It has been a rough year for SandRidge Energy, Inc. (NYSE: SD) after earnings, guidance, and production/rates have not always been so positive as it mixes its gas and oil portfolio. Shares have recovered from the post-dip lows and now the company is selling off some non-core assets. Sale proceeds from this transaction will be used to fund a portion of SandRidge’s planned capital expenditures in 2011.
This morning SandRidge announced that it has sold off its Bone Spring asset package for $110 million. The company will receive $88 million cash at the closing. SandRidge will then receive the additional $22 million in the first quarter of 2011, subject to satisfaction of customary post-closing conditions.
The Bone Spring package includes approximately 40,000 net acres in the Permian Basin with development potential in the Avalon Shale and Bone Spring reservoirs. That brings the sale to approximately approximately $2,750 per acre.
SandRidge noted that there is no production or proved reserves associated with these assets, and SandRidge will retain all rights above and below the Avalon Shale and Bone Spring formations.
As far as what the $110 million translates to, SandRidge has a market cap of $2.1 billion. After closing at $6.08, its 52-week trading range is $3.87 to $11.08.
JON C. OGG
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