Oklahoma-based SandRidge Power, Inc. is buying sure producing belongings and leasehold pursuits within the Cherokee play of the Western Anadarko Basin.
The transaction is for money consideration of $144 million, earlier than customary buy worth changes, SandRidge stated in a information launch. The vendor of the belongings was not disclosed.
The transaction has an efficient date of July 1, with anticipated closing within the third quarter. SandRidge plans to fund the transaction with money readily available, it stated.
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Sandridge famous that it additionally entered right into a joint growth settlement (JDA) governing its participation sooner or later growth of sure of the acquired leasehold pursuits.
The belongings are positioned throughout the Mid-Continent area, the place SandRidge presently operates. Moreover, the belongings are within the neighborhood of the corporate’s ongoing leasing program, offering additional optionality for future SandRidge-operated drilling initiatives, it stated.
Additional, the belongings have a web manufacturing of roughly 6,000 barrels of oil equal per day, consisting of 40 p.c oil, centered on Ellis and Roger Mills Counties, Oklahoma. They embody 42 producing wells along with 4 drilled uncompleted wells scheduled to be turned to manufacturing within the yr.
The acquisition additionally contains leasehold curiosity in 11 drilling spacing models (DSUs), which add stock of as much as 22 two-mile lateral wells within the extremely productive core of the Cherokee play, Sandridge said, including that it plans the joint growth of the DSUs with “a accomplice who has a demonstrable historical past of profitable operations within the Cherokee play”. SandRidge will assume operatorship of the brand new wells after they’re producing.
SandRidge President and CEO Grayson Pranin stated, “We’re excited to develop our footprint within the Mid-Continent by upgrading our stock by way of the Cherokee Shale play within the Western Anadarko Basin. These belongings bolster our base manufacturing and money movement profile by instantly including larger oil content material whereas offering entry to a profitable drilling marketing campaign by way of joint growth of the belongings. We’re wanting ahead to collaborating in new high-return drilling and completion initiatives and taking on operatorship of the brand new wells, permitting us to use SandRidge’s low-cost lease working experience to the brand new belongings”.
“This transaction permits us to spice up future manufacturing and money movement ranges, whereas preserving our sturdy steadiness sheet and deliberate capital return program. The undeveloped belongings are centered in a confirmed and extremely productive space in Roger Mills County, Oklahoma and are self-funding on a standalone foundation,” Pranin continued.
“Lastly, the acquired producing belongings and DSUs flange up with areas the place we have been lately investigating the potential for brand spanking new SandRidge-operated drilling alternatives. As we function and collectively develop the acquired belongings, our workforce might be properly positioned to guage and execute on future natural development alternatives,” he concluded.
SandRidge Power is an impartial oil and fuel firm engaged within the growth, acquisition, and manufacturing of oil and fuel belongings. Its major space of operations is the Mid-Continent area in Oklahoma and Kansas.
To contact the writer, e-mail rocky.teodoro@rigzone.com
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