SandRidge Energy Inc.'s decision to morph itself into an oil company is paying dividends.
CEO Tom Ward said the shift that began in 2008 has fueled the Oklahoma City company's success.
SandRidge ranked No. 3 on this year's Oklahoma Inc. list of top public companies in the state, with a best-in-Oklahoma 75.9 percent increase in revenues over last year.
SandRidge recently celebrated its 180-degree turn as an exploration and production company with a new logo and slogan.
“Our focus will continue to be oil,” Ward said. “It's very difficult to change focus like we did.
“Crude oil is a world market and that's what we want, to be able to sell into a world market.”
Eighty percent of SandRidge's production was natural gas in 2008, when prices dropped precipitously. The company hedged all of its future gas production and set about amassing oil assets.
Ward said SandRidge has focused on low-risk oil targets in shallow reservoirs that can be reached with conventional wells.
“We've always tried to find things that other people weren't necessarily doing at the time,” he said.
Ward said areas like the Permian Basin in Texas and Mississippian play in Oklahoma and Kansas were overlooked by other producers eager to find the next big unconventional play.
He said SandRidge liked the production history and good permeable rocks in those areas.
Producers have been finding oil in the Permian for more than 80 years, while the Mississippian has been productive for more than 30 years.
Ward said SandRidge has a 10-year inventory of drilling sites in the Central Basin Platform of the Permian.
He expects the company to have close to 2 million acres of leasehold in the Mississippian by the end of the year, with an eye toward lining up another decade's worth of drilling opportunities.
“That means a very aggressive drilling schedule,” Ward said. “We'll have 45 rigs working in the Mississippian play in Oklahoma and Kansas in the next two years. Today we have 18. That's why you have very low unemployment in Oklahoma.”
Ward also said SandRidge will continue to focus on conventional plays like the Permian where drilling costs are lower because of the surplus of equipment available.
“I believe it's the most inexpensive play to drill in the United States that has scale,” Ward said.
About the same time SandRidge decided to turn its business model upside down, the company moved its base of operations to downtown Oklahoma City.
SandRidge has resided in downtown Oklahoma City since Ward swung a deal with former partner Aubrey McClendon to acquire the Kerr-McGee tower in July 2007.
Now the company is in the midst of a dramatic renovation plan that calls for construction of one new building at 120 Robert S. Kerr Ave. and replacement of six remaining structures with landscaped plazas.
The development dubbed “SandRidge Commons” is expected to add usable open space to downtown through the replacement of old blighted buildings while providing room for SandRidge's growing workforce.