OKLAHOMA CITY, July 1, 2020 /PRNewswire/ -- SandRidge
Energy, Inc. (the "Company" or "SandRidge") (NYSE: SD) today
announced that its Board of Directors (the "Board") adopted a tax
benefits preservation plan (the "Section 382 Rights Plan") designed
to protect the availability of SandRidge's net operating loss
carryforwards ("NOLs") under the Internal Revenue Code (the
"Code").
As of December 31, 2019, SandRidge
had approximately $1.4 billion of
usable U.S. federal NOLs that could be available to offset its
future federal taxable income. SandRidge's ability to use these
NOLs would be substantially limited if it experienced an "ownership
change" within the meaning of Section 382 of the Code. In general,
a company would undergo an ownership change if its "5-percent
shareholders" (determined under Section 382) increased their
ownership of such company's stock by more than 50 percentage points
over a rolling three-year period. The Section 382 Rights Plan is
intended to reduce the likelihood of such an ownership change at
SandRidge by deterring any person or group from acquiring
beneficial ownership of 4.9% or more of SandRidge's outstanding
common stock.
The Section 382 Rights Plan is similar to those adopted by
numerous other public companies with significant NOLs. The Section
382 Rights Plan is not designed to prevent any action that the
Board determines to be in the best interest of SandRidge and its
shareholders.
Under the Section 382 Rights Plan, the rights will initially
trade with SandRidge's common stock and will generally become
exercisable only if a person (or any persons acting as a group)
acquires 4.9% or more of SandRidge's outstanding common stock. The
Section 382 Rights Plan does not aggregate the ownership of
shareholders "acting in concert" unless and until they have formed
a group under applicable securities laws. If the rights become
exercisable, all holders of rights (other than any triggering
person) will be entitled to acquire shares of common stock at a 50%
discount or SandRidge may exchange each right held by such holders
for one share of common stock. Under the Section 382 Rights Plan,
any person which currently owns 4.9% or more of SandRidge's common
stock may continue to own its shares of common stock but may not
acquire any additional shares without triggering the Section 382
Rights Plan. The Board has the discretion to exempt any person or
group from the provisions of the Section 382 Rights Plan.
The Section 382 Rights Plan will expire on the day following the
certification of the voting results for SandRidge's 2021 annual
meeting of shareholders or any prior special meeting of
shareholders, unless SandRidge's shareholders ratify the Section
382 Rights Plan at such meeting, in which case the Section 382
Rights Plan will continue in effect until July 1, 2023, unless terminated earlier in
accordance with its terms. The Company intends to seek shareholder
approval of the Section 382 Rights Plan at the earliest practical
opportunity.
Additional information about the Section 382 Rights Plan is
available on a Form 8-K filed by SandRidge with the U.S. Securities
and Exchange Commission.
Winston & Strawn LLP is acting as legal counsel to the
Company.
About SandRidge Energy, Inc.
SandRidge Energy, Inc.
(NYSE: SD) is an independent oil and gas company engaged in the
development and acquisition of oil and gas properties. Its primary
areas of operation are the Mid-Continent in Oklahoma and Kansas and the North Park Basin in
Colorado. Further information can
be found at www.sandridgeenergy.com.
For further information, please contact:
Investor Relations
SandRidge Energy, Inc.
123 Robert S. Kerr Avenue
Oklahoma City, OK 73102-6406
(405) 429-5515
Cautionary Statement Regarding Forward-Looking
Statements
This press release includes "forward-looking statements" within the
meaning of the Private Securities Litigation Reform Act of 1995,
Section 27A of the Securities Act of 1933, as amended, and Section
21E of the Securities Exchange Act of 1934, as amended." These
forward-looking statements are neither historical facts nor
assurances of future performance and reflect SandRidge's current
beliefs and expectations regarding future events and SandRidge's
ability to utilize and realize the value of its NOLs and how they
could be substantially limited if SandRidge experienced an
"ownership change" as defined in Section 382 of the Code, whether
the Rights Plan will reduce the likelihood of such an unintended
ownership change from occurring, the potential impact of the
utilization of the NOLs on SandRidge's free cash generation and the
potential impact of distribution of rights on SandRidge's financial
conditions and results of operations. We have based these
forward-looking statements on our current expectations and
assumptions and analyses made by us in light of our experience and
our perception of historical trends, current conditions and
expected future developments, as well as other factors we believe
are appropriate under the circumstances. However, whether actual
results and developments will conform with our expectations and
predictions is subject to a number of risks, many of which are
beyond our control and could cause actual results to materially
differ from the results discussed in the forward-looking
statements, including, without limitation, federal and state tax
legislation and unreported buying and selling activity by SandRidge
shareholders. We refer you to the discussion of risk factors in
Part I, Item 1A - "Risk Factors" of our Annual Report on Form 10-K
and in comparable "Risk Factor" sections of our Quarterly Reports
on Form 10-Q filed after such Form 10-K. All of the forward-looking
statements made in this press release are qualified by these
cautionary statements. The actual results or developments
anticipated may not be realized or, even if substantially realized,
they may not have the expected consequences to or effects on our
Company or our business or operations. Such statements are not
guarantees of future performance and actual results or developments
may differ materially from those projected in the forward-looking
statements. We undertake no obligation to update or revise any
forward-looking statements, except where we are expressly required
to do so by law.
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SOURCE SandRidge Energy, Inc.