SandRidge Energy Unloads Holdings in downtown OKC and West Texas

Two big financial announcements were made recently by financially-struggling SandRidge Energy, Inc. in Oklahoma City. On Friday, the company announced it and a third party agreed to settle all claims between them arising out of a 30-year agreement for the removal of CO2 from natural gas volumes by SandRidge in the Pinon field in west Texas. It is a move that will save SandRidge nearly $40 million in expenses this year. The deal was signed on Jan. 21 where SandRidge transferred substantially all of its exploration and production and midstream assets in the field to a wholly-owned subsidiary of Occidental Petroleum Corporation along with $11 million cash. In return, the subsidiary released SandRidge from all past, current and future claims and obligations related to the gas treating agreement which contained minimum CO2 volume commitments until 2041.

The exploration and production assets represented nearly 6 percent of SandRidge’s total production and 17 percent of its total lease operating expense in the third quarter of 2015. The midstream assets comprised 370 miles of gathering lines, 100 miles of CO2 pipelines and other processing infrastructure. There were also 24,598 MBoe of proved reserves with a value of nearly $13.3 million based on SEC pricing. The agreement also called for the transfer of seismic data covering more than 1,300 square miles of the West Texas Overthrust region and other properties in the same region. By making the move, SandRidge expects to lower its operating expenses by nearly $39 million in 2016.

SandRidge made another move to lower expenses by selling the Braniff Building in downtown Oklahoma City for nearly $16 million, as reported Sunday by Steve Lackmeyer in the Sunday Oklahoman.

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Sunday Oklahoman

Once the home to Braniff Airlines, the building was constructed in 1923 and is on the National Register of Historic Places. It was purchased by Sandridge Energy and restored when the company also bought the former Kerr-McGee offices which it is also attempting to sell. The new owner of the Braniff building is Josh Leffler, co-founder of Black Hawk Mineral Partners LLC.