Sanchez Energy Corporation Adopts Rights Plan to Protect Net Operating Loss Carryforwards

HOUSTON, TX--(Marketwired - July 28, 2015) - Sanchez Energy Corporation (NYSE: SN) ("Sanchez Energy" or the "Company") announced today that its Board of Directors (the "Board") has adopted a net operating loss carryforwards ("NOLs") rights plan (the "Rights Plan") in an effort to prevent the imposition of significant limitations under Section 382 of the Internal Revenue Code on its ability to utilize its current NOLs to reduce its future tax liabilities.

The Company had federal NOLs totaling approximately $645.1 million as of March 31, 2015. The Company's use of its NOLs could be substantially limited if the Company experiences an "ownership change" (as defined in Section 382 of the Internal Revenue Code). In general, an ownership change occurs if there is a cumulative change in a company's ownership by "5% percent shareholders" (as defined in Section 382 of the Internal Revenue Code) that increases by more than 50 percentage points over the lowest percentage owned by such stockholders at any time during the prior three years on a rolling basis. The Company noted that the Rights Plan is designed to serve the interests of all stockholders by preserving the availability of its NOLs and is similar to plans adopted by other companies with significant NOLs.

Said Tony Sanchez, III, President and Chief Executive Officer of Sanchez Energy, "The Board took this prudent step of adopting the Rights Plan to protect the Company's NOLs. The Rights Plan, which is consistent with actions taken by other companies with sizable NOLs, has been structured and approved by the Board solely to protect the Company's ability to use its NOLs to offset future tax liabilities. The plan has a limited life and is not intended for defensive or anti-takeover purposes."

Pursuant to the Rights Plan, one right will be distributed to stockholders of the Company for each share of Company common stock owned of record by them as of the close of business on August 7, 2015. Initially, these rights will not be exercisable and will trade with the shares of Company common stock. If the rights become exercisable, each right will initially entitle stockholders to buy one one-thousandth of a share of a newly created series of preferred stock at an exercise price of $32.00 per right. While the Rights Plan is in effect, any person or group that acquires beneficial ownership of 4.9% or more of the Company's outstanding common stock (such person, an "Acquiring Person") without approval from the Board would be subject to significant dilution in their ownership interest in the Company. In such an event, each right will entitle its holder to buy, at the exercise price, common stock of the Company having a value of two times the exercise price of the right and the rights held by such acquiring person will become void. The Rights Plan also gives discretion to the Board to determine that someone is an Acquiring Person even if they do not own 4.9% or more of the Company's outstanding common stock but do own 4.9% or more in value of the Company's outstanding stock, as determined pursuant to Section 382 of the Internal Revenue Code and the regulations promulgated thereunder. Stockholders who currently own 4.9% or more of the Company's outstanding common stock will not trigger the Rights Plan unless they acquire additional shares, and such stockholders may be able to acquire additional shares pursuant to certain exceptions set forth in the Rights Plan designed to protect the availability of the NOLs. In addition, the Board has established procedures to consider requests to exempt certain acquisitions of the Company's securities from the Rights Plan if the Board determines that doing so would not limit or impair the availability of the NOLs or is otherwise in the best interests of the Company. The Board may redeem the rights for $0.01 per right at any time before any person or group triggers the Rights Plan. The distribution of the rights is not a taxable event for stockholders of the Company and will not affect the Company's financial condition or results of operations (including earnings per share).