Sep. 22, 2009 (PR Newswire) --
OKLAHOMA CITY, Sept. 22 /PRNewswire-FirstCall/ -- SandRidge Energy, Inc. (NYSE: SD) today announced that it has entered into an agreement with Crusader Energy Group Inc. to purchase all shares of common stock of Crusader that will be issued upon the effectiveness of their reorganization under Chapter 11 of the United States Bankruptcy Code. Under Crusader's plan of reorganization, all of the currently outstanding equity interests in Crusader would be cancelled and Crusader and its subsidiaries would become indirect, wholly-owned subsidiaries of SandRidge.
The transaction would further substantiate SandRidge's positions in the Anadarko basin of Western Oklahoma and in the Permian Basin in West Texas. Additionally, the cash flow from Crusader's existing production is expected to enhance SandRidge's balance sheet and provide increased liquidity. Tom L. Ward, SandRidge's CEO commented, "We believe this transaction will be accretive to SandRidge in terms of reserves, production and cash flow and provide new drilling opportunities for the company."
SandRidge agreed to pay cash and common stock valued in the aggregate at $230 million, no more than $85 million of which will be cash, subject to certain adjustments. Common shares to be issued will be valued at $13.45 per share. SandRidge will also issue warrants to purchase an additional two million shares of SandRidge common stock. The warrants will be exercisable at a price of $15.00 per share for five years after the closing of the transaction. Recipients of the SandRidge common stock and warrants will not be permitted to dispose of such common stock or warrants for 180 days after the closing of the transaction.
The closing of the transaction is subject to customary conditions, as well as approval of Crusader's creditors and the Bankruptcy Court, and consideration of alternative transactions that may be submitted prior to a deadline to be approved by the Bankruptcy Court. SandRidge has obtained an agreement from Crusader, its unsecured creditors committee and its principal secured creditors to support the proposed transaction. The closing is expected to occur during the fourth quarter of 2009. The acquisition agreement provides that if it is terminated by either SandRidge or Crusader because the Bankruptcy Court approves an alternative transaction that is consummated within one year, Crusader will pay SandRidge a termination fee.
Deutsche Bank Securities advised SandRidge on this transaction.
The company will host a conference call to discuss the Crusader transaction on September 23, 2009 at 8:00 am CDT. The telephone number to access the conference call from within the U.S. is 866-804-6920 and from outside the U.S. is 857-350-1666. The passcode for the call is 69025370.
