SandRidge Energy Inc. (SD) agreed to sell oil and natural gas assets in the Gulf of Mexico to Riverstone Holdings LLC-backed Fieldwood Energy LLC for $750 million in cash to focus drilling and production in Oklahoma and Kansas.
Fieldwood will also assume $370 million of abandonment liabilities, Oklahoma-City based SandRidge said today in a statement. SandRidge will retain a 2 percent royalty interest in certain exploration prospects.
SandRidge fired former Chief Executive Officer Tom Ward in June after investors questioned transactions he and his family members had with the company, days before an activist shareholder was poised to gain control of the board. Proceeds from today’s sale and capital planned for the Gulf will be diverted to onshore drilling, SandRidge said, as it more than doubled forecast output growth for 2014 to 26 percent.
“We will increase the pace of development in our six county de-risked focus area where we have over a decade of drilling locations,” SandRidge CEO James Bennett said in the statement.
SandRidge increased 5.2 percent to $6.12 before the start of regular trading in New York. As of yesterday, the shares were down 14 percent in the past year.
Fieldwood will acquire proved reserves equivalent to 57.2 million barrels of oil, of which 51 percent are crude, with daily net production in excess of 25,000 barrels, the Houston-based company said in a separate statement.
Private-equity firm Riverstone also has a 10.5 percent stake in SandRidge, according to data compiled by Bloomberg.
RBC Richardson Barr advised SandRidge on today’s transaction.
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