in its industry.
- Currently the debt-to-equity ratio of 1.62 is quite high overall and when compared to the industry average, suggesting that the current management of debt levels should be re-evaluated. Despite the company's weak debt-to-equity ratio, the company has managed to keep a very strong quick ratio of 3.16, which shows the ability to cover short-term cash needs.
- The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Oil, Gas & Consumable Fuels industry and the overall market, SANCHEZ ENERGY CORP's return on equity significantly trails that of both the industry average and the S&P 500.
- The gross profit margin for SANCHEZ ENERGY CORP is currently very high, coming in at 78.15%. Regardless of SN's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, SN's net profit margin of 23.64% significantly outperformed against the industry.
- Net operating cash flow has significantly increased by 227.57% to $130.65 million when compared to the same quarter last year. In addition, SANCHEZ ENERGY CORP has also vastly surpassed the industry average cash flow growth rate of -1.72%.
- You can view the full analysis from the report here: SN Ratings Report