SandRidge Initial Look – July 2007

SandRidge Energy (formerly Riata): proposed symbol (SD). Another Oklahoma powerhouse comes to market.

* Top notch management: Tom Ward runs the show, former President and COO of (CHK). His name has attracted top management and technical talent, some from Chesapeake and most from other public companies.

* Top notch underwriters: Lehman, Goldman, B of A,

* Operations: Big play is gas ladden West Texas Overthrust or WTO which is where the North and South American continents slammed together creating layers of rock with traps for hydrocarbons. Here SandRidge is concentrating on developing the Pinon Field and two prospects: South Sabino and Big Canyon. They plan to have 30 rigs drilling in the WTO by during 2Q07. They have additional activities in the Cotton Valley Reef trend of E. Tx/N. La, along the Gulf Coast, on the GOM shelf, and in the Piceance Basin of Colorado. The later two areas are not the focus here.

* Potential drilling locations: 3,800 (2,600 in the WTO). * Reserves: 1 Tcfe, 85% natural gas. 99% independently engineered by Netherland Sewell which runs which is the #1 or #2 out there in the business. Almost 60% of reserves are in the Pinon of the WTO area. * They own 32 drilling rigs outright and participate in a JV that owns another 12 with (CWEI). This is a huge strength both from cost and control/availability standpoints. Especially in this time of spiraling service inflation.

* More on the WTO: through year end 2006 200 Bcfe has been produced from only 300 wells scattered across several fields (including the Pinon) in the WTO. These are stacked pay or multi zone targets but the area is remote and lacks infrastructure (Terrell and Pecos counties). SandRidge is acquiring a massive 3D shoot over the area now (1,300 sq miles). The first two phase of seismic should help additional infill drilling opportunities in the Pinon and should be complete by year end.

* The other two WTO prospects are near the Pinon. The Big Canyon prospect has some well control from a 1993 well that tested gas from a sand and a chert (think of fractured quartz or flint) but was abandoned. They drilled two wells which encountered hydrocarbons but no flow info means they were non commercial. They were selected using 2d and the addition of 3D data should firm up some potential targets late 2007.

* They have installed additional compression capacity for future expansion of Pinon gas production and more is on the way by year end.

* They gather CO2 from the WTO gas and use it for tertiary recovery of oil in older, post water flood fields in West Texas.

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