SandRidge Energy Inc., Oklahoma City, will acquire private Houston independent Dynamic Offshore Resources LLC for $1.275 billion including $680 million in cash and 74 million SandRidge common shares.
SandRidge said Dynamic had 62.5 million bbl of oil equivalent proved reserves, 80% proved developed, and production of 25,000 boe/d at yearend 2011 in less than 300 ft of water in the Gulf of Mexico. About 50% of the reserves and production are oil.
SandRidge said it expects the Dynamic operations to “contribute significant free cash flow in excess of the anticipated annual drilling and recompletion capital budget of $200 million.” Closing is set for this year’s second quarter.
Meanwhile, SandRidge said its 2011 yearend proved reserves were up 11% to 471 million boe, including oil reserves that increased 17% to 245 million bbl. The company’s oil production was up 60% as total production grew 16% to 23.4 million boe.
SandRidge is producing 67,000 boe/d. The company said estimated ultimate recovery from its horizontal Mississippian wells has increased 11% to 456 million boe/well.
The company drilled 167 Mississippian horizontal wells in northern Oklahoma and southern Kansas last year and has 21 rigs drilling horizontal production wells there and 3 rigs drilling salt water disposal wells. It plans to add 1 rig/month in 2012 and drill 380 wells.
SandRidge drilled 803 wells in the Permian basin in 2011 and is now running 13 rigs on the Central Basin Platform mainly drilling Grayburg/San Andres vertical wells at 4,500-7,500 ft. It plans to drill 759 Permian basin wells in 2012.