SandRidge Energy Inc. is taking another step in its ongoing transformation.
The Oklahoma City-based oil and natural gas producer announced Tuesday it is selling its Gulf of Mexico business for $750 million in cash so it can focus on its onshore properties.
“Our mission here at SandRidge is to create the premier, high-return, growth-oriented resource conversion company focused in the Mid-Continent region of the United States,” CEO James Bennett said. “This sale represents a major step toward that mission by positioning SandRidge as a high-growth, liquid-rich Mid-Continent company.”
Proceeds from the sale to Fieldwood Energy LLC will be reinvested over time into SandRidge's Mid-Continent drilling projects.
SandRidge revised its 2014 production guidance as it announced the Gulf deal. The company expects to be able to boost production to about 29.3 million barrels of oil equivalent this year, pushing its year-over-year growth from 12 percent to 26 percent by adding three more drilling rigs in the Mississippian play.
“Given our status as a premier operator in the Mid-Continent, where we have established competitive advantages including infrastructure networks, subsurface knowledge and a best-in-class cost structure, we have elected to further focus our efforts into developing this area,” 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.”
He said that inventory of high-return drilling locations should allow SandRidge to post annual production growth of 20 percent or more for years to come.
SandRidge intends to maintain about 600,000 acres in its focus area in northern Oklahoma and southern Kansas.