Small-cap independent oil and gas producer Sanchez Energy Corp. (NYSE: SN) this morning announced that it had purchased approximately 43,000 net acres in the Eagle Ford shale play in South Texas from Hess Corp. (NYSE: HES) for $265 million in cash. The acquisition adds about 13.4 million barrels of oil equivalent to Sanchez’s proved reserves and about 4,500 barrels a day to the growing company’s daily production.

Sanchez also announced this morning the private placement of $175 million in newly created Series B preferred stock and its intention to offer additional preferred shares up to an amount totaling $250 million. Today’s offering is expected to yield net proceeds of $168.4 million and if the company raises the offering, net proceeds are expected to reach $241 million.

The company will use some of the proceeds from the sale of preferred shares to pay for today’s announced acquisition. The preferred shares will pay an annual dividend of $3.25 and carry a liquidation preference value of $50 a share. Preferred shares may be converted to common stock at an initial conversion rate of 2.3370 shares of common stock for each preferred share. Sanchez may not redeem the preferred shares, but has the option to convert them to common stock under certain conditions on or after April 6, 2018.

In announcing its acquisition of the Eagle Ford assets, Sanchez said it had obtained financing commitments of $325 million. The acquisition is expected to close in the second quarter of this year.

Shares of Sanchez are up about 0.8% in the premarket this morning, at $19.60 in a 52-week range of $16.37 to $25.37.