The estimated purchase price is based on Arena’s reported shares outstanding as of March 1, according to an Arena regulatory filing.

The transaction values Arena at $40 per share, a 16.8 per cent premium over its Thursday closing price of $34.26, the companies said, adding that Arena shareholders will receive 4.7771 SandRidge shares and $2.50 in cash for each Arena share.

SandRidge Chief Executive Tom Ward said the deal will add “low-risk drilling opportunities”. Further, the transaction is expected to close in the second or third quarter of 2010.