SandRidge Energy's $900M offering could increase liquidity by $192M

By Oil & Gas Financial Journal staff

Oklahoma City-based SandRidge Energy Inc. (NYSE: SD) increased its previously announced private placement offering of 7.50% Senior Notes due 2021 from $700 million to $900 million. The offering is expected to settle on March 15, 2011.

Net proceeds will be used to fund the company’s pending tender offer for up to $650 million in aggregate principal amount of its 8.625% Senior Notes due 2015, payment of the accrued, unpaid interest on such notes in connection with the tender offer and repay borrowings under the company’s senior credit facility.

A March 3 research note from Global Hunter Securities puts the total consideration for the tender off at $680.472 million or $1,046.88 per $1,000 principal amount of notes tendered. This includes a consent payment of $30 per $1,000. 

In the note, Global Hunter commented, “This transaction should increase the company’s liquidity by approximately $192 million. Combined with the pending asset sales and Trust offering, this transaction should be sufficient to close the company’s 2011 liquidity gap.” 

WIth a net income of $308 million in 3Q10, SandRidge Energy was a new addition to the top 20 income-earners in OGFJ's February 2011 installment of the OGJ150 Quarterly.

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