SandRidge Energy has abandoned its previously announced plan to acquire the Bonanza Creek Energy oil and natural gas company in the US.
SandRidge initially agreed to purchase Bonanza Creek for $746m as part of a definitive merger agreement signed in November last year.
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The decision to cancel the purchase was influenced by SandRidge’s belief that the deal will not be approved, following consultation with the company’s largest shareholders.
The move to scrap the aquisition has been unanimously approved by SandRidge’s Board of Directors.
Both companies have now signed another agreement to mutually terminate the merger deal.
Bonanza Creek will receive up to $3.7m in reimbursement from SandRidge for transaction-related expenses.
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By GlobalDataSandRidge stated: “This payment is in line with the company’s obligation under the merger agreement should the transaction have been rejected by the company’s shareholders at the special meeting.”
The original deal included acquisition of Bonanza Creek’s drill-ready locations in the DJ Basin of Colorado and midstream infrastructure.
It also covered Bonanza Creek’s ~970 2P Niobrara and Codell locations, as well as third quarter 2017 production of 15.8 thousand barrels of oil equivalent per day (MBoepd), 52% oil and year-end 2016 proved reserves of 91 million barrels of oil equivalent (MMBoe), 55% oil.
The acquisition would have complemented SandRidge’s existing North Park, Northwest STACK and Mississippian assets.
Bonanza Creek Energy is involved in the exploration and production of onshore oil and associated liquids-rich natural gas.
It is engaged in operations in the Rocky Mountain region in the Wattenberg Field and southern Arkansas.
