Exhibit 99.1
SandRidge Energy, Inc. Adopts Tax Benefits Preservation Plan to Protect its NOL Assets and Shareholder Value
Oklahoma City, Oklahoma, July 1, 2020 /PRNewswire/ – SandRidge Energy, Inc. (the “Company” or “SandRidge”) (NYSE:SD) today announced that its Board of Directors (the “Board”) adopted a tax benefits preservation plan (the “Section 382 Rights Plan”) designed to protect the availability of SandRidge’s net operating loss carryforwards (“NOLs”) under the Internal Revenue Code (the “Code”).
As of December 31, 2019, SandRidge had approximately $1.4 billion of usable U.S. federal NOLs that could be available to offset its future federal taxable income. SandRidge’s ability to use these NOLs would be substantially limited if it experienced an “ownership change” within the meaning of Section 382 of the Code. In general, a company would undergo an ownership change if its“5-percent shareholders” (determined under Section 382) increased their ownership of such company’s stock by more than 50 percentage points over a rolling three-year period. The Section 382 Rights Plan is intended to reduce the likelihood of such an ownership change at SandRidge by deterring any person or group from acquiring beneficial ownership of 4.9% or more of SandRidge’s outstanding common stock.
The Section 382 Rights Plan is similar to those adopted by numerous other public companies with significant NOLs. The Section 382 Rights Plan is not designed to prevent any action that the Board determines to be in the best interest of SandRidge and its shareholders.
Under the Section 382 Rights Plan, the rights will initially trade with SandRidge’s common stock and will generally become exercisable only if a person (or any persons acting as a group) acquires 4.9% or more of SandRidge’s outstanding common stock. The Section 382 Rights Plan does not aggregate the ownership of shareholders “acting in concert” unless and until they have formed a group under applicable securities laws. If the rights become exercisable, all holders of rights (other than any triggering person) will be entitled to acquire shares of common stock at a 50% discount or SandRidge may exchange each right held by such holders for one share of common stock. Under the Section 382 Rights Plan, any person which currently owns 4.9% or more of SandRidge’s common stock may continue to own its shares of common stock but may not acquire any additional shares without triggering the Section 382 Rights Plan. The Board has the discretion to exempt any person or group from the provisions of the Section 382 Rights Plan.
The Section 382 Rights Plan will expire on the day following the certification of the voting results for SandRidge’s 2021 annual meeting of shareholders or any prior special meeting of shareholders, unless SandRidge’s shareholders ratify the Section 382 Rights Plan at such meeting, in which case the Section 382 Rights Plan will continue in effect until July 1, 2023, unless terminated earlier in accordance with its terms. The Company intends to seek shareholder approval of the Section 382 Rights Plan at the earliest practical opportunity.
123 Robert S. Kerr Avenue, Oklahoma City, OK 73102 • Phone 405.429.5500, Fax 405.429.5977 • www.SandRidgeEnergy.com
