SandRidge Energy to buy Bonanza Creek in $746m deal

The consideration consists of $19.20 in cash and $16.80 of SandRidge shares for each Bonanza share, implying a total transaction value of around $746m and representing a 17.4% premium to Bonanza’s closing price on Tuesday.

SandRidge chief executive James Bennett said: “This acquisition greatly enhances our existing portfolio by adding a deep inventory of drill-ready locations in the DJ Basin of Colorado and is highly complementary to our existing North Park, Northwest STACK and Mississippian assets. The geological and operational characteristics of Bonanza's Niobrara and Codell locations are analogous to our existing Colorado North Park assets, and we expect to benefit from the expertise of their teams.

“Overall, we believe this will drive strong risk-adjusted returns in both areas. Likewise, SandRidge will benefit from the greatly increased scale and substantial cost and operational synergies as a result of the transaction. Lastly, the acquisition will be accretive to cash flow per share and will enhance our ability over time to increase cash flow generation of the business."

The combined entity will operate over 630,000 net acres focused in the Rockies and Mid-Continent, producing around 55,000 barrels of oil equivalent per day, as of 30 September 2017.

Following the deal, which is expected to close in the first quarter of 2018, Bonanza shareholders will own between around 31.4% and to 35.8% of the outstanding shares of SandRidge.