SandRidge, Repsol Put Finishing Touches On Mississippian JV

Acquired 25% nonop WI (250,000 net acres) in Extension Mississippian play in W KS & 16% nonop WI (113,636 net acres) in original Mississippian play, for total 363,636 net acres.

SandRidge Energy Inc., Oklahoma City, (NYSE: SD) has wrapped up its sale of a nonoperared assets in a joint venture concerning Mississippian assets in Kansas with a subsidiary of Repsol YPF SA, Madrid, (Madrid: REP) for $1 billion.

Repsol paid $250 million in cash at closing and will fund a portion of SandRidge’s operations on the joint venture to the tune of $750-million in three-year drilling-carry obligation.

Repsol acquired an approximate 25% nonoperated working interest, or 250,000 net acres, in the Extension Mississippian play in western Kansas and an approximate 16% nonoperated working interest, or 113,636 net acres, in SandRidge’s original Mississippian play, for a total of 363,636 net acres

The joint venture will exclude all wells and acreage within the associated spacing units spudded prior to Jan. 1, and all wells and acreage associated with SandRidge Mississippian Trust I.

Tom Ward, SandRidge chairman and CEO, says, "We are excited to announce this joint venture with Repsol, a global energy leader, and we are pleased that they share our confidence in the development potential of this vast Mississippian oil play. We compare the scope of this play to the Bakken and believe it will be transformational for the Midcontinent region of the United States.”

SandRidge has now drilled more than 195 horizontal wells the Mississippian Play, representing nearly half of all the horizontal wells drilled in the play to date. As a result of the drilling carry and its lower working interest, SandRidge's 2012 capex is expected to decline to $1.6 billion from a previous budget of $1.8 billion.

SandRidge was advised by Tudor, Pickering, Holt & Co. and Vinson & Elkins LLP.