SandRidge Energy announces sale of northern Colorado assets for $47 million
SandRidge Energy is selling its operations in Colorado’s North Park for $47 million to Gondola Resources.
The Oklahoma City company said in a statement Monday that the transaction is expected to close in the first quarter of 2021. SandRidge operates on 93,000 acres in the Niobrara formation in Jackson County in northern Colorado, according to its website.
More than 80% of the minerals produced is oil.
SandRidge said its North Park Basin assets accounted for less than 10% of its production during the quarter that ended Sept. 30. The company said the area’s production was less than 10% of its proved developed reserves at the end of last year.
Carl Giesler, SandRidge president and CEO, said in a statement that the transaction monetizes an asset that doesn’t fit with the company’s shift to a “cash optimization-focused strategy.”
SandRidge didn’t return a request for comment Tuesday.
“I think we’ll see a lot of this. Companies are scaling back” on capital spending, said Andrew Dittmar, senior mergers and acquisitions analyst for Enverus. “Everyone’s very clash-flow driven and cash-flow-focused at the moment.”
“I think lot of companies are going to look to sell off whatever smaller pieces of their portfolio are still hanging in there,” Dittmar added.
And Dittmar said he expects to see more private equity companies step in and acquire assets. “There’s not a lot of appetite in the public market to go out and make acquisitions right now.”
The sale of the North Park assets follow’s the company’s recent sale of its headquarters in Oklahoma City for $35 million to the state of Oklahoma. The company’s bankruptcy case, filed in 2016, was closed in November.
The buyer, Gondola Resources, is based in Frisco, Texas, and is backed by Fulcrum Energy Capital Funds.
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