Sandridge emerges from bankruptcy, sheds $3.7 billion in debt

SandRidge Energy Inc., Oklahoma City, has emerged from Chapter 11 having eliminated $3.7 billion in pre-petition funded debt.

SandRidge Energy Inc., Oklahoma City, has emerged from Chapter 11 having eliminated $3.7 billion in pre-petition funded debt (OGJ Online, May 16, 2016).

Combining its unrestricted cash balance with the availability under its first lien credit facility following emergence, SandRidge exits its restructuring with $525 million in total liquidity. The firm’s new capital structure consists of a $425 million first lien revolving credit facility maturing in 2020 and $282 million in mandatorily convertible notes.

The firm said last week it plans to invest $225-255 million of capital expenditures in 2016, with $56 million spent during the second quarter and $110 million during the first half. Its full-year total production is estimated at 18.9-19.3 million boe.

SandRidge is running one drilling rig for most of 2016 in the Midcontinent region. Thirty-seven horizontal laterals are planned to be spudded during the year, with 26 in the Midcontinent and 11 in North Park.

The lateral counts include four extended laterals, one dual extended lateral, and two full-section development projects in the Midcontinent, and one extended lateral in North Park.

SandRidge has been developing the Mississippian and adjacent oil and gas reservoirs since 2010, drilling more than 1,600 horizontal producing wells in Oklahoma and Kansas. While the firm has a combined 1.1 million acres in all of Oklahoma and Kansas, its current drilling activity is concentrated within its 462,000 acres of focus area leasehold in Oklahoma, 64% of which is held by production.

During the second quarter, the firm’s Midcontinent assets averaged 52,000 boe/d, of which 25% was oil, 24% NGLs, and 51% natural gas.

SandRidge acquired its oil-rich Niobrara properties in December 2015 and began development in January. The firm holds 129,000 net acres in the Niobrara, 55% of which is held by production or held by federal unit.

The firm is preparing applications for two additional federal units and plans to shoot additional 3D seismic surveys in early 2017 to extend and complement its existing 54-sq mile 3D survey. Initial development plans include 1,300 Niobrara drilling locations. The properties averaged 1,200 b/d of oil during the second quarter.

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