SandRidge Energy (NYSE:SD) is working towards doubling the company's production of crude oil over the next three years. The company plans to accomplish this target through the aggressive development of a Mississippian oil play and properties in the Permian Basin.

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Analyst Day
SandRidge Energy held an analyst day in February 2012, and set a number of operational and financial goals for the company to achieve by 2014. These include doubling the company's production of crude oil relative to 2011 levels, while improving the company's balance sheet.

The company also plans to increase EBITDA to above $2 billion annually and fund the company's capital budget through cash flow by the end of 2014.

2012 Plans
SandRidge Energy will kick off this three year growth plan in 2012 with the drilling of 1,139 wells in the Permian Basin and Mid Continent areas. The company estimates that this development here and in other areas will lead to crude oil production growth of 54% in 2012.

SEE: Peak Oil: What To Do When The Wells Run Dry

Mississippian Oil Play
SandRidge has staked out a leading position in an emerging oil play in the Mid Continent area. It has approximately 1.5 million acres under lease in southern Kansas and northern Oklahoma that is prospective for a Mississippian oil play.

The company has moved aggressively to develop acreage here and has increased production to the current level of 21,334 barrels of oil equivalent (BOE) per day, compared to almost nothing two years ago.

SandRidge plans to drill 380 horizontal wells in this play in 2012, and operate an average of 26 rigs here during the year. The company's net capital spending in this play in 2012 will be $457 million, as it is involved in a joint venture with Repsol YPF (OTC:REPYY) and will have that company cover part of its drilling and completions costs through a drilling carry.

Other operators are also moving quickly into this emerging play, but are at the initial stage of development. PetroQuest (NYSE:PQ) recently completed a salt water disposal well here and is currently drilling the company's first horizontal well into this play. The company estimates that it will drill between 12 and 15 wells here in 2012.

Chesapeake Energy (NYSE:CHK) is also active in this play, and is operating at close to the same level of activity as SandRidge Energy. The company is operating 22 rigs here and is currently producing 11,300 (BOE per day.

Permian Basin
SandRidge also has a large position in the Permian Basin with 225,000 net acres under lease. The company plans to drill 759 gross wells into various formations in 2012 at a net capital cost of $479 million.

The company is developing its Permian Basin acreage in 2012 with vertical wells and will drill 80% of these wells into the San Andres formation. Although the average well here has an estimated ultimate recovery (EUR) of only 58,000 BOE, the average cost to drill and complete of $643,000 yields high returns for SandRidge Energy.

The Bottom Line
SandRidge Energy moved quicker than many of its competitors and established large positions in the Permian Basin and Mid Continent areas in the United States. The company's plan to double oil production by 2014 seems feasible, given its large inventory of drilling locations.

SEE: A Guide To Investing In Oil Markets

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At the time of writing, Eric Fox did not own shares in any of the companies mentioned in this article.