On Aug. 4, SandRidge Energy (NYSE: SD) said it has entered into a joint venture with an affiliate of Atinum Partners Co., Ltd., a private investment firm located in the Republic of Korea. Oklahoma City-based SandRidge will transfer a 13.2% non-working interest in about 860,000 acres, or approximately 113,000 net acres to Atinum, for a total transaction value to SandRidge of $500 million.
Atinum will pay $250 million in cash at closing and the remainder in the form of a drilling carry. The JV area of mutual interest (AMI) covers substantially all of SandRidge’s original Mississippian play area, located in northern Oklahoma and southern Kansas other than wells and acreage within the associated spacing units spudded prior to the effective date and all wells associated with SandRidge Mississippian Trust I. The transaction is expected to close in the fourth quarter.
Atinum has committed to a drilling carry obligation to pay 13.2% of SandRidge’s share of drilling and completion costs for wells drilled in the AMI up to a total amount of $250 million, which is expected to occur over a three-year period.
Tom L. Ward, SandRidge chairman and CEO, said, “We are pleased to announce this joint venture with Atinum Partners and look forward to having them as our partner. This transaction completes another step in our plan to raise the capital needed to accelerate and maximize the value of our assets.”
Kyung Soo Chung, president and CEO of Atinum, commented, “We are excited about the opportunity to invest in the Mississippi Lime and to partner with SandRidge, the leading operator in the area. This builds on our prior investments in the US energy sector, implementing our strategy to actively invest in significant growth opportunities.”
SandRidge was advised by Tudor, Pickering, Holt & Co. and Vinson & Elkins LLP. Atinum was advised by Barclays Capital and Skadden, Arps, Slate, Meagher, & Flom LLP in the transaction.