SandRidge Energy to acquire Arena Resources for $1.6 billion
05 Apr 2010
US oil and gas explorer SandRidge Energy has signed a deal to acquire its rival Arena Resources for $1.6 billion, in its quest to raiser its oil production and reserves.
In November, Oklahoma-based SandRidge had acquired the Permian Basin oil assets of Denver, Colorado-based Forest Oil Corporation for about $800 million, but decided to drop its $230-million bid to buy oil driller Crusader Energy Group in the same month.
SandRidge, which reported a hefty loss of $1.78 billion last year after paying preferred dividends on revenue of $591 million, focuses on oil and gas exploration and production in West Texas, the Permian Basin, the Mid-Continent, the Cotton Valley Trend in East Texas, the Gulf Coast, and the Gulf of Mexico.
SandRidge owns and operates gas gathering and processing facilities and CO2 treating and transportation facilities and also owns and operates a drilling rig and related oil field services business.
Under the deal, SandRidge will pay $2.50 in cash and 4.78 SandRidge shares for each Arena Resource share, a 17 per cent premium to Arena's 1 April closing price of $34.26.
The acquisition will make SandRidge one of the largest producers of West Texas conventional oil and gas, said the company.