- Sells assets to affiliate of Riverstone Holdings
- Raises 2014 output growth forecast to 26 pct from 12 pct
- SandRidge to focus on drilling onshore
SandRidge shares were up nearly 4 percent in trading before the bell.
Riverstone affiliate Fieldwood Energy LLC, which bought Apache Corp’s Gulf of Mexico shelf operations for $3.75 billion in July, will also assume abandonment liabilities of $370 million as part of the deal with SandRidge.
Most U.S. oil and gas companies are increasing spending on their onshore fields as technological advancements open up vast shale reserves.
SandRidge is the latest company to dispose its Gulf of Mexico assets, following Apache, Devon Energy Corp and Callon Petroleum Co.
SandRidge said it would redeploy capital allocated to develop Gulf of Mexico into its mid-continent properties, including the Mississippian Oil Play of northern Oklahoma and western Kansas.
The redeployment is expected to push production up by about 37 percent in the mid-continent region this year.
SandRidge raised its forecast for production growth in 2014 to 26 percent from 12 percent, after adjusting for the sale.
SandRidge will retain a 2 percent overriding royalty interest in certain exploration areas in the U.S. Gulf.
Garima Goel is a reporter for Reuters News in Bangalore