SandRidge Energy Inc. has signed a letter of intent with an undisclosed independent producer to sell some of its deep acreage rights in the natural gas-rich Cana Shale in Oklahoma for $140 million in cash.

The Oklahoma City-based producer said it had no associated proved reserves or current production from the deep rights to be sold, which are an extension of the Woodford Shale in northwestern Oklahoma. SandRidge would retain the shallow drilling rights on the leasehold.

Proceeds from the sale, which is expected to be completed before the end of September, would be used to pay down existing debt.

The transaction does not affect a pending merger with Arena Resources Inc., said SandRidge. The estimated $1.6 billion Arena merger, announced in April, is expected to be completed by the end of the year, ultimately increasing SandRidge's oil production and reserves (see Daily GPI, April 6).

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