SandRidge to sell Gulf of Mexico business for $750M, raises output guidance

|About: SandRidge Energy, Inc. (SD)|By:, SA News Editor

SandRidge Energy (SD) +7.4% premarket after announcing the sale of its Gulf of Mexico business to Fieldwood Energy for $750M cash and the assumption of $370M of abandonment liabilities; SD will retain a 2% overriding royalty interest in certain exploration prospects.

Adjusting for the impact of the sale, SD provides revised guidance for 2014, including production growth of 26% vs. 12% previous guidance; in 2014, SD will redeploy the capital expenditures previously allocated to Gulf of Mexico development into its Mid-Continent assets.

SD plans to add three additional rigs during Q2, resulting in the drilling of ~30 additional gross wells vs. the previous budget; it now expects to exit 2014 with 29 rigs operating in its Mid-Continent acreage.