SandRidge Energy Inc. is bringing all of its business back on land.
The Oklahoma City-based oil and natural gas company announced early Tuesday it is selling its holdings in the Gulf of Mexico to focus on its core operations in Oklahoma and Kansas.
“Given our status as a premier operator in the Mid-Continent, where we have established competitive advantages including infrastructure networks, sub-surface knowledge and a best-in-class cost structure, we have elected to further focus our efforts into developing this area,” CEO James Bennett said. “Based on our confidence in the asset base, 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 is selling all of its Gulf of Mexico and Gulf Coast properties to Fieldwood Energy LLC for $750 million in cash and the assumption of $370 million of abandonment liabilities.
Proceeds from the sale will be invested over time in the company’s Mid-Continent projects, prompting SandRidge to boost its production growth estimates from 2014.
“Our growing cash flow plus the availability of additional reserves based borrowings are envisioned to fund our growth strategy,” Bennett said. “SandRidge is now a high growth, Mid-Continent focused company.”
The company now expects to produce 29.3 million barrels of oil equivalent this year, up from an estimated 22.4 million barrels before the Gulf sale.
SandRidge amassed the bulk of its Gulf assets in February 2012 in its $1.275 billion acquisition of Houston-based Dynamic Offshore Resources LLC.