OKLAHOMA CITY (AP) — SandRidge Energy has more than doubled its 2014 production growth target even as the oil and natural gas company announced that it has sold its Gulf of Mexico business to Fieldwood Energy LLC for $750 million in cash.
The sale includes all of SandRidge's Gulf of Mexico and Gulf Coast properties. The company anticipates using the sale's proceeds to reinvest in its Mid-Continent drilling projects. It expects production growth of 26 percent for the year, up from a prior outlook of 12 percent.
The company's stock climbed 4 percent in premarket trading Tuesday.
As part of the sale of its Gulf of Mexico business, Fieldwood will assume $370 million of abandonment liabilities. SandRidge will keep a 2 percent overriding royalty interest in certain exploration prospects.
Fieldwood President and CEO Matt McCarroll said in a statement that the transaction demonstrates its commitment to acquire and develop in the Gulf of Mexico and also helps to further diversify its business to include an onshore Gulf Coast unit and the deepwater Bullwinkle field.
The deal is expected to close in the first quarter.
Shares of SandRidge Energy Inc. rose 24 cents, or 4.1 percent, to $6.06 in premarket trading about an hour before the market opening.