SandRidge Energy Inc. is getting out of the enhanced oil recovery business.
The Oklahoma City-based oil producer sold subsidiary SandRidge Tertiary LLC for $130 million to Trinity CO2 Investments, a portfolio company of Morgan Stanley Global Private Equity. The deal also included the Wellman Pipeline.
Some of the SandRidge subsidiary's management team will move to Trinity as well.
“We have a clear long-term strategy to expand our existing asset base and develop a comprehensive and integrated CO2 (carbon dioxide) business,” Trinity CEO Barry Petty said.
“With the addition of SandRidge Tertiary, we are excited to leverage the positive momentum and strength of our current partnership with Morgan Stanley Global Private Equity to take Trinity CO2 to the next level.”
Midland, Texas-based SandRidge Tertiary has enhanced oil recovery projects in west Texas' Permian Basin that have proved reserves of 24 million barrels of oil equivalent, as of Dec. 31.
Those projects currently produce about 1,100 barrels of oil a day, according to SandRidge.
“The acquisition of SandRidge Tertiary represents a unique opportunity to combine an attractive upstream EOR (enhanced oil recovery) business with Trinity CO2's strategically located CO2 pipeline and supply platform,” said John Moon, managing director of Morgan Stanley Global Private Equity. “We believe that there will be additional opportunities for this platform to grow, and we are delighted to have the management team at SandRidge Tertiary on board and working closely with our partners at Trinity CO2.”
The sale closed Monday, SandRidge said, indicating the assets were not part of its core holdings.