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SandRidge Energy Inc. plans an initial offering of about $500 million in common units in its newly-formed Mississippian Trust II, according to filings with the U.S. Securities and Exchange Commission.
The company reports underwriters will have the option to purchase about $75 million in additional units within 30 days of closing to cover over allotments. In addition, the company plans to list the common units of the Mississippian Trust II on the New York Stock Exchange.
The registration has been filed with the SEC, but has not yet become effective, SandRidge reports. The book-running managers for the offering will be Morgan Stanley & Co LLC and Raymond James & Associates Inc. The common units will be made exclusively through a prospectus. The preliminary prospectus and all related offerings will be available through Morgan Stanley.
SandRidge reports in connection with the offering it will convey to the trust certain royalty interests in exchange for the net proceeds from the offering and units representing approximately 48% of the beneficial interest in the trust. The royalty interests will entitle the trust to a percentage of the proceeds received by SandRidge from the production of hydrocarbons from currently producing wells and development wells to be drilled by SandRidge on approximately 53,000 net acres in the Mississippian formation in northern Oklahoma and Kansas. SandRidge intends to use the net proceeds from the offering for general corporate purposes.