SandRidge Rejects Midstates Petroleum Offer to Merge

Oklahoma City-based SandRidge Energy has rejected the offer by Tulsa’s Midstates Petroleum to merge.

In an announcement this week, the oil and gas producer said “the relative asset values of the two companies do not support a combination effected at current stock prices.”

Midstates had proposed a stock merger at a 60%/40% exchange ratio. But SandRidge leadership indicate it disagreed with Midstates’ estimate that the combined business plan would result in generally flat production and free cash flow of $320 million to $400 million.

“For these and other reasons,” stated the company, “SandRidge has concluded that accepting Midstates’ proposal would be highly dilutive and not in the best long-term interests of SandRidge stockholders.”

But SandRidge indicated it is considering “indications of interest regarding alternative transactions from other oil and gas companies.”

Bill Griffin, President and CEO indicated Sandridge has started to evaluate those possibilities.

“The process will include, but is not limited to, an evaluation of divestment or joint venture opportunities associated with its North Park basin assets and potential corporate and asset combination options with other Mid-Continent operators.”

But he also said the company is not providing a timetable for the process and would “limit further comments and updates on the process while it is underway.”

Midstates Petroleum CEO David Sambrooks announced the proposal in January and two days later, SandRidge fired CEO James Bennett.

At last word, Midstates had not made any announced response to the merger rejection.