OKLAHOMA CITY, Sept. 10, 2018 /PRNewswire/ -- SandRidge
Energy, Inc. (the "Company") (NYSE: SD) announced today that it has
concluded its formal strategic review process following the
thorough evaluation of multiple potential transactions, all of
which the Board of Directors believes significantly undervalue
either the Company or its resources. The Board believes several
impermanent items may have impacted bid valuations, including
Colorado's ballot initiative 97,
which would significantly restrict drilling on the North Park
property, the current lack of a pipeline connection in Jackson County, Colorado where our North Park
acreage is located, and a lack of current market interest in the
Mississippian Lime play. When the highest cash bids were totaled,
the Company's implied liquidation value was approximately
$12.00-$13.00 per share, which the Board believes
meaningfully undervalues the Company.
"What we found through our comprehensive and thorough process
was a significant disconnect between the intrinsic value of
SandRidge and the bidders' perception of the Company. The highest
cash bids received for the Company's properties included
$305 million for a combination of the
Mississippian Lime and additional other Oklahoma properties, $70 million for the Northwest STACK properties
and only $100 million for the North
Park Basin assets, which are simply not consistent with the current
proven reserves and expected cash flows of these properties,"
Bill Griffin, President and CEO
stated.
Jonathan Frates, Chairman of the
Board, went on to say, "At the right price, notwithstanding the
conclusion of this formal strategic review process, the Board is
prepared to recommend a sale of the Company or certain of its
assets, or the consummation of an appropriate merger
opportunity. The value of the Company's current reserve
development plan exceeds recent trading values and certainly these
offers, which grossly undervalue the Company. Unfortunately,
our properties are located in areas that are currently out of favor
and are therefore meaningfully undervalued. We will work
assiduously over the next few years to realize the true value of
the business."
After several months of extensive solicitation, review of
various proposals and reverse due diligence, the Board determined
that the submitted cash offers were not representative of the
Company's current or potential future asset value. Further, the
merger proposals received were unattractive primarily because the
offers entailed asking SandRidge to take meaningfully overvalued
properties in lieu of cash, to burden the balance sheet with
significant debt, provided no meaningful synergies or resulted in
wide valuation gaps.
The Board has concluded that the optimal course at this time is
to develop the Company's extensive inventory base in the Northwest
STACK and the North Park Basin and pursue value enhancement
opportunities in the Mississippian Lime. The Company will also
pursue opportunistic acquisitions of strategic assets that provide
complimentary, high quality production and development upside in a
capital disciplined manner. The Company will continue to focus on
cost reductions, margin improvements and divestment of non-core
properties while moving forward with a profitable plan for organic
growth. The Company looks forward to sharing the details of its new
go-forward strategy in the very near future.
The strategic review process started on May 17, 2018 before the change in composition of
the Board of Directors with the assistance of RBC Capital Markets
LLC ("RBCCM"). The process included RBCCM contacting 662 entities
to explore a complete or partial sale of the Company or its assets,
or a combination of the Company with those entities, including
domestic, international and financial buyers. The Company executed
28 non-disclosure agreements and received eight offers to purchase
the Company or certain of its assets or to consummate some form of
combination with the Company.
Investor Contact:
Johna Robinson
Investor Relations
SandRidge Energy, Inc.
123 Robert S. Kerr Avenue Oklahoma City,
OK 73102
+1 (405) 429-5515
Cautionary Statement Concerning Forward Looking
Statements
This communication contains "forward-looking statements"
"forward-looking statements" within the meaning of Section 27A
of the Securities Act of 1933, as amended, and Section 21E of
the Securities Exchange Act of 1934, as amended. These statements
express a belief, expectation or intention and are generally
accompanied by words that convey projected future events or
outcomes. Such statements are often identified by use of the words
"expects," "believes," "will," "would," "could," "forecasts,"
"projections," "estimates," "targets," "opportunities,"
"potential," and other similar terminology. All statements, other
than statements of historical facts, included in this press release
that address activities, events or developments that SandRidge
expects, believes or anticipates will or may occur in the future
are forward-looking statements. Such statements are subject to a
number of assumptions, risks and uncertainties, including, but not
limited to: the volatility of oil, gas and natural gas liquids
("NGL") prices; uncertainties inherent in estimating oil, gas and
NGL reserves and resource potential; the uncertainties, costs and
risks involved in exploration and development activities;
regulatory restrictions, compliance costs and other risks relating
to governmental regulation; risk related to third party control
over non-operated properties; midstream capacity
constraints and potential interruptions in production, and other
factors, many of which are beyond our control. SandRidge cautions
that the foregoing list of factors is not exclusive. Additional
information concerning these and other risk factors is contained in
SandRidge's public filings with the SEC, which are available at the
SEC's website, http://www.sec.gov. Each forward-looking statement
speaks only as of the date of the particular statement, and
SandRidge undertakes no obligation to publicly update any of these
forward-looking statements to reflect events or circumstances that
may arise after the date hereof.
About SandRidge Energy, Inc.
SandRidge Energy, Inc. (NYSE: SD) is an oil and natural gas
exploration and production company headquartered in Oklahoma City, Oklahoma with its principal
focus on developing high-return, growth oriented projects in
Oklahoma and Colorado. The majority of the Company's
production is generated from the Mississippi Lime formation in
Oklahoma and Kansas. Development activity is currently
focused on the Meramec formation in the NW STACK Play in
Oklahoma and multiple oil rich
Niobrara benches in the North Park Basin in Colorado.
View original content to download
multimedia:http://www.prnewswire.com/news-releases/sandridge-energy-concludes-strategic-review-process-and-will-move-forward-with-company-development-and-growth-plan-300710020.html
SOURCE SandRidge Energy, Inc.