SandRidge Energy signs $1 billion JV deal with Repsol
Baku, January 6 (AZERTAC). U.S. independent oil and gas company SandRidge Energy Inc (SD.N) sold part of its interest in an Oklahoma oil field to Spain`s Repsol YPF (REP.MC) in a potential $1 billion deal, sending its shares up 23 percent. It is the latest move by SandRidge to raise money for drilling as a collapse in natural gas prices squeezes its cash flow, having sold off natural gas properties and struck another joint venture with a South Korean firm earlier this year. Repsol will acquire 363,636 net acres in the Mississippian basin in Oklahoma for $250 million in cash and pay for the rest by assuming SandRidge`s capital expenditure, which SandRidge expects to take in over the next three years. Neal Dingmann at SunTrust Robinson Humphrey said the per-acre value of the deal was more than Wall Street had expected. "Maybe most importantly, a deal this size essentially eliminates all the funding concerns for next year," he added. Because of the deal, which is expected to close next quarter, SandRidge cut its capital expenditure guidance for 2012 to $1.6 billion from $1.8 billion. SandRidge shares jumped 23 percent to close at $8.21 on the New York Stock Exchange, within pennies of a four-month high. Chesapeake Energy Corp (CHK.N), whose co-founder Tom Ward now runs SandRidge, led the way into the Mississippian in 2007, and it has grown in profile as oil prices climbed in the past few years while natural gas prices declined steadily. "It does not have the extremely high initial production rates that we see in the Bakken (North Dakota), but overall returns are very comparable," Dingmann said. In September, SandRidge agreed to sell its East Texas natural gas properties for about $231 million to NFR Energy, a joint venture between Nabors Industries Ltd (NBR.N) and private equity firm First Reserve. A month before, SandRidge sold for $500 million a 13.2 percent stake in acreage in Oklahoma and Kansas to an affiliate of Korean investment firm Atinum Partners.
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