NEW YORK, April 4 (Reuters) - SandRidge Energy Inc, an oil and gas exploration company, on Sunday said it agreed to buy rival Arena Resources Inc for about $1.55 billion, boosting its exposure to oil as natural gas prices fall.
The estimated purchase price is based on Arena's reported shares outstanding as of March 1, according to an Arena regulatory filing.
The transaction values Arena at $40 per share, a 16.8 percent premium over its Thursday closing price of $34.26, the companies said in a statement Arena shareholders will receive 4.7771 SandRidge shares and $2.50 in cash for each Arena share.
SandRidge shares closed Thursday at $7.85.
SandRidge, based in Oklahoma City, Oklahoma, said the acquisition will make it one of the largest producers of West Texas conventional oil and gas.
SandRidge Chief Executive Tom Ward said the deal will add 'low-risk drilling opportunities' and continue a strategic shift SandRidge began making in 2009 to boost oil production and reserves.
Arena is based in Tulsa, Oklahoma.
The companies did not return calls seeking further comment.
Natural gas prices have fallen about 26.5 percent this year, while oil prices are up 7.4 percent to more than $85 a barrel, according to Reuters data. Oil traded below $35 a barrel as recently as February 2009.
The transaction is expected to close in the second or third quarter of 2010. Deutsche Bank Securities LLC and law firm Covington & Burling LLP represented SandRidge, while SunTrust Robinson Humphrey and law firm Johnson & Jones PC represented Arena.
(Reporting by Jonathan Stempel; Editing by Leslie Adler) Keywords: ARENA/SANDRIDGE (jon.stempel@thomsonreuters.com +1 646 223 6317; Reuters Messaging: jon.stempel.reuters.com@reuters.net) COPYRIGHT Copyright Thomson Reuters 2010. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.
The estimated purchase price is based on Arena's reported shares outstanding as of March 1, according to an Arena regulatory filing.
The transaction values Arena at $40 per share, a 16.8 percent premium over its Thursday closing price of $34.26, the companies said in a statement Arena shareholders will receive 4.7771 SandRidge shares and $2.50 in cash for each Arena share.
SandRidge shares closed Thursday at $7.85.
SandRidge, based in Oklahoma City, Oklahoma, said the acquisition will make it one of the largest producers of West Texas conventional oil and gas.
SandRidge Chief Executive Tom Ward said the deal will add 'low-risk drilling opportunities' and continue a strategic shift SandRidge began making in 2009 to boost oil production and reserves.
Arena is based in Tulsa, Oklahoma.
The companies did not return calls seeking further comment.
Natural gas prices have fallen about 26.5 percent this year, while oil prices are up 7.4 percent to more than $85 a barrel, according to Reuters data. Oil traded below $35 a barrel as recently as February 2009.
The transaction is expected to close in the second or third quarter of 2010. Deutsche Bank Securities LLC and law firm Covington & Burling LLP represented SandRidge, while SunTrust Robinson Humphrey and law firm Johnson & Jones PC represented Arena.
(Reporting by Jonathan Stempel; Editing by Leslie Adler) Keywords: ARENA/SANDRIDGE (jon.stempel@thomsonreuters.com +1 646 223 6317; Reuters Messaging: jon.stempel.reuters.com@reuters.net) COPYRIGHT Copyright Thomson Reuters 2010. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.