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Acquisitions and Divestitures (Tables) | 12 Months Ended
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Dec. 31, 2013
Permian Properties |
Business Acquisitions and Dispositions [Line Items] |
Disposal, Revenue and Expense Information | The following table presents revenues and direct operating expenses of the Permian Properties included in the accompanying consolidated statements of operations for the years ended December 31, 2013, 2012 and 2011 (in thousands):
|  | Year Ended December 31,
|  | 2013(1) |  | 2012 |  | 2011
Revenues |  | $ | 68,027 |  |  | $ | 566,075 |  |  | $ | 614,666 |
Direct operating expenses |  | $ | 17,453 |  |  | $ | 130,337 |  |  | $ | 144,066 |
____________________
(1) | Includes revenues and direct operating expenses through February 26, 2013, the date of sale.
Dynamic Acquisition |
Business Acquisitions and Dispositions [Line Items] |
Assets Acquired and Liabilities Assumed | In the second quarter of 2013, the Company completed its valuation of the Dynamic Acquisition with no adjustments in 2013 to the valuation of assets acquired and liabilities assumed, which are included in the following table (in thousands, except stock price):
Consideration(1) |
Shares of SandRidge common stock issued | 73,962 |
SandRidge common stock price | $ | 7.33 |
Fair value of common stock issued | 542,138 |
Cash consideration(2) | 680,000 |
Cash balance adjustment(3) | 13,091 |
Total purchase price | $ | 1,235,229 |
Fair Value of Liabilities Assumed |
Current liabilities | $ | 129,363 |
Asset retirement obligations(4) | 315,922 |
Long-term deferred tax liability(5) | 100,288 |
Other long-term liabilities | 4,469 |
Amount attributable to liabilities assumed | 550,042 |
Total purchase price plus liabilities assumed | 1,785,271 |
Fair Value of Assets Acquired |
Current assets | 142,027 |
Oil and natural gas properties(6) | 1,746,753 |
Other property, plant and equipment | 1,296 |
Other non-current assets | 17,891 |
Amount attributable to assets acquired | 1,907,967 |
Bargain purchase gain(7) | $ | (122,696 | )
____________________
(1) | Consideration paid by the Company consisted of 74 million shares of SandRidge common stock and cash of approximately $680.0 million. The value of the stock consideration is based upon the closing price of $7.33 per share of SandRidge common stock on April 17, 2012, which was the closing date of the Dynamic Acquisition. Under the acquisition method of accounting, the purchase price is determined based on the total cash paid and the fair value of SandRidge common stock issued on the acquisition date.
(2) | Cash consideration paid, including amounts paid to retire Dynamic’s long-term debt, was funded through a portion of the net proceeds from the Company’s issuance of $750.0 million of unsecured 8.125% Senior Notes due 2022.
(3) | In accordance with the acquisition agreement, the Company remitted to the seller a cash payment equal to Dynamic’s average daily cash balance for the 30-day period ending on the second day prior to closing. This resulted in an additional cash payment by the Company of $13.1 million at closing.
(4) | The estimated fair value of the acquired asset retirement obligations was determined using the Company’s credit adjusted risk-free rate.
(5) | The net deferred tax liability is primarily a result of the difference between the estimated fair value and the Company’s expected tax basis in the assets acquired and liabilities assumed. The net deferred tax liability also includes the effects of deferred tax assets associated with net operating losses and other tax attributes acquired as a result of the Dynamic Acquisition.
(6) | The fair value of oil and natural gas properties acquired was estimated using a discounted cash flow model, with future cash flows estimated based upon projections of oil and natural gas reserve quantities and weighted average oil and natural gas prices of $113.62 per barrel of oil and $3.83 per Mcf of natural gas, after adjustment for transportation fees and regional price differentials. The commodity prices utilized were based upon commodity strip prices as of April 17, 2012 for the first four years and escalated for inflation at a rate of 2.0% annually beginning with the fifth year through the end of production. Future cash flows were discounted using an industry weighted average cost of capital rate.
(7) | The bargain purchase gain resulted from the excess of the fair value of net assets acquired over consideration paid. To validate the bargain purchase gain on this acquisition, the Company reviewed its initial identification and valuation of assets acquired and liabilities assumed. The Company believes it was able to acquire Dynamic for less than the estimated fair value of its net assets due to their offshore location resulting in less bidding competition.
Unaudited Pro Forma Results of Operations | The pro forma results of operations do not include any cost savings or other synergies that resulted from the Dynamic Acquisition or any estimated costs incurred to integrate Dynamic.
| Year Ended December 31,
| 2012(1) (Revised) |  | 2011(2)
| (In thousands, except per share data)
| (Unaudited)
Revenues | $ | 2,112,576 |  |  | $ | 1,932,945 |
Net income | $ | 39,563 |  |  | $ | 509,644 |
(Loss applicable) income available to SandRidge Energy, Inc. common stockholders | $ | (120,962 | ) |  | $ | 399,278 |
(Loss) earnings per common share |  |  |
Basic | $ | (0.25 | ) |  | $ | 0.84 |
Diluted | $ | (0.25 | ) |  | $ | 0.80 |
____________________
(1) | Pro forma net income, loss applicable to SandRidge Energy, Inc. common stockholders and loss per common share exclude a $122.7 million bargain purchase gain, a $100.3 million partial valuation allowance release included in income tax benefit, $10.9 million of fees incurred to secure financing for the Dynamic Acquisition included in interest expense and $13.0 million of transaction costs incurred and included in general and administrative expense in the accompanying consolidated statement of operations for the year ended December 31, 2012.
(2) | Pro forma net income, income available to SandRidge Energy, Inc. common stockholders and earnings per common share include a $122.7 million bargain purchase gain, a $100.3 million partial valuation allowance release, $10.9 million of fees incurred to secure financing and $13.0 million of transaction costs.
Gulf of Mexico Properties |
Business Acquisitions and Dispositions [Line Items] |
Assets Acquired and Liabilities Assumed | The following table summarizes the consideration paid to acquire the properties and the final valuation of assets acquired and liabilities assumed as of June 20, 2012 (in thousands):
Consideration paid |
Cash, net of purchase price adjustments | $ | 43,282 |
Fair value of identifiable assets acquired and liabilities assumed |
Proved developed and undeveloped properties | $ | 98,725 |
Asset retirement obligations | (55,443 | )
Total identifiable net assets | $ | 43,282 |
Unaudited Pro Forma Results of Operations | The supplemental pro forma results of operations are provided for illustrative purposes only and do not purport to be indicative of the actual results that would have been achieved had the transaction been in effect for the periods presented.
| Year Ended December 31,
| 2012 (Revised) |  | 2011
| (In thousands, except per share data)
| (Unaudited)
Revenues | $ | 1,963,058 |  |  | $ | 1,502,325 |
Net income | $ | 247,035 |  |  | $ | 191,073 |
Income available to SandRidge Energy, Inc. common stockholders | $ | 86,510 |  |  | $ | 81,167 |
Earnings per common share |  |  |
Basic | $ | 0.19 |  |  | $ | 0.20 |
Diluted | $ | 0.19 |  |  | $ | 0.20 |
Drilling Carry Transaction Activities |
Business Acquisitions and Dispositions [Line Items] |
Drilling And Completion Costs Associated With Sale Of Working Interests | These transactions and the associated drilling carries as of December 31, 2013 were as follows:
Partner |  | Closing Date |  | Total Drilling Carry |  | Drilling Carry Recorded |  | Drilling Carry Remaining
|  |  |  | (In thousands)
Atinum MidCon I, LLC |  | September 2011 |  | $ | 250,000 |  |  | $ | 250,000 |  |  | $ | — |
Repsol E&P USA, Inc. |  | January 2012 |  | 750,000 |  |  | 544,400 |  |  | 205,600 |
|  |  |  | $ | 1,000,000 |  |  | $ | 794,400 |  |  | $ | 205,600 |

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