Current Report Filing (8-k)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d)

of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): August 13, 2015

SANDRIDGE ENERGY, INC.

(Exact name of registrant as specified in its charter)

Delaware

1-33784

20-8084793

(State or Other Jurisdiction of

Incorporation or Organization)

(Commission

File Number)

(I.R.S. Employer

Identification No.)

123 Robert S. Kerr Avenue

Oklahoma City, Oklahoma

73102

(Address of Principal Executive Offices)

(Zip Code)

Registrant’s Telephone Number, including Area Code: (405) 429-5500

Not Applicable.

(Former name or former address if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 8.01

Other Events.

Purchase and Exchange Agreements

On August 13, 2015, SandRidge Energy, Inc. (the “Company”) entered into separate privately negotiated purchase and exchange agreements (the “Purchase and Exchange Agreements”) under which it will repurchase and retire $250 million aggregate principal amount of its senior unsecured notes for $94.5 million cash and will exchange $275 million aggregate principal amount of its senior unsecured notes for the same aggregate principal amount of new convertible unsecured senior notes, which if fully converted would convert into an aggregate of 100 million shares of the Company’s common stock, par value $0.001 per share (the “Common Stock”), subject to certain adjustments.

The Company entered into the Exchange and Purchase Agreements with certain holders of its 8.75% Senior Notes due 2020 (the “2020 Outstanding Notes”), its 7.5% Senior Notes due 2021 (the “2021 Outstanding Notes”), its 8.125% Senior Notes due 2022 (the “2022 Outstanding Notes”) and its 7.5% Senior Notes due 2023 (the “2023 Outstanding Notes” and, together with the 2020 Outstanding Notes, the 2021 Outstanding Notes and the 2022 Outstanding Notes, the “Outstanding Notes”) to exchange in private placements in reliance on Section 4(a)(2) of the Securities Act of 1933, as amended, (the “Exchange Transactions”) $15.9 million aggregate principal amount of the 2020 Outstanding Notes, $40.7 million aggregate principal amount of the 2021 Outstanding Notes, $101.8 million aggregate principal amount of the 2022 Outstanding Notes and $116.6 million aggregate principal amount of its 2023 Outstanding Notes for $158.4 million aggregate principal amount of its new 8.125% Convertible Senior Notes due 2022 (the “2022 Convertible Notes”) and $116.6 million aggregate principal amount of its new 7.5% Convertible Senior Notes due 2023 (the “2023 Convertible Notes” and, together with the 2022 Convertible Notes, the “New Convertible Notes”).

In addition to the Exchange Transactions, the Purchase and Exchange Agreements provide for the repurchase and retirement of an aggregate of $250 million principal amount of Outstanding Notes, including $29.3 million aggregate principal amount of the 2020 Outstanding Notes, $111.6 million aggregate principal amount of the 2021 Outstanding Notes, $26.1 million aggregate principal amount of the 2022 Outstanding Notes and $83.0 million aggregate principal amount of the 2023 Outstanding Notes, for total cash payments of $94.5 million (the “Outstanding Notes Repurchases” and, together with the Exchange Transactions, the “Transactions”). The terms of the Outstanding Notes will remain unchanged.

The Company expects that the Transactions will close on August 19, 2015.

Conversion Features of the New Convertible Notes

The New Convertible Notes will be convertible, at the option of the holders, into shares of Common Stock at any time from the date of issuance up until to the close of business on the earlier of (i) the fifth business day following the date of a mandatory conversion notice, (ii) with respect to a New Convertible Note called for redemption, the business day immediately preceding the redemption date or (iii) the business day immediately preceding the maturity date. In addition, if a holder exercises its right to convert on or prior to the first anniversary of the issuance of the New Convertible Notes, such holder will receive an early conversion payment in an amount equal to the amount of 18 months of interest payable on the applicable series of converted New Convertible Notes. If a holder exercises its right to convert after the first anniversary of the issuance of the New Convertible Notes but on or prior to the second anniversary of the issuance of such New Convertible Notes, such holder will receive an early conversion payment in an amount equal to 12 months of interest payable on the applicable series of converted New Convertible Notes.

The initial conversion rate is 363.6363 shares of Common Stock, per $1,000 principal amount of New Convertible Notes (representing an initial conversion price of $2.75 per share), subject to adjustment upon the occurrence of certain events.

Subject to compliance with certain conditions, the Company has the right to mandatorily convert the New Convertible Notes in whole or in part if the volume weighted average price of the Common Stock, or VWAP (as defined in the applicable indentures governing the New Convertible Notes) exceeds 40.00% of the applicable conversion price of the New Convertible Notes (representing an initial mandatory conversion trigger price of $1.10 per share) for at least 20 trading days during any 30 consecutive trading day period and the Company delivers a mandatory conversion notice. No early conversion payment will be made upon a mandatory conversion.

2022 Convertible Notes

The 2022 Convertible Notes will have an interest rate of 8.125% per year, payable in cash semi-annually in arrears on April 15 and October 15 of each year, beginning October 15, 2015; provided that the final interest payment date shall be on October 16, 2022. Interest on the 2022 Convertible Notes accrues from August 19, 2015. The 2022 Convertible Notes will mature on October 16, 2022, unless earlier repurchased or converted.

At any time prior to April 15, 2017, the Company is entitled, at its option, to redeem some or all of the 2022 Convertible Notes at a redemption price of 100% of the principal amount thereof, plus the “Applicable Premium” (as defined in the indenture governing the 2022 Convertible Notes) and accrued and unpaid interest, if any. On and after April 15, 2017, the Company may redeem the 2022 Convertible Notes, in whole or in part, at redemption prices (expressed as percentages of principal amount thereof) equal to 104.063% for the twelve-month period beginning on April 16, 2017, 102.708% for the twelve-month period beginning April 15, 2018, 101.354% for the twelve-month period beginning April 15, 2019 and 100.00% beginning on April 15, 2020 and thereafter, plus accrued and unpaid interest, if any. Additionally, in the event of a Change of Control (as defined in the indenture governing the 2022 Convertible Notes), holders of the New Convertible Notes may require the Company to repurchase all or a portion of their New Convertible Notes at a repurchase price equal to 101% of the principal amount of New Convertible Notes, plus accrued and unpaid interest, if any, to the applicable repurchase date.

The 2022 Convertible Notes will be guaranteed by the same guarantors that guarantee the 2022 Outstanding Notes, and the indenture governing the 2022 Convertible Notes will contain covenants substantially identical to those applicable to the 2022 Outstanding Notes.

2023 Convertible Notes

The 2023 Convertible Notes will have an interest rate of 7.5% per year, payable in cash semi-annually in arrears on February 15 and August 15 of each year, beginning February 15, 2016; provided that the final interest payment date shall be on February 16, 2023. Interest on the 2023 Convertible Notes accrues from August 19, 2015. The 2023 Convertible Notes will mature on February 16, 2023, unless earlier repurchased or converted.

At any time prior to August 15, 2017, the Company is entitled, at its option, to redeem some or all of the 2023 Convertible Notes at a redemption price of 100% of the principal amount thereof, plus the “Applicable Premium” (as defined in the indenture governing the 2023 Convertible Notes) and accrued and unpaid interest, if any. On and after August 15, 2017, the Company may redeem the 2023 Convertible Notes, in whole or in part, at redemption prices (expressed as percentages of principal amount thereof) equal to 103.75% for the twelve-month period beginning on August 15, 2017, 102.50% for the twelve-month period beginning August 15, 2018, 101.25% for the twelve-month period beginning August 15, 2019, and 100.00% beginning on August 15, 2020 and thereafter, plus accrued and unpaid interest, if any. Additionally, in the event of a Change of Control (a as defined in the indenture governing the 2023 Convertible Notes), holders of the New Convertible Notes may require the Company to repurchase all or a portion of their New Convertible Notes at a repurchase price equal to 101% of the principal amount of New Convertible Notes, plus accrued and unpaid interest, if any, to the applicable repurchase date.

The 2023 Convertible Notes will be guaranteed by the same guarantors that guarantee the 2023 Outstanding Notes, and the indenture governing the 2023 Convertible Notes will contain covenants substantially identical to those applicable to the 2023 Outstanding Notes.

Credit Agreement Amendment

On August 13, 2015, in conjunction with the Transactions, the Company, Royal Bank of Canada, as administrative agent and the lenders signatory to the Fourth Amended and Restated Credit Agreement, dated as of June 10, 2015 (the “Credit Agreement”), agreed to amend the Credit Agreement to allow the Company to redeem or purchase Existing Notes for up to $200 million in cash subject to certain limitations. Among other things, the amendment also modifies the definition of Consolidated Net Income to exclude any income attributable to the cancellation or early extinguishment of any Indebtedness from the calculation of Consolidated Net Income and Consolidated EBITDA.

Terms capitalized in the foregoing paragraph have the meaning given to them in the Credit Agreement.

The description above is a summary only and is qualified in its entirety by reference to the First Amendment to the Credit Agreement, dated as of August 13, 2015, filed as Exhibit 10.1 hereto and incorporated herein by reference.

On August 13, 2015, the Company issued a press release with respect to the issuance of the New Convertible Notes in the Exchange Transactions, the Outstanding Notes Repurchase and the amendment to the Credit Agreement. A copy of this press release is attached as Exhibit 99.1 hereto.

Item 9.01

Financial Statements and Exhibits

(d) Exhibits


Exhibit No.		Description

10.1		First Amendment to Fourth Amended and Restated Credit Agreement, dated as of August 13, 2015, by and among the Company, as borrower, Royal Bank of Canada, as administrative agent, and the lenders signatory thereto.

99.1		Press release issued by SandRidge Energy, Inc. dated as of August 14, 2015.

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, hereunto duly authorized.

Date: August 14, 2015


SANDRIDGE ENERGY, INC.
(Registrant)

By:		/s/ Philip T. Warman
Name:		Philip T. Warman
Title:		Senior Vice President, General Counsel and Corporate Secretary

Exhibit Index


No.		Description

10.1		First Amendment to Fourth Amended and Restated Credit Agreement, dated as of August 13, 2015, by and among the Company, as borrower, Royal Bank of Canada, as administrative agent, and the lenders signatory thereto.

99.1		Press release issued by SandRidge Energy, Inc. dated as of August 14, 2015

Exhibit 10.1

Execution Version

FIRST AMENDMENT

FOURTH AMENDED AND RESTATED CREDIT AGREEMENT

dated as of August 13, 2015

among

SANDRIDGE ENERGY, INC.,

as the Borrower,

ROYAL BANK OF CANADA,

as the Administrative Agent for the Lenders,

and

THE LENDERS PARTY HERETO

CAPITAL ONE, NATIONAL ASSOCIATION, CITIZENS BANK, N.A.,

NATIXIS, NEW YORK BRANCH, SUNTRUST BANK and

UBS SECURITIES LLC,

Documentation Agents

RBC CAPITAL MARKETS¹,

BARCLAYS BANK PLC

and

MORGAN STANLEY SENIOR FUNDING, INC.,

Joint Lead Arrangers and Joint Book Managers

¹	RBC Capital Markets is the global brand name of the corporate and investment banking business of Royal Bank of Canada and its affiliates.

FIRST AMENDMENT TO

FOURTH AMENDED AND RESTATED CREDIT AGREEMENT

THIS FIRST AMENDMENT TO FOURTH AMENDED AND RESTATED CREDIT AGREEMENT (this “First Amendment”) dated as of August [●], 2015 is among SANDRIDGE ENERGY, INC., a Delaware corporation (the “Borrower”), each of the Lenders party hereto and ROYAL BANK OF CANADA, as administrative agent for the Lenders (in such capacity, together with its successors in such capacity, the “Administrative Agent”).

R E C I T A L S

A. The Borrower, the Administrative Agent and the Lenders are parties to that certain Credit Agreement, dated as of June 10, 2015 (the “Credit Agreement”), pursuant to which the Lenders have made certain credit available to and on behalf of the Borrower.

B. The Borrower has requested, and the Administrative Agent and the Majority Lenders party hereto have agreed, to make certain changes to the Credit Agreement.

C. NOW, THEREFORE, to induce the Administrative Agent and the Lenders party hereto to enter into this First Amendment and in consideration of the premises and the mutual covenants herein contained, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

Section 1. Defined Terms. Each capitalized term used herein but not otherwise defined herein has the meaning given such term in the Credit Agreement. Unless otherwise indicated, all section references in this First Amendment refer to sections of the Credit Agreement. Upon and after the execution of this First Amendment by each of the parties hereto, each reference in the Credit Agreement to “this Agreement”, “hereunder”, “hereof” or words of like import referring to the Credit Agreement, and each reference in the other Loan Documents to “the Credit Agreement”, “thereunder”, “thereof” or words of like import referring to the Credit Agreement, shall mean and be a reference to the Credit Agreement as modified hereby.

Section 2. Amendments to Credit Agreement.

2.1 Amendment to Definitions.

2.1.1 The definition of “Consolidated Net Income” is hereby amended and restated in its entirety as follows:

“Consolidated Net Income” means, for any period, the net income (or loss) of Borrower and its Consolidated Restricted Subsidiaries for such period determined in accordance with GAAP, provided that the following shall be excluded in calculating Consolidated Net Income and Consolidated EBITDA: (i) any extraordinary items of gain or loss, (ii) any gain or loss from the sale of assets other than in the ordinary course of business, (iii) any non-cash income, gains, losses or charges resulting from the requirements of SFAS 133 or 143, (iv) the net income (or loss) of any Royalty Trust, any master limited partnership or any person accounted for on the equity method, except to the extent of cash distributions received by the Borrower or a Consolidated Restricted Subsidiary for such period and (v) any income attributable to cancellation or early extinguishment of any Indebtedness of Borrower or a Consolidated Restricted Subsidiary.

2.1.2 The definition of “Permitted Refinancing” is hereby amended by deleting the word “maturity,” from clause (ii) thereof.

2.2 Amendment to Section 7.02. Section 7.02 is hereby amended by (i) deleting the word “and” at the end of clause (p) thereof, (ii) adding the word “and” at the end of clause (q) thereof and (iii) adding the following clause (r) after clause (q) thereof:

“(r) Investments expressly permitted by Section 7.15(a)(v).”

2.3 Amendment to Section 7.15(a). Section 7.15(a) is hereby amended and restated in its entirety as follows:

(a) Optionally prepay, redeem, purchase, defease or otherwise satisfy prior to the scheduled maturity thereof in any manner (it being understood that mandatory payments of principal and interest shall be permitted to the extent permitted by the applicable provisions of the intercreditor agreement applicable thereto; provided that no such mandatory payments shall be made using any funds or proceeds that may otherwise be reinvested by the Borrower), any Principal Debt Obligations or any other Indebtedness permitted under Section 7.03(c) or Section 7.03(l) (collectively, “Restricted Debt”) or make any payment in violation of any terms of any Restricted Debt Documentation, except (i) with the proceeds of, or in exchange for, any Refinancing Indebtedness in respect thereof, (ii) the conversion of any Restricted Debt to Equity Interests (other than Disqualified Stock) of the Borrower, (iii) the redemption of any Restricted Debt with the Net Cash Proceeds of any offering of Equity Interests (other than Disqualified Stock) of the Borrower, (iv) subject to the satisfaction of the Available Amount Conditions, other prepayments, redemptions, purchases, defeasances and other payments in respect of Restricted Debt in an amount not to exceed the Available Amount at such time and (v) the redemption or purchase of Existing Notes for cash consideration in an aggregate amount not to exceed $200,000,000, subject to the satisfaction of the following conditions both before and after giving effect to such open market purchases: (A) the sum of the Available Borrowing Base plus unrestricted cash and Cash Equivalents of the Borrower and its Restricted Subsidiaries is not less than $500,000,000 and (B) the proceeds of Committed Loans are not used, directly or indirectly, to finance such open market purchases.

Section 3. Conditions Precedent. This First Amendment shall not become effective until the date on which each of the following conditions is satisfied (such date, the “Amendment Effective Date”):

3.1 The Administrative Agent shall have received from (a) the Borrower and (b) Lenders sufficient to constitute the Majority Lenders, counterparts (in such number as may be requested by the Administrative Agent) of this First Amendment signed on behalf of such Person.

3.2 The Administrative Agent and the Lenders shall have received all amounts due and payable on or prior to the Amendment Effective Date, including, to the extent invoiced, reimbursement or payment of all documented out-of-pocket expenses required to be reimbursed or paid by the Borrower under the Credit Agreement.

3.3 The representations and warranties of the Borrower and each other Loan Party contained in Article 5 of the Credit Agreement or any other Loan Document, or which are contained in any document furnished at any time under or in connection herewith or therewith, shall be true and correct in all material respects (or if such representation or warranty is qualified by materiality or reference to

Material Adverse Effect, such representation or warranty shall be true and correct in all respects) on and as of the date hereof except to the extent that such representations and warranties specifically refer to an earlier date, in which case they shall be true and correct in all material respects(or if such representation or warranty is qualified by materiality or reference to Material Adverse Effect, such representation or warranty shall be true and correct in all respects) as of such earlier date and the representations and warranties contained in subsection (a) of Section 5.05 of the Credit Agreement shall be deemed to refer to the most recent statements furnished pursuant to clause (a) of Section 6.01 of the Credit Agreement.

3.4 No Default or Event of Default shall have occurred and be continuing as of the date hereof, after giving effect to the terms of this First Amendment.

The Administrative Agent is hereby authorized and directed to declare this First Amendment to be effective when it has received documents confirming or certifying, to the satisfaction of the Administrative Agent, compliance with the conditions set forth in this Section 3 or the waiver of such conditions as permitted hereby. Such declaration shall be final, conclusive and binding upon all parties to the Credit Agreement for all purposes.

Section 4. Miscellaneous.

4.1 Confirmation. The provisions of the Credit Agreement, as amended by this First Amendment, shall remain in full force and effect following the effectiveness of this First Amendment.

4.2 Ratification and Affirmation; Representations and Warranties. Each of the Loan Parties hereby (a) ratifies and affirms its obligations under, and acknowledges, renews and extends its continued liability under, each Loan Document to which it is a party and agrees that each Loan Document to which it is a party remains in full force and effect, except as expressly amended hereby and (b) represents and warrants to the Lenders that as of the date hereof, after giving effect to the terms of this First Amendment all of the representations and warranties contained in each Loan Document to which it is a party are true and correct in all material respects (or if such representation or warranty is qualified by materiality or reference to Material Adverse Effect, such representation or warranty shall be true and correct in all respects), except to the extent that such representations and warranties specifically refer to an earlier date, in which case they shall continue to be true and correct, in all material respects (or if such representation or warranty is qualified by materiality or reference to Material Adverse Effect, such representation or warranty shall be true and correct in all respects), as of such earlier date and the representations and warranties contained in subsection (a) of Section 5.05 of the Credit Agreement shall be deemed to refer to the most recent statements furnished pursuant to clause (a) of Section 6.01 of the Credit Agreement.

4.3 No Waiver; Loan Document. The execution, delivery and effectiveness of this First Amendment shall not operate as a waiver of any right, power or remedy of any Lender or the Administrative Agent under any of the Loan Documents, nor constitute a waiver of any provision of any of the Loan Documents. On and after the Amendment Effective Date, this First Amendment shall for all purposes constitute a Loan Document.

4.4 Counterparts. This First Amendment may be executed by one or more of the parties hereto in any number of separate counterparts, and all of such counterparts taken together shall be deemed to constitute one and the same instrument. Delivery of this First Amendment by facsimile or electronic transmission in portable document format (.pdf) shall be effective as delivery of a manually executed counterpart hereof.

4.5 NO ORAL AGREEMENT. THIS FIRST AMENDMENT, THE CREDIT AGREEMENT AND THE OTHER LOAN DOCUMENTS EXECUTED IN CONNECTION

HEREWITH AND THEREWITH REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES WITH RESPECT TO THE SUBJECT MATTER HEREOF AND THEREOF AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. AS OF THE DATE OF THIS FIRST AMENDMENT, THERE ARE NO ORAL AGREEMENTS BETWEEN THE PARTIES.

4.6 GOVERNING LAW. THIS FIRST AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.

[SIGNATURES BEGIN NEXT PAGE]

IN WITNESS WHEREOF, the parties hereto have caused this First Amendment to be duly executed as of the date first written above.


BORROWER:	SANDRIDGE ENERGY, INC.

	By:	/s/ Philip T. Warman
	Name:	Philip T. Warman
	Title:	Senior Vice President and General Counsel

GUARANTORS:	SANDRIDGE OPERATING COMPANY

	By:	/s/ Philip T. Warman
	Name:	Philip T. Warman
	Title:	Senior Vice President and General Counsel

	INTEGRA ENERGY, L.L.C.

	By:	SANDRIDGE EXPLORATION AND PRODUCTION, LLC, managing member

	By:	/s/ Philip T. Warman
	Name:	Philip T. Warman
	Title:	Senior Vice President and General Counsel

	LARIAT SERVICES, INC.

	By:	/s/ Philip T. Warman
	Name:	Philip T. Warman
	Title:	Senior Vice President and General Counsel

	SANDRIDGE HOLDINGS, INC.

	By:	/s/ Philip T. Warman
	Name:	Philip T. Warman
	Title:	Senior Vice President and General Counsel