SandRidge Energy, Inc. announced the $4.85 million acquisition of all the overriding royalty interest assets of SandRidge Mississippian Trust I.
The purchase price included $3.55 million net given the company’s 26.9% ownership of the Trust.
SandRidge stated that in making the purchase, at the current strip and based on historical production trends, it believes the acquisition represents an attractive price-to-value, approximating PDP PV-55 and a 2-year cash-on-cash payback.
“Buying in the ORRIs from SDT will add to our PDP reserves and improve our netbacks and cash flow in wells that we already operate for the most part,” stated Carl Giesler, President and CEO. “This acquisition is a good example of the relatively low-capital, high-return, quick-payback, ‘small-ball’ investments that the Board and management are making to increase shareholder value realization from its asset base.”