© 2024 KGOU
Oklahoma sunset
News and Music for Oklahoma
Play Live Radio
Next Up:
0:00 0:00
Available On Air Stations

Oklahoma City's SandRidge Energy Files For Chapter 11 Bankruptcy

SandRidge Energy
Brian Hardzinski

Oklahoma City-based SandRidge Energy has formally filed for Chapter 11 bankruptcy protection.

The company announced  a prearranged restructuring plan Monday morning that was endorsed by a majority of its lenders and bondholders. SandRidge will swap $3.7 billion for stock in the reorganized company. 

In a court filing, SandRidge listed assets of about $7 billion dollars and total debt of $4 billion as of March 31. It’s the latest company to be hit by the 18-month downturn in commodity prices that started in late 2014, Reuters reports:

SandRidge, which has been in talks with creditors on a restructuring deal, said on Wednesday it would not be able to file financial results for the quarter ended March 31 on time. Small oil and gas producers have largely exhausted funding alternatives after issuing more equity and debt, tapping second-lien loans and shedding assets over the last two years to stay afloat as banks trim credit lines.

The company said in a statement the "first day" motions it filed will allow the company to continue day-to-day operations as usual, including paying employee wages and benefits.

Read SandRidge's Bankruptcy Filing

So how did this happen? The Journal Record’s Sarah Terry-Cobo took an in-depth look at SandRidge’s troubles last year, and attributed much of the company’s current issues to seismic activity.

SandRidge’s major stake is in the Mississippi Lime play in northwest Oklahoma and southern Kansas. The area has seen an uptick in earthquakes, and the Oklahoma Corporation Commission ordered cutbacks in disposal well volumes, Terry-Cobo writes:

SandRidge invested more than $200 million in infrastructure to ship salty, toxic wastewater from petroleum wells through pipes to disposal wells nearby. One in six wells the OCC put under a microscope belongs to SandRidge, accounting for nearly 85 percent of the company’s 125 active disposal sites. If the Oklahoma Corporation Commission requires dramatic cutbacks for all of SandRidge’s wells, the company might not be able to afford to move the water elsewhere. One geologist estimated that reducing the volume from one disposal means redistributing to about four wells to reduce earthquake risk. And SandRidge can’t produce oil and gas if it can’t dispose of all the wastewater.

The company told employees and investors Monday morning no leadership changes are planned during the reorganization, and they say their $600 million in cash will be able to cover business expenses during the process. The company laid off more than 400 workers this year and now has about 700 employees. 

SandRidge says the bankruptcy agreement and reorganization plan requires it to emerge from Chapter 11 protection by December 27. A first-day hearing will take place Wednesday at 1:45 p.m. in the U.S. Bankruptcy Court for the Southern District of Texas.

SandRidge has set up an email address and a hotline at (844) 276-3028 for employees and investors interested in the process. The company’s claims agent Prime Clerk is also making the court filings available online.

KGOU is a community-supported news organization and relies on contributions from readers and listeners to fulfill its mission of public service to Oklahoma and beyond. Donate online, or by contacting our Membership department.

Brian Hardzinski is from Flower Mound, Texas and a graduate of the University of Oklahoma. He began his career at KGOU as a student intern, joining KGOU full time in 2009 as Operations and Public Service Announcement Director. He began regularly hosting Morning Edition in 2014, and became the station's first Digital News Editor in 2015-16. Brian’s work at KGOU has been honored by Public Radio News Directors Incorporated (PRNDI), the Oklahoma Association of Broadcasters, the Oklahoma Associated Press Broadcasters, and local and regional chapters of the Society of Professional Journalists. Brian enjoys competing in triathlons, distance running, playing tennis, and entertaining his rambunctious Boston Terrier, Bucky.
More News
Support nonprofit, public service journalism you trust. Give now.