Midstates wants to buy part of SandRidge Energy’s operations—talks underway

Bloomberg News reports Tulsa-based Midstates Petroleum Co. may soon walk away with at least some of SandRidge Energy Inc. after setting out to acquire all of it earlier this year.

Midstates is in talks to buy SandRidge’s Mississippi and Oklahoma operations, according to people familiar with the matter who asked not to be identified because it wasn’t public.

The prospects come after Midstates reported a $1.5 million or 6-cent a share loss in the second quarter of 2018. It compared to a net income of $13.7 million or 53-cents a share in the second quarter of 2017. The company also had first quarter 2018 net income of $4 million or 15-cents a share.

A deal could be reached by the end of the month, one of the people said. The transaction hasn’t been finalized and talks could fall through, the people said.

A representative for SandRidge declined to comment. A representative for Midstates didn’t return calls seeking comment.

SandRidge has been exploring strategic options since June following activist investor Carl Icahn’s successful campaign to win control of the company’s board. Oklahoma City-based Sandridge, which is working with Royal Bank of Canada, rejected a stock-for-stock merger with Midstates in March.

SandRidge entered into confidentiality agreements with 26 potential buyers for all or some of its assets, it said in a statement in June. Sixteen suitors were only interested in its operations in Colorado, it said.

SandRidge, founded by Tom L. Ward in 2006, has been a public company since November 2007. The stock fell below the $26-a-share IPO price the following year, reaching that mark again only briefly after the company emerged from bankruptcy in 2016. Its shares fell 4.2 percent to $15.40 in New York trading Wednesday.

The company has been led by President and Chief Executive Officer Bill Griffin since February 2018, according to its website.