(Updates with comment from Sandridge CEO in third paragraph.)
Dec. 22 (Bloomberg) -- Repsol YPF SA will spend $250 million for a share in SandRidge Energy Inc.’s oil and natural- gas fields in Kansas and Oklahoma to boost the Spanish company’s reserves and production.
Repsol will pay $250 million upfront and as much as $750 million for drilling costs during the next three years, Oklahoma City-based Sandridge said in a statement today. Repsol will acquire two stakes totaling about 364,000 net acres in the Mississippian formation, according to the statement.
“We compare the scope of this play to the Bakken and believe it will be transformational for the Mid-Continent region of the U.S.,” SandRidge Chief Executive Officer and Chairman Tom Ward said in the statement. The Bakken shale oil field is the largest contiguous oil deposit in the continental U.S., according to data compiled by Bloomberg.
Repsol wants to diversify its portfolio in countries within the Organization for Economic Cooperation and Development, the Madrid-based company said in a filing in today. Repsol announced on Dec. 20 an $840 million exploration and production venture in Russia with Alliance Oil Co. and is investing in Brazil’s offshore Santos Basin.
Repsol expects to drill more than 200 horizontal wells in 2012 in the Mississippian and have more than 1,000 wells by 2014, according to the filing. Its share of the site’s output will peak at 90,000 barrels of oil equivalent a day in 2019.
SandRidge rose 23 percent, its biggest one-day climb in more than three years, to close at $8.21 in New York. Repsol rose 1.4 percent in Madrid to close at 23.16 euros before the announcement.
-- With assistance from Joanna Ossinger in New York, Editors: Jasmina Kelemen, Tina Davis
To contact the reporter on this story: Emma Ross-Thomas in Madrid at firstname.lastname@example.org
To contact the editor responsible for this story: Craig Stirling at