SandRidge Prices Private Offering for Net Proceeds of $207MM

SandRidge has priced a private offering of 2.25 million shares of a new series of 8.5% convertible perpetual preferred stock for net proceeds of approximately $207 million. Shares are being issued to qualified institutional buyers eligible under Rule 144A. The company has also granted a 30-day option to the initial purchasers to purchase an additional 400,000 shares, or $40 million, of convertible preferred stock solely to cover over-allotments, if any.

The annual dividend on each share of convertible preferred stock is $8.50 and is payable semi-annually, in arrears, on each February 15 and August 15, commencing on February 15, 2010, when, as and if declared by the company's board of directors. No dividends will accrue or accumulate prior to August 15, 2009. The company may, at its option, pay dividends in cash, common stock or any combination thereof.

Each share of convertible preferred stock has a liquidation preference of $100 per share and is convertible, at the holder's option, at any time on or after April 15, 2009, initially into approximately 12.4805 shares of company common stock based on an initial conversion price of $8.0125 per share. The conversion price will be subject to customary adjustments in certain circumstances. No payment or adjustment for accumulated dividends will be made upon conversion. At any time on or after February 20, 2014, the company may, at its option, cause all outstanding shares of the convertible preferred stock to be automatically converted if the closing price of the company's common stock equals or exceeds certain thresholds.

Closing of the private offering is expected to occur on January 21, 2009 and will be subject to satisfaction of various customary closing conditions.


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