2010-04-05-2010-04-04-2010-07-16

Transaction Type
Sellers
Buyers
Announce Date
Post Date
Close Date
Estimated Price
1.6BB
Description

Acquired company with assets in W. TX & NM Permian Basin, gaining 69.3 BOE proved, 8,500 BOE/d.

Oklahoma City-based SandRidge Energy Inc. (NYSE: SD) has acquired Arena Resources Inc., Tulsa, Okla., (NYSE: ARD) for $1.8 billion in stock and cash, increasing its oil footprint in the Permian Basin with more than 5,700 potential drilling leads.

SandRidge now holds total proved reserves of 288 million BOE (57% proved developed) and production of 57.8 million BOE per day.

When the deal was announced in April for $1.6 billion, SandRidge agreed to pay 4.7771 shares and $2.50 in cash per Arena share for a total of $40 per Arena share, representing a 17% premium to the April 1 closing price. SandRidge also agreed to issue 191 million new shares in the acquisition. In June, the offer was revised so that each Arena share would be converted in the merger into the right to receive 4.7771 shares of SandRidge stock, plus $4.50 per share in cash.

Arena has $63.6 million cash on hand and no debt. The combined enterprise value is approximately $6.2 billion, with Arena shareholders holding 42% of the combined entity.

Acquired assets include an average 95% working interest in 67,600 net acres, 85% of which are concentrated in the Central Basin Platform in the West Texas Permian Basin and New Mexico. Proved reserves are 69.3 million BOE equivalent (37% proved developed) and production is 8,500 BOE per day (86% oil). Upside includes 2,700 drilling locations, primarily targeting the San Andres and Clear Fork formations. Arena also holds interests in Oklahoma and Kansas.

Broadening its oil position in December 2009, SandRidge acquired Permian assets from Forest Oil Corp., Denver, (NYSE: FST) for $800 million.

Trading in Arena's common stock on the New York Stock Exchange will cease after the market closes July 16.

Deutsche Bank Securities Inc. was financial advisor to SandRidge and provided a fairness opinion. Covington & Burling LLP was legal advisor. SunTrust Robinson Humphrey Inc. was financial advisor to Arena. Tudor, Pickering, Holt & Co. Securities Inc. provided a fairness opinion. Johnson & Jones PC and Haynes and Boone LLP were legal advisors to Arena.

SandRidge also has E&P operations in the Mid-Continent, the East Texas Cotton Valley trend, the Gulf Coast and the Gulf of Mexico.