SandRidge Energy Rejects Midstates' Proposal; Reviews Strategic Alternatives

(RTTNews) - SandRidge Energy Inc. (SD) announced that its Board has rejected Midstates Petroleum's unsolicited public offer to combine the two companies in a stock for stock merger at a 60%/40% exchange ratio.

After extensive analysis, SandRidge has concluded that the relative asset values of the two companies do not support a combination effected at current stock prices. The decision was primarily based on significantly differing opinions of Midstates' proven oil and gas reserves, largely related to the assessment of the number of economically viable drilling locations at current oil and gas prices, SandRidge said.

SandRidge recognizes the combination would likely result in meaningful synergies given the expectation that SandRidge could efficiently absorb Midstates' assets and operations with limited incremental expense. However, the Company does not support Midstates' estimate that the combined business plan would result in generally flat production and free cash flow of $320 million to $400 million, over the four year period from 2019 to 2022.

SandRidge said, "For these and other reasons, SandRidge has concluded that accepting Midstates' proposal would be highly dilutive and not in the best long-term interests of SandRidge stockholders."

Following the receipt of Midstates' offer, SandRidge has received indications of interest regarding alternative transactions from other oil and gas companies. As a result, the Company announced today that it will undertake a formal process to evaluate strategic alternatives to maximize shareholder value.

The process will include, but is not limited to, an evaluation of divestment or joint venture opportunities associated with its North Park Basin assets and potential corporate and asset combination options with other Mid-Continent operators, including Midstates, should it elect to participate in this competitive process.

SandRidge will thoroughly evaluate all third-party proposals and will pursue options which add incremental shareholder value relative to its continued standalone option.