U.S. oil and gas company SandRidge Energy Inc, which is facing calls from two top investors to replace its board and chief executive, struck a deal to sell its Permian Basin properties in west Texas to privately held oil and gas company Sheridan Production Partners for $2.6 billion.
Last month, SandRidge had said it was exploring the sale of these assets, an announcement that proved to be unpopular with some shareholders, who felt the company should keep the valuable oil producing acreage.
But investors seemed to have since warmed to the deal, sending the company's shares up more than 7 percent to $7.00 in after market trading.From Yahoo! In-Play:
SandRidge Energy agrees to sell Permian assets for $2.6 bln in cash: Co announced that it has signed a definitive agreement to sell its Permian Basin properties to Sheridan Production Partners II, a privately held Houston-based oil and gas company, for $2.6 bln in cash. SD announced on Nov 8 that it was exploring the sale of the assets.
Tom Ward, SandRidge's Chairman and CEO, commented, "This is a great outcome for our shareholders. The sale of the Permian assets at this time has allowed us to capitalize on current strong valuations for mature, conventional Permian assets and generate a very strong return on our investment there."
Noting that the Permian Basin assets were a key part of SandRidge's planned strategic transition from a natural gas producer to an oil rich E&P co, Ward added, "With these proceeds we will have a cash balance of almost $3 billion and liquidity of over $3.5 billion, which we intend to use to reduce debt and strengthen the balance sheet. This will also allow us to fund development of our acreage position as well as future opportunities in the highly scalable, high return Mississippian Play."
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