Oklahoma City-based SandRidge Energy Inc. (NYSE: SD) has amended its agreement to acquire Permian Basin-focused Arena Resources Inc., Tulsa, Okla., (NYSE: ARD), increasing its stock and cash consideration to approximately $1.8 billion.
When the deal was first announced, SandRidge agreed to pay 4.7771 shares and $2.50 in cash per Arena share for a total of $40 per Arena share, representing a 17% premium to the April 1 closing price. SandRidge also agreed to issue 191 million new shares in the acquisition.
Now, each Arena share will be converted in the merger into the right to receive 4.7771 shares of SandRidge stock plus $4.50 per share in cash. Arena may also solicit other offers for a 30-day period ending July 1. The termination fee will be reduced from $50 million to $39 million if Arena accepts another company’s offer.
Arena chairman and co-founder Tim Rochford says, “The amended merger allows for a ‘go-shop’ period, an increase in the cash consideration and a lower termination fee…We are confident that upon completion of this period, we will be able to close the transaction.”
SandRidge chief executive Tom Ward is also confident. “We continue to believe the combination realizes numerous synergies and creates a stronger platform from which to grow production across a balanced and concentrated West Texas asset base.”
Arena has $63.6 million cash on hand and no debt. The combined enterprise value is approximately $6.2 billion, with Arena shareholders holding 42% of the combined entity.
Recommended Reading
Quantum Capital’s View on AI: Lots of Benefits, Pain Points
2024-05-16 - The energy industry is lagging in the race to implement AI, but Sebastian Gass, CTO of Quantum Capital Group, offered a few solutions during Hart Energy’s 2024 SUPER DUG Conference & Expo.
Aramco Credits Adaptability, Collaboration for Driving Innovation
2024-05-15 - Aramco’s implementation of different approaches has led to the creation and commercialization of newer products, said Max Deffenbaugh, principal scientist for Aramco, at the 2024 Offshore Technology Conference in Houston.
OTC: E&Ps Improving Operational Safety with Digitization
2024-05-13 - Artificial intelligence and the digitization of the oilfield have allowed for several improvements in keeping operators out of harm’s way, panelists said during the 2024 Offshore Technology Conference.
Exclusive: Cost-effective Benefits of Extracting from Mature Assets
2024-05-13 - Baker Hughes' well abandonment leader Bart Joppe details the importance of extracting resources from mature assets and the company's approach to managing a well, in this Hart Energy Exclusive interview.
TGS Starts Up Multiclient Wind, Metaocean North Sea Campaign
2024-05-07 - TGS is utilizing two laser imaging and ranging buoys to receive detailed wind measurements and metaocean data, with the goal of supporting decision-making in wind lease rounds in the German Bright.