IPO Filing Alert: SandRidge Energy, Inc. (SD)

After Friday’s close, an energy drilling company called SandRidge Energy, Inc. filed to come public via an Initial Public Offering under the ticker "SD" on NYSE.  It may be worth a note that the company had a filing from early 2006 that was recently withdrawn, but the June 22, 2007 date is the new effective filing date.

SandRidge has not set terms yet, but the proposed maximum aggregate filing is for up to $690 million.  As far as underwriters it lists Lehman Brothers, Goldman Sachs, and Banc of America.

SandRidge is an independent natural gas and oil company concentrating in exploration, development and production in West Texas in a spot known as West Texas Overthrust, or “WTO,” a natural gas prone region where it has operated since 1986.  This includes the Piñon Field and its South Sabino and Big Canyon prospects.  SandRidge intends to add to its existing reserve and production base by increasing development drilling activities and exploration program in other prospects identified. As a result of 2006 acquisitions, it doubled net acreage positions in the WTO since January 2006 to become what it believes as the largest operator and producer in the WTO.  SadRidge also operates significant interests in the Cotton Valley Trend in East Texas, the Gulf Coast area, the Gulf of Mexico and the Piceance Basin of Colorado.  It owns and operates an extensive natural gas and oil property base with over 3,800 potential drilling locations (over 2,600 are in the WTO). As of December 31, 2006, it claims proved reserves were 1,001.8 Bcfe, of which 84.9% were natural gas and 99% were independently engineered; had 1,281 gross (916 net) producing wells. As of March 31, 2007, it had interests in over 1,093,852 gross (541,787 net) natural gas and oil leased acres and expects to have 30 rigs drilling in the WTO by the end of Q2 2007.

Tom L. Ward, the co-founder and former President & COO of Chesapeake Energy Corporation, purchased a significant ownership interest in June 2006 and joined as CEO and Chairman of the Board.  Since Mr. Ward joined the company it added eight new executive officers, substantially all of whom have experience at public exploration and production companies; and it added key professionals in exploration, operations, land, accounting and finance.  Its acquisitions have helped it grow rapidly with 2005 revenues at $287.6 million, 2006 revenues at $388.2 million, and Q1 2007 revenues $149 million (up from $85.9 million in Q1 2006).

Jon C. Ogg
June 23, 2007

Jon Ogg can be reached at [email protected]; he does not own securities in the companies he covers.