Dec. 19, 2012
/PRNewswire/ -- SandRidge Energy, Inc. (NYSE: SD) today announced that it has signed a definitive agreement to sell its Permian Basin properties to Sheridan Production Partners II, a privately held
-based oil and gas company, for
in cash. SandRidge announced on
that it was exploring the sale of the assets.
, SandRidge's Chairman and CEO, commented, "This is a great outcome for our shareholders. The sale of the Permian assets at this time has allowed us to capitalize on current strong valuations for mature, conventional Permian assets and generate a very strong return on our investment there."
Noting that the Permian Basin assets were a key part of SandRidge's planned strategic transition from a natural gas producer to an oil rich E&P company, Ward added, "With these proceeds we will have a cash balance of almost
and liquidity of over
, which we intend to use to reduce debt and strengthen the balance sheet. This will also allow us to fund development of our acreage position as well as future opportunities in the highly scalable, high return Mississippian Play."
Ward continued, "We are excited about focusing our efforts on the Mississippian, which encompasses parts of northern
, an area we believe generates some of the highest rates of return for horizontal drilling in the U.S. today. With 1.85 million net acres and 11,000 possible future drilling locations, the Company is the industry leader in the region. We also have a unique advantage because of extensive investments in critical infrastructure that make our operating costs there among the lowest in the industry. With the sale of the Permian assets, we will significantly reduce our debt balances and, with our ample cash and liquidity, be very well positioned to fund our capital expenditures through 2014 and deliver significant value to stockholders."
The Permian properties being sold were producing approximately 24,500 Boe per day at the end of the third quarter (67% oil, 15% NGLs and 18% natural gas) and exclude assets associated with SandRidge Permian Trust (NYSE: PER).