Midstates Petroleum Co. Inc. said Wednesday that it has reached a deal with an undisclosed buyer to sell its Anadarko Basin properties in the Texas panhandle and western Oklahoma for $58 million.
The properties had 4Q2017 production of 3,900 boe/d and a year-end 2017 proved developed reserve value of $53 million. The transaction would have a Jan. 1, 2018 effective date if it closes as expected by the end of June.
Midstates said that in anticipation of the sale, it cut its workforce in January to “align staffing levels with current activity.” The company said that move reduced its adjusted cash general and administrative expenses by $3-5 million annually.
“The sale of our Anadarko Basin properties aligns perfectly with our strategy to focus our activity, reduce costs, generate substantial free cash flow and improve liquidity for maximum optionality,” said CEO David Sambrooks.
While it retains optionality in its position in the northwest STACK (Sooner Trend of the Anadarko Basin, mostly in Canadian and Kingfisher counties), the company is primarily focused on its Mississippian Lime assets in Woods and Alfalfa counties, OK.
Midstates emerged from bankruptcy in 2016. The company later enlisted SunTrust Robinson Humphrey as a financial advisor to explore strategic alternatives for the Anadarko Basin and northwest STACK assets.
The company said it would use the proceeds from the Anadarko Basin sale to pay down a portion of outstanding borrowings under its revolving credit facility and for general corporate purposes.
Last month, SandRidge Energy Inc. rejected Midstates’ unsolicited merger offer, which was aimed at creating one of the largest exploration and production companies focused on the Mississippian Lime. But Midstates said Wednesday after the sale that it would continue evaluating a range of options to make the best use of its liquidity and free cash flow, including mergers and acquisitions, stock repurchases or dividends.