SandRidge Energy expanded its western Oklahoma holdings with a $144 million acquisition announced this week.
The identity of the seller or sellers was not disclosed but the announcement indicated the acquisition was in the Cherokee play of the Western Anadarko Basin and was for cash consideration. SandRidge also entered into a Joint Development Agreement for its participation in the future development of certain of the acquired leasehold interests. It did not identify the participant in the Joint Development Agreement.
“These assets bolster our base production and cash flow profile by immediately adding higher oil content while providing access to a successful drilling campaign through joint development of the assets. We’re looking forward to participating in new high-return drilling and completion projects and taking over operatorship of the new wells, allowing us to apply SandRidge’s low-cost lease operating expertise to the new assets,” declared Grayson Pranin, SandRidge’s President & Chief Executive Officer.
“This transaction allows us to boost future production and cash flow levels, while preserving our strong balance sheet and planned capital return program. The undeveloped assets are focused in a proven and highly productive area in Roger Mills County, Oklahoma and are self-funding on a standalone basis.”
He said the acquisition and joint development also increase more drilling opportunities for the company.
The land in question is in Ellis and Roger Mills Counties and includes 42 producing wells in addition to four drilled but uncompleted wells scheduled to be turned to production sometime this year. The net production is stated at 6 MBoed and 40% is oil.
- Oily PDP production and new development is projected to meaningfully increase SandRidge’s EBITDA and cash flow on a pro forma basis, all while maintaining its planned quarterly dividend(1)
- Leasehold interest in 11 drilling spacing units (“DSUs”), which add inventory of up to 22 two-mile lateral wells in the highly productive core of the Cherokee play
- Joint development of DSUs with a partner who has a demonstrable history of successful operations in the Cherokee play
- SandRidge will assume operatorship of new wells after they are producing
- Acquisition assets are located within the Mid-Continent region, where SandRidge currently operates. Additionally, the assets are in the vicinity of the Company’s ongoing leasing program, providing further optionality for future SandRidge-operated drilling projects
- July 1, 2024 effective date with anticipated closing in the third quarter 2024. SandRidge plans to fund the transaction with cash on hand