SandRidge Energy, Inc.
Company Summary
Description
SandRidge Energy is an oil and natural gas company headquartered in Oklahoma City, Oklahoma with its principle focus on exploration and production activities in the Niobrara Shale of Colorado’s North Park Basin and the Mid-Continent region of the United States. SandRidge and its subsidiaries also own and operate gas gathering and processing facilities, saltwater disposal and electrical infrastructure facilities and conduct marketing operations. Our focus extends beyond energy production and into our communities, where we dedicate our time, talents and resources to the places we call home.Website
https://sandridgeenergy.com/Operational Regions
- Niobrara Basin
- Midcontinent
Financial Data:
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SD - New York Stock Exchange
Related Entities
Firm Transport Commitments
Project: Advantage Gas-to-Liquids Processing Plant
Firm Commitment: 0
Recent news
- 7/13/2023 - SandRidge Energy Boosts... (subscriber access)
- 3/7/2022 - SandRidge Will Announce... (subscriber access)
- 8/12/2021 - Sandridge No Open... (subscriber access)
- 8/12/2021 - Sandridge 2Q21... (subscriber access)
- 8/12/2021 - Sandridge Returns 49... (subscriber access)
Investor Presentations
- 2Q19 Investor Presentation
- 1Q19 Investor Presentation (subscriber access)
- 4Q18 Investor Presentation (subscriber access)
- 3Q18 Investor Presentation (subscriber access)
- 2Q18 Investor Presentation (subscriber access)
- 1Q18 Investor Presentation (subscriber access)
- Fourth Quarter 2017 Earnings Slideshow (subscriber access)
- November 2017 Investor Presentation (subscriber access)
- Q3'17 Earnings Presentation (subscriber access)
- Investor Presentation - August 2017 (subscriber access)
- Investor Presentation - May 2017 (subscriber access)
- Investor Presentation - February 2017 (subscriber access)
- Investor Presentation - November 2016 (subscriber access)
Company Transactions
Date: 4/23/2021
Type: Acquisition
NOTES:
SandRidge has acquired all overriding royalty interest assets of SandRidge Mississippian Trust I for a gross price of $4.85 million (net $3.55 million, since they own 26.9% of the company already.)
SandRidge has acquired all overriding royalty interest assets of SandRidge Mississippian Trust I for a gross price of $4.85 million (net $3.55 million, since they own 26.9% of the company already.)
REGIONS:
Midcontinent
Date: 2/9/2021
Type: Acquisition
NOTES:
SandRidge has reached a deal to divest its North Park Basin assets for $47 million in cash to an undisclosed buyer. The deal is set to close in the first quarter of 2021, and the assets account for <10% of SandRidge's production and <10% of reserves.
SandRidge has reached a deal to divest its North Park Basin assets for $47 million in cash to an undisclosed buyer. The deal is set to close in the first quarter of 2021, and the assets account for <10% of SandRidge's production and <10% of reserves.
REGIONS:
Rockies
Date: 12/31/2018
Type: Merger
NOTES:
Midstates Petroleum has proposed a business combination to SandRidge Energy to be done through an all-stock deal, which included a letter sent to the Sandridge Board of Directors urging a friendly transaction. Initial terms would have SandRidge hold a 60% stake in the company versus Midstates 40%.
Midstates Petroleum has proposed a business combination to SandRidge Energy to be done through an all-stock deal, which included a letter sent to the Sandridge Board of Directors urging a friendly transaction. Initial terms would have SandRidge hold a 60% stake in the company versus Midstates 40%.
REGIONS:
Oklahoma STACK Play
Mississippi Lime
DJ Basin
Date: 11/6/2018
Type: Acquisition
NOTES:
The deal brings their operating interest in the area to 80%, adds a 13.2% stake in a producer water gathering and disposal system and monthly net production of 3,775 boe/d.
The deal brings their operating interest in the area to 80%, adds a 13.2% stake in a producer water gathering and disposal system and monthly net production of 3,775 boe/d.
REGIONS:
Midcontinent
Oklahoma STACK Play
Mississippi Lime
Date: 11/6/2018
Type: Acquisition
NOTES:
SandRidge reported the sale of their oil & gas assets in the Central Basin Platform of the Permian Basin and 13.1 million common units of the SandRidge Permian Basin Trust to another party for $14.5 million.
SandRidge reported the sale of their oil & gas assets in the Central Basin Platform of the Permian Basin and 13.1 million common units of the SandRidge Permian Basin Trust to another party for $14.5 million.
REGIONS:
Central Basin Platform
News & Press Releases
Criterion News
- 7/13/2023 - SandRidge Energy Boosts... (subscriber access)
- 3/7/2022 - SandRidge Will Announce... (subscriber access)
- 8/12/2021 - Sandridge No Open... (subscriber access)
- 8/12/2021 - Sandridge 2Q21... (subscriber access)
- 8/12/2021 - Sandridge Returns 49... (subscriber access)
- 4/27/2021 - SandRidge Energy Closes... (subscriber access)
- 4/23/2021 - SandRidge Energy... (subscriber access)
- 2/9/2021 - SandRidge Closes on Sale... (subscriber access)
- 12/14/2020 - SandRidge Energy Selling... (subscriber access)
- 12/1/2020 - SandRidge Closes on New... (subscriber access)
- 9/1/2020 - SandRidge Energy Sells... (subscriber access)
- 7/2/2020 - SandRidge Adopts Plan to... (subscriber access)
- 4/17/2020 - Chesapeake Energy Laying... (subscriber access)
- 4/7/2020 - SandRidge Evaluating... (subscriber access)
- 4/7/2020 - SandRidge Further... (subscriber access)
- 4/7/2020 - SandRidge Announces... (subscriber access)
- 3/5/2020 - SandRidge Issues 2020... (subscriber access)
- 3/5/2020 - SandRidge Reduces 2020... (subscriber access)
- 3/5/2020 - SandRidge Reports 4Q19... (subscriber access)
- 12/13/2019 - SandRidge Discloses... (subscriber access)
- 11/20/2019 - NYSE Suspends Trade on... (subscriber access)
- 11/13/2019 - Sandridge Energy... (subscriber access)
- 11/13/2019 - Sandridge Energy... (subscriber access)
- 11/13/2019 - Sandridge Energy Reports... (subscriber access)
- 11/13/2019 - Sandridge Energy... (subscriber access)
- 11/13/2019 - Sandridge Energy Reduces... (subscriber access)
- 8/9/2019 - Sandridge Reports 2Q19... (subscriber access)
- 8/9/2019 - Sandridge Reports 2Q19... (subscriber access)
- 5/9/2019 - SandRidge Energy Drills... (subscriber access)
- 5/9/2019 - SandRidge Energy Drills... (subscriber access)
Press Releases
- Decreased net debt1 by $44.7 million to $0.8 million compared to $45.5 million at the end of the prior quarter
- Generated Adjusted EBITDA of $15.4 million compared to $8.8 million in the prior quarter
- Produced 22.3 MBoepd compared to 23.6 MBoepd in the prior quarter
- Incurred a net loss of $48.7 million, or $1.36 per share, driven largely by lower commodity prices and a non-cash ceiling test write down. Adjusted net income was $5.4 million, or $0.15 per share
- Decreased G&A by $1.8 million to $2.5 million, or $1.22 per boe from $4.3 million, or $2.01 per boe in the prior quarter and decreased Adjusted G&A by $1.5 million to $2.3 million, or $1.11 per boe from $3.7 million, or 1.74 per boe in the prior quarter
- Decreased LOE by $0.6 million to $8.1 million, or $3.94 per boe from $8.7 million, or $4.04 per boe in the prior quarter
- Closed on the sale of the company headquarters for net proceeds of $35.4 million
- Closed on the acquisition of the overriding royalty interests held by SandRidge Mississippian Royalty Trust II for a net purchase price of $3.3 million
- Continued streak without a recordable Health, Safety and Environmental ("HS&E") incident for 25 months as of the end of the quarter
- Produced 23.6 MBoepd for the quarter
- Incurred a net loss of $215.8 million, or $6.06 per share, driven largely by significantly challenged commodity prices, a non-cash ceiling test write down and an impairment charge to the value of the Company's office headquarters, and adjusted net loss of $7.4 million, or $0.21 per share
- Generated Adjusted EBITDA of $8.8 million for the quarter
- Decreased G&A and Adjusted G&A year-over-year by 57% and 58%, respectively, to $4.3 million, or $2.01 per boe, and $3.7 million, or $1.74 per boe
- Decreased LOE year-over-year by 65% to $8.7 million, or $4.04 per boe
- Entered into agreement to sell company headquarters for $35.5 million, which is expected to close in the third quarter of 2020
- Continued streak without a recordable Health, Safety and Environmental ("HS&E") incident for 22 months as of the end of the second quarter
- Costs. The Company will continue to right-size both its G&A and operating cost structure for the limited current growth environment given recent oil and gas market dynamics. Planned further actions, including salary and additional personnel reductions, will deepen the savings detailed on the Company's recent February earnings call.
- Capital. SandRidge will substantially further reduce its capital expenditures in 2020, limiting spend to that needed for safety or mechanical integrity and to low capex, quick payback, cash flow enhancing "small ball" workovers and other projects to extend the Company's production profile. The Company plans to defer any material drilling and completion activity until commodity prices and the corresponding economics for new wells improve.
- Strategic Alternatives. The Company will continue to evaluate the sale of non-cash flowing assets as well as other sale opportunities that deliver premium value to shareholders. It will also consider strategic combinations that bring cost economies, improve operating margins, extend its reserve life, lower its base production decline and grow its debt-adjusted cash flow per share.
- Fourth quarter net loss of $249 million, or $7.01 per share, driven largely by a non-cash ceiling test write down, and adjusted net loss of $4 million, or $0.11 per share
- Fourth quarter adjusted EBITDA increased 24% quarter-over-quarter to $32 million
- Met or exceeded all 2019 operational guidance metrics
- Decreased G&A and adjusted G&A year-over-year by 21% and 19%, respectively, and beat the low end of adjusted G&A guidance by 7%
- North Park oil production increased 48% year-over-year and reached 52% of total company oil production for the fourth quarter
- Proved reserves of 90 MMBoe at December 31, 2019 with Standardized Measure and PV-10 of $364 million
- Evaluation of minimal 2020 capex plan to maximize free cash flow
- John P. Suter named Interim President & CEO following departure of Paul D. McKinney
- Reduced G&A by 38% and Adjusted G&A by 39%, quarter over quarter
- Reduced full year 2019 capital expenditures and adjusted G&A guidance midpoints
- Net loss of $182 million, or $5.12 per share, driven largely by a non-cash ceiling test write down, and adjusted net loss of $17 million, or $0.49 per share
- Oil production increased 16% quarter over quarter to 984 MBbls
- Total production increased 2% quarter over quarter to 3.2 MMBoe
- Reduced annual cash G&A run rate by $6 million
- Net loss of $13 million, or $0.38 per share, driven by changes in commodity prices and a reduction in force, and adjusted net loss of $9 million, or $0.25 per share
- EBITDA of $30 million and Adjusted EBITDA of $35 million
- Production of 3.2 MMBoe, a 4% increase from fourth quarter
- G&A decreased 27% and Adjusted G&A decreased 17% year-over-year
- Net loss of $5 million, or $0.15 per share, or breakeven on an adjusted net income basis (excluding non-cash impact of derivatives and other items)
- EBITDA of $35 million and Adjusted EBITDA of $41 million
- Reaffirming full year guidance
- Appointed Paul McKinney as President & CEO in January 2019
- Fourth quarter net income of $54 million, or $1.53 per share (including $43 million of gains on derivatives), and adjusted net income of $5 million, or $0.15 per share (excluding non-cash impact of hedges and other items)
- Year end 2018 net loss of $9 million, or $0.26 per share (including $17 million of loss on derivatives), and adjusted net income of $20 million, or $0.57 per share (excluding non-cash impact of hedges and other items)
- Adjusted EBITDA of $45 million for the fourth quarter and $167 million for year end 2018
- Beat midpoint of 2018 production guidance while achieving cash costs and capital expenditures that were 3% and 8% below midpoint of guidance, respectively
- North Park production increased 53% year over year, reaching 30% of total Company oil production in 2018
- Standardized Measure and PV-10 of $1.0 billion ($612 million using alternative pricing of $54/Bbl and $2.75/MMBtu)
- Net Income of $12 million, or $0.33 per diluted share; Adjusted Net Income of $11 million, or $0.31 per diluted share
- Cash flow from operating activities of $53 million, up 21% from 2017 third quarter
- Total Company production of 34 MBoepd, up 6% compared to 2018 second quarter; Oil production of 10.4 MBopd, up 27% over same period
- 6% increase to mid-point of 2018 production guidance
- EBITDA and Adjusted EBITDA of $48 million
- Exit from the Central Basin Platform with sale of non-core properties
- Acquired incremental ownership position in existing Mid-Continent assets
- All five new North Park wells exceed pre-drill production estimates with two achieving oil rates in excess of 1,500 Bopd
- Five new wells online in the NW STACK with a combined 30-Day IP rate averaging 584 Boepd (69% oil)
- Further reduced cash G&A and LOE costs to $30.6 million, down 22% from the second quarter of 2017
- Strategic alternatives process moves to evaluation phase
- New Board of Directors initiates thorough review of Company's cost structure, asset development plan and potential for monetization of non-core assets
- As of today, SandRidge has entered into 17 confidentiality agreements with potential bidders, including Icahn.
- Each of these potential counterparties, including Icahn, have been granted access to SandRidge's virtual data room to conduct their due diligence review. Management presentations with these potential counterparties have been made and continue to be scheduled.
- After negotiating with Midstates Petroleum ("Midstates") (NYSE: MPO) for over a month, Midstates has been offered a form of confidentiality agreement with terms more favorable than any other participant. To date, Midstates continues to reject both reasonable terms of non-disclosure and participation in the process.
- Potential counterparties have until June 25 to submit their indications of interest.
- "…by failing to provide shareholders with a detailed disclosure of its go-forward plan, [Icahn] is asking shareholders to simply trust that, if granted a majority, it will do the right thing. Regardless of any assurances of a fair process, that level of trust would be easier to gain were it not for the fact that the dissident is actively participating in a process to potentially acquire the company."
- "…a board controlled by nominees of a potential bidder may be a deterrent to other potential bidders."1
- "…we do not believe SandRidge investors should be persuaded to overlook the very direct conflicts arising from appointing current or former Icahn employees to the board at this time…we are nevertheless inclined to conclude the election of any current -- or, indeed, former -- Icahn employees to the SandRidge board during an active solicitation in which Icahn may submit a bid would represent a clear deviation from foundational principles of sound corporate governance."2
- "by failing to provide shareholders with a detailed disclosure of its go-forward plan, [Icahn] is asking shareholders to simply trust that, if granted a majority, it will do the right thing. Regardless of any assurances of a fair process, that level of trust would be easier to gain were it not for the fact that the dissident is actively participating in a process to potentially acquire the company."
- "the board has also taken responsibility to facilitate substantial, fairly rapid change over the course of roughly two quarters."
- "we see the adoption of a universal card as a positive development."
- "…we do not believe SandRidge investors should be persuaded to overlook the very direct conflicts arising from appointing current or former Icahn employees to the board at this time…we are nevertheless inclined to conclude the election of any current -- or, indeed, former -- Icahn employees to the SandRidge board during an active solicitation in which Icahn may submit a bid would represent a clear deviation from foundational principles of sound corporate governance."
- Matt Grubb was installed by Company founder Tom Ward as the Chief Operating Officer of SandRidge prior to the 2007 IPO and promoted to President in January of 2011. He was Tom Ward's "right hand man."
- In Icahn's own words about the Company's previous management team, he stated, "following a debt-fueled acquisition spree, in 2013 [Tom] Ward was ousted by activist investors." Icahn conveniently ignores the fact that Grubb was an integral part of that management team and resigned in March of 2013 in connection with a settlement with the activist investors and as a precursor to Tom Ward's ouster three months later.
- From the time of SandRidge's initial public offering in November 2007 to Mr. Grubb's departure in March 2013, the Company's share price decreased from $26.00 to $5.63, resulting in a negative 78% return and the destruction of more than $800 million of total shareholder value.
- We estimate that Icahn has presided over the destruction of ~$27 billion2 of shareholder value across the six energy companies in which he has made investments and agitated for change since 2010.
- He has destroyed value in four and underperformed the relevant benchmark in each and every one of them.
- Independent
- Dominated by Icahn Capital Employees
- Demonstrably Responsive to
Shareholder Concerns - Inherently Biased Towards a Single Outcome
- Experienced in Our Industry
- Largely Inexperienced in Our Industry
- Committed to Maximizing Value for
All Shareholders - Intent On Side-Stepping the
Company's Ongoing Strategic Process - Vote "FOR" existing directors: Sylvia K. Barnes, Kenneth H. Beer, Michael L. Bennett, William M. Griffin and David J. Kornder.
- Vote "FOR" the addition of only two new independent directors proposed by Icahn Capital – the Board has already carefully vetted and offered to have John J. "Jack" Lipinski and Randolph C. Read join as directors.
- Vote "FOR" the ratification of the continuation of the short-term shareholder rights plan through November 26, 2018 to protect shareholders from unfair, abusive or coercive takeover strategies, including acquisition of control without payment of an adequate premium, while the Board continues its review of strategic alternatives to maximize shareholder value.
- DO NOT support nominees employed, or recently employed, by Icahn Capital – Jonathan Christodoro, Jonathan Frates and Nicholas Graziano.
- DO NOT turn control of the Board over to Icahn Capital's seven nominees.
- Committed the Company to a new strategic direction;
- Implemented a management transition plan to replace the Company's President and Chief Executive Officer and Chief Financial Officer; and
- Dramatically reduced the Company's general and administrative expenses.
- Implemented Management Changes and Announced Process to Review Strategic Alternatives
- Reducing General and Administrative Cash Expense Rate by One-Third
- Reallocated Capital to Drill Four Mississippian Wells in the Third Quarter
- Reaffirming 2018 Guidance
- Solid Operating Performance. In 2017, SandRidge met or exceeded its production and cost targets for the year. In addition, the Company's actions enabled it to increase:
- Proved reserves to 177.6 MMBoe, with a 130% reserve replacement ratio;
- Total present value of proved reserves to $749.3 million (discounted at 10% per annum and calculated in accordance with GAAP).
- Improved Financial Discipline. SandRidge has initiated action to reduce general and administrative cash expenses by one-third to $36-$39 million per year. Following the implementation of this plan, the Company will have reduced general and administrative expenses by 50% since emerging from bankruptcy in October 2016.
In addition, SandRidge has implemented a focused capital program with moderate outspend reducing its capital expenditure budget for 2018 to $180-$190 million from $247 million in 2017.
- New Management and Directors. In early 2018, the Board implemented a management transition plan, including a new President and Chief Executive Officer and Chief Financial Officer.
The Board has also added two new directors – Sylvia Barnes and Ken Beer – who bring valuable experience in capital markets and the energy industry to the Company's Board. With the addition of Ms. Barnes and Mr. Beer, 40% of the Board is new since the beginning of 2018, bringing independent individuals with new ideas and perspectives and the same focus on value creation to the Board. - Aligning Pay with Performance. The Board has taken considerable actions to address concerns related to compensation raised over the past year. These efforts include eliminating the compensation program adopted by the prior Board in connection with the Company's reorganization in favor of a balanced program consisting of a more modest base salary and a greater percentage of performance-based annual incentives; and retaining a new independent compensation consultant.
The Company has also transitioned to granting restricted stock awards with double trigger vesting and, for 2018, committed that at least half of long-term incentive equity awards would be performance based and the Compensation Committee will consider further changes and suggestions by shareholders for improvements consistent with best practices in the industry. - Our mature Mississippi Lime assets in the Mid-continent generate significant production and material free cash flow, which help fund investment and value creation in our emerging assets. However, they are declining assets that do not offer meaningful opportunities for additional development and oil and cash flow growth.
- Our North Park Basin Niobrara assets are in the delineation phase of the development cycle and require significant investment over the next several years, including the construction of midstream and pipeline takeaway infrastructure, before full field development can be realized.
- Our NW STACK assets in the Mid-continent are also in the early phases of the development cycle and are being efficiently delineated under a development agreement that provides an initial $100 million of capital from our financial partner.
- Adding 30-50% rate of return, development-ready inventory within a well-known, highly delineated area
- Adding an estimated 970 total drilling locations close to existing infrastructure in a well-delineated play
- Adding an estimated 230 proved locations, a 92% increase over SandRidge's preliminary year end 2017 PUD inventory
- Increasing Niobrara production to 25% of total production, from 4%
- Reducing Mississippi Lime production to less than 60% of the Company's total production, from 80%
- 15% accretion to cash flow per share in 2018
- 4% accretion to net asset value per share in 2018 while significantly reducing the Company's risk profile
- 21% improvement in 2018 EBITDA margin per BOE
- At least $20 million in annual G&A savings
- An increase to 41% oil production in 2018, from 35%
- A strong balance sheet, which remains at or below 1.9x leverage over the next three years
- Proved reserves support a new $700 million borrowing base on more favorable terms
- Greater than $300 million of liquidity at closing
- Sharing drilling rig and stimulation crews
- Utilizing dedicated vendor services
- Achieving flexibility in scheduling drilling and completion activities
- Remotely monitoring and operating our assets using our centralized operations center
- Realizing efficiencies of scale in the procurement of materials
- Third quarter 2017 production of 15.8 MBoepd, 52% oil
- Year-end 2016 proved reserves of 91 MMBoe, 55% oil
- 67,000 highly delineated net acres in the rural oil window of the DJ Basin
- ~970 2P Niobrara and Codell locations driving future oil development opportunities
- Stacked pay DJ Basin assets targeting Niobrara and Codell formations
- Company owned midstream infrastructure enhancing E&P operations
- Mature, cash generating Cotton Valley production
- Significant cost, technical and operational synergies
- Zero debt and $31 million of cash on hand as of September 30, 2017
- Third quarter production of 3.3 MMBoe (36.0 MBoepd, 22% oil, 24% NGLs, 54% natural gas)
- Drilled first SandRidge Dewey County Meramec well with a 30-Day IP of 598 Boepd (71% oil)
- Confirmed Meramec/Osage stacked pay with Meramec well producing a 30-Day IP of 397 Boepd (88% oil)
- Spud initial wells under NW STACK Drilling Participation Agreement
- Averaged two rigs targeting the Meramec during the quarter
- Drilled seven SRLs and two XRLs during the quarter and brought two SRLs and three XRLs online
- Third quarter oil production of 128 MBo (1.4 MBopd)
- Confirmed all four North Park Basin Niobrara benches (A, B, C, and D) productive
- Achieved Niobrara XRL D&C capital reduction of $0.5 million due to pad drilling
- One rig targeting the Niobrara during the quarter
- Drilled three XRLs and brought two XRLs online during the quarter
- Net loss of $8 million, or $0.25 per share, for third quarter 2017 compared to a $404 million loss, or $0.56 per share, in third quarter of 2016
- Adjusted net income of $12 million, or $0.35 per diluted share, for third quarter 2017 compared to adjusted net income of $25 million, or $0.04 per diluted share, in third quarter 2016
- Adjusted EBITDA was $42 million for third quarter 2017 compared to $65 million in third quarter 2016
- Net cash provided by operating activities of $44 million for third quarter of 2017 compared to $75 million for third quarter of 2016
- Operating cash flow of $46 million for third quarter 2017 compared to $32 million in third quarter 2016
- Net Income of $66 million, or $2.06 per diluted share, for the first nine months of 2017 compared to a $1.2 billion loss, or $1.76 per share, for the first nine months of 2016
- Adjusted net income of $41 million, or $1.27 per diluted share, for the first nine months of 2017 compared to an adjusted net loss of $93 million, or $0.13 per share, for the first nine months of 2016
- Adjusted EBITDA was $144 million for the first nine months of 2017 compared to $167 million for the first nine months of 2016
- Net cash provided by operating activities of $148 million for the first nine months of 2017 compared to $64 million used in the first nine months of 2016
- Operating cash flow of $142 million for the first nine months of 2017 compared to negative $60 million for the first nine months of 2016
- 35.6 million shares outstanding
- $600 million reserve-based credit facility with confirmed $425 million borrowing base
- Liquidity of $515 million including $98 million of cash and $417 million capacity under the credit facility, net of outstanding letters of credit
- Outstanding debt consists of a $38 million note secured by the Company's real estate, resulting in zero net debt
- Increases net asset value by accelerating delineation of NW STACK, creating additional proved and undeveloped reserves
- Improves Company's rate of return while reducing capital expenditure requirements through carry structure
- Preserves future drilling locations with wellbore-only conveyance
- Increases ability to hold acreage by production, reducing future lease renewal costs
- Allows retention of operational control
- Second quarter production of 3.5 MMBoe, (38.7 MBoepd, 22% oil, 25% NGLs, 53% natural gas)
- 902 Boepd (81% oil) 30-Day IP on first Major County Meramec XRL, Campbell 2015 1-26H
- Averaged 2.5 rigs, targeting the Meramec during the second quarter
- Year-to-date $15 million proceeds from the sale of non-core assets
- Second quarter oil production of 172 MBo (1.9 MBopd)
- Improved North Park Niobrara type curve due to shallower oil decline
- Resumed drilling activity with one rig targeting multiple Niobrara benches
- Drilled two XRLs averaging 12 days from spud to rig release, compared to 24 days on the previous XRL
- Extended favorable $3.15 differential to WTI through 2018
- Net Income of $23 million, or $0.69 per share, for second quarter 2017 compared to a $521 million loss, or $0.73 per share, in second quarter of 2016
- Adjusted EBITDA was $46 million for second quarter 2017 compared to $62 million in second quarter 2016
- Adjusted net income of $8 million, or $0.23 per share, for second quarter 2017 compared to an adjusted net loss of $22 million, or $0.03 per share, in second quarter 2016
- Net cash provided from operating activities of $40 million for second quarter of 2017 compared to $24 million for second quarter of 2016
- Adjusted operating cash flow of $43 million for second quarter 2017 compared to $19 million in second quarter 2016
- Net Income of $74 million, or $2.42 per diluted share, for the first six months of 2017 compared to a $845 million loss, or $1.20 per share, for the first six months of 2016
- Adjusted EBITDA was $102 million for the first six months of 2017 compared to $102 million for the first six months of 2016
- Adjusted net income of $29 million, or $0.94 per diluted share, for the first six months of 2017 compared to an adjusted net loss of $118 million, or $0.17 per share, for the first six months of 2016
- Net cash provided from operating activities of $104 million for the first six months of 2017 compared to $139 million used in the first six months of 2016
- Adjusted operating cash flow of $96 million for the first six months of 2017 compared to negative $92 million for the first six months of 2016
- 35.8 million shares outstanding
- $600 million reserve-based credit facility with $425 million borrowing base
- Liquidity of $563 million including $145 million of cash and $418 million capacity under the credit facility, net of outstanding letters of credit
- Outstanding debt consists of a $38 million note secured by the Company's real estate, resulting in zero net debt
- First quarter production of 3.7 MMBoe, (40.8 MBoepd, 23% oil, 24% NGLs, 53% natural gas)
- Drilled two laterals in the first quarter and brought three laterals online
- Incremental leasehold additions totaling 10,000 net acres bring current NW STACK position to 70,000 net acres
- Mississippian full section development multilateral, the Hawk Haven 2710 1-22H, produced a combined 30-Day IP of 1,248 Boepd or 416 Boepd per lateral equivalent (47% oil), drilled and completed for $5.5 million ($1.8 million per lateral)
- Currently running two rigs targeting Meramec in NW STACK
- Four Meramec extended reach wells currently in progress: one flowing back, one completing and two drilling
- Acquired rights to 329 square mile 3D seismic survey to further enhance NW STACK reservoir characterization
- First quarter production of 173 MBo (1.9 MBopd)
- Drilling activity to resume at midyear with current plans to have one rig targeting multiple Niobrara benches
- Average cumulative oil production as of May 4 from all wells drilled in 2016 exceeds type curve by 11%
- First "C" bench well, the Hebron 4-18H, (30-Day IP of 539 Boepd, 92% oil) produced cumulative oil of 70 MBo after 170 producing days. This volume is 32% higher than type curve and is the strongest single lateral of the 2016 program.
- Peterson Ridge and Rabbit Ears 3D seismic survey completed (61 square miles), increasing total NPB 3D seismic coverage to 115 square miles
- Extension of current oil transportation and marketing agreement continues ~$3.15/ bbl WTI differential through the end of 2018
- Net Income of $51 million, or $1.90 per share, for first quarter 2017 compared to a $324 million loss in first quarter of 2016
- Adjusted EBITDA was $56 million for first quarter 2017 compared to $42 million in first quarter 2016, pro forma for divestitures
- Adjusted net income of $21 million, or $0.78 per share, for first quarter 2017 compared to an adjusted net loss of $81 million in first quarter 2016
- Net cash provided from operating activities of $64 million for first quarter of 2017 compared to $163 million used in first quarter of 2016
- Adjusted operating cash flow of $53 million for first quarter 2017 compared to negative $111 million in first quarter 2016
- 35.9 million shares outstanding
- $600 million reserve-based credit facility with $425 million borrowing base
- Liquidity of $554 million including $137 million of cash and $417 million capacity under the credit facility, net of outstanding letters of credit
- Outstanding debt consists of a $38 million note secured by the Company's real estate, resulting in zero current net debt
- 35.9 million shares outstanding
- New $600 million reserve-based credit facility with $425 million conforming borrowing base
- Liquidity of $537 million including ~$120 million of cash and $417 million capacity under the credit facility, net of outstanding letters of credit
- Outstanding debt consists of a $36 million par value note secured by the Company's real estate in Oklahoma City, resulting in zero current net debt
- Fourth quarter production of 4.0 MMBoe, (43.7 MBoepd, 23% oil, 24% NGLs, 53% natural gas)
- Drilled six laterals in the fourth quarter, bringing six laterals online
- Two Mississippian extended reach lateral wells (four total laterals), the Cherokee 1-2H/11 H and Cherokee 2-2H/11 H produced a combined 30-Day IP of 2,226 Boepd (49% oil), drilled and completed for $5.3 million ($1.3 million per lateral) – a new low cost record for the Company
- 2016 Mississippian drilling and completion costs averaged $1.7 million per lateral, a ~23% reduction versus 2015
- In the fourth quarter, SandRidge's first Major County Meramec lateral, the Medill 1-27H, produced a 30-Day IP of 925 Boepd (77% oil), drilled and completed for $3.9 million
- In the third quarter, SandRidge's first Major County lower Osage lateral, the Keeton 1-24H, produced a 30-Day IP of 540 Boepd (46% oil), drilled and completed for $4.2 million
- In the second quarter, the first Meramec horizontal lateral in Garfield County, the Charlene 1-29H, produced a 30-Day IP of 328 Boepd (54% oil), drilled and completed for $3.1 million
- Fourth quarter production of 181 MBo (2.0 MBopd), and full year production of 500 MBo
- Completed and brought online three laterals during the fourth quarter including first extended reach lateral and first Niobrara "C" bench well
- First Niobrara "C" bench well, the Hebron 4-18H, produced a 30-Day IP of 539 Boepd (92% oil)
- First Niobrara two-mile extended reach lateral, the Castle 1-17H 20, produced a 30-Day IP of 901 Boepd (91% oil), drilled and completed for $6.8 million ($3.4 million per lateral – lowest cost per lateral to date)
- North Park 3D seismic acquisition ongoing in Q1'17
- Planned core to include the Niobrara Shale, Carlile Shale and Frontier Sand in 2017. The associated pilot hole will log the entire stratigraphic section to investigate additional shallow zones such as the Sussex and Shannon formations.
- SEC proved reserves of 164 MMBoe with a PV-10 of $438 million (equal to the standardized measure)
- NYMEX strip-based proved reserves of 184 MMBoe with a PV-10 of $946 million
- 74% of total proved reserves are proved developed
- 53% liquids (32% oil, an increase from 24% at year end 2015)
- 9 MMBoe (45% oil) reserve additions (extensions) from 2016 drilling program
- Negative performance revisions were approximately 85% gas and associated NGLs and 15% oil
- Adjusted EBITDA was $71 million for fourth quarter 2016 compared to $79 million in fourth quarter 2015, pro forma for divestitures and net of Noncontrolling Interest
- Adjusted operating cash flow of $52 million for fourth quarter 2016 compared to ($56) million in fourth quarter 2015
- Adjusted net income of $29 million, or $0.86 per diluted share, for fourth quarter 2016 compared to adjusted net loss of $74 million in fourth quarter 2015
- Incurred a non-cash ceiling test impairment charge of approximately $319 million resulting primarily from the application of fresh start accounting in which the full cost pool was determined based upon forward strip prices as of the Company's Emergence date, where those prices were materially higher than prices utilized by SEC guidelines
- Adjusted EBITDA was $238 million in 2016 compared to $528 million in 2015, net of Noncontrolling Interest
- Adjusted operating cash flow of ($9) million in 2016 compared to $246 million in 2015
- Adjusted net loss of $64 million in 2016 compared to adjusted net loss of $135 million in 2015
- an increased principal commitment to $600 million from $425 million;
- a $425 million conforming borrowing base;
- a $50 million increase in available cash (representing the release of $50 million in escrow to the Company);
- an elimination of certain negative covenants, such as the PDP asset coverage ratio, $20 million minimum liquidity requirement and limitations on capital expenditures;
- conventional semi-annual borrowing base redeterminations beginning October 1, 2017;
- a total net leverage ratio covenant of 3.50:1.00 and an interest coverage ratio covenant of 2.25:1.00; and
- a maturity date of March 31, 2020.
- Third quarter production of 4.3 MMBoe (46.2 MBoepd, 24% oil, 25% NGLs, 51% natural gas)
- Drilled six laterals in the third quarter, bringing three laterals online
- 24 laterals drilled in the first nine months of 2016 with all Mid-Continent activity focused in Oklahoma
- First nine months of Mississippian drilling and completion costs averaged $1.9 million per lateral or $392 per completed foot, a ~26% reduction from all of 2015
- 100% multi and extended lateral Mississippian drilling in 2016
- First North Park Niobrara extended lateral drilled
- 100% multi and extended lateral development planned in 2017 across both Niobrara and Mid-Continent assets
- Third quarter production of 161 MBo (1.8 MBopd), an increase of 49% compared to the second quarter of 2016
- Averaged 3.3 MBopd the second half of October, including production from 11 Niobrara laterals drilled in 2016
- North Park Niobrara type curve of 315 MBoe (86% oil) per single lateral, supported by cumulative production from 14 laterals
- Drilled three laterals, completed four laterals, and brought three laterals online during the third quarter
- Drilled first two-mile extended lateral, the Castle 1-17H 20, for below $7 million, less than $3.5 million per lateral
- During the third quarter, Permian Central Basin Platform properties produced 153 MBoe (1.7 MBoepd, 80% oil, 13% NGLs, 7% natural gas)
- Adjusted EBITDA, net of Noncontrolling Interest, was $65 million for third quarter 2016 compared to $118 million in third quarter 2015
- Adjusted operating cash flow of $32 million for third quarter 2016 compared to $45 million in third quarter 2015
- Adjusted net income of $25 million for third quarter 2016 compared to adjusted net loss of $45 million in third quarter 2015
- Adjusted EBITDA, net of Noncontrolling Interest, was $169 million in the first nine months of 2016 compared to $510 million in first nine months of 2015, pro forma for divestitures
- Adjusted operating cash flow of ($60) million in the first nine months of 2016 compared to $302 million in the first nine months of 2015
- Adjusted net loss of $93 million in the first nine months of 2016 compared to adjusted net loss of $61 million in the first nine months of 2015
- 20.6 million common shares outstanding
- 14.8 million shares issuable upon conversion of mandatory convertible notes
- 4.9 million warrants exercisable at $41.34 (net share settlement); 2.1 million warrants exercisable at $42.03 (net share settlement)
- No cash interest expense under current capital structure including undrawn revolver, $35 million secured building note and $278 million of zero interest bearing, mandatorily convertible notes
- $3.7 million par value of convertible notes converted as of October 31st
- No leverage or interest coverage financial covenants, only asset coverage ratio until October 2018
- No borrowing base redeterminations for approximately two years
- $536 million of liquidity as of October 31st, including $111 million of unrestricted cash and a $425 million undrawn revolver
- $100 million pro forma for emergence payments (including expected post-emergence repayment of RBL)
- $425 million borrowing base
- Undrawn (after expected post-emergence repayment with cash on hand)1
- No financial covenants or borrowing base redeterminations for two years
- LIBOR (100 bps floor) + 475 bps rate
- $281,780,873 in principal amount of 0.00% Convertible Senior Subordinated Notes due 2020 (the "Convertible Notes") which gives effect to the election of certain holders to receive common stock on the effective date instead of the Convertible Notes
- Initially convertible at the option of the holder based on an initial conversion rate of 0.05330841 shares of the Company's common stock per $1.00 principal amount or 15,021,291 shares, subject to customary anti-dilution adjustments
- The Convertible Notes will mature and mandatorily convert into the Company's common stock on October 4, 2020. In addition, the Company is required to convert all outstanding Convertible Notes upon certain events.
- No interest
- Upon the occurrence of certain events, including any acceleration, repayment or prepayment of the Convertible Notes (including any optional redemption), the Company will be required to pay a make-whole amount of $0.783478 (the "Make-Whole Amount") for each $1.00 in principal amount. The conversion rate will be automatically adjusted such that the Convertible Notes convert into the same percentage of common stock before and after such event.
- $35 million note secured by mortgages on the Company's headquarters facility and certain other non-oil and gas real property, with interest payable in kind through the earlier of August 4, 2020 or events related to the refinancing or repayment of the New First Lien Exit Facility
- 19,371,229 shares of common stock issued at emergence, including 971,231 shares issued and outstanding to give effect to the election of certain holders to receive common stock on the effective date instead of the Convertible Notes
- 4,913,251 warrants to purchase common stock at $41.34 strike price expiring on October 4, 2022
- 2,068,690 warrants to purchase common stock at $42.03 strike price expiring on October 4, 2022
- Pro forma for divestitures and net of noncontrolling interest, adjusted EBITDA was $79 million in the fourth quarter of 2015 compared to $239 million in the fourth quarter of 2014. Adjusted EBITDA, net of noncontrolling interest, was $67 million in the fourth quarter of 2015 compared to $224 million in the fourth quarter of 2014.
- Adjusted operating cash flow of ($56) million for fourth quarter 2015 compared to $203 million in fourth quarter 2014.
- Adjusted net loss of $74 million, or $0.09 per diluted share, for fourth quarter 2015 compared to adjusted net income of $44 million, or $0.08 per diluted share, in fourth quarter 2014.
- Pro forma for divestitures and net of noncontrolling interest, adjusted EBITDA was $589 million in 2015 compared to $873 million in 2014. Adjusted EBITDA, net of noncontrolling interest, was $528 million in 2015 compared to $873 million in 2014.
- Adjusted operating cash flow of $246 million for 2015 compared to $712 million in 2014.
- Adjusted net loss of $135 million, or $0.21 per diluted share, for 2015 compared to $150 million adjusted income, or $0.26 per diluted share, in 2014.
- Mid-Continent: During the fourth quarter of 2015, SandRidge drilled 19 laterals. The Company averaged four horizontal rigs operating in the play. The Company's Mid-Continent assets produced 63.7 MBoepd (29% oil, 19% NGLs, 52% natural gas) during the fourth quarter.
- West Texas: During the fourth quarter, Permian Basin properties produced approximately 3.8 MBoepd (83% oil, 10% NGLs, 7% natural gas). Legacy West Texas Overthrust properties produced approximately 4.8 MBoepd (99% natural gas, 1% oil).
- 325 MMBoe consolidated proved reserves and $1.3 billion of SEC PV-10 reserves value
- 245% reserve replacement prior to revisions
- 153% drill bit reserve replacement with 46 MMBoe organic reserve adds
- 80% of total proved reserves are proved developed reserves
- 43% liquids in consolidated proved reserves
SandRidge Energy, Inc. Announces Sale of North Park Basin Assets For $47 Million
Source: PR Newswire
OKLAHOMA CITY, Dec. 14, 2020 /PRNewswire/ -- SandRidge Energy, Inc. (the "Company" or "SandRidge") (NYSE:SD) today announced that it has entered into a definitive agreement for the sale of its North Park Basin assets ("NPB").
The consideration is $47 million in cash subject to customary post-closing adjustments. The effective date is October 1, 2020, and the transaction is expected to close during the first quarter of 2021.
NPB accounted for less than 10% of the Company's production during the quarter ended September 30, 2020 and less than 10% of the Company's Proved Developed Reserves as of December 31, 2019.
Carl Giesler, SandRidge's President and CEO, commented, "We believe this transaction significantly enhances shareholder value. It monetizes an asset the value of which, we believe, has not been adequately reflected in our stock price and which had become increasingly non-core with the Company's shift to a cash optimization-focused strategy."
Jefferies LLC provided a financial fairness opinion to the Company. Winston & Strawn LLP acted as legal advisor to the Company.
About SandRidge Energy, Inc.
SandRidge Energy, Inc. (NYSE: SD) is an independent oil and gas company engaged in the development and acquisition of oil and gas properties. Its primary areas of operation are the Mid-Continent in Oklahoma and Kansas and the North Park Basin in Colorado. Further information can be found at www.sandridgeenergy.com.
For further information, please contact:
Investor Relations
SandRidge Energy, Inc.
1 E. Sheridan Ave., Suite 500
Oklahoma City, OK 73104
(405) 429-5500
View original content to download multimedia:http://www.prnewswire.com/news-releases/sandridge-energy-inc-announces-sale-of-north-park-basin-assets-for-47-million-301191680.html
SOURCE SandRidge Energy, Inc.
Article Date
12/14/2020SandRidge Energy, Inc. Announces Closing of New Credit Facility
Source: PR Newswire
OKLAHOMA CITY, Nov. 30, 2020 /PRNewswire/ -- SandRidge Energy, Inc. (the "Company" or "SandRidge") (NYSE:SD) today announced the closing of a $30 million credit facility (the "New Credit Facility").
The New Credit Facility is with affiliates of Icahn Enterprises, and consists of a $10 million revolving loan facility and a $20 million term loan facility.
The New Credit Facility replaced the Company's prior credit agreement ("Prior Credit Facility") which was with a lending syndicate led by Royal Bank of Canada. The Prior Credit Facility was terminated effective November 30, 2020 and otherwise would have matured on April 1, 2021.
The New Credit Facility will charge the same interest rate as the previous facility, however, unlike the old facility it will have no scheduled borrowing base redeterminations and no longer charge a commitment fee.
The New Credit Facility matures on November 30, 2023. The Company has the right to prepay loans under the New Credit Facility at any time without a prepayment penalty, other than customary "breakage" costs with respect to LIBOR loans.
The Company's Form 8-K filed on November 30, 2020 provides further details on and includes the full New Credit Facility agreement as an exhibit.
Carl Giesler, SandRidge's President and CEO, commented, "We appreciate Icahn Enterprises and its affiliates working with us to put this facility in place. It substantially extends our liquidity runway on more efficient pricing and other terms than we believe we could achieve in the current oil & gas reserve-based lending market. It also underscores the benefit of having Icahn Enterprises as a supportive major shareholder."
About SandRidge Energy, Inc.
SandRidge Energy, Inc. (NYSE: SD) is an independent oil and gas company engaged in the development and acquisition of oil and gas properties. Its primary areas of operation are the Mid-Continent in Oklahoma and Kansas and the North Park Basin in Colorado. Further information can be found at www.sandridgeenergy.com.
For further information, please contact:
Investor Relations
SandRidge Energy, Inc.
123 Robert S. Kerr Avenue
Oklahoma City, OK 73102-6406
(405) 429-5515
View original content to download multimedia:http://www.prnewswire.com/news-releases/sandridge-energy-inc-announces-closing-of-new-credit-facility-301182000.html
SOURCE SandRidge Energy, Inc.
Article Date
12/1/2020SandRidge Energy, Inc. Reports Financial and Operational Results for the three and nine-month period ending September 30, 2020
Source: PR Newswire
OKLAHOMA CITY, Nov. 4, 2020 /PRNewswire/ – SandRidge Energy, Inc. (the "Company" or "SandRidge") (NYSE: SD) today announced financial and operational results for the quarter ended September 30, 2020.
Results and highlights during the quarter:
_________________________ | ||
1 Net debt is defined as total debt less unrestricted cash |
Financial Results
For the quarter, the Company reported a net loss of $48.7 million, or $1.36 per share, and net cash provided by operating activities of $27.4 million. After adjusting for certain items, the Company's adjusted net income amounted to $5.4 million, or $0.15 per share, operating cash flow totaled $12.7 million and adjusted EBITDA was $15.4 million for the quarter. The Company defines and reconciles adjusted net income, adjusted EBITDA and other non-GAAP financial measures to the most directly comparable GAAP measure in supporting tables at the conclusion of this press release.
Operational Results and Activity
Production totaled 2,048 MBoe (23.6 MBoepd, 22% oil, 32% NGLs and 46% natural gas) for the quarter.
Mid-Continent Assets in Oklahoma and Kansas
Production in the Mississippian totaled 1,719 MBoe (18.7 MBoepd, 12% oil) and 126 MBoe (1.4 MBoepd, 31% oil) in the Northwest STACK during the quarter.
North Park Basin Assets in Colorado
Net production for North Park Basin totaled 203 MBoe (2.2 MBoepd, 100% oil) during the quarter.
Building Sale
On August 31, 2020, the Company closed on the previously announced sale of its corporate headquarters building located in Oklahoma City, OK for net proceeds of approximately $35.4 million.
ORRI Acquisition
On September 10, 2020, the Company acquired all of the overriding royalty interests of SandRidge Mississippian Royalty Trust II for a gross purchase price of $5.25 million (net purchase price of $3.28 million, given the Company's prior 37.6% ownership of the Trust).
2020 Capital Expenditures and Operational Guidance
The Company reaffirms its 2020 capital expenditures and operational guidance previously published on May 18, 2020.
Liquidity and Capital Structure
As of September 30, 2020, the Company's total liquidity was $69.9 million, based on $11.2 million of cash, excluding restricted cash and $58.7 million available under its credit facility. The Company currently has $12.0 million drawn under its $75.0 million facility and $4.3 million in outstanding letters of credit.
Given the net proceeds from the third quarter sale of our corporate headquarters for $35.4 million as well as several initiatives from prior quarters expected to optimize free cash flow, including personnel and non-personnel cost reductions and entering into commodity derivative contracts for natural gas, we were able to alleviate prior conditions that gave rise to substantial doubt about our ability to continue as a going concern.
Conference Call Information
The Company will host a conference call to discuss these results on Thursday, November 5, 2020 at 10:00 am CT. The conference call can be accessed by registering online at http://www.directeventreg.com/registration/event/2188429 at which time registrants will receive dial-in information as well as a passcode and registrant ID. At the time of the call, participants will dial in using the numbers in the confirmation email and enter their passcode and ID, upon which they will enter the conference call.
A live audio webcast of the conference call will also be available via SandRidge's website, www.sandridgeenergy.com, under Investor Relations/Presentation & Events. The webcast will be archived for replay on the Company's website for 30 days.
Operational and Financial Statistics
Information regarding the Company's production, pricing, costs and earnings is presented below:
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||
Production - Total | |||||||||||||||
Oil (MBbl) | 454 | 835 | 1,656 | 2,668 | |||||||||||
NGL (MBbl) | 646 | 629 | 2,096 | 2,335 | |||||||||||
Natural Gas (MMcf) | 5,686 | 8,318 | 18,078 | 25,414 | |||||||||||
Oil equivalent (MBoe) | 2,048 | 2,850 | 6,765 | 9,239 | |||||||||||
Daily production (MBoed) | 22.3 | 31.0 | 24.7 | 33.8 | |||||||||||
Average price per unit | |||||||||||||||
Realized oil price per barrel - as reported | $ | 37.60 | $ | 52.78 | $ | 34.59 | $ | 53.54 | |||||||
Realized impact of derivatives per barrel | — | 0.75 | 6.00 | 0.23 | |||||||||||
Net realized price per barrel | $ | 37.60 | $ | 53.53 | $ | 40.59 | $ | 53.77 | |||||||
Realized NGL price per barrel - as reported | $ | 7.71 | $ | 10.11 | $ | 5.97 | $ | 12.37 | |||||||
Realized impact of derivatives per barrel | — | — | — | — | |||||||||||
Net realized price per barrel | $ | 7.71 | $ | 10.11 | $ | 5.97 | $ | 12.37 | |||||||
Realized natural gas price per Mcf - as reported | $ | 0.97 | $ | 0.93 | $ | 0.79 | $ | 1.37 | |||||||
Realized impact of derivatives per Mcf | 0.10 | — | 0.07 | 0.20 | |||||||||||
Net realized price per Mcf | $ | 1.07 | $ | 0.93 | $ | 0.86 | $ | 1.57 | |||||||
Realized price per Boe - as reported | $ | 13.45 | $ | 20.42 | $ | 12.44 | $ | 22.34 | |||||||
Net realized price per Boe - including impact of derivatives | $ | 13.76 | $ | 20.64 | $ | 14.09 | $ | 22.96 | |||||||
Average cost per Boe | |||||||||||||||
Lease operating | $ | 3.94 | $ | 8.37 | $ | 4.79 | $ | 7.76 | |||||||
Production, ad valorem, and other taxes | $ | 1.14 | $ | 1.52 | $ | 1.09 | $ | 1.66 | |||||||
Depletion (1) | $ | 3.67 | $ | 13.64 | $ | 6.76 | $ | 12.42 | |||||||
Loss per share | |||||||||||||||
Loss per share applicable to common stockholders | |||||||||||||||
Basic | $ | (1.36) | $ | (5.12) | $ | (7.78) | $ | (5.66) | |||||||
Diluted | $ | (1.36) | $ | (5.12) | $ | (7.78) | $ | (5.66) | |||||||
Adjusted net income (loss) per share available to common stockholders | |||||||||||||||
Basic | $ | 0.15 | $ | (0.49) | $ | (0.26) | $ | (0.74) | |||||||
Diluted | $ | 0.15 | $ | (0.49) | $ | (0.26) | $ | (0.74) | |||||||
Weighted average number of shares outstanding (in thousands) | |||||||||||||||
Basic | 35,783 | 35,491 | 35,649 | 35,390 | |||||||||||
Diluted | 35,783 | 35,491 | 35,649 | 35,390 | |||||||||||
(1) Includes accretion of asset retirement obligation. | |||||||||||||||
Capital Expenditures
The table below presents actual results of the Company's capital expenditures for the three and nine months ended September 30, 2020.
Three Months Ended | Nine Months Ended | ||||||
September 30, 2020 | September 30, 2020 | ||||||
(In thousands) | (In thousands) | ||||||
Drilling, completion and capital workovers | $ | 876 | $ | 3,306 | |||
Other capital expenditures | 399 | 896 | |||||
Total Capital Expenditures | $ | 1,275 | $ | 4,202 | |||
(excluding acquisitions and plugging and abandonment) | |||||||
Derivative Contracts
The table below sets forth the Company's open derivative contracts as of September 30, 2020.
Notional (MMBtu) | Weighted Average Fixed Price per Unit | |||||
Natural Gas Price Swaps: October 2020 | 1,240,000 | $ | 2.14 | |||
Natural Gas Price Swaps: November 2020 - December 2020 | 2,135,000 | $ | 2.54 | |||
Natural Gas Price Swaps: January 2021 - December 2021 | 10,950,000 | $ | 2.61 | |||
Capitalization
The Company's capital structure as of September 30, 2020 and December 31, 2019 is presented below:
September 30, 2020 | December 31, 2019 | ||||||
(In thousands) | |||||||
Cash, cash equivalents and restricted cash | $ | 12,641 | $ | 5,968 | |||
Credit facility | $ | 12,000 | $ | 57,500 | |||
Total debt | 12,000 | 57,500 | |||||
Stockholders' equity | |||||||
Common stock | 36 | 36 | |||||
Warrants | 88,520 | 88,520 | |||||
Additional paid-in capital | 1,061,961 | 1,059,253 | |||||
Accumulated deficit | (1,022,555) | (745,357) | |||||
Total SandRidge Energy, Inc. stockholders' equity | 127,962 | 402,452 | |||||
Total capitalization | $ | 139,962 | $ | 459,952 | |||
SandRidge Energy, Inc. and Subsidiaries | |||||||||||||||
Condensed Consolidated Statements of Operations (Unaudited) | |||||||||||||||
(In thousands, except per share amounts) | |||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||
Revenues | |||||||||||||||
Oil, natural gas and NGL | $ | 27,547 | $ | 58,188 | $ | 84,134 | $ | 206,432 | |||||||
Other | 129 | 181 | 526 | 561 | |||||||||||
Total revenues | 27,676 | 58,369 | 84,660 | 206,993 | |||||||||||
Expenses | |||||||||||||||
Lease operating expenses | 8,069 | 23,866 | 32,409 | 71,721 | |||||||||||
Production, ad valorem, and other taxes | 2,333 | 4,346 | 7,386 | 15,303 | |||||||||||
Depreciation and depletion—oil and natural gas | 7,525 | 38,871 | 45,728 | 114,755 | |||||||||||
Depreciation and amortization—other | 1,698 | 2,981 | 6,071 | 8,910 | |||||||||||
Impairment | 44,043 | 165,507 | 253,797 | 165,507 | |||||||||||
General and administrative | 2,493 | 6,238 | 12,290 | 26,261 | |||||||||||
Restructuring expenses | 1,199 | — | 1,643 | — | |||||||||||
Employee termination benefits | 3,184 | — | 8,431 | 4,465 | |||||||||||
(Gain) loss on derivative contracts | 5,299 | (1,756) | (7,168) | (1,547) | |||||||||||
Other operating expense, net | (116) | 23 | 269 | 142 | |||||||||||
Total expenses | 75,727 | 240,076 | 360,856 | 405,517 | |||||||||||
(Loss) income from operations | (48,051) | (181,707) | (276,196) | (198,524) | |||||||||||
Other income (expense) | |||||||||||||||
Interest expense, net | (569) | (722) | (1,653) | (2,009) | |||||||||||
Other income (expense), net | (129) | 827 | 5 | 370 | |||||||||||
Total other income (expense) | (698) | 105 | (1,648) | (1,639) | |||||||||||
Loss before income taxes | (48,749) | (181,602) | (277,844) | (200,163) | |||||||||||
Income tax expense (benefit) | — | — | (646) | — | |||||||||||
Net loss | $ | (48,749) | $ | (181,602) | $ | (277,198) | $ | (200,163) | |||||||
Loss per share | |||||||||||||||
Basic | $ | (1.36) | $ | (5.12) | $ | (7.78) | $ | (5.66) | |||||||
Diluted | $ | (1.36) | $ | (5.12) | $ | (7.78) | $ | (5.66) | |||||||
Weighted average number of common shares outstanding | |||||||||||||||
Basic | 35,783 | 35,491 | 35,649 | 35,390 | |||||||||||
Diluted | 35,783 | 35,491 | 35,649 | 35,390 | |||||||||||
SandRidge Energy, Inc. and Subsidiaries | |||||||
Condensed Consolidated Balance Sheets (Unaudited) | |||||||
(In thousands) | |||||||
September 30, | December 31, | ||||||
ASSETS | |||||||
Current assets | |||||||
Cash and cash equivalents | $ | 11,187 | $ | 4,275 | |||
Restricted cash - other | 1,454 | 1,693 | |||||
Accounts receivable, net | 16,292 | 28,644 | |||||
Derivative contracts | — | 114 | |||||
Prepaid expenses | 1,105 | 3,342 | |||||
Other current assets | 80 | 538 | |||||
Total current assets | 30,118 | 38,606 | |||||
Oil and natural gas properties, using full cost method of accounting | |||||||
Proved | 1,479,664 | 1,484,359 | |||||
Unproved | 18,653 | 24,603 | |||||
Less: accumulated depreciation, depletion and impairment | (1,367,703) | (1,129,622) | |||||
130,614 | 379,340 | ||||||
Other property, plant and equipment, net | 104,825 | 188,603 | |||||
Other assets | 564 | 1,140 | |||||
Total assets | $ | 266,121 | $ | 607,689 | |||
LIABILITIES AND STOCKHOLDERS' EQUITY | |||||||
Current liabilities | |||||||
Accounts payable and accrued expenses | $ | 42,449 | $ | 64,937 | |||
Current maturities of long-term debt | 12,000 | — | |||||
Asset retirement obligation | 22,007 | 22,119 | |||||
Derivative contracts | 3,088 | — | |||||
Other current liabilities | 962 | 1,367 | |||||
Total current liabilities | 80,506 | 88,423 | |||||
Long-term debt | — | 57,500 | |||||
Asset retirement obligation | 53,436 | 52,897 | |||||
Other long-term obligations | 4,217 | 6,417 | |||||
Total liabilities | 138,159 | 205,237 | |||||
Stockholders' Equity | |||||||
Common stock, $0.001 par value; 250,000 shares authorized; 35,906 issued and outstanding at September 30, 2020 and 35,772 issued and outstanding at December 31, 2019 | 36 | 36 | |||||
Warrants | 88,520 | 88,520 | |||||
Additional paid-in capital | 1,061,961 | 1,059,253 | |||||
Accumulated deficit | (1,022,555) | (745,357) | |||||
Total stockholders' equity | 127,962 | 402,452 | |||||
Total liabilities and stockholders' equity | $ | 266,121 | $ | 607,689 | |||
SandRidge Energy, Inc. and Subsidiaries | ||||||||
Condensed Consolidated Cash Flows (Unaudited) | ||||||||
(In thousands) | ||||||||
Nine Months Ended September 30, | ||||||||
2020 | 2019 | |||||||
CASH FLOWS FROM OPERATING ACTIVITIES | ||||||||
Net loss | $ | (277,198) | $ | (200,163) | ||||
Adjustments to reconcile net loss to net cash provided by operating activities | ||||||||
Provision for doubtful accounts | 469 | (90) | ||||||
Depreciation, depletion, and amortization | 51,799 | 123,665 | ||||||
Impairment | 253,797 | 165,507 | ||||||
Debt issuance costs amortization | 477 | 398 | ||||||
Write off of debt issuance costs | — | 142 | ||||||
(Gain) loss on derivative contracts | (7,168) | (1,547) | ||||||
Cash received on settlement of derivative contracts | 11,197 | 5,700 | ||||||
Loss (gain) on sale of assets | (100) | — | ||||||
Stock-based compensation | 2,753 | 3,930 | ||||||
Other | 114 | (119) | ||||||
Changes in operating assets and liabilities | (8,784) | (1,894) | ||||||
Net cash provided by operating activities | 27,356 | 95,529 | ||||||
CASH FLOWS FROM INVESTING ACTIVITIES | ||||||||
Capital expenditures for property, plant and equipment | (8,110) | (170,723) | ||||||
Acquisition of assets | (3,276) | 236 | ||||||
Proceeds from sale of assets | 37,243 | 1,347 | ||||||
Net cash provided by (used in) investing activities | 25,857 | (169,140) | ||||||
CASH FLOWS FROM FINANCING ACTIVITIES | ||||||||
Proceeds from borrowings | 39,000 | 170,096 | ||||||
Repayments of borrowings | (84,500) | (108,096) | ||||||
Reduction of financing lease liability | (977) | — | ||||||
Debt issuance costs | — | (910) | ||||||
Cash paid for tax withholdings on vested stock awards | (63) | (362) | ||||||
Net cash provided by (used in) financing activities | (46,540) | 59,694 | ||||||
NET INCREASE (DECREASE) IN CASH, CASH EQUIVALENTS and RESTRICTED CASH | 6,673 | (13,917) | ||||||
CASH, CASH EQUIVALENTS and RESTRICTED CASH, beginning of year | 5,968 | 19,645 | ||||||
CASH, CASH EQUIVALENTS and RESTRICTED CASH, end of period | $ | 12,641 | $ | 5,728 | ||||
Supplemental Disclosure of Cash Flow Information | ||||||||
Cash paid for interest, net of amounts capitalized | $ | (1,271) | $ | (1,446) | ||||
Cash received for income taxes | $ | 616 | $ | — | ||||
Supplemental Disclosure of Noncash Investing and Financing Activities | ||||||||
Purchase of PP&E in accounts payable | $ | 683 | $ | 12,790 | ||||
Right-of-use assets obtained in exchange for financing lease obligations | $ | 67 | $ | 3,237 | ||||
Carrying values of properties exchanged | $ | 3,890 | $ | 5,384 | ||||
Non-GAAP Financial Measures
This press release includes non-GAAP financial measures. These non-GAAP measures are not alternatives to GAAP measures, and you should not consider these non-GAAP measures in isolation or as a substitute for analysis of our results as reported under GAAP. Below is additional disclosure regarding each of the non-GAAP measures used in this press release, including reconciliations to their most directly comparable GAAP measure.
Reconciliation of Cash Provided by Operating Activities to Operating Cash Flow
The Company defines operating cash flow as net cash provided by operating activities before changes in operating assets and liabilities as shown in the following table. Operating cash flow is a supplemental financial measure used by the Company's management and by securities analysts, investors, lenders, rating agencies and others who follow the industry as an indicator of the Company's ability to internally fund exploration and development activities and to service or incur additional debt. The Company also uses this measure because operating cash flow relates to the timing of cash receipts and disbursements that the Company may not control and may not relate to the period in which the operating activities occurred. Further, operating cash flow allows the Company to compare its operating performance and return on capital with those of other companies without regard to financing methods and capital structure. This measure should not be considered in isolation or as a substitute for net cash provided by operating activities prepared in accordance with GAAP.
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||
(In thousands) | |||||||||||||||
Net cash (used in) provided by operating activities | $ | 13,894 | $ | 33,056 | $ | 27,356 | $ | 95,529 | |||||||
Changes in operating assets and liabilities | (1,241) | (7,508) | 8,784 | 1,894 | |||||||||||
Operating cash flow | $ | 12,653 | $ | 25,548 | $ | 36,140 | $ | 97,423 | |||||||
Reconciliation of Net Loss to EBITDA and Adjusted EBITDA
The Company defines EBITDA as net loss before income tax (benefit) expense, interest expense, depreciation and amortization - other and depreciation and depletion - oil and natural gas. Adjusted EBITDA, as presented herein, is EBITDA excluding items that the Company believes affect the comparability of operating results such as items whose timing and/or amount cannot be reasonably estimated or are non-recurring, as shown in the following tables.
Adjusted EBITDA is presented because management believes it provides useful additional information used by the Company's management and by securities analysts, investors, lenders, ratings agencies and others who follow the industry for analysis of the Company's financial and operating performance on a recurring basis and the Company's ability to internally fund exploration and development and to service or incur additional debt. In addition, management believes that adjusted EBITDA is widely used by professional research analysts and others in the valuation, comparison and investment recommendations of companies in the oil and gas industry. The Company's adjusted EBITDA may not be comparable to similarly titled measures used by other companies.
Three Months Ended | Nine Months Ended | ||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||
(In thousands) | |||||||||||||||
Net loss | $ | (48,749) | $ | (181,602) | $ | (277,198) | $ | (200,163) | |||||||
Adjusted for | |||||||||||||||
Income tax (benefit) expense | — | — | (646) | — | |||||||||||
Interest expense | 570 | 742 | 1,663 | 2,091 | |||||||||||
Depreciation and amortization - other | 1,698 | 2,981 | 6,071 | 8,910 | |||||||||||
Depreciation and depletion - oil and natural gas | 7,525 | 38,871 | 45,728 | 114,755 | |||||||||||
EBITDA | (38,956) | (139,008) | (224,382) | (74,407) | |||||||||||
Asset impairment | 44,043 | 165,507 | 253,797 | 165,507 | |||||||||||
Stock-based compensation (1) | 219 | 808 | 948 | 2,953 | |||||||||||
(Gain) loss on derivative contracts | 5,299 | (1,756) | (7,168) | (1,547) | |||||||||||
Cash received upon settlement of derivative contracts | 619 | 622 | 11,197 | 5,700 | |||||||||||
Employee termination benefits | 3,184 | — | 8,431 | 4,465 | |||||||||||
Restructuring expenses | 1,199 | — | 1,643 | — | |||||||||||
Other | (179) | (85) | (110) | (202) | |||||||||||
Adjusted EBITDA | $ | 15,428 | $ | 26,088 | $ | 44,356 | $ | 102,469 | |||||||
1. | Excludes non-cash stock-based compensation included in employee termination benefits. |
Reconciliation of Cash Provided by Operating Activities to Adjusted EBITDA
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||
(In thousands) | |||||||||||||||
Net cash (used in) provided by operating activities | $ | 13,894 | $ | 33,056 | $ | 27,356 | $ | 95,529 | |||||||
Changes in operating assets and liabilities | (1,241) | (7,508) | 8,784 | 1,894 | |||||||||||
Interest expense | 570 | 742 | 1,663 | 2,091 | |||||||||||
Employee termination benefits (1) | 1,400 | 1 | 6,607 | 3,487 | |||||||||||
Income tax (benefit) expense | — | — | (646) | — | |||||||||||
Other | 805 | (203) | 592 | (532) | |||||||||||
Adjusted EBITDA | $ | 15,428 | $ | 26,088 | $ | 44,356 | $ | 102,469 | |||||||
1. | Excludes associated stock-based compensation. |
Reconciliation of Net Loss Available to Common Stockholders to Adjusted Net Income (Loss) Available to Common Stockholders
The Company defines adjusted net income (loss) as net loss excluding items that the Company believes affect the comparability of operating results and are typically excluded from published estimates by the investment community, including items whose timing and/or amount cannot be reasonably estimated or are non-recurring, as shown in the following tables.
Management uses the supplemental measure of adjusted net income (loss) as an indicator of the Company's operational trends and performance relative to other oil and natural gas companies and believes it is more comparable to earnings estimates provided by securities analysts. Adjusted net income (loss) is not a measure of financial performance under GAAP and should not be considered a substitute for net loss available to common stockholders.
Three Months Ended | Three Months Ended | ||||||||||||||
$ | $/Diluted Share | $ | $/Diluted Share | ||||||||||||
(In thousands, except per share amounts) | |||||||||||||||
Net loss available to common stockholders | $ | (48,749) | $ | (1.36) | $ | (181,602) | $ | (5.12) | |||||||
Asset impairment | 44,043 | 1.23 | 165,507 | 4.66 | |||||||||||
(Gain) loss on derivative contracts | 5,299 | 0.15 | (1,756) | (0.05) | |||||||||||
Cash received upon settlement of derivative contracts | 619 | 0.02 | 622 | 0.02 | |||||||||||
Employee termination benefits | 3,184 | 0.09 | — | — | |||||||||||
Restructuring expenses | 1,199 | 0.03 | — | — | |||||||||||
Other | (178) | — | (66) | — | |||||||||||
Adjusted net income (loss) available to common stockholders | $ | 5,417 | $ | 0.15 | $ | (17,295) | $ | (0.49) | |||||||
Basic | Diluted | Basic | Diluted | ||||||||||||
Weighted average number of common shares outstanding | 35,783 | 35,783 | 35,491 | 35,491 | |||||||||||
Total adjusted net income (loss) per share | $ | 0.15 | $ | 0.15 | $ | (0.49) | $ | (0.49) | |||||||
Nine Months Ended | Nine Months Ended | ||||||||||||||
$ | $/Diluted Share | $ | $/Diluted Share | ||||||||||||
(In thousands, except per share amounts) | |||||||||||||||
Net loss available to common stockholders | $ | (277,198) | $ | (7.78) | $ | (200,163) | $ | (5.66) | |||||||
Asset impairment | 253,797 | 7.12 | 165,507 | 4.68 | |||||||||||
(Gain) loss on derivative contracts | (7,168) | (0.20) | (1,547) | (0.04) | |||||||||||
Cash received upon settlement of derivative contracts | 11,197 | 0.31 | 5,700 | 0.16 | |||||||||||
Employee termination benefits | 8,431 | 0.24 | 4,465 | 0.13 | |||||||||||
Restructuring expenses | 1,643 | 0.05 | — | — | |||||||||||
Other | (107) | — | (120) | — | |||||||||||
Adjusted net loss available to common stockholders | $ | (9,405) | $ | (0.26) | $ | (26,158) | $ | (0.74) | |||||||
Basic | Diluted | Basic | Diluted | ||||||||||||
Weighted average number of common shares outstanding | 35,649 | 35,649 | 35,390 | 35,390 | |||||||||||
Total adjusted net loss per share | $ | (0.26) | $ | (0.26) | $ | (0.74) | $ | (0.74) | |||||||
Reconciliation of G&A to Adjusted G&A
The Company reports and provides guidance on Adjusted G&A per Boe because it believes this measure is commonly used by management, analysts and investors as an indicator of cost management and operating efficiency on a comparable basis from period to period and to compare and make investment recommendations of companies in the oil and gas industry. This non-GAAP measure allows for the analysis of general and administrative spend without regard to stock-based compensation programs and other non-recurring cash items, if any, which can vary significantly between companies. Adjusted G&A per Boe is not a measure of financial performance under GAAP and should not be considered a substitute for general and administrative expense per Boe. Therefore, the Company's Adjusted G&A per Boe may not be comparable to other companies' similarly titled measures.
The Company defines adjusted G&A as general and administrative expense adjusted for certain non-cash stock-based compensation and other non-recurring items, if any, as shown in the following tables:
Three Months Ended | Three Months Ended | ||||||||||||||
$ | $/Boe | $ | $/Boe | ||||||||||||
(In thousands, except per Boe amounts) | |||||||||||||||
General and administrative | $ | 2,493 | $ | 1.22 | $ | 6,238 | $ | 2.19 | |||||||
Stock-based compensation (1) | (219) | (0.11) | (808) | (0.28) | |||||||||||
Adjusted G&A | $ | 2,274 | $ | 1.11 | $ | 5,430 | $ | 1.91 | |||||||
Nine Months Ended | Nine Months Ended | ||||||||||||||
$ | $/Boe | $ | $/Boe | ||||||||||||
(In thousands, except per Boe amounts) | |||||||||||||||
General and administrative | $ | 12,290 | $ | 1.82 | $ | 26,261 | $ | 2.84 | |||||||
Stock-based compensation (1) | (948) | (0.14) | (2,953) | (0.31) | |||||||||||
Adjusted G&A | $ | 11,342 | $ | 1.68 | $ | 23,308 | $ | 2.52 | |||||||
1. | Excludes non-cash stock-based compensation included in employee termination benefits. |
For further information, please contact:
Investor Relations
SandRidge Energy, Inc.
123 Robert S. Kerr Avenue
Oklahoma City, OK 73102-6406
investors@sandridgeenergy.com
Cautionary Note to Investors - This press release includes "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, including, but not limited to, the information appearing under the heading "Revised 2020 Operational and Capital Expenditure Guidance." These forward-looking statements are neither historical facts nor assurances of future performance and reflect SandRidge's current beliefs and expectations regarding future events and operating performance. The forward-looking statements include projections and estimates of the Company's corporate strategies, future operations, development plans and appraisal programs, drilling inventory and locations, estimated oil, natural gas and natural gas liquids production, price realizations and differentials, hedging program, projected operating, general and administrative and other costs, projected capital expenditures, tax rates, efficiency and cost reduction initiative outcomes, liquidity and capital structure. We have based these forward-looking statements on our current expectations and assumptions and analyses made by us in light of our experience and our perception of historical trends, current conditions and expected future developments, as well as other factors we believe are appropriate under the circumstances. However, whether actual results and developments will conform with our expectations and predictions is subject to a number of risks and uncertainties, including the volatility of oil and natural gas prices, our success in discovering, estimating, developing and replacing oil and natural gas reserves, actual decline curves and the actual effect of adding compression to natural gas wells, the availability and terms of capital, the ability of counterparties to transactions with us to meet their obligations, our timely execution of hedge transactions, credit conditions of global capital markets, changes in economic conditions, the amount and timing of future development costs, the availability and demand for alternative energy sources, regulatory changes, including those related to carbon dioxide and greenhouse gas emissions, and other factors, many of which are beyond our control. We refer you to the discussion of risk factors in Part I, Item 1A - "Risk Factors" of our Annual Report on Form 10-K and in comparable "Risk Factor" sections of our Quarterly Reports on Form 10-Q filed after such form 10-K. All of the forward-looking statements made in this press release are qualified by these cautionary statements. The actual results or developments anticipated may not be realized or, even if substantially realized, they may not have the expected consequences to or effects on our Company or our business or operations. Such statements are not guarantees of future performance and actual results or developments may differ materially from those projected in the forward-looking statements. We undertake no obligation to update or revise any forward-looking statements.
SandRidge Energy, Inc. (NYSE: SD) is an independent oil and gas company engaged in the development and acquisition of oil and gas properties. Its primary areas of operation are the Mid-Continent in Oklahoma and Kansas and the North Park Basin in Colorado. Further information can be found at www.sandridgeenergy.com.
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SOURCE SandRidge Energy, Inc.
Article Date
11/4/20209/1/2020 - SandRidge Energy, Inc. Announces Closing on the Sale of Office Building For $35.4 Million
SandRidge Energy, Inc. Announces Closing on the Sale of Office Building For $35.4 Million
Source: PR Newswire
OKLAHOMA CITY, Sept. 1, 2020 /PRNewswire/ -- SandRidge Energy, Inc. (the "Company" or "SandRidge") (NYSE:SD) today announced the closing on the sale of the Company's 30-story office tower and annex with parking and ancillary uses located at 123 Robert S. Kerr, Oklahoma City, Oklahoma 73102 (the "Sale"), for net proceeds of approximately $35.4 million.
As of June 30, 2020, the Company had approximately $14.9 million in cash and $59.0 million in outstanding debt under the Company's revolving credit facility. The $35.4 million in net proceeds received as part of the closing of the Sale significantly reduces the Company's net debt position. The Company believes that the closing of the Sale and resulting receipt of $35.4 million in net proceeds should alleviate any substantial doubt about its ability to continue as a going concern.
About SandRidge Energy, Inc.
SandRidge Energy, Inc. (NYSE: SD) is an independent oil and gas company engaged in the development and acquisition of oil and gas properties. Its primary areas of operation are the Mid-Continent in Oklahoma and Kansas and the North Park Basin in Colorado. Further information can be found at www.sandridgeenergy.com.
For further information, please contact:
Investor Relations
SandRidge Energy, Inc.
123 Robert S. Kerr Avenue
Oklahoma City, OK 73102-6406
(405) 429-5515
Cautionary Statement Regarding Forward-Looking Statements
This press release includes "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended." These forward-looking statements are neither historical facts nor assurances of future performance and reflect SandRidge's current beliefs and expectations regarding future events We have based these forward-looking statements on our current expectations and assumptions and analyses made by us in light of our experience and our perception of historical trends, current conditions and expected future developments, as well as other factors we believe are appropriate under the circumstances. We refer you to the discussion of risk factors in Part I, Item 1A - "Risk Factors" of our Annual Report on Form 10-K and in comparable "Risk Factor" sections of our Quarterly Reports on Form 10-Q filed after such Form 10-K. All of the forward-looking statements made in this press release are qualified by these cautionary statements. The actual results or developments anticipated may not be realized or, even if substantially realized, they may not have the expected consequences to or effects on our Company or our business or operations. Such statements are not guarantees of future performance and actual results or developments may differ materially from those projected in the forward-looking statements. We undertake no obligation to update or revise any forward-looking statements, except where we are expressly required to do so by law.
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SOURCE SandRidge Energy, Inc.
Article Date
9/1/2020SandRidge Energy, Inc. Reports Financial and Operational Results for the three and six-month period ending June 30, 2020
Source: PR Newswire
OKLAHOMA CITY, Aug. 5, 2020 /PRNewswire/ -- SandRidge Energy, Inc. (the "Company" or "SandRidge") (NYSE:SD) today announced financial and operational results for the quarter ended June 30, 2020.
Results and highlights during the quarter:
Financial Results
For the quarter, the Company reported a net loss of $215.8 million, or $6.06 per share, and net cash provided by operating activities of $13.5 million. After adjusting for certain items, the Company's adjusted net loss amounted to $7.4 million, or $0.21 per share, operating cash flow totaled $6.1 million and adjusted EBITDA was $8.8 million for the quarter. The Company defines and reconciles adjusted net income, adjusted EBITDA and other non-GAAP financial measures to the most directly comparable GAAP measure in supporting tables at the conclusion of this press release.
Operational Results and Activity
Production totaled 2,151 MBoe (24% oil, 32% NGLs and 44% natural gas) for the quarter.
Mid-Continent Assets in Oklahoma and Kansas
Production in the Mississippian totaled 1,786 MBoe (19.6 MBoepd, 14% oil) and 143 MBoe (1.6 MBoepd, 32% oil) in the Northwest STACK during the quarter.
North Park Basin Assets in Colorado
Net production for North Park Basin totaled 222 MBoe (2.4 MBoepd, 100% oil) during the quarter.
Management and Board Update
The Company appointed Carl F. Giesler, Jr. to the position of President and CEO in April 2020 and to the Board of Directors (the "Board") as of July 29, 2020. Further, the Company appointed Salah I. Gamoudi to the position of Chief Financial Officer and Chief Accounting Officer in July 2020. It also announced in April 2020 the separation of employment of Michael A. Johnson from his position as Senior Vice President and Chief Financial Officer and John P. Suter from his position as Executive Vice President and Chief Operating Officer, effective July 2020.
Building Sale
On May 15, 2020, the Company signed an agreement to sell its corporate headquarters in Oklahoma City for $35.5 million. The sale is expected to close in the third quarter of 2020.
2020 Capital Expenditures and Operational Guidance
The Company reaffirms its 2020 capital expenditures and operational guidance previously published on May 18, 2020.
Liquidity and Capital Structure
The Company completed its semi-annual borrowing base redetermination at $75.0 million under its revolving credit facility in April 2020. As of June 30, 2020, the Company's total liquidity was $25.2 million, based on $13.5 million of cash and $11.7 million available under its credit facility. The Company currently has $59.0 million drawn on the facility and $4.3 million in outstanding letters of credit.
Given the anticipated third quarter proceeds from the May 2020 agreement to sell our corporate headquarters for $35.5 million as well as several initiatives expected to optimize free cash flow, including personnel and non-personnel cost reductions and entering into commodity derivative contracts for natural gas, and while we cannot give absolute assurance that our plans will succeed, we have concluded that management's plans are probable of being achieved to alleviate substantial doubt about our ability to continue as a going concern.
Conference Call Information
The Company will host a conference call to discuss these results on Thursday, August 6, 2020 at 9:00 am CT. The conference call can be accessed by registering online at http://www.directeventreg.com/registration/event/8584959 at which time registrants will receive dial-in information as well as a passcode and registrant ID. At the time of the call, participants will dial in using the numbers in the confirmation email and enter their passcode and ID, upon which they will enter the conference call.
A live audio webcast of the conference call will also be available via SandRidge's website, www.sandridgeenergy.com, under Investor Relations/Presentation & Events. The webcast will be archived for replay on the Company's website for 30 days.
Operational and Financial Statistics | |||||||||||||||
Information regarding the Company's production, pricing, costs and earnings is presented below: | |||||||||||||||
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||
Production - Total | |||||||||||||||
Oil (MBbl) | 520 | 984 | 1,202 | 1,833 | |||||||||||
NGL (MBbl) | 681 | 830 | 1,451 | 1,706 | |||||||||||
Natural Gas (MMcf) | 5,697 | 8,476 | 12,391 | 17,096 | |||||||||||
Oil equivalent (MBoe) | 2,151 | 3,227 | 4,718 | 6,388 | |||||||||||
Daily production (MBoed) | 23.6 | 35.5 | 25.9 | 35.3 | |||||||||||
Average price per unit | |||||||||||||||
Realized oil price per barrel - as reported | $ | 22.22 | $ | 56.52 | $ | 33.45 | $ | 53.89 | |||||||
Realized impact of derivatives per barrel | 11.25 | — | 8.27 | — | |||||||||||
Net realized price per barrel | $ | 33.47 | $ | 56.52 | $ | 41.72 | $ | 53.89 | |||||||
Realized NGL price per barrel - as reported | $ | 2.34 | $ | 11.34 | $ | 5.19 | $ | 13.20 | |||||||
Realized impact of derivatives per barrel | — | — | — | — | |||||||||||
Net realized price per barrel | $ | 2.34 | $ | 11.34 | $ | 5.19 | $ | 13.20 | |||||||
Realized natural gas price per Mcf - as reported | $ | 0.58 | $ | 1.20 | $ | 0.71 | $ | 1.58 | |||||||
Realized impact of derivatives per Mcf | 0.11 | — | 0.06 | 0.29 | |||||||||||
Net realized price per Mcf | $ | 0.69 | $ | 1.20 | $ | 0.77 | $ | 1.87 | |||||||
Realized price per Boe - as reported | $ | 7.65 | $ | 23.30 | $ | 11.99 | $ | 23.21 | |||||||
Net realized price per Boe - including impact of derivatives | $ | 10.67 | $ | 23.30 | $ | 14.24 | $ | 24.00 | |||||||
Average cost per Boe | |||||||||||||||
Lease operating | $ | 4.04 | $ | 7.77 | $ | 5.16 | $ | 7.49 | |||||||
Production, ad valorem, and other taxes | $ | 0.86 | $ | 1.82 | $ | 1.07 | $ | 1.72 | |||||||
Depletion (1) | $ | 6.21 | $ | 12.22 | $ | 8.10 | $ | 11.88 | |||||||
Loss per share | |||||||||||||||
Loss per share applicable to common stockholders | |||||||||||||||
Basic | $ | (6.06) | $ | (0.38) | $ | (6.42) | $ | (0.53) | |||||||
Diluted | $ | (6.06) | $ | (0.38) | $ | (6.42) | $ | (0.53) | |||||||
Adjusted net loss per share available to common stockholders | |||||||||||||||
Basic | $ | (0.21) | $ | (0.25) | $ | (0.42) | $ | (0.25) | |||||||
Diluted | $ | (0.21) | $ | (0.25) | $ | (0.42) | $ | (0.25) | |||||||
Weighted average number of shares outstanding (in thousands) | |||||||||||||||
Basic | 35,611 | 35,356 | 35,581 | 35,339 | |||||||||||
Diluted | 35,611 | 35,356 | 35,581 | 35,339 | |||||||||||
(1) Includes accretion of asset retirement obligation. | |||||||||||||||
Capital Expenditures | |||||||
The table below presents actual results of the Company's capital expenditures for the three and six months ended June 30, 2020. | |||||||
Three Months Ended | Six Months Ended | ||||||
June 30, 2020 | June 30, 2020 | ||||||
(In thousands) | (In thousands) | ||||||
Drilling, completion and capital workovers | 1,005 | 2,430 | |||||
Other capital expenditures | (6) | 497 | |||||
Total Capital Expenditures | $ | 999 | $ | 2,927 | |||
(excluding acquisitions and plugging and abandonment) | |||||||
Derivative Contracts | ||||||
The table below sets forth the Company's open derivative contracts as of June 30, 2020 in addition to | ||||||
Notional (MMBtu) | Weighted Average Fixed Price per Unit | |||||
Natural Gas Price Swaps: July 2020 - October 2020 | 4,920,000 | $ | 2.14 | |||
Natural Gas Price Swaps: November 2020 - December 2020 | 2,135,000 | $ | 2.54 | |||
Natural Gas Price Swaps: January 2021 - December 2021 | 10,950,000 | $ | 2.61 | |||
Capitalization | |||||||
The Company's capital structure as of June 30, 2020 and December 31, 2019 is presented below: | |||||||
June 30, 2020 | December 31, 2019 | ||||||
(In thousands) | |||||||
Cash, cash equivalents and restricted cash | $ | 14,927 | $ | 5,968 | |||
Credit facility | $ | 59,000 | $ | 57,500 | |||
Total debt | 59,000 | 57,500 | |||||
Stockholders' equity | |||||||
Common stock | 36 | 36 | |||||
Warrants | 88,520 | 88,520 | |||||
Additional paid-in capital | 1,060,019 | 1,059,253 | |||||
Accumulated deficit | (973,806) | (745,357) | |||||
Total SandRidge Energy, Inc. stockholders' equity | 174,769 | 402,452 | |||||
Total capitalization | $ | 233,769 | $ | 459,952 | |||
SandRidge Energy, Inc. and Subsidiaries | |||||||||||||||
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||
Revenues | |||||||||||||||
Oil, natural gas and NGL | $ | 16,448 | $ | 75,196 | $ | 56,587 | $ | 148,244 | |||||||
Other | 207 | 192 | 397 | 380 | |||||||||||
Total revenues | 16,655 | 75,388 | 56,984 | 148,624 | |||||||||||
Expenses | |||||||||||||||
Lease operating expenses | 8,698 | 25,076 | 24,340 | 47,855 | |||||||||||
Production, ad valorem, and other taxes | 1,854 | 5,877 | 5,053 | 10,957 | |||||||||||
Depreciation and depletion—oil and natural gas | 13,348 | 39,419 | 38,203 | 75,884 | |||||||||||
Depreciation and amortization—other | 1,739 | 2,986 | 4,373 | 5,929 | |||||||||||
Impairment | 201,784 | — | 209,754 | — | |||||||||||
General and administrative | 4,314 | 10,084 | 9,797 | 20,023 | |||||||||||
Restructuring expenses | 444 | — | 444 | — | |||||||||||
Employee termination benefits | 1,993 | 4,465 | 5,247 | 4,465 | |||||||||||
(Gain) loss on derivative contracts | (2,241) | — | (12,467) | 209 | |||||||||||
Other operating expense | 108 | 37 | 385 | 119 | |||||||||||
Total expenses | 232,041 | 87,944 | 285,129 | 165,441 | |||||||||||
(Loss) income from operations | (215,386) | (12,556) | (228,145) | (16,817) | |||||||||||
Other income (expense) | |||||||||||||||
Interest expense, net | (447) | (702) | (1,084) | (1,287) | |||||||||||
Other income (expense), net | 58 | (26) | 134 | (457) | |||||||||||
Total other expense | (389) | (728) | (950) | (1,744) | |||||||||||
Loss before income taxes | (215,775) | (13,284) | (229,095) | (18,561) | |||||||||||
Income tax expense (benefit) | 4 | — | (646) | — | |||||||||||
Net loss | $ | (215,779) | $ | (13,284) | $ | (228,449) | $ | (18,561) | |||||||
Loss per share | |||||||||||||||
Basic | $ | (6.06) | $ | (0.38) | $ | (6.42) | $ | (0.53) | |||||||
Diluted | $ | (6.06) | $ | (0.38) | $ | (6.42) | $ | (0.53) | |||||||
Weighted average number of common shares outstanding | |||||||||||||||
Basic | 35,611 | 35,356 | 35,581 | 35,339 | |||||||||||
Diluted | 35,611 | 35,356 | 35,581 | 35,339 | |||||||||||
SandRidge Energy, Inc. and Subsidiaries | |||||||
June 30, 2020 | December 31, 2019 | ||||||
ASSETS | |||||||
Current assets | |||||||
Cash and cash equivalents | $ | 13,473 | $ | 4,275 | |||
Restricted cash - other | 1,454 | 1,693 | |||||
Accounts receivable, net | 16,608 | 28,644 | |||||
Derivative contracts | 2,004 | 114 | |||||
Prepaid expenses | 2,218 | 3,342 | |||||
Assets held for sale | 35,447 | — | |||||
Other current assets | 80 | 538 | |||||
Total current assets | 71,284 | 38,606 | |||||
Oil and natural gas properties, using full cost method of accounting | |||||||
Proved | 1,489,793 | 1,484,359 | |||||
Unproved | 22,753 | 24,603 | |||||
Less: accumulated depreciation, depletion and impairment | (1,335,830) | (1,129,622) | |||||
176,716 | 379,340 | ||||||
Other property, plant and equipment, net | 106,665 | 188,603 | |||||
Other assets | 766 | 1,140 | |||||
Total assets | $ | 355,431 | $ | 607,689 | |||
LIABILITIES AND STOCKHOLDERS' EQUITY | |||||||
Current liabilities | |||||||
Accounts payable and accrued expenses | $ | 41,996 | $ | 64,937 | |||
Current maturities of long-term debt | 59,000 | — | |||||
Asset retirement obligation | 22,055 | 22,119 | |||||
Liabilities held for sale | 403 | — | |||||
Other current liabilities | 1,120 | 1,367 | |||||
Total current liabilities | 124,574 | 88,423 | |||||
Long-term debt | — | 57,500 | |||||
Asset retirement obligation | 52,879 | 52,897 | |||||
Other long-term obligations | 3,209 | 6,417 | |||||
Total liabilities | 180,662 | 205,237 | |||||
Stockholders' Equity | |||||||
Common stock, $0.001 par value; 250,000 shares authorized; 35,865 issued and outstanding at | 36 | 36 | |||||
Warrants | 88,520 | 88,520 | |||||
Additional paid-in capital | 1,060,019 | 1,059,253 | |||||
Accumulated deficit | (973,806) | (745,357) | |||||
Total stockholders' equity | 174,769 | 402,452 | |||||
Total liabilities and stockholders' equity | $ | 355,431 | $ | 607,689 | |||
SandRidge Energy, Inc. and Subsidiaries | ||||||||
Six Months Ended June 30, | ||||||||
2020 | 2019 | |||||||
CASH FLOWS FROM OPERATING ACTIVITIES | ||||||||
Net loss | $ | (228,449) | $ | (18,561) | ||||
Adjustments to reconcile net loss to net cash provided by operating activities | ||||||||
Provision for doubtful accounts | 283 | (91) | ||||||
Depreciation, depletion, and amortization | 42,576 | 81,813 | ||||||
Impairment | 209,754 | — | ||||||
Debt issuance costs amortization | 318 | 238 | ||||||
Write off of debt issuance costs | — | 142 | ||||||
(Gain) loss on derivative contracts | (12,467) | 209 | ||||||
Cash received on settlement of derivative contracts | 10,577 | 5,078 | ||||||
Loss (gain) on sale of assets | 78 | — | ||||||
Stock-based compensation | 749 | 3,104 | ||||||
Other | 68 | (57) | ||||||
Changes in operating assets and liabilities | (10,025) | (9,402) | ||||||
Net cash provided by operating activities | 13,462 | 62,473 | ||||||
CASH FLOWS FROM INVESTING ACTIVITIES | ||||||||
Capital expenditures for property, plant and equipment | (6,814) | (123,676) | ||||||
Acquisition of assets | — | 236 | ||||||
Proceeds from sale of assets | 1,506 | 852 | ||||||
Net cash used in investing activities | (5,308) | (122,588) | ||||||
CASH FLOWS FROM FINANCING ACTIVITIES | ||||||||
Proceeds from borrowings | 39,000 | 112,596 | ||||||
Repayments of borrowings | (37,500) | (60,596) | ||||||
Reduction of financing lease liability | (694) | (635) | ||||||
Debt issuance costs | — | (901) | ||||||
Cash paid for tax withholdings on vested stock awards | (1) | (205) | ||||||
Net cash provided by financing activities | 805 | 50,259 | ||||||
NET INCREASE (DECREASE) IN CASH, CASH EQUIVALENTS and RESTRICTED CASH | 8,959 | (9,856) | ||||||
CASH, CASH EQUIVALENTS and RESTRICTED CASH, beginning of year | 5,968 | 19,645 | ||||||
CASH, CASH EQUIVALENTS and RESTRICTED CASH, end of period | $ | 14,927 | $ | 9,789 | ||||
Supplemental Disclosure of Cash Flow Information | ||||||||
Cash paid for interest, net of amounts capitalized | $ | (812) | $ | (949) | ||||
Cash received for income taxes | $ | 616 | $ | — | ||||
Supplemental Disclosure of Noncash Investing and Financing Activities | ||||||||
Purchase of PP&E in accounts payable | $ | 704 | $ | 17,224 | ||||
Right-of-use assets obtained in exchange for financing lease obligations | $ | 67 | $ | 2,655 | ||||
Non-GAAP Financial Measures
This press release includes non-GAAP financial measures. These non-GAAP measures are not alternatives to GAAP measures, and you should not consider these non-GAAP measures in isolation or as a substitute for analysis of our results as reported under GAAP. Below is additional disclosure regarding each of the non-GAAP measures used in this press release, including reconciliations to their most directly comparable GAAP measure.
Reconciliation of Cash Provided by Operating Activities to Operating Cash Flow
The Company defines operating cash flow as net cash provided by operating activities before changes in operating assets and liabilities as shown in the following table. Operating cash flow is a supplemental financial measure used by the Company's management and by securities analysts, investors, lenders, rating agencies and others who follow the industry as an indicator of the Company's ability to internally fund exploration and development activities and to service or incur additional debt. The Company also uses this measure because operating cash flow relates to the timing of cash receipts and disbursements that the Company may not control and may not relate to the period in which the operating activities occurred. Further, operating cash flow allows the Company to compare its operating performance and return on capital with those of other companies without regard to financing methods and capital structure. This measure should not be considered in isolation or as a substitute for net cash provided by operating activities prepared in accordance with GAAP.
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||
(In thousands) | |||||||||||||||
Net cash (used in) provided by operating activities | $ | (4,641) | $ | 30,903 | $ | 13,462 | $ | 62,473 | |||||||
Changes in operating assets and liabilities | 10,711 | 404 | 10,025 | 9,402 | |||||||||||
Operating cash flow | $ | 6,070 | $ | 31,307 | $ | 23,487 | $ | 71,875 | |||||||
Reconciliation of Net Loss to EBITDA and Adjusted EBITDA
The Company defines EBITDA as net loss before income tax (benefit) expense, interest expense, depreciation and amortization - other and depreciation and depletion - oil and natural gas. Adjusted EBITDA, as presented herein, is EBITDA excluding items that the Company believes affect the comparability of operating results such as items whose timing and/or amount cannot be reasonably estimated or are non-recurring, as shown in the following tables.
Adjusted EBITDA is presented because management believes it provides useful additional information used by the Company's management and by securities analysts, investors, lenders, ratings agencies and others who follow the industry for analysis of the Company's financial and operating performance on a recurring basis and the Company's ability to internally fund exploration and development and to service or incur additional debt. In addition, management believes that adjusted EBITDA is widely used by professional research analysts and others in the valuation, comparison and investment recommendations of companies in the oil and gas industry. The Company's adjusted EBITDA may not be comparable to similarly titled measures used by other companies.
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||
(In thousands) | |||||||||||||||
Net loss | $ | (215,779) | $ | (13,284) | $ | (228,449) | $ | (18,561) | |||||||
Adjusted for | |||||||||||||||
Income tax (benefit) expense | 4 | — | (646) | — | |||||||||||
Interest expense | 449 | 737 | 1,093 | 1,349 | |||||||||||
Depreciation and amortization - other | 1,739 | 2,986 | 4,373 | 5,929 | |||||||||||
Depreciation and depletion - oil and natural gas | 13,348 | 39,419 | 38,203 | 75,884 | |||||||||||
EBITDA | (200,239) | 29,858 | (185,426) | 64,601 | |||||||||||
Asset impairment | 201,784 | — | 209,754 | — | |||||||||||
Stock-based compensation (1) | 581 | 1,149 | 710 | 2,145 | |||||||||||
(Gain) loss on derivative contracts | (2,241) | — | (12,467) | 209 | |||||||||||
Cash received upon settlement of derivative contracts | 6,490 | — | 10,577 | 5,078 | |||||||||||
Employee termination benefits | 1,993 | 4,465 | 5,247 | 4,465 | |||||||||||
Restructuring expenses | 444 | — | 444 | — | |||||||||||
Other | (44) | (26) | 62 | (117) | |||||||||||
Adjusted EBITDA | $ | 8,768 | $ | 35,446 | $ | 28,901 | $ | 76,381 | |||||||
1. | Excludes non-cash stock-based compensation included in employee termination benefits. |
Reconciliation of Cash Provided by Operating Activities to Adjusted EBITDA | |||||||||||||||
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||
(In thousands) | |||||||||||||||
Net cash (used in) provided by operating activities | $ | (4,641) | $ | 30,903 | $ | 13,462 | $ | 62,473 | |||||||
Changes in operating assets and liabilities | 10,711 | 404 | 10,025 | 9,402 | |||||||||||
Interest expense | 449 | 737 | 1,093 | 1,349 | |||||||||||
Employee termination benefits (1) | 1,993 | 3,486 | 5,247 | 3,486 | |||||||||||
Income tax (benefit) expense | 4 | — | (646) | — | |||||||||||
Other | 252 | (84) | (280) | (329) | |||||||||||
Adjusted EBITDA | $ | 8,768 | $ | 35,446 | $ | 28,901 | $ | 76,381 | |||||||
1. Excludes associated stock-based compensation. |
Reconciliation of Net Loss Available to Common Stockholders to Adjusted Net Loss Available to Common Stockholders
The Company defines adjusted net loss as net loss excluding items that the Company believes affect the comparability of operating results and are typically excluded from published estimates by the investment community, including items whose timing and/or amount cannot be reasonably estimated or are non-recurring, as shown in the following tables.
Management uses the supplemental measure of adjusted net loss as an indicator of the Company's operational trends and performance relative to other oil and natural gas companies and believes it is more comparable to earnings estimates provided by securities analysts. Adjusted net loss is not a measure of financial performance under GAAP and should not be considered a substitute for net loss available to common stockholders.
Three Months Ended June 30, 2020 | Three Months Ended June 30, 2019 | ||||||||||||||
$ | $/Diluted Share | $ | $/Diluted Share | ||||||||||||
(In thousands, except per share amounts) | |||||||||||||||
Net loss available to common stockholders | $ | (215,779) | $ | (6.06) | $ | (13,284) | $ | (0.38) | |||||||
Asset impairment | 201,784 | 5.67 | — | — | |||||||||||
(Gain) loss on derivative contracts | (2,241) | (0.06) | — | — | |||||||||||
Cash received upon settlement of derivative contracts | 6,490 | 0.18 | — | — | |||||||||||
Employee termination benefits | 1,993 | 0.06 | 4,465 | 0.13 | |||||||||||
Restructuring expenses | 444 | 0.01 | — | — | |||||||||||
Other | (42) | — | 10 | — | |||||||||||
Adjusted net loss available to common stockholders | $ | (7,351) | $ | (0.21) | $ | (8,809) | $ | (0.25) | |||||||
Basic | Diluted | Basic | Diluted | ||||||||||||
Weighted average number of common shares outstanding | 35,611 | 35,611 | 35,356 | 35,356 | |||||||||||
Total adjusted net loss per share | $ | (0.21) | $ | (0.21) | $ | (0.25) | $ | (0.25) | |||||||
Six Months Ended June 30, 2020 | Six Months Ended June 30, 2019 | ||||||||||||||
$ | $/Diluted Share | $ | $/Diluted Share | ||||||||||||
(In thousands, except per share amounts) | |||||||||||||||
Net loss available to common stockholders | $ | (228,449) | $ | (6.42) | $ | (18,561) | $ | (0.53) | |||||||
Asset impairment | 209,754 | 5.90 | — | — | |||||||||||
(Gain) loss on derivative contracts | (12,467) | (0.35) | 209 | 0.01 | |||||||||||
Cash received upon settlement of derivative contracts | 10,577 | 0.30 | 5,078 | 0.14 | |||||||||||
Employee termination benefits | 5,247 | 0.15 | 4,465 | 0.13 | |||||||||||
Restructuring expenses | 444 | 0.01 | — | — | |||||||||||
Other | 71 | — | (54) | — | |||||||||||
Adjusted net loss available to common stockholders | $ | (14,823) | $ | (0.42) | $ | (8,863) | $ | (0.25) | |||||||
Basic | Diluted | Basic | Diluted | ||||||||||||
Weighted average number of common shares outstanding | 35,581 | 35,581 | 35,339 | 35,339 | |||||||||||
Total adjusted net loss per share | $ | (0.42) | $ | (0.42) | $ | (0.25) | $ | (0.25) | |||||||
Reconciliation of G&A to Adjusted G&A
The Company reports and provides guidance on Adjusted G&A per Boe because it believes this measure is commonly used by management, analysts and investors as an indicator of cost management and operating efficiency on a comparable basis from period to period and to compare and make investment recommendations of companies in the oil and gas industry. This non-GAAP measure allows for the analysis of general and administrative spend without regard to stock-based compensation programs and other non-recurring cash items, if any, which can vary significantly between companies. Adjusted G&A per Boe is not a measure of financial performance under GAAP and should not be considered a substitute for general and administrative expense per Boe. Therefore, the Company's Adjusted G&A per Boe may not be comparable to other companies' similarly titled measures.
The Company defines adjusted G&A as general and administrative expense adjusted for certain non-cash stock-based compensation and other non-recurring items, if any, as shown in the following tables:
Three Months Ended June 30, 2020 | Three Months Ended June 30, 2019 | ||||||||||||||
$ | $/Boe | $ | $/Boe | ||||||||||||
(In thousands, except per Boe amounts) | |||||||||||||||
General and administrative | $ | 4,314 | $ | 2.01 | $ | 10,084 | $ | 3.13 | |||||||
Stock-based compensation (1) | (581) | (0.27) | (1,149) | (0.36) | |||||||||||
Adjusted G&A | $ | 3,733 | $ | 1.74 | $ | 8,935 | $ | 2.77 | |||||||
Six Months Ended June 30, 2020 | Six Months Ended June 30, 2019 | ||||||||||||||
$ | $/Boe | $ | $/Boe | ||||||||||||
(In thousands, except per Boe amounts) | |||||||||||||||
General and administrative | $ | 9,797 | $ | 2.08 | $ | 20,023 | $ | 3.13 | |||||||
Stock-based compensation (1) | (709) | (0.15) | (2,145) | (0.33) | |||||||||||
Adjusted G&A | $ | 9,088 | $ | 1.93 | $ | 17,878 | $ | 2.80 | |||||||
1. Excludes non-cash stock-based compensation included in employee termination benefits. |
For further information, please contact:
Investor Relations
SandRidge Energy, Inc.
123 Robert S. Kerr Avenue
Oklahoma City, OK 73102-6406
investors@sandridgeenergy.com
Cautionary Note to Investors - This press release includes "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, including, but not limited to, the information appearing under the heading "Revised 2020 Operational and Capital Expenditure Guidance." These forward-looking statements are neither historical facts nor assurances of future performance and reflect SandRidge's current beliefs and expectations regarding future events and operating performance. The forward-looking statements include projections and estimates of the Company's corporate strategies, future operations, development plans and appraisal programs, drilling inventory and locations, estimated oil, natural gas and natural gas liquids production, price realizations and differentials, hedging program, projected operating, general and administrative and other costs, projected capital expenditures, tax rates, efficiency and cost reduction initiative outcomes, liquidity and capital structure. We have based these forward-looking statements on our current expectations and assumptions and analyses made by us in light of our experience and our perception of historical trends, current conditions and expected future developments, as well as other factors we believe are appropriate under the circumstances. However, whether actual results and developments will conform with our expectations and predictions is subject to a number of risks and uncertainties, including the volatility of oil and natural gas prices, our success in discovering, estimating, developing and replacing oil and natural gas reserves, actual decline curves and the actual effect of adding compression to natural gas wells, the availability and terms of capital, the ability of counterparties to transactions with us to meet their obligations, our timely execution of hedge transactions, credit conditions of global capital markets, changes in economic conditions, the amount and timing of future development costs, the availability and demand for alternative energy sources, regulatory changes, including those related to carbon dioxide and greenhouse gas emissions, and other factors, many of which are beyond our control. We refer you to the discussion of risk factors in Part I, Item 1A - "Risk Factors" of our Annual Report on Form 10-K and in comparable "Risk Factor" sections of our Quarterly Reports on Form 10-Q filed after such form 10-K. All of the forward-looking statements made in this press release are qualified by these cautionary statements. The actual results or developments anticipated may not be realized or, even if substantially realized, they may not have the expected consequences to or effects on our Company or our business or operations. Such statements are not guarantees of future performance and actual results or developments may differ materially from those projected in the forward-looking statements. We undertake no obligation to update or revise any forward-looking statements.
SandRidge Energy, Inc. (NYSE: SD) is an independent oil and gas company engaged in the development and acquisition of oil and gas properties. Its primary areas of operation are the Mid-Continent in Oklahoma and Kansas and the North Park Basin in Colorado. Further information can be found at www.sandridgeenergy.com.
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SOURCE SandRidge Energy, Inc.
Article Date
8/5/2020SandRidge Energy, Inc. Adopts Tax Benefits Preservation Plan to Protect its NOL Assets and Shareholder Value
Source: PR Newswire
OKLAHOMA CITY, 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.
Additional information about the Section 382 Rights Plan is available on a Form 8-K filed by SandRidge with the U.S. Securities and Exchange Commission.
Winston & Strawn LLP is acting as legal counsel to the Company.
About SandRidge Energy, Inc.
SandRidge Energy, Inc. (NYSE: SD) is an independent oil and gas company engaged in the development and acquisition of oil and gas properties. Its primary areas of operation are the Mid-Continent in Oklahoma and Kansas and the North Park Basin in Colorado. Further information can be found at www.sandridgeenergy.com.
For further information, please contact:
Investor Relations
SandRidge Energy, Inc.
123 Robert S. Kerr Avenue
Oklahoma City, OK 73102-6406
(405) 429-5515
Cautionary Statement Regarding Forward-Looking Statements
This press release includes "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended." These forward-looking statements are neither historical facts nor assurances of future performance and reflect SandRidge's current beliefs and expectations regarding future events and SandRidge's ability to utilize and realize the value of its NOLs and how they could be substantially limited if SandRidge experienced an "ownership change" as defined in Section 382 of the Code, whether the Rights Plan will reduce the likelihood of such an unintended ownership change from occurring, the potential impact of the utilization of the NOLs on SandRidge's free cash generation and the potential impact of distribution of rights on SandRidge's financial conditions and results of operations. We have based these forward-looking statements on our current expectations and assumptions and analyses made by us in light of our experience and our perception of historical trends, current conditions and expected future developments, as well as other factors we believe are appropriate under the circumstances. However, whether actual results and developments will conform with our expectations and predictions is subject to a number of risks, many of which are beyond our control and could cause actual results to materially differ from the results discussed in the forward-looking statements, including, without limitation, federal and state tax legislation and unreported buying and selling activity by SandRidge shareholders. We refer you to the discussion of risk factors in Part I, Item 1A - "Risk Factors" of our Annual Report on Form 10-K and in comparable "Risk Factor" sections of our Quarterly Reports on Form 10-Q filed after such Form 10-K. All of the forward-looking statements made in this press release are qualified by these cautionary statements. The actual results or developments anticipated may not be realized or, even if substantially realized, they may not have the expected consequences to or effects on our Company or our business or operations. Such statements are not guarantees of future performance and actual results or developments may differ materially from those projected in the forward-looking statements. We undertake no obligation to update or revise any forward-looking statements, except where we are expressly required to do so by law.
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SOURCE SandRidge Energy, Inc.
Article Date
7/1/2020SandRidge Energy Announces a Leadership Transition and Further Initiatives to Improve Shareholder Value
Source: PR Newswire
OKLAHOMA CITY, April 7, 2020 /PRNewswire/ -- SandRidge Energy, Inc. ("SandRidge" or the "Company") (NYSE: SD) today announced new leadership as well as further initiatives to realize shareholder value.
The Company named Carl F. Giesler, Jr. as its President and Chief Executive Officer. Most recently, Mr. Giesler led the cost and operational turnaround and subsequent cash sale in January for Jones Energy, Inc. ("Jones Energy"). At Jones Energy, Mr. Giesler led a team that significantly right-sized that company's administrative and operating costs as well meaningfully improved its capital expenditure efficiency and effectiveness.
Commensurate with the new leadership appointment, the Company plans to implement several further significant initiatives to maximize free cash flow, reduce the Company's low debt level, preserve its strong balance sheet and liquidity position and, ultimately, to realize greater shareholder value.
Given the coronavirus pandemic and the associated market volatility and uncertain oil and gas market outlook, SandRidge feels it is appropriate to withdraw its 2020 guidance.
Jonathan Frates, Chairman of the Board, stated, "Given the ongoing headwinds in the oil and gas environment, we're committed to protecting our strong balance sheet and liquidity, and to maximizing the value of the enterprise for our shareholders. Key to both of those objectives is the further right-sizing of our cost structure, rationalizing our capital program and improving our capital efficiency. We believe that Carl, with his proven cost and operational turnaround experience at public oil and gas companies, is the right person to lead these initiatives."
Mr. Frates added, "We appreciate John Suter's contributions to the Company during these challenging times and are appreciative that he has agreed to stay on as Chief Operating Officer and assist us in these efforts."
Prior to joining the Company, Mr. Giesler served as the Chief Executive Officer and a Director of Jones Energy Inc. from the summer of 2018 through its cash sale earlier this year. Prior to that, he served in the same roles at Glacier Oil and Gas and its predecessor company. Mr. Giesler has also served in various oil and gas principal investing and other roles with Harbinger Group, Inc., Harbinger Capital Partners, AIG FP and Morgan Stanley. Mr. Giesler received his BA from the University of Virginia and his JD from Harvard Law School. He is also a CFA Charterholder.
About SandRidge Energy, Inc.
SandRidge Energy, Inc. (NYSE: SD) is an oil and gas exploration and production company headquartered in Oklahoma City, Oklahoma with its principal focus on generating value through the development of its high potential oil and gas assets in Oklahoma and Colorado. The majority of the Company's production is generated from the Mississippian Lime formation in Oklahoma and Kansas.
For further information, please contact:
Johna Robinson
Investor Relations
SandRidge Energy, Inc.
123 Robert S. Kerr Avenue
Oklahoma City, OK 73102-6406
(405) 429-5515
Cautionary Statement Regarding Forward-Looking Statements
This communication may contain certain "forward-looking statements" under applicable securities laws, including the Private Securities Litigation Reform Act of 1995. These statements are typically identified by words or phrases such as "may," "will," "could," "should," "predict," "potential," "pursue," "outlook," "continue," "anticipate," "estimate," "expect," "project," "intend," "plan," "believe," "target," "forecast," and other words and terms of similar meaning. For example, statements regarding expectations about the hiring of a permanent President and Chief Executive Officer, the future results and benefits of announced initiatives and future financial results and operational plans are forward-looking statements. These forward-looking statements are subject to numerous risks and uncertainties, many of which are beyond the Company's control, which could cause actual benefits, results, effects and timing to differ materially from the results predicted or implied by the statements. Additional information concerning the risk factors faced by the Company is contained in SandRidge's public filings with the Securities and Exchange Commission (the "SEC"), which are available at the SEC's website, http://www.sec.gov. Each forward-looking statement speaks only as of the date of the particular statement, and SandRidge undertakes no obligation to publicly update any of these forward-looking statements to reflect events or circumstances that may arise after the date hereof.
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SOURCE SandRidge Energy, Inc.
Article Date
4/7/20202/26/2020 - SandRidge Energy, Inc. Reports Financial and Operational Results for Fourth Quarter and Full Year 2019
SandRidge Energy, Inc. Reports Financial and Operational Results for Fourth Quarter and Full Year 2019
Source: PR Newswire
OKLAHOMA CITY, Feb. 26, 2020 /PRNewswire/ -- SandRidge Energy, Inc. (the "Company" or "SandRidge") (NYSE:SD) today announced financial and operational results for the quarter and fiscal year ended December 31, 2019.
Results and highlights during the fourth quarter and full year 2019:
John Suter, Interim President and CEO commented, "This was a challenging year for SandRidge with financial results impacted by low and volatile commodity prices, particularly with regard to Mid-Continent natural gas and NGL realizations. To adapt, we adjusted capital spending for the fourth quarter by deferring projects to minimize outspend and generate moderate free cash flow. Even with the deferral of fourth quarter projects, we delivered within or exceeded all operational guidance metrics. Entering 2020, we remain focused on our strategy to maximize value for our shareholders by relentlessly driving cost reduction and pursuing only high return opportunities. Our reduced capital spending plan is expected to generate positive free cash flow assuming $53 per Bbl and $2.15 per MMBtu. We continue to remain flexible with contingent development plans should commodity prices improve."
Financial Results
Fourth Quarter
For the fourth quarter, the Company reported a net loss of $249 million, or $7.01 per share, and net cash provided by operating activities of $26 million. After adjusting for certain items, the Company's adjusted net loss amounted to $4 million, or $0.11 per share, operating cash flow totaled $31 million and adjusted EBITDA was $32 million for the quarter. The Company defines and reconciles adjusted net income, adjusted EBITDA and other non-GAAP financial measures to the most directly comparable GAAP measure in supporting tables at the conclusion of this press release beginning on page 11.
Full Year
For the full year of 2019, the Company reported a net loss of $449 million, or $12.68 per share, and net cash provided by operating activities of $121 million. After adjusting for certain items, the Company's adjusted net loss amounted to $30 million, or $0.85 per share, operating cash flow totaled $129 million and adjusted EBITDA was $135 million for the year.
Operational Results and Activity
Production totaled 2.7 MMBoe (31% oil, 21% NGLs and 48% natural gas) for the fourth quarter and 12.0 MMBoe (30% oil, 24% NGLs and 46% natural gas) for the full year of 2019. The Company did not bring any new wells to sales during the fourth quarter.
North Park Basin Asset in Jackson County, Colorado
Net production for North Park Basin totaled 445 MBoe (4.8 MBoepd) during the fourth quarter and 1.5 MMBoe (4.2 MBoepd) for the year. During 2019, the Company drilled ten wells and brought sixteen wells to sales which progressed both well spacing and delineation of the play. Nine of these wells were involved in two different spacing pattern tests, one with a twenty-three wells-per-section pattern and the other with a fifteen wells-per-section pattern. The results help optimize full field development planning in the future.
Mid-Continent Assets in Oklahoma and Kansas
Production in the Mississippian totaled 2.1 MMBoe (22.5 MBoepd, 16% oil) during the fourth quarter and 9.4 MMBoe (25.8 MBoepd, 16% oil) for the year. Production in Northwest STACK totaled 201 MBoe (2.2 MBoepd, 38% oil) during the quarter and 1.0 MMBoe (2.8 MBoepd, 44% oil) for the year. During 2019, the Company drilled eleven wells and brought fourteen wells to sales in the Northwest STACK.
Year End 2019 Estimated Proved Reserves
Proved reserves decreased from 160 MMBoe at December 31, 2018 to 90 MMBoe at December 31, 2019, primarily due to downward revisions associated with the decrease in year-over-year SEC commodity pricing. Approximately 70% or 49 MMBoe of the total reserves decrease is due to SEC pricing and increased commodity price differentials. The remaining reserve decrease primarily resulted from a combination of downgrading PUDs due to a revised drilling schedule, production, modest performance revisions and well shut-ins during 2019. Proved developed reserves made up 69% of the Company's 2019 estimated proved reserves and 31% were classified as proved undeveloped. The Company's Standardized Measure and PV-10 at December 31, 2019 was $364 million utilizing SEC pricing of $55.69 per Bbl for oil and $2.58 per MMBtu for natural gas, before adjustments.
Oil MBbls | NGLs MBbls | Gas MMcf | Equivalent | Standardized | |||||||||||
Proved Reserves, December 31, 2018 | 64,019 | 28,175 | 407,891 | 160,176 | $ | 1,046 | |||||||||
Revisions of previous estimates | (25,530) | (9,277) | (142,239) | (58,514) | |||||||||||
Extensions and discoveries | 635 | 94 | 2,127 | 1,084 | |||||||||||
Sales of reserves in place | (297) | (223) | (2,308) | (905) | |||||||||||
Production | (3,519) | (2,910) | (33,164) | (11,956) | |||||||||||
Proved Reserves, December 31, 2019 | 35,308 | 15,859 | 232,307 | 89,885 | $ | 364 | |||||||||
1) Equivalent Boe are calculated using an energy equivalent ratio of six Mcf of natural gas to one Bbl of oil. Using an energy-equivalent ratio does not factor in price differences and energy-equivalent prices may differ significantly among produced products. |
2020 Capital Expenditures and Operational Guidance
In 2020, the Company plans to spend $25 - $30 million in total capital expenditures allocated between the North Park Basin and Mid-Continent. With this capital plan, the Company expects to be free cash flow positive assuming $53 per Bbl and $2.15 per MMBtu. Total production for 2020 is projected to be 7.7 - 8.6 MMBoe. Other operational guidance detail can be found on the "2020 Operational and Capital Expenditure Guidance" table below. With this plan, the Company intends to reduce debt and maintain a clean balance sheet.
Liquidity and Capital Structure
As of February 21, 2020, the Company's total liquidity was $176 million, based on $3 million of cash and $173 million available under its credit facility, net of outstanding letters of credit. The Company currently has $49 million drawn on the facility.
Conference Call Information
The Company will host a conference call to discuss these results on Thursday, February 27, 2020 at 10:00 am CT. The telephone number to access the conference call from within the U.S. is (866) 393-4306 and from outside the U.S. is (734) 385-2616. The passcode for the call is 9278407. An audio replay of the call will be available from February 27, 2020 until 11:59 pm CT on March 5, 2020. The number to access the conference call replay is (855) 859-2056 or (404) 537-3406. The passcode for the replay is 9278407.
A live audio webcast of the conference call will also be available via SandRidge's website, www.sandridgeenergy.com, under Investor Relations/Presentation & Events. The webcast will be archived for replay on the Company's website for 30 days.
2020 Operational and Capital Expenditure Guidance
Presented below is the Company's updated operational and capital expenditure guidance for 2020.
Guidance | ||
Projection as of | ||
February 26, 2020 | ||
Production | ||
Oil (MMBbls) | 1.9 - 2.2 | |
Natural Gas Liquids (MMBbls) | 1.7 - 2.0 | |
Total Liquids (MMBbls) | 3.6 - 4.2 | |
Natural Gas (Bcf) | 24.5 - 26.5 | |
Total (MMBoe) | 7.7 - 8.6 | |
Price Differentials to NYMEX | ||
Oil (per Bbl) | ($3.85) | |
Natural Gas (per MMBtu) | ($1.30) | |
Expenses | ||
LOE | $72 - $78 million | |
Adjusted G&A Expense (1) | $18 - $20 million | |
% of Revenue | ||
Severance and Ad Valorem Taxes | 7.0% - 7.5% | |
Capital Expenditures | ||
Capital Expenditures (excluding acquisitions and plugging and abandonment) | $25 - $30 million | |
1. | Adjusted G&A expense is a non-GAAP financial measure. The Company has defined this measure at the conclusion of this press release under "Non-GAAP Financial Measures" beginning on page 11. Information to reconcile this non-GAAP financial measure to the most directly comparable GAAP financial measure is not available at this time, as management is unable to forecast the excluded items for future periods. |
Operational and Financial Statistics
Information regarding the Company's production, pricing, costs and earnings is presented below:
Three Months Ended December 31, | Year Ended December 31, | ||||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||
Production - Total | |||||||||||||||
Oil (MBbl) | 851 | 840 | 3,519 | 3,477 | |||||||||||
NGL (MBbl) | 575 | 719 | 2,910 | 2,829 | |||||||||||
Natural Gas (MMcf) | 7,750 | 8,954 | 33,164 | 36,175 | |||||||||||
Oil equivalent (MBoe) | 2,718 | 3,051 | 11,956 | 12,335 | |||||||||||
Daily production (MBoed) | 29.5 | 33.2 | 32.8 | 33.8 | |||||||||||
Average price per unit | |||||||||||||||
Realized oil price per barrel - as reported | $ | 51.13 | $ | 57.20 | $ | 52.96 | $ | 61.73 | |||||||
Realized impact of derivatives per barrel | 0.67 | (4.22) | 0.34 | (10.39) | |||||||||||
Net realized price per barrel | $ | 51.80 | $ | 52.98 | $ | 53.30 | $ | 51.35 | |||||||
Realized NGL price per barrel - as reported | $ | 11.67 | $ | 20.86 | $ | 12.23 | $ | 23.72 | |||||||
Realized impact of derivatives per barrel | — | — | — | — | |||||||||||
Net realized price per barrel | $ | 11.67 | $ | 20.86 | $ | 12.23 | $ | 23.72 | |||||||
Realized natural gas price per Mcf - as reported | $ | 1.22 | $ | 2.44 | $ | 1.33 | $ | 1.85 | |||||||
Realized impact of derivatives per Mcf | — | (0.22) | 0.15 | 0.04 | |||||||||||
Net realized price per Mcf | $ | 1.22 | $ | 2.22 | $ | 1.48 | $ | 1.89 | |||||||
Realized price per Boe - as reported | $ | 21.95 | $ | 27.84 | $ | 22.26 | $ | 28.27 | |||||||
Net realized price per Boe - including impact of derivatives | $ | 22.17 | $ | 26.03 | $ | 22.78 | $ | 25.47 | |||||||
Average cost per Boe | |||||||||||||||
Lease operating | $ | 7.07 | $ | 7.41 | $ | 7.61 | $ | 7.12 | |||||||
Production, ad valorem, and other taxes | $ | 1.51 | $ | 2.02 | $ | 1.62 | $ | 2.06 | |||||||
Depletion (1) | $ | 11.82 | $ | 11.55 | $ | 12.28 | $ | 10.32 | |||||||
(Loss) earnings per share | |||||||||||||||
(Loss) earnings per share applicable to common stockholders | |||||||||||||||
Basic | $ | (7.01) | $ | 1.53 | $ | (12.68) | $ | (0.26) | |||||||
Diluted | $ | (7.01) | $ | 1.53 | $ | (12.68) | $ | (0.26) | |||||||
Adjusted net (loss) income per share available to common stockholders | |||||||||||||||
Basic | $ | (0.11) | $ | 0.15 | $ | (0.85) | $ | 0.57 | |||||||
Diluted | $ | (0.11) | $ | 0.15 | $ | (0.85) | $ | 0.57 | |||||||
Weighted average number of shares outstanding (in thousands) | |||||||||||||||
Basic | 35,536 | 35,312 | 35,427 | 35,057 | |||||||||||
Diluted | 35,536 | 35,312 | 35,427 | 35,057 | |||||||||||
(1) Includes accretion of asset retirement obligation. | |||||||||||||||
Capital Expenditures
The table below presents actual results of the Company's capital expenditures for the three months and twelve months ended December 31, 2019.
Three Months Ended | Twelve Months Ended | ||||||
December 31, 2019 | December 31, 2019 | ||||||
(In thousands) | (In thousands) | ||||||
Drilling and Completion | 1,730 | 105,607 | |||||
Other Exploration and Production | 11,026 | 56,427 | |||||
Total Capital Expenditures | $ | 12,756 | $ | 162,034 | |||
(excluding acquisitions and plugging and abandonment) | |||||||
Derivative Contracts
The table below sets forth the Company's hedge position for 2020 as of February 26, 2020:
Quarter Ending | ||||||||||
3/31/2020 | 6/30/2020 | 9/30/2020 | 12/31/2020 | FY 2020 | ||||||
WTI Swaps: | ||||||||||
Total Volume (MBbls) | 273.0 | 182.0 | - | - | 455.0 | |||||
Swap Price ($/Bbl) | $61.05 | $60.00 | - | - | $60.63 | |||||
Capitalization
The Company's capital structure as of December 31, 2019 and December 31, 2018 is presented below:
December 31, 2019 | December 31, 2018 | ||||||
(In thousands) | |||||||
Cash, cash equivalents and restricted cash | $ | 5,968 | $ | 19,645 | |||
Credit facility | $ | 57,500 | $ | — | |||
Total debt | 57,500 | — | |||||
Stockholders' equity | |||||||
Common stock | 36 | 36 | |||||
Warrants | 88,520 | 88,516 | |||||
Additional paid-in capital | 1,059,253 | 1,055,164 | |||||
Accumulated deficit | (745,357) | (295,995) | |||||
Total SandRidge Energy, Inc. stockholders' equity | 402,452 | 847,721 | |||||
Total capitalization | $ | 459,952 | $ | 847,721 | |||
SandRidge Energy, Inc. and Subsidiaries Consolidated Statements of Operations (In thousands, except per share amounts) | ||||||||||
Year Ended December 31, | ||||||||||
2019 | 2018 | 2017 | ||||||||
Revenues | ||||||||||
Oil, natural gas and NGL | $ | 266,104 | $ | 348,726 | $ | 356,210 | ||||
Other | 741 | 669 | 1,089 | |||||||
Total revenues | 266,845 | 349,395 | 357,299 | |||||||
Expenses | ||||||||||
Lease operating expenses | 90,938 | 87,786 | 99,052 | |||||||
Production, ad valorem, and other taxes | 19,394 | 25,434 | 18,211 | |||||||
Depreciation and depletion—oil and natural gas | 146,874 | 127,281 | 118,035 | |||||||
Depreciation and amortization—other | 11,684 | 11,982 | 13,852 | |||||||
Impairment | 409,574 | 4,170 | 4,019 | |||||||
General and administrative | 32,058 | 40,619 | 75,133 | |||||||
Accelerated vesting of employment compensation | — | 6,545 | — | |||||||
Proxy contest | — | 7,139 | — | |||||||
Terminated merger costs | — | — | 8,162 | |||||||
Employee termination benefits | 4,792 | 32,657 | 4,815 | |||||||
(Gain) loss on derivative contracts | (1,094) | 17,155 | (24,090) | |||||||
Other operating (income) expense | (608) | (998) | 479 | |||||||
Total expenses | 713,612 | 359,770 | 317,668 | |||||||
(Loss) income from operations | (446,767) | (10,375) | 39,631 | |||||||
Other (expense) income | ||||||||||
Interest expense, net | (2,974) | (2,787) | (3,868) | |||||||
Gain on extinguishment of debt | — | 1,151 | — | |||||||
Other income, net | 436 | 2,865 | 2,550 | |||||||
Total other (expense) income | (2,538) | 1,229 | (1,318) | |||||||
(Loss) income before income taxes | (449,305) | (9,146) | 38,313 | |||||||
Income tax benefit | — | (71) | (8,749) | |||||||
Net (loss) income | $ | (449,305) | $ | (9,075) | $ | 47,062 | ||||
(Loss) earnings per share | ||||||||||
Basic | $ | (12.68) | $ | (0.26) | $ | 1.45 | ||||
Diluted | $ | (12.68) | $ | (0.26) | $ | 1.44 | ||||
Weighted average number of common shares outstanding | ||||||||||
Basic | 35,427 | 35,057 | 32,442 | |||||||
Diluted | 35,427 | 35,057 | 32,663 | |||||||
SandRidge Energy, Inc. and Subsidiaries Consolidated Balance Sheets (In thousands) | |||||||
December 31, 2019 | December 31, 2018 | ||||||
ASSETS | |||||||
Current assets | |||||||
Cash and cash equivalents | $ | 4,275 | $ | 17,660 | |||
Restricted cash - other | 1,693 | 1,985 | |||||
Accounts receivable, net | 28,644 | 45,503 | |||||
Derivative contracts | 114 | 5,286 | |||||
Prepaid expenses | 3,342 | 2,628 | |||||
Other current assets | 538 | 265 | |||||
Total current assets | 38,606 | 73,327 | |||||
Oil and natural gas properties, using full cost method of accounting | |||||||
Proved | 1,484,359 | 1,269,091 | |||||
Unproved | 24,603 | 60,152 | |||||
Less: accumulated depreciation, depletion and impairment | (1,129,622) | (580,132) | |||||
379,340 | 749,111 | ||||||
Other property, plant and equipment, net | 188,603 | 200,838 | |||||
Other assets | 1,140 | 1,062 | |||||
Total assets | $ | 607,689 | $ | 1,024,338 | |||
LIABILITIES AND STOCKHOLDERS' EQUITY | |||||||
Current liabilities | |||||||
Accounts payable and accrued expenses | $ | 64,937 | $ | 111,797 | |||
Asset retirement obligation | 22,119 | 25,393 | |||||
Other current liabilities | 1,367 | — | |||||
Total current liabilities | 88,423 | 137,190 | |||||
Long-term debt | 57,500 | — | |||||
Asset retirement obligation | 52,897 | 34,671 | |||||
Other long-term obligations | 6,417 | 4,756 | |||||
Total liabilities | 205,237 | 176,617 | |||||
Stockholders' Equity | |||||||
Common stock, $0.001 par value; 250,000 shares authorized; 35,772 issued and outstanding at December 31, 2019 and 35,687 issued and outstanding at December 31, 2018 | 36 | 36 | |||||
Warrants | 88,520 | 88,516 | |||||
Additional paid-in capital | 1,059,253 | 1,055,164 | |||||
Accumulated deficit | (745,357) | (295,995) | |||||
Total stockholders' equity | 402,452 | 847,721 | |||||
Total liabilities and stockholders' equity | $ | 607,689 | $ | 1,024,338 | |||
SandRidge Energy, Inc. and Subsidiaries Consolidated Cash Flows (In thousands) | |||||||||||
Year Ended December 31, | |||||||||||
2019 | 2018 | 2017 | |||||||||
CASH FLOWS FROM OPERATING ACTIVITIES | |||||||||||
Net (loss) income | $ | (449,305) | $ | (9,075) | $ | 47,062 | |||||
Adjustments to reconcile net loss to net cash provided by operating activities | |||||||||||
Provision for doubtful accounts | 16 | (462) | 406 | ||||||||
Depreciation, depletion, and amortization | 158,558 | 139,263 | 131,887 | ||||||||
Impairment | 409,574 | 4,170 | 4,019 | ||||||||
Debt issuance costs amortization | 558 | 470 | 430 | ||||||||
Amortization of discount, net of premium, on debt | — | (47) | (330) | ||||||||
Gain on extinguishment of debt | — | (1,151) | — | ||||||||
Write off of debt issuance costs | 142 | — | — | ||||||||
(Gain) loss on derivative contracts | (1,094) | 17,155 | (24,090) | ||||||||
Cash received (paid) on settlement of derivative contracts | 6,266 | (35,325) | 7,260 | ||||||||
Stock-based compensation | 4,254 | 23,377 | 15,750 | ||||||||
Other | (187) | (1,571) | 344 | ||||||||
Changes in operating assets and liabilities | |||||||||||
Receivables | 15,829 | 16,560 | 115 | ||||||||
Prepaid expenses | (714) | 2,620 | 127 | ||||||||
Other current assets | (301) | 170 | 191 | ||||||||
Other assets and liabilities, net | (610) | (1,754) | 4,186 | ||||||||
Accounts payable and accrued expenses | (17,217) | (4,257) | (2,199) | ||||||||
Asset retirement obligations | (4,445) | (4,629) | (3,979) | ||||||||
Net cash provided by operating activities | 121,324 | 145,514 | 181,179 | ||||||||
CASH FLOWS FROM INVESTING ACTIVITIES | |||||||||||
Capital expenditures for property, plant and equipment | (191,678) | (187,047) | (219,246) | ||||||||
Acquisition of assets | 236 | (24,764) | (48,312) | ||||||||
Proceeds from sale of assets | 1,593 | 28,358 | 21,834 | ||||||||
Net cash used in investing activities | (189,849) | (183,453) | (245,724) | ||||||||
CASH FLOWS FROM FINANCING ACTIVITIES | |||||||||||
Proceeds from borrowings | 211,096 | 10,000 | — | ||||||||
Repayments of borrowings | (153,596) | (46,304) | — | ||||||||
Debt issuance costs | (911) | — | (1,488) | ||||||||
Reduction of financing lease liability | (1,374) | — | — | ||||||||
Cash paid for tax withholdings on vested stock awards | (367) | (7,420) | (6,730) | ||||||||
Net cash provided by (used in) financing activities | 54,848 | (43,724) | (8,218) | ||||||||
NET DECREASE IN CASH, CASH EQUIVALENTS and RESTRICTED CASH | (13,677) | (81,663) | (72,763) | ||||||||
CASH, CASH EQUIVALENTS and RESTRICTED CASH, beginning of year | 19,645 | 101,308 | 174,071 | ||||||||
CASH, CASH EQUIVALENTS and RESTRICTED CASH, end of period | $ | 5,968 | $ | 19,645 | $ | 101,308 | |||||
Supplemental Disclosure of Cash Flow Information | |||||||||||
Cash paid for interest, net of amounts capitalized | $ | (2,157) | $ | (4,045) | $ | (2,438) | |||||
Cash received for income taxes | $ | — | $ | 4,381 | $ | 4,348 | |||||
Supplemental Disclosure of Noncash Investing and Financing Activities | |||||||||||
Purchase of PP&E in accounts payable | $ | 4,592 | $ | 34,235 | $ | 50,096 | |||||
Right-of-use assets obtained in exchange for financing lease obligations | $ | 3,347 | $ | — | |||||||
Carrying values of properties exchanged | $ | 5,384 | $ | — | $ | — | |||||
Equity Issues for debt | $ | — | $ | — | $ | (268,779) | |||||
Non-GAAP Financial Measures
This press release includes non-GAAP financial measures. These non-GAAP measures are not alternatives to GAAP measures, and you should not consider these non-GAAP measures in isolation or as a substitute for analysis of our results as reported under GAAP. Below is additional disclosure regarding each of the non-GAAP measures used in this press release, including reconciliations to their most directly comparable GAAP measure.
Reconciliation of Cash Provided by Operating Activities to Operating Cash Flow
The Company defines operating cash flow as net cash provided by operating activities before changes in operating assets and liabilities as shown in the following table. Operating cash flow is a supplemental financial measure used by the Company's management and by securities analysts, investors, lenders, rating agencies and others who follow the industry as an indicator of the Company's ability to internally fund exploration and development activities and to service or incur additional debt. The Company also uses this measure because operating cash flow relates to the timing of cash receipts and disbursements that the Company may not control and may not relate to the period in which the operating activities occurred. Further, operating cash flow allows the Company to compare its operating performance and return on capital with those of other companies without regard to financing methods and capital structure. This measure should not be considered in isolation or as a substitute for net cash provided by operating activities prepared in accordance with GAAP.
Three Months Ended December 31, | Year Ended December 31, | ||||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||
(In thousands) | |||||||||||||||
Net cash provided by operating activities | $ | 25,795 | $ | 36,346 | $ | 121,324 | $ | 145,514 | |||||||
Changes in operating assets and liabilities | 5,564 | 7,697 | 7,458 | (8,710) | |||||||||||
Operating cash flow | $ | 31,359 | $ | 44,043 | $ | 128,782 | $ | 136,804 | |||||||
Reconciliation of Net (Loss) Income to EBITDA and Adjusted EBITDA
The Company defines EBITDA as net (loss) income before income tax benefit, interest expense, depreciation and amortization - other and depreciation and depletion - oil and natural gas. Adjusted EBITDA, as presented herein, is EBITDA excluding items that the Company believes affect the comparability of operating results such as items whose timing and/or amount cannot be reasonably estimated or are non-recurring, as shown in the following tables.
Adjusted EBITDA is presented because management believes it provides useful additional information used by the Company's management and by securities analysts, investors, lenders, ratings agencies and others who follow the industry for analysis of the Company's financial and operating performance on a recurring basis and the Company's ability to internally fund exploration and development and to service or incur additional debt. In addition, management believes that adjusted EBITDA is widely used by professional research analysts and others in the valuation, comparison and investment recommendations of companies in the oil and gas exploration and production industry. The Company's adjusted EBITDA may not be comparable to similarly titled measures used by other companies.
Three Months Ended December 31, | Year Ended December 31, | ||||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||
(In thousands) | |||||||||||||||
Net (loss) income | $ | (249,142) | $ | 54,178 | $ | (449,305) | $ | (9,075) | |||||||
Adjusted for | |||||||||||||||
Income tax expense (benefit) | — | 1 | — | (71) | |||||||||||
Interest expense | 974 | 640 | 3,064 | 3,148 | |||||||||||
Depreciation and amortization - other | 2,774 | 2,753 | 11,684 | 11,982 | |||||||||||
Depreciation and depletion - oil and natural gas | 32,119 | 35,233 | 146,874 | 127,281 | |||||||||||
EBITDA | (213,275) | 92,805 | (287,683) | 133,265 | |||||||||||
Asset impairment | 244,067 | — | 409,574 | 4,170 | |||||||||||
Stock-based compensation | 313 | 962 | 3,266 | 10,246 | |||||||||||
Loss (gain) on derivative contracts | 453 | (42,608) | (1,094) | 17,155 | |||||||||||
Cash received (paid) upon settlement of derivative contracts | 566 | (6,300) | 6,266 | (35,325) | |||||||||||
Employee termination benefits | 327 | 4 | 4,792 | 32,657 | |||||||||||
Proxy contest | — | — | — | 7,139 | |||||||||||
Acceleration of performance units | — | — | — | 1,232 | |||||||||||
Gain on extinguishment of debt | — | — | — | (1,151) | |||||||||||
Other | (76) | (212) | (279) | (2,669) | |||||||||||
Adjusted EBITDA | $ | 32,375 | $ | 44,651 | $ | 134,842 | $ | 166,719 | |||||||
Reconciliation of Cash Provided by Operating Activities to Adjusted EBITDA
Three Months Ended December 31, | Year Ended December 31, | ||||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||
(In thousands) | |||||||||||||||
Net cash provided by operating activities | $ | 25,795 | $ | 36,346 | $ | 121,324 | $ | 145,514 | |||||||
Changes in operating assets and liabilities | 5,564 | 7,697 | 7,458 | (8,710) | |||||||||||
Interest expense | 974 | 640 | 3,064 | 3,148 | |||||||||||
Employee termination benefits (1) | 315 | 4 | 3,802 | 19,526 | |||||||||||
Proxy contest | — | — | — | 7,139 | |||||||||||
Acceleration of performance units | — | — | — | 1,232 | |||||||||||
Income tax expense (benefit) | — | 1 | — | (71) | |||||||||||
Other | (273) | (37) | (806) | (1,059) | |||||||||||
Adjusted EBITDA | $ | 32,375 | $ | 44,651 | $ | 134,842 | $ | 166,719 | |||||||
1. Excludes associated stock-based compensation. |
Reconciliation of Net (Loss) Income Available to Common Stockholders to Adjusted Net (Loss) Income Available to Common Stockholders
The Company defines adjusted net (loss) income as net (loss) income excluding items that the Company believes affect the comparability of operating results and are typically excluded from published estimates by the investment community, including items whose timing and/or amount cannot be reasonably estimated or are non-recurring, as shown in the following tables.
Management uses the supplemental measure of adjusted net (loss) income as an indicator of the Company's operational trends and performance relative to other oil and natural gas companies and believes it is more comparable to earnings estimates provided by securities analysts. Adjusted net (loss) income is not a measure of financial performance under GAAP and should not be considered a substitute for net (loss) income available to common stockholders.
Three Months Ended December 31, 2019 | Three Months Ended December 31, 2018 | ||||||||||||||
$ | $/Diluted Share | $ | $/Diluted Share | ||||||||||||
(In thousands, except per share amounts) | |||||||||||||||
Net (loss) income available to common stockholders | $ | (249,142) | $ | (7.01) | $ | 54,178 | $ | 1.53 | |||||||
Asset impairment | 244,067 | 6.87 | — | — | |||||||||||
Loss (gain) on derivative contracts | 453 | 0.01 | (42,608) | (1.21) | |||||||||||
Cash received (paid) upon settlement of derivative contracts | 566 | 0.01 | (6,300) | (0.17) | |||||||||||
Employee termination benefits | 327 | 0.01 | 4 | — | |||||||||||
Proxy contest | — | — | — | — | |||||||||||
Other | (68) | — | (131) | — | |||||||||||
Adjusted net (loss) income available to common stockholders | $ | (3,797) | $ | (0.11) | $ | 5,143 | $ | 0.15 | |||||||
Basic | Diluted | Basic | Diluted | ||||||||||||
Weighted average number of common shares outstanding | 35,536 | 35,536 | 35,312 | 35,312 | |||||||||||
Total adjusted net (loss) income per share | $ | (0.11) | $ | (0.11) | $ | 0.15 | $ | 0.15 | |||||||
Year Ended December 31, 2019 | Year Ended December 31, 2018 | ||||||||||||||
$ | $/Diluted Share | $ | $/Diluted Share | ||||||||||||
(In thousands, except per share amounts) | |||||||||||||||
Net loss available to common stockholders | $ | (449,305) | $ | (12.68) | $ | (9,075) | $ | (0.26) | |||||||
Asset impairment | 409,574 | 11.56 | 4,170 | 0.12 | |||||||||||
(Gain) loss on derivative contracts | (1,094) | (0.03) | 17,155 | 0.49 | |||||||||||
Cash received (paid) upon settlement of derivative contracts | 6,266 | 0.17 | (35,325) | (1.01) | |||||||||||
Employee termination benefits | 4,792 | 0.14 | 32,657 | 0.93 | |||||||||||
Proxy contest | — | — | 7,139 | 0.20 | |||||||||||
Accelerated vesting of employment compensation | — | — | 6,545 | 0.19 | |||||||||||
Gain on extinguishment of debt | — | — | (1,151) | (0.03) | |||||||||||
Other | (188) | (0.01) | (2,208) | (0.06) | |||||||||||
Adjusted net (loss) income available to common stockholders | $ | (29,955) | $ | (0.85) | $ | 19,907 | $ | 0.57 | |||||||
Basic | Diluted | Basic | Diluted | ||||||||||||
Weighted average number of common shares outstanding | 35,427 | 35,427 | 35,057 | 35,057 | |||||||||||
Total adjusted net (loss) income per share | $ | (0.85) | $ | (0.85) | $ | 0.57 | $ | 0.57 | |||||||
Reconciliation of PV-10 to Standardized Measure
PV-10 is a non-GAAP financial measure and represents the present value of estimated future cash inflows from proved oil, natural gas and NGL reserves, less future development and production costs, discounted at 10% per annum to reflect timing of future cash flows and using 12-month average prices for the years ended December 31, 2019 and 2018. PV-10 differs from Standardized Measure because it does not include the effects of income taxes on future net revenues. PV-10 is used by the industry and by management as a reserve asset value measure to compare against past reserve bases and the reserve bases of other business entities. It is useful because its calculation is not dependent on the taxpaying status of the entity. Because of the present value of future income tax discounted at 10% is insignificant, these measures are equivalent.
Reconciliation of G&A to Adjusted G&A
The Company reports and provides guidance on Adjusted G&A per Boe because it believes this measure is commonly used by management, analysts and investors as an indicator of cost management and operating efficiency on a comparable basis from period to period and to compare and make investment recommendations of companies in the oil and gas industry. This non-GAAP measure allows for the analysis of general and administrative spend without regard to stock-based compensation programs and other non-recurring cash items, if any, which can vary significantly between companies. Adjusted G&A per Boe is not a measure of financial performance under GAAP and should not be considered a substitute for general and administrative expense per Boe. Therefore, the Company's Adjusted G&A per Boe may not be comparable to other companies' similarly titled measures.
The Company defines adjusted G&A as general and administrative expense adjusted for certain non-cash stock-based compensation and other non-recurring items, if any, as shown in the following tables.
Three Months Ended December 31, 2019 | Three Months Ended December 31, 2018 | ||||||||||||||
$ | $/Boe | $ | $/Boe | ||||||||||||
(In thousands, except per Boe amounts) | |||||||||||||||
General and administrative | $ | 5,797 | $ | 2.13 | $ | 7,796 | $ | 2.56 | |||||||
Stock-based compensation | (313) | (0.11) | (962) | (0.32) | |||||||||||
Adjusted G&A | $ | 5,484 | $ | 2.02 | $ | 6,834 | $ | 2.24 | |||||||
Year Ended December 31, 2019 | Year Ended December 31, 2018 | ||||||||||||||
$ | $/Boe | $ | $/Boe | ||||||||||||
(In thousands, except per Boe amounts) | |||||||||||||||
General and administrative | $ | 32,058 | $ | 2.68 | $ | 40,619 | $ | 3.29 | |||||||
Stock-based compensation (1) | (3,266) | (0.27) | (4,933) | (0.40) | |||||||||||
Adjusted G&A | $ | 28,792 | $ | 2.41 | $ | 35,686 | $ | 2.89 | |||||||
1. | Excludes non-cash stock-based compensation included in employee termination benefits and accelerated vesting of employment compensation in the consolidated statement of operations. |
For further information, please contact:
Johna Robinson
Investor Relations
SandRidge Energy, Inc.
123 Robert S. Kerr Avenue
Oklahoma City, OK 73102-6406
(405) 429-5515
Cautionary Note to Investors - This press release includes "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, including, but not limited to, the information appearing under the heading "2020 Operational and Capital Expenditure Guidance." These forward-looking statements are neither historical facts nor assurances of future performance and reflect SandRidge's current beliefs and expectations regarding future events and operating performance. The forward-looking statements include projections and estimates of the Company's corporate strategies, future operations, and development plans and appraisal programs, drilling inventory and locations, estimated oil, natural gas and natural gas liquids production, reserves, price realizations and differentials, hedging program, projected operating, general and administrative and other costs, projected capital expenditures, tax rates, efficiency and cost reduction initiative outcomes, liquidity and capital structure. We have based these forward-looking statements on our current expectations and assumptions and analyses made by us in light of our experience and our perception of historical trends, current conditions and expected future developments, as well as other factors we believe are appropriate under the circumstances. However, whether actual results and developments will conform with our expectations and predictions is subject to a number of risks and uncertainties, including the volatility of oil and natural gas prices, our success in discovering, estimating, developing and replacing oil and natural gas reserves, actual decline curves and the actual effect of adding compression to natural gas wells, the availability and terms of capital, the ability of counterparties to transactions with us to meet their obligations, our timely execution of hedge transactions, credit conditions of global capital markets, changes in economic conditions, the amount and timing of future development costs, the availability and demand for alternative energy sources, regulatory changes, including those related to carbon dioxide and greenhouse gas emissions, and other factors, many of which are beyond our control. We refer you to the discussion of risk factors in Part I, Item 1A - "Risk Factors" of our Annual Report on Form 10-K and in comparable "Risk Factor" sections of our Quarterly Reports on Form 10-Q filed after such form 10-K. All of the forward-looking statements made in this press release are qualified by these cautionary statements. The actual results or developments anticipated may not be realized or, even if substantially realized, they may not have the expected consequences to or effects on our Company or our business or operations. Such statements are not guarantees of future performance and actual results or developments may differ materially from those projected in the forward-looking statements. We undertake no obligation to update or revise any forward-looking statements.
SandRidge Energy, Inc. (NYSE: SD) is an oil and natural gas exploration and production company headquartered in Oklahoma City, Oklahoma with its principal focus on developing high-return, growth oriented projects in Oklahoma and Colorado. The majority of the Company's production is generated from the Mississippian Lime formation in Oklahoma and Kansas.
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SOURCE SandRidge Energy, Inc.
Article Date
2/26/2020SandRidge Energy Announces a Series of Initiatives to Improve Shareholder Value
Source: PR Newswire
OKLAHOMA CITY, Dec. 13, 2019 /PRNewswire/ -- SandRidge Energy, Inc. ("SandRidge" or the "Company") (NYSE: SD) today announced it has initiated a series of actions designed to improve shareholder value:
The Company will be focusing on actions to maximize value to shareholders, which will include evaluation of the 2020 capital expenditure program in light of market conditions with a focus on maximizing free cash flow. Management and the Board of Directors (the "Board") will undertake a comprehensive review of the Company with the aim to improve operational efficiencies and cost controls.
Jonathan Frates, Chairman of the Board, stated, "In light of the current challenging price environment, we are reevaluating our 2020 capital plans with an emphasis on cost control and free cash flow generation. Our goal is to maintain our strong balance sheet and pursue only high return opportunities."
In connection with this initiative, Paul D. McKinney has resigned as President and Chief Executive Officer and as a Board member and John P. Suter, who currently serves as the Company's Chief Operating Officer, has agreed to serve as Interim President and Chief Executive Officer.
Mr. Frates added, "On behalf of SandRidge, I offer my sincere thanks to Paul for his service to the Company and wish him all the best in his future endeavors."
Mr. Suter commented: "I'm honored that the Board has selected me for this opportunity. I am excited to work with the talented and dedicated individuals at SandRidge as we advance initiatives in our assets and our organization to generate shareholder value."
John Suter has extensive senior management, operational and technical experience in the exploration and production industry as well as intimate knowledge of the Company through his service as the Company's Chief Operating Officer for the past three years. Having overseen John and the management team since June 2018, the Board is highly confident in his ability to perform as SandRidge's Interim President and Chief Executive Officer.
Mr. Suter joined SandRidge in April 2015 as Senior Vice President of Mid-Continent Operations, bringing with him extensive experience in the exploration and production sector, including management roles with American Energy Partners, LP, Chesapeake Energy Corporation, Continental Resources, Inc., and Cabot Oil & Gas Corporation. He holds a Bachelor of Science degree in Petroleum Engineering from Texas Tech University.
About SandRidge Energy, Inc.
SandRidge Energy, Inc. (NYSE: SD) is an oil and natural gas exploration and production company headquartered in Oklahoma City, Oklahoma with its principal focus on developing high-return, growth oriented projects in Oklahoma and Colorado. The majority of the Company's production is generated from the Mississippian Lime formation in Oklahoma and Kansas.
For further information, please contact:
Johna Robinson
Investor Relations
SandRidge Energy, Inc.
123 Robert S. Kerr Avenue
Oklahoma City, OK 73102-6406
(405) 429-5515
Cautionary Statement Regarding Forward-Looking Statements
This communication may contain certain "forward-looking statements" under applicable securities laws, including the Private Securities Litigation Reform Act of 1995. These statements are typically identified by words or phrases such as "may," "will," "could," "should," "predict," "potential," "pursue," "outlook," "continue," "anticipate," "estimate," "expect," "project," "intend," "plan," "believe," "target," "forecast," and other words and terms of similar meaning. For example, statements regarding expectations about the hiring of a permanent President and Chief Executive Officer, the future results and benefits of announced initiatives and future financial results and operational plans are forward-looking statements. These forward-looking statements are subject to numerous risks and uncertainties, many of which are beyond the Company's control, which could cause actual benefits, results, effects and timing to differ materially from the results predicted or implied by the statements. Additional information concerning the risk factors faced by the Company is contained in SandRidge's public filings with the Securities and Exchange Commission (the "SEC"), which are available at the SEC's website, http://www.sec.gov. Each forward looking statement speaks only as of the date of the particular statement, and SandRidge undertakes no obligation to publicly update any of these forward-looking statements to reflect events or circumstances that may arise after the date hereof.
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SOURCE SandRidge Energy, Inc.
Article Date
12/13/201911/12/2019 - SandRidge Energy, Inc. Reports Financial and Operational Results for Third Quarter 2019
SandRidge Energy, Inc. Reports Financial and Operational Results for Third Quarter 2019
Source: PR Newswire
OKLAHOMA CITY, Nov. 12, 2019 /PRNewswire/ -- SandRidge Energy, Inc. (the "Company" or "SandRidge") (NYSE:SD) today announced financial and operational results for the quarter ended September 30, 2019.
Highlights during the third quarter:
Paul McKinney, President and CEO commented, "During the third quarter, we faced a challenging price environment, particularly with regard to NGLs, which significantly impacted our results. We continued to focus our efforts on further reducing our G&A costs, evaluating various M&A opportunities and reviewing our capital spending plans for the rest of the year. The planned reduction in our fourth quarter capital spending is in response to the continued volatile commodity price environment. While we are very pleased with the early results of our North Park wells completed during the quarter, we are currently assessing our capital budget for 2020 with a focus on value enhancing opportunities and financial discipline."
Financial Results
For the third quarter, the Company reported a net loss of $182 million, or $5.12 per share, and net cash provided by operating activities of $33 million. After adjusting for certain items, the Company's adjusted net loss amounted to $17 million, or $0.49 per share, operating cash flow totaled $26 million and adjusted EBITDA was $26 million for the quarter. The Company defines and reconciles adjusted net income, adjusted EBITDA and other non-GAAP financial measures to the most directly comparable GAAP measure in supporting tables at the conclusion of this press release beginning on page 10.
Operational Results and Activity
Production totaled 2.9 MMBoe (29% oil, 22% NGLs and 49% natural gas) for the third quarter.
North Park Basin Asset in Jackson County, Colorado
Net production from the North Park Basin totaled 363 MBoe (3.9 MBoepd) for the quarter. During the quarter, the Company brought six wells to sales with initial production rates in line with expectations and completed a refrac on the Grizzly 3-32H (including 1,000 feet of additional perforations), which resulted in a more than tenfold increase in production from previous rates.
Mid-Continent Assets in Oklahoma and Kansas
In the third quarter, production in the Mississippian totaled 2.2 MMBoe (24.1 MBoepd, 16% oil) and Northwest STACK production totaled 274 MBoe (3.0 MBoepd, 43% oil).
Liquidity and Capital Structure
As of October 31, 2019, the Company's total liquidity was $205 million, based on $2 million of cash and $203 million available under the aggregate elected commitment amount of its credit facility, net of outstanding letters of credit. The Company currently has $61 million drawn on the facility.
Conference Call Information
The Company will host a conference call to discuss these results on Wednesday, November 13, 2019 at 10:00 am CT. The telephone number to access the conference call from within the U.S. is (866) 393-4306 and from outside the U.S. is (734) 385-2616. The passcode for the call is 5481108. An audio replay of the call will be available from November 13, 2019 until 11:59 pm CT on November 27, 2019. The number to access the conference call replay is (855) 859-2056 or (404) 537-3406. The passcode for the replay is 5481108.
A live audio webcast of the conference call will also be available via SandRidge's website, www.sandridgeenergy.com, under Investor Relations/Presentation & Events. The webcast will be archived for replay on the Company's website for 30 days.
2019 Operational and Capital Expenditure Guidance
Presented below is the Company's updated operational and capital expenditure guidance for 2019.
Updated | Previous | ||
Projection as of | Projection as of | ||
November 12, 2019 | August 7, 2019 | ||
Production | |||
Oil (MMBbls) | 3.4 - 3.5 | 3.7 - 3.9 | |
Natural Gas Liquids (MMBbls) | 2.8 - 2.9 | 2.5 - 2.6 | |
Total Liquids (MMBbls) | 6.2 - 6.4 | 6.2 - 6.5 | |
Natural Gas (Bcf) | 31.5 - 33.5 | 31.0 - 33.0 | |
Total (MMBoe) | 11.5 - 12.0 | 11.4 - 12.0 | |
Price Differentials to NYMEX | |||
Oil (per Bbl) | ($4.30) | ($4.30) | |
Natural Gas Liquids (realized % of NYMEX WTI) | 21% | 25% | |
Natural Gas (per MMBtu) | ($1.30) | ($1.30) | |
Expenses | |||
LOE | $91 - $94 million | $89 - $94 million | |
Adjusted G&A Expense (1) | $31 - $33 million | $31 - $35 million | |
% of Revenue | |||
Severance and Ad Valorem Taxes | 7.0% - 7.5% | 6.5% - 7.0% | |
Capital Expenditures ($ in millions) | |||
Drilling and Completion | $105 - $110 | $115 - $125 | |
Other Exploration and Production | $55 - $60 | $45 - $55 | |
Total Capital Expenditures | $160 - $170 | $160 - $180 | |
(excluding acquisitions and plugging and abandonment) | |||
1. | Adjusted G&A expense is a non-GAAP financial measure. The Company has defined this measure at the conclusion of this press release under "Non-GAAP Financial Measures" beginning on page 10. Information to reconcile this non-GAAP financial measure to the most directly comparable GAAP financial measure is not available at this time, as management is unable to forecast the excluded items for future periods. |
Operational and Financial Statistics
Information regarding the Company's production, pricing, costs and earnings is presented below:
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||
Production - Total | |||||||||||
Oil (MBbl) | 835 | 956 | 2,668 | 2,637 | |||||||
NGL (MBbl) | 629 | 710 | 2,335 | 2,110 | |||||||
Natural Gas (MMcf) | 8,318 | 8,757 | 25,414 | 27,221 | |||||||
Oil equivalent (MBoe) | 2,850 | 3,126 | 9,239 | 9,284 | |||||||
Daily production (MBoed) | 31.0 | 34.0 | 33.8 | 34.0 | |||||||
Average price per unit | |||||||||||
Realized oil price per barrel - as reported | $ | 52.78 | $ | 66.94 | $ | 53.54 | $ | 63.16 | |||
Realized impact of derivatives per barrel | 0.75 | (12.95) | 0.23 | (12.35) | |||||||
Net realized price per barrel | $ | 53.53 | $ | 53.99 | $ | 53.77 | $ | 50.81 | |||
Realized NGL price per barrel - as reported | $ | 10.11 | $ | 26.45 | $ | 12.37 | $ | 24.70 | |||
Realized impact of derivatives per barrel | — | — | — | — | |||||||
Net realized price per barrel | $ | 10.11 | $ | 26.45 | $ | 12.37 | $ | 24.70 | |||
Realized natural gas price per Mcf - as reported | $ | 0.93 | $ | 1.68 | $ | 1.37 | $ | 1.66 | |||
Realized impact of derivatives per Mcf | — | 0.09 | 0.20 | 0.13 | |||||||
Net realized price per Mcf | $ | 0.93 | $ | 1.77 | $ | 1.57 | $ | 1.79 | |||
Realized price per Boe - as reported | $ | 20.42 | $ | 31.19 | $ | 22.34 | $ | 28.41 | |||
Net realized price per Boe - including impact of derivatives | $ | 20.64 | $ | 27.47 | $ | 22.96 | $ | 25.28 | |||
Average cost per Boe | |||||||||||
Lease operating | $ | 8.37 | $ | 7.01 | $ | 7.76 | $ | 7.02 | |||
Production, ad valorem, and other taxes | $ | 1.52 | $ | 2.35 | $ | 1.66 | $ | 2.07 | |||
Depletion (1) | $ | 13.64 | $ | 10.59 | $ | 12.42 | $ | 9.91 | |||
(Loss) earnings per share | |||||||||||
(Loss) earnings per share applicable to common stockholders | |||||||||||
Basic | $ | (5.12) | $ | 0.33 | $ | (5.66) | $ | (1.81) | |||
Diluted | $ | (5.12) | $ | 0.33 | $ | (5.66) | $ | (1.81) | |||
Adjusted net (loss) income per share available to common stockholders | |||||||||||
Basic | $ | (0.49) | $ | 0.31 | $ | (0.74) | $ | 0.42 | |||
Diluted | $ | (0.49) | $ | 0.31 | $ | (0.74) | $ | 0.42 | |||
Weighted average number of shares outstanding (in thousands) | |||||||||||
Basic | 35,491 | 35,308 | 35,390 | 34,971 | |||||||
Diluted | 35,491 | 35,330 | 35,390 | 34,971 | |||||||
(1) Includes accretion of asset retirement obligation. |
Capital Expenditures
The table below presents actual results of the Company's capital expenditures for the three months and nine months ended September 30, 2019.
Three Months Ended | Nine Months Ended | ||||
September 30, 2019 | September 30, 2019 | ||||
(In thousands) | (In thousands) | ||||
Drilling and Completion | 27,231 | 103,878 | |||
Other Exploration and Production | 15,382 | 45,401 | |||
Total Capital Expenditures | $ | 42,613 | $ | 149,279 | |
(excluding acquisitions and plugging and abandonment) | |||||
Derivative Contracts
The table below sets forth the Company's hedge position for 2019 as of November 12, 2019:
Quarter Ending | ||||||||||
3/31/2019 | 6/30/2019 | 9/30/2019 | 12/31/2019 | FY 2019 | ||||||
WTI Swaps: | ||||||||||
Total Volume (MBbls) | - | - | 163.0 | 184.0 | 347.0 | |||||
Swap Price ($/Bbl) | - | - | $60.04 | $60.04 | $60.04 | |||||
Capitalization
The Company's capital structure as of September 30, 2019 and December 31, 2018 is presented below:
September 30, 2019 | December 31, 2018 | ||||
(In thousands) | |||||
Cash, cash equivalents and restricted cash | $ | 5,728 | $ | 19,645 | |
Credit facility | $ | 62,000 | $ | — | |
Total debt | 62,000 | — | |||
Stockholders' equity | |||||
Common stock | 36 | 36 | |||
Warrants | 88,518 | 88,516 | |||
Additional paid-in capital | 1,058,905 | 1,055,164 | |||
Accumulated deficit | (496,215) | (295,995) | |||
Total SandRidge Energy, Inc. stockholders' equity | 651,244 | 847,721 | |||
Total capitalization | $ | 713,244 | $ | 847,721 | |
SandRidge Energy, Inc. and Subsidiaries | |||||||||||
Condensed Consolidated Statements of Operations (Unaudited) | |||||||||||
(In thousands, except per share amounts) | |||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||
Revenues | |||||||||||
Oil, natural gas and NGL | $ | 58,188 | $ | 97,491 | $ | 206,432 | $ | 263,761 | |||
Other | 181 | 169 | 561 | 489 | |||||||
Total revenues | 58,369 | 97,660 | 206,993 | 264,250 | |||||||
Expenses | |||||||||||
Lease operating expenses | 23,866 | 21,913 | 71,721 | 65,189 | |||||||
Production, ad valorem, and other taxes | 4,346 | 7,339 | 15,303 | 19,256 | |||||||
Depreciation and depletion—oil and natural gas | 38,871 | 33,090 | 114,755 | 92,048 | |||||||
Depreciation and amortization—other | 2,981 | 3,036 | 8,910 | 9,229 | |||||||
Impairment | 165,507 | — | 165,507 | 4,170 | |||||||
General and administrative | 6,238 | 9,064 | 26,261 | 32,823 | |||||||
Accelerated vesting of employment compensation | — | — | — | 6,545 | |||||||
Proxy contest | — | (459) | — | 7,139 | |||||||
Employee termination benefits | — | 23 | 4,465 | 32,653 | |||||||
(Gain) loss on derivative contracts | (1,756) | 11,329 | (1,547) | 59,763 | |||||||
Other operating expense (income) | 23 | (105) | 142 | (1,343) | |||||||
Total expenses | 240,076 | 85,230 | 405,517 | 327,472 | |||||||
(Loss) income from operations | (181,707) | 12,430 | (198,524) | (63,222) | |||||||
Other (expense) income | |||||||||||
Interest expense, net | (722) | (627) | (2,009) | (2,226) | |||||||
Gain on extinguishment of debt | — | — | — | 1,151 | |||||||
Other income (expense), net | 827 | (118) | 370 | 972 | |||||||
Total other income (expense) | 105 | (745) | (1,639) | (103) | |||||||
(Loss) income before income taxes | (181,602) | 11,685 | (200,163) | (63,325) | |||||||
Income tax benefit | — | (30) | — | (72) | |||||||
Net (loss) income | $ | (181,602) | $ | 11,715 | $ | (200,163) | $ | (63,253) | |||
(Loss) earnings per share | |||||||||||
Basic | $ | (5.12) | $ | 0.33 | $ | (5.66) | $ | (1.81) | |||
Diluted | $ | (5.12) | $ | 0.33 | $ | (5.66) | $ | (1.81) | |||
Weighted average number of common shares outstanding | |||||||||||
Basic | 35,491 | 35,308 | 35,390 | 34,971 | |||||||
Diluted | 35,491 | 35,330 | 35,390 | 34,971 | |||||||
SandRidge Energy, Inc. and Subsidiaries | |||||
Condensed Consolidated Balance Sheets (Unaudited) | |||||
(In thousands) | |||||
September 30, 2019 | December 31, 2018 | ||||
ASSETS | |||||
Current assets | |||||
Cash and cash equivalents | $ | 4,035 | $ | 17,660 | |
Restricted cash - other | 1,693 | 1,985 | |||
Accounts receivable, net | 31,706 | 45,503 | |||
Derivative contracts | 1,133 | 5,286 | |||
Prepaid expenses | 1,999 | 2,628 | |||
Other current assets | 830 | 265 | |||
Total current assets | 41,396 | 73,327 | |||
Oil and natural gas properties, using full cost method of accounting | |||||
Proved | 1,455,609 | 1,269,091 | |||
Unproved | 26,107 | 60,152 | |||
Less: accumulated depreciation, depletion and impairment | (855,765) | (580,132) | |||
625,951 | 749,111 | ||||
Other property, plant and equipment, net | 191,280 | 200,838 | |||
Other assets | 1,325 | 1,062 | |||
Total assets | $ | 859,952 | $ | 1,024,338 | |
LIABILITIES AND STOCKHOLDERS' EQUITY | |||||
Current liabilities | |||||
Accounts payable and accrued expenses | $ | 79,812 | $ | 111,797 | |
Asset retirement obligation | 13,968 | 25,393 | |||
Other current liabilities | 1,415 | — | |||
Total current liabilities | 95,195 | 137,190 | |||
Long-term debt | 62,000 | — | |||
Asset retirement obligation | 45,901 | 34,671 | |||
Other long-term obligations | 5,612 | 4,756 | |||
Total liabilities | 208,708 | 176,617 | |||
Stockholders' Equity | |||||
Common stock, $0.001 par value; 250,000 shares authorized; 35,730 issued and outstanding at September 30, 2019 and 35,687 issued and outstanding at December 31, 2018 | 36 | 36 | |||
Warrants | 88,518 | 88,516 | |||
Additional paid-in capital | 1,058,905 | 1,055,164 | |||
Accumulated deficit | (496,215) | (295,995) | |||
Total stockholders' equity | 651,244 | 847,721 | |||
Total liabilities and stockholders' equity | $ | 859,952 | $ | 1,024,338 | |
SandRidge Energy, Inc. and Subsidiaries | |||||
Condensed Consolidated Cash Flows (Unaudited) | |||||
(In thousands) | |||||
Nine Months Ended September 30, | |||||
2019 | 2018 | ||||
CASH FLOWS FROM OPERATING ACTIVITIES | |||||
Net loss | $ | (200,163) | $ | (63,253) | |
Adjustments to reconcile net loss to net cash provided by operating activities | |||||
Provision for doubtful accounts | (90) | (6) | |||
Depreciation, depletion, and amortization | 123,665 | 101,277 | |||
Impairment | 165,507 | 4,170 | |||
Debt issuance costs amortization | 398 | 352 | |||
Amortization of premiums and discounts on debt | — | (47) | |||
Write off of debt issuance costs | 142 | — | |||
Gain on extinguishment of debt | — | (1,151) | |||
(Gain) loss on derivative contracts | (1,547) | 59,763 | |||
Cash received (paid) on settlement of derivative contracts | 5,700 | (29,025) | |||
Stock-based compensation | 3,930 | 22,415 | |||
Other | (119) | (1,734) | |||
Changes in operating assets and liabilities | (1,894) | 16,407 | |||
Net cash provided by operating activities | 95,529 | 109,168 | |||
CASH FLOWS FROM INVESTING ACTIVITIES | |||||
Capital expenditures for property, plant and equipment | (170,723) | (146,819) | |||
Acquisition of assets | 236 | — | |||
Proceeds from sale of assets | 1,347 | 14,497 | |||
Net cash used in investing activities | (169,140) | (132,322) | |||
CASH FLOWS FROM FINANCING ACTIVITIES | |||||
Proceeds from borrowings | 170,096 | — | |||
Repayments of borrowings | (108,096) | (36,304) | |||
Reduction of financing lease liability | (1,034) | — | |||
Debt issuance costs | (910) | — | |||
Cash paid for tax withholdings on vested stock awards | (362) | (7,376) | |||
Net cash provided by (used in) financing activities | 59,694 | (43,680) | |||
NET DECREASE IN CASH, CASH EQUIVALENTS and RESTRICTED CASH | (13,917) | (66,834) | |||
CASH, CASH EQUIVALENTS and RESTRICTED CASH, beginning of year | 19,645 | 101,308 | |||
CASH, CASH EQUIVALENTS and RESTRICTED CASH, end of period | $ | 5,728 | $ | 34,474 | |
Supplemental Disclosure of Cash Flow Information | |||||
Cash paid for interest, net of amounts capitalized | $ | (1,446) | $ | — | |
Cash received for income taxes | $ | — | $ | 4,381 | |
Supplemental Disclosure of Noncash Investing and Financing Activities | |||||
Purchase of PP&E in accounts payable | $ | 12,790 | $ | 20,955 | |
Right-of-use assets obtained in exchange for financing lease obligations | $ | 3,237 | $ | — | |
Carrying values of properties exchanged | $ | 5,384 | $ | — | |
Non-GAAP Financial Measures
This press release includes non-GAAP financial measures. These non-GAAP measures are not alternatives to GAAP measures, and you should not consider these non-GAAP measures in isolation or as a substitute for analysis of our results as reported under GAAP. Below is additional disclosure regarding each of the non-GAAP measures used in this press release, including reconciliations to their most directly comparable GAAP measure.
Reconciliation of Cash Provided by Operating Activities to Operating Cash Flow
The Company defines operating cash flow as net cash provided by operating activities before changes in operating assets and liabilities as shown in the following table. Operating cash flow is a supplemental financial measure used by the Company's management and by securities analysts, investors, lenders, rating agencies and others who follow the industry as an indicator of the Company's ability to internally fund exploration and development activities and to service or incur additional debt. The Company also uses this measure because operating cash flow relates to the timing of cash receipts and disbursements that the Company may not control and may not relate to the period in which the operating activities occurred. Further, operating cash flow allows the Company to compare its operating performance and return on capital with those of other companies without regard to financing methods and capital structure. This measure should not be considered in isolation or as a substitute for net cash provided by operating activities prepared in accordance with GAAP.
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||
(In thousands) | |||||||||||
Net cash provided by operating activities | $ | 33,056 | $ | 53,051 | $ | 95,529 | $ | 109,168 | |||
Changes in operating assets and liabilities | (7,508) | (5,061) | 1,894 | (16,407) | |||||||
Operating cash flow | $ | 25,548 | $ | 47,990 | $ | 97,423 | $ | 92,761 | |||
Reconciliation of Net (Loss) Income to EBITDA and Adjusted EBITDA
The Company defines EBITDA as net (loss) income before income tax benefit, interest expense, depreciation and amortization - other and depreciation and depletion - oil and natural gas. Adjusted EBITDA, as presented herein, is EBITDA excluding items that the Company believes affect the comparability of operating results such as items whose timing and/or amount cannot be reasonably estimated or are non-recurring, as shown in the following tables.
Adjusted EBITDA is presented because management believes it provides useful additional information used by the Company's management and by securities analysts, investors, lenders, ratings agencies and others who follow the industry for analysis of the Company's financial and operating performance on a recurring basis and the Company's ability to internally fund exploration and development and to service or incur additional debt. In addition, management believes that adjusted EBITDA is widely used by professional research analysts and others in the valuation, comparison and investment recommendations of companies in the oil and gas exploration and production industry. The Company's adjusted EBITDA may not be comparable to similarly titled measures used by other companies.
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||
(In thousands) | |||||||||||
Net (loss) income | $ | (181,602) | $ | 11,715 | $ | (200,163) | $ | (63,253) | |||
Adjusted for | |||||||||||
Income tax benefit | — | (30) | — | (72) | |||||||
Interest expense | 742 | 702 | 2,091 | 2,508 | |||||||
Depreciation and amortization - other | 2,981 | 3,036 | 8,910 | 9,229 | |||||||
Depreciation and depletion - oil and natural gas | 38,871 | 33,090 | 114,755 | 92,048 | |||||||
EBITDA | (139,008) | 48,513 | (74,407) | 40,460 | |||||||
Asset impairment | 165,507 | — | 165,507 | 4,170 | |||||||
Stock-based compensation | 808 | 506 | 2,953 | 9,284 | |||||||
(Gain) loss on derivative contracts | (1,756) | 11,329 | (1,547) | 59,763 | |||||||
Cash received (paid) upon settlement of derivative contracts | 622 | (11,632) | 5,700 | (29,025) | |||||||
Employee termination benefits | — | 23 | 4,465 | 32,653 | |||||||
Proxy contest | — | (459) | — | 7,139 | |||||||
Acceleration of performance units | — | — | — | 1,232 | |||||||
Gain on extinguishment of debt | — | — | — | (1,151) | |||||||
Other | (85) | (245) | (202) | (2,457) | |||||||
Adjusted EBITDA | $ | 26,088 | $ | 48,035 | $ | 102,469 | $ | 122,068 | |||
Reconciliation of Cash Provided by Operating Activities to Adjusted EBITDA | |||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||
(In thousands) | |||||||||||
Net cash provided by operating activities | $ | 33,056 | $ | 53,051 | $ | 95,529 | $ | 109,168 | |||
Changes in operating assets and liabilities | (7,508) | (5,061) | 1,894 | (16,407) | |||||||
Interest expense | 742 | 702 | 2,091 | 2,508 | |||||||
Employee termination benefits (1) | 1 | 23 | 3,487 | 19,522 | |||||||
Proxy contest | — | (459) | — | 7,139 | |||||||
Acceleration of performance units | — | — | — | 1,232 | |||||||
Income tax benefit | — | (30) | — | (72) | |||||||
Other | (203) | (191) | (532) | (1,022) | |||||||
Adjusted EBITDA | $ | 26,088 | $ | 48,035 | $ | 102,469 | $ | 122,068 | |||
1. | Excludes associated stock-based compensation. |
Reconciliation of Net (Loss) Income Available to Common Stockholders to Adjusted Net (Loss) Income Available to Common Stockholders
The Company defines adjusted net (loss) income as net (loss) income excluding items that the Company believes affect the comparability of operating results and are typically excluded from published estimates by the investment community, including items whose timing and/or amount cannot be reasonably estimated or are non-recurring, as shown in the following tables.
Management uses the supplemental measure of adjusted net (loss) income as an indicator of the Company's operational trends and performance relative to other oil and natural gas companies and believes it is more comparable to earnings estimates provided by securities analysts. Adjusted net (loss) income is not a measure of financial performance under GAAP and should not be considered a substitute for net (loss) income available to common stockholders.
Three Months Ended September 30, 2019 | Three Months Ended September 30, 2018 | ||||||||||
$ | $/Diluted Share | $ | $/Diluted Share | ||||||||
(In thousands, except per share amounts) | |||||||||||
Net (loss) income available to common stockholders | $ | (181,602) | $ | (5.12) | $ | 11,715 | $ | 0.33 | |||
Asset impairment | 165,507 | 4.66 | — | — | |||||||
(Gain) loss on derivative contracts | (1,756) | (0.05) | 11,329 | 0.32 | |||||||
Cash received (paid) upon settlement of derivative contracts | 622 | 0.02 | (11,632) | (0.33) | |||||||
Employee termination benefits | — | — | 23 | — | |||||||
Proxy contest | — | — | (459) | (0.01) | |||||||
Other | (66) | — | (172) | — | |||||||
Adjusted net (loss) income available to common stockholders | $ | (17,295) | $ | (0.49) | $ | 10,804 | $ | 0.32 | |||
Basic | Diluted | Basic | Diluted | ||||||||
Weighted average number of common shares outstanding | 35,491 | 35,491 | 35,308 | 35,330 | |||||||
Total adjusted net (loss) income per share | $ | (0.49) | $ | (0.49) | $ | 0.31 | $ | 0.31 | |||
Nine Months Ended September 30, 2019 | Nine Months Ended September 30, 2018 | ||||||||||
$ | $/Diluted Share | $ | $/Diluted Share | ||||||||
(In thousands, except per share amounts) | |||||||||||
Net loss available to common stockholders | $ | (200,163) | $ | (5.66) | $ | (63,253) | $ | (1.81) | |||
Asset impairment | 165,507 | 4.68 | 4,170 | 0.12 | |||||||
(Gain) loss on derivative contracts | (1,547) | (0.05) | 59,763 | 1.71 | |||||||
Cash received (paid) upon settlement of derivative contracts | 5,700 | 0.16 | (29,025) | (0.83) | |||||||
Employee termination benefits | 4,465 | 0.13 | 32,653 | 0.93 | |||||||
Proxy contest | — | — | 7,139 | 0.20 | |||||||
Accelerated vesting of employment compensation | — | — | 6,545 | 0.19 | |||||||
Gain on extinguishment of debt | — | — | (1,151) | (0.03) | |||||||
Other | (120) | — | (2,077) | (0.06) | |||||||
Adjusted net (loss) income available to common stockholders | $ | (26,158) | $ | (0.74) | $ | 14,764 | $ | 0.42 | |||
Basic | Diluted | Basic | Diluted | ||||||||
Weighted average number of common shares outstanding | 35,390 | 35,390 | 34,971 | 34,971 | |||||||
Total adjusted net (loss) income per share | $ | (0.74) | $ | (0.74) | $ | 0.42 | $ | 0.42 | |||
Reconciliation of G&A to Adjusted G&A
The Company reports and provides guidance on Adjusted G&A per Boe because it believes this measure is commonly used by management, analysts and investors as an indicator of cost management and operating efficiency on a comparable basis from period to period and to compare and make investment recommendations of companies in the oil and gas industry. This non-GAAP measure allows for the analysis of general and administrative spend without regard to stock-based compensation programs and other non-recurring cash items, if any, which can vary significantly between companies. Adjusted G&A per Boe is not a measure of financial performance under GAAP and should not be considered a substitute for general and administrative expense per Boe. Therefore, the Company's Adjusted G&A per Boe may not be comparable to other companies' similarly titled measures.
The Company defines adjusted G&A as general and administrative expense adjusted for certain non-cash stock-based compensation and other non-recurring items, if any, as shown in the following tables.
Three Months Ended September 30, 2019 | Three Months Ended September 30, 2018 | ||||||||||
$ | $/Boe | $ | $/Boe | ||||||||
(In thousands, except per Boe amounts) | |||||||||||
General and administrative | $ | 6,238 | $ | 2.19 | $ | 9,064 | $ | 2.90 | |||
Stock-based compensation | (808) | (0.28) | (506) | (0.16) | |||||||
Adjusted G&A | $ | 5,430 | $ | 1.91 | $ | 8,558 | $ | 2.74 | |||
Nine Months Ended September 30, 2019 | Nine Months Ended September 30, 2018 | ||||||||||
$ | $/Boe | $ | $/Boe | ||||||||
(In thousands, except per Boe amounts) | |||||||||||
General and administrative | $ | 26,261 | $ | 2.84 | $ | 32,823 | $ | 3.54 | |||
Stock-based compensation (1) | (2,953) | (0.32) | (3,971) | (0.43) | |||||||
Adjusted G&A | $ | 23,308 | $ | 2.52 | $ | 28,852 | $ | 3.11 | |||
1. | Excludes non-cash stock-based compensation included in employee termination benefits and accelerated vesting of employment compensation in the consolidated statement of operations. |
For further information, please contact:
Johna Robinson
Investor Relations
SandRidge Energy, Inc.
123 Robert S. Kerr Avenue
Oklahoma City, OK 73102-6406
(405) 429-5515
Cautionary Note to Investors - This press release includes "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, including, but not limited to, the information appearing under the heading "2019 Operational and Capital Expenditure Guidance." These forward-looking statements are neither historical facts nor assurances of future performance and reflect SandRidge's current beliefs and expectations regarding future events and operating performance. The forward-looking statements include projections and estimates of the Company's corporate strategies, future operations, and development plans and appraisal programs, estimated oil, natural gas and natural gas liquids production, projected operating, general and administrative and other costs, projected capital expenditures, efficiency and cost reduction initiative outcomes and liquidity and capital structure. We have based these forward-looking statements on our current expectations and assumptions and analyses made by us in light of our experience and our perception of historical trends, current conditions and expected future developments, as well as other factors we believe are appropriate under the circumstances. However, whether actual results and developments will conform with our expectations and predictions is subject to a number of risks and uncertainties, including the volatility of oil and natural gas prices, our success in discovering, estimating, developing and replacing oil and natural gas reserves, actual decline curves and the actual effect of adding compression to natural gas wells, the availability and terms of capital, the ability of counterparties to transactions with us to meet their obligations, our timely execution of hedge transactions, credit conditions of global capital markets, changes in economic conditions, the amount and timing of future development costs, the availability and demand for alternative energy sources, regulatory changes, including those related to carbon dioxide and greenhouse gas emissions, and other factors, many of which are beyond our control. We refer you to the discussion of risk factors in Part I, Item 1A - "Risk Factors" of our Annual Report on Form 10-K and in comparable "Risk Factor" sections of our Quarterly Reports on Form 10-Q filed after such form 10-K. All of the forward-looking statements made in this press release are qualified by these cautionary statements. The actual results or developments anticipated may not be realized or, even if substantially realized, they may not have the expected consequences to or effects on our Company or our business or operations. Such statements are not guarantees of future performance and actual results or developments may differ materially from those projected in the forward-looking statements. We undertake no obligation to update or revise any forward-looking statements.
SandRidge Energy, Inc. (NYSE: SD) is an oil and natural gas exploration and production company headquartered in Oklahoma City, Oklahoma with its principal focus on developing high-return, growth oriented projects in Oklahoma and Colorado. The majority of the Company's production is generated from the Mississippian Lime formation in Oklahoma and Kansas.
View original content to download multimedia:http://www.prnewswire.com/news-releases/sandridge-energy-inc-reports-financial-and-operational-results-for-third-quarter-2019-300956869.html
SOURCE SandRidge Energy, Inc.
Article Date
11/12/2019SandRidge Energy, Inc. Reports Financial and Operational Results for Second Quarter 2019
Source: PR Newswire
OKLAHOMA CITY, Aug. 7, 2019 /PRNewswire/ -- SandRidge Energy, Inc. (the "Company" or "SandRidge") (NYSE:SD) today announced financial and operational results for the quarter ended June 30, 2019.
Highlights during the second quarter:
Paul McKinney, President and CEO commented, "During the second quarter, our teams demonstrated their commitment to delivering on what we said we would do. Oil production is up 16% quarter over quarter, total forecasted production is near the high end of guidance, and we continue to make progress reducing cash costs. As we head into the final months of summer, we will finish completing the six wells of our 15-wells-per-section test drilled in North Park earlier this year and continue the planning process for our future drilling and development programs."
Mr. McKinney continued, "As planned, the majority of our budgeted drilling and completion capital was spent during the first half of 2019. We expect the remaining drilling projects for 2019 to fall within our capital spending guidance range as we remain focused on financial discipline."
Financial Results
For the second quarter, the Company reported a net loss of $13 million, or $0.38 per share, and net cash provided by operating activities of $31 million. After adjusting for certain items, the Company's adjusted net loss amounted to $9 million, or $0.25 per share, operating cash flow totaled $31 million and adjusted EBITDA was $35 million for the quarter. The Company defines and reconciles adjusted net income, adjusted EBITDA and other non-GAAP financial measures to the most directly comparable GAAP measure in supporting tables at the conclusion of this press release beginning on page 10.
Operational Results and Activity
Production totaled 3.2 MMBoe (30% oil, 26% NGLs and 44% natural gas) for the second quarter. The Company averaged one rig in the Mid-Continent region targeting the Northwest STACK Meramec and one rig in the North Park Basin targeting the Niobrara.
North Park Basin Asset in Jackson County, Colorado
Net production from the North Park Basin totaled 450 MBoe (4.9 MBoepd) for the quarter. During the quarter, the Company drilled six wells that will be completed during the third quarter and brought two wells to sales. The two wells brought to sales during the quarter produced a 30-Day IP per well average of 472 Bopd, which is 18% above type curve.
Mid-Continent Assets in Oklahoma and Kansas
In the second quarter, production in the Mississippian totaled 2.5 MMBoe (27.1 MBoepd, 16% oil) and Northwest STACK production totaled 309 MBoe (3.4 MBoepd, 48% oil).
During the quarter, the Company drilled the final three wells under the Drilling Participation Agreement in the Northwest STACK. The Company brought a total of seven Meramec wells to sales with a 30-Day IP per well average of 511 Boepd (70% oil), which is in line with type curve.
Liquidity and Capital Structure
During the quarter, the Company amended and restated its existing credit facility with improved terms. As of August 2, 2019, the Company's total liquidity was $225 million, based on $20 million of cash and $205 million of available elected commitments under its credit facility, net of outstanding letters of credit. The Company currently has $57 million drawn on the facility.
Conference Call Information
The Company will host a conference call to discuss these results on Thursday, August 8, 2019 at 8:00 am CT. The telephone number to access the conference call from within the U.S. is (833) 245-9650 and from outside the U.S. is (647) 689-4222. The passcode for the call is 9891594. An audio replay of the call will be available from August 8, 2019 until 11:59 pm CT on August 22, 2019. The number to access the conference call replay from within the U.S. is (800) 585-8367 and from outside the U.S. is (416) 621-4642. The passcode for the replay is 9891594.
A live audio webcast of the conference call will also be available via SandRidge's website, www.sandridgeenergy.com, under Investor Relations/Presentation & Events. The webcast will be archived for replay on the Company's website for 30 days.
2019 Operational and Capital Expenditure Guidance
Presented below is the Company's operational and capital expenditure guidance for 2019 with updated measures italicized and bold.
Guidance | ||
Projection as of | ||
August 7, 2019 | ||
Production | ||
Oil (MMBbls) | 3.7 - 3.9 | |
Natural Gas Liquids (MMBbls) | 2.5 - 2.6 | |
Total Liquids (MMBbls) | 6.2 - 6.5 | |
Natural Gas (Bcf) | 31.0 - 33.0 | |
Total (MMBoe) | 11.4 - 12.0 | |
Price Differentials to NYMEX | ||
Oil (per Bbl) | ($4.30) | |
Natural Gas Liquids (realized % of NYMEX WTI) | 25% | |
Natural Gas (per MMBtu) | ($1.30) | |
Expenses | ||
LOE | $89 - $94 million | |
Adjusted G&A Expense (1) | $31 - $35 million | |
% of Revenue | ||
Severance and Ad Valorem Taxes | 6.5% - 7.0% | |
Capital Expenditures ($ in millions) | ||
Drilling and Completion | $115 - $125 | |
Other Exploration and Production | $45 - $55 | |
Total Capital Expenditures | $160 - $180 | |
(excluding acquisitions and plugging and abandonment) | ||
1. | Adjusted G&A expense is a non-GAAP financial measure. The Company has defined this measure at the conclusion of this press release under "Non-GAAP Financial Measures" beginning on page 10. Information to reconcile this non-GAAP financial measure to the most directly comparable GAAP financial measure is not available at this time, as management is unable to forecast the excluded items for future periods. |
Operational and Financial Statistics
Information regarding the Company's production, pricing, costs and earnings is presented below:
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||
Production - Total | |||||||||||
Oil (MBbl) | 984 | 755 | 1,833 | 1,681 | |||||||
NGL (MBbl) | 830 | 700 | 1,706 | 1,400 | |||||||
Natural Gas (MMcf) | 8,476 | 8,977 | 17,096 | 18,464 | |||||||
Oil equivalent (MBoe) | 3,227 | 2,951 | 6,388 | 6,158 | |||||||
Daily production (MBoed) | 35.5 | 32.4 | 35.3 | 34.0 | |||||||
Average price per unit | |||||||||||
Realized oil price per barrel - as reported | $ | 56.52 | $ | 65.19 | $ | 53.89 | $ | 61.01 | |||
Realized impact of derivatives per barrel | — | (16.44) | — | (12.01) | |||||||
Net realized price per barrel | $ | 56.52 | $ | 48.75 | $ | 53.89 | $ | 49.00 | |||
Realized NGL price per barrel - as reported | $ | 11.34 | $ | 24.21 | $ | 13.20 | $ | 23.81 | |||
Realized impact of derivatives per barrel | — | — | — | — | |||||||
Net realized price per barrel | $ | 11.34 | $ | 24.21 | $ | 13.20 | $ | 23.81 | |||
Realized natural gas price per Mcf - as reported | $ | 1.20 | $ | 1.46 | $ | 1.58 | $ | 1.65 | |||
Realized impact of derivatives per Mcf | — | 0.13 | 0.29 | 0.15 | |||||||
Net realized price per Mcf | $ | 1.20 | $ | 1.59 | $ | 1.87 | $ | 1.80 | |||
Realized price per Boe - as reported | $ | 23.30 | $ | 26.87 | $ | 23.21 | $ | 27.00 | |||
Net realized price per Boe - including impact of derivatives | $ | 23.30 | $ | 23.05 | $ | 24.00 | $ | 24.18 | |||
Average cost per Boe | |||||||||||
Lease operating | $ | 7.77 | $ | 6.70 | $ | 7.49 | $ | 7.03 | |||
Production, ad valorem, and other taxes | $ | 1.82 | $ | 1.93 | $ | 1.72 | $ | 1.94 | |||
Depletion (1) | $ | 12.22 | $ | 10.49 | $ | 11.88 | $ | 9.57 | |||
Loss per share | |||||||||||
Loss per share applicable to common stockholders | |||||||||||
Basic | $ | (0.38) | $ | (0.97) | $ | (0.53) | $ | (2.15) | |||
Diluted | $ | (0.38) | $ | (0.97) | $ | (0.53) | $ | (2.15) | |||
Adjusted net (loss) income per share available to common stockholders | |||||||||||
Basic | $ | (0.25) | $ | (0.05) | $ | (0.25) | $ | 0.11 | |||
Diluted | $ | (0.25) | $ | (0.05) | $ | (0.25) | $ | 0.11 | |||
Weighted average number of shares outstanding (in thousands) | |||||||||||
Basic | 35,356 | 35,017 | 35,339 | 34,800 | |||||||
Diluted (2) | 35,356 | 35,017 | 35,339 | 34,884 | |||||||
(1) | Includes accretion of asset retirement obligation. | |||||||||||
(2) | Includes shares considered antidilutive for calculating loss per share in accordance with GAAP. | |||||||||||
Capital Expenditures
The table below presents actual results of the Company's capital expenditures for the three months and six months ended June 30, 2019.
Three Months Ended | Six Months Ended | ||||
June 30, 2019 | June 30, 2019 | ||||
(In thousands) | (In thousands) | ||||
Drilling and Completion | 22,898 | 76,647 | |||
Other Exploration and Production | 12,324 | 30,019 | |||
Total Capital Expenditures | $ | 35,222 | $ | 106,666 | |
(excluding acquisitions and plugging and abandonment) | |||||
Derivative Contracts
The table below sets forth the Company's hedge position for 2019 as of August 7, 2019:
Quarter Ending | ||||||||||
3/31/2019 | 6/30/2019 | 9/30/2019 | 12/31/2019 | FY 2019 | ||||||
WTI Swaps: | ||||||||||
Total Volume (MBbls) | - | - | 163.0 | 184.0 | 347.0 | |||||
Swap Price ($/Bbl) | - | - | $60.04 | $60.04 | $60.04 | |||||
Capitalization
The Company's capital structure as of June 30, 2019 and December 31, 2018 is presented below:
June 30, 2019 | December 31, 2018 | ||||
(In thousands) | |||||
Cash, cash equivalents and restricted cash | $ | 9,789 | $ | 19,645 | |
Credit facility | $ | 52,000 | $ | — | |
Total debt | 52,000 | — | |||
Stockholders' equity | |||||
Common stock | 36 | 36 | |||
Warrants | 88,518 | 88,516 | |||
Additional paid-in capital | 1,058,200 | 1,055,164 | |||
Accumulated deficit | (314,613) | (295,995) | |||
Total SandRidge Energy, Inc. stockholders' equity | 832,141 | 847,721 | |||
Total capitalization | $ | 884,141 | $ | 847,721 | |
SandRidge Energy, Inc. and Subsidiaries | |||||||||||
Condensed Consolidated Statements of Operations (Unaudited) | |||||||||||
(In thousands, except per share amounts) | |||||||||||
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||
Revenues | |||||||||||
Oil, natural gas and NGL | $ | 75,196 | $ | 79,304 | $ | 148,244 | $ | 166,270 | |||
Other | 192 | 158 | 380 | 320 | |||||||
Total revenues | 75,388 | 79,462 | 148,624 | 166,590 | |||||||
Expenses | |||||||||||
Lease operating expenses | 25,076 | 19,757 | 47,855 | 43,276 | |||||||
Production, ad valorem, and other taxes | 5,877 | 5,683 | 10,957 | 11,917 | |||||||
Depreciation and depletion—oil and natural gas | 39,419 | 30,961 | 75,884 | 58,958 | |||||||
Depreciation and amortization—other | 2,986 | 3,040 | 5,929 | 6,193 | |||||||
Impairment | — | — | — | 4,170 | |||||||
General and administrative | 10,084 | 10,077 | 20,023 | 23,759 | |||||||
Accelerated vesting of employment compensation | — | 6,545 | — | 6,545 | |||||||
Proxy contest | — | 7,191 | — | 7,598 | |||||||
Employee termination benefits | 4,465 | 1,043 | 4,465 | 32,630 | |||||||
Loss on derivative contracts | — | 30,104 | 209 | 48,434 | |||||||
Other operating expense (income) | 37 | (1,254) | 119 | (1,238) | |||||||
Total expenses | 87,944 | 113,147 | 165,441 | 242,242 | |||||||
Loss from operations | (12,556) | (33,685) | (16,817) | (75,652) | |||||||
Other (expense) income | |||||||||||
Interest expense, net | (702) | (651) | (1,287) | (1,599) | |||||||
Gain on extinguishment of debt | — | — | — | 1,151 | |||||||
Other (expense) income, net | (26) | 217 | (457) | 1,090 | |||||||
Total other (expense) income | (728) | (434) | (1,744) | 642 | |||||||
Loss before income taxes | (13,284) | (34,119) | (18,561) | (75,010) | |||||||
Income tax benefit | — | (45) | — | (42) | |||||||
Net loss | $ | (13,284) | $ | (34,074) | $ | (18,561) | $ | (74,968) | |||
Loss per share | |||||||||||
Basic | $ | (0.38) | $ | (0.97) | $ | (0.53) | $ | (2.15) | |||
Diluted | $ | (0.38) | $ | (0.97) | $ | (0.53) | $ | (2.15) | |||
Weighted average number of common shares outstanding | |||||||||||
Basic | 35,356 | 35,017 | 35,339 | 34,800 | |||||||
Diluted | 35,356 | 35,017 | 35,339 | 34,800 | |||||||
SandRidge Energy, Inc. and Subsidiaries | |||||
Condensed Consolidated Balance Sheets (Unaudited) | |||||
(In thousands) | |||||
June 30, 2019 | December 31, 2018 | ||||
ASSETS | |||||
Current assets | |||||
Cash and cash equivalents | $ | 7,808 | $ | 17,660 | |
Restricted cash - other | 1,981 | 1,985 | |||
Accounts receivable, net | 51,025 | 45,503 | |||
Derivative contracts | — | 5,286 | |||
Prepaid expenses | 2,927 | 2,628 | |||
Other current assets | 247 | 265 | |||
Total current assets | 63,988 | 73,327 | |||
Oil and natural gas properties, using full cost method of accounting | |||||
Proved | 1,390,054 | 1,269,091 | |||
Unproved | 46,274 | 60,152 | |||
Less: accumulated depreciation, depletion and impairment | (652,709) | (580,132) | |||
783,619 | 749,111 | ||||
Other property, plant and equipment, net | 197,706 | 200,838 | |||
Other assets | 1,500 | 1,062 | |||
Total assets | $ | 1,046,813 | $ | 1,024,338 | |
LIABILITIES AND STOCKHOLDERS' EQUITY | |||||
Current liabilities | |||||
Accounts payable and accrued expenses | $ | 95,734 | $ | 111,797 | |
Asset retirement obligation | 14,820 | 25,393 | |||
Other current liabilities | 1,355 | — | |||
Total current liabilities | 111,909 | 137,190 | |||
Long-term debt | 52,000 | — | |||
Asset retirement obligation | 46,176 | 34,671 | |||
Other long-term obligations | 4,587 | 4,756 | |||
Total liabilities | 214,672 | 176,617 | |||
Stockholders' Equity | |||||
Common stock, $0.001 par value; 250,000 shares authorized; 35,762 issued and outstanding at June 30, 2019 and 35,687 issued and outstanding at December 31, 2018 | 36 | 36 | |||
Warrants | 88,518 | 88,516 | |||
Additional paid-in capital | 1,058,200 | 1,055,164 | |||
Accumulated deficit | (314,613) | (295,995) | |||
Total stockholders' equity | 832,141 | 847,721 | |||
Total liabilities and stockholders' equity | $ | 1,046,813 | $ | 1,024,338 | |
SandRidge Energy, Inc. and Subsidiaries | |||||
Condensed Consolidated Cash Flows (Unaudited) | |||||
(In thousands) | |||||
Six Months Ended June 30, | |||||
2019 | 2018 | ||||
CASH FLOWS FROM OPERATING ACTIVITIES | |||||
Net loss | $ | (18,561) | $ | (74,968) | |
Adjustments to reconcile net loss to net cash provided by operating activities | |||||
Provision for doubtful accounts | (91) | (6) | |||
Depreciation, depletion, and amortization | 81,813 | 65,151 | |||
Impairment | — | 4,170 | |||
Debt issuance costs amortization | 238 | 235 | |||
Amortization of premiums and discounts on debt | — | (47) | |||
Write off of debt issuance costs | 142 | — | |||
Gain on extinguishment of debt | — | (1,151) | |||
Loss on derivative contracts | 209 | 48,434 | |||
Cash received (paid) on settlement of derivative contracts | 5,078 | (17,393) | |||
Stock-based compensation | 3,104 | 21,909 | |||
Other | (57) | (1,563) | |||
Changes in operating assets and liabilities | (9,402) | 11,346 | |||
Net cash provided by operating activities | 62,473 | 56,117 | |||
CASH FLOWS FROM INVESTING ACTIVITIES | |||||
Capital expenditures for property, plant and equipment | (123,676) | (95,328) | |||
Acquisition of assets | 236 | — | |||
Proceeds from sale of assets | 852 | 13,563 | |||
Net cash used in investing activities | (122,588) | (81,765) | |||
CASH FLOWS FROM FINANCING ACTIVITIES | |||||
Proceeds from borrowings | 112,596 | — | |||
Repayments of borrowings | (60,596) | (36,304) | |||
Reduction of financing lease liability | (635) | — | |||
Debt issuance costs | (901) | — | |||
Cash paid for tax withholdings on vested stock awards | (205) | (7,376) | |||
Net cash provided by (used in) financing activities | 50,259 | (43,680) | |||
NET DECREASE IN CASH, CASH EQUIVALENTS and RESTRICTED CASH | (9,856) | (69,328) | |||
CASH, CASH EQUIVALENTS and RESTRICTED CASH, beginning of year | 19,645 | 101,308 | |||
CASH, CASH EQUIVALENTS and RESTRICTED CASH, end of period | $ | 9,789 | $ | 31,980 | |
Supplemental Disclosure of Cash Flow Information | |||||
Cash paid for interest, net of amounts capitalized | $ | (949) | $ | — | |
Supplemental Disclosure of Noncash Investing and Financing Activities | |||||
Change in accrued capital expenditures | $ | 17,224 | $ | 29,464 | |
Right-of-use assets obtained in exchange for financing lease obligations | $ | 2,655 | $ | — | |
Non-GAAP Financial Measures
This press release includes non-GAAP financial measures. These non-GAAP measures are not alternatives to GAAP measures, and you should not consider these non-GAAP measures in isolation or as a substitute for analysis of our results as reported under GAAP. Below is additional disclosure regarding each of the non-GAAP measures used in this press release, including reconciliations to their most directly comparable GAAP measure.
Reconciliation of Cash Provided by Operating Activities to Operating Cash Flow
The Company defines operating cash flow as net cash provided by operating activities before changes in operating assets and liabilities as shown in the following table. Operating cash flow is a supplemental financial measure used by the Company's management and by securities analysts, investors, lenders, rating agencies and others who follow the industry as an indicator of the Company's ability to internally fund exploration and development activities and to service or incur additional debt. The Company also uses this measure because operating cash flow relates to the timing of cash receipts and disbursements that the Company may not control and may not relate to the period in which the operating activities occurred. Further, operating cash flow allows the Company to compare its operating performance and return on capital with those of other companies without regard to financing methods and capital structure. This measure should not be considered in isolation or as a substitute for net cash provided by operating activities prepared in accordance with GAAP.
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||
(In thousands) | |||||||||||
Net cash provided by operating activities | $ | 30,903 | $ | 25,710 | $ | 62,473 | $ | 56,117 | |||
Changes in operating assets and liabilities | 404 | (1,797) | 9,402 | (11,346) | |||||||
Operating cash flow | $ | 31,307 | $ | 23,913 | $ | 71,875 | $ | 44,771 | |||
Reconciliation of Net Loss to EBITDA and Adjusted EBITDA
The Company defines EBITDA as net loss before income tax expense, interest expense, depreciation and amortization - other and depreciation and depletion - oil and natural gas. Adjusted EBITDA, as presented herein, is EBITDA excluding items that the Company believes affect the comparability of operating results such as items whose timing and/or amount cannot be reasonably estimated or are non-recurring, as shown in the following tables.
Adjusted EBITDA is presented because management believes it provides useful additional information used by the Company's management and by securities analysts, investors, lenders, ratings agencies and others who follow the industry for analysis of the Company's financial and operating performance on a recurring basis and the Company's ability to internally fund exploration and development and to service or incur additional debt. In addition, management believes that adjusted EBITDA is widely used by professional research analysts and others in the valuation, comparison and investment recommendations of companies in the oil and gas exploration and production industry. The Company's adjusted EBITDA may not be comparable to similarly titled measures used by other companies.
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||
(In thousands) | |||||||||||
Net loss | $ | (13,284) | $ | (34,074) | $ | (18,561) | $ | (74,968) | |||
Adjusted for | |||||||||||
Income tax benefit | — | (45) | — | (42) | |||||||
Interest expense | 737 | 699 | 1,349 | 1,806 | |||||||
Depreciation and amortization - other | 2,986 | 3,040 | 5,929 | 6,193 | |||||||
Depreciation and depletion - oil and natural gas | 39,419 | 30,961 | 75,884 | 58,958 | |||||||
EBITDA | 29,858 | 581 | 64,601 | (8,053) | |||||||
Asset impairment | — | — | — | 4,170 | |||||||
Stock-based compensation | 1,149 | 5,856 | 2,145 | 8,778 | |||||||
Loss on derivative contracts | — | 30,104 | 209 | 48,434 | |||||||
Cash (paid) received upon settlement of derivative contracts | — | (11,274) | 5,078 | (17,393) | |||||||
Employee termination benefits | 4,465 | 1,043 | 4,465 | 32,630 | |||||||
Proxy contest | — | 7,191 | — | 7,598 | |||||||
Acceleration of performance units | — | 1,232 | — | 1,232 | |||||||
Gain on extinguishment of debt | — | — | — | (1,151) | |||||||
Other | (26) | (1,372) | (117) | (2,212) | |||||||
Adjusted EBITDA | $ | 35,446 | $ | 33,361 | $ | 76,381 | $ | 74,033 | |||
Reconciliation of Cash Provided by Operating Activities to Adjusted EBITDA
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||
(In thousands) | |||||||||||
Net cash provided by operating activities | $ | 30,903 | $ | 25,710 | $ | 62,473 | $ | 56,117 | |||
Changes in operating assets and liabilities | 404 | (1,797) | 9,402 | (11,346) | |||||||
Interest expense | 737 | 699 | 1,349 | 1,806 | |||||||
Employee termination benefits (1) | 3,486 | 862 | 3,486 | 19,499 | |||||||
Proxy contest | — | 7,191 | — | 7,598 | |||||||
Acceleration of performance units | — | 1,232 | — | 1,232 | |||||||
Income tax benefit | — | (45) | — | (42) | |||||||
Other | (84) | (491) | (329) | (831) | |||||||
Adjusted EBITDA | $ | 35,446 | $ | 33,361 | $ | 76,381 | $ | 74,033 | |||
1. | Excludes associated stock-based compensation. |
Reconciliation of Net Loss Available to Common Stockholders to Adjusted Net (Loss) Income Available to Common Stockholders
The Company defines adjusted net (loss) income as net (loss) income excluding items that the Company believes affect the comparability of operating results and are typically excluded from published estimates by the investment community, including items whose timing and/or amount cannot be reasonably estimated or are non-recurring, as shown in the following tables.
Management uses the supplemental measure of adjusted net (loss) income as an indicator of the Company's operational trends and performance relative to other oil and natural gas companies and believes it is more comparable to earnings estimates provided by securities analysts. Adjusted net (loss) income is not a measure of financial performance under GAAP and should not be considered a substitute for net (loss) income available to common stockholders.
Three Months Ended June 30, 2019 | Three Months Ended June 30, 2018 | ||||||||||
$ | $/Diluted Share | $ | $/Diluted Share | ||||||||
(In thousands, except per share amounts) | |||||||||||
Net loss available to common stockholders | $ | (13,284) | $ | (0.38) | $ | (34,074) | $ | (0.97) | |||
Loss on derivative contracts | — | — | 30,104 | 0.86 | |||||||
Cash paid upon settlement of derivative contracts | — | — | (11,274) | (0.32) | |||||||
Employee termination benefits | 4,465 | 0.13 | 1,043 | 0.03 | |||||||
Proxy contest | — | — | 7,191 | 0.21 | |||||||
Accelerated vesting of employment compensation | — | — | 6,545 | 0.19 | |||||||
Other | 10 | — | (1,324) | (0.05) | |||||||
Adjusted net loss available to common stockholders | $ | (8,809) | $ | (0.25) | $ | (1,789) | $ | (0.05) | |||
Basic | Diluted (1) | Basic | Diluted (1) | ||||||||
Weighted average number of common shares outstanding | 35,356 | 35,356 | 35,017 | 35,017 | |||||||
Total adjusted net loss per share | $ | (0.25) | $ | (0.25) | $ | (0.05) | $ | (0.05) | |||
Six Months Ended June 30, 2019 | Six Months Ended June 30, 2018 | ||||||||||
$ | $/Diluted Share | $ | $/Diluted Share | ||||||||
(In thousands, except per share amounts) | |||||||||||
Net loss available to common stockholders | $ | (18,561) | $ | (0.53) | $ | (74,968) | $ | (2.15) | |||
Asset impairment | — | — | 4,170 | 0.12 | |||||||
Loss on derivative contracts | 209 | 0.01 | 48,434 | 1.39 | |||||||
Cash received (paid) upon settlement of derivative contracts | 5,078 | 0.14 | (17,393) | (0.50) | |||||||
Employee termination benefits | 4,465 | 0.13 | 32,630 | 0.94 | |||||||
Proxy contest | — | — | 7,598 | 0.22 | |||||||
Accelerated vesting of employment compensation | — | — | 6,545 | 0.19 | |||||||
Gain on extinguishment of debt | — | — | (1,151) | (0.03) | |||||||
Other | (54) | — | (1,905) | (0.07) | |||||||
Adjusted net (loss) income available to common stockholders | $ | (8,863) | $ | (0.25) | $ | 3,960 | $ | 0.11 | |||
Basic | Diluted (1) | Basic | Diluted (1) | ||||||||
Weighted average number of common shares outstanding | 35,339 | 35,339 | 34,800 | 34,884 | |||||||
Total adjusted net (loss) income per share | $ | (0.25) | $ | (0.25) | $ | 0.11 | $ | 0.11 | |||
1. | Weighted average fully diluted common shares outstanding for certain periods presented includes shares that are considered antidilutive for calculating loss per share in accordance with GAAP. |
Reconciliation of G&A to Adjusted G&A
The Company reports and provides guidance on Adjusted G&A per Boe because it believes this measure is commonly used by management, analysts and investors as an indicator of cost management and operating efficiency on a comparable basis from period to period and to compare and make investment recommendations of companies in the oil and gas industry. This non-GAAP measure allows for the analysis of general and administrative spend without regard to stock-based compensation programs and other non-recurring cash items, if any, which can vary significantly between companies. Adjusted G&A per Boe is not a measure of financial performance under GAAP and should not be considered a substitute for general and administrative expense per Boe. Therefore, the Company's Adjusted G&A per Boe may not be comparable to other companies' similarly titled measures.
The Company defines adjusted G&A as general and administrative expense adjusted for certain non-cash stock-based compensation and other non-recurring items, if any, as shown in the following tables.
Three Months Ended June 30, 2019 | Three Months Ended June 30, 2018 | ||||||||||
$ | $/Boe | $ | $/Boe | ||||||||
(In thousands, except per Boe amounts) | |||||||||||
General and administrative | $ | 10,084 | $ | 3.13 | $ | 10,077 | $ | 3.41 | |||
Stock-based compensation (1) | (1,149) | (0.36) | (543) | (0.18) | |||||||
Adjusted G&A | $ | 8,935 | $ | 2.77 | $ | 9,534 | $ | 3.23 | |||
Six Months Ended June 30, 2019 | Six Months Ended June 30, 2018 | ||||||||||
$ | $/Boe | $ | $/Boe | ||||||||
(In thousands, except per Boe amounts) | |||||||||||
General and administrative | $ | 20,023 | $ | 3.13 | $ | 23,759 | $ | 3.86 | |||
Stock-based compensation (1) | (2,145) | (0.33) | (3,465) | (0.56) | |||||||
Adjusted G&A | $ | 17,878 | $ | 2.80 | $ | 20,294 | $ | 3.30 | |||
1. | Excludes non-cash stock-based compensation included in employee termination benefits and accelerated vesting of employment compensation in the consolidated statement of operations. |
For further information, please contact:
Johna Robinson
Investor Relations
SandRidge Energy, Inc.
123 Robert S. Kerr Avenue
Oklahoma City, OK 73102-6406
(405) 429-5515
Cautionary Note to Investors - This press release includes "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, including, but not limited to, the information appearing under the heading "2019 Operational and Capital Expenditure Guidance." These forward-looking statements are neither historical facts nor assurances of future performance and reflect SandRidge's current beliefs and expectations regarding future events and operating performance. The forward-looking statements include projections and estimates of the Company's corporate strategies, future operations, and development plans and appraisal programs, estimated oil, natural gas and natural gas liquids production, projected operating, general and administrative and other costs, projected capital expenditures, efficiency and cost reduction initiative outcomes and liquidity and capital structure. We have based these forward-looking statements on our current expectations and assumptions and analyses made by us in light of our experience and our perception of historical trends, current conditions and expected future developments, as well as other factors we believe are appropriate under the circumstances. However, whether actual results and developments will conform with our expectations and predictions is subject to a number of risks and uncertainties, including the volatility of oil and natural gas prices, our success in discovering, estimating, developing and replacing oil and natural gas reserves, actual decline curves and the actual effect of adding compression to natural gas wells, the availability and terms of capital, the ability of counterparties to transactions with us to meet their obligations, our timely execution of hedge transactions, credit conditions of global capital markets, changes in economic conditions, the amount and timing of future development costs, the availability and demand for alternative energy sources, regulatory changes, including those related to carbon dioxide and greenhouse gas emissions, and other factors, many of which are beyond our control. We refer you to the discussion of risk factors in Part I, Item 1A - "Risk Factors" of our Annual Report on Form 10-K and in comparable "Risk Factor" sections of our Quarterly Reports on Form 10-Q filed after such form 10-K. All of the forward-looking statements made in this press release are qualified by these cautionary statements. The actual results or developments anticipated may not be realized or, even if substantially realized, they may not have the expected consequences to or effects on our Company or our business or operations. Such statements are not guarantees of future performance and actual results or developments may differ materially from those projected in the forward-looking statements. We undertake no obligation to update or revise any forward-looking statements.
SandRidge Energy, Inc. (NYSE: SD) is an oil and natural gas exploration and production company headquartered in Oklahoma City, Oklahoma with its principal focus on developing high-return, growth oriented projects in Oklahoma and Colorado. The majority of the Company's production is generated from the Mississippian Lime formation in Oklahoma and Kansas. Development activity is currently focused on the Meramec formation in the Northwest STACK Play in Oklahoma and multiple oil rich Niobrara benches in the Colorado North Park Basin.
View original content to download multimedia:http://www.prnewswire.com/news-releases/sandridge-energy-inc-reports-financial-and-operational-results-for-second-quarter-2019-300898206.html
SOURCE SandRidge Energy, Inc.
Article Date
8/7/2019SandRidge Energy, Inc. Announces 2019 Second Quarter Financial and Operational Results Release Date and Conference Call Information
Source: PR Newswire
OKLAHOMA CITY, Aug. 1, 2019 /PRNewswire/ -- SandRidge Energy, Inc. (NYSE: SD) will release its 2019 second quarter financial and operational results after the close of trading on the New York Stock Exchange on Wednesday, August 7, 2019.
The company will host a conference call to discuss these results on Thursday, August 8, 2019 at 8:00am CT. The telephone number to access the conference call from within the U.S. is (833) 245-9650 and from outside the U.S. is (647) 689-4222. The passcode for the call is 9891594. An audio replay of the call will be available from August 8, 2019 until 11:59pm CT on August 22, 2019. The number to access the conference call replay from within the U.S. is (800) 585-8367 and from outside the U.S. is (416) 621-4642. The passcode for the replay is 9891594.
A live audio webcast of the conference call will also be available via SandRidge's website, www.sandridgeenergy.com, under Investor Relations/Presentations & Events. The webcast will be archived for replay on the company's website for 30 days.
About SandRidge Energy, Inc.
SandRidge Energy, Inc. (NYSE: SD) is an oil and natural gas exploration and production company headquartered in Oklahoma City, Oklahoma with its principal focus on developing high-return, growth oriented projects in Oklahoma and Colorado. The majority of the Company's production is generated from the Mississippian Lime formation in Oklahoma and Kansas. Development activity is currently focused on the Meramec formation in the Northwest STACK Play in Oklahoma and multiple oil rich Niobrara benches in the Colorado North Park Basin.
CONTACT:
Johna Robinson
Investor Relations
SandRidge Energy, Inc.
123 Robert S. Kerr Avenue
Oklahoma City, OK 73102
+1 (405) 429-5515
View original content to download multimedia:http://www.prnewswire.com/news-releases/sandridge-energy-inc-announces-2019-second-quarter-financial-and-operational-results-release-date-and-conference-call-information-300895335.html
SOURCE SandRidge Energy, Inc.
Article Date
8/1/2019SandRidge Energy, Inc. Reports Financial and Operational Results for First Quarter 2019
Source: PR Newswire
OKLAHOMA CITY, May 8, 2019 /PRNewswire/ -- SandRidge Energy, Inc. (the "Company" or "SandRidge") (NYSE:SD) today announced financial and operational results for the quarter ended March 31, 2019.
Highlights during the first quarter
Paul McKinney, President and CEO commented, "Our first quarter results reveal early progress on our business strategy to deliver competitive and sustainable returns. Our production is up 4% over the previous quarter and we have substantially reduced our year-over-year cash costs with reductions in both LOE and G&A. We intend to make additional progress reducing our cash costs throughout the remaining quarters of 2019 and although we have benefited this quarter from higher oil prices, we will continue to stand by our commitment to financial discipline, and plan to spend within or very close to within our cash flow. Preserving our balance sheet is vital in the current commodity price environment and allows us to remain opportunistic in the market place.
"Operationally speaking, we are pleased with the results from our drilling programs in both North Park and the Mid-Continent areas. The average 30-Day IP rates from our Mid-Continent wells have met or exceeded type curve and the rates in North Park continue to meet expectations. Now that the Colorado Senate Bill 181 has been signed into law, we believe more clarity will come as the various regulatory agencies finalize their rulemaking. We anticipate that our development plans will experience minimal impacts from these changes primarily because none of our leasehold is located in highly developed or populated areas. We look forward to working with Jackson County, the COGCC, the BLM, and the local community to safely and responsibly continue our development plans in North Park."
Financial Results
For the first quarter, the Company reported a net loss of $5 million, or $0.15 per share, and net cash provided by operating activities of $32 million. After adjusting for certain items, the Company broke even on an adjusted net income basis, operating cash flow totaled $41 million and adjusted EBITDA was $41 million for the quarter. The Company defines and reconciles adjusted net income, adjusted EBITDA and other non-GAAP financial measures to the most directly comparable GAAP measure in supporting tables at the conclusion of this press release beginning on page 11.
Operational Results and Activity
During the quarter, production totaled 3.2 MMBoe (27% oil, 28% NGLs and 45% natural gas). The Company averaged two rigs in the Mid-Continent region targeting the Northwest STACK Meramec and one rig in North Park Basin targeting the Niobrara. Capital expenditures totaled $71 million for the quarter, which includes $36 million of completion capital carryover from 2018. The Company reaffirms capital guidance of $160 to $180 million for the year.
North Park Basin Asset in Jackson County, Colorado
Net oil production from the North Park Basin totaled 275 MBo (3.1 MBopd) for the first quarter. During the quarter, the Company drilled four wells, including two southern delineation wells and two wells within the core development area. The Company brought eight wells to sales late in the quarter that will significantly increase second quarter oil production. Three of these wells are in the Surprise Unit at the far southern end of the play and are currently producing approximately 1,800 Bopd. The other five wells complete a high-density spacing test initiated last year on the western side of the field. These results will be used to help define future development plans.
Mid-Continent Assets in Oklahoma and Kansas
In the first quarter, production in the Mississippian totaled 2.7 MMBoe (29.4 MBoepd, 18% oil) and Northwest STACK production totaled 236 MBoe (2.6 MBoepd, 45% oil).
During the quarter, the Company drilled eight wells in the Northwest STACK targeting the Meramec, with five of these wells drilled under the previously announced Drilling Participation Agreement. The Company also brought seven wells to sales with a 30-Day IP per well average of 576 Boepd (76% oil).
Liquidity and Capital Structure
As of May 2, 2019, the Company's total liquidity was $316 million, which includes $11 million of cash and $305 million of availability under its credit facility, net of outstanding letters of credit. The Company currently has $40 million drawn on the facility. The borrowing base is under evaluation by the Company and its lenders in connection with the scheduled spring redetermination.
Conference Call Information
The Company will host a conference call to discuss these results on Thursday, May 9, 2019 at 8:00 am CT. The telephone number to access the conference call from within the U.S. is (833) 245-9650 and from outside the U.S. is (647) 689-4222. The passcode for the call is 5575467. An audio replay of the call will be available from May 9, 2019 until 11:59 pm CT on June 9, 2019. The number to access the conference call replay from within the U.S. is (800) 585-8367 and from outside the U.S. is (416) 621-4642. The passcode for the replay is 5575467.
A live audio webcast of the conference call will also be available via SandRidge's website, www.sandridgeenergy.com, under Investor Relations/Presentation & Events. The webcast will be archived for replay on the Company's website for 30 days.
2019 Operational and Capital Expenditure Guidance
Presented below is the Company's operational and capital expenditure guidance for 2019.
Guidance | ||
Projection as of | ||
May 8, 2019 | ||
Production | ||
Oil (MMBbls) | 3.7 - 3.9 | |
Natural Gas Liquids (MMBbls) | 2.5 - 2.6 | |
Total Liquids (MMBbls) | 6.2 - 6.5 | |
Natural Gas (Bcf) | 31.0 - 33.0 | |
Total (MMBoe) | 11.4 - 12.0 | |
Price Differentials to NYMEX | ||
Oil (per Bbl) | ($4.30) | |
Natural Gas Liquids (realized % of NYMEX WTI) | 37% | |
Natural Gas (per MMBtu) | ($1.30) | |
Expenses | ||
LOE | $89 - $94 million | |
Adjusted G&A Expense (1) | $34 - $37 million | |
% of Revenue | ||
Severance and Ad Valorem Taxes | 6.5% - 7.0% | |
Capital Expenditures ($ in millions) | ||
Drilling and Completion | $115 - $125 | |
Other Exploration and Production | $45 - $55 | |
Total Capital Expenditures | $160 - $180 | |
(excluding acquisitions and plugging and abandonment) | ||
1. | Adjusted G&A expense is a non-GAAP financial measure. The Company has defined this measure at the conclusion of this press release under "Non-GAAP Financial Measures" beginning on page 11. Information to reconcile this non-GAAP financial measure to the most directly comparable GAAP financial measure is not available at this time, as management is unable to forecast the excluded items for future periods. |
Operational and Financial Statistics
Information regarding the Company's production, pricing, costs and earnings is presented below:
Three Months Ended March 31, | |||||
2019 | 2018 | ||||
Production - Total | |||||
Oil (MBbl) | 849 | 926 | |||
NGL (MBbl) | 875 | 700 | |||
Natural Gas (MMcf) | 8,620 | 9,487 | |||
Oil equivalent (MBoe) | 3,161 | 3,207 | |||
Daily production (MBoed) | 35.1 | 35.6 | |||
Average price per unit | |||||
Realized oil price per barrel - as reported | $ | 50.84 | $ | 57.60 | |
Realized impact of derivatives per barrel | — | (8.40) | |||
Net realized price per barrel | $ | 50.84 | $ | 49.20 | |
Realized NGL price per barrel - as reported | $ | 14.98 | $ | 23.41 | |
Realized impact of derivatives per barrel | — | — | |||
Net realized price per barrel | $ | 14.98 | $ | 23.41 | |
Realized natural gas price per Mcf - as reported | $ | 1.95 | $ | 1.82 | |
Realized impact of derivatives per Mcf | 0.59 | 0.17 | |||
Net realized price per Mcf | $ | 2.54 | $ | 1.99 | |
Realized price per Boe - as reported | $ | 23.11 | $ | 27.12 | |
Net realized price per Boe - including impact of derivatives | $ | 24.72 | $ | 25.21 | |
Average cost per Boe | |||||
Lease operating | $ | 7.21 | $ | 7.33 | |
Production, ad valorem, and other taxes | $ | 1.61 | $ | 1.94 | |
Depletion (1) | $ | 11.54 | $ | 8.73 | |
Earnings per share | |||||
Loss per share applicable to common stockholders | |||||
Basic | $ | (0.15) | $ | (1.18) | |
Diluted | $ | (0.15) | $ | (1.18) | |
Adjusted net income per share available to common stockholders | |||||
Basic | $ | — | $ | 0.17 | |
Diluted | $ | — | $ | 0.17 | |
Weighted average number of shares outstanding (in thousands) | |||||
Basic | 35,322 | 34,575 | |||
Diluted (2) | 35,322 | 34,637 | |||
(1) | Includes accretion of asset retirement obligation. | |
(2) | Includes shares considered antidilutive for calculating loss per share in accordance with GAAP. | |
Capital Expenditures
The table below presents actual results of the Company's capital expenditures for the three months ended March 31, 2019.
Three Months Ended | |||
March 31, 2019 | |||
(In thousands) | |||
Drilling and Completion | 53,749 | ||
Other Exploration and Production | 17,695 | ||
Total Capital Expenditures | $ | 71,444 | |
(excluding acquisitions and plugging and abandonment) | |||
Derivative Contracts
As of May 7, 2019, the Company had no outstanding derivative positions.
Capitalization
The Company's capital structure as of March 31, 2019 and December 31, 2018 is presented below:
March 31, 2019 | December 31, 2018 | ||||
(In thousands) | |||||
Cash, cash equivalents and restricted cash | $ | 9,335 | $ | 19,645 | |
Credit facility | $ | 20,000 | $ | — | |
Total debt | 20,000 | — | |||
Stockholders' equity | |||||
Common stock | 36 | 36 | |||
Warrants | 88,518 | 88,516 | |||
Additional paid-in capital | 1,056,235 | 1,055,164 | |||
Accumulated deficit | (301,329) | (295,995) | |||
Total SandRidge Energy, Inc. stockholders' equity | 843,460 | 847,721 | |||
Total capitalization | $ | 863,460 | $ | 847,721 | |
SandRidge Energy, Inc. and Subsidiaries | ||||||
Condensed Consolidated Statements of Operations (Unaudited) | ||||||
(In thousands, except per share amounts) | ||||||
Three Months Ended March 31, | ||||||
2019 | 2018 | |||||
Revenues | ||||||
Oil, natural gas and NGL | $ | 73,048 | $ | 86,966 | ||
Other | 188 | 162 | ||||
Total revenues | 73,236 | 87,128 | ||||
Expenses | ||||||
Lease operating expenses | 22,779 | 23,519 | ||||
Production, ad valorem, and other taxes | 5,080 | 6,234 | ||||
Depreciation and depletion—oil and natural gas | 36,465 | 27,997 | ||||
Depreciation and amortization—other | 2,943 | 3,153 | ||||
Impairment | — | 4,170 | ||||
General and administrative | 9,939 | 13,682 | ||||
Proxy contest | — | 407 | ||||
Employee termination benefits | — | 31,587 | ||||
Loss on derivative contracts | 209 | 18,330 | ||||
Other operating expense | 82 | 16 | ||||
Total expenses | 77,497 | 129,095 | ||||
Loss from operations | (4,261) | (41,967) | ||||
Other (expense) income | ||||||
Interest expense, net | (585) | (948) | ||||
Gain on extinguishment of debt | — | 1,151 | ||||
Other (expense) income, net | (431) | 873 | ||||
Total other (expense) income | (1,016) | 1,076 | ||||
Loss before income taxes | (5,277) | (40,891) | ||||
Income tax expense | — | 3 | ||||
Net loss | (5,277) | (40,894) | ||||
Loss per share | ||||||
Basic | $ | (0.15) | $ | (1.18) | ||
Diluted | $ | (0.15) | $ | (1.18) | ||
Weighted average number of common shares outstanding | ||||||
Basic | 35,322 | 34,575 | ||||
Diluted | 35,322 | 34,575 | ||||
SandRidge Energy, Inc. and Subsidiaries | |||||
Condensed Consolidated Balance Sheets (Unaudited) | |||||
(In thousands) | |||||
March 31, 2019 | December 31, 2018 | ||||
ASSETS | |||||
Current assets | |||||
Cash and cash equivalents | $ | 7,354 | $ | 17,660 | |
Restricted cash - other | 1,981 | 1,985 | |||
Accounts receivable, net | 51,053 | 45,503 | |||
Derivative contracts | — | 5,286 | |||
Prepaid expenses | 3,128 | 2,628 | |||
Other current assets | 251 | 265 | |||
Total current assets | 63,767 | 73,327 | |||
Oil and natural gas properties, using full cost method of accounting | |||||
Proved | 1,344,552 | 1,269,091 | |||
Unproved | 57,363 | 60,152 | |||
Less: accumulated depreciation, depletion and impairment | (614,972) | (580,132) | |||
786,943 | 749,111 | ||||
Other property, plant and equipment, net | 200,014 | 200,838 | |||
Other assets | 820 | 1,062 | |||
Total assets | $ | 1,051,544 | $ | 1,024,338 | |
LIABILITIES AND STOCKHOLDERS' EQUITY | |||||
Current liabilities | |||||
Accounts payable and accrued expenses | $ | 119,436 | $ | 111,797 | |
Current maturities of long-term debt | 20,000 | — | |||
Asset retirement obligation | 25,355 | 25,393 | |||
Other current liabilities | 29 | — | |||
Total current liabilities | 164,820 | 137,190 | |||
Asset retirement obligation | 35,836 | 34,671 | |||
Other long-term obligations | 7,428 | 4,756 | |||
Total liabilities | 208,084 | 176,617 | |||
Stockholders' Equity | |||||
Common stock, $0.001 par value; 250,000 shares authorized; 35,687 issued and outstanding at March 31, 2019 and December 31, 2018 | 36 | 36 | |||
Warrants | 88,518 | 88,516 | |||
Additional paid-in capital | 1,056,235 | 1,055,164 | |||
Accumulated deficit | (301,329) | (295,995) | |||
Total stockholders' equity | 843,460 | 847,721 | |||
Total liabilities and stockholders' equity | $ | 1,051,544 | $ | 1,024,338 | |
SandRidge Energy, Inc. and Subsidiaries | |||||
Condensed Consolidated Cash Flows (Unaudited) | |||||
(In thousands) | |||||
Three Months Ended March 31, | |||||
2019 | 2018 | ||||
CASH FLOWS FROM OPERATING ACTIVITIES | |||||
Net loss | $ | (5,277) | $ | (40,894) | |
Adjustments to reconcile net loss to net cash provided by operating activities | |||||
Provision for doubtful accounts | 72 | (335) | |||
Depreciation, depletion, and amortization | 39,408 | 31,150 | |||
Impairment | — | 4,170 | |||
Debt issuance costs amortization | 117 | 117 | |||
Amortization of premiums and discounts on debt | — | (47) | |||
Gain on extinguishment of debt | — | (1,151) | |||
Loss on derivative contracts | 209 | 18,330 | |||
Cash received (paid) on settlement of derivative contracts | 5,078 | (6,119) | |||
Stock-based compensation | 996 | 15,872 | |||
Other | (35) | (235) | |||
Changes in operating assets and liabilities | (8,998) | 9,549 | |||
Net cash provided by operating activities | 31,570 | 30,407 | |||
CASH FLOWS FROM INVESTING ACTIVITIES | |||||
Capital expenditures for property, plant and equipment | (62,254) | (65,527) | |||
Acquisition of assets | 326 | — | |||
Proceeds from sale of assets | 341 | 955 | |||
Net cash used in investing activities | (61,587) | (64,572) | |||
CASH FLOWS FROM FINANCING ACTIVITIES | |||||
Proceeds from borrowings | 39,596 | — | |||
Repayments of borrowings | (19,596) | (36,304) | |||
Reduction of financing lease liability | (293) | — | |||
Cash paid for tax withholdings on vested stock awards | — | (1,661) | |||
Net cash provided by (used in) financing activities | 19,707 | (37,965) | |||
NET DECREASE IN CASH, CASH EQUIVALENTS and RESTRICTED CASH | (10,310) | (72,130) | |||
CASH, CASH EQUIVALENTS and RESTRICTED CASH, beginning of year | 19,645 | 101,308 | |||
CASH, CASH EQUIVALENTS and RESTRICTED CASH, end of period | $ | 9,335 | $ | 29,178 | |
Supplemental Disclosure of Cash Flow Information | |||||
Cash paid for interest, net of amounts capitalized | $ | (408) | $ | — | |
Supplemental Disclosure of Noncash Investing and Financing Activities | |||||
Change in accrued capital expenditures | $ | (9,190) | $ | 28,258 | |
Right-of-use assets obtained in exchange for financing lease obligations | $ | 1,992 | $ | — | |
Non-GAAP Financial Measures
This press release includes non-GAAP financial measures. These non-GAAP measures are not alternatives to GAAP measures, and you should not consider these non-GAAP measures in isolation or as a substitute for analysis of our results as reported under GAAP. Below is additional disclosure regarding each of the non-GAAP measures used in this press release, including reconciliations to their most directly comparable GAAP measure.
Reconciliation of Cash Provided by Operating Activities to Operating Cash Flow
The Company defines operating cash flow as net cash provided by operating activities before changes in operating assets and liabilities as shown in the following table. Operating cash flow is a supplemental financial measure used by the Company's management and by securities analysts, investors, lenders, rating agencies and others who follow the industry as an indicator of the Company's ability to internally fund exploration and development activities and to service or incur additional debt. The Company also uses this measure because operating cash flow relates to the timing of cash receipts and disbursements that the Company may not control and may not relate to the period in which the operating activities occurred. Further, operating cash flow allows the Company to compare its operating performance and return on capital with those of other companies without regard to financing methods and capital structure. This measure should not be considered in isolation or as a substitute for net cash provided by operating activities prepared in accordance with GAAP.
Three Months Ended March 31, | |||||
2019 | 2018 | ||||
Net cash provided by operating activities | $ | 31,570 | $ | 30,407 | |
Changes in operating assets and liabilities | 8,998 | (9,549) | |||
Operating cash flow | $ | 40,568 | $ | 20,858 | |
Reconciliation of Net Loss to EBITDA and Adjusted EBITDA
The Company defines EBITDA as net loss before income tax expense, interest expense, depreciation and amortization - other and depreciation and depletion - oil and natural gas. Adjusted EBITDA, as presented herein, is EBITDA excluding items that the Company believes affect the comparability of operating results such as items whose timing and/or amount cannot be reasonably estimated or are non-recurring, as shown in the following tables.
Adjusted EBITDA is presented because management believes it provides useful additional information used by the Company's management and by securities analysts, investors, lenders, ratings agencies and others who follow the industry for analysis of the Company's financial and operating performance on a recurring basis and the Company's ability to internally fund exploration and development and to service or incur additional debt. In addition, management believes that adjusted EBITDA is widely used by professional research analysts and others in the valuation, comparison and investment recommendations of companies in the oil and gas exploration and production industry. The Company's adjusted EBITDA may not be comparable to similarly titled measures used by other companies.
Three Months Ended March 31, | |||||
2019 | 2018 | ||||
Net loss | $ | (5,277) | $ | (40,894) | |
Adjusted for | |||||
Income tax expense | — | 3 | |||
Interest expense | 612 | 1,107 | |||
Depreciation and amortization - other | 2,943 | 3,153 | |||
Depreciation and depletion - oil and natural gas | 36,465 | 27,997 | |||
EBITDA | 34,743 | (8,634) | |||
Asset impairment | — | 4,170 | |||
Stock-based compensation | 996 | 2,922 | |||
Loss on derivative contracts | 209 | 18,330 | |||
Cash received (paid) upon settlement of derivative contracts | 5,078 | (6,119) | |||
Employee termination benefits | — | 31,587 | |||
Proxy contest | — | 407 | |||
Gain on extinguishment of debt | — | (1,151) | |||
Other | (91) | (840) | |||
Adjusted EBITDA | $ | 40,935 | $ | 40,672 | |
Reconciliation of Cash Provided by Operating Activities to Adjusted EBITDA
Three Months Ended March 31, | |||||
2019 | 2018 | ||||
Net cash provided by operating activities | $ | 31,570 | $ | 30,407 | |
Changes in operating assets and liabilities | 8,998 | (9,549) | |||
Interest expense | 612 | 1,107 | |||
Employee termination benefits (1) | — | 18,637 | |||
Proxy contest | — | 407 | |||
Income tax expense | — | 3 | |||
Other | (245) | (340) | |||
Adjusted EBITDA | $ | 40,935 | $ | 40,672 | |
1. | Excludes associated stock-based compensation. |
Reconciliation of Net Loss Available to Common Stockholders to Adjusted Net (Loss) Income Available to Common Stockholders
The Company defines adjusted net (loss) income as net (loss) income excluding items that the Company believes affect the comparability of operating results and are typically excluded from published estimates by the investment community, including items whose timing and/or amount cannot be reasonably estimated or are non-recurring, as shown in the following tables.
Management uses the supplemental measure of adjusted net (loss) income as an indicator of the Company's operational trends and performance relative to other oil and natural gas companies and believes it is more comparable to earnings estimates provided by securities analysts. Adjusted net (loss) income is not a measure of financial performance under GAAP and should not be considered a substitute for net (loss) income available to common stockholders.
Three Months Ended March 31, 2019 | Three Months Ended March 31, 2018 | ||||||||||
$ | $/Diluted Share | $ | $/Diluted Share | ||||||||
(In thousands, except per share amounts) | |||||||||||
Net loss available to common stockholders | $ | (5,277) | $ | (0.15) | $ | (40,894) | $ | (1.18) | |||
Asset impairment | — | — | 4,170 | 0.12 | |||||||
Loss on derivative contracts | 209 | 0.01 | 18,330 | 0.53 | |||||||
Cash received (paid) upon settlement of derivative contracts | 5,078 | 0.14 | (6,119) | (0.18) | |||||||
Employee termination benefits | — | — | 31,587 | 0.91 | |||||||
Proxy contest | — | — | 407 | 0.01 | |||||||
Gain on extinguishment of debt | — | — | (1,151) | (0.03) | |||||||
Other | (64) | — | (581) | (0.01) | |||||||
Adjusted net (loss) income available to common stockholders | $ | (54) | $ | — | $ | 5,749 | $ | 0.17 | |||
Basic | Diluted (1) | Basic | Diluted (1) | ||||||||
Weighted average number of common shares outstanding | 35,322 | 35,322 | 34,575 | 34,637 | |||||||
Total adjusted net income per share | $ | — | $ | — | $ | 0.17 | $ | 0.17 | |||
1. | Weighted average fully diluted common shares outstanding for certain periods presented includes shares that are considered antidilutive for calculating loss per share in accordance with GAAP. |
Reconciliation of G&A to Adjusted G&A
The Company reports and provides guidance on Adjusted G&A per Boe because it believes this measure is commonly used by management, analysts and investors as an indicator of cost management and operating efficiency on a comparable basis from period to period and to compare and make investment recommendations of companies in the oil and gas industry. This non-GAAP measure allows for the analysis of general and administrative spend without regard to stock-based compensation programs and other non-recurring cash items, if any, which can vary significantly between companies. Adjusted G&A per Boe is not a measure of financial performance under GAAP and should not be considered a substitute for general and administrative expense per Boe. Therefore, the Company's Adjusted G&A per Boe may not be comparable to other companies' similarly titled measures.
The Company defines adjusted G&A as general and administrative expense adjusted for certain non-cash stock-based compensation and other non-recurring items, if any, as shown in the following tables.
Three Months Ended March 31, 2019 | Three Months Ended March 31, 2018 | ||||||||||
$ | $/Boe | $ | $/Boe | ||||||||
(In thousands, except per Boe amounts) | |||||||||||
General and administrative | $ | 9,939 | $ | 3.14 | $ | 13,682 | $ | 4.27 | |||
Stock-based compensation (1) | (996) | (0.31) | (2,921) | (0.91) | |||||||
Adjusted G&A | $ | 8,943 | $ | 2.83 | $ | 10,761 | $ | 3.36 | |||
1. | Three-month period ended March 31, 2018 excludes non-cash stock-based compensation included in employee termination benefits in the consolidated statement of operations. |
For further information, please contact:
Johna Robinson
Investor Relations
SandRidge Energy, Inc.
123 Robert S. Kerr Avenue
Oklahoma City, OK 73102-6406
(405) 429-5515
Cautionary Note to Investors - This press release includes "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, including, but not limited to, the information appearing under the heading "2019 Operational and Capital Expenditure Guidance." These forward-looking statements are neither historical facts nor assurances of future performance and reflect SandRidge's current beliefs and expectations regarding future events and operating performance. The forward-looking statements include projections and estimates of the Company's corporate strategies, future operations, and development plans and appraisal programs, estimated oil, natural gas and natural gas liquids production, projected operating, general and administrative and other costs, projected capital expenditures, efficiency and cost reduction initiative outcomes, liquidity and capital structure and the outcome of regulatory initiatives impacting our operations. We have based these forward-looking statements on our current expectations and assumptions and analyses made by us in light of our experience and our perception of historical trends, current conditions and expected future developments, as well as other factors we believe are appropriate under the circumstances. However, whether actual results and developments will conform with our expectations and predictions is subject to a number of risks and uncertainties, including the volatility of oil and natural gas prices, our success in discovering, estimating, developing and replacing oil and natural gas reserves, actual decline curves and the actual effect of adding compression to natural gas wells, the availability and terms of capital, the ability of counterparties to transactions with us to meet their obligations, our timely execution of hedge transactions, credit conditions of global capital markets, changes in economic conditions, the amount and timing of future development costs, the availability and demand for alternative energy sources, regulatory changes, including those related to carbon dioxide and greenhouse gas emissions, and other factors, many of which are beyond our control. We refer you to the discussion of risk factors in Part I, Item 1A - "Risk Factors" of our Annual Report on Form 10-K and in comparable "Risk Factor" sections of our Quarterly Reports on Form 10-Q filed after such form 10-K. All of the forward-looking statements made in this press release are qualified by these cautionary statements. The actual results or developments anticipated may not be realized or, even if substantially realized, they may not have the expected consequences to or effects on our Company or our business or operations. Such statements are not guarantees of future performance and actual results or developments may differ materially from those projected in the forward-looking statements. We undertake no obligation to update or revise any forward-looking statements.
SandRidge Energy, Inc. (NYSE: SD) is an oil and natural gas exploration and production company headquartered in Oklahoma City, Oklahoma with its principal focus on developing high-return, growth oriented projects in Oklahoma and Colorado. The majority of the Company's production is generated from the Mississippian Lime formation in Oklahoma and Kansas. Development activity is currently focused on the Meramec formation in the Northwest STACK Play in Oklahoma and multiple oil rich Niobrara benches in the Colorado North Park Basin.
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SOURCE SandRidge Energy, Inc.
Article Date
5/8/2019SandRidge Energy, Inc. Announces 2019 First Quarter Financial and Operational Results Release Date and Conference Call Information
Source: PR Newswire
OKLAHOMA CITY, May 1, 2019 /PRNewswire/ -- SandRidge Energy, Inc. (NYSE: SD) will release its 2019 first quarter financial and operational results after the close of trading on the New York Stock Exchange on Wednesday, May 8, 2019.
The company will host a conference call to discuss these results on Thursday, May 9, 2019 at 8:00am CT. The telephone number to access the conference call from within the U.S. is (833) 245-9650 and from outside the U.S. is (647) 689-4222. The passcode for the call is 5575467. An audio replay of the call will be available from May 9, 2019 until 11:59pm CT on June 9, 2019. The number to access the conference call replay from within the U.S. is (800) 585-8367 and from outside the U.S. is (416) 621-4642. The passcode for the replay is 5575467.
A live audio webcast of the conference call will also be available via SandRidge's website, www.sandridgeenergy.com, under Investor Relations/Presentations & Events. The webcast will be archived for replay on the company's website for 30 days.
About SandRidge Energy, Inc.
SandRidge Energy, Inc. (NYSE: SD) is an oil and natural gas exploration and production company headquartered in Oklahoma City, Oklahoma with its principal focus on developing high-return, growth oriented projects in Oklahoma and Colorado. The majority of the Company's production is generated from the Mississippian Lime formation in Oklahoma and Kansas. Development activity is currently focused on the Meramec formation in the Northwest STACK Play in Oklahoma and multiple oil rich Niobrara benches in the Colorado North Park Basin.
CONTACT:
Johna Robinson
Investor Relations
SandRidge Energy, Inc.
123 Robert S. Kerr Avenue
Oklahoma City, OK 73102
+1 (405) 429-5515
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SOURCE SandRidge Energy, Inc.
Article Date
5/1/2019SandRidge Energy, Inc. Reports Financial and Operational Results for Fourth Quarter and Full Year 2018
Source: PR Newswire
OKLAHOMA CITY, March 4, 2019 /PRNewswire/ -- SandRidge Energy, Inc. (the "Company" or "SandRidge") (NYSE:SD) today announced financial and operational results for the quarter and fiscal year ended December 31, 2018.
Highlights During and Subsequent to Fourth Quarter and Full Year 2018
"This is a great time to be joining SandRidge Energy," said Paul McKinney, President and CEO. "With a clean balance sheet, a talented team of oil and gas professionals, and the support of our Board of Directors, we are focusing on profitably growing shareholder value. We have developed a business strategy founded on the principles and industry best practices that we believe will deliver a competitive rate of return to our shareholders on a sustainable basis. Considering the commodity price volatility our industry is experiencing, we plan to maintain flexibility in our capital spending plans with the intention of staying within or very close to within our cash flow. This strategy also supports our ability to capture accretive opportunities we encounter in the market place.
"Our business strategy is focused on a few key components we believe will drive success as we acquire, explore for and develop hydrocarbon resources in the United States. To win in this industry you need to have a winning team and we will do whatever is necessary to attract and retain top tier talent. We will pursue operational excellence with a sense of urgency to deliver low-cost and efficient execution of our operations, leveraging advanced technologies and data analytics to develop a culture of continuous improvement while holding to our core values prioritizing health, safety and environmental stewardship. We will allocate our resources to projects that deliver high margins and returns while fully accounting for risk and uncertainty in each investment opportunity, optimize our portfolio by upgrading our assets through accretive acquisitions, mergers and dispositions that reduce our break-even costs, and explore all avenues of cost reduction. Finally, we will continue to exercise financial discipline by protecting our balance sheet through responsible use of leverage and hedging and financial strategies that sustain our capital programs, and ultimately deliver free cash flow with competitive debt-adjusted per share returns."
Financial Results
Fourth Quarter
For the fourth quarter, the Company reported net income of $54 million, or $1.53 per share, and net cash provided by operating activities of $36 million. After adjusting for certain items, the Company's adjusted net income amounted to $5 million, or $0.15 per share, operating cash flow totaled $44 million and adjusted EBITDA was $45 million for the quarter. The Company defines and reconciles adjusted net income, adjusted EBITDA and other non-GAAP financial measures to the most directly comparable GAAP measure in supporting tables at the conclusion of this press release beginning on page 15.
Full Year
For the full year of 2018, the Company reported a net loss of $9 million, or $0.26 per share, and net cash provided by operating activities of $146 million. After adjusting for certain items, the Company's adjusted net income amounted to $20 million, or $0.57 per share, operating cash flow totaled $137 million and adjusted EBITDA was $167 million for the year.
Operational Results and Activity
Production totaled 3.1 MMBoe (27% oil, 24% NGLs and 49% natural gas) for the fourth quarter and 12.3 MMBoe (28% oil, 23% NGLs and 49% natural gas) for the full year of 2018. During the quarter, the Company averaged two rigs in the Mid-Continent region targeting the Mississippian and the Northwest STACK Meramec and one rig in North Park Basin targeting the Niobrara.
North Park Basin Asset in Jackson County, Colorado
Fourth Quarter
Net oil production in the North Park Basin totaled 314 MBo (3.4 MBopd) for the fourth quarter. During the quarter, the Company drilled six wells.
Full Year 2018
In 2018, the Company drilled twelve North Park Basin wells and brought nine wells to sales. One rig drilled two spacing tests, a federal unit obligation well and initiated southern delineation. Production from the eight well eastern spacing test exceeded type curve expectation by a cumulative 14% on an average per well basis and confirmed a minimum of twelve wells per section spacing in this area. The Company also drilled a six well western spacing test using a twenty-three wells per section pattern. The six wells are currently being tested with results expected early in the second quarter 2019. With seven months of drilling, the Company increased oil production in the field by 53% year over year.
Efforts to expand gas processing capabilities progressed throughout the year. The mechanical refrigeration unit "MRU" went into service during the first quarter 2019. The MRU is currently processing 2,000 Mcf per day to extract natural gas liquids and reduce emissions within the field. Construction of a gas to liquids "GTL" processing facility is ongoing with initial installation expected in the second quarter 2019. The GTL pilot is projected to convert 500 Mcf per day into 50 Bbls of diesel and naphtha, with no residual gas.
Mid-Continent Assets in Oklahoma and Kansas
Fourth Quarter
In the fourth quarter, production in the Mississippian totaled 2.5 MMBoe (27 MBoepd, 17% oil) and Northwest STACK production totaled 183 MBoe (2 MBoepd, 40% oil). The Company averaged two rigs in the Mid-Continent and drilled seven wells, two in the Mississippian and five in the Northwest STACK.
The five wells drilled in the Northwest STACK targeted the Meramec, with three wells drilled under the previously announced Drilling Participation Agreement. During the quarter, the Company brought three wells to sales in the Northwest STACK with a 30-Day IP per well average of 292 Boepd (67% oil).
During the quarter, the Company drilled the remaining two wells of the Mississippian four well program and brought three wells online.
Full Year 2018
During the year, the Company drilled twenty-two wells in the Mid-Continent with an average of two rigs and brought twenty wells to sales. In the Northwest STACK, eighteen Meramec wells were drilled with fifteen wells under the Drilling Participation Agreement. Under this agreement, the Company spent only $6 million in total drilling and completion capital for 2018. As a result, the Company converted 5,800 acres to 'held by production,' delineated the play and optimized geologic targeting and completions techniques. In the Mississippian, the Company drilled and completed a four well program which produced a 30-Day IP per well average of 399 Boepd (58% oil).
Year End 2018 Estimated Proved Reserves
The Company's total estimated SEC proved reserves as of December 31, 2018 were 160 MMBoe, a decrease of 10% year over year. The Company's Standardized Measure and PV-10 was $1.0 billion, an increase of 40% year over year. SEC pricing used in the preparation of the December 31, 2018 reserves was $65.56 per Bbl for oil and $3.10 per MMBtu for natural gas, before adjustments.
For comparative purposes, utilizing alternative pricing of $54.00 per Bbl of oil and $2.75 per MMBtu for natural gas rather than SEC pricing for oil and natural gas, total reserves at December 31, 2018 were 128 MMBoe, with a PV-10 of $612 million. These calculations were based on the SEC proved reserves estimation methodology, but applied the aforementioned alternative prices.
Proved reserves decreased from 177.6 MMBoe at December 31, 2017 to 160.2 MMBoe at December 31, 2018, primarily as a result of incorporating a one-time adjustment to estimated future workover costs in the Mississippian Lime where a larger population of these wells are transitioning into late-life mature production. This estimate of future costs contributed to a 24.9 MMBoe decrease associated with shorter economic lives and when combined with a decrease of 8.3 MMBoe attributable to well performance, results in total revisions of 33.2 MMBoe (7% oil). Proved reserves also decreased 6.6 MMBoe due to divestitures. These reductions were partially offset by the acquisition of 15.4 MMBoe associated with the purchase of interest in Mid-Continent wells, extensions and discoveries of 19.3 MMBoe from successful drilling, as well as recording proved undeveloped reserves at an increased well density in the North Park Basin.
Oil MBbls | NGLs MBbls | Gas MMcf | Equivalent MBoe1 | Standardized | ||||||
Proved Reserves, December 31, 2017 | 61,791 | 34,314 | 488,932 | 177,594 | $ | 749 | ||||
Extensions & Discoveries | 11,148 | 2,320 | 35,185 | 19,332 | ||||||
Purchases | 2,146 | 4,131 | 54,436 | 15,350 | ||||||
Sales of Assets | (5,273) | (809) | (2,969) | (6,577) | ||||||
Production | (3,477) | (2,829) | (36,175) | (12,335) | ||||||
Revisions | (2,316) | (8,952) | (131,518) | (33,188) | ||||||
Proved Reserves, December 31, 2018 | 64,019 | 28,175 | 407,891 | 160,176 | $ | 1,046 | ||||
1) Equivalent Boe are calculated using an energy equivalent ratio of six Mcf of natural gas to one Bbl of oil. Using an energy-equivalent ratio does not factor in price differences and energy-equivalent prices may differ significantly among produced products. |
SEC Proved Reserves and Alternative Price Based Proved Reserves
YE 2018 @ SEC Pricing1 | YE 2018 @ Alternative Pricing2 | |||||||||
Equivalent MBoe | Standardized | Equivalent | PV-10 $MM | |||||||
Developed | 92,302 | $ | 659 | 82,659 | $ | 479 | ||||
Undeveloped | 67,874 | $ | 387 | 44,847 | $ | 133 | ||||
Total Proved | 160,176 | $ | 1,046 | 127,506 | $ | 612 | ||||
1) SEC Pricing remains flat for reserve life at $65.56/Bo & $3.10/MMBtu | ||||||||||
2) Alternative pricing of $54.00/Bo & $2.75/MMBtu |
2019 Capital Expenditures and Operational Guidance
In 2019, the Company plans to spend $160 - $180 million in total capital expenditures, which includes $115 - $125 million in drilling and completion capital allocated between the North Park Basin and Mid-Continent. Total production for 2019 is projected to be 11.4 - 12.0 MMBoe with oil production over 32%. Other operational guidance detail can be found on the "2019 Operational and Capital Expenditure Guidance" table below.
Liquidity and Capital Structure
As of February 20, 2019, the Company had no debt and total liquidity was $356 million, which includes $11 million of cash and $345 million of borrowing base under the credit facility, net of outstanding letters of credit.
Conference Call Information
The Company will host a conference call to discuss these results on Tuesday, March 5, 2019 at 8:00 am CT. The telephone number to access the conference call from within the U.S. is (833) 245-9650 and from outside the U.S. is (647) 689-4222. The passcode for the call is 3764669. An audio replay of the call will be available from March 5, 2019 until 11:59 pm CT on April 4, 2019. The number to access the conference call replay from within the U.S. is (800) 585-8367 and from outside the U.S. is (416) 621-4642. The passcode for the replay is 3764669.
A live audio webcast of the conference call will also be available via SandRidge's website, www.sandridgeenergy.com, under Investor Relations/Presentation & Events. The webcast will be archived for replay on the Company's website for 30 days.
2019 Operational and Capital Expenditure Guidance
Presented below is the Company's operational and capital expenditure guidance for 2019.
Guidance | ||
Projection as of | ||
March 4, 2019 | ||
Production | ||
Oil (MMBbls) | 3.7 - 3.9 | |
Natural Gas Liquids (MMBbls) | 2.5 - 2.6 | |
Total Liquids (MMBbls) | 6.2 - 6.5 | |
Natural Gas (Bcf) | 31.0 - 33.0 | |
Total (MMBoe) | 11.4 - 12.0 | |
Price Differentials to NYMEX | ||
Oil (per Bbl) | ($4.30) | |
Natural Gas Liquids (realized % of NYMEX WTI) | 37% | |
Natural Gas (per MMBtu) | ($1.30) | |
Expenses | ||
LOE | $89 - $94 million | |
Adjusted G&A Expense (1) | $34 - $37 million | |
% of Revenue | ||
Severance and Ad Valorem Taxes | 6.5% - 7.0% | |
Capital Expenditures ($ in millions) | ||
Drilling and Completion | $115 - $125 | |
Other Exploration and Production | $45 - $55 | |
Total Capital Expenditures | $160 - $180 | |
(excluding acquisitions and plugging and abandonment) | ||
1. Adjusted G&A expense is a non-GAAP financial measure. The Company has defined this measure at the conclusion of this press release under "Non-GAAP Financial Measures" beginning on page 15. Information to reconcile this non-GAAP financial measure to the most directly comparable GAAP financial measure is not available at this time, as management is unable to forecast the excluded items for future periods. |
2018 Actual Results vs. 2018 Guidance
Presented below is the Company's 2018 operational and capital expenditure actuals vs. the midpoint of 2018 guidance.
FY 2018 Actuals | FY 2018 Guidance | Delta | |||
Production | |||||
Oil (MMBbls) | 3.5 | 3.5 | 0 | ||
Natural Gas Liquids (MMBbls) | 2.8 | 2.8 | 0 | ||
Total Liquids (MMBbls) | 6.3 | 6.3 | 0 | ||
Natural Gas (Bcf) | 36.2 | 35.7 | 0.5 | ||
Total (MMBoe) | 12.3 | 12.2 | 0.1 | ||
Expenses | |||||
LOE ($ in millions) | $93 | $94 | $(1) | ||
Adjusted G&A Expense (1) ($ in millions) | $37 | $40 | $(3) | ||
Capital Expenditures ($ in millions) | |||||
Drilling and Completion | |||||
Mid-Continent | $27 | $24 | $3 | ||
North Park Basin | 55 | 58 | (3) | ||
Other (2) | 33 | 35 | (2) | ||
Total Drilling and Completion | $115 | $117 | $(2) | ||
Other E&P | |||||
Land, G&G, and Seismic | $11 | $16 | $(5) | ||
Infrastructure (3) | 15 | 18 | (3) | ||
Workover | 25 | 26 | (1) | ||
Capitalized G&A and Interest | 5 | 7 | (2) | ||
Total Other Exploration and Production | $56 | $67 | $(11) | ||
General Corporate | 0 | 1 | (1) | ||
Total Capital Expenditures | $171 | $185 | $(14) | ||
(excluding acquisitions and plugging and abandonment) | |||||
1. Adjusted G&A expense is a non-GAAP financial measure. The Company has defined this measure at the conclusion of this press release under "Non-GAAP Financial Measures" beginning on page 15. Information to reconcile this non-GAAP financial measure to the most directly comparable GAAP financial measure is not available at this time, as management is unable to forecast the excluded items for future periods. |
2. Primarily 2017 Carryover |
3. Includes Production Gathering and Facilities |
Operational and Financial Statistics
Information regarding the Company's production, pricing, costs and earnings is presented below:
Three Months Ended December 31, | Year Ended December 31, | ||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||
Production - Total | |||||||||||
Oil (MBbl) | 840 | 1,027 | 3,477 | 4,157 | |||||||
NGL (MBbl) | 719 | 775 | 2,829 | 3,376 | |||||||
Natural Gas (MMcf) | 8,954 | 10,354 | 36,175 | 44,237 | |||||||
Oil equivalent (MBoe) | 3,051 | 3,528 | 12,335 | 14,906 | |||||||
Daily production (MBoed) | 33.2 | 38.3 | 33.8 | 40.8 | |||||||
Average price per unit | |||||||||||
Realized oil price per barrel - as reported | $ | 57.20 | $ | 53.31 | $ | 61.73 | $ | 48.72 | |||
Realized impact of derivatives per barrel | (4.22) | (2.54) | (10.38) | 1.03 | |||||||
Net realized price per barrel | $ | 52.98 | $ | 50.77 | $ | 51.35 | $ | 49.75 | |||
Realized NGL price per barrel - as reported | $ | 20.86 | $ | 23.69 | $ | 23.72 | $ | 18.16 | |||
Realized impact of derivatives per barrel | — | — | — | — | |||||||
Net realized price per barrel | $ | 20.86 | $ | 23.69 | $ | 23.72 | $ | 18.16 | |||
Realized natural gas price per Mcf - as reported | $ | 2.44 | $ | 1.92 | $ | 1.85 | $ | 2.09 | |||
Realized impact of derivatives per Mcf | (0.22) | 0.21 | 0.04 | 0.06 | |||||||
Net realized price per Mcf | $ | 2.22 | $ | 2.13 | $ | 1.89 | $ | 2.15 | |||
Realized price per Boe - as reported | $ | 27.84 | $ | 26.35 | $ | 28.27 | $ | 23.90 | |||
Net realized price per Boe - including impact of derivatives | $ | 26.03 | $ | 26.23 | $ | 25.47 | $ | 24.38 | |||
Average cost per Boe | |||||||||||
Lease operating | $ | 7.79 | $ | 7.29 | $ | 7.52 | $ | 6.89 | |||
Production taxes | $ | 1.56 | $ | 1.19 | $ | 1.58 | $ | 0.92 | |||
Depletion (1) | $ | 11.55 | $ | 8.66 | $ | 10.32 | $ | 7.92 | |||
Earnings per share | |||||||||||
Earnings (loss) per share applicable to common stockholders | |||||||||||
Basic | $ | 1.53 | $ | (0.54) | $ | (0.26) | $ | 1.45 | |||
Diluted | $ | 1.53 | $ | (0.54) | $ | (0.26) | $ | 1.44 | |||
Adjusted net income (loss) per share available to common stockholders | |||||||||||
Basic | $ | 0.15 | $ | 0.34 | $ | 0.57 | $ | 1.62 | |||
Diluted | $ | 0.15 | $ | 0.34 | $ | 0.57 | $ | 1.61 | |||
Weighted average number of shares outstanding (in thousands) | |||||||||||
Basic | 35,312 | 34,494 | 35,057 | 32,442 | |||||||
Diluted (2) | 35.312 | 34,547 | 35,057 | 32,663 | |||||||
(1) Includes accretion of asset retirement obligation. | |||||||||||
(2) Includes shares considered antidilutive for calculating loss per share in accordance with GAAP. |
Capital Expenditures
The table below presents actual results of the Company's capital expenditures for the three and twelve months ended December 31, 2018 at the same level of detail as the 2018 full year capital expenditure guidance.
Three Months Ended | Twelve Months Ended | ||||
December 31, 2018 | December 31, 2018 | ||||
(In thousands) | (In thousands) | ||||
Drilling and Completion | |||||
Mid-Continent | $ | 15,934 | $ | 27,025 | |
North Park Basin | 17,896 | 54,737 | |||
Other (1) | 3,448 | 33,349 | |||
Total Drilling and Completion | $ | 37,278 | $ | 115,111 | |
Other E&P | |||||
Land, G&G, and Seismic | $ | 1,402 | $ | 11,147 | |
Infrastructure (2) | 7,450 | 14,649 | |||
Workovers | 6,192 | 24,508 | |||
Capitalized G&A and Interest | 838 | 5,379 | |||
Total Other Exploration and Production | $ | 15,882 | $ | 55,683 | |
General Corporate | $ | 347 | $ | 392 | |
Total Capital Expenditures | $ | 53,507 | $ | 171,186 | |
(excluding acquisitions and plugging and abandonment) | |||||
(1) Primarily 2017 Carryover | |||||
(2) Production Gathering and Facilities |
Derivative Contracts
In December 2018, the Company entered into early settlements of all open crude oil swaps covering 9 MBbls per day of production in December 2018 at an average strike price of $56.12 and 5 MBbls per day of production in 2019 at an average strike price of $54.29. The table below sets forth the Company's hedge position for 2019 as of March 4, 2019:
Quarter Ending | ||||||||||
3/31/2019 | 6/30/2019 | 9/30/2019 | 12/31/2019 | FY 2019 | ||||||
Natural Gas Swaps: | ||||||||||
Total Volume (Bcf) | 4.50 | — | — | — | 4.50 | |||||
Daily Volume (MMBtupd) | 50.0 | — | — | — | 50.0 | |||||
Swap Price ($/MMBtu) | $4.28 | — | — | — | $4.28 | |||||
Capitalization
The Company's capital structure as of December 31, 2018 and December 31, 2017 is presented below:
December 31, 2018 | December 31, 2017 | ||||
(In thousands) | |||||
Cash, cash equivalents and restricted cash | $ | 19,645 | $ | 101,308 | |
Credit facility | $ | — | $ | — | |
Building note | — | 37,502 | |||
Total debt | — | 37,502 | |||
Stockholders' equity | |||||
Common stock | 36 | 36 | |||
Warrants | 88,516 | 88,500 | |||
Additional paid-in capital | 1,055,164 | 1,038,324 | |||
Accumulated deficit | (295,995) | (286,920) | |||
Total SandRidge Energy, Inc. stockholders' equity | 847,721 | 839,940 | |||
Total capitalization | $ | 847,721 | $ | 877,442 | |
SandRidge Energy, Inc. and Subsidiaries | ||||||||||||
Consolidated Statements of Operations | ||||||||||||
(In thousands, except per share amounts) | ||||||||||||
Successor | Predecessor | |||||||||||
Year Ended December 31, 2018 | Year Ended December 31, 2017 | Period from | Period from | |||||||||
Revenues | ||||||||||||
Oil, natural gas and NGL | $ | 348,726 | $ | 356,210 | $ | 98,307 | $ | 279,971 | ||||
Other | 669 | 1,089 | 149 | 13,838 | ||||||||
Total revenues | 349,395 | 357,299 | 98,456 | 293,809 | ||||||||
Expenses | ||||||||||||
Production | 92,703 | 102,728 | 24,997 | 129,608 | ||||||||
Production taxes | 19,470 | 13,644 | 2,643 | 6,107 | ||||||||
Depreciation and depletion—oil and natural gas | 127,281 | 118,035 | 36,061 | 90,978 | ||||||||
Depreciation and amortization—other | 11,982 | 13,852 | 3,922 | 21,323 | ||||||||
Impairment | 4,170 | 4,019 | 319,087 | 718,194 | ||||||||
General and administrative | 41,666 | 76,024 | 9,837 | 116,091 | ||||||||
Accelerated vesting of employment compensation | 6,545 | — | — | — | ||||||||
Proxy contest | 7,139 | — | — | — | ||||||||
Terminated merger costs | — | 8,162 | — | — | ||||||||
Employee termination benefits | 32,657 | 4,815 | 12,334 | 18,356 | ||||||||
Loss (gain) on derivative contracts | 17,155 | (24,090) | 25,652 | 4,823 | ||||||||
Loss on settlement of contract | — | — | — | 90,184 | ||||||||
Other operating (income) expense | (998) | 479 | 268 | 4,348 | ||||||||
Total expenses | 359,770 | 317,668 | 434,801 | 1,200,012 | ||||||||
(Loss) income from operations | (10,375) | 39,631 | (336,345) | (906,203) | ||||||||
Other (expense) income | ||||||||||||
Interest expense, net | (2,787) | (3,868) | (372) | (126,099) | ||||||||
Gain on extinguishment of debt | 1,151 | — | — | 41,179 | ||||||||
Gain on reorganization items, net | — | — | — | 2,430,599 | ||||||||
Other income, net | 2,865 | 2,550 | 2,744 | 1,332 | ||||||||
Total other income (expense) | 1,229 | (1,318) | 2,372 | 2,347,011 | ||||||||
(Loss) income before income taxes | (9,146) | 38,313 | (333,973) | 1,440,808 | ||||||||
Income tax (benefit) expense | (71) | (8,749) | 9 | 11 | ||||||||
Net (loss) income | (9,075) | 47,062 | (333,982) | 1,440,797 | ||||||||
Preferred stock dividends | — | — | — | 16,321 | ||||||||
(Loss applicable) income available to SandRidge Energy, Inc. common stockholders | $ | (9,075) | $ | 47,062 | $ | (333,982) | $ | 1,424,476 | ||||
(Loss) earnings per share | ||||||||||||
Basic | $ | (0.26) | $ | 1.45 | $ | (17.61) | $ | 2.01 | ||||
Diluted | $ | (0.26) | $ | 1.44 | $ | (17.61) | $ | 2.01 | ||||
Weighted average number of common shares outstanding | ||||||||||||
Basic | 35,057 | 32,442 | 18,967 | 708,928 | ||||||||
Diluted | 35,057 | 32,663 | 18,967 | 708,928 | ||||||||
SandRidge Energy, Inc. and Subsidiaries | |||||
Consolidated Balance Sheets | |||||
(In thousands) | |||||
December 31, 2018 | December 31, 2017 | ||||
ASSETS | |||||
Current assets | |||||
Cash and cash equivalents | $ | 17,660 | $ | 99,143 | |
Restricted cash - other | 1,985 | 2,165 | |||
Accounts receivable, net | 45,503 | 71,277 | |||
Derivative contracts | 5,286 | 1,310 | |||
Prepaid expenses | 2,628 | 5,248 | |||
Other current assets | 265 | 15,954 | |||
Total current assets | 73,327 | 195,097 | |||
Oil and natural gas properties, using full cost method of accounting | |||||
Proved | 1,269,091 | 1,056,806 | |||
Unproved | 60,152 | 100,884 | |||
Less: accumulated depreciation, depletion and impairment | (580,132) | (460,431) | |||
749,111 | 697,259 | ||||
Other property, plant and equipment, net | 200,838 | 225,981 | |||
Other assets | 1,062 | 1,290 | |||
Total assets | $ | 1,024,338 | $ | 1,119,627 | |
LIABILITIES AND STOCKHOLDERS' EQUITY | |||||
Current liabilities | |||||
Accounts payable and accrued expenses | $ | 111,797 | $ | 139,155 | |
Derivative contracts | — | 10,627 | |||
Asset retirement obligation | 25,393 | 41,017 | |||
Other current liabilities | — | 8,115 | |||
Total current liabilities | 137,190 | 198,914 | |||
Long-term debt | — | 37,502 | |||
Derivative contracts | — | 3,568 | |||
Asset retirement obligation | 34,671 | 36,527 | |||
Other long-term obligations | 4,756 | 3,176 | |||
Total liabilities | 176,617 | 279,687 | |||
Stockholders' Equity | |||||
Common stock, $0.001 par value; 250,000 shares authorized; 35,687 issued and outstanding at December 31, 2018 and 35,650 issued and outstanding at December 31, 2017 | 36 | 36 | |||
Warrants | 88,516 | 88,500 | |||
Additional paid-in capital | 1,055,164 | 1,038,324 | |||
Accumulated deficit | (295,995) | (286,920) | |||
Total stockholders' equity | 847,721 | 839,940 | |||
Total liabilities and stockholders' equity | $ | 1,024,338 | $ | 1,119,627 | |
SandRidge Energy, Inc. and Subsidiaries | ||||||||||||
Consolidated Cash Flows | ||||||||||||
(In thousands) | ||||||||||||
Successor | Predecessor | |||||||||||
Year Ended December 31, 2018 | Year Ended December 31, 2017 | Period from | Period from | |||||||||
CASH FLOWS FROM OPERATING ACTIVITIES | ||||||||||||
Net (loss) income | $ | (9,075) | $ | 47,062 | $ | (333,982) | $ | 1,440,797 | ||||
Adjustments to reconcile net (loss) income to net cash provided by (used in) operating activities | ||||||||||||
Provision for doubtful accounts | (462) | 406 | (13,166) | 16,704 | ||||||||
Depreciation, depletion, and amortization | 139,263 | 131,887 | 39,983 | 112,301 | ||||||||
Impairment | 4,170 | 4,019 | 319,087 | 718,194 | ||||||||
Gain on reorganization items, net | — | — | — | (2,442,436) | ||||||||
Debt issuance costs amortization | 470 | 430 | — | 4,996 | ||||||||
Amortization of premiums and discounts on debt | (47) | (330) | (81) | 2,734 | ||||||||
Gain on extinguishment of debt | (1,151) | — | — | (41,179) | ||||||||
Gain on debt derivatives | — | — | — | (1,324) | ||||||||
Cash paid for early conversion of convertible notes | — | — | — | (33,452) | ||||||||
Loss (gain) on derivative contracts | 17,155 | (24,090) | 25,652 | 4,823 | ||||||||
Cash (paid) received on settlement of derivative contracts | (35,325) | 7,260 | 7,698 | 72,608 | ||||||||
Loss on settlement of contract | — | — | — | 90,184 | ||||||||
Cash paid on settlement of contract | — | — | — | (11,000) | ||||||||
Stock-based compensation | 23,377 | 15,750 | 6,250 | 9,075 | ||||||||
Other | (1,571) | 344 | 717 | (3,260) | ||||||||
Changes in operating assets and liabilities increasing (decreasing) cash | ||||||||||||
Deconsolidation of noncontrolling interest | — | — | — | (9,654) | ||||||||
Receivables | 16,560 | 115 | 12,872 | 36,116 | ||||||||
Prepaid expenses | 2,620 | 127 | (1,079) | (5,681) | ||||||||
Other current assets | 170 | 191 | (260) | (181) | ||||||||
Other assets and liabilities, net | (1,754) | 4,186 | 1,505 | (7,542) | ||||||||
Accounts payable and accrued expenses | (4,257) | (2,199) | 990 | (3,595) | ||||||||
Asset retirement obligations | (4,629) | (3,979) | (591) | (61,305) | ||||||||
Net cash provided by (used in) operating activities | 145,514 | 181,179 | 65,595 | (112,077) | ||||||||
CASH FLOWS FROM INVESTING ACTIVITIES | ||||||||||||
Capital expenditures for property, plant and equipment | (187,047) | (219,246) | (51,676) | (186,452) | ||||||||
Acquisition of assets | (24,764) | (48,312) | — | (1,328) | ||||||||
Proceeds from sale of assets | 28,358 | 21,834 | 11,841 | 20,090 | ||||||||
Net cash used in investing activities | (183,453) | (245,724) | (39,835) | (167,690) | ||||||||
CASH FLOWS FROM FINANCING ACTIVITIES | ||||||||||||
Proceeds from borrowings | 10,000 | — | — | 489,198 | ||||||||
Repayments of borrowings | (46,304) | — | (414,954) | (74,243) | ||||||||
Debt issuance costs | — | (1,488) | — | (333) | ||||||||
Proceeds from building mortgage | — | — | — | 26,847 | ||||||||
Payment of mortgage proceeds and cash recovery to debt holders | — | — | — | (33,874) | ||||||||
Cash paid for tax withholdings on vested stock awards | (7,420) | (6,730) | (110) | (44) | ||||||||
Other | — | — | 3 | — | ||||||||
Net cash (used in) provided by financing activities | (43,724) | (8,218) | (415,061) | 407,551 | ||||||||
NET (DECREASE) INCREASE IN CASH, CASH EQUIVALENTS and RESTRICTED CASH | (81,663) | (72,763) | (389,301) | 127,784 | ||||||||
CASH, CASH EQUIVALENTS and RESTRICTED CASH, beginning of year | 101,308 | 174,071 | 563,372 | 435,588 | ||||||||
CASH, CASH EQUIVALENTS and RESTRICTED CASH, end of period | $ | 19,645 | $ | 101,308 | $ | 174,071 | $ | 563,372 | ||||
Non-GAAP Financial Measures
This press release includes non-GAAP financial measures. These non-GAAP measures are not alternatives to GAAP measures, and you should not consider these non-GAAP measures in isolation or as a substitute for analysis of our results as reported under GAAP. Below is additional disclosure regarding each of the non-GAAP measures used in this press release, including reconciliations to their most directly comparable GAAP measure.
Reconciliation of Cash Provided by Operating Activities to Operating Cash Flow
The Company defines operating cash flow as net cash provided by operating activities before changes in operating assets and liabilities as shown in the following table. Operating cash flow is a supplemental financial measure used by the Company's management and by securities analysts, investors, lenders, rating agencies and others who follow the industry as an indicator of the Company's ability to internally fund exploration and development activities and to service or incur additional debt. The Company also uses this measure because operating cash flow relates to the timing of cash receipts and disbursements that the Company may not control and may not relate to the period in which the operating activities occurred. Further, operating cash flow allows the Company to compare its operating performance and return on capital with those of other companies without regard to financing methods and capital structure. This measure should not be considered in isolation or as a substitute for net cash provided by operating activities prepared in accordance with GAAP.
Three Months Ended December 31, | Year Ended December 31, | ||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||
(In thousands) | |||||||||||
Net cash provided by operating activities | $ | 36,346 | $ | 33,273 | $ | 145,514 | $ | 181,179 | |||
Changes in operating assets and liabilities | 7,697 | 7,258 | (8,710) | 1,559 | |||||||
Operating cash flow | $ | 44,043 | $ | 40,531 | $ | 136,804 | $ | 182,738 | |||
Reconciliation of Net Income (Loss) to EBITDA and Adjusted EBITDA
The Company defines EBITDA as net income (loss) before income tax benefit, interest expense, depreciation and amortization - other and depreciation and depletion - oil and natural gas. Adjusted EBITDA, as presented herein, is EBITDA excluding items that the Company believes affect the comparability of operating results such as items whose timing and/or amount cannot be reasonably estimated or are non-recurring, as shown in the following tables.
Adjusted EBITDA is presented because management believes it provides useful additional information used by the Company's management and by securities analysts, investors, lenders, ratings agencies and others who follow the industry for analysis of the Company's financial and operating performance on a recurring basis and the Company's ability to internally fund exploration and development and to service or incur additional debt. In addition, management believes that adjusted EBITDA is widely used by professional research analysts and others in the valuation, comparison and investment recommendations of companies in the oil and gas exploration and production industry. The Company's adjusted EBITDA may not be comparable to similarly titled measures used by other companies.
Three Months Ended December 31, | Year Ended December 31, | ||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||
(In thousands) | |||||||||||
Net income (loss) | $ | 54,178 | $ | (18,760) | $ | (9,075) | $ | 47,062 | |||
Adjusted for | |||||||||||
Income tax expense (benefit) | 1 | (253) | (71) | (8,749) | |||||||
Interest expense | 640 | 1,377 | 3,148 | 4,886 | |||||||
Depreciation and amortization - other | 2,753 | 3,123 | 11,982 | 13,852 | |||||||
Depreciation and depletion - oil and natural gas | 35,233 | 30,549 | 127,281 | 118,035 | |||||||
EBITDA | 92,805 | 16,036 | 133,265 | 175,086 | |||||||
Asset impairment | — | 544 | 4,170 | 4,019 | |||||||
Stock-based compensation | 962 | 3,134 | 10,246 | 13,923 | |||||||
(Gain) loss on derivative contracts | (42,608) | 21,934 | 17,155 | (24,090) | |||||||
Cash (paid) received upon settlement of derivative contracts | (6,300) | (440) | (35,325) | 7,260 | |||||||
Employee termination benefits | 4 | — | 32,657 | 4,815 | |||||||
Proxy contest | — | — | 7,139 | — | |||||||
Acceleration of performance units | — | — | 1,232 | — | |||||||
Restructuring costs | — | — | — | 3,739 | |||||||
Drilling participation agreement transaction costs | — | 20 | — | 2,901 | |||||||
Terminated merger costs | — | 8,162 | — | 8,162 | |||||||
Gain on extinguishment of debt | — | — | (1,151) | — | |||||||
Other | (212) | (181) | (2,669) | (3,026) | |||||||
Adjusted EBITDA | $ | 44,651 | $ | 49,209 | $ | 166,719 | $ | 192,789 | |||
Reconciliation of Cash Provided by Operating Activities to Adjusted EBITDA
Three Months Ended December 31, | Year Ended December 31, | ||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||
(In thousands) | |||||||||||
Net cash provided by operating activities | $ | 36,346 | $ | 33,273 | $ | 145,514 | $ | 181,179 | |||
Changes in operating assets and liabilities | 7,697 | 7,258 | (8,710) | 1,559 | |||||||
Interest expense | 640 | 1,377 | 3,148 | 4,886 | |||||||
Employee termination benefits (1) | 4 | — | 19,526 | 2,990 | |||||||
Proxy contest | — | — | 7,139 | — | |||||||
Acceleration of performance units | — | — | 1,232 | — | |||||||
Restructuring costs | — | — | — | 3,739 | |||||||
Drilling participation agreement transaction costs | — | 20 | — | 2,901 | |||||||
Income tax expense (benefit) | 1 | (253) | (71) | (8,749) | |||||||
Terminated merger costs | — | 8,162 | — | 8,162 | |||||||
Other | (37) | (628) | (1,059) | (3,878) | |||||||
Adjusted EBITDA | $ | 44,651 | $ | 49,209 | $ | 166,719 | $ | 192,789 | |||
1. Excludes associated stock-based compensation. |
Reconciliation of Net Income (Loss) Available to Common Stockholders to Adjusted Net Income Available to Common Stockholders
The Company defines adjusted net income as net income excluding items that the Company believes affect the comparability of operating results and are typically excluded from published estimates by the investment community, including items whose timing and/or amount cannot be reasonably estimated or are non-recurring, as shown in the following tables.
Management uses the supplemental measure of adjusted net income as an indicator of the Company's operational trends and performance relative to other oil and natural gas companies and believes it is more comparable to earnings estimates provided by securities analysts. Adjusted net income is not a measure of financial performance under GAAP and should not be considered a substitute for net income available to common stockholders.
Three Months Ended December 31, 2018 | Three Months Ended December 31, 2017 | ||||||||||
$ | $/Diluted Share | $ | $/Diluted Share | ||||||||
(In thousands, except per share amounts) | |||||||||||
Net income (loss) available to common stockholders | $ | 54,178 | $ | 1.53 | $ | (18,760) | $ | (0.54) | |||
Asset impairment | — | — | 544 | 0.02 | |||||||
(Gain) loss on derivative contracts | (42,608) | (1.21) | 21,934 | 0.62 | |||||||
Cash paid upon settlement of derivative contracts | (6,300) | (0.17) | (440) | (0.01) | |||||||
Employee termination benefits | 4 | — | — | — | |||||||
Drilling participation agreement transaction costs | — | — | 20 | — | |||||||
Terminated merger costs | — | — | 8,162 | 0.24 | |||||||
Other | (131) | — | 246 | 0.01 | |||||||
Adjusted net income available to common stockholders | $ | 5,143 | $ | 0.15 | $ | 11,706 | $ | 0.34 | |||
Basic | Diluted (1) | Basic | Diluted (1) | ||||||||
Weighted average number of common shares outstanding | 35,312 | 35,312 | 34,494 | 34,547 | |||||||
Total adjusted net income per share | $ | 0.15 | $ | 0.15 | $ | 0.34 | $ | 0.34 | |||
Year Ended December 31, 2018 | Year Ended December 31, 2017 | ||||||||||
$ | $/Diluted Share | $ | $/Diluted Share | ||||||||
(In thousands, except per share amounts) | |||||||||||
Net (loss) income available to common stockholders | $ | (9,075) | $ | (0.26) | $ | 47,062 | $ | 1.44 | |||
Asset impairment | 4,170 | 0.12 | 4,019 | 0.12 | |||||||
Loss (gain) on derivative contracts | 17,155 | 0.49 | (24,090) | (0.73) | |||||||
Cash (paid) received upon settlement of derivative contracts | (35,325) | (1.01) | 7,260 | 0.22 | |||||||
Employee termination benefits | 32,657 | 0.93 | 4,815 | 0.15 | |||||||
Proxy contest | 7,139 | 0.20 | — | — | |||||||
Accelerated vesting of employment compensation | 6,545 | 0.19 | — | — | |||||||
Restructuring costs | — | — | 3,739 | 0.11 | |||||||
Drilling participation agreement transaction costs | — | — | 2,901 | 0.09 | |||||||
Terminated merger costs | — | — | 8,162 | 0.25 | |||||||
Gain on extinguishment of debt | (1,151) | (0.03) | — | — | |||||||
Other | (2,208) | (0.06) | (1,396) | (0.04) | |||||||
Adjusted net income available to common stockholders | $ | 19,907 | $ | 0.57 | $ | 52,472 | $ | 1.61 | |||
Basic | Diluted (1) | Basic | Diluted (1) | ||||||||
Weighted average number of common shares outstanding | 35,057 | 35,057 | 32,442 | 32,663 | |||||||
Total adjusted net income per share | $ | 0.57 | $ | 0.57 | $ | 1.62 | $ | 1.61 | |||
1. Weighted average fully diluted common shares outstanding for certain periods presented includes shares that are considered antidilutive for calculating loss per share in accordance with GAAP. |
Reconciliation of PV-10 to Standardized Measure
PV-10 is a non-GAAP financial measure and represents the present value of estimated future cash inflows from proved oil, natural gas and NGL reserves, less future development and production costs, discounted at 10% per annum to reflect timing of future cash flows and using 12-month average prices for the years ended December 31, 2018 and 2017. PV-10 differs from Standardized Measure because it does not include the effects of income taxes on future net revenues. PV-10 is used by the industry and by management as a reserve asset value measure to compare against past reserve bases and the reserve bases of other business entities. It is useful because its calculation is not dependent on the taxpaying status of the entity. Because of the present value of future income tax discounted at 10% is insignificant, these measures are equivalent.
PV-10 utilizing alternative pricing of $54.00 per Bbl of oil and $2.75 per MMBtu for natural gas is a non-GAAP financial measure. It differs from Standardized Measure and is useful to investors because it reflects the potential value of proved reserves based on commodity price assumptions more closely representative of current average NYMEX futures prices rather than SEC pricing and does not include the effects of income taxes on future net revenues. Neither the PV-10 of the Company's SEC reserves, the PV-10 utilizing alternative pricing nor the Standardized Measure represents an estimate of fair market value of the Company's oil and natural gas properties.
Reconciliation of G&A to Adjusted G&A
The Company reports and provides guidance on Adjusted G&A per Boe because it believes this measure is commonly used by management, analysts and investors as an indicator of cost management and operating efficiency on a comparable basis from period to period and to compare and make investment recommendations of companies in the oil and gas industry. This non-GAAP measure allows for the analysis of general and administrative spend without regard to stock-based compensation programs and other non-recurring cash items which can vary significantly between companies. Adjusted G&A per Boe is not a measure of financial performance under GAAP and should not be considered a substitute for general and administrative expense per Boe. Therefore, the Company's Adjusted G&A per Boe may not be comparable to other companies' similarly titled measures.
The Company defines adjusted G&A as general and administrative expense adjusted for certain non-cash stock-based compensation and other non-recurring items as shown in the following tables.
Three Months Ended December 31, 2018 | Three Months Ended December 31, 2017 | ||||||||||
$ | $/Boe | $ | $/Boe | ||||||||
(In thousands, except per Boe amounts) | |||||||||||
General and administrative | $ | 8,050 | $ | 2.64 | $ | 16,840 | $ | 4.77 | |||
Stock-based compensation | (962) | (0.32) | (3,134) | (0.88) | |||||||
Drilling participation agreement transaction costs | — | — | (20) | (0.01) | |||||||
Adjusted G&A | $ | 7,088 | $ | 2.32 | $ | 13,686 | $ | 3.88 | |||
Year Ended December 31, 2018 | Year Ended December 31, 2017 | ||||||||||
$ | $/Boe | $ | $/Boe | ||||||||
(In thousands, except per Boe amounts) | |||||||||||
General and administrative | $ | 41,666 | $ | 3.38 | $ | 76,024 | $ | 5.10 | |||
Stock-based compensation (1) | (4,933) | (0.40) | (13,925) | (0.94) | |||||||
Restructuring costs | — | — | (3,739) | (0.25) | |||||||
Drilling participation agreement transaction costs | — | — | (2,901) | (0.19) | |||||||
Adjusted G&A | $ | 36,733 | $ | 2.98 | $ | 55,459 | $ | 3.72 | |||
1. Year ended December 31, 2018 excludes non-cash stock-based compensation included in accelerated vesting of employment compensation and employee termination benefits in the consolidated statement of operations. Year ended December 31, 2017 excludes non-cash stock-based compensation included in employee termination benefits in the consolidated statement of operations. |
For further information, please contact:
Johna Robinson
Investor Relations
SandRidge Energy, Inc.
123 Robert S. Kerr Avenue
Oklahoma City, OK 73102-6406
(405) 429-5515
Cautionary Note to Investors - This press release includes "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, including, but not limited to, the information appearing under the heading "2019 Operational and Capital Expenditure Guidance." These forward-looking statements are neither historical facts nor assurances of future performance and reflect SandRidge's current beliefs and expectations regarding future events and operating performance. The forward-looking statements include projections and estimates of the Company's corporate strategies, future operations, and development plans and appraisal programs, drilling inventory and locations, estimated oil, and natural gas and natural gas liquids production, reserves, price realizations and differentials, hedging program, projected operating, general and administrative and other costs, projected capital expenditures, tax rates, efficiency and cost reduction initiative outcomes, liquidity and capital structure and infrastructure assessment and investment. We have based these forward-looking statements on our current expectations and assumptions and analyses made by us in light of our experience and our perception of historical trends, current conditions and expected future developments, as well as other factors we believe are appropriate under the circumstances. However, whether actual results and developments will conform with our expectations and predictions is subject to a number of risks and uncertainties, including the volatility of oil and natural gas prices, our success in discovering, estimating, developing and replacing oil and natural gas reserves, actual decline curves and the actual effect of adding compression to natural gas wells, the availability and terms of capital, the ability of counterparties to transactions with us to meet their obligations, our timely execution of hedge transactions, credit conditions of global capital markets, changes in economic conditions, the amount and timing of future development costs, the availability and demand for alternative energy sources, regulatory changes, including those related to carbon dioxide and greenhouse gas emissions, and other factors, many of which are beyond our control. We refer you to the discussion of risk factors in Part I, Item 1A - "Risk Factors" of our Annual Report on Form 10-K and in comparable "Risk Factor" sections of our Quarterly Reports on Form 10-Q filed after such form 10-K. All of the forward-looking statements made in this press release are qualified by these cautionary statements. The actual results or developments anticipated may not be realized or, even if substantially realized, they may not have the expected consequences to or effects on our Company or our business or operations. Such statements are not guarantees of future performance and actual results or developments may differ materially from those projected in the forward-looking statements. We undertake no obligation to update or revise any forward-looking statements.
SandRidge Energy, Inc. (NYSE: SD) is an oil and natural gas exploration and production company headquartered in Oklahoma City, Oklahoma with its principal focus on developing high-return, growth oriented projects in Oklahoma and Colorado. The majority of the Company's production is generated from the Mississippian Lime formation in Oklahoma and Kansas. Development activity is currently focused on the Meramec formation in the Northwest STACK Play in Oklahoma and multiple oil rich Niobrara benches in the Colorado North Park Basin.
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SOURCE SandRidge Energy, Inc.
Article Date
3/4/2019SandRidge Energy, Inc. Announces 2018 Fourth Quarter and Full Year Financial and Operational Results Release Date and Conference Call Information
Source: PR Newswire
OKLAHOMA CITY, Feb. 27, 2019 /PRNewswire/ -- SandRidge Energy, Inc. (NYSE: SD) will release its 2018 fourth quarter and full year financial and operational results after the close of trading on the New York Stock Exchange on Monday, March 4, 2019.
The company will host a conference call to discuss these results on Tuesday, March 5, 2019 at 8:00am CT. The telephone number to access the conference call from within the U.S. is (833) 245-9650 and from outside the U.S. is (647) 689-4222. The passcode for the call is 3764669. An audio replay of the call will be available from March 5, 2019 until 11:59pm CT on April 4, 2019. The number to access the conference call replay from within the U.S. is (800) 585-8367 and from outside the U.S. is (416) 621-4642. The passcode for the replay is 3764669.
A live audio webcast of the conference call will also be available via SandRidge's website, www.sandridgeenergy.com, under Investor Relations/Presentations & Events. The webcast will be archived for replay on the company's website for 30 days.
About SandRidge Energy, Inc.
SandRidge Energy, Inc. (NYSE: SD) is an oil and natural gas exploration and production company headquartered in Oklahoma City, Oklahoma with its principal focus on developing high-return, growth oriented projects in Oklahoma and Colorado. The majority of the Company's production is generated from the Mississippian Lime formation in Oklahoma and Kansas. Development activity is currently focused on the Meramec formation in the Northwest STACK Play in Oklahoma and multiple oil rich Niobrara benches in the Colorado North Park Basin.
CONTACT:
Johna Robinson
Investor Relations
SandRidge Energy, Inc.
123 Robert S. Kerr Avenue
Oklahoma City, OK 73102
+1 (405) 429-5515
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SOURCE SandRidge Energy, Inc.
Article Date
2/27/20191/28/2019 - SandRidge Energy Announces New President and CEO
SandRidge Energy Announces New President and CEO
Source: PR Newswire
OKLAHOMA CITY, Jan. 28, 2019 /PRNewswire/ -- SandRidge Energy (NYSE: SD) ("SandRidge" or the "Company") announced today that the Board of Directors (the "Board") has appointed Paul D. McKinney as President and Chief Executive Officer, effective January 29, 2019. Mr. McKinney succeeds the Company's current President and Chief Executive Officer, Mr. William M. Griffin, who will continue to serve on the SandRidge Board.
"On behalf of the board, we are excited to have Paul join the team," said Mr. Griffin. "After an extensive search, we are confident we have found a candidate with the leadership skill and experience necessary to maximize value for our shareholders."
Mr. McKinney has thirty-five years of industry experience, most recently having served as President and Chief Operating Officer of Yuma Energy, Inc. Prior to joining Yuma in 2014, he held a variety of leadership positions with Apache Corporation over a six year period, including Vice President of their Gulf Coast Onshore Region. Additionally, he was employed by Tristone Capital in 2007 as Vice President and Director of Acquisitions and Divestitures. Mr. McKinney commenced his career in 1983 with Anadarko Petroleum Corporation, advancing through a variety of engineering and operations positions, ending his time there as Vice-President of Reservoir Engineering for Anadarko Canada Corporation. Mr. McKinney has a Bachelor of Science degree in Petroleum Engineering and is published as a co-author with the Society of Petroleum Engineers and privately on subjects focused on advanced reservoir engineering methods.
"I am very excited to be joining SandRidge and honored to work with the SandRidge team as we develop our plans for the future," Mr. McKinney commented. "The Company's asset base and existing investment opportunities are impressive and have set SandRidge up for organic growth. I look forward to developing these exciting assets as well as pursuing the many opportunities that exist in the market today."
Cautionary Statement Concerning Forward Looking Statements
This communication contains "forward-looking statements" "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These statements express a belief, expectation or intention and are generally accompanied by words that convey projected future events or outcomes. Such statements are often identified by use of the words "expects," "believes," "will," "would," "could," "forecasts," "projections," "estimates," "targets," "opportunities," "potential," and other similar terminology. All statements, other than statements of historical facts, included in this press release that address activities, events or developments that SandRidge expects, believes or anticipates will or may occur in the future are forward-looking statements. Such statements are subject to a number of assumptions, risks and uncertainties, including, but not limited to: the volatility of oil, gas and natural gas liquids ("NGL") prices; uncertainties inherent in estimating oil, gas and NGL reserves and resource potential; the uncertainties, costs and risks involved in exploration and development activities; regulatory restrictions, compliance costs and other risks relating to governmental regulation; risk related to third party control over non-operated properties; midstream capacity constraints and potential interruptions in production, and other factors, many of which are beyond our control. SandRidge cautions that the foregoing list of factors is not exclusive. Additional information concerning these and other risk factors is contained in SandRidge's public filings with the SEC, which are available at the SEC's website, http://www.sec.gov. Each forward-looking statement speaks only as of the date of the particular statement, and SandRidge undertakes no obligation to publicly update any of these forward-looking statements to reflect events or circumstances that may arise after the date hereof.
About SandRidge Energy, Inc.
SandRidge Energy, Inc. (NYSE: SD) is an oil and natural gas exploration and production company headquartered in Oklahoma City, Oklahoma with its principal focus on developing high-return, growth oriented projects in Oklahoma and Colorado. The majority of the Company's production is generated from the Mississippi Lime formation in Oklahoma and Kansas. Development activity is currently focused on the Meramec formation in the NW STACK Play in Oklahoma and multiple oil rich Niobrara benches in the Colorado North Park Basin.
Investor Contact:
Johna Robinson
Investor Relations
SandRidge Energy, Inc.
123 Robert S. Kerr Avenue Oklahoma City, OK 73102
+1 (405) 429-5515
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SOURCE SandRidge Energy
Article Date
1/28/2019SandRidge Energy, Inc. Reports Financial and Operational Results for Third Quarter 2018
Source: PR Newswire
OKLAHOMA CITY, Nov. 7, 2018 /PRNewswire/ -- SandRidge Energy, Inc. (the "Company" or "SandRidge") (NYSE:SD) today announced financial and operational results for the quarter ended September 30, 2018. For the third quarter, the Company reported net income of $12 million, or $0.33 per share, and net cash provided by operating activities of $53 million. After adjusting for certain items, the Company's adjusted net income amounted to $11 million, or $0.31 per share, operating cash flow totaled $48 million and adjusted EBITDA was $48 million for the quarter. The Company defines and reconciles such non-GAAP financial measures to the most directly comparable GAAP measure in supporting tables at the conclusion of this press release under the "Non-GAAP Financial Measures" beginning on page 12.
Highlights During and Subsequent to the Third Quarter
Bill Griffin, President and CEO commented, "The Company's evolution and commitment to change is yielding positive results, as demonstrated with our tangible improvements in third quarter production and earnings, along with positive changes to full year guidance. Additionally, following the culmination of our extended review of strategic alternatives, I am pleased with the organization's ability to put those efforts behind us and shift our full focus on moving forward with execution of development and growth plans. The Company generated $48 million of EBITDA during the quarter, as well as quarter to quarter production growth, driven largely by the results of our drilling program. This accomplishment marks a very positive milestone after an extended period of quarterly production declines. We expect to provide a more detailed picture of longer term earnings growth with the finalization of our 2019 development program and budget.
"The recently announced exit from the Central Basin Platform and the Permian Trust simplifies the Company's core business, improves profitability and significantly reduces our obligations for future abandonment costs. The immediate redeployment of these proceeds into a very complimentary acquisition of low risk Mid-Continent production and reserves at a compelling price further supports our belief that strategic, attractively priced acquisition opportunities exist and should be an important component of additional growth and optionality for SandRidge as we move forward.
"North Park Basin results continue to be very positive and record production rates are driving the meaningful realization of increased oil production and operating income. Growth in the relative contribution of higher margin oil volumes to the Company's total revenue stream remains a key component of our profitability improvement strategy. We continue to advance the learning curve with our Meramec drilling program in the Northwest STACK. Not only have we built confidence in our ability to identify commercially viable areas of future development in the Northwest STACK, we have driven down cycle times and continue to reduce associated development costs.
"SandRidge remains committed to the creation of shareholder value and continuous improvement. We are confident in our ability to deliver profitable growth within our existing asset base. The strategy remains focused on leveraging our strong cash flow and balance sheet to drive development and selectively target appropriately sized acquisitions that fit our core competencies and provide immediate, high-return growth optionality to our inventory."
Operational Results and Activity
During the quarter, production totaled 3.1 MMBoe (30% oil, 23% NGLs and 47% natural gas). The Company averaged two rigs in the Mid-Continent region targeting the Mississippian Lime and the Northwest STACK Meramec. After a pause in North Park Basin drilling earlier this year, drilling resumed during the quarter to bring the Company's total current rig count to three.
North Park Basin Asset in Jackson County, Colorado
Net oil production in the North Park Basin totaled 379 MBo (4.1 MBopd) for the third quarter, a new record for the asset.
During the quarter, the Company continued development activities to advance two separate spacing tests on the eastern and western sides of the field. The eastern area 1,320 foot "wine rack" spacing test, comprised of eight XRLs, produced an average 30-Day IP of 983 Bopd, 129% of type curve. The wells were completed in the B, C and D Niobrara benches utilizing a twelve wells per section pattern.
The second 660 foot "wine rack" spacing test, on the western side of the field, will evaluate the potential for three layers of wells to capture reserves from A, B, C and D benches. Successful results would provide support for a potential of twenty-three wells per section. Early results from the first well were announced last quarter, and the Peters 16-12H13 has since produced a 30-Day IP of 710 Bopd. During the quarter, drilling operations began on five subsequent wells within the pattern with first sales expected during the first quarter of 2019.
Additionally, two XRLs targeting a southern expansion of the core area are projected to spud late in the fourth quarter.
Mid-Continent Assets in Oklahoma and Kansas
In the third quarter, production in the Mississippian Lime totaled 2.4 MMBoe (26 MBoepd, 17% oil) and Northwest STACK production totaled 221 MBoe (2.4 MBoepd, 39% oil).
The Company maintained one rig in the Northwest STACK targeting the Meramec and drilled three wells under the previously announced Drilling Participation Agreement. The Company brought four wells to sales with a combined 30-Day IP averaging 549 Boepd (61% oil).
During the quarter, the Company continued drilling in the Mississippian Lime and recently brought the first of four planned wells online with results expected in the fourth quarter. SandRidge intends to extend this rig through the end of the year to drill three Northwest STACK Meramec wells not under the Drilling Participation agreement. These high interest wells will offset two highly productive wells, the Medill 1-27H which produced a 30-Day IP of 925 Boepd (77% oil), and the Campbell 1-26H23H which delivered a 30-Day IP of 902 Boepd (81% oil).
Colorado Ballot Proposition 112
On November 6, 2018, the citizens of Colorado voted against Proposition 112, a ballot initiative that would have severely restricted energy development in the state. As a result, the Company's current development plans for the North Park Basin remain unchanged. Recently, various initiatives have been promoted by interest groups to increase regulations inhibiting oil and gas development. SandRidge will continue to monitor such initiatives in all of its operational areas. The Company values and respects the environment and remains committed to conducting all operations in a safe and responsible manner.
Capital Expenditures and 2018 Guidance Update
For the three and nine months ended September 30, 2018, capital expenditures were $43 million and $118 million, respectively. For 2018, the Company expects to spend between $180 million and $190 million, which is unchanged from previous guidance. However, the Company's drilling and completion costs were reallocated between North Park and the Mid-Continent due to timing of North Park wells and additional high interest Northwest STACK wells added to the 2018 program.
As a result of higher realized production, the Central Basin Platform divestiture and Mid-Continent acquisition, the Company increased its 2018 production guidance to 12.0 - 12.5 MMBoe from 11.3 - 11.9 MMBoe. Total lease operating expenses will remain unchanged and adjusted G&A decreased by $1 million to a range of $39 - $41 million.
Liquidity and Capital Structure
As a result of the fall redetermination, the Company's borrowing base has been set at $350 million. As of November 2, 2018, following the closing of the previously announced transactions, the Company's liquidity totaled $363.4 million, which includes $19.6 million of cash and $350 million of borrowing capacity under the credit facility, net of outstanding letters of credit. The Company currently has no funds drawn under its credit facility.
Conference Call Information
The Company will host a conference call to discuss these results on Thursday, November 8, 2018 at 8:00 am CT. The telephone number to access the conference call from within the U.S. is (833) 245-9650 and from outside the U.S. is (647) 689-4222. The passcode for the call is 8344069. An audio replay of the call will be available from November 8, 2018 until 11:59 pm CT on December 8, 2018. The number to access the conference call replay from within the U.S. is (800) 585-8367 and from outside the U.S. is (416) 621-4642. The passcode for the replay is 8344069.
A live audio webcast of the conference call will also be available via SandRidge's website, www.sandridgeenergy.com, under Investor Relations/Presentation & Events. The webcast will be archived for replay on the Company's website for 30 days.
2018 Operational and Capital Expenditure Guidance
Presented below is the Company's operational and capital expenditure guidance for 2018.
Updated | Previous | ||
Projection as of | Projection as of | ||
November 7, 2018 | August 8, 2018 | ||
Production | |||
Oil (MMBbls) | 3.4 - 3.6 | 3.4 - 3.6 | |
Natural Gas Liquids (MMBbls) | 2.7 - 2.9 | 2.6 - 2.8 | |
Total Liquids (MMBbls) | 6.1 - 6.5 | 6.0 - 6.4 | |
Natural Gas (Bcf) | 35.5 - 35.8 | 31.5 - 33.0 | |
Total (MMBoe) | 12.0 - 12.5 | 11.3 - 11.9 | |
Price Differential | |||
Oil (per Bbl) | $2.60 | $2.80 | |
Natural Gas Liquids (realized % of NYMEX WTI) | 37% | 36% | |
Natural Gas (per MMBtu) | $1.20 | $1.20 | |
Expenses | |||
LOE | $92 - $95 million | $92 - $95 million | |
Adjusted G&A Expense (1) | $39 - $41 million | $40 - $42 million | |
% of Revenue | |||
Production Taxes | 5.50% - 5.70% | 5.30% - 5.70% | |
Capital Expenditures ($ in millions) | |||
Drilling and Completion | |||
Mid-Continent | $22 - $27 | $17 - $19 | |
North Park Basin | 55 - 60 | 65 - 73 | |
Other (2) | 35 | 34 | |
Total Drilling and Completion | $112 - $122 | $116 - $126 | |
Other E&P | |||
Land, G&G, and Seismic | $16 | $15 | |
Infrastructure (3) | 18 | 15 | |
Workover | 26 | 25 | |
Capitalized G&A and Interest | 7 | 8 | |
Total Other Exploration and Production | $67 | $63 | |
General Corporate | 1 | 1 | |
Total Capital Expenditures | $180 - $190 | $180 - $190 | |
(excluding acquisitions and plugging and abandonment) |
1. | Adjusted G&A expense is a non-GAAP financial measure. The Company has defined this measure at the conclusion of this press release under "Non-GAAP Financial Measures" beginning on page 12. Information to reconcile this non-GAAP financial measure to the most directly comparable GAAP financial measure is not available at this time, as management is unable to forecast the excluded items for future periods. |
2. | Primarily 2017 Carryover |
3. | Includes Production Gathering and Facilities |
Operational and Financial Statistics
Information regarding the Company's production, pricing, costs and earnings is presented below:
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||
Production - Total | |||||||||||
Oil (MBbl) | 956 | 954 | 2,637 | 3,130 | |||||||
NGL (MBbl) | 710 | 807 | 2,110 | 2,601 | |||||||
Natural Gas (MMcf) | 8,757 | 10,850 | 27,221 | 33,883 | |||||||
Oil equivalent (MBoe) | 3,126 | 3,569 | 9,284 | 11,378 | |||||||
Daily production (MBoed) | 34.0 | 38.8 | 34.0 | 41.7 | |||||||
Average price per unit | |||||||||||
Realized oil price per barrel - as reported | $ | 66.94 | $ | 46.16 | $ | 63.16 | $ | 47.22 | |||
Realized impact of derivatives per barrel | (12.95) | 3.51 | (12.35) | 2.20 | |||||||
Net realized price per barrel | $ | 53.99 | $ | 49.67 | $ | 50.81 | $ | 49.42 | |||
Realized NGL price per barrel - as reported | $ | 26.45 | $ | 19.07 | $ | 24.70 | $ | 16.52 | |||
Realized impact of derivatives per barrel | — | — | — | — | |||||||
Net realized price per barrel | $ | 26.45 | $ | 19.07 | $ | 24.70 | $ | 16.52 | |||
Realized natural gas price per Mcf - as reported | $ | 1.68 | $ | 1.95 | $ | 1.66 | $ | 2.14 | |||
Realized impact of derivatives per Mcf | 0.09 | 0.15 | 0.13 | 0.02 | |||||||
Net realized price per Mcf | $ | 1.77 | $ | 2.10 | $ | 1.79 | $ | 2.16 | |||
Realized price per Boe - as reported | $ | 31.19 | $ | 22.57 | $ | 28.41 | $ | 23.14 | |||
Net realized price per Boe - including impact of derivatives | $ | 27.47 | $ | 23.97 | $ | 25.28 | $ | 23.81 | |||
Average cost per Boe | |||||||||||
Lease operating | $ | 7.49 | $ | 7.50 | $ | 7.42 | $ | 6.77 | |||
Production taxes | $ | 1.80 | $ | 1.01 | $ | 1.59 | $ | 0.83 | |||
Depletion (1) | $ | 10.59 | $ | 8.69 | $ | 9.91 | $ | 7.69 | |||
Earnings per share | |||||||||||
Earnings (loss) per share applicable to common stockholders | |||||||||||
Basic | $ | 0.33 | $ | (0.25) | $ | (1.81) | $ | 2.07 | |||
Diluted | $ | 0.33 | $ | (0.25) | $ | (1.81) | $ | 2.06 | |||
Adjusted net income (loss) per share available to common stockholders | |||||||||||
Basic | $ | 0.31 | $ | 0.35 | $ | 0.42 | $ | 1.28 | |||
Diluted | $ | 0.31 | $ | 0.35 | $ | 0.42 | $ | 1.27 | |||
Weighted average number of shares outstanding (in thousands) | |||||||||||
Basic | 35,308 | 34,290 | 34,971 | 31,750 | |||||||
Diluted (2) | 35,330 | 34,388 | 34,971 | 31,984 | |||||||
(1) | Includes accretion of asset retirement obligation. | |||||||||||
(2) | Includes shares considered antidilutive for calculating loss per share in accordance with GAAP. | |||||||||||
Capital Expenditures
The table below presents actual results of the Company's capital expenditures for the three and nine months ended September 30, 2018 at the same level of detail as its full year capital expenditure guidance.
Three Months Ended | Nine Months Ended | ||||
September 30, 2018 | September 30, 2018 | ||||
(In thousands) | (In thousands) | ||||
Drilling and Completion | |||||
Mid-Continent | $ | 7,700 | $ | 11,091 | |
North Park Basin | 16,367 | 36,841 | |||
Other (1) | 5,244 | 29,901 | |||
Total Drilling and Completion | $ | 29,311 | $ | 77,833 | |
Other E&P | |||||
Land, G&G, and Seismic | $ | 4,500 | $ | 9,745 | |
Infrastructure (2) | 2,291 | 7,199 | |||
Workovers | 5,570 | 18,316 | |||
Capitalized G&A and Interest | 1,264 | 4,541 | |||
Total Other Exploration and Production | $ | 13,626 | $ | 39,801 | |
General Corporate | $ | 44 | $ | 44 | |
Total Capital Expenditures | $ | 42,982 | $ | 117,678 | |
(excluding acquisitions and plugging and abandonment) | |||||
(1) | Primarily 2017 Carryover | |||||
(2) | Production Gathering and Facilities | |||||
Derivative Contracts
In light of the high correlation between NGL and NYMEX WTI prices, the Company manages a portion of its NGL price exposure using NYMEX WTI contracts at a three-to-one (3:1) NGL to crude ratio. In contemplation of the previously terminated merger with Bonanza Creek, which would have been partially financed with debt, we entered into several oil derivative contracts in November 2017. Future hedging requires Board approval. The table below sets forth the Company's consolidated oil and natural gas price swaps for 2018 and 2019 as of November 7, 2018:
Quarter Ending | ||||||||||
3/31/2018 | 6/30/2018 | 9/30/2018 | 12/31/2018 | FY 2018 | ||||||
WTI Swaps: | ||||||||||
Total Volume (MMBbls) | 1.05 | 1.00 | 0.92 | 0.83 | 3.80 | |||||
Daily Volume (MBblspd) | 11.7 | 11.0 | 10.0 | 9.0 | 10.4 | |||||
Swap Price ($/bbl) | $55.46 | $55.50 | $56.04 | $56.12 | $55.75 | |||||
Natural Gas Swaps: | ||||||||||
Total Volume (Bcf) | 6.30 | 3.64 | 3.68 | 3.68 | 17.30 | |||||
Daily Volume (MMBtupd) | 70.0 | 40.0 | 40.0 | 40.0 | 47.4 | |||||
Swap Price ($/MMBtu) | $3.24 | $3.11 | $3.11 | $3.11 | $3.16 | |||||
3/31/2019 | 6/30/2019 | 9/30/2019 | 12/31/2019 | FY 2019 | ||||||
WTI Swaps: | ||||||||||
Total Volume (MMBbls) | 0.45 | 0.46 | 0.46 | 0.46 | 1.83 | |||||
Daily Volume (MBblspd) | 5.0 | 5.0 | 5.0 | 5.0 | 5.0 | |||||
Swap Price ($/bbl) | $54.29 | $54.29 | $54.29 | $54.29 | $54.29 | |||||
Capitalization
The Company's capital structure as of September 30, 2018 and December 31, 2017 is presented below:
September 30, 2018 | December 31, 2017 | ||||
(In thousands) | |||||
Cash, cash equivalents and restricted cash | $ | 34,474 | $ | 101,308 | |
Credit facility | $ | — | $ | — | |
Building note | — | 37,502 | |||
Total debt | — | 37,502 | |||
Stockholders' equity | |||||
Common stock | 36 | 36 | |||
Warrants | 88,517 | 88,500 | |||
Additional paid-in capital | 1,054,155 | 1,038,324 | |||
Accumulated deficit | (350,173) | (286,920) | |||
Total SandRidge Energy, Inc. stockholders' equity | 792,535 | 839,940 | |||
Total capitalization | $ | 792,535 | $ | 877,442 | |
SandRidge Energy, Inc. and Subsidiaries | |||||||||||
Condensed Consolidated Statements of Operations (Unaudited) | |||||||||||
(In thousands, except per share amounts) | |||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||
Revenues | |||||||||||
Oil, natural gas and NGL | $ | 97,491 | $ | 80,540 | $ | 263,761 | $ | 263,235 | |||
Other | 169 | 352 | 489 | 858 | |||||||
Total revenues | 97,660 | 80,892 | 264,250 | 264,093 | |||||||
Expenses | |||||||||||
Production | 23,429 | 26,765 | 68,927 | 76,997 | |||||||
Production taxes | 5,636 | 3,606 | 14,725 | 9,435 | |||||||
Depreciation and depletion — oil and natural gas | 33,090 | 31,029 | 92,048 | 87,486 | |||||||
Depreciation and amortization — other | 3,036 | 3,399 | 9,229 | 10,729 | |||||||
Impairment | — | 498 | 4,170 | 3,475 | |||||||
General and administrative | 9,251 | 20,292 | 33,616 | 59,184 | |||||||
Accelerated vesting upon change in control | — | — | 6,545 | — | |||||||
Proxy contest | (459) | — | 7,139 | — | |||||||
Employee termination benefits | 23 | — | 32,653 | 4,815 | |||||||
Loss (gain) on derivative contracts | 11,329 | 11,702 | 59,763 | (46,024) | |||||||
Other operating (income) expense | (105) | (132) | (1,343) | 135 | |||||||
Total expenses | 85,230 | 97,159 | 327,472 | 206,232 | |||||||
Income (loss) from operations | 12,430 | (16,267) | (63,222) | 57,861 | |||||||
Other (expense) income | |||||||||||
Interest expense, net | (627) | (872) | (2,226) | (2,757) | |||||||
Gain on extinguishment of debt | — | — | 1,151 | — | |||||||
Other (expense) income, net | (118) | 197 | 972 | 2,222 | |||||||
Total other expense | (745) | (675) | (103) | (535) | |||||||
Income (loss) before income taxes | 11,685 | (16,942) | (63,325) | 57,326 | |||||||
Income tax benefit | (30) | (8,457) | (72) | (8,496) | |||||||
Net income (loss) | $ | 11,715 | $ | (8,485) | $ | (63,253) | $ | 65,822 | |||
Earnings (loss) per share | |||||||||||
Basic | $ | 0.33 | $ | (0.25) | $ | (1.81) | $ | 2.07 | |||
Diluted | $ | 0.33 | $ | (0.25) | $ | (1.81) | $ | 2.06 | |||
Weighted average number of common shares outstanding | |||||||||||
Basic | 35,308 | 34,290 | 34,971 | 31,750 | |||||||
Diluted | 35,330 | 34,290 | 34,971 | 31,984 | |||||||
SandRidge Energy, Inc. and Subsidiaries | |||||
Condensed Consolidated Balance Sheets (Unaudited) | |||||
(In thousands) | |||||
September 30, 2018 | December 31, 2017 | ||||
ASSETS | |||||
Current assets | |||||
Cash and cash equivalents | $ | 32,562 | $ | 99,143 | |
Restricted cash - other | 1,912 | 2,165 | |||
Accounts receivable, net | 54,493 | 71,277 | |||
Derivative contracts | 73 | 1,310 | |||
Prepaid expenses | 2,223 | 5,248 | |||
Other current assets | 350 | 15,954 | |||
Total current assets | 91,613 | 195,097 | |||
Oil and natural gas properties, using full cost method of accounting | |||||
Proved | 1,206,363 | 1,056,806 | |||
Unproved | 68,737 | 100,884 | |||
Less: accumulated depreciation, depletion and impairment | (546,769) | (460,431) | |||
728,331 | 697,259 | ||||
Other property, plant and equipment, net | 211,198 | 225,981 | |||
Other assets | 1,181 | 1,290 | |||
Total assets | $ | 1,032,323 | $ | 1,119,627 | |
LIABILITIES AND STOCKHOLDERS' EQUITY | |||||
Current liabilities | |||||
Accounts payable and accrued expenses | $ | 112,980 | $ | 139,155 | |
Derivative contracts | 36,905 | 10,627 | |||
Asset retirement obligation | 40,041 | 41,017 | |||
Other current liabilities | 7 | 8,115 | |||
Total current liabilities | 189,933 | 198,914 | |||
Long-term debt | — | 37,502 | |||
Derivative contracts | 6,791 | 3,568 | |||
Asset retirement obligation | 39,227 | 36,527 | |||
Other long-term obligations | 3,837 | 3,176 | |||
Total liabilities | 239,788 | 279,687 | |||
Stockholders' Equity | |||||
Common stock, $0.001 par value; 250,000 shares authorized; 35,691 issued and outstanding at September 30, 2018 and 35,650 issued and outstanding at December 31, 2017 | 36 | 36 | |||
Warrants | 88,517 | 88,500 | |||
Additional paid-in capital | 1,054,155 | 1,038,324 | |||
Accumulated deficit | (350,173) | (286,920) | |||
Total stockholders' equity | 792,535 | 839,940 | |||
Total liabilities and stockholders' equity | $ | 1,032,323 | $ | 1,119,627 | |
SandRidge Energy, Inc. and Subsidiaries | |||||
Condensed Consolidated Cash Flows (Unaudited) | |||||
(In thousands) | |||||
Nine Months Ended September 30, | |||||
2018 | 2017 | ||||
CASH FLOWS FROM OPERATING ACTIVITIES | |||||
Net (loss) income | $ | (63,253) | $ | 65,822 | |
Adjustments to reconcile net (loss) income to net cash provided by operating activities | |||||
Provision for doubtful accounts | (6) | 133 | |||
Depreciation, depletion, and amortization | 101,277 | 98,215 | |||
Impairment | 4,170 | 3,475 | |||
Debt issuance costs amortization | 352 | 313 | |||
Amortization of premiums and discounts on debt | (47) | (231) | |||
Gain on extinguishment of debt | (1,151) | — | |||
Loss (gain) on derivative contracts | 59,763 | (46,024) | |||
Cash (paid) received on settlement of derivative contracts | (29,025) | 7,700 | |||
Stock-based compensation | 22,415 | 12,616 | |||
Other | (1,734) | 188 | |||
Changes in operating assets and liabilities | 16,407 | 5,699 | |||
Net cash provided by operating activities | 109,168 | 147,906 | |||
CASH FLOWS FROM INVESTING ACTIVITIES | |||||
Capital expenditures for property, plant and equipment | (146,819) | (152,743) | |||
Acquisition of assets | — | (48,236) | |||
Proceeds from sale of assets | 14,497 | 19,769 | |||
Net cash used in investing activities | (132,322) | (181,210) | |||
CASH FLOWS FROM FINANCING ACTIVITIES | |||||
Repayments of borrowings | (36,304) | — | |||
Debt issuance costs | — | (1,488) | |||
Cash paid for tax withholdings on vested stock awards | (7,376) | (3,766) | |||
Net cash used in financing activities | (43,680) | (5,254) | |||
NET DECREASE IN CASH, CASH EQUIVALENTS and RESTRICTED CASH | (66,834) | (38,558) | |||
CASH, CASH EQUIVALENTS and RESTRICTED CASH, beginning of year | 101,308 | 174,071 | |||
CASH, CASH EQUIVALENTS and RESTRICTED CASH, end of period | $ | 34,474 | $ | 135,513 | |
Supplemental Disclosure of Cash Flow Information | |||||
Cash received for income taxes | $ | 4,381 | $ | — | |
Supplemental Disclosure of Noncash Investing and Financing Activities | |||||
Change in accrued capital expenditures | $ | 29,141 | $ | (15,241) | |
Equity issued for debt | $ | — | $ | (268,779) | |
Non-GAAP Financial Measures
This press release includes non-GAAP financial measures. These non-GAAP measures are not alternatives to GAAP measures, and you should not consider these non-GAAP measures in isolation or as a substitute for analysis of our results as reported under GAAP. Below is additional disclosure regarding each of the non-GAAP measures used in this press release, including reconciliations to their most directly comparable GAAP measure.
Reconciliation of Cash Provided by Operating Activities to Operating Cash Flow
The Company defines operating cash flow as net cash provided by operating activities before changes in operating assets and liabilities, as shown in the following table. Operating cash flow is a supplemental financial measure used by the Company's management and by securities analysts, investors, lenders, rating agencies and others who follow the industry as an indicator of the Company's ability to internally fund exploration and development activities and to service or incur additional debt. The Company also uses this measure because operating cash flow relates to the timing of cash receipts and disbursements that the Company may not control and may not relate to the period in which the operating activities occurred. Further, operating cash flow allows the Company to compare its operating performance and return on capital with those of other companies without regard to financing methods and capital structure. This measure should not be considered in isolation or as a substitute for net cash provided by operating activities prepared in accordance with GAAP.
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||
(In thousands) | |||||||||||
Net cash provided by operating activities | $ | 53,051 | $ | 43,974 | $ | 109,168 | $ | 147,906 | |||
Changes in operating assets and liabilities | (5,061) | 2,107 | (16,407) | (5,699) | |||||||
Operating cash flow | $ | 47,990 | $ | 46,081 | $ | 92,761 | $ | 142,207 | |||
Reconciliation of Net Income (Loss) to EBITDA and Adjusted EBITDA
The Company defines EBITDA as net income (loss) before income tax benefit, interest expense, depreciation and amortization - other and depreciation and depletion - oil and natural gas. Adjusted EBITDA, as presented herein, is EBITDA excluding items that the Company believes affect the comparability of operating results such as items whose timing and/or amount cannot be reasonably estimated or are non-recurring, as shown in the following tables.
Adjusted EBITDA is presented because management believes it provides useful additional information used by the Company's management and by securities analysts, investors, lenders, ratings agencies and others who follow the industry, for analysis of the Company's financial and operating performance on a recurring basis and the Company's ability to internally fund exploration and development, and to service or incur additional debt. In addition, management believes that adjusted EBITDA is widely used by professional research analysts and others in the valuation, comparison, and investment recommendations of companies in the oil and gas exploration and production industry. The Company's adjusted EBITDA may not be comparable to similarly titled measures used by other companies.
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||
(In thousands) | |||||||||||
Net income (loss) | $ | 11,715 | $ | (8,485) | $ | (63,253) | $ | 65,822 | |||
Adjusted for | |||||||||||
Income tax benefit | (30) | (8,457) | (72) | (8,496) | |||||||
Interest expense | 702 | 1,177 | 2,508 | 3,509 | |||||||
Depreciation and amortization - other | 3,036 | 3,399 | 9,229 | 10,729 | |||||||
Depreciation and depletion - oil and natural gas | 33,090 | 31,029 | 92,048 | 87,486 | |||||||
EBITDA | 48,513 | 18,663 | 40,460 | 159,050 | |||||||
Asset impairment | — | 498 | 4,170 | 3,475 | |||||||
Stock-based compensation | 506 | 2,961 | 9,284 | 10,789 | |||||||
Loss (gain) on derivative contracts | 11,329 | 11,702 | 59,763 | (46,024) | |||||||
Cash (paid) received upon settlement of derivative contracts | (11,632) | 4,994 | (29,025) | 7,700 | |||||||
Employee termination benefits | 23 | — | 32,653 | 4,815 | |||||||
Proxy contest | (459) | — | 7,139 | — | |||||||
Acceleration of performance units | — | — | 1,232 | — | |||||||
Restructuring costs | — | 515 | — | 3,739 | |||||||
Drilling participation agreement transaction costs | — | 2,881 | — | 2,881 | |||||||
Gain on extinguishment of debt | — | — | (1,151) | — | |||||||
Other | (245) | (477) | (2,463) | (2,712) | |||||||
Adjusted EBITDA | $ | 48,035 | $ | 41,737 | $ | 122,062 | $ | 143,713 | |||
Reconciliation of Cash Provided by Operating Activities to Adjusted EBITDA
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||
(In thousands) | |||||||||||
Net cash provided by operating activities | $ | 53,051 | $ | 43,974 | $ | 109,168 | $ | 147,906 | |||
Changes in operating assets and liabilities | (5,061) | 2,107 | (16,407) | (5,699) | |||||||
Interest expense | 702 | 1,177 | 2,508 | 3,509 | |||||||
Employee termination benefits (1) | 23 | — | 19,522 | 2,990 | |||||||
Proxy contest | (459) | — | 7,139 | — | |||||||
Acceleration of performance units | — | — | 1,232 | — | |||||||
Restructuring costs | — | 515 | — | 3,739 | |||||||
Drilling participation agreement transaction costs | — | 2,881 | — | 2,881 | |||||||
Income tax benefit | (30) | (8,457) | (72) | (8,496) | |||||||
Other | (191) | (460) | (1,028) | (3,117) | |||||||
Adjusted EBITDA | $ | 48,035 | $ | 41,737 | $ | 122,062 | $ | 143,713 | |||
(1) | Excludes associated stock-based compensation. | |||||||||||
Reconciliation of Net Income (Loss) Available to Common Stockholders to Adjusted Net Income Available to Common Stockholders
The Company defines adjusted net income as net income excluding items that the Company believes affect the comparability of operating results and are typically excluded from published estimates by the investment community, including items whose timing and/or amount cannot be reasonably estimated or are non-recurring, as shown in the following tables.
Management uses the supplemental measure of adjusted net income as an indicator of the Company's operational trends and performance relative to other oil and natural gas companies and believes it is more comparable to earnings estimates provided by securities analysts. Adjusted net income is not a measure of financial performance under GAAP and should not be considered a substitute for net income available to common stockholders.
Three Months Ended September 30, 2018 | Three Months Ended September 30, 2017 | ||||||||||
$ | $/Diluted Share | $ | $/Diluted Share | ||||||||
(In thousands, except per share amounts) | |||||||||||
Net income (loss) available to common stockholders | $ | 11,715 | $ | 0.33 | $ | (8,485) | $ | (0.25) | |||
Asset impairment | — | — | 498 | 0.01 | |||||||
Loss on derivative contracts | 11,329 | 0.32 | 11,702 | 0.34 | |||||||
Cash (paid) received upon settlement of derivative contracts | (11,632) | (0.33) | 4,994 | 0.15 | |||||||
Employee termination benefits | 23 | — | — | — | |||||||
Proxy contest | (459) | (0.01) | — | — | |||||||
Restructuring costs | — | — | 515 | 0.02 | |||||||
Drilling participation agreement transaction costs | — | — | 2,881 | 0.09 | |||||||
Other | (172) | — | (215) | (0.01) | |||||||
Adjusted net income available to common stockholders | $ | 10,804 | $ | 0.31 | $ | 11,890 | $ | 0.35 | |||
Basic | Diluted (1) | Basic | Diluted (1) | ||||||||
Weighted average number of common shares outstanding | 35,308 | 35,330 | 34,290 | 34,388 | |||||||
Total adjusted net income per share | $ | 0.31 | $ | 0.31 | $ | 0.35 | $ | 0.35 | |||
Nine Months Ended September 30, 2018 | Nine Months Ended September 30, 2017 | ||||||||||
$ | $/Diluted Share | $ | $/Diluted Share | ||||||||
(In thousands, except per share amounts) | |||||||||||
Net (loss) income available to common stockholders | $ | (63,253) | $ | (1.81) | $ | 65,822 | $ | 2.06 | |||
Asset impairment | 4,170 | 0.12 | 3,475 | 0.11 | |||||||
Loss (gain) on derivative contracts | 59,763 | 1.71 | (46,024) | (1.44) | |||||||
Cash (paid) received upon settlement of derivative contracts | (29,025) | (0.83) | 7,700 | 0.24 | |||||||
Employee termination benefits | 32,653 | 0.93 | 4,815 | 0.15 | |||||||
Proxy contest | 7,139 | 0.20 | — | — | |||||||
Accelerated vesting upon change in control | 6,545 | 0.19 | — | — | |||||||
Restructuring costs | — | — | 3,739 | 0.12 | |||||||
Drilling participation agreement transaction costs | — | — | 2,881 | 0.09 | |||||||
Gain on extinguishment of debt | (1,151) | (0.03) | — | — | |||||||
Other | (2,077) | (0.06) | (1,642) | (0.06) | |||||||
Adjusted net income available to common stockholders | $ | 14,764 | $ | 0.42 | $ | 40,766 | $ | 1.27 | |||
Basic | Diluted (1) | Basic | Diluted (1) | ||||||||
Weighted average number of common shares outstanding | 34,971 | 34,971 | 31,750 | 31,984 | |||||||
Total adjusted net income per share | $ | 0.42 | $ | 0.42 | $ | 1.28 | $ | 1.27 | |||
(1) | Weighted average fully diluted common shares outstanding for certain periods presented includes shares that are considered antidilutive for calculating loss per share in accordance with GAAP. | |||||||||||
Reconciliation of G&A to Adjusted G&A
The Company reports and provides guidance on Adjusted G&A per Boe because it believes this measure is commonly used by management, analysts and investors as an indicator of cost management and operating efficiency on a comparable basis from period to period, and to compare and make investment recommendations of companies in the oil and gas industry. This non-GAAP measure allows for the analysis of general and administrative spend without regard to stock-based compensation programs, and other non-recurring cash items which can vary significantly between companies. Adjusted G&A per Boe is not a measure of financial performance under GAAP and should not be considered a substitute for general and administrative expense per Boe. Therefore, the Company's Adjusted G&A per Boe may not be comparable to other companies' similarly titled measures.
The Company defines adjusted G&A as general and administrative expense adjusted for certain non-cash stock-based compensation and other non-recurring items, as shown in the following tables.
Three Months Ended September 30, 2018 | Three Months Ended September 30, 2017 | ||||||||||
$ | $/Boe | $ | $/Boe | ||||||||
(In thousands, except per Boe amounts) | |||||||||||
General and administrative | $ | 9,251 | $ | 2.96 | $ | 20,292 | $ | 5.69 | |||
Stock-based compensation (1) | (506) | (0.16) | (2,960) | (0.83) | |||||||
Restructuring costs | — | — | (515) | (0.14) | |||||||
Drilling participation agreement transaction costs | — | — | (2,881) | (0.82) | |||||||
Adjusted G&A | $ | 8,745 | $ | 2.80 | $ | 13,936 | $ | 3.90 | |||
Nine Months Ended September 30, 2018 | Nine Months Ended September 30, 2017 | ||||||||||
$ | $/Boe | $ | $/Boe | ||||||||
(In thousands, except per Boe amounts) | |||||||||||
General and administrative | $ | 33,616 | $ | 3.62 | $ | 59,184 | $ | 5.20 | |||
Stock-based compensation (1) | (3,971) | (0.43) | (10,789) | (0.95) | |||||||
Restructuring costs | — | — | (3,739) | (0.33) | |||||||
Drilling participation agreement transaction costs | — | — | (2,881) | (0.25) | |||||||
Adjusted G&A | $ | 29,645 | $ | 3.19 | $ | 41,775 | $ | 3.67 | |||
(1) | Nine-month period ended September 30, 2018 excludes approximately $18.4 million for the acceleration of certain stock awards due to the reduction in force in the first quarter of 2018 and the change in control event in the second quarter of 2018. Nine-month period ended September 30, 2017 excludes approximately $1.8 million for the acceleration of certain stock awards. | ||||||||||||
For further information, please contact:
Johna Robinson
Investor Relations
SandRidge Energy, Inc.
123 Robert S. Kerr Avenue
Oklahoma City, OK 73102-6406
(405) 429-5515
Cautionary Note to Investors - This press release includes "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, including, but not limited to, the information appearing under the heading "2018 Operational and Capital Expenditure Guidance." These statements express a belief, expectation or intention and are generally accompanied by words that convey projected future events or outcomes. The forward-looking statements include projections and estimates of the Company's corporate strategies, future operations, and development plans and appraisal programs, drilling inventory and locations, estimated oil, and natural gas and natural gas liquids production, reserves, price realizations and differentials, hedging program, projected operating, general and administrative and other costs, projected capital expenditures, tax rates, efficiency and cost reduction initiative outcomes, liquidity and capital structure and infrastructure assessment and investment. We have based these forward-looking statements on our current expectations and assumptions and analyses made by us in light of our experience and our perception of historical trends, current conditions and expected future developments, as well as other factors we believe are appropriate under the circumstances. However, whether actual results and developments will conform with our expectations and predictions is subject to a number of risks and uncertainties, including the volatility of oil and natural gas prices, our success in discovering, estimating, developing and replacing oil and natural gas reserves, actual decline curves and the actual effect of adding compression to natural gas wells, the availability and terms of capital, the ability of counterparties to transactions with us to meet their obligations, our timely execution of hedge transactions, credit conditions of global capital markets, changes in economic conditions, the amount and timing of future development costs, the availability and demand for alternative energy sources, regulatory changes, including those related to carbon dioxide and greenhouse gas emissions, and other factors, many of which are beyond our control. We refer you to the discussion of risk factors in Part I, Item 1A - "Risk Factors" of our Annual Report on Form 10-K and in comparable "Risk Factor" sections of our Quarterly Reports on Form 10-Q filed after such form 10-K. All of the forward-looking statements made in this press release are qualified by these cautionary statements. The actual results or developments anticipated may not be realized or, even if substantially realized, they may not have the expected consequences to or effects on our Company or our business or operations. Such statements are not guarantees of future performance and actual results or developments may differ materially from those projected in the forward-looking statements. We undertake no obligation to update or revise any forward-looking statements.
SandRidge Energy, Inc. (NYSE: SD) is an oil and natural gas exploration and production company headquartered in Oklahoma City, Oklahoma with its principal focus on developing high-return, growth oriented projects in Oklahoma and Colorado.
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SOURCE SandRidge Energy, Inc.
Article Date
11/7/2018SandRidge Energy, Inc. Announces 2018 Third Quarter Financial and Operational Results Release Date and Conference Call Information
Source: PR Newswire
OKLAHOMA CITY, Oct. 8, 2018 /PRNewswire/ -- SandRidge Energy, Inc. (NYSE: SD) will release its 2018 third quarter financial and operational results after the close of trading on the New York Stock Exchange on Wednesday, November 7, 2018.
The company will host a conference call to discuss these results on Thursday, November 8, 2018 at 8:00am CT. The telephone number to access the conference call from within the U.S. is (833) 245-9650 and from outside the U.S. is (647) 689-4222. The passcode for the call is 8344069. An audio replay of the call will be available from November 8, 2018 until 11:59pm CT on December 8, 2018. The number to access the conference call replay from within the U.S. is (800) 585-8367 and from outside the U.S. is (416) 621-4642. The passcode for the replay is 8344069.
A live audio webcast of the conference call will also be available via SandRidge's website, www.sandridgeenergy.com, under Investor Relations/Presentations & Events. The webcast will be archived for replay on the company's website for 30 days.
About SandRidge Energy, Inc.
SandRidge Energy, Inc. (NYSE: SD) is an oil and natural gas exploration and production company headquartered in Oklahoma City, Oklahoma with its principal focus on developing high-return, growth oriented projects in Oklahoma and Colorado. The majority of the Company's production is generated from the Mississippi Lime formation in Oklahoma and Kansas. Current development activity is generally focused on various reservoirs in the Anadarko Basin and multiple oil rich Niobrara benches in the North Park Basin in Colorado.
CONTACT:
Johna Robinson
Investor Relations
SandRidge Energy, Inc.
123 Robert S. Kerr Avenue
Oklahoma City, OK 73102
+1 (405) 429-5515
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SOURCE SandRidge Energy, Inc.
Article Date
10/8/2018SandRidge Energy Concludes Strategic Review Process and Will Move Forward with Company Development and Growth Plan
Source: PR Newswire
OKLAHOMA CITY, Sept. 10, 2018 /PRNewswire/ -- SandRidge Energy, Inc. (the "Company") (NYSE: SD) announced today that it has concluded its formal strategic review process following the thorough evaluation of multiple potential transactions, all of which the Board of Directors believes significantly undervalue either the Company or its resources. The Board believes several impermanent items may have impacted bid valuations, including Colorado's ballot initiative 97, which would significantly restrict drilling on the North Park property, the current lack of a pipeline connection in Jackson County, Colorado where our North Park acreage is located, and a lack of current market interest in the Mississippian Lime play. When the highest cash bids were totaled, the Company's implied liquidation value was approximately $12.00-$13.00 per share, which the Board believes meaningfully undervalues the Company.
"What we found through our comprehensive and thorough process was a significant disconnect between the intrinsic value of SandRidge and the bidders' perception of the Company. The highest cash bids received for the Company's properties included $305 million for a combination of the Mississippian Lime and additional other Oklahoma properties, $70 million for the Northwest STACK properties and only $100 million for the North Park Basin assets, which are simply not consistent with the current proven reserves and expected cash flows of these properties," Bill Griffin, President and CEO stated.
Jonathan Frates, Chairman of the Board, went on to say, "At the right price, notwithstanding the conclusion of this formal strategic review process, the Board is prepared to recommend a sale of the Company or certain of its assets, or the consummation of an appropriate merger opportunity. The value of the Company's current reserve development plan exceeds recent trading values and certainly these offers, which grossly undervalue the Company. Unfortunately, our properties are located in areas that are currently out of favor and are therefore meaningfully undervalued. We will work assiduously over the next few years to realize the true value of the business."
After several months of extensive solicitation, review of various proposals and reverse due diligence, the Board determined that the submitted cash offers were not representative of the Company's current or potential future asset value. Further, the merger proposals received were unattractive primarily because the offers entailed asking SandRidge to take meaningfully overvalued properties in lieu of cash, to burden the balance sheet with significant debt, provided no meaningful synergies or resulted in wide valuation gaps.
The Board has concluded that the optimal course at this time is to develop the Company's extensive inventory base in the Northwest STACK and the North Park Basin and pursue value enhancement opportunities in the Mississippian Lime. The Company will also pursue opportunistic acquisitions of strategic assets that provide complimentary, high quality production and development upside in a capital disciplined manner. The Company will continue to focus on cost reductions, margin improvements and divestment of non-core properties while moving forward with a profitable plan for organic growth. The Company looks forward to sharing the details of its new go-forward strategy in the very near future.
The strategic review process started on May 17, 2018 before the change in composition of the Board of Directors with the assistance of RBC Capital Markets LLC ("RBCCM"). The process included RBCCM contacting 662 entities to explore a complete or partial sale of the Company or its assets, or a combination of the Company with those entities, including domestic, international and financial buyers. The Company executed 28 non-disclosure agreements and received eight offers to purchase the Company or certain of its assets or to consummate some form of combination with the Company.
Investor Contact:
Johna Robinson
Investor Relations
SandRidge Energy, Inc.
123 Robert S. Kerr Avenue Oklahoma City, OK 73102
+1 (405) 429-5515
Cautionary Statement Concerning Forward Looking Statements
This communication contains "forward-looking statements" "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These statements express a belief, expectation or intention and are generally accompanied by words that convey projected future events or outcomes. Such statements are often identified by use of the words "expects," "believes," "will," "would," "could," "forecasts," "projections," "estimates," "targets," "opportunities," "potential," and other similar terminology. All statements, other than statements of historical facts, included in this press release that address activities, events or developments that SandRidge expects, believes or anticipates will or may occur in the future are forward-looking statements. Such statements are subject to a number of assumptions, risks and uncertainties, including, but not limited to: the volatility of oil, gas and natural gas liquids ("NGL") prices; uncertainties inherent in estimating oil, gas and NGL reserves and resource potential; the uncertainties, costs and risks involved in exploration and development activities; regulatory restrictions, compliance costs and other risks relating to governmental regulation; risk related to third party control over non-operated properties; midstream capacity constraints and potential interruptions in production, and other factors, many of which are beyond our control. SandRidge cautions that the foregoing list of factors is not exclusive. Additional information concerning these and other risk factors is contained in SandRidge's public filings with the SEC, which are available at the SEC's website, http://www.sec.gov. Each forward-looking statement speaks only as of the date of the particular statement, and SandRidge undertakes no obligation to publicly update any of these forward-looking statements to reflect events or circumstances that may arise after the date hereof.
About SandRidge Energy, Inc.
SandRidge Energy, Inc. (NYSE: SD) is an oil and natural gas exploration and production company headquartered in Oklahoma City, Oklahoma with its principal focus on developing high-return, growth oriented projects in Oklahoma and Colorado. The majority of the Company's production is generated from the Mississippi Lime formation in Oklahoma and Kansas. Development activity is currently focused on the Meramec formation in the NW STACK Play in Oklahoma and multiple oil rich Niobrara benches in the North Park Basin in Colorado.
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SOURCE SandRidge Energy, Inc.
Article Date
9/10/20188/23/2018 - Advantage Midstream and SandRidge Energy Enter Agreement for Gas Processing in Jackson County, Colorado
Advantage Midstream and SandRidge Energy Enter Agreement for Gas Processing in Jackson County, Colorado
Source: PR Newswire
DALLAS, Aug. 23, 2018 /PRNewswire/ -- Advantage Midstream, LLC, a Dallas-based, independent midstream company, today announced the completion of an agreement with Oklahoma City-based SandRidge Energy, Inc. (NYSE: SD) to construct and operate a natural gas refrigeration plant and provide gas processing services for acreage in the North Park basin, located in Jackson County, Colorado.
The agreement provides for the installation of a natural gas refrigeration plant to process natural gas from SandRidge Energy's North Park assets. The plant will be installed adjacent to and in conjunction with Advantage's previously announced gas conversion plant that is to be installed in Jackson County. The addition of the refrigeration complex will allow SandRidge to realize increased value from its natural gas stream for natural gas liquids while providing other economic and environmental benefits to SandRidge. As part of the agreement, Advantage will own and operate the system and market all liquids from the plant.
"Advantage Midstream is pleased to announce another layer of processing services with SandRidge in the exciting North Park basin. The combination of traditional NGL processing and our conversion services will allow for optimal environmental and economic benefit," said John Stephenson, chief executive officer of Advantage Midstream. "We are pleased to continue growing our partnership with SandRidge in the North Park basin."
Advantage Midstream is currently focused on opportunities in the Permian, Appalachia, Rockies, Bakken, Mid-Continent and other areas that have stranded or constrained natural gas production. The company offers a variety of services, including natural gas conversion, natural gas gathering, processing, treating and compression, and other oil and gas midstream services.
About Advantage Midstream
Advantage Midstream, based in Dallas, Texas, is a midstream and marketing company focused on applying advanced gas-to-liquid conversion technology to produce premium liquid fuels from natural gas resources across North America. Advantage offers producers and processors tailored solutions for natural gas and natural gas liquids in areas that are geographically constrained or lacking proper infrastructure. For more information, visit www.advantagemidstream.com.
About SandRidge Energy
SandRidge Energy, Inc. (NYSE: SD) is an oil and natural gas exploration and production company headquartered in Oklahoma City, Oklahoma, with its principal focus on developing high-return, growth-oriented projects in Oklahoma and Colorado. The majority of the Company's production is generated from the Mississippi Lime formation in Oklahoma and Kansas. Development activity is currently focused on the Meramec formation in the NW STACK Play in Oklahoma and multiple oil rich Niobrara benches in the North Park Basin in Colorado.
View original content with multimedia:http://www.prnewswire.com/news-releases/advantage-midstream-and-sandridge-energy-enter-agreement-for-gas-processing-in-jackson-county-colorado-300701250.html
SOURCE Advantage Midstream, LLC
Article Date
8/23/2018SandRidge Energy, Inc. Reports Financial and Operational Results for Second Quarter 2018
Source: PR Newswire
OKLAHOMA CITY, Aug. 8, 2018 /PRNewswire/ -- SandRidge Energy, Inc. (the "Company" or "SandRidge") (NYSE:SD) today announced financial and operational results for the quarter ended June 30, 2018. For the second quarter, the Company reported a net loss of $34 million, or $0.97 per share, and net cash provided by operating activities of $26 million. After adjusting for certain items, the Company's adjusted net loss amounted to $2 million, or $0.05 per share, operating cash flow totaled $24 million and adjusted EBITDA was $34 million for the quarter. The Company defines and reconciles such non-GAAP financial measures to the most directly comparable GAAP measure in supporting tables at the conclusion of this press release under the "Non-GAAP Financial Measures" beginning on page 12.
As of August 2, 2018, the Company's liquidity totaled $436 million, which includes $17 million of cash and $419 million of borrowing capacity under the credit facility, net of outstanding letters of credit. The Company currently has no funds drawn under its credit facility. During the quarter, the Company sold the building adjacent to its corporate office building, the Parkside Annex, for $10.75 million.
Highlights During and Subsequent to the Second Quarter
Bill Griffin, President and CEO commented, "Our second quarter performance further demonstrates the Company's ability to stay focused on continuous improvement and consistent operational execution through a period of change."
Mr. Griffin continued, "Our near-term course to strategically deploy capital to create value and provide assurance for a clear, organic growth plan is proving successful. This is best demonstrated by the exciting results associated with our North Park drilling program. We recently brought five new Niobrara wells to sales, each with an initial production rate exceeding our pre-drill projections. In particular, four of these wells were drilled to test a twelve wells per section spacing pattern and the average initial oil production rate per well was 1,327 Bopd, which is 175% above type curve. This outstanding performance provides additional support for testing higher density spacing, which is scheduled to commence in the third quarter of 2018. We also continue to selectively deploy capital in the Mid-Continent, where we have commenced our previously announced drilling program comprised of four Mississippi Lime wells, which are expected to generate excellent returns, along with continuation of our NW STACK delineation efforts with the financial support provided under our drilling participation agreement.
We have remained judicious in our capital spending as we advance efforts to explore any and all strategic alternatives for SandRidge. The Company has continued to make significant progress to reverse production decline and establish a platform for meaningful value growth and a strong balance sheet. Our strategic process continues as we evaluate initial submittals, some of which require reverse due diligence. The Board and Management continue to work diligently to evaluate each and every proposal, while weighing them against the present and future value of the Company in light of our continued positive drilling results."
Operational Results and Activity
During the quarter, production totaled 3.0 MMBoe (25% oil, 24% NGLs and 51% natural gas). The Company averaged one rig in the NW STACK targeting the Meramec and seven wells underwent completions in the North Park Basin. Capital expenditures totaled $37 million.
Niobrara Asset in North Park Basin, Jackson County, Colorado
During the first quarter, the Company laid out plans to drill two spacing tests located on the eastern and western sides of the field. The eastern area test utilizes a twelve wells per section spacing pattern. The first two XRLs of the test, the Castle 5-17H20 and Castle 6-17H20, were announced earlier this year with an average 30-Day IP of 1,109 Boepd (91% oil), 132% of type curve. Four additional XRLs, targeting B, C and D benches, went to sales subsequent to the second quarter with initial oil production rates averaging 1,327 Bopd, 175% of type curve, all with less than thirty days of production. The two remaining wells in the eastern area spacing test are undergoing completion operations and updated well results will be provided at a later date.
The western area is testing a twenty-three wells per section pattern. The Company drilled the first well, the Peters 16-12H13, at the beginning of the second quarter and it recently went to sales with early rates of 832 Bopd, 109% of type curve. Given the encouraging initial results, drilling operations on the remaining wells of the western area spacing test will commence in the third quarter with expected sales during the first quarter of 2019.
Net oil production in the North Park Basin totaled 128 MBo (1.4 MBopd) for the second quarter and gross current production is averaging over 6,000 Bopd, inclusive of recent well outperformance.
Mid-Continent Assets in Oklahoma and Kansas
In the second quarter, production in the Miss Lime totaled 2.5 MMBoe (27 MBoepd, 17% oil) and NW STACK totaled 249 MBoe (2.7 MBoepd, 43% oil). The Company averaged one rig in the NW STACK targeting the Meramec and drilled four wells under the previously announced Drilling Participation Agreement. Two of the wells drilled extend the play into SE Woodward County, further delineating the successful core area. Completion operations for the two step-out wells are underway with first sales expected in the third quarter. Also during the quarter, SandRidge brought six wells online with five having a combined 30-Day IP averaging 584 Boepd (69% oil). Subsequent to the quarter, the Company spud the first of four planned Mississippian wells with an additional rig.
Other Operational Activities
During the second quarter, Permian Central Basin Platform properties produced 113 MBoe (1.2 MBoepd, 80% oil, 13% NGLs, 7% natural gas).
Conference Call Information
The Company will host a conference call to discuss these results on Thursday, August 9, 2018 at 8:00 am CT. The telephone number to access the conference call from within the U.S. is (833) 245-9650 and from outside the U.S. is (647) 689-4222. The passcode for the call is 6365139. An audio replay of the call will be available from August 9, 2018 until 11:59 pm CT on September 9, 2018. The number to access the conference call replay from within the U.S. is (800) 585-8367 and from outside the U.S. is (416) 621-4642. The passcode for the replay is 6365139.
A live audio webcast of the conference call will also be available via SandRidge's website, www.sandridgeenergy.com, under Investor Relations/Presentation & Events. The webcast will be archived for replay on the Company's website for 30 days.
2018 Operational and Capital Expenditure Guidance
As a result of realizing general and administrative ("G&A") savings earlier in the year than expected, the Company lowered full year adjusted G&A guidance from $41 - $44 million to $40 - $42 million. In addition, the Company lowered LOE guidance from $95 - $105 million to $92 - $95 million. Production taxes were also adjusted to 5.30% - 5.70% from 4.80%. Presented below is the Company's capital expenditure and updated operational guidance for 2018.
|
Updated Guidance |
Previous Guidance | ||
|
Projection as of |
Projection as of | ||
|
August 8, 2018 |
May 7, 2018 | ||
|
Production |
|||
|
Oil (MMBbls) |
3.4 - 3.6 |
3.4 - 3.6 | |
|
Natural Gas Liquids (MMBbls) |
2.6 - 2.8 |
2.6 - 2.8 | |
|
Total Liquids (MMBbls) |
6.0 - 6.4 |
6.0 - 6.4 | |
|
Natural Gas (Bcf) |
31.5 - 33.0 |
31.5 - 33.0 | |
|
Total (MMBoe) |
11.3 - 11.9 |
11.3 - 11.9 | |
|
Price Differential |
|||
|
Oil (per Bbl) |
$2.80 |
$2.80 | |
|
Natural Gas Liquids (realized % of NYMEX WTI) |
36% |
33% | |
|
Natural Gas (per MMBtu) |
$1.20 |
$1.20 | |
|
Expenses |
|||
|
LOE |
$92 - $95 million |
$95 - $105 million | |
|
Adjusted G&A Expense1 |
$40 - $42 million |
$41 - $44 million | |
|
% of Revenue |
|||
|
Production Taxes |
5.30% - 5.70% |
4.80% | |
|
Capital Expenditures ($ in millions) |
|||
|
Drilling and Completion |
|||
|
Mid-Continent |
$17 - $19 |
$17 - $19 | |
|
North Park Basin |
65 - 73 |
65 - 73 | |
|
Other2 |
34 |
34 | |
|
Total Drilling and Completion |
$116 - $126 |
$116 - $126 | |
|
Other E&P |
|||
|
Land, G&G, and Seismic |
$15 |
$15 | |
|
Infrastructure3 |
15 |
15 | |
|
Workover |
25 |
25 | |
|
Capitalized G&A and Interest |
8 |
8 | |
|
Total Other Exploration and Production |
$63 |
$63 | |
|
General Corporate |
1 |
1 | |
|
Total Capital Expenditures |
$180 - $190 |
$180 - $190 | |
|
(excluding acquisitions and plugging and abandonment) |
|||
|
1) |
Adjusted G&A expense is a non-GAAP financial measure. The Company has defined this measure at the conclusion of this press release under "Non-GAAP Financial Measures" beginning on page 12. Information to reconcile this non-GAAP financial measure to the most directly comparable GAAP financial measure is not available at this time, as management is unable to forecast the excluded items for future periods. |
|
2) |
Primarily 2017 Carryover |
|
3) |
Includes Production Facilities, Pipeline ROW and Electrical |
Operational and Financial Statistics
Information regarding the Company's production, pricing, costs and earnings is presented below:
|
Three Months Ended June 30, |
Six Months Ended June 30, | ||||||||||||||
|
2018 |
2017 |
2018 |
2017 | ||||||||||||
|
Production - Total |
|||||||||||||||
|
Oil (MBbl) |
755 |
1,042 |
1,681 |
2,176 |
|||||||||||
|
NGL (MBbl) |
700 |
907 |
1,400 |
1,794 |
|||||||||||
|
Natural Gas (MMcf) |
8,977 |
11,267 |
18,464 |
23,033 |
|||||||||||
|
Oil equivalent (MBoe) |
2,951 |
3,827 |
6,158 |
7,809 |
|||||||||||
|
Daily production (MBoed) |
32.4 |
42.1 |
34.0 |
43.1 |
|||||||||||
|
Average price per unit |
|||||||||||||||
|
Realized oil price per barrel - as reported |
$ |
65.19 |
$ |
46.04 |
$ |
61.01 |
$ |
47.68 |
|||||||
|
Realized impact of derivatives per barrel |
(16.44) |
3.11 |
(12.01) |
1.63 |
|||||||||||
|
Net realized price per barrel |
$ |
48.75 |
$ |
49.15 |
$ |
49.00 |
$ |
49.31 |
|||||||
|
Realized NGL price per barrel - as reported |
$ |
24.21 |
$ |
14.49 |
$ |
23.81 |
$ |
15.37 |
|||||||
|
Realized impact of derivatives per barrel |
— |
— |
— |
— |
|||||||||||
|
Net realized price per barrel |
$ |
24.21 |
$ |
14.49 |
$ |
23.81 |
$ |
15.37 |
|||||||
|
Realized natural gas price per Mcf - as reported |
$ |
1.46 |
$ |
2.08 |
$ |
1.65 |
$ |
2.23 |
|||||||
|
Realized impact of derivatives per Mcf |
0.13 |
0.01 |
0.15 |
(0.04) |
|||||||||||
|
Net realized price per Mcf |
$ |
1.59 |
$ |
2.09 |
$ |
1.80 |
$ |
2.19 |
|||||||
|
Realized price per Boe - as reported |
$ |
26.87 |
$ |
22.09 |
$ |
27.00 |
$ |
23.40 |
|||||||
|
Net realized price per Boe - including impact of derivatives |
$ |
23.05 |
$ |
22.97 |
$ |
24.18 |
$ |
23.74 |
|||||||
|
Average cost per Boe |
|||||||||||||||
|
Lease operating |
$ |
7.04 |
$ |
6.59 |
$ |
7.39 |
$ |
6.43 |
|||||||
|
Production taxes |
$ |
1.49 |
$ |
0.69 |
$ |
1.48 |
$ |
0.75 |
|||||||
|
Depletion (1) |
$ |
10.49 |
$ |
7.70 |
$ |
9.57 |
$ |
7.23 |
|||||||
|
Earnings per share |
|||||||||||||||
|
(Loss) earnings per share applicable to common stockholders |
|||||||||||||||
|
Basic |
$ |
(0.97) |
$ |
0.69 |
$ |
(2.15) |
$ |
2.44 |
|||||||
|
Diluted |
$ |
(0.97) |
$ |
0.69 |
$ |
(2.15) |
$ |
2.42 |
|||||||
|
Adjusted net (loss) income per share available to common stockholders |
|||||||||||||||
|
Basic |
$ |
(0.05) |
$ |
0.23 |
$ |
0.11 |
$ |
0.95 |
|||||||
|
Diluted |
$ |
(0.05) |
$ |
0.23 |
$ |
0.11 |
$ |
0.94 |
|||||||
|
Weighted average number of shares outstanding (in thousands) |
|||||||||||||||
|
Basic |
35,017 |
34,076 |
34,800 |
30,458 |
|||||||||||
|
Diluted (2) |
35,017 |
34,138 |
34,884 |
30,650 |
|||||||||||
|
(1) |
Includes accretion of asset retirement obligation. |
|
(2) |
Includes shares considered antidilutive for calculating loss per share in accordance with GAAP. |
Capital Expenditures
The table below presents actual results of the Company's capital expenditures for the three and six months ended June 30, 2018 at the same level of detail as its full year capital expenditure guidance.
|
Three Months Ended |
Six Months Ended | ||||||
|
June 30, 2018 |
June 30, 2018 | ||||||
|
(In thousands) |
(In thousands) | ||||||
|
Drilling and Completion |
|||||||
|
Mid-Continent |
$ |
1,474 |
$ |
3,391 |
|||
|
North Park Basin |
12,240 |
20,474 |
|||||
|
Other1 |
9,092 |
24,657 |
|||||
|
Total Drilling and Completion |
22,806 |
48,522 |
|||||
|
Other E&P |
|||||||
|
Land, G&G, and Seismic |
3,554 |
$ |
5,245 |
||||
|
Infrastructure2 |
2,933 |
4,908 |
|||||
|
Workovers |
6,378 |
12,746 |
|||||
|
Capitalized G&A and Interest |
1,761 |
3,277 |
|||||
|
Total Other Exploration and Production |
14,627 |
$ |
26,175 |
||||
|
General Corporate |
— |
$ |
— |
||||
|
Total Capital Expenditures |
$ |
37,432 |
$ |
74,697 |
|||
|
(excluding acquisitions and plugging and abandonment) |
|||||||
|
1) |
Primarily 2017 Carryover |
|
2) |
Infrastructure - Production Facilities, Pipeline ROW and Electrical |
Derivative Contracts
In light of the high correlation between NGL and NYMEX WTI prices, the Company manages a portion of its NGL price exposure using NYMEX WTI contracts at a three-to-one (3:1) NGL to crude ratio. The table below sets forth the Company's consolidated oil and natural gas price swaps for 2018 and 2019 as of August 8, 2018:
|
Quarter Ending |
||||||||||
|
3/31/2018 |
6/30/2018 |
9/30/2018 |
12/31/2018 |
FY 2018 | ||||||
|
WTI Swaps: |
||||||||||
|
Total Volume (MMBbls) |
1.05 |
1.00 |
0.92 |
0.83 |
3.80 | |||||
|
Daily Volume (MBblspd) |
11.7 |
11.0 |
10.0 |
9.0 |
10.4 | |||||
|
Swap Price ($/bbl) |
$55.46 |
$55.50 |
$56.04 |
$56.12 |
$55.75 | |||||
|
Natural Gas Swaps: |
||||||||||
|
Total Volume (Bcf) |
6.30 |
3.64 |
3.68 |
3.68 |
17.30 | |||||
|
Daily Volume (MMBtupd) |
70.0 |
40.0 |
40.0 |
40.0 |
47.4 | |||||
|
Swap Price ($/MMBtu) |
$3.24 |
$3.11 |
$3.11 |
$3.11 |
$3.16 | |||||
|
3/31/2019 |
6/30/2019 |
9/30/2019 |
12/31/2019 |
FY 2019 | ||||||
|
WTI Swaps: |
||||||||||
|
Total Volume (MMBbls) |
0.45 |
0.46 |
0.46 |
0.46 |
1.83 | |||||
|
Daily Volume (MBblspd) |
5.0 |
5.0 |
5.0 |
5.0 |
5.0 | |||||
|
Swap Price ($/bbl) |
$54.29 |
$54.29 |
$54.29 |
$54.29 |
$54.29 | |||||
Capitalization
The Company's capital structure as of June 30, 2018 and December 31, 2017 is presented below:
|
June 30, |
December 31, | ||||||
|
(In thousands) | |||||||
|
Cash, cash equivalents and restricted cash |
$ |
31,980 |
$ |
101,308 |
|||
|
Credit facility |
$ |
— |
$ |
— |
|||
|
Building note |
— |
37,502 |
|||||
|
Total debt |
— |
37,502 |
|||||
|
Stockholders' equity |
|||||||
|
Common stock |
35 |
36 |
|||||
|
Warrants |
88,514 |
88,500 |
|||||
|
Additional paid-in capital |
1,053,595 |
1,038,324 |
|||||
|
Accumulated deficit |
(361,888) |
(286,920) |
|||||
|
Total SandRidge Energy, Inc. stockholders' equity |
780,256 |
839,940 |
|||||
|
Total capitalization |
$ |
780,256 |
$ |
877,442 |
|||
|
SandRidge Energy, Inc. and Subsidiaries | |||||||||||||||
|
Condensed Consolidated Statements of Operations (Unaudited) | |||||||||||||||
|
(In thousands, except per share amounts) | |||||||||||||||
|
Three Months Ended June 30, |
Six Months Ended June 30, | ||||||||||||||
|
2018 |
2017 |
2018 |
2017 | ||||||||||||
|
Revenues |
|||||||||||||||
|
Oil, natural gas and NGL |
$ |
79,304 |
$ |
84,546 |
$ |
166,270 |
$ |
182,695 |
|||||||
|
Other |
158 |
305 |
320 |
506 |
|||||||||||
|
Total revenues |
79,462 |
84,851 |
166,590 |
183,201 |
|||||||||||
|
Expenses |
|||||||||||||||
|
Production |
20,785 |
25,209 |
45,498 |
50,232 |
|||||||||||
|
Production taxes |
4,389 |
2,653 |
9,089 |
5,829 |
|||||||||||
|
Depreciation and depletion—oil and natural gas |
30,961 |
29,477 |
58,958 |
56,457 |
|||||||||||
|
Depreciation and amortization—other |
3,040 |
3,493 |
6,193 |
7,330 |
|||||||||||
|
Impairment |
— |
446 |
4,170 |
2,977 |
|||||||||||
|
General and administrative |
10,343 |
19,354 |
24,365 |
38,892 |
|||||||||||
|
Accelerated vesting upon change in control |
6,545 |
— |
6,545 |
— |
|||||||||||
|
Proxy contest |
7,191 |
— |
7,598 |
— |
|||||||||||
|
Employee termination benefits |
1,043 |
4,415 |
32,630 |
4,815 |
|||||||||||
|
Loss (gain) on derivative contracts |
30,104 |
(23,543) |
48,434 |
(57,726) |
|||||||||||
|
Other operating (expense) income |
(1,254) |
(1) |
(1,238) |
267 |
|||||||||||
|
Total expenses |
113,147 |
61,503 |
242,242 |
109,073 |
|||||||||||
|
(Loss) income from operations |
(33,685) |
23,348 |
(75,652) |
74,128 |
|||||||||||
|
Other (expense) income |
|||||||||||||||
|
Interest expense, net |
(651) |
(946) |
(1,599) |
(1,885) |
|||||||||||
|
Gain on extinguishment of debt |
— |
— |
1,151 |
— |
|||||||||||
|
Other income, net |
217 |
1,055 |
1,090 |
2,025 |
|||||||||||
|
Total other (expense) income |
(434) |
109 |
642 |
140 |
|||||||||||
|
(Loss) income before income taxes |
(34,119) |
23,457 |
(75,010) |
74,268 |
|||||||||||
|
Income tax benefit |
(45) |
(42) |
(42) |
(39) |
|||||||||||
|
Net (loss) income |
$ |
(34,074) |
$ |
23,499 |
$ |
(74,968) |
$ |
74,307 |
|||||||
|
(Loss) earnings per share |
|||||||||||||||
|
Basic |
$ |
(0.97) |
$ |
0.69 |
$ |
(2.15) |
$ |
2.44 |
|||||||
|
Diluted |
$ |
(0.97) |
$ |
0.69 |
$ |
(2.15) |
$ |
2.42 |
|||||||
|
Weighted average number of common shares outstanding |
|||||||||||||||
|
Basic |
35,017 |
34,076 |
34,800 |
30,458 |
|||||||||||
|
Diluted |
35,017 |
34,138 |
34,800 |
30,650 |
|||||||||||
|
SandRidge Energy, Inc. and Subsidiaries | |||||||
|
Condensed Consolidated Balance Sheets (Unaudited) | |||||||
|
(In thousands) | |||||||
|
June 30, |
December 31, | ||||||
|
ASSETS |
|||||||
|
Current assets |
|||||||
|
Cash and cash equivalents |
$ |
30,125 |
$ |
99,143 |
|||
|
Restricted cash - other |
1,855 |
2,165 |
|||||
|
Accounts receivable, net |
58,992 |
71,277 |
|||||
|
Derivative contracts |
— |
1,310 |
|||||
|
Prepaid expenses |
3,582 |
5,248 |
|||||
|
Other current assets |
411 |
15,954 |
|||||
|
Total current assets |
94,965 |
195,097 |
|||||
|
Oil and natural gas properties, using full cost method of accounting |
|||||||
|
Proved |
1,145,667 |
1,056,806 |
|||||
|
Unproved |
87,268 |
100,884 |
|||||
|
Less: accumulated depreciation, depletion and impairment |
(515,822) |
(460,431) |
|||||
|
717,113 |
697,259 |
||||||
|
Other property, plant and equipment, net |
213,903 |
225,981 |
|||||
|
Other assets |
1,274 |
1,290 |
|||||
|
Total assets |
$ |
1,027,255 |
$ |
1,119,627 |
|||
|
LIABILITIES AND STOCKHOLDERS' EQUITY |
|||||||
|
Current liabilities |
|||||||
|
Accounts payable and accrued expenses |
$ |
120,550 |
$ |
139,155 |
|||
|
Derivative contracts |
35,283 |
10,627 |
|||||
|
Asset retirement obligations |
39,981 |
41,017 |
|||||
|
Other current liabilities |
1,714 |
8,115 |
|||||
|
Total current liabilities |
197,528 |
198,914 |
|||||
|
Long-term debt |
— |
37,502 |
|||||
|
Derivative contracts |
8,642 |
3,568 |
|||||
|
Asset retirement obligations |
38,204 |
36,527 |
|||||
|
Other long-term obligations |
2,625 |
3,176 |
|||||
|
Total liabilities |
246,999 |
279,687 |
|||||
|
Commitments and contingencies |
|||||||
|
Stockholders' Equity |
|||||||
|
Common stock, $0.001 par value; 250,000 shares authorized; 35,332 issued and outstanding at June 30, 2018 and 35,650 issued and outstanding at December 31, 2017 |
35 |
36 |
|||||
|
Warrants |
88,514 |
88,500 |
|||||
|
Additional paid-in capital |
1,053,595 |
1,038,324 |
|||||
|
Accumulated deficit |
(361,888) |
(286,920) |
|||||
|
Total stockholders' equity |
780,256 |
839,940 |
|||||
|
Total liabilities and stockholders' equity |
$ |
1,027,255 |
$ |
1,119,627 |
|||
|
SandRidge Energy, Inc. and Subsidiaries | |||||||
|
Condensed Consolidated Cash Flows (Unaudited) | |||||||
|
(In thousands) | |||||||
|
Six Months Ended June 30, | |||||||
|
2018 |
2017 | ||||||
|
CASH FLOWS FROM OPERATING ACTIVITIES |
|||||||
|
Net (loss) income |
$ |
(74,968) |
$ |
74,307 |
|||
|
Adjustments to reconcile net (loss) income to net cash provided by operating activities |
|||||||
|
Provision for doubtful accounts |
(6) |
— |
|||||
|
Depreciation, depletion and amortization |
65,151 |
63,787 |
|||||
|
Impairment |
4,170 |
2,977 |
|||||
|
Debt issuance costs amortization |
235 |
195 |
|||||
|
Amortization of premiums and discounts on debt |
(47) |
(153) |
|||||
|
Gain on extinguishment of debt |
(1,151) |
— |
|||||
|
Loss (gain) on derivative contracts |
48,434 |
(57,726) |
|||||
|
Cash (paid) received on settlement of derivative contracts |
(17,393) |
2,706 |
|||||
|
Stock-based compensation |
21,909 |
9,654 |
|||||
|
Other |
(1,563) |
379 |
|||||
|
Changes in operating assets and liabilities |
11,346 |
7,806 |
|||||
|
Net cash provided by operating activities |
56,117 |
103,932 |
|||||
|
CASH FLOWS FROM INVESTING ACTIVITIES |
|||||||
|
Capital expenditures for property, plant and equipment |
(95,328) |
(88,904) |
|||||
|
Acquisition of assets |
— |
(48,236) |
|||||
|
Proceeds from sale of assets |
13,563 |
14,756 |
|||||
|
Net cash used in investing activities |
(81,765) |
(122,384) |
|||||
|
CASH FLOWS FROM FINANCING ACTIVITIES |
|||||||
|
Repayments of borrowings |
(36,304) |
— |
|||||
|
Debt issuance costs |
— |
(1,488) |
|||||
|
Cash paid for tax withholdings on vested stock awards |
(7,376) |
(2,891) |
|||||
|
Net cash used in financing activities |
(43,680) |
(4,379) |
|||||
|
NET DECREASE IN CASH, CASH EQUIVALENTS and RESTRICTED CASH |
(69,328) |
(22,831) |
|||||
|
CASH, CASH EQUIVALENTS and RESTRICTED CASH, beginning of year |
101,308 |
174,071 |
|||||
|
CASH, CASH EQUIVALENTS and RESTRICTED CASH, end of period |
$ |
31,980 |
$ |
151,240 |
|||
|
Supplemental Disclosure of Noncash Investing and Financing Activities |
|||||||
|
Change in accrued capital expenditures |
$ |
20,631 |
$ |
(8,340) |
|||
|
Equity issued for debt |
$ |
— |
$ |
(268,779) |
|||
Non-GAAP Financial Measures
This press release includes non-GAAP financial measures. These non-GAAP measures are not alternatives to GAAP measures, and you should not consider these non-GAAP measures in isolation or as a substitute for analysis of our results as reported under GAAP. Below is additional disclosure regarding each of the non-GAAP measures used in this press release, including reconciliations to their most directly comparable GAAP measure.
Reconciliation of Cash Provided by Operating Activities to Operating Cash Flow
The Company defines operating cash flow as net cash provided by operating activities before changes in operating assets and liabilities, as shown in the following table. Operating cash flow is a supplemental financial measure used by the Company's management and by securities analysts, investors, lenders, rating agencies and others who follow the industry as an indicator of the Company's ability to internally fund exploration and development activities and to service or incur additional debt. The Company also uses this measure because operating cash flow relates to the timing of cash receipts and disbursements that the Company may not control and may not relate to the period in which the operating activities occurred. Further, operating cash flow allows the Company to compare its operating performance and return on capital with those of other companies without regard to financing methods and capital structure. This measure should not be considered in isolation or as a substitute for net cash provided by operating activities prepared in accordance with GAAP.
|
Three Months Ended June 30, |
Six Months Ended June 30, | ||||||||||||||
|
2018 |
2017 |
2018 |
2017 | ||||||||||||
|
(In thousands) | |||||||||||||||
|
Net cash provided by operating activities |
$ |
25,710 |
$ |
39,696 |
$ |
56,117 |
$ |
103,932 |
|||||||
|
Changes in operating assets and liabilities |
(1,797) |
3,471 |
(11,346) |
(7,806) |
|||||||||||
|
Operating cash flow |
$ |
23,913 |
$ |
43,167 |
$ |
44,771 |
$ |
96,126 |
|||||||
Reconciliation of Net (Loss) Income to EBITDA and Adjusted EBITDA
The Company defines EBITDA as net (loss) income before income tax benefit, interest expense, depreciation and amortization - other and depreciation and depletion - oil and natural gas. Adjusted EBITDA, as presented herein, is EBITDA excluding items that the Company believes affect the comparability of operating results such as items whose timing and/or amount cannot be reasonably estimated or are non-recurring, as shown in the following tables.
Adjusted EBITDA is presented because management believes it provides useful additional information used by the Company's management and by securities analysts, investors, lenders, ratings agencies and others who follow the industry, for analysis of the Company's financial and operating performance on a recurring basis and the Company's ability to internally fund exploration and development, and to service or incur additional debt. In addition, management believes that adjusted EBITDA is widely used by professional research analysts and others in the valuation, comparison, and investment recommendations of companies in the oil and gas exploration and production industry. The Company's adjusted EBITDA may not be comparable to similarly titled measures used by other companies.
|
Three Months Ended June 30, |
Six Months Ended June 30, | ||||||||||||||
|
2018 |
2017 |
2018 |
2017 | ||||||||||||
|
(In thousands) | |||||||||||||||
|
Net (loss) income |
$ |
(34,074) |
$ |
23,499 |
$ |
(74,968) |
$ |
74,307 |
|||||||
|
Adjusted for |
|||||||||||||||
|
Income tax benefit |
(45) |
(42) |
(42) |
(39) |
|||||||||||
|
Interest expense |
699 |
1,190 |
1,806 |
2,332 |
|||||||||||
|
Depreciation and amortization - other |
3,040 |
3,493 |
6,193 |
7,330 |
|||||||||||
|
Depreciation and depletion - oil and natural gas |
30,961 |
29,477 |
58,958 |
56,457 |
|||||||||||
|
EBITDA |
581 |
57,617 |
(8,053) |
140,387 |
|||||||||||
|
Asset impairment |
— |
446 |
4,170 |
2,977 |
|||||||||||
|
Stock-based compensation |
5,856 |
4,567 |
8,778 |
7,828 |
|||||||||||
|
Loss (gain) on derivative contracts |
30,104 |
(23,543) |
48,434 |
(57,726) |
|||||||||||
|
Cash (paid) received upon settlement of derivative contracts |
(11,274) |
3,344 |
(17,393) |
2,706 |
|||||||||||
|
Employee termination benefits |
1,043 |
4,415 |
32,630 |
4,815 |
|||||||||||
|
Proxy contest |
7,191 |
— |
7,598 |
— |
|||||||||||
|
Acceleration of performance units |
1,232 |
— |
1,232 |
— |
|||||||||||
|
Restructuring costs |
— |
617 |
— |
3,224 |
|||||||||||
|
Gain on extinguishment of debt |
— |
— |
(1,151) |
— |
|||||||||||
|
Other |
(1,043) |
(1,205) |
(2,218) |
(2,235) |
|||||||||||
|
Adjusted EBITDA |
$ |
33,690 |
$ |
46,258 |
$ |
74,027 |
$ |
101,976 |
|||||||
Reconciliation of Cash Provided by Operating Activities to Adjusted EBITDA
|
Three Months Ended June 30, |
Six Months Ended June 30, | ||||||||||||||
|
2018 |
2017 |
2018 |
2017 | ||||||||||||
|
(In thousands) | |||||||||||||||
|
Net cash provided by operating activities |
$ |
25,710 |
$ |
39,696 |
56,117 |
$ |
103,932 |
||||||||
|
Changes in operating assets and liabilities |
(1,797) |
3,471 |
(11,346) |
(7,806) |
|||||||||||
|
Interest expense |
699 |
1,190 |
1,806 |
2,332 |
|||||||||||
|
Employee termination benefits (1) |
862 |
2,590 |
19,499 |
2,990 |
|||||||||||
|
Proxy contest |
7,191 |
— |
7,598 |
— |
|||||||||||
|
Acceleration of performance units |
1,232 |
— |
1,232 |
— |
|||||||||||
|
Restructuring costs |
— |
617 |
— |
3,224 |
|||||||||||
|
Income tax benefit |
(45) |
(42) |
(42) |
(39) |
|||||||||||
|
Other |
(162) |
(1,264) |
(837) |
(2,657) |
|||||||||||
|
Adjusted EBITDA |
$ |
33,690 |
$ |
46,258 |
$ |
74,027 |
$ |
101,976 |
|||||||
|
(1) Excludes associated stock-based compensation. |
Reconciliation of Net (Loss) Income Available to Common Stockholders to Adjusted Net (Loss) Income Available to Common Stockholders
The Company defines adjusted net (loss) income as net (loss) income excluding items that the Company believes affect the comparability of operating results and are typically excluded from published estimates by the investment community, including items whose timing and/or amount cannot be reasonably estimated or are non-recurring, as shown in the following tables.
Management uses the supplemental measure of adjusted net (loss) income as an indicator of the Company's operational trends and performance relative to other oil and natural gas companies and believes it is more comparable to earnings estimates provided by securities analysts. Adjusted net (loss) income is not a measure of financial performance under GAAP and should not be considered a substitute for net (loss) income available to common stockholders.
|
Three Months Ended June 30, 2018 |
Three Months Ended June 30, 2017 | ||||||||||||||
|
$ |
$/Diluted Share |
$ |
$/Diluted Share | ||||||||||||
|
(In thousands, except per share amounts) | |||||||||||||||
|
Net (loss) income available to common stockholders |
$ |
(34,074) |
$ |
(0.97) |
$ |
23,499 |
$ |
0.69 |
|||||||
|
Asset impairment |
— |
— |
446 |
0.01 |
|||||||||||
|
Loss (gain) on derivative contracts |
30,104 |
0.86 |
(23,543) |
(0.69) |
|||||||||||
|
Cash (paid) received upon settlement of derivative contracts |
(11,274) |
(0.32) |
3,344 |
0.10 |
|||||||||||
|
Employee termination benefits |
1,043 |
0.03 |
4,415 |
0.13 |
|||||||||||
|
Proxy contest |
7,191 |
0.21 |
— |
— |
|||||||||||
|
Accelerated vesting upon change in control
|
6,545 |
0.19 |
— |
— |
|||||||||||
|
Restructuring costs |
— |
— |
617 |
0.02 |
|||||||||||
|
Other |
(1,324) |
(0.05) |
(790) |
(0.03) |
|||||||||||
|
Adjusted net (loss) income available to common stockholders |
$ |
(1,789) |
$ |
(0.05) |
$ |
7,988 |
$ |
0.23 |
|||||||
|
Basic |
Diluted (1) |
Basic |
Diluted (1) | ||||||||||||
|
Weighted average number of common shares outstanding |
35,017 |
35,017 |
34,076 |
34,138 |
|||||||||||
|
Total adjusted net (loss) income per share |
$ |
(0.05) |
$ |
(0.05) |
$ |
0.23 |
$ |
0.23 |
|||||||
|
Six Months Ended June 30, 2018 |
Six Months Ended June 30, 2017 | ||||||||||||||
|
$ |
$/Diluted Share |
$ |
$/Diluted Share | ||||||||||||
|
(In thousands, except per share amounts) | |||||||||||||||
|
Net (loss) income available to common stockholders |
$ |
(74,968) |
$ |
(2.15) |
$ |
74,307 |
$ |
2.42 |
|||||||
|
Asset impairment |
4,170 |
0.12 |
2,977 |
0.10 |
|||||||||||
|
Loss (gain) on derivative contracts |
48,434 |
1.39 |
(57,726) |
(1.88) |
|||||||||||
|
Cash (paid) received upon settlement of derivative contracts |
(17,393) |
(0.50) |
2,706 |
0.09 |
|||||||||||
|
Employee termination benefits |
32,630 |
0.94 |
4,815 |
0.16 |
|||||||||||
|
Proxy contest |
7,598 |
0.22 |
— |
— |
|||||||||||
|
Accelerated vesting upon change in control |
6,545 |
0.19 |
— |
— |
|||||||||||
|
Restructuring costs |
— |
— |
3,224 |
0.11 |
|||||||||||
|
Gain on extinguishment of debt |
(1,151) |
(0.03) |
— |
— |
|||||||||||
|
Other |
(1,905) |
(0.07) |
(1,427) |
(0.06) |
|||||||||||
|
Adjusted net income available to common stockholders |
$ |
3,960 |
$ |
0.11 |
$ |
28,876 |
$ |
0.94 |
|||||||
|
Basic |
Diluted (1) |
Basic |
Diluted (1) | ||||||||||||
|
Weighted average number of common shares outstanding |
34,800 |
34,884 |
30,458 |
30,650 |
|||||||||||
|
Total adjusted net income per share |
$ |
0.11 |
$ |
0.11 |
$ |
0.95 |
$ |
0.94 |
|||||||
|
(1) Weighted average fully diluted common shares outstanding for certain periods presented includes shares that are considered antidilutive for calculating loss per share in accordance with GAAP. | |||||||||||||||
Reconciliation of G&A to Adjusted G&A
The Company reports and provides guidance on Adjusted G&A per Boe because it believes this measure is commonly used by management, analysts and investors as an indicator of cost management and operating efficiency on a comparable basis from period to period, and to compare and make investment recommendations of companies in the oil and gas industry. This non-GAAP measure allows for the analysis of general and administrative spend without regard to stock-based compensation programs, and other non-recurring cash items which can vary significantly between companies. Adjusted G&A per Boe is not a measure of financial performance under GAAP and should not be considered a substitute for general and administrative expense per Boe. Therefore, the Company's Adjusted G&A per Boe may not be comparable to other companies' similarly titled measures.
The Company defines adjusted G&A as general and administrative expense adjusted for certain non-cash stock-based compensation and other non-recurring items, as shown in the following tables.
|
Three Months Ended June 30, 2018 |
Three Months Ended June 30, 2017 | ||||||||||||||
|
$ |
$/Boe |
$ |
$/Boe | ||||||||||||
|
(In thousands, except per Boe amounts) | |||||||||||||||
|
General and administrative |
$ |
10,343 |
$ |
3.50 |
$ |
19,354 |
$ |
5.06 |
|||||||
|
Stock-based compensation (1) |
(543) |
(0.18) |
(4,569) |
(1.20) |
|||||||||||
|
Restructuring costs |
— |
— |
(617) |
(0.16) |
|||||||||||
|
Adjusted G&A |
$ |
9,800 |
$ |
3.32 |
$ |
14,168 |
$ |
3.70 |
|||||||
|
Six Months Ended June 30, 2018 |
Six Months Ended June 30, 2017 | ||||||||||||||
|
$ |
$/Boe |
$ |
$/Boe | ||||||||||||
|
(In thousands, except per Boe amounts) | |||||||||||||||
|
General and administrative |
$ |
24,365 |
$ |
3.96 |
$ |
38,892 |
$ |
4.98 |
|||||||
|
Stock-based compensation (1) |
(3,465) |
(0.57) |
(7,829) |
(1.01) |
|||||||||||
|
Restructuring costs |
— |
— |
(3,224) |
(0.41) |
|||||||||||
|
Adjusted G&A |
$ |
20,900 |
$ |
3.39 |
$ |
27,839 |
$ |
3.56 |
|||||||
|
(1) Three and six-month periods ended June 30, 2018 exclude approximately $5.5 million and $18.4 million, respectively, for the acceleration of certain stock awards due to the reduction in force in the first quarter of 2018 and the change in control event in the second quarter of 2018. Three and six-month periods ended June 30, 2017 exclude approximately $1.8 million for the acceleration of certain stock awards. | |||||||||||||||
For further information, please contact:
Johna Robinson
Investor Relations
SandRidge Energy, Inc.
123 Robert S. Kerr Avenue
Oklahoma City, OK 73102-6406
(405) 429-5515
Cautionary Note to Investors - This press release includes "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, including, but not limited to, the information appearing under the heading "2018 Operational and Capital Expenditure Guidance." These statements express a belief, expectation or intention and are generally accompanied by words that convey projected future events or outcomes. The forward-looking statements include projections and estimates of the Company's corporate strategies, future operations, and development plans and appraisal programs, drilling inventory and locations, estimated oil, and natural gas and natural gas liquids production, reserves, price realizations and differentials, hedging program, projected operating, general and administrative and other costs, projected capital expenditures, tax rates, efficiency and cost reduction initiative outcomes, liquidity and capital structure and infrastructure assessment and investment. We have based these forward-looking statements on our current expectations and assumptions and analyses made by us in light of our experience and our perception of historical trends, current conditions and expected future developments, as well as other factors we believe are appropriate under the circumstances. However, whether actual results and developments will conform with our expectations and predictions is subject to a number of risks and uncertainties, including the volatility of oil and natural gas prices, our success in discovering, estimating, developing and replacing oil and natural gas reserves, actual decline curves and the actual effect of adding compression to natural gas wells, the availability and terms of capital, the ability of counterparties to transactions with us to meet their obligations, our timely execution of hedge transactions, credit conditions of global capital markets, changes in economic conditions, the amount and timing of future development costs, the availability and demand for alternative energy sources, regulatory changes, including those related to carbon dioxide and greenhouse gas emissions, and other factors, many of which are beyond our control. We refer you to the discussion of risk factors in Part I, Item 1A - "Risk Factors" of our Annual Report on Form 10-K and in comparable "Risk Factor" sections of our Quarterly Reports on Form 10-Q filed after such form 10-K. All of the forward-looking statements made in this press release are qualified by these cautionary statements. The actual results or developments anticipated may not be realized or, even if substantially realized, they may not have the expected consequences to or effects on our Company or our business or operations. Such statements are not guarantees of future performance and actual results or developments may differ materially from those projected in the forward-looking statements. We undertake no obligation to update or revise any forward-looking statements.
SandRidge Energy, Inc. (NYSE: SD) is an oil and natural gas exploration and production company headquartered in Oklahoma City, Oklahoma with its principal focus on developing high-return, growth oriented projects in Oklahoma and Colorado. The majority of the Company's production is generated from the Mississippi Lime formation in Oklahoma and Kansas. Development activity is currently focused on the Meramec formation in the NW STACK Play in Oklahoma and multiple oil rich Niobrara benches in the North Park Basin in Colorado.
View original content with multimedia:http://www.prnewswire.com/news-releases/sandridge-energy-inc-reports-financial-and-operational-results-for-second-quarter-2018-300694321.html
SOURCE SandRidge Energy, Inc.
Article Date
8/8/2018SandRidge Energy, Inc. Announces 2018 Second Quarter Financial and Operational Results Release Date and Conference Call Information
Source: PR Newswire
OKLAHOMA CITY, July 30, 2018 /PRNewswire/ -- SandRidge Energy, Inc. (NYSE: SD) will release its 2018 second quarter financial and operational results after the close of trading on the New York Stock Exchange on Wednesday, August 8, 2018.
The company will host a conference call to discuss these results on Thursday, August 9, 2018 at 8:00am CT. The telephone number to access the conference call from within the U.S. is (833) 245-9650 and from outside the U.S. is (647) 689-4222. The passcode for the call is 6365139. An audio replay of the call will be available from August 9, 2018 until 11:59pm CT on September 9, 2018. The number to access the conference call replay from within the U.S. is (800) 585-8367 and from outside the U.S. is (416) 621-4642. The passcode for the replay is 6365139.
A live audio webcast of the conference call will also be available via SandRidge's website, www.sandridgeenergy.com, under Investor Relations/Presentations & Events. The webcast will be archived for replay on the company's website for 30 days.
About SandRidge Energy, Inc.
SandRidge Energy, Inc. (NYSE: SD) is an oil and natural gas exploration and production company headquartered in Oklahoma City, Oklahoma with its principal focus on developing high-return, growth oriented projects in Oklahoma and Colorado. The majority of the Company's production is generated from the Mississippi Lime formation in Oklahoma and Kansas. Development activity is currently focused on the Meramec formation in the NW STACK Play in Oklahoma and multiple oil rich Niobrara benches in the North Park Basin in Colorado.
CONTACT:
Johna Robinson
Investor Relations
SandRidge Energy, Inc.
123 Robert S. Kerr Avenue
Oklahoma City, OK 73102
+1 (405) 429-5515
View original content with multimedia:http://www.prnewswire.com/news-releases/sandridge-energy-inc-announces-2018-second-quarter-financial-and-operational-results-release-date-and-conference-call-information-300688184.html
SOURCE SandRidge Energy, Inc.
Article Date
7/30/20186/29/2018 - SandRidge Energy Announces Expanded Pursuit of Strategic Options Process with RBC Capital Markets
SandRidge Energy Announces Expanded Pursuit of Strategic Options Process with RBC Capital Markets
Source: PR Newswire
Orignial Article: https://www.prnewswire.co...
OKLAHOMA CITY, June 29, 2018 /PRNewswire/ -- The newly constituted Board of Directors of SandRidge Energy, Inc. ("SandRidge" or the "Company") (NYSE: SD) has held a series of meetings that have involved a comprehensive review of the position of the Company and how to best maximize value for all shareholders.
With that in mind, the Company is undertaking a strategic review process to determine which avenues would maximize value for the Company, which could include a sale of the Company or significant assets of the Company. All potential bidders will be encouraged to participate in the process, which will include an expanded group of participants.
RBC Capital Markets, LLC, which had previously been retained by the Company to pursue and assist in evaluating such sale possibilities has been reaffirmed in that assignment to increase the number of potential bidders for the Company, including non-U.S. entities, which had previously not been pursued. To update prior statements of the Company, as of today, SandRidge has entered into 26 confidentiality agreements with parties that remain actively pursuing a possible transaction with the Company; 10 involving the entire company, including Midstates Petroleum, and 16 focused solely on the North Park assets. The Company is continuing to negotiate with 3 additional parties to execute confidentiality agreements, and all but one of those potential additional participants are focused solely on the North Park assets. Many of the previously entered confidentiality agreements involve entities contemplating reverse merger transactions.
The Company is emphasizing openness to asset sale proposals, as well as proposals which would result in a sale of the entire Company. The previously announced June 25th deadline for submission of bids has been extended to provide time for additional potential bidders.
The new Board is now undertaking a complete and thorough review of the long-term and short-term strategies for operating the Company, along with a complete review of the Company's assets. This review will include a comprehensive assessment of the previous capital expenditure program and the Company's drilling program in an effort to maximize the value of the Company's assets. The Company will also be reviewing its expense footprint and will be performing a complete and comprehensive re-evaluation of its hedging program.
About SandRidge Energy, Inc.
SandRidge Energy, Inc. (NYSE: SD) is an oil and natural gas exploration and production company headquartered in Oklahoma City, Oklahoma with its principal focus on developing high-return, growth oriented projects in Oklahoma and Colorado. The majority of the Company's production is generated from the Mississippi Lime formation in Oklahoma and Kansas. Development activity is currently focused on the Meramec formation in the NW STACK Play in Oklahoma and multiple oil rich Niobrara benches in the North Park Basin in Colorado.
Cautionary Statement Regarding Forward-Looking Statements
This communication contains forward-looking statements concerning our expectations for future performance. These "forward-looking statements" are based on currently available information, operating plans and projections about future events and trends. They inherently involve risks and uncertainties that could cause actual results to differ materially from those predicted in such forward looking statements. Such risks and uncertainties include, but are not limited to: uncertain outcome, impact, effects and results of SandRidge's exploration of strategic alternatives; and any changes in general economic or industry specific conditions. SandRidge cautions that the foregoing list of factors is not exclusive. Additional information concerning these and other risk factors is contained in SandRidge's public filings with the SEC, which are available at the SEC's website, http://www.sec.gov. Each forward-looking statement speaks only as of the date of the particular statement, and SandRidge undertakes no obligation to publicly update any of these forward-looking statements to reflect events or circumstances that may arise after the date hereof.
Investor Contact:
Johna Robinson
Investor Relations
SandRidge Energy, Inc.
123 Robert S. Kerr Avenue Oklahoma City, OK 73102
+1 (405) 429-5515
View original content with multimedia:http://www.prnewswire.com/news-releases/sandridge-energy-announces-expanded-pursuit-of-strategic-options-process-with-rbc-capital-markets-300674530.html
SOURCE SandRidge Energy, Inc.
Article Date
6/29/2018SandRidge Energy Provides Update on Strategic Review Process
Source: PR Newswire
Orignial Article: https://www.prnewswire.co...
OKLAHOMA CITY, June 15, 2018 /PRNewswire/ -- SandRidge Energy, Inc. ("SandRidge" or the "Company") (NYSE: SD) today issued the following open letter to SandRidge shareholders providing an update on the Company's strategic review process and setting the record straight regarding Carl Icahn's ongoing efforts to mislead investors.
Dear Fellow SandRidge Shareholders,
We are in the final days before our Annual Meeting on June 19. As you consider your vote, we want to reiterate that the facts matter. In contrast to the continued campaign of misinformation being distributed by Carl Icahn, our strategic review process is robust and thorough and we continue to welcome all interested parties to participate. Our goal is both simple and clear – to maximize value for ALL SandRidge shareholders.
Here are the facts about the Company's strategic review process:
Throughout this unnecessary and avoidable fight, Icahn's objective has been clear: he is seeking to place his interests above those of other SandRidge shareholders. If Icahn gets his way by seizing control of, or placing his non-independent nominees on the Board, he will be in a position to simultaneously run and bid for the Company – putting his interests ahead of other shareholders. This goes against all good governance practices and business protocols, and we will continue standing up for the best interests of all SandRidge shareholders. This inherent conflict of interest has been clearly noted by leading independent proxy advisory firms Institutional Shareholder Services Inc. ("ISS") and Glass, Lewis & Co. ("Glass Lewis"):
ISS
Glass Lewis
The one area in which we agree with Icahn is that the choice is yours and yours alone. In order to support a fair, impartial and fulsome strategic review process - well underway - that considers all avenues to maximize your investment, it is critical that you vote for the full slate of five highly-qualified and experienced SandRidge director nominees plus two additional, fully-independent Icahn nominees. Two independent directors will represent almost 30% of the expanded Board, which is well in excess of Carl Icahn's 13.6% ownership, and will ensure that new perspectives will be added to the strategic review process.
Your vote is very important – no matter how many shares you own.
Support your Board by voting the WHITE proxy card TODAY.
As always, we thank you for your investment in SandRidge, and appreciate your continued support.
Sincerely,
The SandRidge Board of Directors
About SandRidge Energy, Inc.
SandRidge Energy, Inc. (NYSE: SD) is an oil and natural gas exploration and production company headquartered in Oklahoma City, Oklahoma with its principal focus on developing high-return, growth oriented projects in Oklahoma and Colorado. The majority of the Company's production is generated from the Mississippi Lime formation in Oklahoma and Kansas. Development activity is currently focused on the Meramec formation in the NW STACK Play in Oklahoma and multiple oil rich Niobrara benches in the North Park Basin in Colorado.
Cautionary Statement Regarding Forward-Looking Statements
This communication contains forward-looking statements concerning our expectations for future performance, including statements regarding the exploration of strategic alternatives, the pursuit of options that maximize shareholder value and the consideration of candidates for nomination to SandRidge's Board of Directors. These "forward-looking statements" are based on currently available information, operating plans and projections about future events and trends. They inherently involve risks and uncertainties that could cause actual results to differ materially from those predicted in such forward looking statements. Such risks and uncertainties include, but are not limited to: uncertain outcome, impact, effects and results of SandRidge's exploration of strategic alternatives; and any changes in general economic or industry specific conditions. SandRidge cautions that the foregoing list of factors is not exclusive. Additional information concerning these and other risk factors is contained in SandRidge's public filings with the SEC, which are available at the SEC's website at www.sec.gov. Each forward-looking statement speaks only as of the date of the particular statement, and SandRidge undertakes no obligation to publicly update any of these forward-looking statements to reflect events or circumstances that may arise after the date hereof.
Investor Contact:
Johna Robinson
Investor Relations
SandRidge Energy, Inc.
123 Robert S. Kerr Avenue Oklahoma City, OK 73102
+1 (405) 429-5515
MacKenzie Partners, Inc.
Dan Burch, +1 (212) 929-5748, dburch@mackenziepartners.com
Paul Schulman, +1 (212) 929-5364, pschulman@mackenziepartners.com
Media Contact:
SVC
Bryan Locke, +1 (312) 895-4700, blocke@sardverb.com
1 Permission to use quotation neither sought nor obtained.
2 Permission to use quotation neither sought nor obtained.
View original content with multimedia:http://www.prnewswire.com/news-releases/sandridge-energy-provides-update-on-strategic-review-process-300666905.html
SOURCE SandRidge Energy, Inc.
Article Date
6/15/2018Leading Independent Proxy Advisory Firm ISS Recommends SandRidge Shareholders Vote FOR Majority of SandRidge Director Nominees
Source: PR Newswire
OKLAHOMA CITY, June 6, 2018 /PRNewswire/ -- SandRidge Energy, Inc. ("SandRidge" or the "Company") (NYSE: SD) today announced that Institutional Shareholder Services Inc. ("ISS"), a leading independent proxy advisory firm, has recommended that SandRidge shareholders vote on the WHITE SandRidge Universal proxy card "FOR" four of SandRidge's highly-qualified and experienced current director nominees at SandRidge's Annual Meeting on June 19, 2018.
The Company commented, "The ISS recommendation recognizes our Board's responsiveness, and the clear steps we have taken to serve the best interests of all independent SandRidge shareholders. The recommendation clearly underscores the Board's belief that turning over control of the entire SandRidge Board to Carl Icahn employees and nominees would end the current impartial review process, drive away competition and position Icahn to consolidate control of SandRidge as cheaply as possible. We urge shareholders to vote "FOR" SandRidge's five Director nominees plus two independent Icahn nominees on the WHITE proxy card today."
In its report, ISS highlighted Icahn's lack of plan and the potential disruption caused by the election of his nominees:i
The Company continued, "While we are pleased that ISS has recommended against two current Icahn employees, we strongly disagree with ISS's recommendation that a recent former employee, Jonathan Christodoro, can serve as an impartial and independent Board member.
"Furthermore, given Icahn's participation in the ongoing strategic review process, the election of current or recent Icahn employees to the Board would present a clear conflict of interest and impact the Board's ability to run a fair, unbiased process that may result in selling the Company to Icahn."
Independent proxy advisory firm Glass, Lewis & Co. ("Glass Lewis") agrees. In their recent report, Glass Lewis highlighted the direct conflict that would result from appointing current or former Icahn employees to the Board:ii
We strongly urge shareholders to vote for the entire slate of five highly-qualified and experienced SandRidge director nominees plus two additional, fully-independent Icahn nominees, as well as vote for the ratification of the short-term rights plan. Your vote is very important – no matter how few shares you own.
Support SandRidge's strategic review process and your Independent Board and management by voting the Company's WHITE universal proxy card TODAY.
Please follow the instructions on the enclosed WHITE universal proxy card to vote by telephone or Internet or sign, date and return the enclosed WHITE universal proxy card in the postage-paid envelope provided.
About SandRidge Energy, Inc.
SandRidge Energy, Inc. (NYSE: SD) is an oil and natural gas exploration and production company headquartered in Oklahoma City, Oklahoma with its principal focus on developing high-return, growth oriented projects in Oklahoma and Colorado. The majority of the Company's production is generated from the Mississippi Lime formation in Oklahoma and Kansas. Development activity is currently focused on the Meramec formation in the NW STACK Play in Oklahoma and multiple oil rich Niobrara benches in the North Park Basin in Colorado.
Cautionary Statement Regarding Forward-Looking Statements
This communication contains forward-looking statements concerning our expectations for future performance, including statements regarding the exploration of strategic alternatives, the pursuit of options that maximize shareholder value and the consideration of candidates for nomination to SandRidge's Board of Directors. These "forward-looking statements" are based on currently available information, operating plans and projections about future events and trends. They inherently involve risks and uncertainties that could cause actual results to differ materially from those predicted in such forward looking statements. Such risks and uncertainties include, but are not limited to: uncertain outcome, impact, effects and results of SandRidge's exploration of strategic alternatives; and any changes in general economic or industry specific conditions. SandRidge cautions that the foregoing list of factors is not exclusive. Additional information concerning these and other risk factors is contained in SandRidge's public filings with the SEC, which are available at the SEC's website at www.sec.gov. Each forward-looking statement speaks only as of the date of the particular statement, and SandRidge undertakes no obligation to publicly update any of these forward-looking statements to reflect events or circumstances that may arise after the date hereof.
Investor Contact:
Johna Robinson
Investor Relations
SandRidge Energy, Inc.
123 Robert S. Kerr Avenue Oklahoma City, OK 73102
+1 (405) 429-5515
MacKenzie Partners, Inc.
Dan Burch, +1 (212) 929-5748, dburch@mackenziepartners.com
Paul Schulman, +1 (212) 929-5364, pschulman@mackenziepartners.com
Media Contact:
SVC
Bryan Locke, +1 (312) 895-4700, blocke@sardverb.com
Jacob Crows, +1 (312) 895-4700, jcrows@sardverb.com
Kelly Kimberly, +1 (832) 680-5120, kkimberly@sardverb.com
i Permission to use quotations neither sought nor obtained.
ii Permission to use quotations neither sought nor obtained.
View original content with multimedia:http://www.prnewswire.com/news-releases/leading-independent-proxy-advisory-firm-iss-recommends-sandridge-shareholders-vote-for-majority-of-sandridge-director-nominees-300661139.html
SOURCE SandRidge Energy, Inc
Article Date
6/6/2018SandRidge Energy Sends Letter to Shareholders
Source: PR Newswire
Orignial Article: https://www.prnewswire.co...
OKLAHOMA CITY, June 5, 2018 /PRNewswire/ -- SandRidge Energy, Inc. ("SandRidge" or the "Company") (NYSE: SD) today announced that it has sent a letter to shareholders outlining Icahn Capital's ("Icahn") poor track record in the energy industry, lack of a plan and false and misleading campaign against the Company.
Additionally, SandRidge highlighted the support it received from leading independent proxy advisory firm, Glass, Lewis & Co., LLC, recommending that shareholders vote for a majority of SandRidge's director nominees and withhold support on Icahn's non-independent nominees, including two who work directly for Icahn and one recent former employee.
The Board strongly recommends that shareholders vote on the WHITE proxy card "FOR" all five of SandRidge's highly-qualified directors: Sylvia K. Barnes, Kenneth H. Beer, Michael L. Bennett, William M. Griffin and David J. Kornder at the Company's 2018 Annual Meeting of Shareholders to be held on June 19, 2018. The Board also recommends that shareholders vote "FOR" the addition of only two independent directors proposed by Icahn. The Board has already carefully vetted and offered to appoint John J. "Jack" Lipinski and Randolph C. Read as directors in connection with a settlement proposal that Icahn refused.
The Board also recommends shareholders vote "FOR" the ratification of the continuation of the short-term shareholder rights plan through November 26, 2018 to protect shareholders from unfair, abusive or coercive takeover strategies, including acquisition of control without payment of an adequate premium, while the Board continues its review of strategic alternatives to maximize shareholder value.
Included below is the full text of the letter.
Dear Fellow SandRidge Shareholders:
The SandRidge Energy Annual Meeting scheduled for June 19, 2018 is rapidly approaching and you have an important decision to make regarding your investment:
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Support our nominees, who will continue the ongoing, impartial review of strategic alternatives to maximize shareholder value; OR |
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Allow Carl C. Icahn and his affiliates (collectively, "Icahn") to short circuit that process by taking control of the Board. |
In the past several months, the SandRidge Board positioned the Company to maximize value for shareholders by implementing a management transition plan, dramatically reducing the Company's general and administrative expenses, overseeing continuing operational refinements and developing a new bottoms-up 3P reserves development plan. This standalone plan provides the necessary foundation to properly assess all proposals received as a result of our strategic review process, which is well underway.
We are moving expeditiously, and expect to receive initial indications of interest before the end of June, after which the Board will evaluate, conduct diligence on and engage in negotiations with potential counter-parties that have submitted viable proposals. Your vote is critical to ensuring SandRidge unlocks its full potential for all of its shareholders.
The clear choice to protect your SandRidge investment is to vote "FOR" SandRidge's five highly-qualified directors plus two independent nominees put forth by Icahn and to support the extension of the short-term shareholder rights plan.
Glass Lewis agrees that electing current or former Icahn employees would be poor corporate governance
In a clear rejection of Icahn's attempt to seize control of the Board, Glass, Lewis & Co. ("Glass Lewis") a leading independent proxy advisory firm, recommends that SandRidge shareholders vote on the Company's WHITE proxy card "FOR" four of SandRidge's highly-qualified and experienced current director nominees and recommends abstaining from supporting Icahn's non-independent nominees, including two who work directly for Icahn and one recent former employee. While Glass Lewis has rebuked Icahn by recommending only one more independent Icahn nominee than we already support, we believe there is no benefit to providing Icahn a third seat on our Board. Doing so would replace an engaged, independent nominee with substantial knowledge of SandRidge and its assets with a third, new nominee with limited knowledge of the Company and little upstream industry experience.
The Glass Lewis recommendation underscores our belief that turning over control of the Board to Icahn would end the impartial strategic review process, drive away competition, and position Icahn to consolidate control of our Company as cheaply as possible. In particular, Glass Lewis warns SandRidge shareholders not to "overlook the very direct conflicts arising from appointing current or former Icahn employees to the board at this time." Regarding this so called "corporate governance crusader's" intended takeover approach, Glass Lewis rejects Icahn's dangerous attempts to effectively position the fox to guard the henhouse:1
"the election of any current -- or, indeed, former -- Icahn employees to the SandRidge board during an active solicitation in which Icahn may submit a bid would represent a clear deviation from foundational principles of sound corporate governance."
Icahn has made clear his desire to acquire SandRidge, and is seeking to gain control without paying you an appropriate premium or participating in a competitive process. Perhaps that is why Icahn continues to falsely claim that the process is not making progress, even while he has been quietly participating in that process. Icahn and his advisors have executed a non-disclosure agreement, accessed the Company's data room, received the summary reserve and long term financial projections from the Company's new 3P development plan and even participated in management presentations at the Company's headquarters in Oklahoma City on May 30, 2018. With this firsthand knowledge of the process, it is completely disingenuous for Icahn to assert that he has "seen no evidence to date that any progress whatsoever has been made." We can only surmise that this is yet another blatant attempt to chill competition and gain control over our process and ultimately the Company.
In an ironic twist, Icahn's "cursory" plan involves hiring SandRidge's old management
Your Board previously announced and is executing on a detailed plan to maximize shareholder value, which is already underway and successfully achieving results. By contrast, Icahn's plan – which Glass Lewis describes as "cursory" and "particularly short sighted" – involves a baffling relationship with a former SandRidge executive, Matthew "Matt" Grubb. Icahn has engaged Mr. Grubb as the advisor who will "help assist [Icahn] in…developing a strategy" and who "will be integral to…the execution of next steps after the Company's annual meeting." According to his agreement with Icahn, Mr. Grubb will receive no compensation from Icahn for this arrangement.
Icahn neglects, however, to tell all shareholders about Matt Grubb's history with SandRidge:
With a complete lack of irony or self-awareness, Icahn has accused our Board of "acting in the grand tradition of previous management and boards of SandRidge," yet he has hired as a consultant and presumptive new management an actual member of the Company's previous management.
Icahn's poor track record in the energy industry
Considering his empty rhetoric, half-truths and hyperbole, it should come as no surprise that Icahn has chosen not to highlight his track record in the energy industry which is simply terrible:
Notably, at CVR Energy, Icahn secured a controlling stake in the company, replaced all nine directors and initiated a process to pursue a sale.
Despite Icahn's strident claims that "the new board will be able to find a purchaser for the company as I have for many companies in the past,"3 the sales process "produced no credible offers for the company".4 Six years later, CVR Energy is left with a Board and management team that is controlled entirely by one shareholder – Icahn.
In another energy investment, Talisman Energy, Icahn appointed two of his employees to the board, including Jonathan Christodoro, whom Icahn recently nominated for election to the SandRidge Board. While Icahn, and his two hand-picked directors, were able to complete a sale of Talisman – it was done at a significant discount to the share price Icahn paid to invest in the company less than two years earlier.
Protect your investment by supporting the SandRidge Board
Don't be fooled by Icahn's false and misleading campaign and don't let Icahn disrupt the ongoing process. It is essential to retain control of your investment and elect an independent Board committed to maximizing value for all shareholders.
We urge you to vote for the entire slate of five highly-qualified and experienced current SandRidge director nominees and two additional, fully-independent nominees and vote for the ratification of the short-term rights plan.
Your vote is very important – no matter how many shares you own. Support your Board by voting the Company's WHITE universal proxy card TODAY. Please follow the instructions on the enclosed WHITE universal proxy card to vote by telephone or Internet or sign, date and return the enclosed WHITE universal proxy card in the postage-paid envelope provided.
Your independent Board is committed to acting in the best interests of the Company and its shareholders. Thank you for your investment.
Sincerely,
Sylvia K. Barnes, Independent Director
Kenneth H. Beer, Independent Director
Michael L. Bennett, Chairman of the Board
William M. Griffin, Jr., Director and Chief Executive Officer
David J. Kornder, Independent Director
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Retain control of your investment – Vote the WHITE universal card TODAY | ||
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Vote FOR ALL 5 Highly-Qualified SandRidge Directors
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Vote FOR ONLY 2 of 4 Independent Icahn Nominees |
DO NOT Support Icahn's Insiders |
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FOR Sylvia Barnes
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John "Jack" Lipinski |
AGAINST Jonathan Christodoro AGAINST Jonathan Frates AGAINST Nicholas Graziano |
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Independent, responsive and committed to maximizing value for all shareholders
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SandRidge has already vetted and offered to appoint Lipinski and Read to the Board |
Inherently biased – two employees and one recent former employee of Icahn |
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Vote FOR the Extension of the Short-term Rights Plan | ||
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Vote FOR the Advisory Vote on Executive Compensation | ||
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DO NOT turn control over to Icahn – Discard the gold card | ||
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If you have any questions or require assistance with voting your WHITE proxy card, please call MacKenzie Partners at the phone numbers listed below:
1407 Broadway New York, New York 10018 (212) 929-5500 (Call Collect) or Call Toll-Free (800) 322-2885
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About SandRidge Energy, Inc.
SandRidge Energy, Inc. (NYSE: SD) is an oil and natural gas exploration and production company headquartered in Oklahoma City, Oklahoma with its principal focus on developing high-return, growth oriented projects in Oklahoma and Colorado. The majority of the Company's production is generated from the Mississippi Lime formation in Oklahoma and Kansas. Development activity is currently focused on the Meramec formation in the NW STACK Play in Oklahoma and multiple oil rich Niobrara benches in the North Park Basin in Colorado.
Cautionary Statement Regarding Forward-Looking Statements
This communication contains forward-looking statements concerning our expectations for future performance, including statements regarding the exploration of strategic alternatives, the pursuit of options that maximize shareholder value and the consideration of candidates for nomination to SandRidge's Board of Directors. These "forward-looking statements" are based on currently available information, operating plans and projections about future events and trends. They inherently involve risks and uncertainties that could cause actual results to differ materially from those predicted in such forward looking statements. Such risks and uncertainties include, but are not limited to: uncertain outcome, impact, effects and results of SandRidge's exploration of strategic alternatives; and any changes in general economic or industry specific conditions. SandRidge cautions that the foregoing list of factors is not exclusive. Additional information concerning these and other risk factors is contained in SandRidge's public filings with the SEC, which are available at the SEC's website at www.sec.gov. Each forward-looking statement speaks only as of the date of the particular statement, and SandRidge undertakes no obligation to publicly update any of these forward-looking statements to reflect events or circumstances that may arise after the date hereof.
Investor Contact:
Johna Robinson
Investor Relations
SandRidge Energy, Inc.
123 Robert S. Kerr Avenue Oklahoma City, OK 73102
+1 (405) 429-5515
MacKenzie Partners, Inc.
Dan Burch, +1 (212) 929-5748, dburch@mackenziepartners.com
Paul Schulman, +1 (212) 929-5364, pschulman@mackenziepartners.com
Media Contact:
SVC
Bryan Locke, +1 (312) 895-4700, blocke@sardverb.com
Kelly Kimberly, +1 (832) 680-5120, kkimberly@sardverb.com
1 Permission to use quotations neither sought nor obtained.
2 Calculated as sum of market cap differences during Icahn holding period
3 Open letter to CVR Energy shareholders, March 19, 2012
4 Open letter to CVR Energy shareholders, August 6, 2012
View original content with multimedia:http://www.prnewswire.com/news-releases/sandridge-energy-sends-letter-to-shareholders-300659597.html
SOURCE SandRidge Energy, Inc.
Article Date
6/5/20185/29/2018 - SandRidge Energy Sends Letter to Shareholders
SandRidge Energy Sends Letter to Shareholders
Source: PR Newswire
Orignial Article: https://www.prnewswire.co...
OKLAHOMA CITY, May 29, 2018 /PRNewswire/ -- SandRidge Energy, Inc. ("SandRidge" or the "Company") (NYSE: SD) today announced that it has sent a letter to shareholders to provide a status update on the ongoing review of strategic alternatives to maximize shareholder value.
The Board strongly recommends that shareholders vote on the WHITE proxy card "FOR" all five of SandRidge's highly-qualified directors: Sylvia K. Barnes, Kenneth H. Beer, Michael L. Bennett, William M. Griffin and David J. Kornder at the Company's 2018 Annual Meeting of Shareholders to be held on June 19, 2018. The Board also recommends that shareholders vote "FOR" the addition of only two independent directors proposed by Carl C. Icahn and his affiliates (collectively, "Icahn"). The Board has already carefully vetted and offered to appoint John J. "Jack" Lipinski and Randolph C. Read as directors in connection with a settlement proposal that Icahn refused.
The Board also recommends shareholders vote "FOR" the ratification of the continuation of the short-term shareholder rights plan through November 26, 2018 to protect shareholders from unfair, abusive or coercive takeover strategies, including acquisition of control without payment of an adequate premium, while the Board continues its review of strategic alternatives to maximize shareholder value.
Included below is the full text of the letter.
Dear Fellow SandRidge Shareholders:
I would like to take this opportunity to provide an update on our previously announced review of strategic alternatives, which is well underway.
We are moving forward expeditiously. As mentioned in our two most recent earnings calls, we have conducted a thorough and comprehensive assessment of the Company's entire undeveloped asset inventory. In conjunction with this assessment, we created an associated unrisked 3P reserve development plan that provides a clear understanding of the Company's long-term growth potential and net asset value. The quantified reserve potential and summary long term financial projections associated with this 3P plan are set forth on a Form 8-K furnished to the Securities and Exchange Commission on May 25, 2018. This plan provides the necessary foundation to properly assess all proposals received as a result of our strategic review process.
With the support of our independent financial advisor, RBC Capital Markets, we initiated solicitation of interested parties and the Company has entered into mutual non-disclosure agreements with several of them – including Carl C. Icahn and his affiliates (collectively, "Icahn"). These parties are thoroughly reviewing the information contained in our confidential data room and preparing to participate in management presentations that begin this week. As we previously announced, we will consider divestment or joint venture opportunities associated with our North Park Basin assets, potential corporate and asset combination options and a sale of the Company, including offers, if presented, from Icahn.
While we are moving quickly, we do not expect to complete the process prior to the Annual Meeting. Our priority is to ensure we reach out to any and all interested parties and provide sufficient time and resources to ensure the best possible outcome is presented for consideration. We expect to receive initial indications of interest before the end of June, after which the Board will evaluate, conduct diligence on and engage in negotiations with potential counter-parties that have submitted viable proposals. Our ultimate objective is that the process outcome provides the best platform for unlocking the full potential value and the realization of that value for the SandRidge shareholders.
Our Board is responsive and accountable to all shareholders and best positioned to conclude the ongoing strategic alternatives review process in a fair and impartial manner. In the past four months, in light of the feedback received from extensive discussions with our largest stockholders, SandRidge's Board has committed the Company to a new strategic direction, implemented a management transition plan to replace the Company's President and Chief Executive Officer and Chief Financial Officer and dramatically reduced the Company's general and administrative expenses. We have also refreshed our Board with 40% of our directors having joined in 2018.
The Board continues to demonstrate its commitment to responsive governance by announcing an expansion of the Board from five to seven members at the 2018 Annual Meeting in order to accommodate two additional independent directors recommended by Icahn and by using a "universal proxy card" at the upcoming Annual Meeting to enhance shareholders' ability to elect their desired directors. In an effort to avoid this proxy contest, we also invited two of Icahn's nominees to immediately join as directors which would have provided it with direct representation of more than 25% of our Board. Icahn unilaterally rejected our constructive offer because it did not give Icahn complete control.
Our nominees have extensive experience in conducting strategic alternatives processes – four of our five directors have successfully led many public company sales processes as board directors, executive team members, or as a financial advisor. A Board led by our nominees ensures we have the independence, experience, skills and knowledge necessary to lead the Company forward with an unrelenting focus on continuous improvement of our operations and maximizing value.
Icahn is seeking to gain control of SandRidge without paying an appropriate premium or participating in a competitive process. Icahn has made clear its desire to acquire SandRidge. However, having nominated for election a full slate of seven candidates, including two who work directly for Icahn and one former employee (the "Icahn Nominees"), to sidestep the ongoing impartial process, Icahn is not content to compete fairly with other potential counterparties in the thorough and even-handed process being conducted by the SandRidge Board.
The election of the Icahn Nominees would end the impartial process, drive away competition and position Icahn to consolidate control as cheaply as possible.
Electing a Board dominated by Icahn Nominees would disadvantage our shareholders because of the distraction and delay caused by the need to fully educate them on the Company and their obvious competing priorities. Worse, a process led by an Icahn-dominated Board, in our view, would likely have a chilling effect on the participation of potential counterparties because such a process would be rigged in favor of Icahn, either in perception or reality. For this reason, we believe that otherwise interested third parties will be unwilling to incur the time, cost and expense of participating in a process controlled by Icahn.
Simply put, we believe it is impossible for a Board dominated by Icahn Nominees to run a fair, unbiased process that may result in selling the Company to Icahn. Do not let Icahn disrupt our progress or gain control of SandRidge without an appropriate premium or impartial, competitive process. Make no mistake, the disruption caused by turning control over to Icahn – which has offered no standalone plan – would leave SandRidge rudderless, jeopardizing your valuable investments and the substantial financial and operational progress your Board and management continue to achieve.
We urge you to vote for the entire slate of five highly-qualified and experienced SandRidge director nominees plus two additional, fully-independent Icahn nominees, and vote for the ratification of the short-term rights plan. Your vote is very important – no matter how few shares you own. Support your Board by voting the Company's WHITE universal proxy card TODAY. Please follow the instructions on the enclosed WHITE universal proxy card to vote by telephone or Internet or sign, date and return the enclosed WHITE universal proxy card in the postage-paid envelope provided.
Sincerely,
William M. Griffin, Jr.
Director and Chief Executive Officer
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Retain control of your investment – Vote the WHITE universal card TODAY | ||
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Vote FOR ALL 5 Highly- |
Vote FOR ONLY 2 of 4 |
DO NOT Support Icahn's Insiders |
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FOR Sylvia Barnes |
John "Jack" Lipinski |
AGAINST Jonathan Christodoro |
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Independent, responsive and
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SandRidge has already vetted
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Inherently Biased – two
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DO NOT turn control over to Icahn – Discard the gold card | ||
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If you have any questions or require assistance with voting your WHITE proxy card, please call MacKenzie Partners at the phone numbers listed below:
1407 Broadway
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About SandRidge Energy, Inc.
SandRidge Energy, Inc. (NYSE: SD) is an oil and natural gas exploration and production company headquartered in Oklahoma City, Oklahoma with its principal focus on developing high-return, growth oriented projects in Oklahoma and Colorado. The majority of the Company's production is generated from the Mississippi Lime formation in Oklahoma and Kansas. Development activity is currently focused on the Meramec formation in the NW STACK Play in Oklahoma and multiple oil rich Niobrara benches in the North Park Basin in Colorado.
Cautionary Statement Regarding Forward-Looking Statements
This communication contains forward-looking statements concerning our expectations for future performance, including statements regarding the exploration of strategic alternatives, the pursuit of options that maximize shareholder value and the consideration of candidates for nomination to SandRidge's Board of Directors. These "forward-looking statements" are based on currently available information, operating plans and projections about future events and trends. They inherently involve risks and uncertainties that could cause actual results to differ materially from those predicted in such forward looking statements. Such risks and uncertainties include, but are not limited to: uncertain outcome, impact, effects and results of SandRidge's exploration of strategic alternatives; and any changes in general economic or industry specific conditions. SandRidge cautions that the foregoing list of factors is not exclusive. Additional information concerning these and other risk factors is contained in SandRidge's public filings with the SEC, which are available at the SEC's website at www.sec.gov. Each forward-looking statement speaks only as of the date of the particular statement, and SandRidge undertakes no obligation to publicly update any of these forward-looking statements to reflect events or circumstances that may arise after the date hereof.
Investor Contact:
Johna Robinson
Investor Relations
SandRidge Energy, Inc.
123 Robert S. Kerr Avenue Oklahoma City, OK 73102
+1 (405) 429-5515
MacKenzie Partners, Inc.
Dan Burch, +1 (212) 929-5748, dburch@mackenziepartners.com
Paul Schulman, +1 (212) 929-5364, pschulman@mackenziepartners.com
Media Contact:
SVC
Bryan Locke, +1 (312) 895-4700, blocke@sardverb.com
Kelly Kimberly, +1 (832) 680-5120, kkimberly@sardverb.com
View original content with multimedia:http://www.prnewswire.com/news-releases/sandridge-energy-sends-letter-to-shareholders-300655546.html
SOURCE SandRidge Energy, Inc.
Article Date
5/29/20185/15/2018 - SandRidge Energy Sends Letter to Shareholders
SandRidge Energy Sends Letter to Shareholders
Source: PR Newswire
Orignial Article: https://www.prnewswire.co...
OKLAHOMA CITY, May 15, 2018 /PRNewswire/ -- SandRidge Energy, Inc. ("SandRidge" or the "Company") (NYSE: SD) today announced that it has sent a letter to shareholders regarding the Company's 2018 Annual Meeting of Shareholders to be held on June 19, 2018. The Company also announced that it has filed definitive proxy materials with the Securities and Exchange Commission in connection with the Annual Meeting, in which SandRidge shareholders of record as of the close of business on April 20, 2018 will be entitled to vote.
The SandRidge Board of Directors strongly recommends that shareholders vote on the WHITE proxy card "FOR" all five of SandRidge's highly-qualified directors: Sylvia K. Barnes, Kenneth H. Beer, Michael L. Bennett, William M. Griffin and David J. Kornder. The Board also recommends that shareholders vote "FOR" the addition of only two independent directors proposed by Icahn Capital. The Board has already carefully vetted and offered to appoint John J. "Jack" Lipinski and Randolph C. Read as directors in connection with a settlement proposal that Icahn Capital refused.
The Board also recommends shareholders vote "FOR" the ratification of the continuation of the short-term shareholder rights plan through November 26, 2018 to protect shareholders from unfair, abusive or coercive takeover strategies, including acquisition of control without payment of an adequate premium, while the Board continues its review of strategic alternatives to maximize shareholder value.
Included below is the full text of the letter.
Dear Fellow SandRidge Shareholders:
As a SandRidge Energy shareholder, you face an important decision at the June 19, 2018 Annual Meeting:
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We recommend you vote on the
ELECT BOARD NOMINEES WHO ARE: |
We recommend you DO NOT vote on the
ELECT ICAHN CAPITAL NOMINEES WHO ARE: | |
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OR |
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The SandRidge Board believes the decision to elect an independent Board and maximize shareholder value is the only logical choice.
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YOUR BOARD RECOMMENDS THE FOLLOWING ACTIONS TO MAXIMIZE SHAREHOLDER VALUE AND RETAIN CONTROL OF YOUR INVESTMENT |
What is at Stake
The SandRidge Board is committed to a thorough and impartial strategic review process.
On March 19, 2018, the Board commenced a review of strategic alternatives to maximize shareholder value. Such alternatives may include divestment or joint venture opportunities associated with our North Park Basin assets and potential corporate and asset combination options with other companies. SandRidge will also evaluate any credible acquisition offers. The Board remains committed to conducting a thorough and impartial strategic review process that seeks to maximize shareholder value and is in the best interest of all shareholders.
Icahn Capital is seeking to gain control of SandRidge without paying an appropriate premium or participating in a competitive process.
Icahn Capital has made clear its desire to acquire SandRidge. Icahn Capital has stated that it "would, after conducting due diligence, be willing to make an all-cash offer" to allow the Company's shareholders to monetize their investment. Rather than competing fairly with other potential counterparties in the thorough and even-handed process being conducted by the SandRidge Board, Icahn Capital has nominated for election a full slate of seven candidates, including two who work directly for Icahn Capital and one recent former employee (the "Icahn Nominees"), to sidestep the ongoing impartial process. If elected, the Icahn Nominees would ostensibly take over the process to evaluate strategic alternatives.
In reality, the election of the Icahn Nominees would end the impartial process, drive away competition and position Icahn Capital to consolidate control as cheaply as possible.
Shareholders would be disadvantaged by a process led by a Board the majority of which consist of the Icahn Nominees because of the distraction and delay caused by their lack of familiarity and limited experience in the upstream oil and gas sector. Worse, a process led by such a Board, in our view, would likely have a chilling effect on the participation of potential counterparties because such a process would be rigged in favor of Icahn Capital, either in perception or reality. For this reason, we believe that otherwise interested third parties will be unwilling to incur the time, cost and expense of participating in a process controlled by Icahn Capital.
Therefore, we believe a process overseen by the current Board has the highest likelihood of maximizing shareholder value relative to an Icahn Nominee-run process.
Our Nominees Are Highly Qualified and Experienced in Our Industry
SandRidge shareholders have the opportunity to elect seven directors at the upcoming Annual Meeting. The Company recommends shareholders vote "FOR" five existing directors: Sylvia K. Barnes, Kenneth H. Beer, Michael L. Bennett, William M. Griffin and David J. Kornder. As set forth below, these directors, have a strong track record in the energy, finance and private equity spaces, with professional experience ranging from 25-40 years per Board member, and all have public company experience.
Our nominees also have experience conducting strategic alternatives processes, and four of our five directors have significant experience in leading strategic sales processes.
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SandRidge Directors (Principal Occupation) |
Independence |
Additional Information |
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Sylvia K. Barnes Principal and owner of
Age: 61 |
Independent (director since 2018) |
Ms. Barnes has over thirty years of oil & gas finance experience and a background in engineering. Her qualifications to serve on the Board include her extensive financial analysis and transaction experience and knowledge of the oil & gas industry. Ms. Barnes' experience provides her with valuable insights into corporate strategy, capital allocation, equity and debt financing and the assessment and management of risks faced by energy companies. See page 29 of our proxy statement for more details. |
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Kenneth H. Beer EVP and CFO, Stone
Age: 60 |
Independent (director since 2018) |
Mr. Beer's nearly forty years of financial analysis, transactional and managerial experience, as well as his knowledge of the oil & gas industry, service on other public company boards and his background in overseeing public company financial management and reporting qualify him to serve on the Board. See page 30 of our proxy statement for more details. |
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Michael L. Bennett President and CEO, Terra Industries, Inc.
Age: 64 |
Independent (director since 2016) |
Mr. M. Bennett's forty plus years of technical and managerial experience in the petrochemical industry, senior management experience, his service on other public company boards and his background in overseeing public company financial management and reporting qualify him to serve on the Board. See page 31 of our proxy statement for more details. |
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William M. Griffin, Jr. Interim President and
Age: 58 |
Previously independent (director since 2016) |
Mr. B. Griffin's thirty-seven years of technical and leadership experience with active public and privately owned upstream energy organizations, along with his demonstrated ability to effectively manage exploration and production businesses while improving profitability and generating value growth through organic asset development and acquisitions qualify him to serve on the Board. See page 31 of our proxy statement for more details. |
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David J. Kornder Co-founder and Managing Director, Sequel Energy Group LLC
Age: 57 |
Independent (director since 2016) |
Mr. Kornder's twenty-five years of experience in the energy industry, senior management experience in the upstream oil and gas sector through various commodity cycles, his prior service on other public and private company boards, his background in energy-focused investing and capital raising activities and his background in overseeing public company financial management and reporting qualify him to serve on the Board. See page 32 of our proxy statement for more details. |
We Believe Two Additional Independent Directors Would Be Additive to Our Board
The Board believes that the addition of two new directors who are independent of both management and Icahn Capital can benefit the Company. The Board determined that increasing the size of the Board to seven would allow for additional independent directors to assist in the Board's impartial review of strategic alternatives and add a fresh perspective. The Board also decided to use a universal proxy card at this year's annual meeting to enable shareholders to cast votes for any director nominee on a single card, regardless of who nominated them.
However, the Board believes that the majority of the directors must be well versed in the Company, its operations, assets and industry to credibly evaluate the variety of options that could emerge and effectively complete the strategic alternatives process. As such, shareholders are encouraged to support only two of Icahn Capital's independent nominees. Shareholders should also note that the Board carefully evaluated and offered to appoint Jack Lipinski and Randolph Read to the Board in connection with a settlement offer that Icahn Capital refused. We have not had the opportunity to fully evaluate Ms. Dunlap or Mr. Christodoro given the timing of their nominations, but based on a review of the Icahn Capital nomination materials, it appears that neither has relevant exploration and production industry experience and only Ms. Dunlap could be considered independent.
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Icahn Capital Nominees (Principal Occupation) |
Independence |
Additional Information |
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John J. "Jack" Lipinski
Age: 67 |
Independent |
Mr. Lipinski has more than forty years of experience in the petroleum refining and nitrogen fertilizer industries, including extensive experience in the role of public company president and CEO, and has served on public and private company boards. See page D-3 of our proxy statement for more details. |
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Randolph C. Read
Age: 65 |
Independent |
Mr. Read has extensive leadership experience in a variety of industries and has served on public and private company boards. See page D-3 of our proxy statement for more details. |
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Bob G. Alexander
Age: 84 |
Independent |
Mr. Alexander has more than forty years of experience in the exploration and production and oil and gas property management industries, including extensive CEO and M&A experience, as well as service on public company boards and numerous industry committees. See page D-1 of our proxy statement for more details. |
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Nancy Dunlap
Age: 65 |
Independence Under Review |
Ms. Dunlap has experience overseeing the personal investment and legal affairs of the family of former New Jersey Governor and United States Senator Jon S. Corzine, before which she served as an attorney focused on commercial real estate transactions. See page D-2 of the proxy statement for more details. |
Turning Board Control Over to Icahn Capital is Not in Shareholders' Best Interest
Icahn Capital has nominated for election to the Board two of its current employees and one recent former employee. These candidates lack independence and would present inherent conflicts given Icahn Capital's desire to acquire SandRidge. Combined with their lack of familiarity and experience with the upstream oil and gas sector, a process led by the Icahn Nominees would likely have a chilling effect on participation by potential counterparties to strategic alternatives.
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Additional Icahn Capital Nominees (Principal Occupation) |
Independence |
Additional Information |
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Jonathan Christodoro
Age: 42 |
Not Independent |
Based on a review of Icahn Capital's nomination materials, Mr. Christodoro joined the board of an exploration and production company only as a representative of Icahn Capital in the context of a settlement. See page D-1 of our proxy statement for more details. |
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Jonathan Frates
Age: 35 |
Not Independent |
Based on a review of Icahn Capital's nomination materials, Mr. Frates has very limited experience in the exploration and production industry. See page D-2 of our proxy statement for more details. |
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Nicholas Graziano
Age: 46 |
Not Independent |
Based on a review of Icahn Capital's nomination materials, Mr. Graziano has very limited experience in the exploration and production industry. See page D-2 of our proxy statement for more details. |
The SandRidge Board Is Committed to Full Accountability
The Board is fully accountable and responsive to shareholders. In light of the feedback received from extensive discussions with our largest shareholders in December 2017 and January 2018, the Board took clear and decisive action:
Further, as detailed in the enclosed proxy statement, the Board is committed to shareholder-centric governance and, in 2017, fully revamped the Company's executive compensation program to reflect input from its shareholders.
Short-Term Rights Plan Is Critical to Protecting Shareholder Interests
Last fall, the Board implemented a short-term shareholder rights plan to encourage the fair and equal treatment of all shareholders by resisting abusive or coercive take-over initiatives absent an appropriate premium. The short-term rights plan will expire unless ratified by shareholders at the Annual Meeting. In light of the Board's commitment to leading a thorough and impartial strategic review process, and taking into consideration the ongoing efforts of Icahn Capital to potentially bias or preempt that process, the Board believes it is in the best interest of shareholders to extend the short-term rights plan. In the absence of the short-term rights plan, Icahn Capital will be able, alone or in concert with others, to acquire creeping control of the Company, or at least a sufficient number of shares to discourage potential counterparties from participating in the strategic alternatives process.
If shareholders choose to extend the short-term rights plan, it will continue in effect until November 26, 2018, at which time it will expire by its terms. The Company believes that this allows for sufficient time to complete the strategic alternatives evaluation prior to the expiration of the short-term rights plan.
Your Vote is Important – Please Sign and Send the White Proxy Card Today
We strongly urge you vote for the entire slate of five highly-qualified and experienced current SandRidge director nominees and two additional fully-independent nominees, as well as vote for the ratification of the short-term rights plan.
Your vote is very important – no matter how many shares you own. Support your Board by voting the WHITE proxy card TODAY. Please follow the instructions on the enclosed WHITE proxy card to vote by telephone or Internet or sign, date and return the enclosed WHITE proxy card in the postage-paid envelope provided.
As we look forward, we are enthusiastic about the opportunities to maximize shareholder value for all Company shareholders while we continue to execute on our business objectives. We are committed to acting in the best interests of the Company and its shareholders. Thank you for your investment.
Sincerely,
Sylvia K. Barnes, Independent Director
Kenneth H. Beer, Independent Director
Michael L. Bennett, Chairman of the Board
William M. Griffin, Jr., Director and Interim President and Chief Executive Officer
David J. Kornder, Independent Director
|
If you have any questions or require assistance with voting your WHITE proxy card, please call MacKenzie Partners at the phone numbers listed below:
MACKENZIE PARTNERS, INC. 1407 Broadway New York, New York 10018 (212) 929-5500 (Call Collect) or Call Toll-Free (800) 322-2885
Email: sandridge@mackenziepartners.com |
About SandRidge Energy, Inc.
SandRidge Energy, Inc. (NYSE: SD) is an oil and natural gas exploration and production company headquartered in Oklahoma City, Oklahoma with its principal focus on developing high-return, growth oriented projects in Oklahoma and Colorado. The majority of the Company's production is generated from the Mississippi Lime formation in Oklahoma and Kansas. Development activity is currently focused on the Meramec formation in the NW STACK Play in Oklahoma and multiple oil rich Niobrara benches in the North Park Basin in Colorado.
Important Additional Information
SandRidge, its directors and certain of its executive officers are participants in the solicitation of proxies from the Company's shareholders in connection with the Company's 2018 Annual Meeting of Shareholders (the "2018 Annual Meeting"). The Company has filed a definitive proxy statement and WHITE proxy card with the U.S. Securities and Exchange Commission (the "SEC") in connection with the solicitation of proxies from the Company's shareholders. SHAREHOLDERS OF THE COMPANY ARE STRONGLY ENCOURAGED TO READ THE COMPANY'S DEFINITIVE PROXY STATEMENT, ACCOMPANYING WHITE PROXY CARD AND ALL OTHER DOCUMENTS FILED WITH THE SEC CAREFULLY AND IN THEIR ENTIRETY WHEN THEY BECOME AVAILABLE AS THEY WILL CONTAIN IMPORTANT INFORMATION. Information regarding the ownership of the Company's directors and executive officers in Company common stock and restricted stock is included in the Company's SEC filings on Forms 3, 4 and 5, which can be found through the Company's website www.sandridgeenergy.com in the section "Investor Relations" or through the SEC's website at www.sec.gov. Information can also be found in the Company's other SEC filings, including the definitive proxy statement, the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2017 and other materials to be filed with the SEC in connection with the 2018 Annual Meeting. Shareholders will be able to obtain any proxy statement, any amendments or supplements to the proxy statement and other documents filed by the Company with the SEC at no charge at the SEC's website at www.sec.gov. Copies will also be available at no charge at the Company's website at www.sandridgeenergy.com in the section "Investor Relations."
Cautionary Statement Regarding Forward-Looking Statements
This communication contains forward-looking statements concerning our expectations for future performance, including statements regarding the exploration of strategic alternatives, the pursuit of options that maximize shareholder value and the consideration of candidates for nomination to SandRidge's Board of Directors. These "forward-looking statements" are based on currently available information, operating plans and projections about future events and trends. They inherently involve risks and uncertainties that could cause actual results to differ materially from those predicted in such forward looking statements. Such risks and uncertainties include, but are not limited to: uncertain outcome, impact, effects and results of SandRidge's exploration of strategic alternatives; and any changes in general economic or industry specific conditions. SandRidge cautions that the foregoing list of factors is not exclusive. Additional information concerning these and other risk factors is contained in SandRidge's public filings with the SEC, which are available at the SEC's website at www.sec.gov. Each forward-looking statement speaks only as of the date of the particular statement, and SandRidge undertakes no obligation to publicly update any of these forward-looking statements to reflect events or circumstances that may arise after the date hereof.
Investor Contact:
Johna Robinson
Investor Relations
SandRidge Energy, Inc.
123 Robert S. Kerr Avenue Oklahoma City, OK 73102
+1 (405) 429-5515
MacKenzie Partners, Inc.
Dan Burch, +1 (212) 929-5748, dburch@mackenziepartners.com
Paul Schulman, +1 (212) 929-5364, pschulman@mackenziepartners.com
Media Contact:
SVC
Bryan Locke, +1 (312) 895-4700, blocke@sardverb.com
Kelly Kimberly, +1 (832) 680-5120, kkimberly@sardverb.com
View original content with multimedia:http://www.prnewswire.com/news-releases/sandridge-energy-sends-letter-to-shareholders-300648259.html
SOURCE SandRidge Energy, Inc.
Article Date
5/15/2018SandRidge Energy, Inc. Reports Financial and Operational Results for First Quarter 2018
Source: PR Newswire
Orignial Article: https://www.prnewswire.co...
OKLAHOMA CITY, May 7, 2018 /PRNewswire/ -- SandRidge Energy, Inc. (the "Company" or "SandRidge") (NYSE: SD) today announced financial and operational results for the quarter ended March 31, 2018, which include the following highlights:
For the first quarter, the Company reported a net loss of $41 million, or $1.18 per share, and net cash provided by operating activities of $30 million. When adjusting these reported amounts for items that are typically excluded by the investment community on the basis that such items affect the comparability of results, the Company's "adjusted net income" amounted to $5 million, or $0.15 per share, and "operating cash flow" totaled $21 million. Earnings before interest, income taxes, depreciation, depletion, and amortization, adjusted for certain other items, otherwise referred to as "adjusted EBITDA," for the first quarter was $40 million.(1)
|
1) The Company has defined and reconciled certain non-GAAP financial measures including adjusted net income, operating cash flow, EBITDA, adjusted EBITDA and adjusted G&A expense, to the most directly comparable GAAP financial measures in supporting tables at the conclusion of this press release under the "Non-GAAP Financial Measures" beginning on page 12. |
Included in the Company's first quarter results is a $32 million charge related to employee termination benefits. Of this amount, $19 million was paid in cash and $13 million was paid in the form of stock-based compensation. As a result of these and other cost-cutting measures, our 2018 first quarter general and administrative expenditures decreased $6 million year-over-year, or 28%.
Liquidity & Capital Structure
As of May 1, 2018, the Company's liquidity totaled $436 million, which includes $18 million of cash and $418 million of borrowing capacity under the credit facility, net of outstanding letters of credit.
The Company currently has no funds drawn under its credit facility. During the quarter, the Company repaid its $36 million building note, resulting in no outstanding long-term debt at March 31, 2018. The Company's $425 million credit facility borrowing base was unanimously reaffirmed by its lenders at the regularly scheduled spring borrowing base redetermination.
Management Comments
Bill Griffin, President and CEO commented, "The first quarter performance for SandRidge demonstrates the Company's consistent ability to execute and adapt to change. We successfully initiated a shift in strategy and leadership, while continuing to remain focused on delivering solid operating and financial results."
Mr. Griffin continued, "We significantly reduced overhead and improved operating margins, which better positions SandRidge to achieve profitable growth and value recognition. Our capital program continues to provide positive results. During the quarter, we completed four new NW STACK Meramec wells with an average 30-Day IP of 675 Boepd, exceeding pre-drill estimates. In the North Park Basin, our capital expenditures were primarily associated with pad drilling within our core area to further define optimal well spacing. As a result, we have seven new North Park wells currently scheduled for completion, with expected significant associated oil production coming online this summer. Most importantly, our program, while delivering strong returns, continues to increase the level of confidence in our undeveloped resource value and potential.
In conjunction with a comprehensive reassessment of the SandRidge drilling portfolio in the current commodity price environment, we have elected to reallocate a portion of our development capital to the Mississippi Lime. We now plan to drill four new wells during the third quarter, which are expected to provide competitive returns and further demonstrate the current undeveloped value in this area after an extended period of drilling inactivity. This change will not impact our 2018 total company guidance."
Mr. Griffin further added, "Our strong balance sheet remains a key consideration as we advance the formal process announced in March to assess strategic options to unlock and generate meaningful incremental value for all shareholders. We are finalizing a comprehensive reassessment of the Company's entire drilling inventory, along with the creation of an associated reserve development plan, which will lend support in the evaluation of any strategic alternatives. We and our advisors are committed to a thorough and impartial review of all proposals and will proceed expeditiously to ascertain the best go-forward strategy for SandRidge."
Operational Results and Activity
During the quarter, production totaled 3.2 MMBoe (29% oil, 22% NGLs and 49% natural gas). The Company averaged one rig in the NW STACK targeting the Meramec and one rig targeting multiple benches of the Niobrara in the North Park Basin. Capital expenditures totaled $37 million.
Mid-Continent Assets in Oklahoma and Kansas
In the first quarter, production in the Mid-Continent totaled 2.9 MMBoe (32 MBoepd, 22% oil). The Company averaged one rig in the NW STACK targeting the Meramec and drilled six SRLs. Of the six wells drilled, five were under the previously announced Drilling Participation Agreement. The Company brought four SRLs online with a combined 30-Day IP averaging 675 Boepd (76% oil). At current commodity prices, these wells have a projected average rate of return in excess of 30%. In addition, four more wells were brought online near or subsequent to quarter end, all with strong preliminary results (less than 30 days). Estimated drilling and completion costs for SRL and XRL wells are currently $4.4 million and $6.5 million, respectively.
Niobrara Asset in North Park Basin, Jackson County, Colorado
Oil production in the North Park Basin totaled 213 MBo (2.4 MBopd) for the first quarter. The Company averaged one rig targeting multiple benches in the Niobrara and drilled four XRLs and one SRL. The four XRLs conclude the drilling of an eight well wine rack spacing test. Five new wells and two remaining DUCs are currently beginning completion operations and are expected to come online late in the second quarter or early in the third quarter. Additionally, one XRL and one SRL were brought online during the first quarter.
During the quarter, the Company signed a definitive agreement for a small scale modular gas to liquids ("GTL") processing facility to be placed at the Big Horn tank battery. The facility will be constructed and operated by a third party at no cost to SandRidge. Both companies will share proceeds from associated liquids recovery by this gas processing. The initial facility is expected to process approximately 500 Mcf per day. The facility provides a scalable gas processing option while the Company advances its long-term development of pipeline takeaway. Upon successful installation of the facility in 2019, the Company will evaluate the potential to add additional GTL facilities.
Other Operational Activities
During the first quarter, Permian Central Basin Platform properties produced 114 MBoe (1.3 MBoepd, 81% oil, 12% NGLs, 7% natural gas).
Conference Call Information
The Company will host a conference call to discuss these results on Tuesday, May 8, 2018 at 8:00 am CT. The telephone number to access the conference call from within the U.S. is (833) 245-9650 and from outside the U.S. is (647) 689-4222. The passcode for the call is 2689729. An audio replay of the call will be available from May 8, 2018 until 11:59 pm CT on June 8, 2018. The number to access the conference call replay from within the U.S. is (800) 585-8367 and from outside the U.S. is (416) 621-4642. The passcode for the replay is 2689729.
A live audio webcast of the conference call will also be available via SandRidge's website, www.sandridgeenergy.com, under Investor Relations/Presentation & Events. The webcast will be archived for replay on the Company's website for 30 days.
2018 Operational and Capital Expenditure Guidance
Presented below is the Company's capital expenditure and operational guidance for 2018.
|
Guidance |
||||
|
Projection as of |
||||
|
May 7, 2018 |
||||
|
Production |
||||
|
Oil (MMBbls) |
3.4 - 3.6 |
|||
|
Natural Gas Liquids (MMBbls) |
2.6 - 2.8 |
|||
|
Total Liquids (MMBbls) |
6.0 - 6.4 |
|||
|
Natural Gas (Bcf) |
31.5 - 33.0 |
|||
|
Total (MMBoe) |
11.3 - 11.9 |
|||
|
Price Differential |
||||
|
Oil (per Bbl) |
$2.80 |
|||
|
Natural Gas Liquids (realized % of NYMEX WTI) |
33% |
|||
|
Natural Gas (per MMBtu) |
$1.20 |
|||
|
Expenses |
||||
|
LOE |
$95 - $105 million |
|||
|
Adjusted G&A Expense1 |
$41 - $44 million |
|||
|
% of Revenue |
||||
|
Production Taxes |
4.80% |
|||
|
Capital Expenditures ($ in millions) |
||||
|
Drilling and Completion |
||||
|
Mid-Continent |
$17 - $19 |
|||
|
North Park Basin |
65 - 73 |
|||
|
Other2 |
34 |
|||
|
Total Drilling and Completion |
$116 - $126 |
|||
|
Other E&P |
||||
|
Land, G&G, and Seismic |
$15 |
|||
|
Infrastructure3 |
15 |
|||
|
Workover |
25 |
|||
|
Capitalized G&A and Interest |
8 |
|||
|
Total Other Exploration and Production |
$63 |
|||
|
General Corporate |
1 |
|||
|
Total Capital Expenditures |
$180 - $190 |
|||
|
(excluding acquisitions and plugging and abandonment) |
||||
|
1) |
Adjusted G&A expense is a non-GAAP financial measure. The Company has defined this measure at the conclusion of this press release under "Non-GAAP Financial Measures" beginning on page 12. Information to reconcile this non-GAAP financial measure to the most directly comparable GAAP financial measure is not available at this time, as management is unable to forecast the excluded items for future periods. |
|
2) |
Primarily 2017 Carryover |
|
3) |
Includes Production Facilities, Pipeline ROW and Electrical |
Operational and Financial Statistics
Information regarding the Company's production, pricing, costs and earnings is presented below:
|
Three Months Ended March 31, | |||||||
|
2018 |
2017 | ||||||
|
Production - Total |
|||||||
|
Oil (MBbl) |
926 |
1,134 |
|||||
|
NGL (MBbl) |
700 |
887 |
|||||
|
Natural Gas (MMcf) |
9,487 |
11,766 |
|||||
|
Oil equivalent (MBoe) |
3,207 |
3,982 |
|||||
|
Daily production (MBoed) |
35.6 |
44.2 |
|||||
|
Average price per unit |
|||||||
|
Realized oil price per barrel - as reported |
$ |
57.60 |
$ |
49.19 |
|||
|
Realized impact of derivatives per barrel |
(8.40) |
0.27 |
|||||
|
Net realized price per barrel |
$ |
49.20 |
$ |
49.46 |
|||
|
Realized NGL price per barrel - as reported |
$ |
23.41 |
$ |
16.27 |
|||
|
Realized impact of derivatives per barrel |
— |
— |
|||||
|
Net realized price per barrel |
$ |
23.41 |
$ |
16.27 |
|||
|
Realized natural gas price per Mcf - as reported |
$ |
1.82 |
$ |
2.37 |
|||
|
Realized impact of derivatives per Mcf |
0.17 |
(0.08) |
|||||
|
Net realized price per Mcf |
$ |
1.99 |
$ |
2.29 |
|||
|
Realized price per Boe - as reported |
$ |
27.12 |
$ |
24.65 |
|||
|
Net realized price per Boe - including impact of derivatives |
$ |
25.21 |
$ |
24.49 |
|||
|
Average cost per Boe |
|||||||
|
Lease operating |
$ |
7.71 |
$ |
6.28 |
|||
|
Production taxes |
$ |
1.47 |
$ |
0.80 |
|||
|
Depletion (1) |
$ |
8.73 |
$ |
6.78 |
|||
|
Earnings per share |
|||||||
|
(Loss) earnings per share applicable to common stockholders |
|||||||
|
Basic |
$ |
(1.18) |
$ |
1.90 |
|||
|
Diluted |
$ |
(1.18) |
$ |
1.90 |
|||
|
Adjusted net income per share available to common stockholders |
|||||||
|
Basic |
$ |
0.15 |
$ |
0.78 |
|||
|
Diluted |
$ |
0.15 |
$ |
0.78 |
|||
|
Weighted average number of shares outstanding (in thousands) |
|||||||
|
Basic |
34,575 |
26,801 |
|||||
|
Diluted (2) |
34,637 |
26,801 |
|||||
|
(1) |
Includes accretion of asset retirement obligation. |
|
(2) |
Includes shares considered antidilutive for calculating loss per share in accordance with GAAP. |
Capital Expenditures
The table below presents actual results of the Company's capital expenditures for the three months ended March 31, 2018 at the same level of detail as its full year capital expenditure guidance.
|
Three Months Ended | |||
|
March 31, 2018 | |||
|
(In thousands) | |||
|
Drilling and Completion |
|||
|
Mid-Continent |
$ |
1,917 |
|
|
North Park Basin |
8,234 |
||
|
Other1 |
15,565 |
||
|
Total Drilling and Completion |
25,716 |
||
|
Other E&P |
|||
|
Land, G&G, and Seismic |
1,691 |
||
|
Infrastructure2 |
1,975 |
||
|
Workovers |
6,368 |
||
|
Capitalized G&A and Interest |
1,516 |
||
|
Total Other Exploration and Production |
11,549 |
||
|
General Corporate |
— |
||
|
Total Capital Expenditures |
$ |
37,265 |
|
|
(excluding acquisitions and plugging and abandonment) |
|||
|
1) Primarily 2017 Carryover |
|||
|
2) Infrastructure - Production Facilities, Pipeline ROW and Electrical |
|||
Derivative Contracts
In light of the high correlation between NGL and NYMEX WTI prices, the Company manages a portion of its NGL price exposure using NYMEX WTI contracts at a three-to-one (3:1) NGL to crude ratio. The table below sets forth the Company's consolidated oil and natural gas price swaps for 2018 and 2019 as of May 1, 2018:
|
Quarter Ending |
||||||||||||||||
|
3/31/2018 |
6/30/2018 |
9/30/2018 |
12/31/2018 |
FY 2018 | ||||||||||||
|
WTI Swaps: |
||||||||||||||||
|
Total Volume (MMBbls) |
1.05 |
1.00 |
0.92 |
0.83 |
3.80 | |||||||||||
|
Daily Volume (MBblspd) |
11.7 |
11.0 |
10.0 |
9.0 |
10.4 | |||||||||||
|
Swap Price ($/bbl) |
$55.46 |
$55.50 |
$56.04 |
$56.12 |
$55.75 | |||||||||||
|
Natural Gas Swaps: |
||||||||||||||||
|
Total Volume (Bcf) |
6.30 |
3.64 |
3.68 |
3.68 |
17.30 | |||||||||||
|
Daily Volume (MMBtupd) |
70.0 |
40.0 |
40.0 |
40.0 |
47.4 | |||||||||||
|
Swap Price ($/MMBtu) |
$3.24 |
$3.11 |
$3.11 |
$3.11 |
$3.16 | |||||||||||
|
3/31/2019 |
6/30/2019 |
9/30/2019 |
12/31/2019 |
FY 2019 | ||||||||||||
|
WTI Swaps: |
||||||||||||||||
|
Total Volume (MMBbls) |
0.45 |
0.46 |
0.46 |
0.46 |
1.83 | |||||||||||
|
Daily Volume (MBblspd) |
5.0 |
5.0 |
5.0 |
5.0 |
5.0 | |||||||||||
|
Swap Price ($/bbl) |
$54.29 |
$54.29 |
$54.29 |
$54.29 |
$54.29 | |||||||||||
Capitalization
The Company's capital structure as of March 31, 2018 and December 31, 2017 is presented below:
|
March 31, |
December 31, | ||||||
|
(In thousands) | |||||||
|
Cash, cash equivalents and restricted cash |
$ |
29,178 |
$ |
101,308 |
|||
|
Credit facility |
$ |
— |
$ |
— |
|||
|
Building note |
— |
37,502 |
|||||
|
Total debt |
— |
37,502 |
|||||
|
Stockholders' equity |
|||||||
|
Common stock |
36 |
36 |
|||||
|
Warrants |
88,500 |
88,500 |
|||||
|
Additional paid-in capital |
1,052,718 |
1,038,324 |
|||||
|
Accumulated deficit |
(327,814) |
(286,920) |
|||||
|
Total SandRidge Energy, Inc. stockholders' equity |
813,440 |
839,940 |
|||||
|
Total capitalization |
$ |
813,440 |
$ |
877,442 |
|||
|
SandRidge Energy, Inc. and Subsidiaries | ||||||||
|
Condensed Consolidated Statements of Operations (Unaudited) | ||||||||
|
(In thousands, except per share amounts) | ||||||||
|
Three Months Ended March 31, | ||||||||
|
2018 |
2017 | |||||||
|
Revenues |
||||||||
|
Oil, natural gas and NGL |
$ |
86,966 |
$ |
98,149 |
||||
|
Other |
162 |
201 |
||||||
|
Total revenues |
87,128 |
98,350 |
||||||
|
Expenses |
||||||||
|
Production |
24,713 |
25,023 |
||||||
|
Production taxes |
4,700 |
3,176 |
||||||
|
Depreciation and depletion—oil and natural gas |
27,997 |
26,980 |
||||||
|
Depreciation and amortization—other |
3,153 |
3,837 |
||||||
|
Impairment |
4,170 |
2,531 |
||||||
|
General and administrative |
14,022 |
19,538 |
||||||
|
Shareholder activism costs |
407 |
— |
||||||
|
Employee termination benefits |
31,587 |
400 |
||||||
|
Loss (gain) on derivative contracts |
18,330 |
(34,183) |
||||||
|
Other operating expense |
16 |
268 |
||||||
|
Total expenses |
129,095 |
47,570 |
||||||
|
(Loss) income from operations |
(41,967) |
50,780 |
||||||
|
Other (expense) income |
||||||||
|
Interest expense, net |
(948) |
(939) |
||||||
|
Gain on extinguishment of debt |
1,151 |
— |
||||||
|
Other income, net |
873 |
970 |
||||||
|
Total other income |
1,076 |
31 |
||||||
|
(Loss) income before income taxes |
(40,891) |
50,811 |
||||||
|
Income tax expense |
3 |
3 |
||||||
|
Net (loss) income |
$ |
(40,894) |
$ |
50,808 |
||||
|
(Loss) earnings per share |
||||||||
|
Basic |
$ |
(1.18) |
$ |
1.90 |
||||
|
Diluted |
$ |
(1.18) |
$ |
1.90 |
||||
|
Weighted average number of common shares outstanding |
||||||||
|
Basic |
34,575 |
26,801 |
||||||
|
Diluted |
34,575 |
26,801 |
||||||
|
SandRidge Energy, Inc. and Subsidiaries | |||||||
|
Condensed Consolidated Balance Sheets (Unaudited) | |||||||
|
(In thousands) | |||||||
|
March 31, |
December 31, | ||||||
|
ASSETS |
|||||||
|
Current assets |
|||||||
|
Cash and cash equivalents |
$ |
27,013 |
$ |
99,143 |
|||
|
Restricted cash - other |
2,165 |
2,165 |
|||||
|
Accounts receivable, net |
67,992 |
71,277 |
|||||
|
Derivative contracts |
— |
1,310 |
|||||
|
Prepaid expenses |
4,241 |
5,248 |
|||||
|
Other current assets |
11,288 |
15,954 |
|||||
|
Total current assets |
112,699 |
195,097 |
|||||
|
Oil and natural gas properties, using full cost method of accounting |
|||||||
|
Proved |
1,103,921 |
1,056,806 |
|||||
|
Unproved |
91,793 |
100,884 |
|||||
|
Less: accumulated depreciation, depletion and impairment |
(486,645) |
(460,431) |
|||||
|
709,069 |
697,259 |
||||||
|
Other property, plant and equipment, net |
216,865 |
225,981 |
|||||
|
Other assets |
1,343 |
1,290 |
|||||
|
Total assets |
$ |
1,039,976 |
$ |
1,119,627 |
|||
|
LIABILITIES AND STOCKHOLDERS' EQUITY |
|||||||
|
Current liabilities |
|||||||
|
Accounts payable and accrued expenses |
$ |
118,866 |
$ |
139,155 |
|||
|
Derivative contracts |
19,952 |
10,627 |
|||||
|
Asset retirement obligations |
40,943 |
41,017 |
|||||
|
Other current liabilities |
425 |
8,115 |
|||||
|
Total current liabilities |
180,186 |
198,914 |
|||||
|
Long-term debt |
— |
37,502 |
|||||
|
Derivative contracts |
5,143 |
3,568 |
|||||
|
Asset retirement obligations |
37,398 |
36,527 |
|||||
|
Other long-term obligations |
3,809 |
3,176 |
|||||
|
Total liabilities |
226,536 |
279,687 |
|||||
|
Commitments and contingencies |
|||||||
|
Stockholders' Equity |
|||||||
|
Common stock, $0.001 par value; 250,000 shares authorized; 35,560 issued and outstanding at March 31, 2018 and 35,650 issued and outstanding at December 31, 2017 |
36 |
36 |
|||||
|
Warrants |
88,500 |
88,500 |
|||||
|
Additional paid-in capital |
1,052,718 |
1,038,324 |
|||||
|
Accumulated deficit |
(327,814) |
(286,920) |
|||||
|
Total stockholders' equity |
813,440 |
839,940 |
|||||
|
Total liabilities and stockholders' equity |
$ |
1,039,976 |
$ |
1,119,627 |
|||
|
SandRidge Energy, Inc. and Subsidiaries | |||||||
|
Condensed Consolidated Cash Flows (Unaudited) | |||||||
|
(In thousands) | |||||||
|
Three Months Ended March 31, | |||||||
|
2018 |
2017 | ||||||
|
CASH FLOWS FROM OPERATING ACTIVITIES |
|||||||
|
Net (loss) income |
$ |
(40,894) |
$ |
50,808 |
|||
|
Adjustments to reconcile net (loss) income to net cash provided by operating activities |
|||||||
|
Provision for doubtful accounts |
(335) |
— |
|||||
|
Depreciation, depletion and amortization |
31,150 |
30,817 |
|||||
|
Impairment |
4,170 |
2,531 |
|||||
|
Debt issuance costs amortization |
117 |
78 |
|||||
|
Amortization of premiums and discounts on debt |
(47) |
(75) |
|||||
|
Gain on extinguishment of debt |
(1,151) |
— |
|||||
|
Loss (gain) on derivative contracts |
18,330 |
(34,183) |
|||||
|
Cash paid on settlement of derivative contracts |
(6,119) |
(638) |
|||||
|
Stock-based compensation |
15,872 |
3,261 |
|||||
|
Other |
(235) |
360 |
|||||
|
Changes in operating assets and liabilities |
9,549 |
11,277 |
|||||
|
Net cash provided by operating activities |
30,407 |
64,236 |
|||||
|
CASH FLOWS FROM INVESTING ACTIVITIES |
|||||||
|
Capital expenditures for property, plant and equipment |
(65,527) |
(43,686) |
|||||
|
Acquisition of assets |
— |
(48,073) |
|||||
|
Proceeds from sale of assets |
955 |
10,203 |
|||||
|
Net cash used in investing activities |
(64,572) |
(81,556) |
|||||
|
CASH FLOWS FROM FINANCING ACTIVITIES |
|||||||
|
Repayments of borrowings |
(36,304) |
— |
|||||
|
Debt issuance costs |
— |
(1,488) |
|||||
|
Cash paid for tax withholdings on vested stock awards |
(1,661) |
(1,424) |
|||||
|
Net cash used in financing activities |
(37,965) |
(2,912) |
|||||
|
NET DECREASE IN CASH, CASH EQUIVALENTS and RESTRICTED CASH |
(72,130) |
(20,232) |
|||||
|
CASH, CASH EQUIVALENTS and RESTRICTED CASH, beginning of year |
101,308 |
174,071 |
|||||
|
CASH, CASH EQUIVALENTS and RESTRICTED CASH, end of period |
$ |
29,178 |
$ |
153,839 |
|||
|
Supplemental Disclosure of Noncash Investing and Financing Activities |
|||||||
|
Change in accrued capital expenditures |
$ |
28,258 |
$ |
2,954 |
|||
|
Equity issued for debt |
$ |
— |
$ |
(268,779) |
|||
Non-GAAP Financial Measures
This press release includes non-GAAP financial measures. These non-GAAP measures are not alternatives to GAAP measures, and you should not consider these non-GAAP measures in isolation or as a substitute for analysis of our results as reported under GAAP. Below is additional disclosure regarding each of the non-GAAP measures used in this press release, including reconciliations to their most directly comparable GAAP measure.
Reconciliation of Cash Provided by Operating Activities to Operating Cash Flow
The Company defines operating cash flow as net cash provided by operating activities before changes in operating assets and liabilities, as shown in the following table. Operating cash flow is a supplemental financial measure used by the Company's management and by securities analysts, investors, lenders, rating agencies and others who follow the industry as an indicator of the Company's ability to internally fund exploration and development activities and to service or incur additional debt. The Company also uses this measure because operating cash flow relates to the timing of cash receipts and disbursements that the Company may not control and may not relate to the period in which the operating activities occurred. Further, operating cash flow allows the Company to compare its operating performance and return on capital with those of other companies without regard to financing methods and capital structure. This measure should not be considered in isolation or as a substitute for net cash provided by operating activities prepared in accordance with GAAP.
|
Three Months Ended March 31, | |||||||
|
2018 |
2017 | ||||||
|
(In thousands) | |||||||
|
Net cash provided by operating activities |
$ |
30,407 |
$ |
64,236 |
|||
|
Changes in operating assets and liabilities |
(9,549) |
(11,277) |
|||||
|
Operating cash flow |
$ |
20,858 |
$ |
52,959 |
|||
Reconciliation of Net (Loss) Income to EBITDA and Adjusted EBITDA
The Company defines EBITDA as net (loss) income before income tax expense, interest expense, depreciation and amortization - other and depreciation and depletion - oil and natural gas. Adjusted EBITDA, as presented herein, is EBITDA excluding items that the Company believes affect the comparability of operating results such as items whose timing and/or amount cannot be reasonably estimated or are non-recurring, as shown in the following tables.
Adjusted EBITDA is presented because management believes it provides useful additional information used by the Company's management and by securities analysts, investors, lenders, ratings agencies and others who follow the industry, for analysis of the Company's financial and operating performance on a recurring basis and the Company's ability to internally fund exploration and development, and to service or incur additional debt. In addition, management believes that adjusted EBITDA is widely used by professional research analysts and others in the valuation, comparison, and investment recommendations of companies in the oil and gas exploration and production industry. The Company's adjusted EBITDA may not be comparable to similarly titled measures used by other companies.
|
Three Months Ended March 31, | |||||||
|
2018 |
2017 | ||||||
|
(In thousands) | |||||||
|
Net (loss) income |
$ |
(40,894) |
$ |
50,808 |
|||
|
Adjusted for |
|||||||
|
Income tax expense |
3 |
3 |
|||||
|
Interest expense |
1,107 |
1,142 |
|||||
|
Depreciation and amortization - other |
3,153 |
3,837 |
|||||
|
Depreciation and depletion - oil and natural gas |
27,997 |
26,980 |
|||||
|
EBITDA |
(8,634) |
82,770 |
|||||
|
Asset impairment |
4,170 |
2,531 |
|||||
|
Stock-based compensation |
2,922 |
3,261 |
|||||
|
Loss (gain) on derivative contracts |
18,330 |
(34,183) |
|||||
|
Cash paid upon settlement of derivative contracts |
(6,119) |
(638) |
|||||
|
Employee termination benefits |
31,587 |
400 |
|||||
|
Restructuring costs |
— |
2,607 |
|||||
|
Gain on extinguishment of debt |
(1,151) |
— |
|||||
|
Shareholder activism costs |
407 |
— |
|||||
|
Other |
(1,175) |
(1,030) |
|||||
|
Adjusted EBITDA |
$ |
40,337 |
$ |
55,718 |
|||
Reconciliation of Cash Provided by Operating Activities to Adjusted EBITDA
|
Three Months Ended March 31, | |||||||
|
2018 |
2017 | ||||||
|
(In thousands) | |||||||
|
Net cash provided by operating activities |
30,407 |
$ |
64,236 |
||||
|
Changes in operating assets and liabilities |
(9,549) |
(11,277) |
|||||
|
Interest expense |
1,107 |
1,142 |
|||||
|
Employee termination benefits (1) |
18,637 |
400 |
|||||
|
Restructuring costs |
— |
2,607 |
|||||
|
Income tax expense |
3 |
3 |
|||||
|
Shareholder activism costs |
407 |
— |
|||||
|
Other |
(675) |
(1,393) |
|||||
|
Adjusted EBITDA |
$ |
40,337 |
$ |
55,718 |
|||
|
(1) Excludes associated stock-based compensation. |
|||||||
Reconciliation of Net (Loss) Income Available to Common Stockholders to Adjusted Net Income Available to Common Stockholders
The Company defines adjusted net (loss) income as net (loss) income excluding items that the Company believes affect the comparability of operating results and are typically excluded from published estimates by the investment community, including items whose timing and/or amount cannot be reasonably estimated or are non-recurring, as shown in the following tables.
Management uses the supplemental measure of adjusted net income as an indicator of the Company's operational trends and performance relative to other oil and natural gas companies and believes it is more comparable to earnings estimates provided by securities analysts. Adjusted net income is not a measure of financial performance under GAAP and should not be considered a substitute for net income available to common stockholders.
|
Three Months Ended March 31, 2018 |
Three Months Ended March 31, 2017 | ||||||||||||||
|
$ |
$/Diluted Share |
$ |
$/Diluted Share | ||||||||||||
|
(In thousands, except per share amounts) | |||||||||||||||
|
Net (loss) income available to common stockholders |
$ |
(40,894) |
$ |
(1.18) |
$ |
50,808 |
$ |
1.90 |
|||||||
|
Asset impairment |
4,170 |
0.12 |
2,531 |
0.09 |
|||||||||||
|
Loss (gain) on derivative contracts |
18,330 |
0.53 |
(34,183) |
(1.28) |
|||||||||||
|
Cash paid upon settlement of derivative contracts |
(6,119) |
(0.18) |
(638) |
(0.02) |
|||||||||||
|
Employee termination benefits |
31,587 |
0.91 |
400 |
0.01 |
|||||||||||
|
Restructuring costs |
— |
— |
2,607 |
0.10 |
|||||||||||
|
Gain on extinguishment of debt |
(1,151) |
(0.03) |
— |
— |
|||||||||||
|
Other |
(581) |
(0.02) |
(637) |
(0.02) |
|||||||||||
|
Adjusted net income available to common stockholders |
$ |
5,342 |
$ |
0.15 |
$ |
20,888 |
$ |
0.78 |
|||||||
|
Basic |
Diluted (1) |
Basic |
Diluted (1) | ||||||||||||
|
Weighted average number of common shares outstanding |
34,575 |
34,637 |
26,801 |
26,801 |
|||||||||||
|
Total adjusted net income per share |
$ |
0.15 |
$ |
0.15 |
$ |
0.78 |
$ |
0.78 |
|||||||
|
(1) Weighted average fully diluted common shares outstanding for certain periods presented includes shares that are considered antidilutive for calculating loss per share in accordance with GAAP. | |||||||||||||||
Reconciliation of G&A to Adjusted G&A
The Company reports and provides guidance on Adjusted G&A per Boe because it believes this measure is commonly used by management, analysts and investors as an indicator of cost management and operating efficiency on a comparable basis from period to period, and to compare and make investment recommendations of companies in the oil and gas industry. This non-GAAP measure allows for the analysis of general and administrative spend without regard to stock-based compensation programs, and other non-recurring cash items which can vary significantly between companies. Adjusted G&A per Boe is not a measure of financial performance under GAAP and should not be considered a substitute for general and administrative expense per Boe. Therefore, the Company's Adjusted G&A per Boe may not be comparable to other companies' similarly titled measures.
The Company defines adjusted G&A as general and administrative expense adjusted for certain non-cash stock-based compensation and other non-recurring items, as shown in the following tables.
|
Three Months Ended March 31, 2018 |
Three Months Ended March 31, 2017 | ||||||||||||||
|
$ |
$/Boe |
$ |
$/Boe | ||||||||||||
|
(In thousands, except per Boe amounts) | |||||||||||||||
|
General and administrative |
$ |
14,022 |
$ |
4.37 |
$ |
19,538 |
$ |
4.91 |
|||||||
|
Stock-based compensation (1) |
(2,921) |
(0.91) |
(3,259) |
(0.82) |
|||||||||||
|
Restructuring costs |
— |
— |
(2,607) |
(0.66) |
|||||||||||
|
Adjusted G&A |
$ |
11,101 |
$ |
3.46 |
$ |
13,672 |
$ |
3.43 |
|||||||
|
(1) |
Three-month period ended March 31, 2018 excludes approximately $13.0 million for the acceleration of certain stock awards. |
For further information, please contact:
Johna Robinson
Investor Relations
SandRidge Energy, Inc.
123 Robert S. Kerr Avenue
Oklahoma City, OK 73102-6406
(405) 429-5515
Cautionary Note to Investors - This press release includes "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, including, but not limited to, the information appearing under the heading "2018 Operational and Capital Expenditure Guidance." These statements express a belief, expectation or intention and are generally accompanied by words that convey projected future events or outcomes. The forward-looking statements include projections and estimates of the Company's corporate strategies, future operations, and development plans and appraisal programs, drilling inventory and locations, estimated oil, and natural gas and natural gas liquids production, reserves, price realizations and differentials, hedging program, projected operating, general and administrative and other costs, projected capital expenditures, tax rates, efficiency and cost reduction initiative outcomes, liquidity and capital structure and infrastructure assessment and investment. We have based these forward-looking statements on our current expectations and assumptions and analyses made by us in light of our experience and our perception of historical trends, current conditions and expected future developments, as well as other factors we believe are appropriate under the circumstances. However, whether actual results and developments will conform with our expectations and predictions is subject to a number of risks and uncertainties, including the volatility of oil and natural gas prices, our success in discovering, estimating, developing and replacing oil and natural gas reserves, actual decline curves and the actual effect of adding compression to natural gas wells, the availability and terms of capital, the ability of counterparties to transactions with us to meet their obligations, our timely execution of hedge transactions, credit conditions of global capital markets, changes in economic conditions, the amount and timing of future development costs, the availability and demand for alternative energy sources, regulatory changes, including those related to carbon dioxide and greenhouse gas emissions, and other factors, many of which are beyond our control. We refer you to the discussion of risk factors in Part I, Item 1A - "Risk Factors" of our Annual Report on Form 10-K and in comparable "Risk Factor" sections of our Quarterly Reports on Form 10-Q filed after such form 10-K. All of the forward-looking statements made in this press release are qualified by these cautionary statements. The actual results or developments anticipated may not be realized or, even if substantially realized, they may not have the expected consequences to or effects on our Company or our business or operations. Such statements are not guarantees of future performance and actual results or developments may differ materially from those projected in the forward-looking statements. We undertake no obligation to update or revise any forward-looking statements.
SandRidge Energy, Inc. (NYSE: SD) is an oil and natural gas exploration and production company headquartered in Oklahoma City, Oklahoma with its principal focus on developing high-return, growth oriented projects in Oklahoma and Colorado. The majority of the Company's production is generated from the Mississippi Lime formation in Oklahoma and Kansas. Development activity is currently focused on the Meramec formation in the NW STACK Play in Oklahoma and multiple oil rich Niobrara benches in the North Park Basin in Colorado.
View original content with multimedia:http://www.prnewswire.com/news-releases/sandridge-energy-inc-reports-financial-and-operational-results-for-first-quarter-2018-300644052.html
SOURCE SandRidge Energy, Inc.
Article Date
5/7/2018SandRidge Energy Expands Board of Directors and Adopts Universal Proxy Card
Source: PR Newswire
Orignial Article: https://www.prnewswire.co...
OKLAHOMA CITY, May 7, 2018 /PRNewswire/ -- SandRidge Energy, Inc. ("SandRidge" or the "Company") (NYSE: SD) today announced that its Board of Directors will increase the number of directors from five to seven, effective immediately prior to the 2018 Annual Meeting of Shareholders.
SandRidge recommends shareholders support its current directors – Sylvia K. Barnes, Kenneth H. Beer, Michael L. Bennett, William M. Griffin and David J. Kornder – at the upcoming Annual Meeting. In addition, the SandRidge Board encourages shareholders to support two independent nominees put forth by Icahn Capital. SandRidge also noted that its Board interviewed and carefully evaluated all of the Icahn Capital nominees and offered to appoint John J. "Jack" Lipinski and Randolph C. Read as directors in connection with a settlement proposal that Icahn Capital refused.
SandRidge also announced it will use a "universal proxy card" at the upcoming annual meeting. The use of a universal proxy card provides shareholders with flexibility and clarity regarding their votes in a contested election and enables shareholders to cast votes for any director nominee on a single card, regardless of who nominated them, without attending the shareholder meeting in person. In this way, each shareholder will be able to vote for those individuals they believe will serve in their best interests as directors. In Icahn Capital's nomination materials dated April 13, 2018, its nominees consented in writing to be named as nominees for directors in SandRidge's proxy statement.
"The changes announced today reflect SandRidge's ongoing commitment to good governance and ensuring the Board consists of highly qualified individuals, focused on the best interest of all shareholders," said Chairman Michael L. Bennett. "We recognize the benefit of independent shareholder representation on the Board and fully support shareholders' ability to elect those candidates they believe will best represent their interests."
Mr. Bennett continued, "We continue to believe that turning control of the Board fully over to the slate of directors proposed by Icahn Capital, including its non-independent employees, presents numerous potential conflicts, and would be detrimental to the Board's ongoing formal evaluation of strategic alternatives. Expanding the Board and enabling shareholders to elect the directors they desire ensures the Board will continue to act in shareholders' best interest."
About SandRidge Energy, Inc.
SandRidge Energy, Inc. (NYSE: SD) is an oil and natural gas exploration and production company headquartered in Oklahoma City, Oklahoma with its principal focus on developing high-return, growth oriented projects in Oklahoma and Colorado. The majority of the Company's production is generated from the Mississippi Lime formation in Oklahoma and Kansas. Development activity is currently focused on the Meramec formation in the NW STACK Play in Oklahoma and multiple oil rich Niobrara benches in the North Park Basin in Colorado.
Important Additional Information
SandRidge, its directors and certain of its executive officers are participants in the solicitation of proxies from the Company's shareholders in connection with the Company's 2018 Annual Meeting of Shareholders (the "2018 Annual Meeting"). The Company has filed a preliminary proxy statement and white proxy card with the U.S. Securities and Exchange Commission (the "SEC") in connection with the solicitation of proxies from the Company's shareholders. SHAREHOLDERS OF THE COMPANY ARE STRONGLY ENCOURAGED TO READ THE COMPANY'S DEFINITIVE PROXY STATEMENT, ACCOMPANYING WHITE PROXY CARD AND ALL OTHER DOCUMENTS FILED WITH THE SEC CAREFULLY AND IN THEIR ENTIRETY WHEN THEY BECOME AVAILABLE AS THEY WILL CONTAIN IMPORTANT INFORMATION. Information regarding the ownership of the Company's directors and executive officers in Company common stock and restricted stock is included in the Company's SEC filings on Forms 3, 4 and 5, which can be found through the Company's website www.sandridgeenergy.com in the section "Investor Relations" or through the SEC's website at www.sec.gov. Information can also be found in the Company's other SEC filings, including the Company's definitive proxy statement for the 2017 Annual Meeting of Shareholders and its Annual Report on Form 10-K for the fiscal year ended December 31, 2017. Updated information regarding the identity of potential participants, and their direct or indirect interests, by security holdings or otherwise, will be set forth in the definitive proxy statement and other materials to be filed with the SEC in connection with the 2018 Annual Meeting. Shareholders will be able to obtain any proxy statement, any amendments or supplements to the proxy statement and other documents filed by the Company with the SEC at no charge at the SEC's website at www.sec.gov. Copies will also be available at no charge at the Company's website at www.sandridgeenergy.com in the section "Investor Relations."
Cautionary Statement Regarding Forward-Looking Statements
This communication contains forward-looking statements concerning our expectations for future performance, including statements regarding the exploration of strategic alternatives, the pursuit of options that maximize shareholder value and the consideration of candidates for nomination to SandRidge's Board of Directors. These "forward-looking statements" are based on currently available information, operating plans and projections about future events and trends. They inherently involve risks and uncertainties that could cause actual results to differ materially from those predicted in such forward looking statements. Such risks and uncertainties include, but are not limited to: uncertain outcome, impact, effects and results of SandRidge's exploration of strategic alternatives; and any changes in general economic or industry specific conditions. SandRidge cautions that the foregoing list of factors is not exclusive. Additional information concerning these and other risk factors is contained in SandRidge's public filings with the SEC, which are available at the SEC's website, http://www.sec.gov. Each forward-looking statement speaks only as of the date of the particular statement, and SandRidge undertakes no obligation to publicly update any of these forward-looking statements to reflect events or circumstances that may arise after the date hereof.
Investor Contact:
Johna Robinson
Investor Relations
SandRidge Energy, Inc.
123 Robert S. Kerr Avenue
Oklahoma City, OK 73102
+1 (405) 429-5515
MacKenzie Partners, Inc.
Dan Burch, +1 (212) 929-5748, dburch@mackenziepartners.com
Paul Schulman, +1 (212) 929-5364, pschulman@mackenziepartners.com
Media Contact:
SVC
Bryan Locke, +1 (312) 895-4700, blocke@sardverb.com
Kelly Kimberly, +1 (832) 680-5120, kkimberly@sardverb.com
View original content with multimedia:http://www.prnewswire.com/news-releases/sandridge-energy-expands-board-of-directors-and-adopts-universal-proxy-card-300643318.html
SOURCE SandRidge Energy, Inc.
Article Date
5/7/2018SandRidge Energy, Inc. Announces 2018 First Quarter Financial and Operational Results Release Date and Conference Call Information
Source: PR Newswire
Orignial Article: https://www.prnewswire.co...
OKLAHOMA CITY, April 24, 2018 /PRNewswire/ -- SandRidge Energy, Inc. (NYSE: SD) will release its 2018 first quarter financial and operational results before the market opens on Tuesday, May 8, 2018. The Company will host a conference call to discuss these results the same day at 8:00am CT.
The telephone number to access the conference call from within the U.S. is (833) 245-9650 and from outside the U.S. is (647) 689-4222. The passcode for the call is 2689729. An audio replay of the call will be available from May 8, 2018 until 11:59pm CT on June 8, 2018. The number to access the conference call replay from within the U.S. is (800) 585-8367 and from outside the U.S. is (416) 621-4642. The passcode for the replay is 2689729.
A live audio webcast of the conference call will also be available via SandRidge's website, www.sandridgeenergy.com, under Investor Relations/Presentations & Events. The webcast will be archived for replay on the company's website for 30 days.
About SandRidge Energy, Inc.
SandRidge Energy, Inc. (NYSE: SD) is an oil and natural gas exploration and production company headquartered in Oklahoma City, Oklahoma with its principal focus on developing high-return, growth oriented projects in Oklahoma and Colorado. The majority of the Company's production is generated from the Mississippi Lime formation across 360,000 net acres in Oklahoma and Kansas. Development activity is currently focused on the Meramec formation in the Northwest STACK Play in Oklahoma and multiple oil rich Niobrara benches across our 125,000 net acres in the North Park Basin in Colorado.
CONTACT:
Johna Robinson
Investor Relations
SandRidge Energy, Inc.
123 Robert S. Kerr Avenue
Oklahoma City, OK 73102
+1 (405) 429-5515
View original content with multimedia:http://www.prnewswire.com/news-releases/sandridge-energy-inc-announces-2018-first-quarter-financial-and-operational-results-release-date-and-conference-call-information-300635777.html
SOURCE SandRidge Energy, Inc.
Article Date
4/24/2018SandRidge Energy Announces Board of Director Changes and Nomination of Directors for Election at 2018 Shareholder Meeting
Source: PR Newswire
Orignial Article: https://www.prnewswire.co...
OKLAHOMA CITY, April 18, 2018 /PRNewswire/ -- SandRidge Energy, Inc. ("SandRidge" or the "Company") (NYSE: SD) today announced that Michael L. Bennett, who has served on the Board since October 2016, has been appointed Chairman, replacing John V. Genova who has elected to retire from the Board, effective immediately. The Company also announced the appointment of Kenneth H. Beer as a new independent director, filling the vacancy following Mr. Genova's retirement.
"Under John's leadership, the SandRidge Board has engaged extensively with shareholders, implemented a new operating plan to reduce costs and capital expenditures, refreshed our Board, and reshaped and refocused the management team. Importantly, we launched a strategic review to maximize shareholder value following our recent rejection of an inadequate merger proposal from another company," said Mr. Bennett.
Mr. Bennett added, "We thank John for his significant contributions to SandRidge and wish him well in his future endeavors. The SandRidge Board and management team are pleased to welcome Ken Beer to our Board. Ken brings extensive oil and gas industry knowledge, financial expertise and corporate management experience. We are confident that he will be a valuable addition to the Board as we move forward to address the challenges and explore the opportunities to realize greater value for all SandRidge shareholders."
SandRidge Recommends Election of its Highly-Qualified Board Nominees
SandRidge also announced that it will be filing its preliminary proxy statement for its 2018 Annual Meeting with the Securities and Exchange Commission shortly. At this year's Annual Meeting shareholders will be given the opportunity to elect directors and vote on three other proposals. The Board believes that the current SandRidge directors are highly qualified to serve the best interests of all SandRidge shareholders. The Company is confident that its nominees – Michael L. Bennett, Sylvia K. Barnes, William M. Griffin, David J. Kornder, and Kenneth H. Beer – possess the necessary qualifications, independence, and knowledge of SandRidge's business and industry risks and drivers to lead the company forward through this evolutionary period.
"Our current directors are committed to executing our strategic plan as we complete the strategic review and continue to act on behalf of all SandRidge shareholders," said Mr. Bennett. "As a Board, we have solicited and acted decisively on feedback from our shareholders to focus on our core assets, cut operating costs, right-size capital expenditures, and initiate a fair and thorough strategic review process to maximize shareholder value. In contrast, by nominating directors, Mr. Icahn has chosen to pursue an obvious attempt to circumvent the thorough and unbiased strategic process currently underway in favor of a narrowly defined, cash-only process potentially rigged for his benefit."
The Board continues to offer Mr. Icahn the full opportunity to participate in its strategic review process and is disappointed that he and his affiliates have determined to bypass the process and attempt to seize control of the Board of Directors without any assurance of a fair premium to all investors. The Board believes that selecting the full, non-independent slate of directors proposed by Mr. Icahn is not in the best interest of all shareholders and presents numerous potential conflicts. The SandRidge Board has made many attempts to constructively discuss possible changes to our Board's composition with Mr. Icahn, including offers to consider independent candidates if he wanted to propose them. While Mr. Icahn has refused to accept any of these offers, as part of our ongoing commitment to good governance, the SandRidge Board will evaluate Mr. Icahn's candidates individually and will consider qualified, independent persons that share the Board's focus on maximizing value and representing the best interests of all shareholders.
Board Supports Continuation of Limited Duration Rights Plan
In order to allow the Board to complete the strategic review process on a timely basis and not allow Icahn or any other party to acquire defacto control of the Company through open market or private purchases, the Board is asking shareholders to vote in favor of retaining the limited duration rights plan in place until November 26, 2018. The limited duration rights plan was adopted with two important features: one that required the directors to put the rights plan to a vote at this Annual Meeting as a condition to it remaining in place until November and a second which exempted any qualifying all-cash tender offers made for all shares of SandRidge's common stock. This feature protects all shareholders from coercive or inadequate offers and gives all shareholders the right to vote on it at this Annual Meeting. This added feature puts the decision on whether to keep the limited duration rights plan in place long enough for the strategic review to be completed fully in the hands of independent shareholders.
Board is Taking Action and Delivering Results
The SandRidge Board is conducting a formal and thorough process to evaluate strategic alternatives, which may include divestment or joint venture opportunities associated with our North Park Basin assets, potential corporate and asset combination options with other companies and/or a sale of the Company. SandRidge has committed to evaluate any credible offers to acquire the Company, including offers from Icahn Capital, and will pursue options that maximize shareholder value.
As the Board conducts this process, SandRidge continues to implement a decisive set of actions focused on maximizing shareholder value which have already delivered clear results:
About Kenneth H. Beer
Mr. Beer has been Executive Vice President and Chief Financial Officer for Stone Energy since January 2011, and previously served as Senior Vice President and Chief Financial Officer since August 2005. Mr. Beer joined Stone Energy after a distinguished career as an energy analyst. Mr. Beer was a partner at the investment banking firm of Johnson Rice & Company, where he served as director of research and a senior energy analyst. Prior to joining Johnson Rice in 1992, he spent five years as an energy analyst and investment banker at Howard Weil Incorporated and prior to that, two years as an associate at the Boston Consulting Group. Mr. Beer received an A.B. degree in Economics from Dartmouth College in 1979 and an M.B.A. from Stanford University in 1983.
About SandRidge Energy, Inc.
SandRidge Energy, Inc. (NYSE: SD) is an oil and natural gas exploration and production company headquartered in Oklahoma City, Oklahoma with its principal focus on developing high-return, growth oriented projects in Oklahoma and Colorado. The majority of the Company's production is generated from the Mississippi Lime formation across 360,000 net acres in Oklahoma and Kansas. Development activity is currently focused on the Meramec formation in the Northwest STACK Play in Oklahoma and multiple oil rich Niobrara benches across our 125,000 net acres in the North Park Basin in Colorado.
Important Additional Information
SandRidge, its directors and certain of its executive officers are participants in the solicitation of proxies from the Company's shareholders in connection with the Company's 2018 Annual Meeting of Shareholders (the "2018 Annual Meeting"). The Company intends to file a proxy statement and white proxy card with the U.S. Securities and Exchange Commission (the "SEC") in connection with any such solicitation of proxies from the Company's shareholders. SHAREHOLDERS OF THE COMPANY ARE STRONGLY ENCOURAGED TO READ SUCH PROXY STATEMENT, ACCOMPANYING WHITE PROXY CARD AND ALL OTHER DOCUMENTS FILED WITH THE SEC CAREFULLY AND IN THEIR ENTIRETY WHEN THEY BECOME AVAILABLE AS THEY WILL CONTAIN IMPORTANT INFORMATION. Information regarding the ownership of the Company's directors and executive officers in Company common stock and restricted stock is included in the Company's SEC filings on Forms 3, 4 and 5, which can be found through the Company's website www.sandridgeenergy.com in the section "Investor Relations" or through the SEC's website at www.sec.gov. Information can also be found in the Company's other SEC filings, including the Company's definitive proxy statement for the 2017 Annual Meeting of Shareholders and its Annual Report on Form 10-K for the fiscal year ended December 31, 2017. Updated information regarding the identity of potential participants, and their direct or indirect interests, by security holdings or otherwise, will be set forth in the definitive proxy statement and other materials to be filed with the SEC in connection with the 2018 Annual Meeting. Shareholders will be able to obtain any proxy statement, any amendments or supplements to the proxy statement and other documents filed by the Company with the SEC at no charge at the SEC's website at www.sec.gov. Copies will also be available at no charge at the Company's website at www.sandridgeenergy.com in the section "Investor Relations."
Cautionary Statement Regarding Forward-Looking Statements
This communication contains forward-looking statements concerning our expectations for future performance, including statements regarding the exploration of strategic alternatives, the pursuit of options that maximize shareholder value and the consideration of candidates for nomination to SandRidge's Board of Directors. These "forward-looking statements" are based on currently available information, operating plans and projections about future events and trends. They inherently involve risks and uncertainties that could cause actual results to differ materially from those predicted in such forward looking statements. Such risks and uncertainties include, but are not limited to: uncertain outcome, impact, effects and results of SandRidge's exploration of strategic alternatives; and any changes in general economic or industry specific conditions. SandRidge cautions that the foregoing list of factors is not exclusive. Additional information concerning these and other risk factors is contained in SandRidge's public filings with the SEC, which are available at the SEC's website, http://www.sec.gov. Each forward-looking statement speaks only as of the date of the particular statement, and SandRidge undertakes no obligation to publicly update any of these forward-looking statements to reflect events or circumstances that may arise after the date hereof.
Investor Contact:
Johna Robinson
Investor Relations
SandRidge Energy, Inc.
123 Robert S. Kerr Avenue Oklahoma City, OK 73102
+1 (405) 429-5515
MacKenzie Partners, Inc.
Dan Burch, +1 (212) 929-5748, dburch@mackenziepartners.com
Paul Schulman, +1 (212) 929-5364, pschulman@mackenziepartners.com
Media Contact:
SVC
Bryan Locke, +1 (312) 895-4700, blocke@sardverb.com
Kelly Kimberly, +1 (832) 680-5120, kkimberly@sardverb.com
View original content with multimedia:http://www.prnewswire.com/news-releases/sandridge-energy-announces-board-of-director-changes-and-nomination-of-directors-for-election-at-2018-shareholder-meeting-300632603.html
SOURCE SandRidge Energy, Inc.
Article Date
4/18/20182/21/2018 - SandRidge Energy, Inc. Reports Financial and Operational Results for Fourth Quarter and Full Year of 2017
SandRidge Energy, Inc. Reports Financial and Operational Results for Fourth Quarter and Full Year of 2017
Source: PR Newswire
Orignial Article: https://www.prnewswire.co...
OKLAHOMA CITY, Feb. 21, 2018 /PRNewswire/ -- SandRidge Energy, Inc. (the "Company" or "SandRidge") (NYSE:SD) today announced financial and operational results for the quarter and fiscal year ended December 31, 2017. Additionally, the Company will host a conference call to discuss these results on February 22, at 8:00 a.m. CT (833-245-9650, International: 647-689-4222 – passcode: 4489951). Presentation slides will be available on the Company's website, www.sandridgeenergy.com, under Investor Relations/Presentations & Events.
Highlights During 2017 Include:
Net Income of $47 Million and Adjusted Net Income of $52 Million for 2017
EBITDA of $175 Million and Adjusted EBITDA of $193 Million for 2017
Proved Reserves at Year End 2017 of 178 MMBoe with 17% Increase in Proved Oil Reserves Over Year End 2016
SEC Total Proved PV-10 of $749 Million ($835 Million Using Year End Strip Pricing), 71% Increase Over Year End 2016
Production of 14.9 MMBoe at High End of Guidance for 2017
Oil Production Increase of 73 MBo or 8% in Fourth Quarter 2017 Over Third Quarter 2017
Bill Griffin, President and CEO said, "SandRidge enters 2018 with a revised strategy and strong platform for economic growth. I step into this role with a full and determined commitment to work diligently with our veteran, senior executive team to quickly implement the announced G&A reductions, while maintaining core competencies and shifting organizational focus. 2017 was a year of solid operating performance, delivering within, or exceeding our production and cost guidance. Importantly, the NPV-10 of our total proved reserve base increased to $835 million when utilizing year-end strip pricing. SandRidge has tremendous potential moving forward. We are taking steps for meaningful improvements in our cash flow margins and we have a significant undeveloped acreage position and prospect inventory. These facts, in combination with a strong and clean balance sheet, give us significant optionality to capture the most attractive opportunities and create meaningful value."
Financial Results
Fourth Quarter
For the fourth quarter, the Company reported a net loss of $19 million, or $0.54 per share, and net cash provided by operating activities of $33 million. When adjusting these reported amounts for items that are typically excluded by the investment community on the basis that such items affect the comparability of results, the Company's "adjusted net income" amounted to $12 million, or $0.34 per share, and "operating cash flow" totaled $41 million. Earnings before interest, income taxes, depreciation, depletion, and amortization, adjusted for certain other items, otherwise referred to as "adjusted EBITDA," for the fourth quarter was $49 million.(1)
Full Year
For the full year of 2017, the Company reported net income of $47 million, or $1.44 per share, and net cash provided by operating activities of $181 million. Adjusted net income amounted to $52 million, or $1.61 per share, and operating cash flow totaled $183 million. Adjusted EBITDA for the full year was $193 million. (1)
|
1) The Company has defined and reconciled certain non-GAAP financial measures including adjusted net income, operating cash flow, EBITDA, adjusted EBITDA, PV-10 and adjusted G&A expense and current net debt, to the most directly comparable GAAP financial measures in supporting tables at the conclusion of this press release under the "Non-GAAP Financial Measures" beginning on page 15. |
Liquidity & Capital Structure
As of February 15, 2018, the Company's total liquidity was $496 million, which includes $78 million of cash and $418 million capacity under the credit facility, net of outstanding letters of credit.
The Company currently has no funds drawn under its credit facility and has provided notice that it intends to repay in full its $38 million building note on February 24, 2018. Interest on the building note is scheduled to increase from 8% to 10% in October 2018. Following repayment of the building note, the Company will have no outstanding long-term debt.
Hedging
For 2018, 86% of the Company's expected liquids production is hedged (at the midpoint of guidance) using derivative instruments for approximately 3.8 million barrels of oil at an average NYMEX WTI price of $55.75. In light of the high correlation between NGL and NYMEX WTI prices, the Company manages a portion of its NGL price exposure using NYMEX WTI contracts at a three-to-one (3:1) NGL to crude ratio. For 2018, the Company also has approximately 17.3 billion cubic feet of natural gas (54% of the midpoint of our guidance) hedged at an average price of $3.16 per MMBtu. For 2019, the Company has approximately 1.8 million barrels of oil hedged at an average WTI price of $54.29.
Operational Results and Activity
Production totaled 3.5 MMBoe (29% oil, 22% NGLs and 49% natural gas) for the fourth quarter, and 14.9 MMBoe for the full year of 2017, at the high end of guidance (14.2-14.9 MMBoe). Oil production grew 8% during the fourth quarter to 1,027 MBo from 954 MBo in the third quarter. The Company averaged two rigs in the NW STACK targeting the Meramec and one rig targeting multiple benches of the Niobrara in the North Park Basin during the quarter. Capital expenditures were $80 million during the quarter, bringing the total for the year to $248 million (excluding acquisitions) compared to 2017 guidance of $250-260 million.
Mid-Continent Assets in Oklahoma and Kansas
In the fourth quarter, production in the Mid-Continent totaled 3.2 MMBoe (23% oil). The Company averaged two rigs in the NW STACK targeting the Meramec and drilled three wells (two SRLs and one XRL). Of the three wells drilled, two were under the previously announced Drilling Participation Agreement. The Company brought eight wells online (six SRLs and two XRLs), and the wells with available 30-Day IPs averaged 565 Boepd (72% oil) for SRLs and 770 Boepd (73% oil) for XRLs.
In 2017, the Company drilled eight XRLs and nine SRLs in the NW STACK targeting the Meramec with one to two rigs. Of the 17 wells drilled, three were under the Drilling Participation Agreement that primarily covers Major and Woodward counties. Drilling and completion costs for SRLs and XRLs are currently $4.4 million and $6.5 million, respectively.
Niobrara Asset in North Park Basin, Jackson County, Colorado
Oil production in the North Park Basin totaled 201 MBo for the fourth quarter. During the quarter, the Company averaged one rig targeting multiple benches in the Niobrara, drilled three XRLs and brought three XRLs online. Two of the XRLs brought online had available 30-Day IPs averaging 1,109 Boepd (91% oil).
In 2017, the Company drilled eight XRLs and brought five wells to sales with one rig in North Park, confirming all four Niobrara benches (A, B, C and D) productive. Commercial productivity was confirmed in the B, C and D benches, while further determination of the A bench commerciality is ongoing. The Company has drilled the first four wells of an eight well spacing test, evaluating the B, C and D benches in a wine rack configuration. The Company will drill the remaining four wells of the test during the second quarter of 2018.
Other Operational Activities
During the fourth quarter, Permian Central Basin Platform properties produced 119 MBoe (1.3 MBoepd, 81% oil, 12% NGLs, 7% natural gas).
Year End 2017 Estimated Proved Reserves
The Company's total estimated SEC proved reserves as of December 31, 2017 were 178 MMBoe, an increase of 8% year over year. Reserves increased due to reserve additions and pricing revisions, with a 130% reserve replacement ratio (excluding pricing adjustments). SEC proved reserves PV-10 was $749 million, an increase of 71% year over year. SEC pricing used in the preparation of the December 31, 2017 reserves was $51.34 per Bbl for oil and $2.98 per MMBtu for natural gas, before adjustments.
For comparative purposes, utilizing NYMEX forward closing prices for oil and natural gas on December 29, 2017 (the last trading day of 2017), total NYMEX strip-based proved reserves at December 31, 2017 were 181 MMBoe, with a PV-10 of $835 million. NYMEX strip-based proved reserves are calculated based on the SEC proved reserves estimation methodology, but applying NYMEX strip prices rather than SEC pricing. NYMEX strip-based PV-10 uses annual average prices for oil and natural gas shown in the NYMEX Strip Pricing table below.
|
Oil MBbls |
NGLs MBbls |
Gas MMcf |
Equivalent |
Standardized | |||||||||||||
|
Proved Reserves, December 31, 2016 |
52,884 |
33,607 |
464,782 |
163,955 |
$ |
438 |
|||||||||||
|
Revisions |
804 |
2,628 |
44,679 |
10,879 |
|||||||||||||
|
Purchases |
18 |
70 |
683 |
202 |
|||||||||||||
|
Extensions & Additions |
12,446 |
1,914 |
30,080 |
19,373 |
|||||||||||||
|
Sales of Assets |
(204) |
(529) |
(7,055) |
(1,909) |
|||||||||||||
|
Production |
(4,157) |
(3,376) |
(44,237) |
(14,906) |
|||||||||||||
|
Proved Reserves, December 31, 2017 |
61,791 |
34,314 |
488,932 |
177,594 |
$ |
749 |
|||||||||||
|
1) Equivalent Boe are calculated using an energy equivalent ratio of six Mcf of natural gas to one Bbl of oil. Using an energy-equivalent ratio does not factor in price differences and energy-equivalent prices may differ significantly among produced products. | ||||||||||||||||
SEC Proved Reserves and NYMEX Strip-Based Proved Reserves
|
YE 2017@SEC Pricing1 |
YE 2017@ NYMEX Strip Pricing2 | |||||||||
|
Equivalent MBoe |
Standardized |
Equivalent MBoe |
PV-10 $MM | |||||||
|
Developed |
123,765 |
$574 |
126,675 |
$630 | ||||||
|
Undeveloped |
53,829 |
$175 |
53,905 |
$206 | ||||||
|
Total Proved |
177,594 |
$749 |
180,580 |
$835 | ||||||
|
1) SEC Pricing remains flat for reserve life at $51.34/Bo & $2.98/MMBtu | ||||||||||
|
2) NYMEX Strip pricing as of December 29, 2017, shown in table below | ||||||||||
|
NYMEX Strip Pricing (as of 12/29/2017) | ||||
|
Year |
Oil |
Gas | ||
|
2017 |
$50.96 |
$3.11 | ||
|
2018 |
$59.40 |
$2.83 | ||
|
2019 |
$55.94 |
$2.81 | ||
|
2020 |
$53.60 |
$2.82 | ||
|
2021 |
$52.20 |
$2.85 | ||
|
2022 |
$51.66 |
$2.89 | ||
|
2023+ |
$52.44 |
$3.08 | ||
2018 Operational and Capital Expenditure Guidance
The Company is currently running one drilling rig in the NW STACK under its Drilling Participation Agreement as well as one rig in the North Park Basin. Capital allocation opportunities based on total return are also under review to exploit high-graded Mississippian Lime locations. The 2018 capital expenditure guidance range is $180 - $190 million. As previously announced, the Company is in the process of instituting changes in its organizational structure to efficiently execute its strategic objectives. These changes are expected to reduce ongoing G&A cash expenses by one-third to $36 - $39 million per year. At these new levels of expense, G&A cash expenses will have been cut by more than half since the Company's emergence from bankruptcy in October 2016. Production and other operational guidance detail for the full year of 2018 can be found below.
|
Guidance |
||
|
Projection as of |
||
|
February 21, 2018 |
||
|
Production |
||
|
Oil (MMBbls) |
3.4 - 3.6 |
|
|
Natural Gas Liquids (MMBbls) |
2.6 - 2.8 |
|
|
Total Liquids (MMBbls) |
6.0 - 6.4 |
|
|
Natural Gas (Bcf) |
31.5 - 33.0 |
|
|
Total (MMBoe) |
11.3 - 11.9 |
|
|
Price Realization |
||
|
Oil (per Bbl) |
$2.80 |
|
|
Natural Gas Liquids (realized % of NYMEX WTI) |
33% |
|
|
Natural Gas (per MMBtu) |
$1.20 |
|
|
Expenses |
||
|
LOE |
$95 - $105 million |
|
|
Adjusted G&A Expense1 |
$41 - $44 million |
|
|
% of Revenue |
||
|
Production Taxes |
4.80% |
|
|
Capital Expenditures ($ in millions) | ||
|
Drilling and Completion |
||
|
Mid-Continent |
$6 - $8 |
|
|
North Park Basin |
76 - 84 |
|
|
Other2 |
34 |
|
|
Total Drilling and Completion |
$116 - $126 |
|
|
Other E&P |
||
|
Land, G&G, and Seismic |
$15 |
|
|
Infrastructure3 |
15 |
|
|
Workover |
25 |
|
|
Capitalized G&A and Interest |
8 |
|
|
Total Other Exploration and Production |
$63 |
|
|
General Corporate |
1 |
|
|
Total Capital Expenditures |
$180 - $190 |
|
|
(excluding acquisitions and plugging and abandonment) |
||
|
1) |
Adjusted G&A expense is a non-GAAP financial measure. The Company has defined this measure at the conclusion of this press release under "Non-GAAP Financial Measures" beginning on page 15. Information to reconcile this non-GAAP financial measure to the most directly comparable GAAP financial measure is not available at this time, as management is unable to forecast the excluded items for future periods. |
|
2) |
Primarily 2017 Carryover |
|
3) |
Includes Production facilities, Pipeline ROW and Electrical |
2017 Actual Results vs. 2017 Capital Expenditure and Operational Guidance
The table below presents the actual results of the Company's operations and capital expenditures for the full year of 2017 in comparison to its previous guidance, provided on November 1, 2017.
|
FY 2017 Actuals |
FY 2017 |
Delta | |||||||||||||
|
Production |
|||||||||||||||
|
Oil (MMBbls) |
4.2 |
4.2 |
0.0 | ||||||||||||
|
Natural Gas Liquids (MMBbls) |
3.4 |
3.2 |
0.2 | ||||||||||||
|
Total Liquids (MMBbls) |
7.6 |
7.4 |
0.2 | ||||||||||||
|
Natural Gas (Bcf) |
44.2 |
42.8 |
1.5 | ||||||||||||
|
Total (MMBoe) |
14.9 |
14.5 |
0.4 | ||||||||||||
|
Cost per Boe |
|||||||||||||||
|
LOE |
$6.89 |
$7.08 |
(0.19) | ||||||||||||
|
Adjusted G&A Expense1 |
$3.72 |
$4.10 |
(0.38) | ||||||||||||
|
Capital Expenditures ($ in Millions) | |||||||||||||||
|
Drilling and Completion |
|||||||||||||||
|
Mid-Continent |
$ |
66 |
$ |
63 |
$ |
3 | |||||||||
|
North Park Basin |
56 |
63 |
(6) | ||||||||||||
|
Other2 |
22 |
20 |
2 | ||||||||||||
|
Total Drilling and Completion |
144 |
145 |
(1) | ||||||||||||
|
Other E&P |
|||||||||||||||
|
Land, G&G, and Seismic |
48 |
46 |
2 | ||||||||||||
|
Infrastructure3 |
15 |
18 |
(3) | ||||||||||||
|
Workovers |
28 |
30 |
(2) | ||||||||||||
|
Capitalized G&A and Interest |
12 |
14 |
(2) | ||||||||||||
|
Total Other Exploration and Production |
102 |
108 |
(6) | ||||||||||||
|
General Corporate |
1 |
2 |
(1) | ||||||||||||
|
Total Capital Expenditures (excluding acquisitions and plugging and abandonment) |
$ |
248 |
$ |
255 |
$ |
(7) | |||||||||
|
1) Adjusted G&A expense is a non-GAAP financial measure. The Company has defined this measure at the conclusion of this press release under the "Non-GAAP Financial Measures" beginning on page 15. Information to reconcile this non-GAAP financial measure to the most directly comparable GAAP financial measure is not available at this time, as management is unable to forecast the excluded items for future periods. | |||||||||||||||
|
2) 2016 Carryover, Coring, Non-Op and SWD | |||||||||||||||
|
3) Includes Production facilities, Pipeline ROW and Electrical | |||||||||||||||
Operational and Financial Statistics
Upon emergence from Chapter 11 reorganization on October 4, 2016, the Company elected to adopt fresh start accounting effective October 1, 2016. As a result of the application of fresh start accounting and the effects of the implementation of the plan of reorganization, the financial statements on or after October 1, 2016 are not comparable with the financial statements prior to that date. References to the "Successor" refer to SandRidge subsequent to adoption of fresh start accounting. References to the "Predecessor" refer to SandRidge prior to adoption of fresh start accounting.
Information regarding the Company's production, pricing, costs and earnings is presented below:
|
Successor |
Successor |
Predecessor | ||||||||||||||||||
|
Three Months |
Year Ended |
Combined |
Period from |
Period from | ||||||||||||||||
|
December 31, 2017 |
||||||||||||||||||||
|
Production - Total |
||||||||||||||||||||
|
Oil (MBbl) |
1,027 |
4,157 |
5,529 |
1,214 |
4,315 |
|||||||||||||||
|
NGL (MBbl) |
775 |
3,376 |
4,357 |
999 |
3,358 |
|||||||||||||||
|
Natural Gas (MMcf) |
10,354 |
44,237 |
56,895 |
12,771 |
44,124 |
|||||||||||||||
|
Oil equivalent (MBoe) |
3,528 |
14,906 |
19,369 |
— |
4,342 |
15,027 |
||||||||||||||
|
Daily production (MBoed) |
38.3 |
40.8 |
52.9 |
47.2 |
54.8 |
|||||||||||||||
|
Average price per unit |
||||||||||||||||||||
|
Realized oil price per barrel - as reported |
$ |
53.31 |
$ |
48.72 |
$ |
39.09 |
$ |
47.03 |
$ |
36.85 |
||||||||||
|
Realized impact of derivatives per barrel |
(2.54) |
1.03 |
12.74 |
7.56 |
14.20 |
|||||||||||||||
|
Net realized price per barrel |
$ |
50.77 |
$ |
49.75 |
$ |
51.83 |
$ |
54.59 |
$ |
51.05 |
||||||||||
|
Realized NGL price per barrel - as reported |
$ |
23.69 |
$ |
18.16 |
$ |
13.15 |
$ |
14.77 |
$ |
12.67 |
||||||||||
|
Realized impact of derivatives per barrel |
— |
— |
— |
— |
— |
|||||||||||||||
|
Net realized price per barrel |
$ |
23.69 |
$ |
18.16 |
$ |
13.15 |
$ |
14.77 |
$ |
12.67 |
||||||||||
|
Realized natural gas price per Mcf - as reported |
$ |
1.92 |
$ |
2.09 |
$ |
1.84 |
$ |
2.07 |
$ |
1.78 |
||||||||||
|
Realized impact of derivatives per Mcf |
0.21 |
0.06 |
(0.03) |
(0.11) |
(0.01) |
|||||||||||||||
|
Net realized price per Mcf |
$ |
2.13 |
$ |
2.15 |
$ |
1.81 |
$ |
1.96 |
$ |
1.77 |
||||||||||
|
Realized price per Boe - as reported |
$ |
26.35 |
$ |
23.90 |
$ |
19.53 |
$ |
22.64 |
$ |
18.63 |
||||||||||
|
Net realized price per Boe - including impact of derivatives |
$ |
26.23 |
$ |
24.38 |
$ |
23.08 |
$ |
24.41 |
$ |
22.70 |
||||||||||
|
Average cost per Boe |
||||||||||||||||||||
|
Lease operating (1) |
$ |
7.29 |
$ |
6.89 |
$ |
7.98 |
$ |
5.76 |
$ |
8.63 |
||||||||||
|
Production taxes |
$ |
1.19 |
$ |
0.92 |
$ |
0.45 |
$ |
0.61 |
$ |
0.41 |
||||||||||
|
Depletion (2) |
$ |
8.66 |
$ |
7.92 |
$ |
6.56 |
$ |
8.31 |
$ |
6.05 |
||||||||||
|
Earnings per share |
||||||||||||||||||||
|
(Loss) earnings per share applicable to common stockholders |
||||||||||||||||||||
|
Basic |
$ |
(0.54) |
$ |
1.45 |
$ |
(17.61) |
$ |
2.01 |
||||||||||||
|
Diluted |
$ |
(0.54) |
$ |
1.44 |
$ |
(17.61) |
$ |
2.01 |
||||||||||||
|
Adjusted net income (loss) per share available to common stockholders |
||||||||||||||||||||
|
Basic |
$ |
0.34 |
$ |
1.62 |
$ |
1.53 |
$ |
(0.13) |
||||||||||||
|
Diluted |
$ |
0.34 |
$ |
1.61 |
$ |
0.86 |
$ |
(0.13) |
||||||||||||
|
Weighted average number of shares outstanding (in thousands) |
||||||||||||||||||||
|
Basic |
34,494 |
32,442 |
18,967 |
708,928 |
||||||||||||||||
|
Diluted (3) |
34,547 |
32,663 |
33,573 |
708,928 |
||||||||||||||||
|
(1) |
Transportation costs are presented as a reduction of revenue by the Successor Company compared to the Predecessor Company's presentation of these costs as lease operating expenses. |
|
(2) |
Includes accretion of asset retirement obligation. |
|
(3) |
Includes shares considered antidilutive for calculating loss per share in accordance with GAAP. |
Capital Expenditures
The table below presents actual results of the Company's capital expenditures for the three months and full year periods ended December 31, 2017 at the same level of detail as its full year capital expenditure guidance.
|
Three Months Ended |
Year Ended | ||||||
|
December 31, 2017 |
December 31, 2017 | ||||||
|
(In thousands) |
(In thousands) | ||||||
|
Drilling and Completion |
|||||||
|
Mid-Continent |
$ |
18,312 |
$ |
65,959 |
|||
|
North Park Basin |
31,449 |
56,230 |
|||||
|
Other1 |
3,870 |
22,245 |
|||||
|
Total Drilling and Completion |
53,631 |
144,435 |
|||||
|
Other E&P |
|||||||
|
Land, G&G, and Seismic |
7,718 |
47,633 |
|||||
|
Infrastructure2 |
9,970 |
14,759 |
|||||
|
Workovers |
6,241 |
27,908 |
|||||
|
Capitalized G&A and Interest |
2,748 |
12,151 |
|||||
|
Total Other Exploration and Production |
26,677 |
102,452 |
|||||
|
General Corporate |
(49) |
1,358 |
|||||
|
Total Capital Expenditures |
$ |
80,260 |
$ |
248,244 |
|||
|
(excluding acquisitions and plugging and abandonment) |
|||||||
|
1) 2016 Carryover, Coring, Non-Op and SWD | |||||||
|
2) Infrastructure - Production facilities, Pipeline ROW and Electrical |
Derivative Contracts
The table below sets forth the Company's consolidated oil and natural gas price swaps for 2018 and 2019 as of February 21, 2018:
|
Quarter Ending |
||||||||||
|
3/31/2018 |
6/30/2018 |
9/30/2018 |
12/31/2018 |
FY 2018 | ||||||
|
WTI Swaps: |
||||||||||
|
Total Volume (MMBbls) |
1.05 |
1.00 |
0.92 |
0.83 |
3.80 | |||||
|
Daily Volume (MBblspd) |
11.7 |
11.0 |
10.0 |
9.0 |
10.4 | |||||
|
Swap Price ($/bbl) |
$55.46 |
$55.50 |
$56.04 |
$56.12 |
$55.75 | |||||
|
Natural Gas Swaps: |
||||||||||
|
Total Volume (Bcf) |
6.30 |
3.64 |
3.68 |
3.68 |
17.30 | |||||
|
Daily Volume (MMBtupd) |
70.0 |
40.0 |
40.0 |
40.0 |
47.4 | |||||
|
Swap Price ($/MMBtu) |
$3.24 |
$3.11 |
$3.11 |
$3.11 |
$3.16 | |||||
|
3/31/2019 |
6/30/2019 |
9/30/2019 |
12/31/2019 |
FY 2019 | ||||||
|
WTI Swaps: |
||||||||||
|
Total Volume (MMBbls) |
0.45 |
0.46 |
0.46 |
0.46 |
1.83 | |||||
|
Daily Volume (MBblspd) |
5.0 |
5.0 |
5.0 |
5.0 |
5.0 | |||||
|
Swap Price ($/bbl) |
$54.29 |
$54.29 |
$54.29 |
$54.29 |
$54.29 | |||||
Capitalization
The Company's capital structure as of December 31, 2017 and December 31, 2016 is presented below:
|
December 31, |
December 31, | ||||||
|
2017 |
2016 | ||||||
|
(In thousands) | |||||||
|
Cash, cash equivalents and restricted cash |
$ |
101,308 |
$ |
174,071 |
|||
|
Credit facility |
$ |
— |
$ |
— |
|||
|
Building note |
37,502 |
36,528 |
|||||
|
Mandatorily convertible 0% notes |
— |
268,780 |
|||||
|
Total debt |
37,502 |
305,308 |
|||||
|
Stockholders' equity |
|||||||
|
Common stock |
36 |
20 |
|||||
|
Warrants |
88,500 |
88,381 |
|||||
|
Additional paid-in capital |
1,038,324 |
758,498 |
|||||
|
Accumulated deficit |
(286,920) |
(333,982) |
|||||
|
Total SandRidge Energy, Inc. stockholders' equity |
839,940 |
512,917 |
|||||
|
Total capitalization |
$ |
877,442 |
$ |
818,225 |
|||
|
SandRidge Energy, Inc. and Subsidiaries Condensed Consolidated Statements of Operations | ||||||||||||||||
|
(In thousands, except per share amounts) | ||||||||||||||||
|
Successor |
Predecessor | |||||||||||||||
|
Year Ended |
Period from |
Period from |
Year Ended | |||||||||||||
|
Revenues |
||||||||||||||||
|
Oil, natural gas and NGL |
$ |
356,210 |
$ |
98,307 |
$ |
279,971 |
$ |
707,434 |
||||||||
|
Other |
1,089 |
149 |
13,838 |
61,275 |
||||||||||||
|
Total revenues |
357,299 |
98,456 |
293,809 |
768,709 |
||||||||||||
|
Expenses |
||||||||||||||||
|
Production |
102,728 |
24,997 |
129,608 |
308,701 |
||||||||||||
|
Production taxes |
13,644 |
2,643 |
6,107 |
15,440 |
||||||||||||
|
Depreciation and depletion—oil and natural gas |
118,035 |
36,061 |
90,978 |
324,390 |
||||||||||||
|
Depreciation and amortization—other |
13,852 |
3,922 |
21,323 |
47,382 |
||||||||||||
|
Impairment |
4,019 |
319,087 |
718,194 |
4,534,689 |
||||||||||||
|
General and administrative |
76,024 |
9,837 |
116,091 |
137,715 |
||||||||||||
|
Terminated merger costs |
8,162 |
— |
— |
— |
||||||||||||
|
Employee termination benefits |
4,815 |
12,334 |
18,356 |
12,451 |
||||||||||||
|
(Gain) loss on derivative contracts |
(24,090) |
25,652 |
4,823 |
(73,061) |
||||||||||||
|
Loss on settlement of contract |
— |
— |
90,184 |
50,976 |
||||||||||||
|
Other operating expenses |
479 |
268 |
4,348 |
52,704 |
||||||||||||
|
Total expenses |
317,668 |
434,801 |
1,200,012 |
5,411,387 |
||||||||||||
|
Income (loss) from operations |
39,631 |
(336,345) |
(906,203) |
(4,642,678) |
||||||||||||
|
Other (expense) income |
||||||||||||||||
|
Interest expense |
(3,868) |
(372) |
(126,099) |
(321,421) |
||||||||||||
|
Gain on extinguishment of debt |
— |
— |
41,179 |
641,131 |
||||||||||||
|
Gain on reorganization items, net |
— |
— |
2,430,599 |
— |
||||||||||||
|
Other income, net |
2,550 |
2,744 |
1,332 |
2,040 |
||||||||||||
|
Total other (expense) income |
(1,318) |
2,372 |
2,347,011 |
321,750 |
||||||||||||
|
Income (loss) before income taxes |
38,313 |
(333,973) |
1,440,808 |
(4,320,928) |
||||||||||||
|
Income tax (benefit) expense |
(8,749) |
9 |
11 |
123 |
||||||||||||
|
Net income (loss) |
47,062 |
(333,982) |
1,440,797 |
(4,321,051) |
||||||||||||
|
Less: net loss attributable to noncontrolling interest |
— |
— |
— |
(623,506) |
||||||||||||
|
Net income (loss) attributable to SandRidge Energy, Inc. |
47,062 |
(333,982) |
1,440,797 |
(3,697,545) |
||||||||||||
|
Preferred stock dividends |
— |
— |
16,321 |
37,950 |
||||||||||||
|
Income available (loss applicable) to SandRidge Energy, Inc. common stockholders |
$ |
47,062 |
$ |
(333,982) |
$ |
1,424,476 |
$ |
(3,735,495) |
||||||||
|
Earnings (loss) per share |
||||||||||||||||
|
Basic |
$ |
1.45 |
$ |
(17.61) |
$ |
2.01 |
$ |
(7.16) |
||||||||
|
Diluted |
$ |
1.44 |
$ |
(17.61) |
$ |
2.01 |
$ |
(7.16) |
||||||||
|
Weighted average number of common shares outstanding |
||||||||||||||||
|
Basic |
32,442 |
18,967 |
708,928 |
521,936 |
||||||||||||
|
Diluted |
32,663 |
18,967 |
708,928 |
521,936 |
||||||||||||
|
SandRidge Energy, Inc. and Subsidiaries Condensed Consolidated Balance Sheets | |||||||
|
(In thousands) | |||||||
|
December 31, |
December 31, | ||||||
|
2017 |
2016 | ||||||
|
ASSETS |
|||||||
|
Current assets |
|||||||
|
Cash and cash equivalents |
$ |
99,143 |
$ |
121,231 |
|||
|
Restricted cash - collateral |
— |
50,000 |
|||||
|
Restricted cash - other |
2,165 |
2,840 |
|||||
|
Accounts receivable, net |
71,277 |
74,097 |
|||||
|
Derivative contracts |
1,310 |
— |
|||||
|
Prepaid expenses |
5,248 |
5,375 |
|||||
|
Other current assets |
15,954 |
3,633 |
|||||
|
Total current assets |
195,097 |
257,176 |
|||||
|
Oil and natural gas properties, using full cost method of accounting |
|||||||
|
Proved (includes development and project costs excluded from amortization of $16.7 million at December 31, 2016) |
1,056,806 |
840,201 |
|||||
|
Unproved |
100,884 |
74,937 |
|||||
|
Less: accumulated depreciation, depletion and impairment |
(460,431) |
(353,030) |
|||||
|
697,259 |
562,108 |
||||||
|
Other property, plant and equipment, net |
225,981 |
255,824 |
|||||
|
Other assets |
1,290 |
6,284 |
|||||
|
Total assets |
$ |
1,119,627 |
$ |
1,081,392 |
|||
|
LIABILITIES AND STOCKHOLDERS' EQUITY |
|||||||
|
Current liabilities |
|||||||
|
Accounts payable and accrued expenses |
$ |
139,155 |
$ |
116,517 |
|||
|
Derivative contracts |
10,627 |
27,538 |
|||||
|
Asset retirement obligations |
41,017 |
66,154 |
|||||
|
Other current liabilities |
8,115 |
3,497 |
|||||
|
Total current liabilities |
198,914 |
213,706 |
|||||
|
Long-term debt |
37,502 |
305,308 |
|||||
|
Derivative contracts |
3,568 |
2,176 |
|||||
|
Asset retirement obligations |
36,527 |
40,327 |
|||||
|
Other long-term obligations |
3,176 |
6,958 |
|||||
|
Total liabilities |
279,687 |
568,475 |
|||||
|
Commitments and contingencies (Note 15) |
|||||||
|
Stockholders' Equity |
|||||||
|
Common stock, $0.001 par value; 250,000 shares authorized; 35,650 issued and outstanding at December 31, 2017 and 21,042 issued and 19,635 outstanding at December 31, 2016 |
36 |
20 |
|||||
|
Warrants |
88,500 |
88,381 |
|||||
|
Additional paid-in capital |
1,038,324 |
758,498 |
|||||
|
Accumulated deficit |
(286,920) |
(333,982) |
|||||
|
Total stockholders' equity |
839,940 |
512,917 |
|||||
|
Total liabilities and stockholders' equity |
$ |
1,119,627 |
$ |
1,081,392 |
|||
|
SandRidge Energy, Inc. and Subsidiaries Condensed Consolidated Cash Flows | ||||||||||||||||
|
(In thousands) | ||||||||||||||||
|
Successor |
Predecessor | |||||||||||||||
|
Year Ended |
Period from |
Period from |
Year Ended | |||||||||||||
|
CASH FLOWS FROM OPERATING ACTIVITIES |
||||||||||||||||
|
Net income (loss) |
$ |
47,062 |
$ |
(333,982) |
$ |
1,440,797 |
$ |
(4,321,051) |
||||||||
|
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities |
||||||||||||||||
|
Provision for doubtful accounts |
406 |
(13,166) |
16,704 |
— |
||||||||||||
|
Depreciation, depletion and amortization |
131,887 |
39,983 |
112,301 |
371,772 |
||||||||||||
|
Impairment |
4,019 |
319,087 |
718,194 |
4,534,689 |
||||||||||||
|
Gain on reorganization items, net |
— |
— |
(2,442,436) |
— |
||||||||||||
|
Debt issuance costs amortization |
430 |
— |
4,996 |
11,884 |
||||||||||||
|
Amortization of discount, net of premium, on debt |
(330) |
(81) |
2,734 |
3,130 |
||||||||||||
|
Gain on extinguishment of debt |
— |
— |
(41,179) |
(641,131) |
||||||||||||
|
Write off of debt issuance costs |
— |
— |
— |
7,108 |
||||||||||||
|
(Gain) loss on debt derivatives |
— |
— |
(1,324) |
10,377 |
||||||||||||
|
Cash paid for early conversion of convertible notes |
— |
— |
(33,452) |
(32,741) |
||||||||||||
|
(Gain) loss on derivative contracts |
(24,090) |
25,652 |
4,823 |
(73,061) |
||||||||||||
|
Cash received on settlement of derivative contracts |
7,260 |
7,698 |
72,608 |
327,702 |
||||||||||||
|
Loss on settlement of contract |
— |
— |
90,184 |
50,976 |
||||||||||||
|
Cash paid on settlement of contract |
— |
— |
(11,000) |
(24,889) |
||||||||||||
|
Stock-based compensation |
15,750 |
6,250 |
9,075 |
18,380 |
||||||||||||
|
Other |
344 |
717 |
(3,260) |
2,842 |
||||||||||||
|
Changes in operating assets and liabilities increasing (decreasing) cash |
||||||||||||||||
|
Deconsolidation of noncontrolling interest |
— |
— |
(9,654) |
— |
||||||||||||
|
Receivables |
115 |
12,872 |
36,116 |
201,907 |
||||||||||||
|
Prepaid expenses |
127 |
(1,079) |
(5,681) |
1,148 |
||||||||||||
|
Other current assets |
191 |
(260) |
(181) |
12,710 |
||||||||||||
|
Other assets and liabilities, net |
4,186 |
1,505 |
(7,542) |
2,239 |
||||||||||||
|
Accounts payable and accrued expenses |
(2,199) |
990 |
(3,595) |
(86,470) |
||||||||||||
|
Asset retirement obligations |
(3,979) |
(591) |
(61,305) |
(3,984) |
||||||||||||
|
Net cash provided by (used in) operating activities |
181,179 |
65,595 |
(112,077) |
373,537 |
||||||||||||
|
CASH FLOWS FROM INVESTING ACTIVITIES |
||||||||||||||||
|
Capital expenditures for property, plant and equipment |
(219,246) |
(51,676) |
(186,452) |
(879,201) |
||||||||||||
|
Acquisitions of assets |
(48,312) |
— |
(1,328) |
(216,943) |
||||||||||||
|
Proceeds from sale of assets |
21,834 |
11,841 |
20,090 |
56,504 |
||||||||||||
|
Net cash used in investing activities |
(245,724) |
(39,835) |
(167,690) |
(1,039,640) |
||||||||||||
|
CASH FLOWS FROM FINANCING ACTIVITIES |
||||||||||||||||
|
Proceeds from borrowings |
— |
— |
489,198 |
2,065,000 |
||||||||||||
|
Repayments of borrowings |
— |
(414,954) |
(74,243) |
(939,466) |
||||||||||||
|
Debt issuance costs |
(1,488) |
— |
(333) |
(53,244) |
||||||||||||
|
Proceeds from building mortgage |
— |
— |
26,847 |
— |
||||||||||||
|
Payment of mortgage proceeds and cash recovery to debt holders |
— |
— |
(33,874) |
— |
||||||||||||
|
Noncontrolling interest distributions |
— |
— |
— |
(138,305) |
||||||||||||
|
Cash paid for tax withholdings on vested stock awards |
(6,730) |
(110) |
(44) |
(3,535) |
||||||||||||
|
Dividends paid—preferred |
— |
— |
— |
(11,262) |
||||||||||||
|
Other |
— |
3 |
— |
1,250 |
||||||||||||
|
Net cash (used in) provided by financing activities |
(8,218) |
(415,061) |
407,551 |
920,438 |
||||||||||||
|
NET (DECREASE) INCREASE IN CASH, CASH EQUIVALENTS and RESTRICTED CASH |
(72,763) |
(389,301) |
127,784 |
254,335 |
||||||||||||
|
CASH, CASH EQUIVALENTS and RESTRICTED CASH, beginning of year |
174,071 |
563,372 |
435,588 |
181,253 |
||||||||||||
|
CASH, CASH EQUIVALENTS and RESTRICTED CASH end of year |
$ |
101,308 |
$ |
174,071 |
$ |
563,372 |
$ |
435,588 |
||||||||
Conference Call Information
The Company will host a conference call to discuss these results on Thursday, February 22, 2018 at 8:00 am CT. The telephone number to access the conference call from within the U.S. is (833) 245-9650 and from outside the U.S. is (647) 689-4222. The passcode for the call is 4489951. An audio replay of the call will be available from February 22, 2018 until 11:59 pm CT on March 24, 2018. The number to access the conference call replay from within the U.S. is (800) 585-8367 and from outside the U.S. is (416) 621-4642. The passcode for the replay is 4489951.
A live audio webcast of the conference call will also be available via SandRidge's website, www.sandridgeenergy.com, under Investor Relations/Presentation & Events. The webcast will be archived for replay on the Company's website for 30 days.
Non-GAAP Financial Measures
This press release includes non-GAAP financial measures. These non-GAAP measures are not alternatives to GAAP measures, and you should not consider these non-GAAP measures in isolation or as a substitute for analysis of our results as reported under GAAP. Below is additional disclosure regarding each of the non-GAAP measures used in this press release, including reconciliations to their most directly comparable GAAP measure.
Reconciliation of Cash Provided by (Used in) Operating Activities to Operating Cash Flow
The Company defines operating cash flow as net cash provided by (used in) operating activities before changes in operating assets and liabilities, as shown in the following table. Operating cash flow is a supplemental financial measure used by the Company's management and by securities analysts, investors, lenders, rating agencies and others who follow the industry as an indicator of the Company's ability to internally fund exploration and development activities and to service or incur additional debt. The Company also uses this measure because operating cash flow relates to the timing of cash receipts and disbursements that the Company may not control and may not relate to the period in which the operating activities occurred. Further, operating cash flow allows the Company to compare its operating performance and return on capital with those of other companies without regard to financing methods and capital structure. This measure should not be considered in isolation or as a substitute for net cash provided by operating activities prepared in accordance with GAAP.
|
Successor |
Successor |
Predecessor | |||||||||||||||||
|
Three Months |
Year Ended |
Combined |
Period from |
Period from | |||||||||||||||
|
December 31, 2017 |
|||||||||||||||||||
|
(In thousands) | |||||||||||||||||||
|
Net cash provided by (used in) operating activities |
$ |
33,273 |
$ |
181,179 |
$ |
(46,482) |
$ |
65,595 |
$ |
(112,077) |
|||||||||
|
Changes in operating assets and liabilities |
7,258 |
1,559 |
37,759 |
(13,437) |
51,196 |
||||||||||||||
|
Operating cash flow |
$ |
40,531 |
$ |
182,738 |
$ |
(8,723) |
$ |
52,158 |
$ |
(60,881) |
|||||||||
Reconciliation of Net (Loss) Income to EBITDA and Adjusted EBITDA
The Company defines EBITDA as net (loss) income before income tax (benefit) expense, interest expense, depreciation and amortization - other and depreciation and depletion - oil and natural gas. Adjusted EBITDA, as presented herein, is EBITDA excluding items that the Company believes affect the comparability of operating results such as items whose timing and/or amount cannot be reasonably estimated or are non-recurring, as shown in the following tables.
Adjusted EBITDA is presented because management believes it provides useful additional information used by the Company's management and by securities analysts, investors, lenders, ratings agencies and others who follow the industry, for analysis of the Company's financial and operating performance on a recurring basis and the Company's ability to internally fund exploration and development, and to service or incur additional debt. In addition, management believes that adjusted EBITDA is widely used by professional research analysts and others in the valuation, comparison, and investment recommendations of companies in the oil and gas exploration and production industry. The Company's adjusted EBITDA may not be comparable to similarly titled measures used by other companies.
|
Successor |
Successor |
Predecessor | |||||||||||||||||
|
Three Months |
Year Ended |
Combined |
Period from |
Period from | |||||||||||||||
|
December 31, 2017 |
|||||||||||||||||||
|
(In thousands) | |||||||||||||||||||
|
Net (loss) income |
$ |
(18,760) |
$ |
47,062 |
$ |
1,106,815 |
$ |
(333,982) |
$ |
1,440,797 |
|||||||||
|
Adjusted for |
|||||||||||||||||||
|
Income tax (benefit) expense |
(253) |
(8,749) |
20 |
9 |
11 |
||||||||||||||
|
Interest expense |
1,377 |
4,886 |
129,107 |
1,590 |
127,517 |
||||||||||||||
|
Depreciation and amortization - other |
3,123 |
13,852 |
25,245 |
3,922 |
21,323 |
||||||||||||||
|
Depreciation and depletion - oil and natural gas |
30,549 |
118,035 |
127,039 |
36,061 |
90,978 |
||||||||||||||
|
EBITDA |
16,036 |
175,086 |
1,388,226 |
(292,400) |
1,680,626 |
||||||||||||||
|
Asset impairment |
544 |
4,019 |
1,037,281 |
319,087 |
718,194 |
||||||||||||||
|
Stock-based compensation |
3,134 |
13,923 |
6,257 |
1,966 |
4,291 |
||||||||||||||
|
Loss (gain) on derivative contracts |
21,934 |
(24,090) |
30,475 |
25,652 |
4,823 |
||||||||||||||
|
Cash (paid) received upon settlement of derivative contracts (1) |
(440) |
7,260 |
80,306 |
13,455 |
66,851 |
||||||||||||||
|
Loss on settlement of contract |
— |
— |
90,184 |
— |
90,184 |
||||||||||||||
|
Restructuring costs (2) |
— |
8,554 |
53,544 |
17,138 |
36,406 |
||||||||||||||
|
Drilling participation agreement transaction costs |
20 |
2,901 |
— |
— |
— |
||||||||||||||
|
Terminated merger costs |
8,162 |
8,162 |
— |
— |
— |
||||||||||||||
|
Oil field services - exit costs |
— |
— |
2,428 |
— |
2,428 |
||||||||||||||
|
Gain on extinguishment of debt |
— |
— |
(41,179) |
— |
(41,179) |
||||||||||||||
|
Gain on reorganization items, net |
— |
— |
(2,430,599) |
— |
(2,430,599) |
||||||||||||||
|
Employee incentive and retention |
— |
— |
22,984 |
2,843 |
20,141 |
||||||||||||||
|
Other |
92 |
(2,620) |
(1,840) |
(16,660) |
14,820 |
||||||||||||||
|
Adjusted EBITDA |
$ |
49,482 |
$ |
193,195 |
$ |
238,067 |
$ |
71,081 |
$ |
166,986 |
|||||||||
|
(1) |
Excludes amounts received for early settlement of contracts in the year ended December 31, 2016. | |||||||||||||||||||
|
(2) |
Includes severance. | |||||||||||||||||||
Reconciliation of Cash Provided by (Used in) Operating Activities to Adjusted EBITDA
|
Successor |
Successor |
Predecessor | |||||||||||||||||
|
Three Months |
Year Ended |
Combined |
Period from |
Period from | |||||||||||||||
|
December 31, 2017 |
|||||||||||||||||||
|
(In thousands) | |||||||||||||||||||
|
Net cash provided by (used in) operating activities |
$ |
33,273 |
$ |
181,179 |
$ |
(46,482) |
65,595 |
$ |
(112,077) |
||||||||||
|
Changes in operating assets and liabilities |
7,258 |
1,559 |
37,759 |
(13,437) |
51,196 |
||||||||||||||
|
Interest expense |
1,377 |
4,886 |
129,107 |
1,590 |
127,517 |
||||||||||||||
|
Cash received on early settlement of derivative contracts |
— |
— |
(17,894) |
— |
(17,894) |
||||||||||||||
|
Contractual maturity reached on previous early settlements |
— |
— |
17,893 |
5,756 |
12,137 |
||||||||||||||
|
Cash paid on early conversion of convertible notes |
— |
— |
33,452 |
— |
33,452 |
||||||||||||||
|
Cash paid on settlement of contract |
— |
— |
11,000 |
— |
11,000 |
||||||||||||||
|
Gain on convertible notes derivative liability |
— |
— |
1,324 |
— |
1,324 |
||||||||||||||
|
Oil field services - exit costs (1) |
— |
— |
2,386 |
— |
2,386 |
||||||||||||||
|
Restructuring costs (1)(2) |
— |
6,729 |
44,180 |
12,852 |
31,328 |
||||||||||||||
|
Drilling participation agreement transaction costs |
20 |
2,901 |
— |
— |
— |
||||||||||||||
|
Income tax (benefit) expense |
(253) |
(8,749) |
— |
— |
— |
||||||||||||||
|
Terminated merger costs |
8,162 |
8,162 |
— |
— |
— |
||||||||||||||
|
Cash paid for reorganization items |
— |
— |
12,483 |
— |
12,483 |
||||||||||||||
|
Employee incentive and retention |
— |
— |
22,984 |
2,843 |
20,141 |
||||||||||||||
|
Other |
(355) |
(3,472) |
(10,125) |
(4,118) |
(6,007) |
||||||||||||||
|
Adjusted EBITDA |
$ |
49,482 |
$ |
193,195 |
$ |
238,067 |
$ |
71,081 |
$ |
166,986 |
|||||||||
|
(1) |
Excludes associated stock-based compensation. |
|
(2) |
Includes severance. |
Reconciliation of Net (Loss) Income Available to Common Stockholders to Adjusted Net Income Available to Common Stockholders
The Company defines adjusted net (loss) income as net (loss) income excluding items that the Company believes affect the comparability of operating results and are typically excluded from published estimates by the investment community, including items whose timing and/or amount cannot be reasonably estimated or are non-recurring, as shown in the following tables.
Management uses the supplemental measure of adjusted net (loss) income as an indicator of the Company's operational trends and performance relative to other oil and natural gas companies and believes it is more comparable to earnings estimates provided by securities analysts. Adjusted net (loss) income is not a measure of financial performance under GAAP and should not be considered a substitute for net (loss) income available to common stockholders.
|
Successor | |||||||||||||||
|
Three Months Ended December 31, 2017 |
Year Ended December 31, 2017 | ||||||||||||||
|
$ |
$/Diluted Share |
$ |
$/Diluted Share | ||||||||||||
|
(In thousands, except per share amounts) | |||||||||||||||
|
Net (loss) income available to common stockholders |
$ |
(18,760) |
$ |
(0.54) |
$ |
47,062 |
$ |
1.44 |
|||||||
|
Asset impairment |
544 |
0.02 |
4,019 |
0.12 |
|||||||||||
|
Loss (gain) on derivative contracts |
21,934 |
0.62 |
(24,090) |
(0.73) |
|||||||||||
|
Cash (paid) received upon settlement of derivative contracts |
(440) |
(0.01) |
7,260 |
0.22 |
|||||||||||
|
Restructuring costs (1) |
— |
— |
8,554 |
0.26 |
|||||||||||
|
Drilling participation agreement transaction costs |
20 |
— |
2,901 |
0.09 |
|||||||||||
|
Terminated merger costs |
8,162 |
0.24 |
8,162 |
0.25 |
|||||||||||
|
Other |
246 |
0.01 |
(1,396) |
(0.04) |
|||||||||||
|
Adjusted net income available to common stockholders |
$ |
11,706 |
$ |
0.34 |
$ |
52,472 |
$ |
1.61 |
|||||||
|
Basic |
Diluted (2) |
Basic |
Diluted (2) | ||||||||||||
|
Weighted average number of common shares outstanding |
34,494 |
34,547 |
32,442 |
32,663 |
|||||||||||
|
Total adjusted net income per share |
$ |
0.34 |
$ |
0.34 |
$ |
1.62 |
$ |
1.61 |
|||||||
|
(1) |
Includes severance. | |||||||||||||||
|
(2) |
Weighted average fully diluted common shares outstanding for certain periods presented includes shares that are considered antidilutive for calculating loss per share in accordance with GAAP. | |||||||||||||||
Reconciliation of Net Income (Loss) Available to Common Stockholders to Adjusted Net (Loss) Income Available to Common Stockholders
|
Combined |
Successor |
Predecessor | |||||||||||||||||
|
Period from October 2, 2016 |
Period from January 1, 2016 | ||||||||||||||||||
|
$ |
$ |
$/Diluted Share |
$ |
$/Diluted Share | |||||||||||||||
|
(In thousands, except per share amounts) | |||||||||||||||||||
|
Net income (loss) available to common stockholders |
$ |
1,090,494 |
$ |
(333,982) |
$ |
(9.95) |
$ |
1,424,476 |
$ |
2.01 |
|||||||||
|
Asset impairment |
1,037,281 |
319,087 |
9.50 |
718,194 |
1.01 |
||||||||||||||
|
Loss on derivative contracts |
30,475 |
25,652 |
0.76 |
4,823 |
0.01 |
||||||||||||||
|
Cash received upon settlement of derivative contracts (1) |
80,306 |
13,455 |
0.40 |
66,851 |
0.09 |
||||||||||||||
|
Gain on convertible notes derivative liability |
(1,324) |
— |
— |
(1,324) |
— |
||||||||||||||
|
Loss on settlement of contract |
90,184 |
— |
— |
90,184 |
0.13 |
||||||||||||||
|
Restructuring costs (2) |
53,544 |
17,138 |
0.51 |
36,406 |
0.05 |
||||||||||||||
|
Oil field services - exit costs |
2,428 |
— |
— |
2,428 |
— |
||||||||||||||
|
Gain on extinguishment of debt |
(41,179) |
— |
— |
(41,179) |
(0.06) |
||||||||||||||
|
Gain on reorganization items, net |
(2,430,599) |
— |
— |
(2,430,599) |
(3.43) |
||||||||||||||
|
Employee incentive and retention |
22,984 |
2,843 |
0.08 |
20,141 |
0.03 |
||||||||||||||
|
Other |
1,565 |
(15,171) |
(0.44) |
16,736 |
0.03 |
||||||||||||||
|
Adjusted net (loss) income available to common stockholders |
$ |
(63,841) |
$ |
29,022 |
$ |
0.86 |
$ |
(92,863) |
$ |
(0.13) |
|||||||||
|
Basic |
Diluted (3) |
Basic |
Diluted (3) | ||||||||||||||||
|
Weighted average number of common shares outstanding |
18,967 |
33,573 |
708,928 |
708,928 |
|||||||||||||||
|
Total adjusted net income (loss) per share |
$ |
1.53 |
$ |
0.86 |
$ |
(0.13) |
$ |
(0.13) |
|||||||||||
|
(1) |
Excludes amounts received for early settlement of contracts in the 2016 periods. | |||||||||||||||||||
|
(2) |
Includes severance. | |||||||||||||||||||
|
(3) |
Weighted average fully diluted common shares outstanding for certain periods presented includes shares that are considered antidilutive for calculating loss per share in accordance with GAAP. | |||||||||||||||||||
Reconciliation of G&A to Adjusted G&A
The Company reports and provides guidance on Adjusted G&A per Boe because it believes this measure is commonly used by management, analysts and investors as an indicator of cost management and operating efficiency on a comparable basis from period to period, compare and make investment recommendations of companies in the oil and gas industry. This non-GAAP measure allows for the analysis of general and administrative spend without regard to stock-based compensation programs, and other non-recurring cash items which can vary significantly between companies. Adjusted G&A per Boe is not a measure of financial performance under GAAP and should not be considered a substitute for general and administrative expense per Boe. Therefore, the Company's Adjusted G&A per Boe may not be comparable to other companies' similarly titled measures.
The Company defines adjusted G&A as general and administrative expense adjusted for certain non-cash stock-based compensation and other non-recurring items, as shown in the following tables.
|
Successor | |||||||||||||||
|
Three Months Ended December 31, 2017 |
Year Ended December 31, 2017 | ||||||||||||||
|
$ |
$/Boe |
$ |
$/Boe | ||||||||||||
|
(In thousands, except per Boe amounts) | |||||||||||||||
|
General and administrative |
$ |
16,840 |
$ |
4.77 |
$ |
76,024 |
$ |
5.10 |
|||||||
|
Stock-based compensation (1) |
(3,134) |
(0.88) |
(13,925) |
(0.94) |
|||||||||||
|
Restructuring costs |
— |
— |
(3,739) |
(0.25) |
|||||||||||
|
Drilling participation agreement transaction costs |
(20) |
(0.01) |
(2,901) |
(0.19) |
|||||||||||
|
Adjusted G&A |
$ |
13,686 |
$ |
3.88 |
$ |
55,459 |
$ |
3.72 |
|||||||
|
Combined Year Ended |
Successor |
Predecessor | |||||||||||||||||||||
|
Period from October 2, 2016 |
Period from January 1, 2016 | ||||||||||||||||||||||
|
$ |
$/Boe |
$ |
$/Boe |
$ |
$/Boe | ||||||||||||||||||
|
(In thousands, except per Boe amounts) | |||||||||||||||||||||||
|
General and administrative |
$ |
125,928 |
$ |
6.50 |
$ |
9,837 |
$ |
2.27 |
$ |
116,091 |
$ |
7.73 |
|||||||||||
|
Stock-based compensation (1) |
(5,963) |
(0.31) |
(1,965) |
(0.45) |
(3,998) |
(0.27) |
|||||||||||||||||
|
Employee incentive and retention |
(22,984) |
(1.19) |
(2,843) |
(0.65) |
(20,141) |
(1.34) |
|||||||||||||||||
|
Restructuring costs |
(23,669) |
(1.22) |
(4,804) |
(1.11) |
(18,865) |
(1.26) |
|||||||||||||||||
|
Doubtful receivable (write-off) recovery |
(3,556) |
(0.18) |
13,166 |
3.02 |
(16,722) |
(1.11) |
|||||||||||||||||
|
Shareholder litigation costs |
(963) |
(0.05) |
— |
— |
(963) |
(0.06) |
|||||||||||||||||
|
Adjusted G&A |
$ |
68,793 |
$ |
3.55 |
$ |
13,391 |
$ |
3.08 |
$ |
55,402 |
$ |
3.69 |
|||||||||||
|
(1) |
Year ended December 31, 2017, Successor 2016 Period and Predecessor 2016 Period exclude $1.8 million, $4.3 million and $5.1 million, respectively, for the acceleration of certain stock awards. |
Reconciliation of PV-10 to Standardized Measure
PV-10 is a non-GAAP financial measure and represents the present value of estimated future cash inflows from proved oil, natural gas and NGL reserves, less future development and production costs, discounted at 10% per annum to reflect timing of future cash flows and using 12-month average prices for the year ended December 31, 2017. PV-10 differs from Standardized Measure because it does not include the effects of income taxes on future net revenues. PV-10 is used by the industry and by management as a reserve asset value measure to compare against past reserve bases and the reserve bases of other business entities. It is useful because its calculation is not dependent on the taxpaying status of the entity. Because of the present value of future income tax discounted at 10% is insignificant, these measures are equivalent.
The PV-10 of strip-based proved reserves is a non-GAAP financial measure and differs from standardized measure because it reflects the estimated proved reserves economically recoverable based on forward NYMEX strip prices rather than SEC pricing and does not include the effects of income taxes on future net revenues. PV-10 of strip-based proved reserves is useful to investors to illustrate the potential value of proved reserves that are economically recoverable in the current commodity price environment rather than SEC prices. Neither the PV-10 of the Company's SEC reserves, the PV-10 of strip-based proved reserves nor the Standardized Measure represents an estimate of fair market value of the Company's oil and natural gas properties.
Net Debt
The Company also uses the term net debt to determine the extent to which the Company's outstanding debt obligations would be satisfied by its cash and cash equivalents on hand. Management believes this metric is useful to investors in determining the Company's current leverage position following recent significant events subsequent to the period.
For further information, please contact:
Johna M. Robinson
Investor Relations
SandRidge Energy, Inc.
123 Robert S. Kerr Avenue
Oklahoma City, OK 73102-6406
(405) 429-5515
Cautionary Note to Investors - This press release includes "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, including, but not limited to, the information appearing under the heading "2018 Operational and Capital Expenditure Guidance." These statements express a belief, expectation or intention and are generally accompanied by words that convey projected future events or outcomes. The forward-looking statements include projections and estimates of the Company's corporate strategies, future operations, and development plans and appraisal programs, projected acreage position, drilling inventory and locations, estimated oil, and natural gas and natural gas liquids production, rates of return, reserves, price realizations and differentials, hedging program, projected operating, general and administrative and other costs, projected capital expenditures, tax rates, efficiency and cost reduction initiative outcomes, liquidity and capital structure and infrastructure assessment and investment. We have based these forward-looking statements on our current expectations and assumptions and analyses made by us in light of our experience and our perception of historical trends, current conditions and expected future developments, as well as other factors we believe are appropriate under the circumstances. However, whether actual results and developments will conform with our expectations and predictions is subject to a number of risks and uncertainties, including the volatility of oil and natural gas prices, our success in discovering, estimating, developing and replacing oil and natural gas reserves, actual decline curves and the actual effect of adding compression to natural gas wells, the availability and terms of capital, the ability of counterparties to transactions with us to meet their obligations, our timely execution of hedge transactions, credit conditions of global capital markets, changes in economic conditions, the amount and timing of future development costs, the availability and demand for alternative energy sources, regulatory changes, including those related to carbon dioxide and greenhouse gas emissions, and other factors, many of which are beyond our control. We refer you to the discussion of risk factors in Part I, Item 1A - "Risk Factors" of our Annual Report on Form 10-K and in comparable "Risk Factor" sections of our Quarterly Reports on Form 10-Q filed after such form 10-K. All of the forward-looking statements made in this press release are qualified by these cautionary statements. The actual results or developments anticipated may not be realized or, even if substantially realized, they may not have the expected consequences to or effects on our Company or our business or operations. Such statements are not guarantees of future performance and actual results or developments may differ materially from those projected in the forward-looking statements. We undertake no obligation to update or revise any forward-looking statements.
SandRidge Energy, Inc. (NYSE: SD) is an oil and natural gas exploration and production company headquartered in Oklahoma City, Oklahoma with its principal focus on developing high-return, growth-oriented projects in the U.S. Mid-Continent and Niobrara Shale.
View original content with multimedia:http://www.prnewswire.com/news-releases/sandridge-energy-inc-reports-financial-and-operational-results-for-fourth-quarter-and-full-year-of-2017-300602265.html
SOURCE SandRidge Energy, Inc.
Article Date
2/21/2018SandRidge Energy, Inc. Announces 2017 Fourth Quarter and Full Year Financial and Operational Results Release Date and Conference Call Information
Source: PR Newswire
Orignial Article: https://www.prnewswire.co...
OKLAHOMA CITY, Feb. 13, 2018 /PRNewswire/ -- SandRidge Energy, Inc. (NYSE: SD) will release its 2017 fourth quarter and full year financial and operational results after the close of trading on the New York Stock Exchange on Wednesday, February 21, 2018.
The company will host a conference call to discuss these results on Thursday, February 22, 2018 at 8:00am CT. The telephone number to access the conference call from within the U.S. is (833) 245-9650 and from outside the U.S. is (647) 689-4222. The passcode for the call is 4489951. An audio replay of the call will be available from February 22, 2018 until 11:59pm CT on March 24, 2018. The number to access the conference call replay from within the U.S. is (800) 585-8367 and from outside the U.S. is (416) 621-4642. The passcode for the replay is 4489951.
A live audio webcast of the conference call will also be available via SandRidge's website, www.sandridgeenergy.com, under Investor Relations/Presentations & Events. The webcast will be archived for replay on the company's website for 30 days.
About SandRidge Energy, Inc.
SandRidge Energy, Inc. (NYSE: SD) is an oil and natural gas exploration and production company headquartered in Oklahoma City, Oklahoma with its principal focus on developing high-return, growth-oriented projects in the U.S. Mid-Continent and Niobrara Shale.
CONTACT:
Johna M. Robinson
Investor Relations
SandRidge Energy, Inc.
123 Robert S. Kerr Avenue
Oklahoma City, OK 73102
+1 (405) 429-5515
View original content with multimedia:http://www.prnewswire.com/news-releases/sandridge-energy-inc-announces-2017-fourth-quarter-and-full-year-financial-and-operational-results-release-date-and-conference-call-information-300598225.html
SOURCE SandRidge Energy, Inc.
Article Date
2/13/2018SandRidge Energy, Inc. Announces The Departure Of Chief Executive Officer And Chief Financial Officer And Appoints Sylvia K. Barnes As An Independent Member Of The Board Of Directors
Source: PR Newswire
Orignial Article: https://www.prnewswire.co...
OKLAHOMA CITY, Feb. 8, 2018 /PRNewswire/ -- The independent directors of SandRidge Energy, Inc. ("SandRidge" or the "Company") (NYSE: SD) today announced that, in light of our new strategic direction, discussions with large shareholders and robust deliberation among the independent members of the Board, now is the right time to begin transitioning to a new leadership team.
James Bennett, the Company's President and Chief Effective Officer, will depart from the Company, effective February 8, 2018. Bill Griffin, who currently serves as an independent director, has agreed to serve as Interim President and Chief Executive Officer while the Company conducts a full review of internal and external candidates. While serving as the Interim President and Chief Executive Officer, Mr. Griffin will continue to serve as a member of the Board.
John V. Genova, Chairman of the Board, stated, "Over the past five years as Chief Executive Officer, James Bennett guided the Company through a challenging period of financial distress. However, as the Company moves forward in a new strategic direction, the Board has determined that the time has come to transition to new leadership. The Board thanks James for his service to the Company."
Mr. Genova continued, "Bill Griffin has extensive senior management, operational and technical experience in the exploration and production industry as well as intimate knowledge of the Company through his service as an independent director. Having personally served on the Board with Bill since October 2016, I am highly confident in his ability as to perform as SandRidge's Interim Chief Executive Officer."
Julian Bott, the Company's Chief Financial Officer, will also depart from the Company, effective at the close of business on the date of filing the Company's 2017 Annual Report on Form 10-K. Mike Johnson, the Company's Chief Accounting Officer, has agreed to serve as Interim Chief Financial Officer.
Mr. Genova noted, "The Board thanks Mr. Bott for his important role on the Company's management team and for establishing a strong financial footing following the Company's emergence from Chapter 11 reorganization. We wish him well in his future endeavors."
Mr. Genova continued, "Mr. Johnson's extensive senior management and accounting experience in the exploration and production industry, including his long service as Chief Accounting Officer of Chesapeake Energy, provides an excellent background to serve as Interim Chief Financial Officer under the Company's new strategic direction."
John Suter will continue in his role as Chief Operating Officer and Philip Warman will remain as General Counsel with an expanded role as an Executive Vice President.
The Board has accepted the recommendation of its Nominating and Governance Committee to appoint Sylvia K. Barnes as an independent member of the Board. The Board will continue to have four independent directors with the appointment of Ms. Barnes, who has valuable experience in capital markets, the energy industry and serving as a director on a public board. Ms. Barnes will replace Mr. Griffin on the Company's Compensation and Audit Committees.
Mr. Genova, who serves as the Chair of the Nominating and Governance Committee, noted, "Following extensive due diligence of Ms. Barnes and an assessment of other potential candidates, we selected Ms. Barnes considering, among other things, her background in the financial and energy industries, her prior service as a public company director and the strength of her interviews and references. Ms. Barnes' appointment also brings added and valuable diversity to our Board."
Ms. Barnes is a Principal and owner of Tanda Resources LLC, a privately-held oil & gas investment and consulting company. From 2011 – 2015, Ms. Barnes served as Managing Director and Group Head for KeyBanc Capital Markets Oil & Gas Investment and Corporate Banking Group and was a member of the firm's Executive Committee. Prior to joining KeyBanc, Ms. Barnes was Head of Energy Investment Banking at Madison Williams, and Managing Director at Merrill Lynch's energy investment banking practice. She joined Merrill as part of the firm's acquisition of Petrie Parkman & Co. From 1994 - 2000, Ms. Barnes worked as Managing Director and SVP for Nesbitt Burns, including serving as head of the firm's U.S. energy investment banking group. Prior to that she worked in various capacities at Nesbitt Burns and its parent company, Bank of Montreal. As a banker Ms. Barnes devoted her career to serving companies in the upstream oil and gas sector and she successfully executed a variety of mergers, acquisitions and divestiture transactions, and advised on public and private equity offerings and private debt and equity placements. Ms. Barnes is a member of the board of directors of Halcon Resources Corporation and serves on the Audit and Reserves Committees. Ms. Barnes began her career as a reservoir engineer for Esso Resources. Ms. Barnes graduated from the University of Manitoba with a Bachelor of Science in Engineering (Dean's List), was a licensed professional engineer in Alberta and earned a Masters of Business Administration in Finance from York University. Ms. Barnes' experience provides her with valuable insights into corporate strategy, capital allocation, equity and debt financing and the assessment and management of risks faced by energy companies. Her qualifications to serve on the board include her extensive financial analysis and transaction experience and knowledge of the oil & gas industry.
About SandRidge Energy, Inc.
SandRidge Energy, Inc. (NYSE: SD) is an oil and natural gas exploration and production company headquartered in Oklahoma City, Oklahoma with its principal focus on developing high-return, growth-oriented projects in the U.S. Mid-Continent and Niobrara Shale.
Cautionary Statement Regarding Forward-Looking Statements
This communication may contain certain "forward-looking statements" under applicable securities laws, including the Private Securities Litigation Reform Act of 1995. These statements are typically identified by words or phrases such as "may," "will," "could," "should," "predict," "potential," "pursue," "outlook," "continue," "anticipate," "estimate," "expect," "project," "intend," "plan," "believe," "target," "forecast," and other words and terms of similar meaning. For example, statements regarding future results regarding the benefits of the strategic initiatives announced, and future financial results and operational plans are forward-looking statements. These forward-looking statements are subject to numerous risks and uncertainties, many of which are beyond the Company's control, which could cause actual benefits, results, effects and timing to differ materially from the results predicted or implied by the statements. Additional information concerning the risk factors faced by the Company is contained in SandRidge's public filings with the Securities and Exchange Commission (the "SEC"), which are available at the SEC's website, http://www.sec.gov. Each forward looking statement speaks only as of the date of the particular statement, and SandRidge undertakes no obligation to publicly update any of these forward-looking statements to reflect events or circumstances that may arise after the date hereof.
Important Additional Information
This communication does not constitute a solicitation of a vote or proxy. In connection with the Company's 2018 Annual Meeting of Shareholders, the Company intends to file a proxy statement and white proxy card with the SEC in connection with any such solicitation of proxies from the Company's shareholders. SHAREHOLDERS OF THE COMPANY ARE STRONGLY ENCOURAGED TO READ SUCH PROXY STATEMENT, ACCOMPANYING WHITE PROXY CARD AND ALL OTHER DOCUMENTS FILED WITH THE SEC CAREFULLY AND IN THEIR ENTIRETY WHEN THEY BECOME AVAILABLE AS THEY WILL CONTAIN IMPORTANT INFORMATION. Information regarding the ownership of the Company's directors and executive officers in Company stock, restricted stock and options is included in the Company's SEC filings on Forms 3, 4, and 5, which can be found through the Company's website www.sandridgeenergy.com in the section "Investor Relations" or through the SEC's website at www.sec.gov. Information can also be found in the Company's other SEC filings, including the Company's definitive proxy statement for the 2017 Annual Meeting of Shareholders and its Annual Report on Form 10-K for the year ended December 31, 2016. Updated information regarding the identity of potential participants, and their direct or indirect interests, by security holdings or otherwise, will be set forth in the definitive proxy statement and other materials to be filed with the SEC in connection with the 2018 Annual Meeting. Shareholders will be able to obtain any proxy statement, any amendments or supplements to the proxy statement and other documents filed by the Company with the SEC at no charge at the SEC's website at www.sec.gov. Copies will also be available at no charge at the Company's website at www.sandridgeenergy.com in the section "Investor Relations."
CONTACT:
Johna Robinson
Investor Relations
SandRidge Energy, Inc.
123 Robert S. Kerr Avenue
Oklahoma City, OK 73102
+1 (405) 429-5515
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SOURCE SandRidge Energy, Inc.
Article Date
2/8/2018SandRidge Energy Issues Letter To Shareholders
Source: PR Newswire
Orignial Article: https://www.prnewswire.co...
OKLAHOMA CITY, Feb. 8, 2018 /PRNewswire/ -- The independent directors of SandRidge Energy, Inc. ("SandRidge" or the "Company") (NYSE: SD) today issued a letter to update shareholders on its strategic objectives.
The text of the letter follows:
Dear Fellow SandRidge Shareholder:
In our January 23rd letter to you, we committed to expanding our dialog with shareholders. This letter is the first of a series of communications delivering on our pledge to carefully consider concerns voiced by shareholders and to develop, implement and communicate plans of action.
In this regard, the Company announced today that it has updated its strategic objectives consistent with market conditions and recent feedback from many of its large shareholders. The objectives emphasize safety, operational excellence, financial discipline and a focus on maximizing asset value and risk-adjusted returns while capturing economic merger and acquisition opportunities. The full text of the Company's strategic objectives is attached to this letter.
Given these updated strategic objectives, the Company is announcing the following:
A Focused Capital Program with Moderate Outspend
The Company's Board of Directors has approved the Company's budget for 2018, which includes $180-$190 million in total capital expenditures, down from $247 million in 2017. The Company will continue a one-rig program in the NW STACK of the Mid-Continent substantially funded by a development agreement that provides an initial $100 million of capital from our financial partner. The Company will also continue a one-rig drilling program in North Park Basin. Both programs are designed to delineate and advance our NW STACK and North Park Basin assets to full field development. The Company will provide further details with respect to production and other operational guidance during its upcoming Fourth Quarter 2017 earnings call.
A Significant Reduction in General and Administrative (G&A) Cash Expense
Consistent with the need for superior financial discipline, the Company is in the process of instituting changes in the organization structure to efficiently execute our strategic objectives. These changes are expected to reduce our ongoing G&A cash expenses by one-third to $36-$39 million per year. At these new levels of expense, G&A will have been cut by more than half since the Company's emergence from bankruptcy in October 2016. The Company will provide updated cost guidance during its upcoming Fourth Quarter 2017 earnings call.
The Company expects these measures to enhance shareholder value and improve its competitiveness in the marketplace. We thank you for your support and look forward to continued dialogue with you, as we and everyone at SandRidge continue to preserve and build lasting shareholder value.
Thank you,
|
John V. Genova |
Michael L. Bennett |
|
Chairman of the Board |
Independent Director |
|
Sylvia K. Barnes |
David J. Kornder |
|
Independent Director |
Independent Director |
SANDRIDGE ENERGY STRATEGIC OBJECTIVES
Operate in a safe, reliable and environmentally responsible manner. Our highest priority is the health and safety of our employees and contractors while protecting the environment in which we operate.
Operating Excellence. We are committed to maintaining a culture and track record of operating excellence as it is essential to capturing cost efficiencies while maximizing the value and return of our oil and gas properties.
Maintain top-quality human resource management, development and utilization. Achieving our strategic objectives is to be accomplished by our employees. It is therefore critical to have development and compensation programs that attract, retain and motivate the types of people we need to succeed.
Financial discipline. Maintaining financial flexibility is a key priority and requires balancing our economic growth objectives with preserving our conservatively leveraged balance sheet. We continually evaluate the appropriate capital allocation to our development program, largely driven by expected rates of return on our various drilling projects balanced with acceptable levels of debt. As the energy sector remains subject to significant volatility in oil and gas prices, we believe maintaining a leverage ratio of no more than two times EBITDA to be an appropriate target. As such, the pace of delineation and development of our emerging North Park Basin and NW Stack assets will be set in part by limiting our capital outspend or our ability to attract financial partners.
Monetize our unutilized or non-core assets and infrastructure. We will seek to divest assets at prices above our retention alternative with the aim of increasing our financial flexibility while focusing on the development of our core assets.
Maximize asset value and risk-adjusted returns. Core to our value proposition is prioritizing projects with the greatest certainty of capturing economic returns well above our cost of capital while growing our oil and gas resource base.
Capture economic merger and acquisition opportunities. We regularly evaluate merger and acquisition opportunities in our existing or complimentary development areas. Any acquisition must be complimentary and accretive to our existing property base. Evaluation criteria will include acquisition structure, synergies, proximity to our existing assets, the fit within our development plans, the stage in development cycle, and the fit of our core competencies and technical expertise. Specifically, our near-term focus will remain on optimizing and growing our existing asset portfolio in Anadarko Basin of the Mid-Continent area and the North Park Basin of Colorado where we have significant operating experience. Use of our stock as a currency in such acquisitions will be primarily limited to acquisitions that carry a similar or lower multiple to our stock.
About SandRidge Energy, Inc.
SandRidge Energy, Inc. (NYSE: SD) is an oil and natural gas exploration and production company headquartered in Oklahoma City, Oklahoma with its principal focus on developing high-return, growth-oriented projects in the U.S. Mid-Continent and Niobrara Shale.
Cautionary Statement Regarding Forward-Looking Statements
This communication may contain certain "forward-looking statements" under applicable securities laws, including the Private Securities Litigation Reform Act of 1995. These statements are typically identified by words or phrases such as "may," "will," "could," "should," "predict," "potential," "pursue," "outlook," "continue," "anticipate," "estimate," "expect," "project," "intend," "plan," "believe," "target," "forecast," and other words and terms of similar meaning. For example, statements regarding future results regarding the benefits of the strategic initiatives announced, and future financial results and operational plans are forward-looking statements. These forward-looking statements are subject to numerous risks and uncertainties, many of which are beyond the Company's control, which could cause actual benefits, results, effects and timing to differ materially from the results predicted or implied by the statements. Additional information concerning the risk factors faced by the Company is contained in SandRidge's public filings with the Securities and Exchange Commission (the "SEC"), which are available at the SEC's website, http://www.sec.gov. Each forward looking statement speaks only as of the date of the particular statement, and SandRidge undertakes no obligation to publicly update any of these forward-looking statements to reflect events or circumstances that may arise after the date hereof.
Important Additional Information
This communication does not constitute a solicitation of a vote or proxy. In connection with the Company's 2018 Annual Meeting of Shareholders, the Company intends to file a proxy statement and white proxy card with the SEC in connection with any such solicitation of proxies from the Company's shareholders. SHAREHOLDERS OF THE COMPANY ARE STRONGLY ENCOURAGED TO READ SUCH PROXY STATEMENT, ACCOMPANYING WHITE PROXY CARD AND ALL OTHER DOCUMENTS FILED WITH THE SEC CAREFULLY AND IN THEIR ENTIRETY WHEN THEY BECOME AVAILABLE AS THEY WILL CONTAIN IMPORTANT INFORMATION. Information regarding the ownership of the Company's directors and executive officers in Company stock, restricted stock and options is included in the Company's SEC filings on Forms 3, 4, and 5, which can be found through the Company's website www.sandridgeenergy.com in the section "Investor Relations" or through the SEC's website at www.sec.gov. Information can also be found in the Company's other SEC filings, including the Company's definitive proxy statement for the 2017 Annual Meeting of Shareholders and its Annual Report on Form 10-K for the year ended December 31, 2016. Updated information regarding the identity of potential participants, and their direct or indirect interests, by security holdings or otherwise, will be set forth in the definitive proxy statement and other materials to be filed with the SEC in connection with the 2018 Annual Meeting. Shareholders will be able to obtain any proxy statement, any amendments or supplements to the proxy statement and other documents filed by the Company with the SEC at no charge at the SEC's website at www.sec.gov. Copies will also be available at no charge at the Company's website at www.sandridgeenergy.com in the section "Investor Relations."
CONTACT:
Johna Robinson
Investor Relations
SandRidge Energy, Inc.
123 Robert S. Kerr Avenue
Oklahoma City, OK 73102
+1 (405) 429-5515
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SOURCE SandRidge Energy, Inc.
Article Date
2/8/2018SandRidge Energy to Review Unsolicited Proposal from Midstates Petroleum
Source: PR Newswire
Orignial Article: https://www.prnewswire.co...
OKLAHOMA CITY, Feb. 7, 2018 /PRNewswire/ -- SandRidge Energy, Inc. ("SandRidge" or the "Company") (NYSE: SD) today confirmed it has received an unsolicited proposal from Midstates Petroleum Company, Inc. (NYSE: MPO) ("Midstates") to combine the two companies in an all stock, at market transaction.
As previously disclosed, SandRidge's independent directors are engaged in an ongoing dialogue with shareholders and are developing a plan of action in line with their commitment to acting in the best interests of all shareholders. The SandRidge Board, in consultation with its independent financial and legal advisors, will carefully review and evaluate Midstates' proposal, taking into account the Company's current strategic plan and standalone prospects.
About SandRidge Energy, Inc.
SandRidge Energy, Inc. (NYSE: SD) is an oil and natural gas exploration and production company headquartered in Oklahoma City, Oklahoma with its principal focus on developing high-return, growth-oriented projects in the U.S. Mid-Continent and Niobrara Shale.
Cautionary Statement Regarding Forward-Looking Statements
This communication may contain certain "forward-looking statements" under applicable securities laws, including the Private Securities Litigation Reform Act of 1995. These statements are typically identified by words or phrases such as "may," "will," "could," "should," "predict," "potential," "pursue," "outlook," "continue," "anticipate," "estimate," "expect," "project," "intend," "plan," "believe," "target," "forecast," and other words and terms of similar meaning. For example, statements regarding future results regarding the benefits of the strategic initiatives announced, and future financial results and operational plans are forward-looking statements. These forward-looking statements are subject to numerous risks and uncertainties, many of which are beyond the Company's control, which could cause actual benefits, results, effects and timing to differ materially from the results predicted or implied by the statements. Additional information concerning the risk factors faced by the Company is contained in SandRidge's public filings with the Securities and Exchange Commission (the "SEC"), which are available at the SEC's website, http://www.sec.gov. Each forward looking statement speaks only as of the date of the particular statement, and SandRidge undertakes no obligation to publicly update any of these forward-looking statements to reflect events or circumstances that may arise after the date hereof.
Investor Contact:
Justin M. Lewellen
Director of Investor Relations
SandRidge Energy, Inc.
123 Robert S. Kerr Avenue
Oklahoma City, OK 73102
+1 (405) 429-5515
MacKenzie Partners, Inc.
Dan Burch, +1 (212) 929-5748, dburch@mackenziepartners.com
Paul Schulman, +1 (212) 929-5364, pschulman@mackenziepartners.com
Media Contact:
SVC
Bryan Locke, +1 (312) 895-4700, blocke@sardverb.com
Kelly Kimberly, +1 (832) 680-5120, kkimberly@sardverb.com
David A Kimmel
Director of Communications
SandRidge Energy, Inc.
123 Robert S. Kerr Ave.
Oklahoma City, OK 73102
+1 (405) 429-5599
View original content with multimedia:http://www.prnewswire.com/news-releases/sandridge-energy-to-review-unsolicited-proposal-from-midstates-petroleum-300594704.html
SOURCE SandRidge Energy, Inc.
Article Date
2/7/2018SandRidge Energy Comments on Letter from Carl Icahn
Source: PR Newswire
Orignial Article: https://www.prnewswire.co...
OKLAHOMA CITY, Jan. 9, 2018 /PRNewswire/ -- SandRidge Energy, Inc. ("SandRidge" or the "Company") (NYSE: SD) today commented on the open letter that was received from Carl Icahn this morning:
The SandRidge Board of Directors and management team value constructive shareholder dialogue and are engaged in ongoing discussions with shareholders, including Mr. Icahn. In this regard, SandRidge's independent board members are scheduled to meet with several major shareholders next week, including Mr. Icahn.
As we have already confirmed in writing to Mr. Icahn on two separate occasions, both publicly in our Form 8-K filed on December 11, 2017 and privately in a letter to his counsel dated December 12, 2017, the short-term rights plan does not prevent shareholders from speaking with each other as long as they do not form a group and comply with federal securities laws.
About SandRidge Energy, Inc.
SandRidge Energy, Inc. (NYSE: SD) is an oil and natural gas exploration and production company headquartered in Oklahoma City, Oklahoma with its current principal focus on developing high-return, growth-oriented projects in the U.S. Mid-Continent and Niobrara Shale.
Cautionary Statement Regarding Forward-Looking Statements
This communication contains certain "forward-looking statements" under applicable securities laws, including the Private Securities Litigation Reform Act of 1995. These statements are typically identified by words or phrases such as "may," "will," "could," "should," "predict," "potential," "pursue," "outlook," "continue," "anticipate," "estimate," "expect," "project," "intend," "plan," "believe," "target," "forecast," and other words and terms of similar meaning. For example, statements regarding the Company's plans to meet with major shareholders, respond to Mr. Icahn's proposal and take any other actions related thereto are forward-looking statements. These forward-looking statements are subject to numerous risks, uncertainties and other factors, which could cause results, effects, actions and timing to differ materially from those predicted or implied by the statements. Readers are cautioned not to place undue reliance on any of these forward-looking statements. Each forward-looking statement speaks only as of the date of the particular statement, and SandRidge undertakes no obligation to publicly update any of these forward-looking statements to reflect events or circumstances that may arise after the date hereof.
Investor Contact:
Justin M. Lewellen
Director of Investor Relations
SandRidge Energy, Inc.
123 Robert S. Kerr Avenue
Oklahoma City, OK 73102
+1 (405) 429-5515
David A Kimmel
Director of Communications
SandRidge Energy, Inc.
123 Robert S. Kerr Ave.
Oklahoma City, OK 73102
+1 (405) 429-5599
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SOURCE SandRidge Energy, Inc.
Article Date
1/9/2018SandRidge Energy Announces Termination of Agreement to Acquire Bonanza Creek Energy
Source: PR Newswire
Orignial Article: https://www.prnewswire.co...
OKLAHOMA CITY, Dec. 28, 2017 /PRNewswire/ -- SandRidge Energy, Inc. (NYSE: SD) ("SandRidge" or the "Company") today announced that it has agreed with Bonanza Creek Energy, Inc. (NYSE: BCEI) ("Bonanza Creek") to terminate its previously announced agreement to acquire Bonanza Creek.
After consultation with SandRidge's largest shareholders, it became clear that the Company would not receive approval for the transaction at the planned special meeting. After careful consideration, the decision was unanimously approved by the Company's Board of Directors and an agreement was reached with Bonanza Creek to mutually terminate the merger agreement.
As part of the mutual termination agreement, SandRidge will reimburse Bonanza Creek for transaction related expenses up to $3.7 million. This payment is consistent with the Company's obligation under the merger agreement should the transaction have been rejected by the Company's shareholders at the special meeting.
About SandRidge Energy, Inc.
SandRidge Energy, Inc. (NYSE: SD) is an oil and natural gas exploration and production company headquartered in Oklahoma City, Oklahoma with its principal focus on developing high-return, growth-oriented projects in the U.S. Mid-Continent and Niobrara Shale.
Investor Contact:
Justin M. Lewellen
Director of Investor Relations
SandRidge Energy, Inc.
123 Robert S. Kerr Avenue
Oklahoma City, OK 73102
+1 (405) 429-5515
MacKenzie Partners, Inc.
Dan Burch, +1 (212) 929-5748, dburch@mackenziepartners.com
Paul Schulman, +1 (212) 929-5364, pschulman@mackenziepartners.com
Media Contact:
SVC
Bryan Locke, +1 (312) 895-4700, blocke@sardverb.com
Kelly Kimberly, +1 (832) 680-5120, kkimberly@sardverb.com
David A Kimmel
Director of Communications
SandRidge Energy, Inc.
123 Robert S. Kerr Ave.
Oklahoma City, OK 73102
+1 (405) 429-5599
View original content with multimedia:http://www.prnewswire.com/news-releases/sandridge-energy-announces-termination-of-agreement-to-acquire-bonanza-creek-energy-300575934.html
SOURCE SandRidge Energy, Inc.
Article Date
12/28/201712/11/2017 - SandRidge Energy Publishes Letter to Shareholders Regarding Strategic Acquisition of Bonanza Creek
SandRidge Energy Publishes Letter to Shareholders Regarding Strategic Acquisition of Bonanza Creek
Source: PR Newswire
Orignial Article: https://www.prnewswire.co...
OKLAHOMA CITY, Dec. 11, 2017 /PRNewswire/ -- SandRidge Energy, Inc. ("SandRidge" or the "Company") (NYSE: SD) today issued a letter to shareholders highlighting the benefits of the acquisition of Bonanza Creek Energy, Inc. (NYSE: BCEI). The Company also announced that it will file a registration statement on Form S-4 today, which will communicate the strategic rationale behind the proposed acquisition and contain other important details and analysis regarding the transaction.
In addition, the Company has launched a dedicated website – www.sandridgeandbonanza.com – with information regarding the transaction.
The text of the letter follows:
Dear Fellow SandRidge Shareholders:
On November 15, 2017, the SandRidge Board of Directors and management team announced the acquisition of Bonanza Creek Energy. This strategic opportunity is immediately accretive and positions us to deliver additional long-term shareholder value by adding high-return and development-ready projects to our Niobrara position. After a detailed and thorough assessment of Bonanza Creek, we determined this acquisition to be in the best long-term interests of our shareholders.
BONANZA CREEK IS A HIGHLY STRATEGIC OPPORTUNITY
The acquisition of Bonanza Creek provides immediate cash flow and high-return development opportunities that allow us to continue generating strong risk-adjusted returns while we delineate our emerging assets.
Our existing assets in the Mid-Continent and Niobrara are in different stages of the development cycle:
This current combination of mature Mississippi Lime assets and emerging North Park and NW STACK assets, in the absence of significant development-ready inventory, results in a higher risk profile. The expansion of our Niobrara position to include Bonanza Creek's DJ Basin assets considerably improves our risk profile by:
These assets will allow us to accelerate returns and grow cash flow while our emerging assets progress to the development phase.
Significantly Strengthens Our Financial Profile
The acquisition results in meaningful benefits compared to the Company's standalone plans:
Strong Balance Sheet with Enhanced Liquidity from New $700 Million Credit Facility
To effect the transaction, we chose to use a measured balance of cash and equity and weighed increasing accretion from funding with cash against pro forma leverage and liquidity. The balance we chose of approximately 53% cash and 47% equity results in significant accretion while maintaining a prudent level of leverage which remains at or below 1.9x over the next three years.
Following the transaction, we expect greater than $300 million of liquidity at closing through a new reserve based loan with an initial borrowing base of $700 million on more favorable terms. To support the new credit facility, our current agent bank has delivered a highly confident letter to the Company supporting these terms. The increased borrowing base of $700 million versus the expected borrowing base of $618 million provides enhanced liquidity at closing and indicates the strength of the combined company's proved reserves.
Operational, Technical and Financial Synergies
The acquisition is expected to generate meaningful operational, technical and financial synergies. Upon closing, we will immediately take the steps necessary to achieve at least $20 million in annual G&A savings and continue to focus on reducing our cost structure. We also expect to capture additional cost savings through operational efficiencies such as:
We also expect to benefit by leveraging the expertise of our combined operational teams to drive improvement in drill-site selection, drilling and completion techniques, well bore design and regulatory and stakeholder relationships across the Niobrara play.
Compelling Acquisition Value
In addition to delivering immediate accretion to cash flow per share and net asset value per share, the transaction is attractively valued. As highlighted in the table below, the $36.00 per share acquisition price is well within the per share valuation ranges implied by Bonanza Creek's net asset value, historical trading range since emerging from bankruptcy and comparable company EBITDA and production multiples. These multiples compare favorably to recently announced acquisitions in the DJ Basin.
|
Bonanza Creek |
Implied Value per Share Range | |
|
Historical Trading Range Since Emergence from Bankruptcy |
$497 million - $812 million |
$24.00 - $39.20 |
|
Aggregate Value to 2018 Consensus EBITDA Estimates |
4.7x - 6.0x |
$31.10 - $39.70 |
|
Aggregate Value to Current Production ($/Boepd) |
$45,000 - $60,000 |
$34.34 - $45.78 |
|
Net Asset Value |
$682 million - $804 million |
$32.91 - $38.79 |
SETTING THE RECORD STRAIGHT
A vocal minority of shareholders have attempted to criticize the acquisition by distorting the facts and misleading the investing public. Their assertions are false and reckless and we believe it is imperative to set the record straight for our investors.
|
Strategy |
• Myth: The Bonanza Creek acquisition is not consistent with SandRidge's stated strategy. |
|
• Fact: The Bonanza Creek acquisition is highly strategic and fits within our stated strategy, which clearly includes opportunistic acquisitions. We articulated our key strategies, including "pursuing opportunistic acquisitions"in Item 1 of our 2017 Annual Report. | |
|
Transaction Premium |
• Myth: SandRidge is paying a 75% premium. |
|
• Fact: The 75% premium calculation is misleading and based on a $421 million deeply discounted valuation in connection with a rights offering, which in no way reflects the public market valuation immediately prior to the transaction. | |
|
• Fact: The transaction actually represents a 17.4% premium to Bonanza Creek's closing price as of November 14, which is easily warranted given the strategic fit of the assets and the $20 million of annual G&A savings and operational synergies we have identified. | |
|
• Fact: The transaction represents only an 8% premium to the equity valuation prepared in connection with Bonanza Creek's restructuring in early 2017, which had a mid-point of $690 million and relied on lower commodity price and total production assumptions than used in our valuation of Bonanza Creek. | |
|
Rights Plan |
• Myth: This rights plan is designed to prevent large shareholders from campaigning against the Bonanza Creek transaction. |
|
• Fact: The rights plan provides no such restriction. It is designed to protect the rights of all SandRidge shareholders, enabling them to fully review the merits of the proposed acquisition of Bonanza Creek and vote on the transaction. It also protects all of our shareholders from anyone gaining control of SandRidge without payment of a control premium. Importantly, the rights plan expires after one year unless terminated earlier by our shareholders at next year's annual meeting. | |
|
Board of Directors |
• Myth: The Board is entrenched. |
|
• Fact: Our independent directors have been in office for just over one year and were vetted and approved by the Company's creditors in connection with its restructuring in 2016. | |
|
• Fact: These same independent directors were reelected at our most recent annual meeting by SandRidge shareholders—most of whom were prior creditors—with greater than 97% of the shares voting in favor. All Board members are subject to election by the shareholders annually. | |
|
• Fact: SandRidge Board members have a strong track record in the energy and private equity space, with professional experience ranging from 20-40 years per Board member. All directors have public company experience. |
COMMITTED TO SHAREHOLDER ENGAGEMENT
As shareholders, you have an important decision to make regarding the Bonanza Creek acquisition. We urge you to make this decision only after careful analysis of all of the facts. The preliminary proxy statement, investor presentation and other materials detailing the acquisition are being made available at www.sandridgeandbonanza.com, and we urge you to review these materials. After fully considering the rationale for the Bonanza Creek transaction and the detailed analysis that supports the Board's decision to recommend it to shareholders, we are confident that you will agree that this transaction is immediately accretive and in the best long-term interests of SandRidge and all of its shareholders.
In closing, we look forward to continuing to engage in constructive dialogue with shareholders and to answering your questions, which you can submit to our Investor Relations team at Investors@SandRidgeEnergy.com or by calling 405-429-5515.
Thank you, and have a wonderful holiday season,
|
John V. Genova |
James D. Bennett |
|
Chairman of the Board |
President and Chief Executive Officer |
About SandRidge Energy, Inc.
SandRidge Energy, Inc. (NYSE: SD) is an oil and natural gas exploration and production company headquartered in Oklahoma City, Oklahoma with its principal focus on developing high-return, growth-oriented projects in the U.S. Mid-Continent and Niobrara Shale.
Important Information for Investors and Shareholders
This communication does not constitute an offer to sell or the solicitation of an offer to buy any securities or a solicitation of any vote or approval. In connection with the proposed merger, SandRidge Energy, Inc. ("SandRidge") will file with the Securities and Exchange Commission ("SEC") a registration statement on Form S-4, which will include a preliminary prospectus of SandRidge and a preliminary joint proxy statement of Bonanza Creek Energy, Inc. ("Bonanza Creek") and SandRidge. SandRidge and Bonanza Creek also plan to file other documents with the SEC regarding the proposed merger. After the registration statement has been declared effective by the SEC, a definitive joint proxy statement/prospectus will be mailed to the shareholders of Bonanza Creek and the shareholders of SandRidge. SHAREHOLDERS OF BONANZA CREEK AND SANDRIDGE ARE URGED TO READ THE REGISTRATION STATEMENT AND JOINT PROXY STATEMENT/PROSPECTUS (INCLUDING ALL AMENDMENTS AND SUPPLEMENTS THERETO) AND OTHER DOCUMENTS RELATING TO THE PROPOSED MERGER THAT WILL BE FILED WITH THE SEC CAREFULLY AND IN THEIR ENTIRETY WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED MERGER. Investors will be able to obtain free copies of the joint proxy statement/prospectus and other documents containing important information about SandRidge and Bonanza Creek, once such documents are filed with the SEC, through the website maintained by the SEC at http://www.sec.gov. Copies of the documents filed with the SEC by SandRidge will be available free of charge on SandRidge's internet website at www.sandridgeenergy.com under the tab "Investor Relations" and then under the tab "SEC Filings" or by contacting SandRidge's Investor Relations Department at (405) 429-5515. Copies of the documents filed with the SEC by Bonanza Creek will be available free of charge on Bonanza Creek's internet website at www.bonanzacrk.com under the tab "For Investors" and then under the tab "SEC Filings" or by contacting Bonanza Creek's Investor Relations Department at (720) 440-6136.
Details regarding valuation estimates and projections of future results can be found in the Company's registration statement filed today with the SEC on Form S-4. The calculations presented in this letter give effect to the full $20 million in additional annual G&A cost savings, which the Company believes are reasonably achievable.
Participants in the Solicitation
Bonanza Creek, SandRidge, their respective directors and executive officers may be deemed to be participants in the solicitation of proxies in respect of the proposed transaction. Information about the directors and executive officers of Bonanza Creek is set forth in Bonanza Creek's public filings with the SEC, including its Current Reports on Form 8-K filed with the SEC on April 28, 2017, June 12, 2017 and August 4, 2017 and its Quarterly Report on Form 10-Q for the period ending September 30, 2017, filed with the SEC on November 9, 2017. Information about the directors and executive officers of SandRidge is set forth in SandRidge's public filings with the SEC, including its definitive proxy statement on Form DEF 14A filed with the SEC on April 28, 2017 and its Current Reports on Form 8-K filed with the SEC on June 28, 2017 and August 1, 2017. Other information regarding the participants in the proxy solicitation and a description of their direct and indirect interests, by security holdings or otherwise, will be contained in the joint proxy statement/prospectus of SandRidge and Bonanza Creek, white proxy cards and other relevant materials filed with the SEC. Free copies of these documents can be obtained as described in the preceding paragraph.
Cautionary Statement Regarding Forward-Looking Statements
This communication may contain certain "forward-looking statements" under applicable securities laws, including the Private Securities Litigation Reform Act of 1995. These statements are typically identified by words or phrases such as "may," "will," "could," "should," "predict," "potential," "pursue," "outlook," "continue," "anticipate," "estimate," "expect," "project," "intend," "plan," "believe," "target," "forecast," and other words and terms of similar meaning. For example, statements regarding future results regarding the benefits of the transaction, closing of the proposed merger, and future financial results and operational plans are forward-looking statements. These forward-looking statements are subject to numerous risks and uncertainties, many of which are beyond the companies' control, which could cause actual benefits, results, effects and timing to differ materially from the results predicted or implied by the statements. These risks and uncertainties include, but are not limited to: the failure to receive requisite shareholder approval, satisfy closing conditions or obtain regulatory approvals; uncertainties as to the timing of the closing; changes to business relationships, competitive responses, the inability to achieve anticipated synergies, unexpected costs, charges, expenses or difficulties, the outcome of any litigation and the inability to retain key personnel, each related to the proposed merger; the uncertainty of financial performance following completion of the proposed merger; and any changes in general economic or industry specific conditions. SandRidge cautions that the foregoing list of factors is not exclusive. Additional information concerning these and other risk factors is contained in SandRidge's and Bonanza Creek's public filings with the SEC, which are available at the SEC's website, http://www.sec.gov. Each forward looking statement speaks only as of the date of the particular statement, and SandRidge undertakes no obligation to publicly update any of these forward-looking statements to reflect events or circumstances that may arise after the date hereof.
CONTACT:
Justin M. Lewellen
Director of Investor Relations
SandRidge Energy, Inc.
123 Robert S. Kerr Avenue
Oklahoma City, OK 73102
+1 (405) 429-5515
David A Kimmel
Director of Communications
SandRidge Energy, Inc.
123 Robert S. Kerr Ave.
Oklahoma City, OK 73102
+1 (405) 429-5599
MacKenzie Partners, Inc.
Toll-free: 800-322-2885.
Collect: +1 (212) 929-5500
Attn: Dan Burch / Paul Schulman
Media Contact:
SVC
Bryan Locke, +1 (312) 895-4700, blocke@sardverb.com
Kelly Kimberly, +1 (832) 680-5120, kkimberly@sardverb.com
View original content with multimedia:http://www.prnewswire.com/news-releases/sandridge-energy-publishes-letter-to-shareholders-regarding-strategic-acquisition-of-bonanza-creek-300569420.html
SOURCE SandRidge Energy, Inc.
Article Date
12/11/2017SandRidge Energy, Inc. Adopts Short-Term Shareholder Rights Plan
Source: PR Newswire
Orignial Article: https://www.prnewswire.co...
OKLAHOMA CITY, Nov. 27, 2017 /PRNewswire/ -- SandRidge Energy, Inc. ("SandRidge" or the "Company") (NYSE: SD) today announced that its Board of Directors (the "Board") has unanimously adopted a short-term shareholder rights plan (the "Rights Plan").
The Rights Plan is designed to protect our shareholders' right to vote, on a fully informed basis, on the proposal to approve the issuance of the Company's common stock in connection with the proposed merger with Bonanza Creek Energy, Inc. (NYSE: BCEI) based on the additional disclosure forthcoming in the Company's proxy materials for the merger. The Board adopted the Rights Plan to ensure that the Board remains in the best position to perform its fiduciary duties, comply with the Company's obligations under its merger agreement with Bonanza Creek, and enable all SandRidge shareholders to realize the long-term value of their investment in the Company. The Rights Plan is designed to deter the acquisition of actual, de facto or negative control of the Company by any person or group without appropriately compensating its shareholders for such control. The Rights Plan is not designed to prevent any action the Board determines to be in the best interest of the Company and its shareholders.
John Genova, Chairman of the Board of SandRidge said, "Today's actions are designed to protect the interests of all of our shareholders and preserve their ability to fully consider all information related to the proposed Bonanza Creek merger -- including information which will be included in our proxy materials -- and vote as they see fit. SandRidge looks forward to continuing to engage in constructive dialogue with shareholders regarding our plans for the business and the compelling strategic opportunity we see with Bonanza Creek."
The Company intends to recommend the ratification of the Rights Plan for approval by its shareholders at the Company's 2018 annual meeting of shareholders. If ratified by the shareholders, the Rights Plan will expire on November 26, 2018. If the Rights Plan is not ratified, then the Rights Plan will terminate and cease to be effective.
The Rights Plan will be triggered only if a person or group of persons acting in concert exceeds beneficial ownership of 10% or more of the Company's common stock. Shareholders who currently have beneficial ownership of over 10% are grandfathered in, but may not acquire additional shares without triggering the Rights Plan.
The Rights Plan, which was adopted by the Board following evaluation and consultation with the Company's advisors, is similar to plans adopted by numerous publicly traded companies. It was not adopted in response to any specific takeover bid. In fact, the Company's shareholders may require the Board to redeem the Rights Plan in the event a fully-financed takeover or exchange offer is made for the Company (a "Qualifying Offer" as defined in the Rights Plan), pursuant to procedures described in the Rights Plan. Moreover, the Rights Plan could potentially preserve the Company's estimated $470 million (as of December 31, 2017) of usable tax net operating loss carryforwards by deterring an "ownership change" under Section 382 of the Internal Revenue Code of 1986, as amended.
While it is SandRidge's policy not to comment on specific discussions with shareholders, the Company has and will continue to welcome all constructive input furthering the goal of enhancing shareholder value and positioning SandRidge as a leading oil and natural gas exploration and production company.
Further details regarding the Rights Plan are contained in a Form 8-K filed by the Company with the U.S. Securities and Exchange Commission on November 27, 2017.
Morgan Stanley is serving as financial advisor to the Company. Vinson & Elkins L.L.P. is serving as legal advisor to the Company.
About SandRidge Energy, Inc.
SandRidge Energy, Inc. (NYSE: SD) is an oil and natural gas exploration and production company headquartered in Oklahoma City, Oklahoma with its principal focus on developing high-return, growth-oriented projects in the U.S. Mid-Continent and Niobrara Shale.
Important Information for Investors and Shareholders
This communication does not constitute an offer to sell or the solicitation of an offer to buy any securities or a solicitation of any vote or approval. In connection with the proposed merger, SandRidge Energy, Inc. ("SandRidge") will file with the Securities and Exchange Commission ("SEC") a registration statement on Form S-4, which will include a prospectus of SandRidge and a joint proxy statement of Bonanza Creek Energy, Inc. ("Bonanza Creek") and SandRidge. SandRidge and Bonanza Creek also plan to file other documents with the SEC regarding the proposed merger. After the registration statement has been declared effective by the SEC, a definitive joint proxy statement/prospectus will be mailed to the shareholders of Bonanza Creek and the shareholders of SandRidge. SHAREHOLDERS OF BONANZA CREEK AND SANDRIDGE ARE URGED TO READ THE REGISTRATION STATEMENT AND JOINT PROXY STATEMENT/PROSPECTUS (INCLUDING ALL AMENDMENTS AND SUPPLEMENTS THERETO) AND OTHER DOCUMENTS RELATING TO THE PROPOSED MERGER THAT WILL BE FILED WITH THE SEC CAREFULLY AND IN THEIR ENTIRETY WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED MERGER. Investors will be able to obtain free copies of the joint proxy statement/prospectus and other documents containing important information about SandRidge and Bonanza Creek, once such documents are filed with the SEC, through the website maintained by the SEC at http://www.sec.gov. Copies of the documents filed with the SEC by SandRidge will be available free of charge, on SandRidge's internet website at www.sandridgeenergy.com under the tab "Investor Relations" and then under the tab "SEC Filings" or by contacting SandRidge's Investor Relations Department at (405) 429-5515. Copies of the documents filed with the SEC by Bonanza Creek will be available free of charge on Bonanza Creek's internet website at www.bonanzacrk.com under the tab "For Investors" and then under the tab "SEC Filings" or by contacting Bonanza Creek's Investor Relations Department at (720) 440-6136.
Participants in the Solicitation
Bonanza Creek, SandRidge, their respective directors and executive officers may be deemed to be participants in the solicitation of proxies in respect of the proposed transaction. Information about the directors and executive officers of Bonanza Creek is set forth in Bonanza Creek's public filings with the SEC, including its Current Reports on Form 8-K filed with the SEC on April 28, 2017, June 12, 2017 and August 4, 2017 and its Quarterly Report on Form 10-Q for the period ending September 30, 2017, filed with the SEC on November 9, 2017. Information about the directors and executive officers of SandRidge is set forth in SandRidge's public filings with the SEC, including its definitive proxy statement on Form DEF 14A filed with the SEC on April 28, 2017 and its Current Reports on Form 8-K filed with the SEC on June 28, 2017 and August 1, 2017. Other information regarding the participants in the proxy solicitation and a description of their direct and indirect interests, by security holdings or otherwise, will be contained in the joint proxy statement/prospectus and White proxy cards and other relevant materials filed with the SEC. Free copies of these documents can be obtained as described in the preceding paragraph.
Cautionary Statement Regarding Forward-Looking Statements
This communication may contain certain "forward-looking statements" under applicable securities laws, including the Private Securities Litigation Reform Act of 1995. These statements are typically identified by words or phrases such as "may," "will," "could," "should," "predict," "potential," "pursue," "outlook," "continue," "anticipate," "estimate," "expect," "project," "intend," "plan," "believe," "target," "forecast," and other words and terms of similar meaning. For example, statements regarding future results regarding the benefits of the transaction, closing of the proposed merger, and future financial results and operational plans are forward-looking statements. These forward-looking statements are subject to numerous risks and uncertainties, many of which are beyond the companies' control, which could cause actual benefits, results, effects and timing to differ materially from the results predicted or implied by the statements. These risks and uncertainties include, but are not limited to: the failure to receive requisite shareholder approval, satisfy closing conditions or obtain regulatory approvals; uncertainties as to the timing of the closing; changes to business relationships, competitive responses, the inability to achieve anticipated synergies, unexpected costs, charges, expenses or difficulties, the outcome of any litigation and the inability to retain key personnel, each related to the proposed merger; the uncertainty of financial performance following completion of the proposed merger; and any changes in general economic or industry specific conditions. SandRidge cautions that the foregoing list of factors is not exclusive. Additional information concerning these and other risk factors is contained in SandRidge's and Bonanza Creek's public filings with the SEC, which are available at the SEC's website, http://www.sec.gov. Each forward looking statement speaks only as of the date of the particular statement, and SandRidge undertakes no obligation to publicly update any of these forward-looking statements to reflect events or circumstances that may arise after the date hereof.
CONTACT:
Justin M. Lewellen
Director of Investor Relations
SandRidge Energy, Inc.
123 Robert S. Kerr Avenue
Oklahoma City, OK 73102
+1 (405) 429-5515
David A Kimmel
Director of Communications
SandRidge Energy, Inc.
123 Robert S. Kerr Ave.
Oklahoma City, OK 73102
+1 (405) 429-5599
MacKenzie Partners, Inc.
Toll-free: 800-322-2885.
Collect: +1 (212) 929-5500
Attn: Dan Burch / Paul Schulman
Media Contact:
S V C
Bryan Locke, +1 (312) 895-4700, blocke@sardverb.com
Kelly Kimberly, +1 (832) 680-5120, kkimberly@sardverb.com
View original content with multimedia:http://www.prnewswire.com/news-releases/sandridge-energy-inc-adopts-short-term-shareholder-rights-plan-300561721.html
SOURCE SandRidge Energy, Inc.
Article Date
11/27/2017BONANZA CREEK ENERGY INVESTOR ALERT BY THE FORMER ATTORNEY GENERAL OF LOUISIANA: Kahn Swick & Foti, LLC Investigates Adequacy of Price and Process in Proposed Sale of Bonanza Creek Energy, Inc.
Source: PR Newswire
NEW ORLEANS, Nov. 16, 2017 /PRNewswire/ -- Former Attorney General of Louisiana Charles C. Foti, Jr., Esq. and the law firm of Kahn Swick & Foti, LLC ("KSF") are investigating the proposed sale of Bonanza Creek Energy, Inc. ("Bonanza" or the "Company") (NYSE: BCEI) to SandRidge Energy, Inc. (NYSE: SD). Under the terms of the proposed transaction, shareholders of Bonanza will receive only $19.20 in cash and $16.80 in SandRidge stock, subject to a collar, for each share of Bonanza that they own. KSF is seeking to determine whether this consideration and the process that led to it are adequate, or whether the consideration undervalues the Company.
If you believe that this transaction undervalues the Company and/or if you would like to discuss your legal rights regarding the proposed sale, you may, without obligation or cost to you, e-mail or call KSF Managing Partner Lewis S. Kahn (lewis.kahn@ksfcounsel.com) toll free at any time at 855-768-1857.
To learn more about KSF, whose partners include the Former Louisiana Attorney General, visit www.ksfcounsel.com.
Kahn Swick & Foti, LLC
206 Covington St.
Madisonville, LA 70447
View original content with multimedia:http://www.prnewswire.com/news-releases/bonanza-creek-energy-investor-alert-by-the-former-attorney-general-of-louisiana-kahn-swick--foti-llc-investigates-adequacy-of-price-and-process-in-proposed-sale-of-bonanza-creek-energy-inc-300558029.html
SOURCE Kahn Swick & Foti, LLC
Article Date
11/16/201711/15/2017 - SandRidge Energy to Acquire Bonanza Creek Energy for $36.00 Per Share in Cash and Stock
SandRidge Energy to Acquire Bonanza Creek Energy for $36.00 Per Share in Cash and Stock
Source: PR Newswire
Orignial Article: https://www.prnewswire.co...
OKLAHOMA CITY and DENVER, Nov. 15, 2017 /PRNewswire/ -- SandRidge Energy (NYSE: SD) and Bonanza Creek Energy (NYSE: BCEI) jointly announced today that the two companies have entered into a definitive merger agreement under which SandRidge will acquire all of the outstanding shares of common stock of Bonanza Creek in a cash-and-stock transaction valued at $36.00 per share. The consideration consists of $19.20 in cash and $16.80 of SandRidge shares for each Bonanza Creek share, subject to the collar mechanism described below.
James Bennett, SandRidge's CEO, said "This acquisition greatly enhances our existing portfolio by adding a deep inventory of drill-ready locations in the DJ Basin of Colorado and is highly complementary to our existing North Park, Northwest STACK and Mississippian assets. The geological and operational characteristics of Bonanza's Niobrara and Codell locations are analogous to our existing Colorado North Park assets, and we expect to benefit from the expertise of their teams. Overall, we believe this will drive strong risk-adjusted returns in both areas. Likewise, SandRidge will benefit from the greatly increased scale and substantial cost and operational synergies as a result of the transaction. Lastly, the acquisition will be accretive to cash flow per share and will enhance our ability over time to increase cash flow generation of the business."
Jack Vaughn, Bonanza Creek's Chairman of the Board, stated "We are pleased to be able to accomplish this combination with SandRidge. This transaction represents an attractive opportunity for our shareholders to monetize a portion of their holdings through the cash consideration as well as to participate in the continued upside of the combined company. We believe our Niobrara and Codell assets and expertise will provide a strong complement to the SandRidge story and are excited to partner with SandRidge in growing the combined company."
Brian Steck, a Director of Bonanza Creek and Partner of Mangrove Partners, one of Bonanza Creek's largest shareholders, said "Mangrove is happy to support this transaction and believes that Bonanza Creek's high-return inventory in the DJ Basin provides an excellent complement to SandRidge's attractive development opportunities in the NW STACK and North Park Basin. We believe that the sequenced development of these three assets provide an attractive path to create oil-weighted growth for the combined company."
Acquisition Highlights
The combined SandRidge-Bonanza Creek will operate over 630,000 net acres focused in the Rockies and Mid-Continent, producing approximately 55,000 Boepd, as of September 30, 2017.
SandRidge is acquiring all of Bonanza Creek's assets included here with other related highlights:
Transaction Details
Bonanza Creek shareholders will receive $36.00 per share under the terms of the agreement, comprised of $19.20 per share in cash and $16.80 per share in common shares of SandRidge stock, subject to the collar mechanism. This represents a 17.4% premium to Bonanza Creek's closing price as of November 14.
This purchase price implies a total transaction value of approximately $746 million, comprised of $398 million in cash and 18.89 million shares of SandRidge stock, based on SandRidge's stock price as of November 14.
Following the transaction, shareholders of Bonanza Creek are expected to own between approximately 31.4% and 35.8% of the outstanding shares of SandRidge based upon the Average Parent Stock Price (as defined below). One of the independent directors of Bonanza Creek will be joining the Board of Directors of SandRidge.
The stock portion will be subject to a collar based on the volume weighted average price of SandRidge common shares over the 20 business days ending on the third business day prior to closing (the "Average Parent Stock Price"). If the Average Parent Stock Price is greater than or equal to $17.50 but less than or equal to $21.38, Bonanza Creek shareholders will receive a number of SandRidge shares between 0.7858 and 0.9600 equal to $16.80 in value per Bonanza Creek share. Bonanza Creek shareholders will receive 0.9600 SandRidge common shares if the Average Parent Stock Price is below $17.50 and 0.7858 SandRidge common shares if the Average Parent Stock Price is above $21.38.
The Boards of Directors of both companies have unanimously approved the terms of the agreement, and have recommended that both shareholder groups approve the transaction. The completion of the transaction is subject to the approval of each company's shareholders, certain regulatory approvals and customary closing conditions. The transaction is expected to close in the first quarter of 2018.
Morgan Stanley & Co. LLC and Vinson & Elkins L.L.P. acted as financial and legal advisors, respectively, to SandRidge. Evercore and Kirkland & Ellis LLP acted as financial and legal advisors, respectively, to Bonanza Creek.
Investor Call
The company will host a conference call to discuss this acquisition on November 15, 2017 at 7:30 am CT. The telephone number to access the conference call from within the U.S. is (866) 393-4306 and from outside the U.S. is (734) 385-2616. The passcode for the call is 7357668. An audio replay of the call will be available from November 15, 2017 until 11:59 pm CT on December 15, 2017. The number to access the conference call replay from within the U.S. is (855) 859-2056 and from outside the U.S. is (404) 537-3406. The passcode for the replay is 7357668.
About SandRidge Energy
SandRidge Energy, Inc. (NYSE: SD) is an oil and natural gas exploration and production company headquartered in Oklahoma City, Oklahoma with its principal focus on developing high-return, growth-oriented projects in the U.S. Mid-Continent and Niobrara Shale.
About Bonanza Creek Energy
Bonanza Creek Energy, Inc. (NYSE: BCEI) is an independent oil and natural gas company engaged in the acquisition, exploration, development and production of onshore oil and associated liquids-rich natural gas in the United States. The Company's assets and operations are concentrated primarily in the Rocky Mountain region in the Wattenberg Field, focused on the Niobrara and Codell formations, and in southern Arkansas, focused on oily Cotton Valley sands. For more information about the Company, please visit www.bonanzacrk.com.
Important Information for Investors and Shareholders
This communication does not constitute an offer to sell or the solicitation of an offer to buy any securities or a solicitation of any vote or approval.
In connection with the proposed merger, SandRidge will file with the Securities and Exchange Commission ("SEC") a registration statement on Form S-4, which will include a prospectus of SandRidge and a joint proxy statement of Bonanza Creek and SandRidge. SandRidge and Bonanza Creek also plan to file other documents with the SEC regarding the proposed merger. After the registration statement has been declared effective by the SEC, a definitive joint proxy statement/prospectus will be mailed to the shareholders of Bonanza Creek and the shareholders of SandRidge. SHAREHOLDERS OF BONANZA CREEK AND SANDRIDGE ARE URGED TO READ THE REGISTRATION STATEMENT AND JOINT PROXY STATEMENT/PROSPECTUS (INCLUDING ALL AMENDMENTS AND SUPPLEMENTS THERETO) AND OTHER DOCUMENTS RELATING TO THE PROPOSED MERGER THAT WILL BE FILED WITH THE SEC CAREFULLY AND IN THEIR ENTIRETY WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED MERGER. Investors will be able to obtain free copies of the joint proxy statement/prospectus and other documents containing important information about SandRidge and Bonanza Creek, once such documents are filed with the SEC, through the website maintained by the SEC at http://www.sec.gov. Copies of the documents filed with the SEC by SandRidge will be available free of charge, on SandRidge's internet website at www.sandridgeenergy.com under the tab "Investor Relations" and then under the tab "SEC Filings" or by contacting SandRidge's Investor Relations Department at (405) 429-5515. Copies of the documents filed with the SEC by Bonanza Creek will be available free of charge on Bonanza Creek's internet website at www.bonanzacrk.com under the tab "For Investors" and then under the tab "SEC Filings" or by contacting Bonanza Creek's Investor Relations Department at (720) 440-6136.
Participants in the Solicitation
Bonanza Creek, SandRidge, their respective directors and executive officers may be deemed to be participants in the solicitation of proxies in respect of the proposed transaction. Information about the directors and executive officers of Bonanza Creek is set forth in Bonanza Creek's public filings with the SEC, including its Current Reports on Form 8-K filed with the SEC on April 28, 2017, June 12, 2017 and August 4, 2017 and its Quarterly Report on Form 10-Q for the period ending September 30, 2017, filed with the SEC on November 9, 2017. Information about the directors and executive officers of SandRidge is set forth in SandRidge's public filings with the SEC, including its definitive proxy statement on Form DEF 14A filed with the SEC on April 28, 2017 and its Current Reports on Form 8-K filed with the SEC on June 28, 2017 and August 1, 2017. Other information regarding the participants in the proxy solicitation and a description of their direct and indirect interests, by security holdings or otherwise, will be contained in the joint proxy statement/prospectus and other relevant materials filed with the SEC. Free copies of these documents can be obtained as described in the preceding paragraph.
Cautionary Statement Regarding Forward-Looking Statements
This communication may contain certain "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, Section 21E of the Securities and Exchange Act of 1934 and the Private Securities Litigation Reform Act of 1995. These include statements regarding the effects of the proposed merger, estimates, expectations, projections, goals, forecasts, assumptions, risks and uncertainties and are typically identified by words or phrases such as "may," "will," "could," "should," "predict," "potential," "pursue," "outlook," "continue," "anticipate," "estimate," "expect," "project," "intend," "plan," "believe," "target," "forecast," and other words and terms of similar meaning. For example, statements regarding future financial performance, future competitive positioning and business synergies, future acquisition cost savings, future market demand, future benefits to shareholders, future economic and industry conditions, the proposed merger (including its benefits, results, effects and timing) and whether and when the transactions contemplated by the merger agreement will be consummated, are forward-looking statements within the meaning of federal securities laws.
These forward-looking statements are subject to numerous risks and uncertainties, many of which are beyond the companies' control, which could cause actual benefits, results, effects and timing to differ materially from the results predicted or implied by the statements. These risks and uncertainties include, but are not limited to: the failure of the shareholders of Bonanza Creek to approve the proposed merger or the shareholders of SandRidge to approve the stock issuance; the risk that the conditions to the closing of the proposed merger are not satisfied; the risk that regulatory approvals required for the proposed merger are not obtained or are obtained subject to conditions that are not anticipated; potential adverse reactions or changes to business relationships resulting from the announcement or completion of the proposed merger; uncertainties as to the timing of the proposed merger; competitive responses to the proposed merger; costs and difficulties related to the integration of Bonanza Creek's business and operations with SandRidge's business and operations; the inability to obtain or delay in obtaining cost savings and synergies from the proposed merger; unexpected costs, charges or expenses resulting from the proposed merger; the outcome of pending or potential litigation; the inability to retain key personnel; uncertainty of the expected financial performance of SandRidge following completion of the proposed merger; and any changes in general economic and/or industry specific conditions.
SandRidge and Bonanza Creek caution that the foregoing list of factors is not exclusive. Additional information concerning these and other risk factors is contained in SandRidge's and Bonanza Creek's most recently filed Annual Reports on Form 10-K, subsequent Quarterly Reports on Form 10-Q, recent Current Reports on Form 8-K, and other SEC filings, which are available at the SEC's website, http://www.sec.gov. All subsequent written and oral forward-looking statements concerning SandRidge, Bonanza Creek, the proposed transaction or other matters attributable to SandRidge and Bonanza Creek or any person acting on their behalf are expressly qualified in their entirety by the cautionary statements above. Each forward looking statement speaks only as of the date of the particular statement, and neither SandRidge nor Bonanza Creek undertakes any obligation to publicly update any of these forward-looking statements to reflect events or circumstances that may arise after the date hereof.
Investor Contacts
Justin M. Lewellen
Director of Investor Relations
SandRidge Energy, Inc.
123 Robert S. Kerr Avenue
Oklahoma City, OK 73102
(405) 429-5515
James R. Edwards
Director of Investor Relations
Bonanza Creek Energy
410 17th St
Denver, CO 80202
(720) 440-6136
View original content:http://www.prnewswire.com/news-releases/sandridge-energy-to-acquire-bonanza-creek-energy-for-3600-per-share-in-cash-and-stock-300556519.html
SOURCE SandRidge Energy, Inc.
Article Date
11/15/201711/1/2017 - SandRidge Energy, Inc. Reports Financial and Operational Results for Third Quarter of 2017
SandRidge Energy, Inc. Reports Financial and Operational Results for Third Quarter of 2017
Source: PR Newswire
Orignial Article: https://www.prnewswire.co...
OKLAHOMA CITY, Nov. 1, 2017 /PRNewswire/ -- SandRidge Energy, Inc. (the "Company" or "SandRidge") (NYSE:SD) today announced financial and operational results for the quarter ended September 30, 2017. Additionally, the Company will host a conference call to discuss these results on November 2, at 8:00 a.m. CT (833-245-9650, International: 647-689-4222 – passcode: 94553818). Presentation slides will be available on the Company's website, www.sandridgeenergy.com, under Investor Relations/Events.
Operational Results and Activity
Production for the third quarter was 3.6 MMBoe (27% oil, 23% NGLs and 50% natural gas). The Company's Mid-Continent assets produced approximately 93% of total production, with its North Park Basin and Permian assets making up the balance. As more NW STACK and North Park wells are brought to sales, oil is expected to become a larger percentage of total production. During the quarter, the Company averaged two rigs in the NW STACK targeting the Meramec and one rig targeting multiple benches of the Niobrara in the North Park Basin.
Financial Results
The Company reported a net loss of $8 million, or $0.25 per share, and net cash provided by operating activities of $44 million for the third quarter of 2017. When adjusting these reported amounts for items that are typically excluded by the investment community on the basis that such items affect the comparability of results, the Company's "adjusted net income" amounted to $12 million, or $0.35 per share, and "operating cash flow" totaled $46 million. Earnings before interest, income taxes, depreciation, depletion, and amortization, adjusted for certain other items, otherwise referred to as "adjusted EBITDA," for the third quarter was $42 million.(1)
|
1) |
The Company has defined and reconciled certain non-GAAP financial measures including adjusted net income, operating cash flow, adjusted EBITDA, adjusted G&A per Boe and current net debt, to the most directly comparable GAAP financial measures in supporting tables at the conclusion of this press release under the "Non-GAAP Financial Measures" beginning on page 14. |
James Bennett, SandRidge President and CEO said, "As we near the end of the year, we remain committed to our strategy of balance sheet preservation and cost reduction while prudently developing our assets. In Oklahoma's NW STACK, successful Meramec drilling above horizontal Osage production demonstrates stacked pay and supports future development of the deeper Osage zone. In Colorado's North Park Basin, recent drilling confirms production from all four Niobrara benches (A, B, C and D), proving additional zones and increasing our future drilling inventory. Our previously announced Drilling Participation Agreement will fund continued delineation of the NW STACK, allowing for capital reallocation toward a growing opportunity set in the North Park Basin. Ongoing success with our cost reduction initiatives is reflected in our updated LOE and G&A guidance, which reduces cash costs another $7 million this year. As we prepare our 2018 budget, our undivided focus will be directed toward returns on capital and resource value creation, supported by our strategic emphasis on oil-weighted development."
Highlights During and Subsequent to the Third Quarter
Confirmed All Four North Park Basin Niobrara Benches (A, B, C and D) Productive
Achieved $0.5 Million D&C Capital Reduction on North Park Niobrara Two-Mile XRLs
Spud Initial Wells Under NW STACK Drilling Participation Agreement
Confirmed Meramec/Osage Stacked Pay in NW STACK Spacing Test
Drilled First SandRidge NW STACK Well in Dewey County, Oklahoma
Lowered Lease Operating Expense Guidance to $6.90-$7.25 from $7.00-$7.50
Lowered Adjusted G&A per Boe Guidance to $4.00-$4.20 from $4.25-$4.50
Net Loss of $8 Million and Adjusted Net Income of $12 Million
Adjusted EBITDA of $42 Million
Capital Expenditures of $71 Million
Production of 3.6 MMBoe (27% Oil, 23% NGLs and 50% Natural Gas)
$515 Million of Liquidity Including $98 Million of Cash and $417 Million Capacity Under Credit Facility (Net of Letters of Credit)
Confirmed $425 Million Borrowing Base Under Credit Facility
Updated 2017 Operational Guidance
The Company is updating its operational guidance to reflect cost savings related to lease operating expense and G&A reduction initiatives. These savings reflect the removal of approximately $7 million from the Company's current cost structure, at the midpoint of guidance.
More information regarding operational guidance updates and capital budget details can be found below on page 6 of this release.
Mid-Continent Assets in Oklahoma
NW STACK Highlights and Developments
NW STACK highlights from the third quarter include extension of Meramec production south into Dewey County and the confirmation of stacked pay. The Regina 1915 1-18H SRL is the Company's first Meramec well drilled in Dewey County, Oklahoma. Producing a 30-Day IP of 598 Boepd (71% oil), this well extends the Company's production and resource potential beyond Major, Woodward and Garfield counties. In Major County, the Company confirmed Meramec/Osage stacked pay by drilling a Meramec well above existing horizontal Osage production. The Audra Claire 2015 1-24H, producing a 30-Day IP of 397 Boepd (88% oil) from the Meramec, supports stacked pay potential in the NW STACK. As part of the Company's strategy to initially develop the Meramec, this spacing test supports future development of the Osage.
During the fourth quarter, the Company will spend approximately $15 million completing wells drilled in the third quarter and running two rigs under the Drilling Participation Agreement. The two rigs will continue to drill SRLs and XRLs targeting the Meramec where drilling and completion costs are $4.4 million and $6.5 million, respectively.
NW STACK Drilling Participation Agreement
As previously announced, the Company executed a $200 million development agreement (the "Drilling Participation Agreement") with a private investment fund ("Counterparty") to develop SandRidge Meramec operated wells in dedicated sections, primarily in Major and Woodward Counties. Under the Drilling Participation Agreement, the Counterparty will fund an initial $100 million tranche for its share of drilling and completion costs, receiving a wellbore-only working interest subject to reversionary hurdles.
|
Development Costs and Working Interest (WI) Structure | ||
|
Counterparty |
SandRidge | |
|
Development Costs |
90% of Costs |
10% of Costs |
|
Initial Working Interest |
80% of WI |
20% of WI |
|
Reversion If Counterparty Achieves 10% IRR |
35% of WI |
65% of WI |
|
Reversion If Counterparty Achieves 15% IRR |
11% of WI |
89% of WI |
The Company initiated the first wells under the Drilling Participation Agreement during the quarter and will continue running two rigs under its terms. Designated as operator, the Company is responsible for the selection, location and scheduling of wells drilled. Following the initial tranche of wells and funding, a second $100 million tranche will be available subject to mutual agreement.
Niobrara Asset in North Park Basin, Jackson County, Colorado
During the quarter, the Company completed and brought online two XRLs, the Grizzly 2-1H36 and Grizzly 4-1H36, which are currently flowing back. These wells established oil production in the Niobrara A and B benches, confirming all four Niobrara benches (A, B, C and D) productive which expands the Company's oil resource value.
In addition to growing its inventory, the Company has continued to capture efficiencies in the North Park Basin. The Grizzly wells were each drilled in 12 days, surpassing cycle time expectations by 20%. Furthermore, four additional XRLs were drilled in less than 14 days each as part of a recent 80 acre spacing test. These cycle time achievements and numerous other pad drilling efficiencies have successfully led to reduced drilling and completion costs of $6.7 million, compared to $7.2 million where full rig mobilization is required.
During the fourth quarter, the Company will spend approximately $34 million of capital completing wells drilled in the third quarter and running one rig drilling Niobrara XRLs. The Company's 2017 drilling program will hold over 105,000 acres by production or federal unit, which represents 85% of its current 123,000 net acre position. Lastly, $13 million will be invested to construct central tank batteries and infrastructure in support of production brought online this year and into 2018.
Other Operational Activities
During the third quarter, Permian Central Basin Platform properties produced 127 MBoe (1.4 MBoepd, 80% oil, 13% NGLs, 7% natural gas).
Key Financial Highlights and Results
Third Quarter Results
First Nine Months of 2017
Capitalization & Liquidity
Hedging
In 2017, the Company has approximately 3.3 million barrels of oil hedged at an average WTI price of $52.24 as well as 32.9 billion cubic feet of natural gas hedged at an average price of $3.20 per MMBtu. 2017 oil hedges represent 78% of the midpoint of current oil volume guidance. 2017 gas hedges represent 77% of the midpoint of current gas volume guidance.
For 2018, the Company has approximately 2.4 million barrels of oil hedged at an average WTI price of $54.59 as well as 17.3 billion cubic feet of natural gas hedged at an average price of $3.16 per MMBtu.
Conference Call Information
The Company will host a conference call to discuss these results on Thursday, November 2, 2017 at 8:00 am CT. The telephone number to access the conference call from within the U.S. is (833) 245-9650 and from outside the U.S. is (647) 689-4222. The passcode for the call is 94553818. An audio replay of the call will be available from November 2, 2017 until 11:59 pm CT on December 2, 2017. The number to access the conference call replay from within the U.S. is (800) 585-8367 and from outside the U.S. is (416) 621-4642. The passcode for the replay is 94553818.
A live audio webcast of the conference call will also be available via SandRidge's website, www.sandridgeenergy.com, under Investor Relations/Events. The webcast will be archived for replay on the Company's website for 30 days.
2017 Operational and Capital Expenditure Guidance
The table below highlights reductions to the Company's lease operating expense and adjusted G&A guidance as well as raised production severance tax guidance.
Additional 2017 Guidance detail is available on the Company's website, www.sandridgeenergy.com, under Investor Relations/Financial Information/Guidance.
|
Updated |
Previous |
||||||
|
Guidance |
Guidance |
||||||
|
Projection as of |
Projection as of |
||||||
|
November 1, 2017 |
August 2, 2017 |
||||||
|
Production |
|||||||
|
Oil (MMBbls) |
4.1 - 4.3 |
4.1 - 4.3 |
|||||
|
Natural Gas Liquids (MMBbls) |
3.1 - 3.3 |
3.1 - 3.3 |
|||||
|
Total Liquids (MMBbls) |
7.2 - 7.6 |
7.2 - 7.6 |
|||||
|
Natural Gas (Bcf) |
42.0 - 43.5 |
42.0 - 43.5 |
|||||
|
Total (MMBoe) |
14.2 - 14.9 |
14.2 - 14.9 |
|||||
|
Price Realization |
|||||||
|
Oil (differential below NYMEX WTI) |
$2.75 |
$2.75 |
|||||
|
Natural Gas Liquids (realized % of NYMEX WTI) |
33% |
28% |
|||||
|
Natural Gas (differential below NYMEX Henry Hub) |
$1.00 |
$1.00 |
|||||
|
Costs per Boe |
|||||||
|
LOE |
$6.90 - $7.25 |
$7.00 - $7.50 |
|||||
|
Adjusted G&A1 |
$4.00 - $4.20 |
$4.25 - $4.50 |
|||||
|
% of Revenue |
|||||||
|
Production Taxes |
3.50% - 3.75% |
3.00% - 3.25% |
|||||
|
Capital Expenditures ($ in millions) | |||||||
|
Drilling and Completion |
|||||||
|
Mid-Continent |
$60 - $65 |
$60 - $65 |
|||||
|
North Park Basin |
60 - 65 |
60 - 65 |
|||||
|
Other2 |
20 |
20 |
|||||
|
Total Drilling and Completion |
$140 - $150 |
$140 - $150 |
|||||
|
Other E&P |
|||||||
|
Land, G&G, and Seismic |
$46 |
$46 |
|||||
|
Infrastructure3 |
18 |
18 |
|||||
|
Workover |
30 |
30 |
|||||
|
Capitalized G&A and Interest |
14 |
14 |
|||||
|
Total Other Exploration and Production |
$108 |
$108 |
|||||
|
General Corporate |
2 |
2 |
|||||
|
Total Capital Expenditures |
$250 - $260 |
$250 - $260 |
|||||
|
(excluding acquisitions and plugging and abandonment) |
|||||||
|
1) |
Adjusted G&A per Boe is a non-GAAP financial measure. The Company has defined this measure at the conclusion of this press release under the "Non-GAAP Financial Measures" beginning on page 14. Information to reconcile this non-GAAP financial measure to the most directly comparable GAAP financial measure is not available at this time, as management is unable to forecast the excluded items for future periods. | ||||||
|
2) |
2016 Carryover, Coring, Non-Op and SWD | ||||||
|
3) |
Infrastructure - Production facilities, Pipeline ROW and Electrical | ||||||
Operational and Financial Statistics
Upon emergence from Chapter 11 reorganization, the Company elected to adopt fresh start accounting effective October 1, 2016. As a result of the application of fresh start accounting and the effects of the implementation of the plan of reorganization, the financial statements on or after October 1, 2016 will not be comparable with the financial statements prior to that date. References to the "Successor" refer to SandRidge subsequent to adoption of fresh start accounting. References to the "Predecessor" refer to SandRidge prior to adoption of fresh start accounting.
Information regarding the Company's production, pricing, costs and earnings is presented below:
|
Three Months Ended September 30, |
Nine Months Ended September 30, | ||||||||||||
|
Successor |
Predecessor |
Successor |
Predecessor | ||||||||||
|
2017 |
2016 |
2017 |
2016 | ||||||||||
|
Production - Total |
|||||||||||||
|
Oil (MBbl) |
954 |
1,282 |
3,130 |
4,315 | |||||||||
|
NGL (MBbl) |
807 |
1,103 |
2,601 |
3,358 | |||||||||
|
Natural gas (MMcf) |
10,850 |
13,079 |
33,883 |
44,124 | |||||||||
|
Oil equivalent (MBoe) |
3,569 |
4,565 |
11,378 |
15,027 | |||||||||
|
Daily production (MBoed) |
38.8 |
49.6 |
41.7 |
54.8 | |||||||||
|
Average price per unit |
|||||||||||||
|
Realized oil price per barrel - as reported |
$ 46.16 |
$ 42.82 |
$ 47.22 |
$ 36.85 | |||||||||
|
Realized impact of derivatives per barrel |
3.51 |
10.93 |
2.20 |
14.20 | |||||||||
|
Net realized price per barrel |
$ 49.67 |
$ 53.75 |
$ 49.42 |
$ 51.05 | |||||||||
|
Realized NGL price per barrel - as reported |
$ 19.07 |
$ 13.90 |
$ 16.52 |
$ 12.67 | |||||||||
|
Realized impact of derivatives per barrel |
- |
- |
- |
- | |||||||||
|
Net realized price per barrel |
$ 19.07 |
$ 13.90 |
$ 16.52 |
$ 12.67 | |||||||||
|
Realized natural gas price per Mcf - as reported |
$ 1.95 |
$ 2.27 |
$ 2.14 |
$ 1.78 | |||||||||
|
Realized impact of derivatives per Mcf |
0.15 |
0.05 |
0.02 |
(0.01) | |||||||||
|
Net realized price per Mcf |
$ 2.10 |
$ 2.32 |
$ 2.16 |
$ 1.77 | |||||||||
|
Realized price per Boe - as reported |
$ 22.57 |
$ 21.89 |
$ 23.14 |
$ 18.63 | |||||||||
|
Net realized price per Boe - including impact of derivatives |
$ 23.97 |
$ 25.10 |
$ 23.81 |
$ 22.70 | |||||||||
|
Average cost per Boe |
|||||||||||||
|
Lease operating(1) |
$ 7.50 |
$ 8.68 |
$ 6.77 |
$ 8.63 | |||||||||
|
Production taxes |
$ 1.01 |
$ 0.50 |
$ 0.83 |
$ 0.41 | |||||||||
|
General and administrative |
$ 5.69 |
$ 6.38 |
$ 5.62 |
$ 8.95 | |||||||||
|
Less non-recurring items (2) |
(0.96) |
(0.11) |
(0.85) |
(3.31) | |||||||||
|
Less stock-based compensation |
(0.83) |
(2.39) |
(1.10) |
(1.95) | |||||||||
|
Adjusted G&A |
$ 3.90 |
$ 3.88 |
$ 3.67 |
$ 3.69 | |||||||||
|
Depletion (3) |
$ 8.69 |
$ 6.07 |
$ 7.69 |
$ 6.05 | |||||||||
|
Earnings per share |
|||||||||||||
|
(Loss) earnings per share applicable to common stockholders |
|||||||||||||
|
Basic |
$ (0.25) |
$ (0.56) |
$ 2.07 |
$ (1.76) | |||||||||
|
Diluted |
$ (0.25) |
$ (0.56) |
$ 2.06 |
$ (1.76) | |||||||||
|
Adjusted net income (loss) per share available to common stockholders |
|||||||||||||
|
Basic |
$ 0.35 |
$ 0.04 |
$ 1.28 |
$ (0.13) | |||||||||
|
Diluted |
$ 0.35 |
$ 0.04 |
$ 1.27 |
$ (0.13) | |||||||||
|
Weighted average number of shares outstanding (in thousands) |
|||||||||||||
|
Basic |
34,290 |
718,373 |
31,750 |
708,788 | |||||||||
|
Diluted (4) |
34,388 |
718,373 |
31,984 |
708,788 | |||||||||
|
(1) |
Transportation costs are presented as a reduction of revenue by the Successor Company compared to the Predecessor Company's presentation of these costs as lease operating expenses. | ||||||||||||
|
(2) |
Adjusted G&A per Boe is a non-GAAP financial measure. The Company has defined this measure at the conclusion of this press release under the "Non-GAAP Financial Measures" beginning on page 14. Excludes restructuring costs and drilling participating agreement transaction costs totaling $3.4 million and $9.6 million for the three and nine-month periods ended September 30, 2017. Excludes restructuring costs and various other insignificant costs totaling $0.5 million and $33.1 million for the three and nine-month periods ended September 30, 2016, respectively. The nine-month period ended September 30, 2016 additionally excludes a $16.7 million doubtful receivable write-off. | ||||||||||||
|
(3) |
Includes accretion of asset retirement obligation. | ||||||||||||
|
(4) |
Includes shares considered antidilutive for calculating loss per share in accordance with GAAP. | ||||||||||||
Capital Expenditures
The table below presents actual results of the Company's capital expenditures for the three and nine-month periods ended September 30, 2017 at the same level of detail as its full year capital expenditure guidance.
|
Three Months Ended |
Nine Months Ended | |||||||
|
September 30, 2017 |
September 30, 2017 | |||||||
|
(in thousands) |
(in thousands) | |||||||
|
Drilling and Completion |
||||||||
|
Mid-Continent |
$ 20,686 |
$ 47,647 | ||||||
|
North Park Basin |
19,468 |
24,782 | ||||||
|
Other1 |
5,799 |
18,375 | ||||||
|
Total Drilling and Completion |
$ 45,954 |
$ 90,804 | ||||||
|
Other E&P |
||||||||
|
Land, G&G, and Seismic |
$ 10,109 |
$ 39,915 | ||||||
|
Infrastructure2 |
3,072 |
4,789 | ||||||
|
Workovers |
8,285 |
21,667 | ||||||
|
Capitalized G&A and Interest |
3,315 |
9,402 | ||||||
|
Total Other Exploration and Production |
$ 24,782 |
$ 75,774 | ||||||
|
General Corporate |
$ 4 |
$ 1,406 | ||||||
|
Total Capital Expenditures |
$ 70,740 |
$ 167,984 | ||||||
|
(excluding acquisitions and plugging and abandonment) |
||||||||
|
1) 2016 Carryover, Coring, Non-Op and SWD |
|||||
|
2) Infrastructure - Production facilities, Pipeline ROW and Electrical | |||||
Derivative Contracts
The table below sets forth the Company's consolidated oil and natural gas price swaps for 2017 and 2018 as of October 27, 2017:
|
Quarter Ending |
||||||||||||
|
3/31/2017 |
6/30/2017 |
9/30/2017 |
12/31/2017 |
FY 2017 | ||||||||
|
Oil Swaps: |
||||||||||||
|
Total Volume (MMBbls) |
0.81 |
0.82 |
0.83 |
0.83 |
3.29 | |||||||
|
Daily Volume (MBblspd) |
9.0 |
9.0 |
9.0 |
9.0 |
9.0 | |||||||
|
Swap Price ($/bbl) |
$52.24 |
$52.24 |
$52.24 |
$52.24 |
$52.24 | |||||||
|
Natural Gas Swaps: |
||||||||||||
|
Total Volume (Bcf) |
8.10 |
8.19 |
8.28 |
8.28 |
32.85 | |||||||
|
Daily Volume (MMBtupd) |
90.0 |
90.0 |
90.0 |
90.0 |
90.0 | |||||||
|
Swap Price ($/MMBtu) |
$3.20 |
$3.20 |
$3.20 |
$3.20 |
$3.20 | |||||||
|
3/31/2018 |
6/30/2018 |
9/30/2018 |
12/31/2018 |
FY 2018 | ||||||||
|
Oil Swaps: |
||||||||||||
|
Total Volume (MMBbls) |
0.63 |
0.64 |
0.55 |
0.55 |
2.37 | |||||||
|
Daily Volume (MBblspd) |
7.0 |
7.0 |
6.0 |
6.0 |
6.5 | |||||||
|
Swap Price ($/bbl) |
$54.27 |
$54.27 |
$54.97 |
$54.97 |
$54.59 | |||||||
|
Natural Gas Swaps: |
||||||||||||
|
Total Volume (Bcf) |
6.30 |
3.64 |
3.68 |
3.68 |
17.30 | |||||||
|
Daily Volume (MMBtupd) |
70.0 |
40.0 |
40.0 |
40.0 |
47.4 | |||||||
|
Swap Price ($/MMBtu) |
$3.24 |
$3.11 |
$3.11 |
$3.11 |
$3.16 | |||||||
Capitalization
The Company's capital structure as of September 30, 2017 and December 31, 2016 is presented below:
|
September 30, |
December 31, | ||||||
|
2017 |
2016 | ||||||
|
(In thousands) | |||||||
|
Cash, cash equivalents and restricted cash |
$ 135,513 |
$ 174,071 | |||||
|
Credit facility |
$ - |
$ - | |||||
|
Building note |
37,601 |
36,528 | |||||
|
Mandatorily convertible 0% notes |
- |
268,780 | |||||
|
Total debt |
37,601 |
305,308 | |||||
|
Stockholders' equity |
|||||||
|
Common stock |
36 |
20 | |||||
|
Warrants |
88,475 |
88,381 | |||||
|
Additional paid-in capital |
1,037,932 |
758,498 | |||||
|
Accumulated deficit |
(268,160) |
(333,982) | |||||
|
Total SandRidge Energy, Inc. stockholders' equity |
858,283 |
512,917 | |||||
|
Total capitalization |
$ 895,884 |
$ 818,225 | |||||
|
SandRidge Energy, Inc. and Subsidiaries Condensed Consolidated Statements of Operations | |||||||||||
|
(Unaudited) | |||||||||||
|
(In thousands, except per share amounts) | |||||||||||
|
Three Months Ended September 30, |
Nine Months Ended September 30, | ||||||||||
|
Successor |
Predecessor |
Successor |
Predecessor | ||||||||
|
2017 |
2016 |
2017 |
2016 | ||||||||
|
Revenues |
|||||||||||
|
Oil, natural gas and NGL |
$ 80,540 |
$ 99,934 |
$ 263,235 |
$ 279,971 | |||||||
|
Other |
352 |
4,122 |
858 |
13,838 | |||||||
|
Total revenues |
80,892 |
104,056 |
264,093 |
293,809 | |||||||
|
Expenses |
|||||||||||
|
Production |
26,765 |
39,640 |
76,997 |
129,608 | |||||||
|
Production taxes |
3,606 |
2,278 |
9,435 |
6,107 | |||||||
|
Depreciation and depletion - oil and natural gas |
31,029 |
27,725 |
87,486 |
90,978 | |||||||
|
Depreciation and amortization - other |
3,399 |
7,514 |
10,729 |
21,323 | |||||||
|
Impairment |
498 |
354,451 |
3,475 |
718,194 | |||||||
|
General and administrative |
20,292 |
29,145 |
63,999 |
134,447 | |||||||
|
Loss (gain) on derivative contracts |
11,702 |
(338) |
(46,024) |
4,823 | |||||||
|
Loss on settlement of contract |
- |
- |
- |
90,184 | |||||||
|
Other operating (income) expense |
(132) |
979 |
135 |
4,348 | |||||||
|
Total expenses |
97,159 |
461,394 |
206,232 |
1,200,012 | |||||||
|
(Loss) income from operations |
(16,267) |
(357,338) |
57,861 |
(906,203) | |||||||
|
Other (expense) income |
|||||||||||
|
Interest expense, net |
(872) |
(3,343) |
(2,757) |
(126,099) | |||||||
|
Gain on extinguishment of debt |
- |
- |
- |
41,179 | |||||||
|
Reorganization items, net |
- |
(42,754) |
- |
(243,672) | |||||||
|
Other income (expense), net |
197 |
(898) |
2,222 |
1,332 | |||||||
|
Total other expense |
(675) |
(46,995) |
(535) |
(327,260) | |||||||
|
(Loss) income before income taxes |
(16,942) |
(404,333) |
57,326 |
(1,233,463) | |||||||
|
Income tax (benefit) expense |
(8,457) |
4 |
(8,496) |
11 | |||||||
|
Net (loss) income |
(8,485) |
(404,337) |
65,822 |
(1,233,474) | |||||||
|
Preferred stock dividends |
- |
- |
- |
16,321 | |||||||
|
(Loss applicable) income available to SandRidge Energy, |
|||||||||||
|
Inc. common stockholders |
$ (8,485) |
$ (404,337) |
$ 65,822 |
$ (1,249,795) | |||||||
|
(Loss) earnings per share |
|||||||||||
|
Basic |
$ (0.25) |
$ (0.56) |
$ 2.07 |
$ (1.76) | |||||||
|
Diluted |
$ (0.25) |
$ (0.56) |
$ 2.06 |
$ (1.76) | |||||||
|
Weighted average number of common shares outstanding |
|||||||||||
|
Basic |
34,290 |
718,373 |
31,750 |
708,788 | |||||||
|
Diluted |
34,290 |
718,373 |
31,984 |
708,788 | |||||||
|
SandRidge Energy, Inc. and Subsidiaries Condensed Consolidated Balance Sheets (Unaudited) | |||||
|
(In thousands) | |||||
|
September 30, |
December 31, | ||||
|
2017 |
2016 | ||||
|
ASSETS |
|||||
|
Current assets |
|||||
|
Cash and cash equivalents |
$ 133,201 |
$ 121,231 | |||
|
Restricted cash - collateral |
- |
50,000 | |||
|
Restricted cash - other |
2,312 |
2,840 | |||
|
Accounts receivable, net |
69,187 |
74,097 | |||
|
Derivative contracts |
6,608 |
- | |||
|
Prepaid expenses |
2,334 |
5,375 | |||
|
Other current assets |
8,045 |
3,633 | |||
|
Total current assets |
221,687 |
257,176 | |||
|
Oil and natural gas properties, using full cost method of accounting |
|||||
|
Proved |
1,004,370 |
840,201 | |||
|
Unproved |
103,533 |
74,937 | |||
|
Less: accumulated depreciation, depletion and impairment |
(432,564) |
(353,030) | |||
|
675,339 |
562,108 | ||||
|
Other property, plant and equipment, net |
238,420 |
255,824 | |||
|
Derivative contracts |
2,010 |
- | |||
|
Other assets |
1,327 |
6,284 | |||
|
Total assets |
$ 1,138,783 |
$ 1,081,392 | |||
|
LIABILITIES AND STOCKHOLDERS' EQUITY |
|||||
|
Current liabilities |
|||||
|
Accounts payable and accrued expenses |
$ 127,941 |
$ 116,517 | |||
|
Derivative contracts |
8 |
27,538 | |||
|
Asset retirement obligations |
62,144 |
66,154 | |||
|
Other current liabilities |
7,422 |
3,497 | |||
|
Total current liabilities |
197,515 |
213,706 | |||
|
Long-term debt |
37,601 |
305,308 | |||
|
Derivative contracts |
- |
2,176 | |||
|
Asset retirement obligations |
42,698 |
40,327 | |||
|
Other long-term obligations |
2,686 |
6,958 | |||
|
Total liabilities |
280,500 |
568,475 | |||
|
Commitments and contingencies |
|||||
|
Stockholders' Equity |
|||||
|
Common stock, $0.001 par value; 250,000 shares authorized; 35,801 issued and outstanding at September 30, 2017 and 21,042 issued and 19,635 outstanding at December 31, 2016 |
36 |
20 | |||
|
Warrants |
88,475 |
88,381 | |||
|
Additional paid-in capital |
1,037,932 |
758,498 | |||
|
Accumulated deficit |
(268,160) |
(333,982) | |||
|
Total stockholders' equity |
858,283 |
512,917 | |||
|
Total liabilities and stockholders' equity |
$ 1,138,783 |
$ 1,081,392 | |||
|
SandRidge Energy, Inc. and Subsidiaries Condensed Consolidated Cash Flows (Unaudited) | ||||||||
|
(In thousands) | ||||||||
|
Nine Months Ended September 30, | ||||||||
|
Successor |
Predecessor | |||||||
|
2017 |
2016 | |||||||
|
CASH FLOWS FROM OPERATING ACTIVITIES |
||||||||
|
Net income (loss) |
$ 65,822 |
$ (1,233,474) | ||||||
|
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities |
||||||||
|
Provision for doubtful accounts |
133 |
16,704 | ||||||
|
Depreciation, depletion and amortization |
98,215 |
112,301 | ||||||
|
Impairment |
3,475 |
718,194 | ||||||
|
Reorganization items, net |
- |
231,836 | ||||||
|
Debt issuance costs amortization |
313 |
4,996 | ||||||
|
Amortization of premiums and discounts on debt |
(231) |
2,734 | ||||||
|
Gain on extinguishment of debt |
- |
(41,179) | ||||||
|
Gain on debt derivatives |
- |
(1,324) | ||||||
|
Cash paid for early conversion of convertible notes |
- |
(33,452) | ||||||
|
(Gain) loss on derivative contracts |
(46,024) |
4,823 | ||||||
|
Cash received on settlement of derivative contracts |
7,700 |
72,608 | ||||||
|
Loss on settlement of contract |
- |
90,184 | ||||||
|
Cash paid on settlement of contract |
- |
(11,000) | ||||||
|
Stock-based compensation |
12,616 |
9,075 | ||||||
|
Other |
188 |
(3,260) | ||||||
|
Changes in operating assets and liabilities |
5,699 |
(3,805) | ||||||
|
Net cash provided by (used in) operating activities |
147,906 |
(64,039) | ||||||
|
CASH FLOWS FROM INVESTING ACTIVITIES |
||||||||
|
Capital expenditures for property, plant and equipment |
(152,743) |
(186,452) | ||||||
|
Acquisition of assets |
(48,236) |
(1,328) | ||||||
|
Proceeds from sale of assets |
19,769 |
20,090 | ||||||
|
Net cash used in investing activities |
(181,210) |
(167,690) | ||||||
|
CASH FLOWS FROM FINANCING ACTIVITIES |
||||||||
|
Proceeds from borrowings |
- |
489,198 | ||||||
|
Repayments of borrowings |
- |
(40,000) | ||||||
|
Debt issuance costs |
(1,488) |
(333) | ||||||
|
Cash paid for tax withholdings on vested stock awards |
(3,766) |
(44) | ||||||
|
Net cash (used in) provided by financing activities |
(5,254) |
448,821 | ||||||
|
NET (DECREASE) INCREASE IN CASH, CASH EQUIVALENTS and RESTRICTED CASH |
(38,558) |
217,092 | ||||||
|
CASH, CASH EQUIVALENTS and RESTRICTED CASH, beginning of year |
174,071 |
435,588 | ||||||
|
CASH, CASH EQUIVALENTS and RESTRICTED CASH, end of period |
$ 135,513 |
$ 652,680 | ||||||
|
Supplemental Disclosure of Cash Flow Information |
||||||||
|
Cash paid for reorganization items |
$ - |
$ (11,836) | ||||||
|
Supplemental Disclosure of Noncash Investing and Financing Activities |
||||||||
|
Cumulative effect of adoption of ASU 2015-02 |
$ - |
$ (247,566) | ||||||
|
Property, plant and equipment transferred in settlement of contract |
$ - |
$ (215,635) | ||||||
|
Change in accrued capital expenditures |
$ (15,241) |
$ 25,045 | ||||||
|
Equity issued for debt |
$(268,779) |
$ (4,409) | ||||||
Non-GAAP Financial Measures
Adjusted net income, operating cash flow, adjusted EBITDA, adjusted G&A per Boe, and net debt are non-GAAP financial measures.
The Company defines adjusted net income as net income before asset impairment, loss (gain) on derivative contracts, cash received upon settlement of derivative contracts, restructuring costs, drilling participation agreement transaction costs, oil field services – exit costs, reorganization items, net, employee incentive and retention and other expenses. The Company defines operating cash flow as net cash provided by (used in) operating activities before changes in operating assets and liabilities. It defines EBITDA as net (loss) income before income tax (benefit) expense, interest expense, depreciation and amortization – other and depreciation and depletion – oil and natural gas. Adjusted EBITDA, as presented herein, is EBITDA excluding asset impairment, stock-based compensation, loss (gain) on derivative contracts, cash received upon settlement of derivative contracts, loss on settlement of contract, restructuring costs, oil field services – exit costs, gain on extinguishment of debt, reorganization items employee incentive and retention and other various items. The Company defines adjusted G&A per Boe as general and administrative expense per Boe adjusted for certain non-recurring items, expressed on a per-Boe basis, and less stock-based compensation expense, expressed on a per-Boe basis.
Operating cash flow and adjusted EBITDA are supplemental financial measures used by the Company's management and by securities analysts, investors, lenders, rating agencies and others who follow the industry as an indicator of the Company's ability to internally fund exploration and development activities and to service or incur additional debt. The Company also uses these measures because operating cash flow and adjusted EBITDA relate to the timing of cash receipts and disbursements that the Company may not control and may not relate to the period in which the operating activities occurred. Further, operating cash flow and adjusted EBITDA allow the Company to compare its operating performance and return on capital with those of other companies without regard to financing methods and capital structure. These measures should not be considered in isolation or as a substitute for net cash provided by operating activities prepared in accordance with generally accepted accounting principles ("GAAP"). Adjusted EBITDA should not be considered as a substitute for net income, operating income, cash flows from operating activities or any other measure of financial performance or liquidity presented in accordance with GAAP. Adjusted EBITDA excludes some, but not all, items that affect net income and operating income and these measures may vary among other companies. Therefore, the Company's adjusted EBITDA may not be comparable to similarly titled measures used by other companies.
Management also uses the supplemental financial measure of adjusted net income (loss), which excludes asset impairment, (gain) loss on derivative contracts, cash received on settlement of derivative contracts, restructuring costs, drilling participation agreement transaction costs, oil field services – exit costs, reorganization items, employee incentive and retention and other non-cash items from income available (loss applicable) to common stockholders. Management uses this financial measure as an indicator of the Company's operational trends and performance relative to other oil and natural gas companies and believes it is more comparable to earnings estimates provided by securities analysts. Adjusted net income (loss) is not a measure of financial performance under GAAP and should not be considered a substitute for loss applicable to common stockholders.
The Company reports and provides guidance on adjusted G&A per Boe because it believes this measure is commonly used by management, analysts and investors as an indicator of cost management and operating efficiency on a comparable basis from period to period. In addition, management believes adjusted G&A per Boe is used by analysts and others in valuation, comparison and investment recommendations of companies in the oil and gas industry. This non-GAAP measure allows for the analysis of general and administrative spend without regard to stock-based compensation programs, and other non-recurring cash items which can vary significantly between companies. Adjusted G&A per Boe is not a measure of financial performance under GAAP and should not be considered a substitute for general and administrative expense per Boe. Therefore, the Company's Adjusted G&A per Boe may not be comparable to other companies' similarly titled measures.
The Company also uses the term net debt to determine the extent to which the Company's outstanding debt obligations would be satisfied by its cash and cash equivalents on hand. Management believes this metric is useful to investors in determining the Company's current leverage position following recent significant events subsequent to the period.
The tables below reconcile the most directly comparable GAAP financial measures to operating cash flow, EBITDA and adjusted EBITDA and adjusted net income (loss).
|
Reconciliation of Cash Provided by (Used in) Operating Activities | ||||||||||
|
to Operating Cash Flow | ||||||||||
|
(In thousands) | ||||||||||
|
Three Months Ended September 30, |
Nine Months Ended September 30, | |||||||||
|
Successor |
Predecessor |
Successor |
Predecessor | |||||||
|
2017 |
2016 |
2017 |
2016 | |||||||
|
Net cash provided by (used in) operating activities |
$ 43,974 |
$ 75,002 |
$ 147,906 |
$ (64,039) | ||||||
|
Changes in operating assets and liabilities |
2,107 |
(43,215) |
(5,699) |
3,805 | ||||||
|
Operating cash flow |
$ 46,081 |
$ 31,787 |
$ 142,207 |
$ (60,234) | ||||||
|
Reconciliation of Net (Loss) Income to EBITDA and Adjusted EBITDA | ||||||||||
|
(In thousands) | ||||||||||
|
Three Months Ended September 30, |
Nine Months Ended September 30, | |||||||||
|
Successor |
Predecessor |
Successor |
Predecessor | |||||||
|
2017 |
2016 |
2017 |
2016 | |||||||
|
Net (loss) income |
$ (8,485) |
$ (404,337) |
$ 65,822 |
$ (1,233,474) | ||||||
|
Adjusted for |
||||||||||
|
Income tax (benefit) expense |
(8,457) |
4 |
(8,496) |
11 | ||||||
|
Interest expense |
1,177 |
3,589 |
3,509 |
127,517 | ||||||
|
Depreciation and amortization - other |
3,399 |
7,514 |
10,729 |
21,323 | ||||||
|
Depreciation and depletion - oil and natural gas |
31,029 |
27,725 |
87,486 |
90,978 | ||||||
|
EBITDA |
18,663 |
(365,505) |
159,050 |
(993,645) | ||||||
|
Asset impairment |
498 |
354,451 |
3,475 |
718,194 | ||||||
|
Stock-based compensation |
2,961 |
1,247 |
10,789 |
4,291 | ||||||
|
Loss (gain) on derivative contracts |
11,702 |
(338) |
(46,024) |
4,823 | ||||||
|
Cash received upon settlement of derivative contracts (1) |
4,994 |
20,393 |
7,700 |
66,851 | ||||||
|
Loss on settlement of contract |
- |
- |
- |
90,184 | ||||||
|
Restructuring costs(2) |
515 |
476 |
8,554 |
36,406 | ||||||
|
Drilling participation agreement transaction costs |
2,881 |
- |
2,881 |
- | ||||||
|
Oil field services - exit costs |
- |
12 |
- |
2,428 | ||||||
|
Gain on extinguishment of debt |
- |
- |
- |
(41,179) | ||||||
|
Reorganization items, net |
- |
42,754 |
- |
243,672 | ||||||
|
Employee incentive and retention |
- |
9,724 |
- |
20,141 | ||||||
|
Other |
(477) |
1,521 |
(2,712) |
14,820 | ||||||
|
Adjusted EBITDA |
$ 41,737 |
$ 64,735 |
$ 143,713 |
$ 166,986 | ||||||
|
(1) |
Excludes amounts received for early settlement of contracts in the nine-month period ended September 30, 2016. |
||||
|
(2) |
Includes severance. | ||||
|
Reconciliation of Cash Provided by (Used in) Operating Activities to Adjusted EBITDA | |||||||||
|
(In thousands) | |||||||||
|
Three Months Ended September 30, |
Nine Months Ended September 30, | ||||||||
|
Successor |
Predecessor |
Successor |
Predecessor | ||||||
|
2017 |
2016 |
2017 |
2016 | ||||||
|
Net cash provided by (used in) operating activities |
$ 43,974 |
$ 75,002 |
$ 147,906 |
$ (64,039) | |||||
|
Changes in operating assets and liabilities |
2,107 |
(43,215) |
(5,699) |
3,805 | |||||
|
Interest expense |
1,177 |
3,589 |
3,509 |
127,517 | |||||
|
Cash received on early settlement of derivative contracts |
- |
- |
- |
(17,894) | |||||
|
Contractual maturity reached on previous early settlements |
- |
5,756 |
- |
12,137 | |||||
|
Cash paid on early conversion of convertible notes |
- |
- |
- |
33,452 | |||||
|
Cash paid on settlement of contract |
- |
- |
- |
11,000 | |||||
|
Restructuring costs(1)(2) |
515 |
498 |
6,729 |
31,328 | |||||
|
Drilling participation agreement transaction costs |
2,881 |
- |
2,881 |
- | |||||
|
Income tax (benefit) expense |
(8,457) |
4 |
(8,496) |
11 | |||||
|
Oil field services - exit costs (2) |
- |
13 |
- |
2,386 | |||||
|
Cash paid for reorganization items |
- |
11,836 |
- |
11,836 | |||||
|
Employee incentive and retention |
- |
9,724 |
- |
20,141 | |||||
|
Other |
(460) |
1,528 |
(3,117) |
(4,694) | |||||
|
Adjusted EBITDA |
$ 41,737 |
$ 64,735 |
$ 143,713 |
$ 166,986 | |||||
|
(1) |
Includes severance. | ||
|
(2) |
Excludes associated stock-based compensation. | ||
|
Reconciliation of Net (Loss Applicable) Income Available to Common Stockholders to Adjusted | ||||||||
|
Net Income Available (Loss Applicable) to Common Stockholders | ||||||||
|
(In thousands) | ||||||||
|
Three Months Ended September 30, | ||||||||
|
Successor |
Predecessor | |||||||
|
2017 |
2016 | |||||||
|
$ |
$/Diluted |
$ |
$/Diluted | |||||
|
Net loss applicable to common stockholders |
$ (8,485) |
$ (0.25) |
$ (404,337) |
$ (0.56) | ||||
|
Asset impairment |
498 |
0.01 |
354,451 |
0.49 | ||||
|
Loss (gain) on derivative contracts |
11,702 |
0.34 |
(338) |
0.00 | ||||
|
Cash received upon settlement of derivative contracts (1) |
4,994 |
0.15 |
20,393 |
0.03 | ||||
|
Restructuring costs(2) |
515 |
0.02 |
476 |
0.00 | ||||
|
Drilling participation agreement transaction costs |
2,881 |
0.09 |
- |
- | ||||
|
Oil field services - exit costs |
- |
- |
12 |
0.00 | ||||
|
Reorganization items, net |
- |
- |
42,754 |
0.06 | ||||
|
Employee incentive and retention |
- |
- |
9,724 |
0.02 | ||||
|
Other |
(215) |
(0.01) |
2,200 |
0.00 | ||||
|
Adjusted net income available to common stockholders |
$ 11,890 |
$ 0.35 |
$ 25,335 |
$ 0.04 | ||||
|
Basic |
Diluted(3) |
Basic |
Diluted(3) | |||||
|
Weighted average number of common shares outstanding |
34,290 |
34,388 |
718,373 |
718,373 | ||||
|
Total adjusted net income per share |
$ 0.35 |
$ 0.35 |
$ 0.04 |
$ 0.04 | ||||
|
Nine Months Ended September 30, | ||||||||
|
Successor |
Predecessor | |||||||
|
2017 |
2016 | |||||||
|
$ |
$/Diluted |
$ |
$/Diluted | |||||
|
Net income available (loss applicable) to common stockholders |
$ 65,822 |
$ 2.06 |
$ (1,249,795) |
$ (1.76) | ||||
|
Asset impairment |
3,475 |
0.11 |
718,194 |
1.01 | ||||
|
(Gain) loss on derivative contracts |
(46,024) |
(1.44) |
4,823 |
0.01 | ||||
|
Cash received upon settlement of derivative contracts (1) |
7,700 |
0.24 |
66,851 |
0.09 | ||||
|
Loss on settlement of contract |
- |
- |
90,184 |
0.13 | ||||
|
Restructuring costs(2) |
8,554 |
0.27 |
36,406 |
0.05 | ||||
|
Drilling participation agreement transaction costs |
2,881 |
0.09 |
- |
- | ||||
|
Oil field services - exit costs |
- |
- |
2,428 |
0.00 | ||||
|
Gain on extinguishment of debt |
- |
- |
(41,179) |
(0.06) | ||||
|
Reorganization items, net |
- |
- |
243,672 |
0.34 | ||||
|
Employee incentive and retention |
- |
- |
20,141 |
0.03 | ||||
|
Other |
(1,642) |
(0.06) |
15,410 |
0.03 | ||||
|
Adjusted net income available (loss applicable) to common stockholders |
$ 40,766 |
$ 1.27 |
$ (92,865) |
$ (0.13) | ||||
|
Basic |
Diluted(3) |
Basic |
Diluted(3) | |||||
|
Weighted average number of common shares outstanding |
31,750 |
31,984 |
708,788 |
708,788 | ||||
|
Total adjusted net income (loss) per share |
$ 1.28 |
$ 1.27 |
$ (0.13) |
$ (0.13) | ||||
|
(1) |
Excludes amounts received for early settlement of contracts in the 2016 periods. | ||||||||||||
|
(2) |
Includes severance. | ||||||||||||
|
(3) |
Weighted average fully diluted common shares outstanding for certain periods presented includes shares that are considered antidilutive for calculating loss per share in accordance with GAAP. | ||||||||||||
For further information, please contact:
Justin M. Lewellen
Director of Investor Relations
SandRidge Energy, Inc.
123 Robert S. Kerr Avenue
Oklahoma City, OK 73102-6406
(405) 429-5515
Cautionary Note to Investors - This press release includes "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, including, but not limited to, the information appearing under the heading "Operational Guidance." These statements express a belief, expectation or intention and are generally accompanied by words that convey projected future events or outcomes. The forward-looking statements include projections and estimates of the Company's corporate strategies, future operations, and development plans and appraisal programs, projected acreage position, drilling inventory and locations, estimated oil, and natural gas and natural gas liquids production, rates of return, reserves, price realizations and differentials, hedging program, projected operating, general and administrative and other costs, projected capital expenditures, tax rates, efficiency and cost reduction initiative outcomes, liquidity and capital structure and infrastructure assessment and investment. We have based these forward-looking statements on our current expectations and assumptions and analyses made by us in light of our experience and our perception of historical trends, current conditions and expected future developments, as well as other factors we believe are appropriate under the circumstances. However, whether actual results and developments will conform with our expectations and predictions is subject to a number of risks and uncertainties, including the volatility of oil and natural gas prices, our success in discovering, estimating, developing and replacing oil and natural gas reserves, actual decline curves and the actual effect of adding compression to natural gas wells, the availability and terms of capital, the ability of counterparties to transactions with us to meet their obligations, our timely execution of hedge transactions, credit conditions of global capital markets, changes in economic conditions, the amount and timing of future development costs, the availability and demand for alternative energy sources, regulatory changes, including those related to carbon dioxide and greenhouse gas emissions, and other factors, many of which are beyond our control. We refer you to the discussion of risk factors in Part I, Item 1A - "Risk Factors" of our Annual Report on Form 10-K for the year ended December 31, 2016 and in comparable "Risk Factor" sections of our Quarterly Reports on Form 10-Q filed after such form 10-K. All of the forward-looking statements made in this press release are qualified by these cautionary statements. The actual results or developments anticipated may not be realized or, even if substantially realized, they may not have the expected consequences to or effects on our Company or our business or operations. Such statements are not guarantees of future performance and actual results or developments may differ materially from those projected in the forward-looking statements. We undertake no obligation to update or revise any forward-looking statements.
SandRidge Energy, Inc. (NYSE: SD) is an oil and natural gas exploration and production company headquartered in Oklahoma City, Oklahoma with its principal focus on developing high-return, growth-oriented projects in the U.S. Mid-Continent and Niobrara Shale.
View original content with multimedia:http://www.prnewswire.com/news-releases/sandridge-energy-inc-reports-financial-and-operational-results-for-third-quarter-of-2017-300547858.html
SOURCE SandRidge Energy, Inc.
Article Date
11/1/2017SandRidge Energy, Inc. Announces 2017 Third Quarter Shareholder Update and Financial Results Release Date and Conference Call Information
Source: PR Newswire
Orignial Article: http://www.prnewswire.com...
OKLAHOMA CITY, Oct. 2, 2017 /PRNewswire/ -- SandRidge Energy, Inc. (NYSE: SD) will release its 2017 third quarter shareholder update and financial results after the close of trading on the New York Stock Exchange on Wednesday, November 1, 2017.
The company will host a conference call to discuss these results on Thursday, November 2, 2017 at 8:00am CT. The telephone number to access the conference call from within the U.S. is (833) 245-9650 and from outside the U.S. is (647) 689-4222. The passcode for the call is 94553818. An audio replay of the call will be available from November 2, 2017 until 11:59pm CT on December 2, 2017. The number to access the conference call replay from within the U.S. is (800) 585-8367 and from outside the U.S. is (416) 621-4642. The passcode for the replay is 94553818.
A live audio webcast of the conference call will also be available via SandRidge's website, www.sandridgeenergy.com, under Investor Relations/Presentations & Events. The webcast will be archived for replay on the company's website for 30 days.
About SandRidge Energy, Inc.
SandRidge Energy, Inc. (NYSE: SD) is an oil and natural gas exploration and production company headquartered in Oklahoma City, Oklahoma with its principal focus on developing high-return, growth-oriented projects in the U.S. Mid-Continent and Niobrara Shale.
CONTACT:
Justin M. Lewellen
Director of Investor Relations
SandRidge Energy, Inc.
123 Robert S. Kerr Avenue
Oklahoma City, OK 73102
+1 (405) 429-5515
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SOURCE SandRidge Energy, Inc.
Article Date
10/2/20178/2/2017 - SandRidge Energy, Inc. Reports Financial and Operational Results for Second Quarter of 2017
SandRidge Energy, Inc. Reports Financial and Operational Results for Second Quarter of 2017
Source: PR Newswire
Orignial Article: http://www.prnewswire.com...
OKLAHOMA CITY, Aug. 2, 2017 /PRNewswire/ -- SandRidge Energy, Inc. (the "Company" or "SandRidge") (NYSE:SD) today announced financial and operational results for the quarter ended June 30, 2017. Additionally, the Company will host a conference call to discuss these results on August 3, at 8:00 a.m. CT (877-201-0168, International: 647-788-4901 – passcode: 42174349). Presentation slides will be available on the Company's website, www.sandridgeenergy.com, under Investor Relations/Events.
Financial Results
The Company reported net income of $23 million, or $0.69 per share, and net cash from operating activities of $40 million for the second quarter of 2017. When adjusting these reported amounts for items that are typically excluded by the investment community on the basis that such items affect the comparability of results, the Company's "adjusted net income" amounted to $8 million, or $0.23 per share, and "adjusted operating cash flow" totaled $43 million. Earnings before interest, income taxes, depreciation, depletion, and amortization, adjusted for certain other items, otherwise referred to as "adjusted EBITDA" for the second quarter was $46 million.(1)
|
1) |
The Company has defined and reconciled certain Non-GAAP financial measures including adjusted net income, adjusted operating cash flow, adjusted EBITDA, and current net debt, to the most directly comparable GAAP financial measures in supporting tables at the conclusion of this press release under the "Non-GAAP Financial Measures" beginning on page 17. |
Operational Results and Activity
Production for the quarter was 3.8 MMBoe (27% oil, 24% NGLs and 49% natural gas). The Company's Mid-Continent assets produced approximately 92% of total production, with North Park Basin and Permian assets making up the balance. As more NW STACK and North Park wells are brought to sales, oil production as a proportion of total production is expected to increase from 27% this quarter to over 30% by the fourth quarter of 2017. During the second quarter the Company averaged two and a half rigs drilling Meramec wells in the NW STACK and resumed drilling Niobrara wells in North Park with one rig at the end of the quarter. For the remainder of the year, SandRidge anticipates averaging two rigs in the NW STACK and one rig in the North Park Basin.
$200 Million NW STACK Drilling Participation Agreement
Subsequent to the quarter, the Company entered into a $200 million development agreement (the "Drilling Participation Agreement") with a private investment fund ("Counterparty") to develop wells in the NW STACK. This wellbore-only drilling program will target the Meramec formation, primarily within Major and Woodward Counties, Oklahoma. The Counterparty will fund $100 million in the initial tranche with an option for a second $100 million tranche (subject to mutual agreement). The Counterparty will fund 90% of the drilling costs and will receive an 80% working interest in each wellbore. SandRidge will be the operator of wells developed under the Drilling Participation Agreement. Prior to declaring the transaction effective, the Company has sought preclearance of certain accounting matters related to the transaction from the SEC.
Updated 2017 Capital and Operational Guidance
At the beginning of 2017, capital expenditures were budgeted for nine months of drilling in order to evaluate results before further allocation of capital, similar to the strategy taken in North Park in 2016 when the Company drilled from February to August. Results in both North Park as well as the NW STACK have exceeded expectations as evidenced by an improved Niobrara type curve and successful Meramec drilling.
Earlier in the year, applications filed by the Company to form two federal units in North Park were under review, but then were subsequently approved earlier than expected. These approvals present SandRidge with an opportunity to hold 13,000 additional acres so long as drilling is completed in a specified time frame. Given the continued production outperformance of the asset, drilling will continue through the remainder of the year, holding the federal acreage while also delivering an additional eight extended reach laterals (XRLs) to the three previously planned. In the NW STACK, additional science and other technical data will advance understanding of the area's geology as the Company licenses 3D seismic and completes core analysis in the fourth quarter, supporting long term development through improved reservoir characterization. As a result, the Company has raised its capital expenditures budget by approximately $40 million, to a range of $250 to $260 million.
Other notable capital guidance highlights include the reduction of Mid-Continent drilling and completion expenditures by $5 million while also increasing laterals drilled to 34 from 22 in 2017 through the Drilling Participation Agreement. Also, Mississippian workover capital projections have been reduced by $7 million, due to longer run times and decreased failure rates on artificial lift.
Due to the North Park production outperformance mentioned above, total company production guidance is also being raised 200 MBoe at the midpoint to a range of 14.2 to 14.9 MMBoe. Liquids production makes up 100% of the increase, with oil anticipated to be 100 MBbls greater (at the midpoint) than previously estimated. Important to note, production from the additional fourth quarter drilling activity will be realized in 2018.
Finally, total company lease operating expense guidance is being revised approximately $16 million lower at the midpoint due to ongoing focus on controllable cost saving efforts, including but not limited to electrical efficiency initiatives and chemical program improvements. As a result of raising production and lowering lifting cost guidance, along with $15 million of non-core asset sales occurring in the first six months of 2017, the Company expects to maintain the same level of outspend as in its original budget.
More information regarding the detailed capital budget and operational guidance variances to previous periods can be found below on page 8 of this release.
James Bennett, SandRidge President and CEO said, "Our strategy remains consistent as we move into the second half of the year: while protecting our unlevered balance sheet, maintaining a modest outspend and utilizing strong cash flow from our Mississippian properties, we will prudently develop our oil-weighted NW STACK and North Park Basin assets. To that end, ongoing drilling activity remains focused on growing oil production and creating resource value in both of our focus areas. The drilling agreement announced today highlights the value of our NW STACK position and enables us to further delineate and develop our substantial acreage in this area.
Regarding our capital allocation plans for 2017, the original guidance anticipated completing our North Park drilling program in the third quarter. However, in light of the results from the 2016 wells, improvement in our type curve, and the approval of two new federal units, we plan to continue drilling in North Park through the end of the year and also construct facilities and infrastructure to support our 2017 and 2018 programs. In the NW STACK, due to the carry structure of the drilling agreement, we are reducing our NW STACK D&C capex while simultaneously increasing the number of laterals drilled by 55%. In total, we are increasing our capital program from a midpoint of $215 million to $255 million. It's important to note that even with this increase in capital spending, we will maintain the same level of outspend as with our original budget as our improvements in LOE, increase in production guidance and approximately $15 million in asset sale proceeds will offset the increase in capex."
Highlights During and Subsequent to the Second Quarter
$200 Million NW STACK Drilling Participation Agreement Expected to Increase Net Asset Value and Delineate Acreage Position
Raising 2017 Production Guidance to 14.2-14.9 MMBoe from 14.0-14.7 MMBoe with Oil Comprising Half of the Increase
Lowering Midpoint of Lease Operating Expense Guidance $1.25 per Boe to $7.00-$7.50 from $8.00-$9.00 or 15% at the Midpoint
2017 Capital Expenditure Guidance Increasing to $250-$260 Million from $210-$220 Million
North Park Basin Drilling Activity Resumed with One Rig Targeting Multiple Niobrara Benches
Improved North Park Basin Niobrara Type Curve Reflects Production Outperformance
First Major County Meramec Two-Mile Lateral (XRL) 30-Day IP of 902 Boepd (81% Oil)
Q2'17 Net Income of $23 Million and $46 Million of Adjusted EBITDA
Q2'17 Adjusted Net Income of $8 Million
Q2'17 Capital Expenditures of $57 Million
Q2'17 Production of 3.8 MMBoe (27% Oil, 24% NGLs and 49% Natural Gas)
$563 Million of Liquidity Including $145 Million of Cash and $418 Million Capacity Under Credit Facility (Net of Letters of Credit)
NW STACK Drilling Participation Agreement
As mentioned above, subsequent to the quarter, the Company executed the $200 million Drilling Participation Agreement with a Counterparty to develop SandRidge operated wells primarily in Major and Woodward Counties. SandRidge will be the operator of wells developed under the agreement and will retain sole discretion as to the number, location and schedule of wells drilled. In the initial tranche, the Counterparty will fund $100 million for its share of drilling and completion costs of the wells and receive a wellbore-only working interest ("WI") in the wells, subject to reversionary hurdles. The second $100 million tranche is subject to mutual agreement. Prior to declaring the transaction effective, the Company has sought preclearance of certain accounting matters related to the transaction from the SEC.
|
Development Costs & |
Counterparty |
SandRidge | |||
|
Development Costs |
90% of costs |
10% of costs | |||
|
WI at Spud |
80% of WI |
20% of WI |
Key highlights and benefits to SandRidge of the wellbore-only NW STACK Drilling Participation Agreement:
Mid-Continent Assets in Oklahoma
For several years, SandRidge has actively developed the Anadarko Basin with over 1,600 horizontal wells drilled in Oklahoma and Kansas. Current drilling activity is concentrated within the Company's 70,000 net acres in the NW STACK encompassing Major, Woodward and Garfield Counties. This area contains an extension of the oil-weighted Meramec and Osage targeting opportunities present in the STACK (Canadian and Kingfisher Counties). The Drilling Participation Agreement announced today allows SandRidge to accelerate delineation of its large NW STACK footprint, increasing drilled laterals to 34 from 22 while simultaneously reducing capital expenditures by 7%.
During the second quarter, SandRidge drilled eight laterals in the NW STACK and brought six laterals to sales. The Campbell 2016 1-26H23H, the Company's first two-mile extended reach lateral (XRL) in Major County, delivered a 30-Day IP of 902 Boepd (81% oil), followed by the Jack Samuel 2012 1-20H29H, a second Major County XRL realizing 436 Boepd (64% oil). The Adams 2122 1-16H9H XRL, located in Western Woodward County, is approximately 30 miles from the nearest operated producing well. Recent production has exceeded 3 MMcfpd with 1,600 psi of flowing tubing pressure. Currently, the Adams is offline for ongoing completion work. Finally, SandRidge will improve Meramec reservoir characterization with the licensing of 3D seismic data covering 329 square miles in Woodward, Major and Dewey Counties.
Niobrara Asset in North Park Basin, Jackson County, Colorado
SandRidge acquired its oil rich North Park Basin Niobrara properties in December 2015 and began development in January 2016. Across the acreage position, the Niobrara formation is located at vertical depths between 5,800 and 7,500 feet with gross thickness from 460 to 500 feet. The Company has 125,000 net acres, 57% of which is held by production or held by federal unit. This land position comprises a dominant footprint in North Park where the Niobrara shale is geologically similar to but thicker and oilier than that of the actively developed Denver-Julesburg or "DJ" Basin. Since acquisition, SandRidge has drilled 12 wells, including two XRLs in the second quarter of 2017, which averaged only 12 days from spud to rig release.
Due to production outperformance of the 2016 program versus initial expectations, the Company adjusted the initial decline of the Niobrara type curve, leading to a substantial improvement in its overall return and present value. This proven performance and value uplift from multiple benches of the Niobrara combined with an opportunity to hold material amounts of federal unit acreage support the decision to continue drilling in this area for the remainder of the year.
In total, the new 2017 plan includes the drilling of 11 XRLs (an increase from three originally) and construction of infrastructure necessary to support the 2018 drilling program. Drilling will include continued development and technical appraisal of multiple Niobrara benches. In addition to the already proven C and D bench, a well will be drilled to target the B bench. To further enhance subsurface understanding, the Company has recently cut and is analyzing a 519 foot core.
Furthermore, two of the planned XRLs will hold an additional 13,000 acres on two federal units. When including acreage to be held by previous plans, the Company will protect 37,000 acres in 2017, bringing total acreage either held by production or federal unit to approximately 85% by year-end. This dominantly held acreage, when combined with the value uplift from the improvement of the Niobrara type curve, positions the Company for longer term development and value creation from this asset.
Other Operational Activities
During the second quarter, Permian Central Basin Platform properties produced 131 MBoe (1.4 MBoepd, 80% oil, 13% NGLs, 7% natural gas).
Key Financial Highlights and Results
Second Quarter Results
First Six Months of 2017
Capitalization & Liquidity
Hedging
Unchanged from the previous reporting period, in 2017 the Company has approximately 3.3 million barrels of oil hedged at an average WTI price of $52.24 as well as 32.9 billion cubic feet of natural gas hedged at an average price of $3.20 per MMBtu. 2017 oil hedges represent 78% of the midpoint of current oil volume guidance. 2017 gas hedges represent 77% of the midpoint of current gas volume guidance.
For 2018, the Company has approximately 1.8 million barrels of oil hedged at an average WTI price of $55.34. Subsequent to the second quarter, 3.6 billion cubic feet of natural gas swaps were added, bringing the total to approximately 16.4 billion cubic feet of natural gas hedged at an average price of $3.15 per MMBtu in 2018.
Conference Call Information
The Company will host a conference call to discuss these results on Thursday, August 3, 2017 at 8:00 am CT. The telephone number to access the conference call from within the U.S. is (877) 201-0168 and from outside the U.S. is (647) 788-4901. The passcode for the call is 42174349. An audio replay of the call will be available from August 3, 2017 until 11:59 pm CT on September 3, 2017. The number to access the conference call replay from within the U.S. is (800) 585-8367 and from outside the U.S. is (416) 621-4642. The passcode for the replay is 42174349.
A live audio webcast of the conference call will also be available via SandRidge's website, www.sandridgeenergy.com, under Investor Relations/Events. The webcast will be archived for replay on the Company's website for 30 days.
2017 Operational and Capital Expenditure Guidance
The table below highlights the raising of the Company's 2017 production guidance along with the increasing of its NGL pricing realization and severance tax estimates. Furthermore, the company is lowering lease operating guidance and increasing capital guidance as previously discussed.
Additional 2017 Guidance detail is available on the Company's website, www.sandridgeenergy.com, under Investor Relations/Financial Information/Guidance.
|
Updated |
Previous | ||||
|
Total Company |
Total Company | ||||
|
Projection as of |
Projection as of | ||||
|
August 2, 2017 |
May 10, 2017 | ||||
|
Production |
|||||
|
Oil (MMBbls) |
4.1 - 4.3 |
4.0 - 4.2 | |||
|
Natural Gas Liquids (MMBbls) |
3.1 - 3.3 |
3.0 - 3.2 | |||
|
Total Liquids (MMBbls) |
7.2 - 7.6 |
7.0 - 7.4 | |||
|
Natural Gas (Bcf) |
42.0 - 43.5 |
42.0 - 43.5 | |||
|
Total (MMBoe) |
14.2 - 14.9 |
14.0 - 14.7 | |||
|
Price Realization |
|||||
|
Oil (differential below NYMEX WTI) |
$2.75 |
$2.75 | |||
|
Natural Gas Liquids (realized % of NYMEX WTI) |
28% |
26% | |||
|
Natural Gas (differential below NYMEX Henry Hub) |
$1.00 |
$1.00 | |||
|
Costs per Boe |
|||||
|
LOE |
$7.00 - $7.50 |
$8.00 - $9.00 | |||
|
Adjusted G&A - Cash1 |
$4.25 - $4.50 |
$4.25 - $4.50 | |||
|
% of Revenue |
|||||
|
Production Taxes |
3.00% - 3.25% |
2.75% - 3.00% | |||
|
Capital Expenditures ($ in millions) | |||||
|
Drilling and Completion |
|||||
|
Mid-Continent |
$60 - $65 |
$65 - $70 | |||
|
North Park Basin |
60 - 65 |
20 - 25 | |||
|
Other2 |
20 |
24 | |||
|
Total Drilling and Completion |
$140 - $150 |
$109 - $119 | |||
|
Other E&P |
|||||
|
Land, G&G, and Seismic |
$46 |
$40 | |||
|
Infrastructure3 |
18 |
7 | |||
|
Workover |
30 |
37 | |||
|
Capitalized G&A and Interest |
14 |
15 | |||
|
Total Other Exploration and Production |
$108 |
$99 | |||
|
General Corporate |
2 |
2 | |||
|
Total Capital Expenditures |
$250 - $260 |
$210 - $220 | |||
|
(1) |
Adjusted G&A - Cash is a non-GAAP financial measure as it excludes from G&A non-cash compensation, severance, bad debt allowance, and other non-recurring items. The most directly comparable GAAP measure for Adjusted G&A - cash is General and Administrative Expense. Information to reconcile this non-GAAP financial measure to the most directly comparable GAAP financial measure is not available at this time, as management is unable to forecast the excluded items for future periods. |
|
(2) |
2016 Carryover, Coring, Non-Op and SWD |
|
(3) |
Infrastructure - Production facilities, Pipeline ROW and Electrical |
Operational and Financial Statistics
Upon emergence from Chapter 11 reorganization, the Company elected to adopt fresh start accounting effective October 1, 2016. As a result of the application of fresh start accounting and the effects of the implementation of the plan of reorganization, the financial statements on or after October 1, 2016 will not be comparable with the financial statements prior to that date. References to the "Successor" refer to SandRidge subsequent to adoption of fresh start accounting. References to the "Predecessor" refer to SandRidge prior to adoption of fresh start accounting.
Information regarding the Company's production, pricing, costs and earnings is presented below:
|
Three Months Ended June 30, |
Six Months Ended June 30, | |||||||||||
|
Successor |
Predecessor |
Successor |
Predecessor | |||||||||
|
2017 |
2016 |
2017 |
2016 | |||||||||
|
Production - Total |
||||||||||||
|
Oil (MBbl) |
1,042 |
1,408 |
2,176 |
3,033 | ||||||||
|
NGL (MBbl) |
907 |
1,144 |
1,794 |
2,255 | ||||||||
|
Natural gas (MMcf) |
11,267 |
14,536 |
23,033 |
31,045 | ||||||||
|
Oil equivalent (MBoe) |
3,827 |
4,974 |
7,809 |
10,462 | ||||||||
|
Daily production (MBoed) |
42.1 |
54.7 |
43.1 |
57.5 | ||||||||
|
Average price per unit |
||||||||||||
|
Realized oil price per barrel - as reported |
$ 46.04 |
$ 41.70 |
$ 47.68 |
$ 34.33 | ||||||||
|
Realized impact of derivatives per barrel |
3.11 |
15.12 |
1.63 |
15.58 | ||||||||
|
Net realized price per barrel |
$ 49.15 |
$ 56.82 |
$ 49.31 |
$ 49.91 | ||||||||
|
Realized NGL price per barrel - as reported |
$ 14.49 |
$ 13.36 |
$ 15.37 |
$ 12.06 | ||||||||
|
Realized impact of derivatives per barrel |
- |
- |
- |
- | ||||||||
|
Net realized price per barrel |
$ 14.49 |
$ 13.36 |
$ 15.37 |
$ 12.06 | ||||||||
|
Realized natural gas price per Mcf - as reported |
$ 2.08 |
$ 1.49 |
$ 2.23 |
$ 1.57 | ||||||||
|
Realized impact of derivatives per Mcf |
0.01 |
(0.02) |
(0.04) |
(0.03) | ||||||||
|
Net realized price per Mcf |
$ 2.09 |
$ 1.47 |
$ 2.19 |
$ 1.54 | ||||||||
|
Realized price per Boe - as reported |
$ 22.09 |
$ 19.23 |
$ 23.40 |
$ 17.21 | ||||||||
|
Net realized price per Boe - including impact of derivatives |
$ 22.97 |
$ 23.44 |
$ 23.74 |
$ 21.65 | ||||||||
|
Average cost per Boe |
||||||||||||
|
Lease operating(1) |
$ 6.59 |
$ 8.58 |
$ 6.43 |
$ 8.60 | ||||||||
|
Production taxes |
0.69 |
0.43 |
0.75 |
0.37 | ||||||||
|
General and administrative |
||||||||||||
|
General and administrative, excluding stock-based compensation |
$ 4.54 |
$ 4.84 |
$ 4.36 |
$ 8.31 | ||||||||
|
Stock-based compensation |
1.67 |
1.40 |
1.24 |
1.75 | ||||||||
|
Total general and administrative |
$ 6.21 |
$ 6.24 |
$ 5.60 |
$ 10.06 | ||||||||
|
General and administrative - adjusted |
||||||||||||
|
General and administrative, excluding stock-based compensation (2) |
$ 3.70 |
$ 2.88 |
$ 3.56 |
$ 3.60 | ||||||||
|
Stock-based compensation (3) |
1.19 |
0.60 |
1.00 |
0.59 | ||||||||
|
Total general and administrative - adjusted |
$ 4.89 |
$ 3.48 |
$ 4.56 |
$ 4.19 | ||||||||
|
Depletion (4) |
$ 7.70 |
$ 5.90 |
$ 7.23 |
$ 6.05 | ||||||||
|
Earnings per share |
||||||||||||
|
Earnings (loss) per share applicable to common stockholders |
||||||||||||
|
Basic |
$ 0.69 |
$ (0.73) |
$ 2.44 |
$ (1.20) | ||||||||
|
Diluted |
$ 0.69 |
$ (0.73) |
$ 2.42 |
$ (1.20) | ||||||||
|
Adjusted net income (loss) per share available to common stockholders |
||||||||||||
|
Basic |
$ 0.23 |
$ (0.03) |
$ 0.95 |
$ (0.17) | ||||||||
|
Diluted |
$ 0.23 |
$ (0.03) |
$ 0.94 |
$ (0.17) | ||||||||
|
Weighted average number of shares outstanding (in thousands) |
||||||||||||
|
Basic |
34,076 |
718,102 |
30,458 |
703,943 | ||||||||
|
Diluted |
34,138 |
718,102 |
30,650 |
703,943 | ||||||||
|
(1) |
Transportation costs are presented as a reduction of revenue by the Successor Company compared to the Predecessor Company's presentation of these costs as lease operating expenses. | |||||||||||
|
(2) |
Excludes restructuring costs and severance totaling $3.2 million and $6.2 million for the three and six-month periods ended June 30, 2017. Excludes severance, restructuring costs and various other insignificant costs totaling $9.7 million and $32.6 million for the three and six-month periods ended June 30, 2016, respectively. The six-month period ended June 30, 2016 additionally excludes a $16.7 million doubtful receivable write-off. | |||||||||||
|
(3) |
Three and six-month periods ended June 30, 2017 exclude $1.8 million for the acceleration of certain stock awards. Three and six-month periods ended June 30, 2016 exclude $4.0 million and $12.0 million, respectively, for the acceleration of certain stock awards. | |||||||||||
|
(4) |
Includes accretion of asset retirement obligation. | |||||||||||
Capital Expenditures
The table below summarizes the Company's capital expenditures for the three and six-month periods ended June 30, 2017 and 2016 (in thousands):
|
Three Months Ended June 30, |
Six Months Ended June 30, | |||||||||
|
Successor |
Predecessor |
Successor |
Predecessor | |||||||
|
2017 |
2016 |
2017 |
2016 | |||||||
|
Drilling and production |
||||||||||
|
Mid-Continent |
$ 30,633 |
$ 21,486 |
$ 50,312 |
$ 63,572 | ||||||
|
North Park |
8,308 |
28,359 |
12,631 |
40,796 | ||||||
|
Other |
217 |
347 |
241 |
561 | ||||||
|
39,158 |
50,192 |
63,184 |
104,929 | |||||||
|
Leasehold and geophysical |
||||||||||
|
Mid-Continent |
16,530 |
1,042 |
28,157 |
(5,937) | ||||||
|
North Park |
111 |
695 |
3,162 |
767 | ||||||
|
Other |
351 |
1,108 |
674 |
3,058 | ||||||
|
16,992 |
2,845 |
31,993 |
(2,112) | |||||||
|
Inventory |
151 |
1,468 |
57 |
2,232 | ||||||
|
Total exploration and development |
56,301 |
54,505 |
95,234 |
105,049 | ||||||
|
Other - operating |
211 |
960 |
608 |
2,190 | ||||||
|
Other - corporate |
- |
685 |
1,402 |
2,393 | ||||||
|
Total capital expenditures, excluding acquisitions |
56,512 |
56,150 |
97,244 |
109,632 | ||||||
|
Acquisitions |
163 |
1,302 |
48,236 |
1,397 | ||||||
|
Total capital expenditures |
$ 56,675 |
$ 57,452 |
$ 145,480 |
$ 111,029 | ||||||
Capital Expenditures (Guidance Category Detail)
The table below presents actual results of the Company's capital expenditures for the three and six-month periods ended June 30, 2017 at the same level of detail as its full year capital expenditure guidance.
|
Three Months Ended |
Six Months Ended | |||||
|
June 30, 2017 |
June 30, 2017 | |||||
|
(in thousands) |
(in thousands) | |||||
|
Drilling and Completion |
||||||
|
Mid-Continent |
$ 22,449 |
$ 26,961 | ||||
|
North Park Basin |
5,196 |
5,314 | ||||
|
Other1 |
1,617 |
12,576 | ||||
|
Total Drilling and Completion |
$ 29,263 |
$ 44,850 | ||||
|
Other E&P |
||||||
|
Land, G&G, and Seismic |
$ 16,263 |
$ 29,806 | ||||
|
Infrastructure2 |
576 |
1,717 | ||||
|
Workovers |
7,210 |
13,382 | ||||
|
Capitalized G&A and Interest |
3,201 |
6,087 | ||||
|
Total Other Exploration and Production |
$ 27,249 |
$ 50,992 | ||||
|
General Corporate |
$ - |
$ 1,402 | ||||
|
Total Capital Expenditures |
$ 56,512 |
$ 97,244 | ||||
|
(excluding acquisitions and plugging and abandonment) |
||||||
|
(1) 2016 Carryover, Coring, Non-Op and SWD |
|
(2) Infrastructure - Production facilities, Pipeline ROW and Electrical |
Derivative Contracts
The table below sets forth the Company's consolidated oil and natural gas price swaps for 2017 and 2018 as of July 30, 2017:
|
Quarter Ending |
|||||||||||
|
3/31/2017 |
6/30/2017 |
9/30/2017 |
12/31/2017 |
FY 2017 | |||||||
|
Oil Swaps: |
|||||||||||
|
Total Volume (MMBbls) |
0.81 |
0.82 |
0.83 |
0.83 |
3.29 | ||||||
|
Daily Volume (MBblspd) |
9.0 |
9.0 |
9.0 |
9.0 |
9.0 | ||||||
|
Swap Price ($/bbl) |
$52.24 |
$52.24 |
$52.24 |
$52.24 |
$52.24 | ||||||
|
Natural Gas Swaps: |
|||||||||||
|
Total Volume (Bcf) |
8.10 |
8.19 |
8.28 |
8.28 |
32.85 | ||||||
|
Daily Volume (MMBtupd) |
90.0 |
90.0 |
90.0 |
90.0 |
90.0 | ||||||
|
Swap Price ($/MMBtu) |
$3.20 |
$3.20 |
$3.20 |
$3.20 |
$3.20 | ||||||
|
3/31/2018 |
6/30/2018 |
9/30/2018 |
12/31/2018 |
FY 2018 | |||||||
|
Oil Swaps: |
|||||||||||
|
Total Volume (MMBbls) |
0.45 |
0.46 |
0.46 |
0.46 |
1.83 | ||||||
|
Daily Volume (MBblspd) |
5.0 |
5.0 |
5.0 |
5.0 |
5.0 | ||||||
|
Swap Price ($/bbl) |
$55.34 |
$55.34 |
$55.34 |
$55.34 |
$55.34 | ||||||
|
Natural Gas Swaps: |
|||||||||||
|
Total Volume (Bcf) |
5.40 |
3.64 |
3.68 |
3.68 |
16.40 | ||||||
|
Daily Volume (MMBtupd) |
60.0 |
40.0 |
40.0 |
40.0 |
44.9 | ||||||
|
Swap Price ($/MMBtu) |
$3.23 |
$3.11 |
$3.11 |
$3.11 |
$3.15 | ||||||
Capitalization
The Company's capital structure as of June 30, 2017 and December 31, 2016 is presented below:
|
June 30, |
December 31, | |||||
|
(In thousands) | ||||||
|
Cash, cash equivalents and restricted cash |
$ 151,240 |
$ 174,071 | ||||
|
Credit facility |
$ - |
$ - | ||||
|
Building note |
37,679 |
36,528 | ||||
|
Mandatorily convertible 0% notes |
- |
268,780 | ||||
|
Total debt |
37,679 |
305,308 | ||||
|
Stockholders' equity |
||||||
|
Common stock |
34 |
20 | ||||
|
Warrants |
88,381 |
88,381 | ||||
|
Additional paid-in capital |
1,035,421 |
758,498 | ||||
|
Accumulated deficit |
(259,675) |
(333,982) | ||||
|
Total SandRidge Energy, Inc. stockholders' equity |
864,161 |
512,917 | ||||
|
Total capitalization |
$ 901,840 |
$ 818,225 | ||||
|
SandRidge Energy, Inc. Condensed Consolidated Statements of Operations (Unaudited) | ||||||||||||||
|
(In thousands, except per share amounts) | ||||||||||||||
|
Three Months Ended June 30, |
Six Months Ended June 30, | |||||||||||||
|
Successor |
Predecessor |
Successor |
Predecessor | |||||||||||
|
2017 |
2016 |
2017 |
2016 | |||||||||||
|
Revenues |
||||||||||||||
|
Oil, natural gas and NGL |
$ 84,546 |
$ 95,662 |
$ 182,695 |
$ 180,037 | ||||||||||
|
Other |
305 |
3,759 |
506 |
9,716 | ||||||||||
|
Total revenues |
84,851 |
99,421 |
183,201 |
189,753 | ||||||||||
|
Expenses |
||||||||||||||
|
Production |
25,209 |
42,686 |
50,232 |
89,968 | ||||||||||
|
Production taxes |
2,653 |
2,121 |
5,829 |
3,829 | ||||||||||
|
Depreciation and depletion - oil and natural gas |
27,038 |
27,952 |
51,609 |
60,278 | ||||||||||
|
Depreciation and amortization - other |
3,493 |
6,974 |
7,330 |
13,809 | ||||||||||
|
Accretion of asset retirement obligations |
2,439 |
1,387 |
4,848 |
2,975 | ||||||||||
|
Impairment |
446 |
253,629 |
2,977 |
363,743 | ||||||||||
|
General and administrative |
23,769 |
31,024 |
43,707 |
105,302 | ||||||||||
|
(Gain) loss on derivative contracts |
(23,543) |
7,969 |
(57,726) |
5,161 | ||||||||||
|
Loss on settlement of contract |
- |
1,092 |
- |
90,184 | ||||||||||
|
Other operating (income) expense |
(1) |
(103) |
267 |
3,369 | ||||||||||
|
Total expenses |
61,503 |
374,731 |
109,073 |
738,618 | ||||||||||
|
Income (loss) from operations |
23,348 |
(275,310) |
74,128 |
(548,865) | ||||||||||
|
Other (expense) income |
||||||||||||||
|
Interest expense |
(946) |
(41,605) |
(1,885) |
(122,756) | ||||||||||
|
(Loss) gain on extinguishment of debt |
- |
(152) |
- |
41,179 | ||||||||||
|
Reorganization items, net |
- |
(200,918) |
- |
(200,918) | ||||||||||
|
Other income, net |
1,055 |
2,077 |
2,025 |
2,230 | ||||||||||
|
Total other income (expense) |
109 |
(240,598) |
140 |
(280,265) | ||||||||||
|
Income (loss) before income taxes |
23,457 |
(515,908) |
74,268 |
(829,130) | ||||||||||
|
Income tax (benefit) expense |
(42) |
3 |
(39) |
7 | ||||||||||
|
Net income (loss) |
23,499 |
(515,911) |
74,307 |
(829,137) | ||||||||||
|
Preferred stock dividends |
- |
5,440 |
- |
16,321 | ||||||||||
|
Income available (loss applicable) to SandRidge Energy, Inc. |
||||||||||||||
|
common stockholders |
$ 23,499 |
$ (521,351) |
$ 74,307 |
$ (845,458) | ||||||||||
|
Earnings (loss) per share |
||||||||||||||
|
Basic |
$ 0.69 |
$ (0.73) |
$ 2.44 |
$ (1.20) | ||||||||||
|
Diluted |
$ 0.69 |
$ (0.73) |
$ 2.42 |
$ (1.20) | ||||||||||
|
Weighted average number of common shares outstanding |
||||||||||||||
|
Basic |
34,076 |
718,102 |
30,458 |
703,943 | ||||||||||
|
Diluted |
34,138 |
718,102 |
30,650 |
703,943 | ||||||||||
|
SandRidge Energy, Inc. Condensed Consolidated Balance Sheets (Unaudited) | ||||||||
|
(In thousands) | ||||||||
|
June 30, |
December 31, | |||||||
|
2017 |
2016 | |||||||
|
ASSETS |
||||||||
|
Current assets |
||||||||
|
Cash and cash equivalents |
$ 148,400 |
$ 121,231 | ||||||
|
Restricted cash - collateral |
- |
50,000 | ||||||
|
Restricted cash - other |
2,840 |
2,840 | ||||||
|
Accounts receivable, net |
57,168 |
74,097 | ||||||
|
Derivative contracts |
17,828 |
- | ||||||
|
Prepaid expenses |
3,925 |
5,375 | ||||||
|
Other current assets |
9,914 |
3,633 | ||||||
|
Total current assets |
240,075 |
257,176 | ||||||
|
Oil and natural gas properties, using full cost method of accounting |
||||||||
|
Proved |
934,248 |
840,201 | ||||||
|
Unproved |
111,202 |
74,937 | ||||||
|
Less: accumulated depreciation, depletion and impairment |
(404,143) |
(353,030) | ||||||
|
641,307 |
562,108 | |||||||
|
Other property, plant and equipment, net |
242,291 |
255,824 | ||||||
|
Derivative contracts |
7,478 |
- | ||||||
|
Other assets |
1,527 |
6,284 | ||||||
|
Total assets |
$1,132,678 |
$ 1,081,392 | ||||||
|
LIABILITIES AND STOCKHOLDERS' EQUITY |
||||||||
|
Current liabilities |
||||||||
|
Accounts payable and accrued expenses |
$ 113,019 |
$ 116,517 | ||||||
|
Derivative contracts |
- |
27,538 | ||||||
|
Asset retirement obligations |
65,893 |
66,154 | ||||||
|
Other current liabilities |
8,270 |
3,497 | ||||||
|
Total current liabilities |
187,182 |
213,706 | ||||||
|
Long-term debt |
37,679 |
305,308 | ||||||
|
Derivative contracts |
- |
2,176 | ||||||
|
Asset retirement obligations |
41,953 |
40,327 | ||||||
|
Other long-term obligations |
1,703 |
6,958 | ||||||
|
Total liabilities |
268,517 |
568,475 | ||||||
|
Commitments and contingencies |
||||||||
|
Stockholders' Equity |
||||||||
|
Common stock, $0.001 par value; 250,000 shares authorized; 35,797 issued and outstanding at June 30, 2017 and 21,042 issued and 19,635 outstanding at December 31, 2016 |
34 |
|||||||
|
20 | ||||||||
|
Warrants |
88,381 |
88,381 | ||||||
|
Additional paid-in capital |
1,035,421 |
758,498 | ||||||
|
Accumulated deficit |
(259,675) |
(333,982) | ||||||
|
Total stockholders' equity |
864,161 |
512,917 | ||||||
|
Total liabilities and stockholders' equity |
$1,132,678 |
$ 1,081,392 | ||||||
|
SandRidge Energy, Inc. Condensed Consolidated Cash Flows (Unaudited) | ||||||||||
|
(In thousands) | ||||||||||
|
Six Months Ended June 30, | ||||||||||
|
Successor |
Predecessor | |||||||||
|
2017 |
2016 | |||||||||
|
CASH FLOWS FROM OPERATING ACTIVITIES |
||||||||||
|
Net income (loss) |
$ 74,307 |
$ (829,137) | ||||||||
|
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities |
||||||||||
|
Provision for doubtful accounts |
- |
16,705 | ||||||||
|
Depreciation, depletion and amortization |
58,939 |
74,087 | ||||||||
|
Accretion of asset retirement obligations |
4,848 |
2,975 | ||||||||
|
Impairment |
2,977 |
363,743 | ||||||||
|
Reorganization items, net |
- |
200,918 | ||||||||
|
Debt issuance costs amortization |
195 |
4,996 | ||||||||
|
Amortization of premiums and discounts on debt |
(153) |
2,734 | ||||||||
|
Gain on extinguishment of debt |
- |
(41,179) | ||||||||
|
Gain on debt derivatives |
- |
(1,324) | ||||||||
|
Cash paid for early conversion of convertible notes |
- |
(33,452) | ||||||||
|
(Gain) loss on derivative contracts |
(57,726) |
5,161 | ||||||||
|
Cash received on settlement of derivative contracts |
2,706 |
57,970 | ||||||||
|
Loss on settlement of contract |
- |
90,184 | ||||||||
|
Cash paid on settlement of contract |
- |
(11,000) | ||||||||
|
Stock-based compensation |
9,654 |
7,850 | ||||||||
|
Other |
379 |
(3,252) | ||||||||
|
Changes in operating assets and liabilities |
7,806 |
(47,020) | ||||||||
|
Net cash provided by (used in) operating activities |
103,932 |
(139,041) | ||||||||
|
CASH FLOWS FROM INVESTING ACTIVITIES |
||||||||||
|
Capital expenditures for property, plant and equipment |
(88,904) |
(126,245) | ||||||||
|
Acquisition of assets |
(48,236) |
(1,397) | ||||||||
|
Proceeds from sale of assets |
14,756 |
16,734 | ||||||||
|
Net cash used in investing activities |
(122,384) |
(110,908) | ||||||||
|
CASH FLOWS FROM FINANCING ACTIVITIES |
||||||||||
|
Proceeds from borrowings |
- |
488,900 | ||||||||
|
Repayments of borrowings |
- |
(40,000) | ||||||||
|
Debt issuance costs |
(1,488) |
(332) | ||||||||
|
Purchase of treasury stock |
(2,891) |
(41) | ||||||||
|
Net cash (used in) provided by financing activities |
(4,379) |
448,527 | ||||||||
|
NET (DECREASE) INCREASE IN CASH, CASH EQUIVALENTS and RESTRICTED CASH |
(22,831) |
198,578 | ||||||||
|
CASH, CASH EQUIVALENTS and RESTRICTED CASH, beginning of year |
174,071 |
435,588 | ||||||||
|
CASH, CASH EQUIVALENTS and RESTRICTED CASH, end of period |
$ 151,240 |
$ 634,166 | ||||||||
|
Supplemental Disclosure of Noncash Investing and Financing Activities |
||||||||||
|
Cumulative effect of adoption of ASU 2015-02 |
$ - |
$ (247,566) | ||||||||
|
Property, plant and equipment transferred in settlement of contract |
$ - |
$ (215,635) | ||||||||
|
Change in accrued capital expenditures |
$ (8,340) |
$ 16,613 | ||||||||
|
Equity issued for debt |
$ (268,779) |
$ (4,409) | ||||||||
Non-GAAP Financial Measures
Adjusted operating cash flow, adjusted EBITDA, pro forma adjusted EBITDA, adjusted net income (loss), and net debt are non-GAAP financial measures.
The Company defines adjusted operating cash flow as net cash provided by (used in) operating activities before changes in operating assets and liabilities. It defines EBITDA as net income (loss) before income tax expense, interest expense and depreciation, depletion and amortization and accretion of asset retirement obligations. Adjusted EBITDA, as presented herein, is EBITDA excluding asset impairment, non-cash portion of stock-based compensation, gain on derivative contracts, cash received upon settlement of derivative contracts, loss on settlement of contract, severance, oil field services – exit costs, loss (gain) on extinguishment of debt, restructuring costs, reorganization items, employee incentive and retention costs and other various items. Pro forma adjusted EBITDA, as presented herein, is adjusted EBITDA excluding adjusted EBITDA attributable to properties or subsidiaries sold during the period.
Adjusted operating cash flow and adjusted EBITDA are supplemental financial measures used by the Company's management and by securities analysts, investors, lenders, rating agencies and others who follow the industry as an indicator of the Company's ability to internally fund exploration and development activities and to service or incur additional debt. The Company also uses these measures because adjusted operating cash flow and adjusted EBITDA relate to the timing of cash receipts and disbursements that the Company may not control and may not relate to the period in which the operating activities occurred. Further, adjusted operating cash flow and adjusted EBITDA allow the Company to compare its operating performance and return on capital with those of other companies without regard to financing methods and capital structure. These measures should not be considered in isolation or as a substitute for net cash provided by operating activities prepared in accordance with generally accepted accounting principles ("GAAP"). Adjusted EBITDA should not be considered as a substitute for net income, operating income, cash flows from operating activities or any other measure of financial performance or liquidity presented in accordance with GAAP. Adjusted EBITDA excludes some, but not all, items that affect net income and operating income and these measures may vary among other companies. Therefore, the Company's adjusted EBITDA may not be comparable to similarly titled measures used by other companies.
Management also uses the supplemental financial measure of adjusted net income (loss), which excludes asset impairment, (gain) loss on derivative contracts, cash received on settlement of derivative contracts, loss on settlement of contract, severance, oil field services – exit costs, loss (gain) on extinguishment of debt, restructuring costs, reorganization items, employee incentive and retention and other non-cash items from income available (loss applicable) to common stockholders. Management uses this financial measure as an indicator of the Company's operational trends and performance relative to other oil and natural gas companies and believes it is more comparable to earnings estimates provided by securities analysts. Adjusted net income (loss) is not a measure of financial performance under GAAP and should not be considered a substitute for income available (loss applicable) to common stockholders.
The Company also uses the term net debt to determine the extent to which the Company's outstanding debt obligations would be satisfied by its cash and cash equivalents on hand. Management believes this metric is useful to investors in determining the Company's current leverage position following recent significant events subsequent to the period.
The tables below reconcile the most directly comparable GAAP financial measures to operating cash flow, EBITDA and adjusted EBITDA and adjusted net income (loss).
|
Reconciliation of Cash Provided by (Used in) Operating Activities | |||||||||||||
|
to Adjusted Operating Cash Flow | |||||||||||||
|
(In thousands) | |||||||||||||
|
Three Months Ended June 30, |
Six Months Ended June 30, | ||||||||||||
|
Successor |
Predecessor |
Successor |
Predecessor | ||||||||||
|
2017 |
2016 |
2017 |
2016 | ||||||||||
|
Net cash provided by (used in) operating activities |
$ 39,696 |
$ 23,603 |
$ 103,932 |
$ (139,041) | |||||||||
|
Changes in operating assets and liabilities |
3,471 |
(5,000) |
(7,806) |
47,020 | |||||||||
|
Adjusted operating cash flow |
$ 43,167 |
$ 18,603 |
$ 96,126 |
$ (92,021) | |||||||||
|
Reconciliation of Net Income (Loss) to EBITDA and Adjusted EBITDA | |||||||||||||
|
(In thousands) | |||||||||||||
|
Three Months Ended June 30, |
Six Months Ended June 30, | ||||||||||||
|
Successor |
Predecessor |
Successor |
Predecessor | ||||||||||
|
2017 |
2016 |
2017 |
2016 | ||||||||||
|
Net income (loss) |
$ 23,499 |
$ (515,911) |
$ 74,307 |
$ (829,137) | |||||||||
|
Adjusted for |
|||||||||||||
|
Income tax (benefit) expense |
(42) |
3 |
(39) |
7 | |||||||||
|
Interest expense |
1,190 |
42,201 |
2,332 |
123,928 | |||||||||
|
Depreciation and amortization - other |
3,493 |
6,974 |
7,330 |
13,809 | |||||||||
|
Depreciation and depletion - oil and natural gas |
27,038 |
27,952 |
51,609 |
60,278 | |||||||||
|
Accretion of asset retirement obligations |
2,439 |
1,387 |
4,848 |
2,975 | |||||||||
|
EBITDA |
57,617 |
(437,394) |
140,387 |
(628,140) | |||||||||
|
Asset impairment |
446 |
253,629 |
2,977 |
363,743 | |||||||||
|
Stock-based compensation |
4,567 |
1,344 |
7,828 |
3,044 | |||||||||
|
(Gain) loss on derivative contracts |
(23,543) |
7,969 |
(57,726) |
5,161 | |||||||||
|
Cash received upon settlement of derivative contracts (1) |
3,344 |
20,922 |
2,706 |
46,458 | |||||||||
|
Loss on settlement of contract |
- |
1,092 |
- |
90,184 | |||||||||
|
Severance |
4,415 |
(438) |
4,815 |
17,486 | |||||||||
|
Oil field services - exit costs |
- |
138 |
- |
2,416 | |||||||||
|
Loss (gain) on extinguishment of debt |
- |
152 |
- |
(41,179) | |||||||||
|
Restructuring costs |
617 |
10,097 |
3,224 |
18,444 | |||||||||
|
Reorganization items, net |
- |
200,918 |
- |
200,918 | |||||||||
|
Employee incentive and retention |
- |
5,887 |
- |
10,417 | |||||||||
|
Other |
(1,205) |
(1,864) |
(2,235) |
13,299 | |||||||||
|
Adjusted EBITDA |
$ 46,258 |
$ 62,452 |
$ 101,976 |
$ 102,251 | |||||||||
|
Less: EBITDA attributable to WTO properties (2016) |
- |
- |
- |
1,990 | |||||||||
|
Pro forma adjusted EBITDA |
$ 46,258 |
$ 62,452 |
$ 101,976 |
$ 104,241 | |||||||||
|
(1) |
Excludes amounts received for early settlement of contracts in the 2016 periods. | ||||||||||||
|
Reconciliation of Cash Provided by (Used in) Operating Activities to Adjusted EBITDA | |||||||||||||
|
(In thousands) | |||||||||||||
|
Three Months Ended June 30, |
Six Months Ended June 30, | ||||||||||||
|
Successor |
Predecessor |
Successor |
Predecessor | ||||||||||
|
2017 |
2016 |
2017 |
2016 | ||||||||||
|
Net cash provided by (used in) operating activities |
$ 39,696 |
$ 23,603 |
$ 103,932 |
$ (139,041) | |||||||||
|
Changes in operating assets and liabilities |
3,471 |
(5,000) |
(7,806) |
47,020 | |||||||||
|
Interest expense |
1,190 |
42,201 |
2,332 |
123,928 | |||||||||
|
Cash received on early settlement of derivative contracts |
- |
(11,513) |
- |
(11,513) | |||||||||
|
Cash paid on early conversion of convertible notes |
- |
- |
- |
33,452 | |||||||||
|
Cash paid on settlement of contract |
- |
- |
- |
11,000 | |||||||||
|
Severance (1) |
2,590 |
(484) |
2,990 |
12,386 | |||||||||
|
Oil field services - exit costs (1) |
- |
95 |
- |
2,373 | |||||||||
|
Restructuring costs |
617 |
10,097 |
3,224 |
18,444 | |||||||||
|
Employee incentive and retention |
- |
5,887 |
- |
10,417 | |||||||||
|
Other |
(1,306) |
(2,434) |
(2,696) |
(6,215) | |||||||||
|
Adjusted EBITDA |
$ 46,258 |
$ 62,452 |
$ 101,976 |
$ 102,251 | |||||||||
|
(1) |
Excludes associated stock-based compensation. | ||||||||||||
|
Reconciliation of Net Income Available (Loss Applicable) to Common Stockholders to Adjusted | |||||||||||||
|
Net Income Available (Loss Applicable) to Common Stockholders | |||||||||||||
|
(In thousands) | |||||||||||||
|
Three Months Ended June 30, |
Six Months Ended June 30, | ||||||||||||
|
Successor |
Predecessor |
Successor |
Predecessor | ||||||||||
|
2017 |
2016 |
2017 |
2016 | ||||||||||
|
Net income available (loss applicable) to common stockholders |
$ 23,499 |
$ (521,351) |
$ 74,307 |
$ (845,458) | |||||||||
|
Asset impairment |
446 |
253,629 |
2,977 |
363,743 | |||||||||
|
(Gain) loss on derivative contracts |
(23,543) |
7,969 |
(57,726) |
5,161 | |||||||||
|
Cash received upon settlement of derivative contracts (1) |
3,344 |
20,922 |
2,706 |
46,458 | |||||||||
|
Loss on settlement of contract |
- |
1,092 |
- |
90,184 | |||||||||
|
Severance |
4,415 |
(438) |
4,815 |
17,486 | |||||||||
|
Oil field services - exit costs |
- |
138 |
- |
2,416 | |||||||||
|
Loss (gain) on extinguishment of debt |
- |
152 |
- |
(41,179) | |||||||||
|
Restructuring costs |
617 |
10,097 |
3,224 |
18,444 | |||||||||
|
Reorganization items, net |
- |
200,918 |
- |
200,918 | |||||||||
|
Employee incentive and retention |
- |
5,887 |
- |
10,417 | |||||||||
|
Other |
(790) |
(1,141) |
(1,427) |
13,210 | |||||||||
|
Adjusted net income available (loss applicable) to common stockholders |
$ 7,988 |
$ (22,126) |
$ 28,876 |
$ (118,200) | |||||||||
|
Weighted average number of common shares outstanding |
|||||||||||||
|
Basic |
34,076 |
718,102 |
30,458 |
703,943 | |||||||||
|
Diluted |
34,138 |
718,102 |
30,650 |
703,943 | |||||||||
|
Total adjusted net income (loss) |
|||||||||||||
|
Per share - basic |
$ 0.23 |
$ (0.03) |
$ 0.95 |
$ (0.17) | |||||||||
|
Per share - diluted |
$ 0.23 |
$ (0.03) |
$ 0.94 |
$ (0.17) | |||||||||
|
(1) |
Excludes amounts received for early settlement of contracts in the 2016 periods. | ||||||||||||
For further information, please contact:
Justin M. Lewellen
Director of Investor Relations
SandRidge Energy, Inc.
123 Robert S. Kerr Avenue
Oklahoma City, OK 73102-6406
(405) 429-5515
Cautionary Note to Investors - This press release includes "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, including, but not limited to, the information appearing under the heading "2017 Operational and Capital Expenditure Guidance." These statements express a belief, expectation or intention and are generally accompanied by words that convey projected future events or outcomes. The forward-looking statements include projections and estimates of the Company's corporate strategies, future operations, drilling plans, oil, and natural gas and natural gas liquids production, price realizations and differentials, hedging program, operating, general and administrative and other costs, capital expenditures, tax rates, efficiency and cost reduction initiative outcomes, infrastructure assessment and investment, and development plans and appraisal programs. We have based these forward-looking statements on our current expectations and assumptions and analyses made by us in light of our experience and our perception of historical trends, current conditions and expected future developments, as well as other factors we believe are appropriate under the circumstances. However, whether actual results and developments will conform with our expectations and predictions is subject to a number of risks and uncertainties, including the volatility of oil and natural gas prices, our success in discovering, estimating, developing and replacing oil and natural gas reserves, actual decline curves and the actual effect of adding compression to natural gas wells, the availability and terms of capital, the ability of counterparties to transactions with us to meet their obligations, our timely execution of hedge transactions, credit conditions of global capital markets, changes in economic conditions, the amount and timing of future development costs, the availability and demand for alternative energy sources, regulatory changes, including those related to carbon dioxide and greenhouse gas emissions, and other factors, many of which are beyond our control. We refer you to the discussion of risk factors in Part I, Item 1A - "Risk Factors" of our Annual Report on Form 10-K for the year ended December 31, 2016 and in comparable "Risk Factor" sections of our Quarterly Reports on Form 10-Q filed after such form 10-K. All of the forward-looking statements made in this press release are qualified by these cautionary statements. The actual results or developments anticipated may not be realized or, even if substantially realized, they may not have the expected consequences to or effects on our Company or our business or operations. Such statements are not guarantees of future performance and actual results or developments may differ materially from those projected in the forward-looking statements. We undertake no obligation to update or revise any forward-looking statements.
SandRidge Energy, Inc. (NYSE: SD) is an oil and natural gas exploration and production company headquartered in Oklahoma City, Oklahoma with its principal focus on developing high-return, growth-oriented projects in the U.S. Mid-Continent and Niobrara Shale.
View original content with multimedia:http://www.prnewswire.com/news-releases/sandridge-energy-inc-reports-financial-and-operational-results-for-second-quarter-of-2017-300498608.html
SOURCE SandRidge Energy, Inc.
Article Date
8/2/2017SandRidge Energy, Inc. Announces 2017 Second Quarter Shareholder Update and Financial Results Release Date and Conference Call Information
Source: PR Newswire
Orignial Article: http://www.prnewswire.com...
OKLAHOMA CITY, July 5, 2017 /PRNewswire/ -- SandRidge Energy, Inc. (NYSE: SD) will release its 2017 second quarter shareholder update and financial results after the close of trading on the New York Stock Exchange on Wednesday, August 2, 2017.
The company will host a conference call to discuss these results on Thursday, August 3, 2017 at 8:00am CT. The telephone number to access the conference call from within the U.S. is (877) 201-0168 and from outside the U.S. is (647) 788-4901. The passcode for the call is 42174349. An audio replay of the call will be available from August 3, 2017 until 11:59pm CT on September 3, 2017. The number to access the conference call replay from within the U.S. is (800) 585-8367 and from outside the U.S. is (416) 621-4642. The passcode for the replay is 42174349.
A live audio webcast of the conference call will also be available via SandRidge's website, www.sandridgeenergy.com, under Investor Relations/Presentations & Events. The webcast will be archived for replay on the company's website for 30 days.
About SandRidge Energy, Inc.
SandRidge Energy, Inc. (NYSE: SD) is an oil and natural gas exploration and production company headquartered in Oklahoma City, Oklahoma with its principal focus on developing high-return, growth-oriented projects in the U.S. Mid-Continent and Niobrara Shale.
CONTACT:
Justin Lewellen
Director of Investor Relations
SandRidge Energy, Inc.
123 Robert S. Kerr Avenue
Oklahoma City, OK 73102
+1 (405) 429-5515
SOURCE SandRidge Energy, Inc.
Article Date
7/5/20175/10/2017 - SandRidge Energy, Inc. Reports Financial and Operational Results for First Quarter of 2017
SandRidge Energy, Inc. Reports Financial and Operational Results for First Quarter of 2017
Source: PR Newswire
Orignial Article: http://www.prnewswire.com...
OKLAHOMA CITY, May 10, 2017 /PRNewswire/ -- SandRidge Energy, Inc. (the "Company" or "SandRidge") (NYSE:SD) today announced financial and operational results for the quarter ended March 31, 2017. Additionally, the Company will host a conference call to discuss these results on May 11 at 8:00 a.m. CT (877-201-0168, International: 647-788-4901 – passcode: 4580429). Presentation slides will be available on the Company's website, www.sandridgeenergy.com, under Investor Relations/Events.
The Company reported net income of $51 million, or $1.90 per share, and net cash from operating activities of $64 million for the first quarter of 2017. When adjusting these reported amounts for items that are typically excluded by the investment community on the basis that such items affect the comparability of results, the Company's "adjusted net income" amounted to $21 million, or $0.78 per share, and "adjusted operating cash flow" totaled $53 million. Earnings before interest, income taxes, depreciation, depletion, and amortization, adjusted for certain other items, otherwise referred to as "adjusted EBITDA" for the first quarter was $56 million.(1)
|
(1) |
The Company has defined and reconciled certain Non-GAAP financial measures including adjusted net income, adjusted operating cash flow, adjusted EBITDA, and current net debt, to the most directly comparable GAAP financial measures in supporting tables at the conclusion of this press release under the "Non-GAAP Financial Measures" beginning on page 13. |
Production for the quarter was 4.0 MMBoe (28% oil, 22% NGLs and 50% natural gas). The Company's Mid-Continent assets produced approximately 92% of total production (23% oil), while the North Park Basin (NPB) of Colorado provided 4% (100% oil) and the Permian Basin 3% (82% oil). The Company had one active rig drilling in the NW STACK area of Oklahoma for most of the first quarter, and added a second rig there in mid-March. Near term drilling will focus on the NW STACK and North Park Basin Niobrara, which produce oil in excess of 50% and 90% of total production, respectively. With more wells being drilled and brought to sales throughout the year in these two plays, crude oil, as a proportion of total production, is expected to increase from 28% in the first quarter to over 30% in the fourth quarter of 2017.
Total lifting costs during the quarter were $7.08 per boe, including lease operating expenses of $6.28 per boe. The Company continues to gain operating efficiencies with a recent focus on chemical treatment optimization and electrical power contract pricing. Decreases in overall expenses were partly offset by above average costs in Colorado due to severe winter weather.
James Bennett, SandRidge President and CEO said, "Motivated by our recent successes in the NW STACK, we now have two rigs developing the Meramec in Major, Woodward and Garfield Counties, where we have 70,000 net acres. Low cost drilling, operational efficiencies and innovations established in our Mississippian program will benefit us as they are applied across our portfolio. Our Colorado North Park Basin drilling will resume at midyear with one rig. Plans there include more Niobrara extended laterals and drilling on our newly established 24,000 acre Federal Unit. The development of our oil-weighted NW STACK and North Park Basin Niobrara projects is creating material resource value and will drive oil production growth later in 2017. Supported by the flexibility of our unlevered balance sheet and $550 million of liquidity, we believe SandRidge has a compelling multiyear story."
Highlights during the first quarter include:
$51 Million of Net Income and $56 Million of Adjusted EBITDA
$41 Million of Capex During the Quarter (Excluding Previously Disclosed ~13,100 Net Acre NW STACK Acquisition)
Incremental Leasehold Additions Totaling 10,000 Net Acres Bring NW STACK Position to 70,000 Net Acres
Two Rigs Targeting Meramec in NW STACK
Q1'17 Production of 4.0 MMBoe (28% Oil, 22% NGLs and 50% Natural Gas)
Mississippian Full Section Development Multilateral (Three Lateral Equivalent), the Hawk Haven 2710 1-22H, Produced Combined 30-Day IP of 1,248 Boepd (47% Oil) at Drilling and Completion Costs of $5.5 Million or $1.8 Million per Lateral
2017 Capital Budget
The Company is reiterating prior capital spending guidance, expecting to invest between $210 and $220 million in 2017. This level of activity supports projected oil production growth in the second half of 2017. Depending on well results and commodity pricing, capital spending plans may be revised later in the year.
Two drilling rigs are currently active in the NW STACK play in Major, Woodward and Garfield Counties, Oklahoma. The Company plans to drill 22 gross laterals (17 net) in the Meramec and six laterals (gross and net) in the North Park Niobrara during 2017, predominantly drilling extended reach laterals.
Mid-Continent Assets in Oklahoma
SandRidge is well established as the low-cost driller of Mississippian wells and expects to transfer capabilities and best practices, including ongoing application of extended reach lateral drilling, to become a low-cost leader in the adjacent NW STACK play as well.
Drilling activity has continued on Meramec targets following the success of the previously announced Medill 1-27H well in Major County, Oklahoma (30-Day IP of 925 Boepd, 77% oil and currently producing ~460 Boepd, with cumulative production of 99 MBoe after 140 days, 99% above type curve).
Additional wells were spud and drilling continued at the end of the quarter in Major County, including the Campbell 2015 1-26H23H, the Company's first Meramec extended reach well drilled in Major County, offset to the Medill. Drilling was also underway in Garfield County with the Landrum 2305 1-30H31H, a Meramec extended reach well near existing SandRidge Meramec and Osage production. Both of these wells should have 30-Day initial production rates reported in the second quarter.
The Adams 2122 1-16H9H extended reach well targeting the Meramec in Woodward County was undergoing completion operations at the end of the first quarter, with a 30-Day initial production rate to be reported in the second quarter earnings release.
During the first quarter, the Company acquired ~13,100 net acres and 700 Boepd of production in the NW STACK of Oklahoma for $48 million of cash. The first new well on the acquired acreage will be spud during the second quarter of 2017.
Niobrara Asset in North Park Basin, Jackson County, Colorado
North Park Basin drilling activity will resume midyear with three extended reach wells planned (equivalent to six laterals). In addition to continued "D" bench development, the Company will drill an extended lateral well targeting the "C" bench following excellent results from the Hebron 4-18H, the first "C" bench single lateral well drilled in 2016. The Hebron 4-18H, the Company's most productive single lateral in 2016, yielded a 30-Day IP of 539 Boepd, 92% of which was oil, and 70 MBo in its first six months of production, 32% above type curve. 2017 drilling will also include a Niobrara well in the newly established 24,000 net acre Rabbit Ears Federal Unit and the Company's first well targeting the thick B bench of the Niobrara.
Following encouraging results from the Company's 2016 drilling program, specific technical goals have been developed for the 2017 program to enhance reservoir characterization with the integration of newly acquired 3D seismic data, coring of multiple Niobrara benches and expanded logging suites.
The Company is currently assessing in-field gas processing (such as the use of mechanical refrigeration units), gas-to-liquids and gas reinjection, with the potential to generate additional revenue streams and reduce combusted gas volumes.
Other Operational Activities
During the first quarter, Permian Central Basin Platform properties produced 136 MBoe (1.5 MBoepd, 82% oil, 11% NGLs, 7% natural gas).
Key Financial Highlights and Results
First Quarter Results
Capitalization & Liquidity
Entering into the new credit facility in February 2017 triggered the release of $50 million of cash held in escrow to the Company and the conversion of all of the $264 million outstanding mandatorily convertible notes into approximately 14.1 million shares of the Company's common stock.
Hedging
Unchanged from the previous reporting period, in 2017 the Company has approximately 3.3 million barrels of oil hedged at an average WTI price of $52.24 as well as 32.9 billion cubic feet of natural gas hedged at an average price of $3.20 per MMBtu. 2017 oil hedges represent 80% of the midpoint of current oil volume guidance. 2017 gas hedges represent 77% of the midpoint of current gas volume guidance.
For 2018, the Company has approximately 1.8 million barrels of oil hedged at an average WTI price of $55.34. Subsequent to the first quarter, 9.1 billion cubic feet of natural gas swaps were added, bringing the total to approximately 12.8 billion cubic feet of natural gas hedged at an average price of $3.16 per MMBtu in 2018.
Conference Call Information
The Company will host a conference call to discuss these results on Thursday, May 11, 2017 at 8:00 am CDT. The telephone number to access the conference call from within the U.S. is (877) 201-0168 and from outside the U.S. is (647) 788-4901. The passcode for the call is 4580429. An audio replay of the call will be available from May 11, 2017 until 11:59 pm CDT on June 11, 2017. The number to access the conference call replay from within the U.S. is (800) 585-8367 and from outside the U.S. is (416) 621-4642. The passcode for the replay is 4580429.
A live audio webcast of the conference call will also be available via SandRidge's website, www.sandridgeenergy.com, under Investor Relations/Events. The webcast will be archived for replay on the Company's website for 30 days.
2017 Capital Expenditure and Operational Guidance
Presented below is the Company's capital expenditure and operational guidance for 2017. This information is unchanged from the initial release on February 22, 2017.
|
Total Company |
|||||
|
Projection as of |
|||||
|
May 10, 2017 |
|||||
|
Production |
|||||
|
Oil (MMBbls) |
4.0 - 4.2 |
||||
|
Natural Gas Liquids (MMBbls) |
3.0 - 3.2 |
||||
|
Total Liquids (MMBbls) |
7.0 - 7.4 |
||||
|
Natural Gas (Bcf) |
42.0 - 43.5 |
||||
|
Total (MMBoe) |
14.0 - 14.7 |
||||
|
Price Realization |
|||||
|
Oil (differential below NYMEX WTI) |
$2.75 |
||||
|
Natural Gas Liquids (realized % of NYMEX WTI) |
26% |
||||
|
Natural Gas (differential below NYMEX Henry Hub) |
$1.00 |
||||
|
Costs per Boe |
|||||
|
LOE |
$8.00 - $9.00 |
||||
|
Adjusted G&A - Cash1 |
$4.25 - $4.50 |
||||
|
% of Revenue |
|||||
|
Production Taxes |
2.75% - 3.00% |
||||
|
Capital Expenditures ($ in millions) | |||||
|
Drilling and Completion |
|||||
|
Mid-Continent |
$65 - $70 |
||||
|
North Park Basin |
20 - 25 |
||||
|
Other2 |
24 |
||||
|
Total Drilling and Completion |
$109 - $119 |
||||
|
Other E&P |
|||||
|
Land, G&G, and Seismic |
$40 |
||||
|
Infrastructure3 |
7 |
||||
|
Workover |
37 |
||||
|
Capitalized G&A and Interest |
15 |
||||
|
Total Other Exploration and Production |
$99 |
||||
|
General Corporate |
2 |
||||
|
Total Capital Expenditures (excluding acquisitions and plugging and abandonment) |
$210 - $220 |
||||
|
1) |
Adjusted G&A - Cash is a non-GAAP financial measure as it excludes from G&A non-cash compensation, severance, bad debt allowance, and other non-recurring items. The most directly comparable GAAP measure for Adjusted G&A - cash is General and Administrative Expense. Information to reconcile this non-GAAP financial measure to the most directly comparable GAAP financial measure is not available at this time, as management is unable to forecast the excluded items for future periods. | ||||
|
2) |
2016 Carryover, Coring, and Non-Op | ||||
|
3) |
Facilities - Electrical, SWD, Gathering, Pipeline ROW | ||||
Operational and Financial Statistics
Upon emergence from Chapter 11 reorganization, the Company elected to adopt fresh start accounting effective October 1, 2016. As a result of the application of fresh start accounting and the effects of the implementation of the plan of reorganization, the financial statements on or after October 1, 2016 will not be comparable with the financial statements prior to that date. References to the "Successor" refer to SandRidge subsequent to adoption of fresh start accounting. References to the "Predecessor" refer to SandRidge prior to adoption of fresh start accounting.
Information regarding the Company's production, pricing, costs and earnings is presented below:
|
Successor |
Predecessor | ||||||
|
Three Months Ended |
Three Months Ended | ||||||
|
March 31, 2017 |
March 31, 2016 | ||||||
|
Production - Total |
|||||||
|
Oil (MBbl) |
1,134 |
1,625 | |||||
|
NGL (MBbl) |
887 |
1,111 | |||||
|
Natural gas (MMcf) |
11,766 |
16,509 | |||||
|
Oil equivalent (MBoe) |
3,982 |
5,488 | |||||
|
Daily production (MBoed) |
44.2 |
60.3 | |||||
|
Production - Mid-Continent |
|||||||
|
Oil (MBbl) |
851 |
1,430 | |||||
|
NGL (MBbl) |
872 |
1,093 | |||||
|
Natural gas (MMcf) |
11,706 |
15,856 | |||||
|
Oil equivalent (MBoe) |
3,673 |
5,166 | |||||
|
Daily production (MBoed) |
40.8 |
56.8 | |||||
|
Average price per unit |
|||||||
|
Realized oil price per barrel - as reported |
$ 49.19 |
$ 27.95 | |||||
|
Realized impact of derivatives per barrel |
0.27 |
15.98 | |||||
|
Net realized price per barrel |
$ 49.46 |
$ 43.93 | |||||
|
Realized NGL price per barrel - as reported |
$ 16.27 |
$ 10.73 | |||||
|
Realized impact of derivatives per barrel |
- |
- | |||||
|
Net realized price per barrel |
$ 16.27 |
$ 10.73 | |||||
|
Realized natural gas price per Mcf - as reported |
$ 2.37 |
$ 1.64 | |||||
|
Realized impact of derivatives per Mcf |
(0.08) |
(0.03) | |||||
|
Net realized price per Mcf |
$ 2.29 |
$ 1.61 | |||||
|
Realized price per Boe - as reported |
$ 24.65 |
$ 15.37 | |||||
|
Net realized price per Boe - including impact of derivatives |
$ 24.49 |
$ 20.03 | |||||
|
Average cost per Boe |
|||||||
|
Lease operating(1) |
$ 6.28 |
$ 8.62 | |||||
|
Production taxes |
0.80 |
0.31 | |||||
|
General and administrative |
|||||||
|
General and administrative, excluding stock-based compensation |
$ 4.19 |
$ 11.48 | |||||
|
Stock-based compensation |
0.82 |
2.06 | |||||
|
Total general and administrative |
$ 5.01 |
$ 13.54 | |||||
|
General and administrative - adjusted |
|||||||
|
General and administrative, excluding stock-based compensation (2) |
$ 3.43 |
$ 4.26 | |||||
|
Stock-based compensation (3) |
0.82 |
0.58 | |||||
|
Total general and administrative - adjusted |
$ 4.25 |
$ 4.84 | |||||
|
Depletion (4) |
$ 6.78 |
$ 6.18 | |||||
|
Lease operating cost per Boe |
|||||||
|
Mid-Continent |
$ 4.86 |
$ 7.32 | |||||
|
Earnings per share |
|||||||
|
Earnings (loss) per share applicable to common stockholders |
|||||||
|
Basic |
$ 1.90 |
$ (0.47) | |||||
|
Diluted |
$ 1.90 |
$ (0.47) | |||||
|
Adjusted net income per share available to common stockholders |
|||||||
|
Basic |
$ 0.78 |
$ (0.14) | |||||
|
Diluted |
$ 0.78 |
$ (0.10) | |||||
|
Weighted average number of shares outstanding (in thousands) |
|||||||
|
Basic |
26,801 |
689,784 | |||||
|
Diluted (5) |
26,801 |
815,750 | |||||
|
(1) |
Transportation costs are presented as a reduction of revenue by the Successor Company compared to the Predecessor Company's presentation of these costs as lease operating expenses. | ||||||
|
(2) |
Excludes restructuring costs and severance totaling $3.0 million for the three-month period ended March 31, 2017. Excludes doubtful receivable write-off, severance, restructuring costs and various other insignificant costs totaling $39.6 million for the three-month period ended March 31, 2016. | ||||||
|
(3) |
Three-month period ended March 31, 2016 excludes $8.1 million for employee incentive and retention and the acceleration of certain stock awards. | ||||||
|
(4) |
Includes accretion of asset retirement obligation. | ||||||
|
(5) |
Includes shares considered antidilutive for calculating earnings per share in accordance with GAAP for certain periods presented. | ||||||
Capital Expenditures
The table below summarizes the Company's capital expenditures for the three-month periods ended March 31, 2017 and 2016:
|
Successor |
Predecessor | ||||||
|
Three Months Ended |
Three Months Ended | ||||||
|
March 31, 2017 |
March 31, 2016 | ||||||
|
(in thousands) | |||||||
|
Drilling and production |
|||||||
|
Mid-Continent |
$ 19,679 |
$ 42,086 | |||||
|
Rockies |
4,323 |
12,437 | |||||
|
Other |
24 |
214 | |||||
|
24,026 |
54,737 | ||||||
|
Leasehold and geophysical |
|||||||
|
Mid-Continent |
11,627 |
(6,979) | |||||
|
Rockies |
3,051 |
72 | |||||
|
Other |
323 |
1,950 | |||||
|
15,001 |
(4,957) | ||||||
|
Inventory |
(94) |
764 | |||||
|
Total exploration and development |
38,933 |
50,544 | |||||
|
Other - operating |
397 |
1,230 | |||||
|
Other - corporate |
1,402 |
1,707 | |||||
|
Total capital expenditures, excluding acquisitions |
40,732 |
53,481 | |||||
|
Acquisitions |
48,073 |
95 | |||||
|
Total capital expenditures |
$ 88,805 |
$ 53,576 | |||||
Capital Expenditures (Guidance Category Detail)
The table below presents actual results of the Company's capital expenditures for the three-month period ended March 31, 2017 at the same level of detail as its full year capital expenditure guidance.
|
Three Months Ended | |||||
|
March 31, 2017 | |||||
|
(in thousands) | |||||
|
Drilling and Completion |
|||||
|
Mid-Continent |
$ 4,511 | ||||
|
North Park Basin |
134 | ||||
|
Other1 |
10,942 | ||||
|
Total Drilling and Completion |
$ 15,587 | ||||
|
Other E&P |
|||||
|
Land, G&G, and Seismic |
$ 13,543 | ||||
|
Infrastructure2 |
1,142 | ||||
|
Workovers |
6,172 | ||||
|
Capitalized G&A and Interest |
2,886 | ||||
|
Total Other Exploration and Production |
$ 23,743 | ||||
|
General Corporate |
$ 1,402 | ||||
|
Total Capital Expenditures (excluding acquisitions and plugging and abandonment) |
$ 40,732 | ||||
|
1) |
2016 Carryover, Coring, and Non-Op |
|
2) |
Facilities - Electrical, SWD, Gathering, Pipeline ROW |
Derivative Contracts
Subsequent to March 31, 2017, the Company entered into additional gas swap contracts for the calendar year 2018. The table below sets forth the Company's consolidated oil and natural gas price swaps for 2017 and 2018 as of May 10, 2017:
|
Quarter Ending |
||||||||||||
|
3/31/2017 |
6/30/2017 |
9/30/2017 |
12/31/2017 |
FY 2017 | ||||||||
|
Oil (MMBbls): |
||||||||||||
|
Swap Volume |
0.81 |
0.82 |
0.83 |
0.83 |
3.29 | |||||||
|
Swap |
$52.24 |
$52.24 |
$52.24 |
$52.24 |
$52.24 | |||||||
|
Natural Gas (Bcf): |
||||||||||||
|
Swap Volume |
8.10 |
8.19 |
8.28 |
8.28 |
32.85 | |||||||
|
Swap |
$3.20 |
$3.20 |
$3.20 |
$3.20 |
$3.20 | |||||||
|
3/31/2018 |
6/30/2018 |
9/30/2018 |
12/31/2018 |
FY 2018 | ||||||||
|
Oil (MMBbls): |
||||||||||||
|
Swap Volume |
0.45 |
0.46 |
0.46 |
0.46 |
1.83 | |||||||
|
Swap |
$55.34 |
$55.34 |
$55.34 |
$55.34 |
$55.34 | |||||||
|
Natural Gas (Bcf): |
||||||||||||
|
Swap Volume |
4.50 |
2.73 |
2.76 |
2.76 |
12.75 | |||||||
|
Swap |
$3.25 |
$3.11 |
$3.11 |
$3.11 |
$3.16 | |||||||
Capitalization
The Company's capital structure as of March 31, 2017 and December 31, 2016 is presented below:
|
March 31, 2017 |
December 31, 2016 | ||||||
|
(in thousands) | |||||||
|
Cash, cash equivalents and restricted cash |
$ 153,839 |
$ 174,071 | |||||
|
Credit facility |
$ - |
$ - | |||||
|
Building note |
37,516 |
36,528 | |||||
|
Mandatorily convertible 0% notes |
- |
268,780 | |||||
|
Total debt |
37,516 |
305,308 | |||||
|
Stockholders' equity |
|||||||
|
Common stock |
34 |
20 | |||||
|
Warrants |
88,381 |
88,381 | |||||
|
Additional paid-in capital |
1,029,668 |
758,498 | |||||
|
Accumulated deficit |
(283,174) |
(333,982) | |||||
|
Total SandRidge Energy, Inc. stockholders' equity |
834,909 |
512,917 | |||||
|
Total capitalization |
$ 872,425 |
$ 818,225 | |||||
|
SandRidge Energy, Inc. Condensed Consolidated Statements of Operations (Unaudited) | ||||||||
|
(In thousands, except per share amounts) | ||||||||
|
Successor |
Predecessor | |||||||
|
Three Months Ended |
Three Months Ended | |||||||
|
March 31, 2017 |
March 31, 2016 | |||||||
|
Revenues |
||||||||
|
Oil, natural gas and NGL |
$ 98,149 |
$ 84,375 | ||||||
|
Other |
201 |
5,957 | ||||||
|
Total revenues |
98,350 |
90,332 | ||||||
|
Expenses |
||||||||
|
Production |
25,023 |
47,282 | ||||||
|
Production taxes |
3,176 |
1,708 | ||||||
|
Depreciation and depletion - oil and natural gas |
24,571 |
32,326 | ||||||
|
Depreciation and amortization - other |
3,837 |
6,835 | ||||||
|
Accretion of asset retirement obligations |
2,409 |
1,588 | ||||||
|
Impairment |
2,531 |
110,114 | ||||||
|
General and administrative |
19,938 |
74,278 | ||||||
|
Gain on derivative contracts |
(34,183) |
(2,808) | ||||||
|
Loss on settlement of contract |
- |
89,092 | ||||||
|
Other operating expense |
268 |
3,472 | ||||||
|
Total expenses |
47,570 |
363,887 | ||||||
|
Income (loss) from operations |
50,780 |
(273,555) | ||||||
|
Other (expense) income |
||||||||
|
Interest expense |
(939) |
(81,151) | ||||||
|
Gain on extinguishment of debt |
- |
41,331 | ||||||
|
Other income, net |
970 |
153 | ||||||
|
Total other income (expense) |
31 |
(39,667) | ||||||
|
Income (loss) before income taxes |
50,811 |
(313,222) | ||||||
|
Income tax expense |
3 |
4 | ||||||
|
Net income (loss) |
50,808 |
(313,226) | ||||||
|
Preferred stock dividends |
- |
10,881 | ||||||
|
Income available (loss applicable) to SandRidge Energy, Inc. common stockholders |
$ 50,808 |
$ (324,107) | ||||||
|
Earnings (loss) per share |
||||||||
|
Basic |
$ 1.90 |
$ (0.47) | ||||||
|
Diluted |
$ 1.90 |
$ (0.47) | ||||||
|
Weighted average number of common shares outstanding |
||||||||
|
Basic |
26,801 |
689,784 | ||||||
|
Diluted |
26,801 |
689,784 | ||||||
|
SandRidge Energy, Inc. Condensed Consolidated Balance Sheets (Unaudited) | ||||||||
|
(In thousands) | ||||||||
|
March 31, |
December 31, | |||||||
|
2017 |
2016 | |||||||
|
ASSETS |
||||||||
|
Current assets |
||||||||
|
Cash and cash equivalents |
$ 150,998 |
$ 121,231 | ||||||
|
Restricted cash - collateral |
- |
50,000 | ||||||
|
Restricted cash - other |
2,841 |
2,840 | ||||||
|
Accounts receivable, net |
56,711 |
74,097 | ||||||
|
Derivative contracts |
1,212 |
- | ||||||
|
Prepaid expenses |
3,684 |
5,375 | ||||||
|
Other current assets |
11,952 |
3,633 | ||||||
|
Total current assets |
227,398 |
257,176 | ||||||
|
Oil and natural gas properties, using full cost method of accounting |
||||||||
|
Proved |
882,946 |
840,201 | ||||||
|
Unproved |
110,941 |
74,937 | ||||||
|
Less: accumulated depreciation, depletion and impairment |
(377,280) |
(353,030) | ||||||
|
616,607 |
562,108 | |||||||
|
Other property, plant and equipment, net |
245,818 |
255,824 | ||||||
|
Derivative contracts |
5,441 |
- | ||||||
|
Other assets |
1,933 |
6,284 | ||||||
|
Total assets |
$1,097,197 |
$ 1,081,392 | ||||||
|
LIABILITIES AND STOCKHOLDERS' EQUITY |
||||||||
|
Current liabilities |
||||||||
|
Accounts payable and accrued expenses |
$ 105,939 |
$ 116,517 | ||||||
|
Derivative contracts |
1,545 |
27,538 | ||||||
|
Asset retirement obligations |
67,015 |
66,154 | ||||||
|
Other current liabilities |
7,167 |
3,497 | ||||||
|
Total current liabilities |
181,666 |
213,706 | ||||||
|
Long-term debt |
37,516 |
305,308 | ||||||
|
Derivative contracts |
- |
2,176 | ||||||
|
Asset retirement obligations |
41,364 |
40,327 | ||||||
|
Other long-term obligations |
1,742 |
6,958 | ||||||
|
Total liabilities |
262,288 |
568,475 | ||||||
|
Commitments and contingencies |
||||||||
|
Stockholders' Equity |
||||||||
|
Common stock, $0.001 par value; 250,000 shares authorized; 35,855 issued and outstanding at March 31, 2017 and 21,042 issued and 19,635 outstanding at December 31, 2016 |
34 |
20 | ||||||
|
Warrants |
88,381 |
88,381 | ||||||
|
Additional paid-in capital |
1,029,668 |
758,498 | ||||||
|
Accumulated deficit |
(283,174) |
(333,982) | ||||||
|
Total stockholders' equity |
834,909 |
512,917 | ||||||
|
Total liabilities and stockholders' equity |
$1,097,197 |
$ 1,081,392 | ||||||
|
SandRidge Energy, Inc. Condensed Consolidated Cash Flows (Unaudited) | ||||||||
|
(In thousands) | ||||||||
|
Successor |
Predecessor | |||||||
|
Three Months Ended |
Three Months Ended | |||||||
|
March 31, 2017 |
March 31, 2016 | |||||||
|
CASH FLOWS FROM OPERATING ACTIVITIES |
||||||||
|
Net income (loss) |
$ 50,808 |
$ (313,226) | ||||||
|
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities |
||||||||
|
Provision for doubtful accounts |
- |
16,701 | ||||||
|
Depreciation, depletion and amortization |
28,408 |
39,161 | ||||||
|
Accretion of asset retirement obligations |
2,409 |
1,588 | ||||||
|
Impairment |
2,531 |
110,114 | ||||||
|
Debt issuance costs amortization |
78 |
3,350 | ||||||
|
Amortization of premiums and discounts on debt |
(75) |
2,013 | ||||||
|
Gain on extinguishment of debt |
- |
(41,331) | ||||||
|
Gain on debt derivatives |
- |
(1,324) | ||||||
|
Cash paid for early conversion of convertible notes |
- |
(33,452) | ||||||
|
Gain on derivative contracts |
(34,183) |
(2,808) | ||||||
|
Cash (paid) received on settlement of derivative contracts |
(638) |
25,536 | ||||||
|
Loss on settlement of contract |
- |
89,092 | ||||||
|
Cash paid on settlement of contract |
- |
(11,000) | ||||||
|
Stock-based compensation |
3,261 |
6,753 | ||||||
|
Other |
360 |
(1,791) | ||||||
|
Changes in operating assets and liabilities increasing (decreasing) cash |
11,277 |
(52,020) | ||||||
|
Net cash provided by (used in) operating activities |
$ 64,236 |
(162,644) | ||||||
|
CASH FLOWS FROM INVESTING ACTIVITIES |
||||||||
|
Capital expenditures for property, plant and equipment |
(43,686) |
(70,546) | ||||||
|
Acquisition of assets |
(48,073) |
(95) | ||||||
|
Proceeds from sale of assets |
10,203 |
3,172 | ||||||
|
Net cash used in investing activities |
(81,556) |
(67,469) | ||||||
|
CASH FLOWS FROM FINANCING ACTIVITIES |
||||||||
|
Proceeds from borrowings |
- |
488,900 | ||||||
|
Debt issuance costs |
(1,488) |
(296) | ||||||
|
Purchase of treasury stock |
(1,424) |
(37) | ||||||
|
Net cash (used in) provided by financing activities |
(2,912) |
488,567 | ||||||
|
NET (DECREASE) INCREASE IN CASH, CASH EQUIVALENTS and RESTRICTED CASH |
(20,232) |
258,454 | ||||||
|
CASH, CASH EQUIVALENTS and RESTRICTED CASH, beginning of year |
174,071 |
435,588 | ||||||
|
CASH, CASH EQUIVALENTS and RESTRICTED CASH, end of period |
$ 153,839 |
$ 694,042 | ||||||
|
Supplemental Disclosure of Noncash Investing and Financing Activities |
||||||||
|
Cumulative effect of adoption of ASU 2015-02 |
$ - |
$ (247,566) | ||||||
|
Property, plant and equipment transferred in settlement of contract |
$ - |
$ (215,635) | ||||||
|
Change in accrued capital expenditures |
$ 2,954 |
$ 17,065 | ||||||
|
Equity issued for debt |
$ (268,779) |
$ (4,409) | ||||||
Non-GAAP Financial Measures
Adjusted operating cash flow, adjusted EBITDA, pro forma adjusted EBITDA, adjusted net loss, and net debt are non-GAAP financial measures.
The Company defines adjusted operating cash flow as net cash provided by (used in) operating activities before changes in operating assets and liabilities. It defines EBITDA as net income (loss) before income tax expense, interest expense and depreciation, depletion and amortization and accretion of asset retirement obligations. Adjusted EBITDA, as presented herein, is EBITDA excluding asset impairment, gain on derivative contracts, cash (paid) received upon settlement of derivative contracts, loss on settlement of contract, severance, oil field services – exit costs, gain on extinguishment of debt, restructuring costs and other various items (including non-cash portion of stock-based compensation). Pro forma adjusted EBITDA, as presented herein, is adjusted EBITDA excluding adjusted EBITDA attributable to properties or subsidiaries sold during the period.
Adjusted operating cash flow and adjusted EBITDA are supplemental financial measures used by the Company's management and by securities analysts, investors, lenders, rating agencies and others who follow the industry as an indicator of the Company's ability to internally fund exploration and development activities and to service or incur additional debt. The Company also uses these measures because adjusted operating cash flow and adjusted EBITDA relate to the timing of cash receipts and disbursements that the Company may not control and may not relate to the period in which the operating activities occurred. Further, adjusted operating cash flow and adjusted EBITDA allow the Company to compare its operating performance and return on capital with those of other companies without regard to financing methods and capital structure. These measures should not be considered in isolation or as a substitute for net cash provided by operating activities prepared in accordance with generally accepted accounting principles ("GAAP"). Adjusted EBITDA should not be considered as a substitute for net income, operating income, cash flows from operating activities or any other measure of financial performance or liquidity presented in accordance with GAAP. Adjusted EBITDA excludes some, but not all, items that affect net income and operating income and these measures may vary among other companies. Therefore, the Company's adjusted EBITDA may not be comparable to similarly titled measures used by other companies.
Management also uses the supplemental financial measure of adjusted net income (loss), which excludes asset impairment, (loss) gain on derivative contracts, cash (paid) received on settlement of derivative contracts, loss on settlement of contract, severance, oil field services – exit costs, gain on extinguishment of debt, restructuring costs, employee incentive and retention and other non-cash items from loss applicable to common stockholders. Management uses this financial measure as an indicator of the Company's operational trends and performance relative to other oil and natural gas companies and believes it is more comparable to earnings estimates provided by securities analysts. Adjusted net income (loss) is not a measure of financial performance under GAAP and should not be considered a substitute for loss applicable to common stockholders.
The Company also uses the term net debt to determine the extent to which the Company's outstanding debt obligations would be satisfied by its cash and cash equivalents on hand. Management believes this metric is useful to investors in determining the Company's current leverage position following recent significant events subsequent to the period.
The tables below reconcile the most directly comparable GAAP financial measures to operating cash flow, EBITDA and adjusted EBITDA and adjusted net loss.
|
Reconciliation of Cash Provided by (Used in) Operating Activities to Adjusted Operating Cash Flow | |||||||
|
Successor |
Predecessor | ||||||
|
Three Months Ended |
Three Months Ended | ||||||
|
March 31, 2017 |
March 31, 2016 | ||||||
|
(in thousands) | |||||||
|
Net cash provided by (used in) operating activities |
$ 64,236 |
$ (162,644) | |||||
|
Changes in operating assets and liabilities |
(11,277) |
52,020 | |||||
|
Adjusted operating cash flow |
$ 52,959 |
$ (110,624) | |||||
|
Reconciliation of Net Income (Loss) to EBITDA and Adjusted EBITDA | |||||||
|
Successor |
Predecessor | ||||||
|
Three Months Ended |
Three Months Ended | ||||||
|
March 31, 2017 |
March 31, 2016 | ||||||
|
(in thousands) | |||||||
|
Net income (loss) |
$ 50,808 |
$ (313,226) | |||||
|
Adjusted for |
|||||||
|
Income tax expense |
3 |
4 | |||||
|
Interest expense |
1,142 |
81,727 | |||||
|
Depreciation and amortization - other |
3,837 |
6,835 | |||||
|
Depreciation and depletion - oil and natural gas |
24,571 |
32,326 | |||||
|
Accretion of asset retirement obligations |
2,409 |
1,588 | |||||
|
EBITDA |
82,770 |
(190,746) | |||||
|
Asset impairment |
2,531 |
110,114 | |||||
|
Stock-based compensation |
3,261 |
1,700 | |||||
|
Gain on derivative contracts |
(34,183) |
(2,808) | |||||
|
Cash (paid) received upon settlement of derivative contracts |
(638) |
25,536 | |||||
|
Loss on settlement of contract |
- |
89,092 | |||||
|
Severance |
400 |
17,924 | |||||
|
Oil field services - exit costs |
- |
2,278 | |||||
|
Gain on extinguishment of debt |
- |
(41,331) | |||||
|
Restructuring costs |
2,607 |
8,347 | |||||
|
Employee incentive and retention |
- |
4,530 | |||||
|
Other |
(1,030) |
15,162 | |||||
|
Adjusted EBITDA |
$ 55,718 |
$ 39,798 | |||||
|
Less: EBITDA attributable to WTO properties (2016) |
- |
1,990 | |||||
|
Pro forma adjusted EBITDA |
$ 55,718 |
$ 41,788 | |||||
|
Reconciliation of Cash Provided by (Used in) Operating Activities to Adjusted EBITDA | ||||||||
|
Successor |
Predecessor |
|||||||
|
Three Months Ended |
Three Months Ended |
|||||||
|
March 31, 2017 |
March 31, 2016 |
|||||||
|
(in thousands) | ||||||||
|
Net cash provided by (used in) operating activities |
$ 64,236 |
$ (162,644) |
||||||
|
Changes in operating assets and liabilities |
(11,277) |
52,020 |
||||||
|
Interest expense |
1,142 |
81,727 |
||||||
|
Cash paid on early conversion of convertible notes |
- |
33,452 |
||||||
|
Cash paid on settlement of contract |
- |
11,000 |
||||||
|
Severance (1) |
400 |
12,870 |
||||||
|
Oil field services - exit costs (1) |
- |
2,278 |
||||||
|
Restructuring costs |
2,607 |
8,347 |
||||||
|
Employee incentive and retention |
- |
4,530 |
||||||
|
Other |
(1,390) |
(3,782) |
||||||
|
Adjusted EBITDA |
$ 55,718 |
$ 39,798 |
||||||
|
(1) |
Excludes associated stock-based compensation. |
|
Reconciliation of Net Income Available (Loss Applicable) to Common Stockholders to Adjusted Net Income Available (Loss Applicable) to Common Stockholders | ||||||||
|
Successor |
Predecessor |
|||||||
|
Three Months Ended |
Three Months Ended |
|||||||
|
March 31, 2017 |
March 31, 2016 |
|||||||
|
(in thousands) | ||||||||
|
Income available (loss applicable) to common stockholders |
$ 50,808 |
$ (324,107) |
||||||
|
Asset impairment |
2,531 |
110,114 |
||||||
|
Gain on derivative contracts |
(34,183) |
(2,808) |
||||||
|
Cash (paid) received upon settlement of derivative contracts |
(638) |
25,536 |
||||||
|
Loss on settlement of contract |
- |
89,092 |
||||||
|
Severance |
400 |
17,924 |
||||||
|
Oil field services - exit costs |
- |
2,278 |
||||||
|
Gain on extinguishment of debt |
- |
(41,331) |
||||||
|
Restructuring costs |
2,607 |
8,347 |
||||||
|
Employee incentive and retention |
- |
4,530 |
||||||
|
Other |
(637) |
14,351 |
||||||
|
Adjusted net income (loss applicable) to common stockholders |
20,888 |
(96,074) |
||||||
|
Preferred stock dividends |
- |
10,881 |
||||||
|
Effect of convertible debt, net of income taxes |
- |
3,912 |
||||||
|
Total adjusted net income (loss) |
$ 20,888 |
$ (81,281) |
||||||
|
Weighted average number of common shares outstanding |
||||||||
|
Basic |
26,801 |
689,784 |
||||||
|
Diluted (1) |
26,801 |
815,750 |
||||||
|
Total adjusted net income (loss) |
||||||||
|
Per share - basic |
$ 0.78 |
$ (0.14) |
||||||
|
Per share - diluted |
$ 0.78 |
$ (0.10) |
||||||
|
(1) |
Weighted average fully diluted common shares outstanding for certain periods presented includes shares that are considered antidilutive for calculating earnings per share in accordance with GAAP. | |||||||
For further information, please contact:
Duane M. Grubert
EVP – Investor Relations and Strategy
SandRidge Energy, Inc.
123 Robert S. Kerr Avenue
Oklahoma City, OK 73102-6406
(405) 429-5515
Cautionary Note to Investors - This press release includes "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, including, but not limited to, the information appearing under the heading "Operational Guidance." These statements express a belief, expectation or intention and are generally accompanied by words that convey projected future events or outcomes. The forward-looking statements include projections and estimates of the Company's corporate strategies, future operations, drilling plans, oil, and natural gas and natural gas liquids production, price realizations and differentials, hedging program, operating, general and administrative and other costs, capital expenditures, tax rates, efficiency and cost reduction initiative outcomes, infrastructure assessment and investment, and development plans and appraisal programs. We have based these forward-looking statements on our current expectations and assumptions and analyses made by us in light of our experience and our perception of historical trends, current conditions and expected future developments, as well as other factors we believe are appropriate under the circumstances. However, whether actual results and developments will conform with our expectations and predictions is subject to a number of risks and uncertainties, including the volatility of oil and natural gas prices, our success in discovering, estimating, developing and replacing oil and natural gas reserves, actual decline curves and the actual effect of adding compression to natural gas wells, the availability and terms of capital, the ability of counterparties to transactions with us to meet their obligations, our timely execution of hedge transactions, credit conditions of global capital markets, changes in economic conditions, the amount and timing of future development costs, the availability and demand for alternative energy sources, regulatory changes, including those related to carbon dioxide and greenhouse gas emissions, and other factors, many of which are beyond our control. We refer you to the discussion of risk factors in Part I, Item 1A - "Risk Factors" of our Annual Report on Form 10-K for the year ended December 31, 2016 and in comparable "Risk Factor" sections of our Quarterly Reports on Form 10-Q filed after such form 10-K. All of the forward-looking statements made in this press release are qualified by these cautionary statements. The actual results or developments anticipated may not be realized or, even if substantially realized, they may not have the expected consequences to or effects on our Company or our business or operations. Such statements are not guarantees of future performance and actual results or developments may differ materially from those projected in the forward-looking statements. We undertake no obligation to update or revise any forward-looking statements.
SandRidge Energy, Inc. (NYSE: SD) is an oil and natural gas exploration and production company headquartered in Oklahoma City, Oklahoma with its principal focus on developing high-return, growth-oriented projects in the U.S. Mid-Continent and Niobrara Shale.
SOURCE SandRidge Energy, Inc.
Article Date
5/10/2017SandRidge Energy, Inc. Announces 2017 First Quarter Shareholder Update and Financial Results Release Date and Conference Call Information
Source: PR Newswire
Orignial Article: http://www.prnewswire.com...
OKLAHOMA CITY, April 10, 2017 /PRNewswire/ -- SandRidge Energy, Inc. (NYSE: SD) will release its 2017 first quarter shareholder update and financial results after the close of trading on the New York Stock Exchange on Wednesday, May 10, 2017.
The company will host a conference call to discuss these results on Thursday, May 11, 2017 at 8:00am CT. The telephone number to access the conference call from within the U.S. is (877) 201-0168 and from outside the U.S. is (647) 788-4901. The passcode for the call is 4580429. An audio replay of the call will be available from May 11, 2017 until 11:59pm CT on June 11, 2017. The number to access the conference call replay from within the U.S. is (800) 585-8367 and from outside the U.S. is (416) 621-4642. The passcode for the replay is 4580429.
A live audio webcast of the conference call will also be available via SandRidge's website, www.sandridgeenergy.com, under Investor Relations/Presentations & Events. The webcast will be archived for replay on the company's website for 30 days.
About SandRidge Energy, Inc.
SandRidge Energy, Inc. (NYSE: SD) is an oil and natural gas exploration and production company headquartered in Oklahoma City, Oklahoma with its principal focus on developing high-return, growth-oriented projects in the U.S. Mid-Continent and Niobrara Shale.
CONTACT:
Duane M. Grubert
EVP – Investor Relations and Strategy
SandRidge Energy, Inc.
123 Robert S. Kerr Avenue
Oklahoma City, OK 73102
+1 (405) 429-5515
SOURCE SandRidge Energy, Inc.
Article Date
4/10/2017SandRidge Energy, Inc. Reports Financial and Operational Results for Fourth Quarter and the Full Year of 2016
Source: PR Newswire
Orignial Article: http://www.prnewswire.com...
OKLAHOMA CITY, Feb. 22, 2017 /PRNewswire/ -- SandRidge Energy, Inc. (the "Company" or "SandRidge") (NYSE:SD) today announced financial and operational results for the quarter and fiscal year ended December 31, 2016. The Company will host a conference call to discuss these results on February 23rd at 8:00 a.m. CT (877-201-0168, International: 647-788-4901 - passcode: 53513467). Presentation slides will be available on the Company's website, www.sandridgeenergy.com, under Investor Relations/Events.
Production in the quarter ending December 31, 2016 was 4.3 MMBoe (47.2 MBoepd, 28% oil, 23% NGLs, 49% natural gas), and 19.4 MMBoe for the full year, at the high end of guidance (19.0-19.4 MMBoe). During the quarter, one drilling rig was active in Oklahoma targeting the Meramec and Osage formations, with the Company also completing wells in the Niobrara North Park Basin of Colorado. Capital expenditures were $41 million during the quarter, bringing the total for the year to $202 million (excluding acquisitions) compared to prior 2016 guidance of $220-$240 million. In February 2017, the Company closed an approximately 13,100 acre acquisition (including 700 Boepd of production) in Woodward County, Oklahoma for $48 million cash, increasing its position in the northwest portion of the Sooner Trend Anadarko Basin Canadian and Kingfisher Counties play (NW STACK) to 60,000 net acres. Capital expenditures and operational guidance for 2017 is included in this release.
The Company reported a net loss of $334 million, which included a non-cash ceiling test impairment charge of $319 million. Net cash from operating activities were $66 million for the fourth quarter of 2016. When adjusting these reported amounts for items that are typically excluded by the investment community on the basis that such items affect the comparability of results, the Company's "adjusted net income" amounted to $29 million and "adjusted operating cash flow" totaled $52 million. Earnings before interest, income taxes, depreciation, depletion, and amortization, adjusted for certain other items, otherwise referred to as "adjusted EBITDA", for the fourth quarter was $71 million, and for the full year of 2016 was $238 million.
The Company has defined and reconciled certain Non-GAAP financial measures including adjusted net income, adjusted operating cash flow, adjusted EBITDA, PV-10 and current net debt, to the most directly comparable GAAP financial measures in supporting tables at the conclusion of this press release under the "Non-GAAP Financial Measures" beginning on page 17.
James Bennett, SandRidge President and CEO said, "After recently increasing our NW STACK position to 60,000 net acres, we will be weighting near term Mid-Continent drilling activity towards the Meramec and Osage, adding a second rig in the spring. Our track record of capturing efficiency gains can now be applied to our portfolio of Oklahoma's NW STACK and Mississippian plays, and in the North Park Basin in Colorado, where Niobrara drilling will resume mid year. Our plan calls for oil production growth by late 2017, with a focus on EBITDA and resource value creation rather than BOE volume growth. With our strong balance sheet and liquidity in excess of $500 million, I believe SandRidge has compelling, multi-year opportunities to add shareholder value."
Highlights during and subsequent to the fourth quarter include:
SEC Reserves of 164 MMBoe at December 31, 2016 with PV-10 of $438 Million (equal to Standardized Measure); Updated Proved Reserves of 184 MMBoe with $946 Million PV-10 at Recent Strip Pricing
Acquisition of ~13,100 Net Acres (Including ~700 Boepd of Production) in Woodward County, Oklahoma with Meramec and Osage Focus for $48 Million in Cash, Increasing NW STACK Position to 60,000 Net Acres
901 Boepd (91% Oil) 30-Day IP on First Niobrara XRL and 539 Boepd (92% Oil) on First Niobrara "C" Bench Well
925 Boepd (77% Oil) 30-Day IP Major County Meramec Well in NW STACK
One Rig Active and Second Rig Starting Late Q1'17 in NW STACK Drilling in Major, Woodward, and Garfield Counties, One Rig Active in North Park at Mid Year
New $600 Million Reserve-based Credit Facility with $425 Million Conforming Borrowing Base
All Outstanding Mandatorily Convertible Notes Converted, 35.9 Million Shares Outstanding as of February 20, 2017
Current Capital Structure
Entering into the new credit facility in February 2017 triggered the release of $50 million of cash held in escrow to the Company and the conversion of all of the $264 million outstanding mandatorily convertible notes into approximately 14.1 million shares of the Company's common stock.
2017 Capital Budget and Operational Guidance
The Company currently has one drilling rig running in Oklahoma, with plans to add a second rig late in the first quarter. Drilling operations will commence mid year in the North Park Basin with one rig. 2017 capital expenditure guidance range is for $210-$220 million. Production and other operational guidance detail for the full year of 2017 can be found below.
Mid-Continent Assets in Oklahoma
The Company drilled the following three NW STACK laterals in 2016:
In 2016, SandRidge drilled 28 laterals, including 13 Mississippian laterals to sales, in the Mid-Continent with one rig. The Mississippian program consisted of 100% extended and multilaterals, providing a program IRR of 51% and achieving an average drilling and completion cost of $1.7 million per lateral, with the most recent two extended reach laterals averaging $1.3 million per lateral. Also in 2016, SandRidge continued development activities in the Oklahoma NW STACK play in Garfield and Major Counties.
Oklahoma NW STACK: Meramec and Osage
The STACK encompasses a geographic area initially developed in Oklahoma's Canadian and Kingfisher Counties. Recently, industry activity expanded northwest into what is considered the NW STACK where SandRidge operates in Major, Woodward, and Garfield Counties with approximately 60,000 net acres prospective for the Meramec and Osage.
The STACK and NW STACK plays, while in different parts of the Anadarko Basin, share the same depositional history. As in the STACK, the NW STACK consists of Mississippian age rock with primary targets in the Meramec and Osage formations. The structure deepens from northeast to southwest, and in SandRidge's Major, Woodward, and Garfield County areas, depth ranges from 5,800 to 12,500 feet true vertical depth (TVD), with the majority of acreage in the 6,000 to 9,000 feet TVD range. The Woodford Shale is the primary hydrocarbon source, while the organic content in the Meramec Shale provides a self-sourcing component as well. Similar to the STACK, there is an over-pressured area and normally pressured area in the NW STACK.
Since 2014, multiple operators (including SandRidge) have demonstrated encouraging initial well results in the NW STACK. The Company's primary target in the NW STACK is the Meramec Shale, which consists of interbedded shales, sands and carbonates with thickness ranging from 50 to 160 feet. The Meramec production to date shows high oil content (greater than 40%), low water rates and total productivity consistent with an over-pressured reservoir. The Company's secondary target, the Osage, is comprised of limestones and cherts, ranging from 450 to 1,300 feet in thickness. The Osage production is typically gassier than the Meramec with oil content greater than 20%. Significant industry activity in the NW STACK has established both the Meramec and Osage as productive reservoirs with successful wells throughout.
Subsequent to the fourth quarter, SandRidge acquired approximately 13,100 net acres (including approximately 700 Boepd of production) in Woodward County for $48 million in cash, expanding the Company's three county (Major, Woodward, and Garfield) NW STACK acreage position to approximately 60,000 net acres. Approximately 27% of that position is currently held by production. Industry activity includes thirteen drilling rigs recently operating across the NW STACK with over 50 wells producing in the areas of interest. The Company's recent success in the play, combined with competitor activity near SandRidge's acreage supports focused Mid-Continent drilling activity, weighted towards Meramec and Osage targets in the NW STACK.
Niobrara Asset in North Park Basin, Jackson County, Colorado
During 2016, the Company drilled 11 laterals and tested various concepts, including Niobrara bench productivity, extended reach drilling, and the use of slickwater (versus crosslinked) frac fluid designs. The first five laterals (all one-mile laterals with crosslinked gel fracs) produced an average 30-Day IP of 478 Boepd (90% oil). The next three one-mile laterals (the Mutual 2-8H, Mutual 3-8H and Mutual 4-8H), tested various frac fluid designs including slickwater. The resulting well performance was influenced by higher than anticipated water cut (greater than 70%), although total fluid production (oil plus water) showed similar to the five previous wells, stimulated with crosslink gel. The higher water cut was a result of pumping 30% more water than in the crosslinked gel jobs. The 30-Day IPs were below type curve expectations averaging 210 Boepd (91% oil) due to the high water cut. These wells are all responding favorably to artificial lift and are expected to achieve type curve EURs as the reservoir is dewatered.
In the fourth quarter, the Hebron 4-18H, the Company's first Niobrara "C" bench well produced a 30-Day IP of 539 Boepd (92% oil), confirming development potential for multiple benches in the play. Also in the quarter, the Castle 1-17H 20 extended lateral well produced a 30-Day IP of 901 Boepd (91% oil). Both wells were completed with crosslinked stimulation.
The North Park Basin wells exhibit a relatively flat oil rate in the first several months of production due to the over-pressured nature of the Niobrara reservoir. The wells will free flow for two to three months at which point artificial lift is installed to further extend the plateau. In several instances, artificial lift was not installed early enough to maintain the plateau and production rates were temporarily reduced. The installation of artificial lift within the first few months of production will be the standard practice going forward.
Other Operational Activities
During the fourth quarter, Permian Central Basin Platform properties produced 143 MBoe (1.6 MBoepd, 82% oil, 11% NGLs, 7% natural gas). SandRidge continues to operate the Permian CBP assets and administrate the filing and distribution affairs on behalf of the Permian Royalty Trust.
Year End 2016 Estimated Proved Reserves
The Company's total estimated SEC proved reserves as of December 31, 2016 were 164 MMBoe, comprised of 53% liquids (32% oil and 21% natural gas liquids) and 47% natural gas. Approximately 74% of the Company's 2016 estimated proved reserves were classified as proved developed and 26% as proved undeveloped. The Company's year end reserves reflect approximately 94.7 MMBoe of negative performance revisions for the year, which is approximately 85% or 79.9 MMBoe from changes to gas and NGL reserves and 15% or 14.8 MMBoe from changes to oil reserves. All of the Company's estimated proved undeveloped reserves at December 31, 2016 are expected to be developed within the next five years. Utilizing SEC price guidelines, the PV-10 was $438.4 million (equal to the standardized measure due to the Company's current tax position).
For comparative purposes, utilizing NYMEX forward closing prices for oil and natural gas on December 30, 2016 (the last trading day of 2016), total NYMEX strip-based proved reserves at December 31, 2016 were 184 MMBoe, with a PV-10 of $946 million, an increase of $508 million over the standardized measure and SEC PV-10. NYMEX strip-based proved reserves are calculated based on the SEC proved reserves estimation methodology, but applying NYMEX strip prices rather than SEC pricing. NYMEX strip-based PV-10 uses annual average prices for oil and natural gas shown in the NYMEX Strip Pricing table below.
Independent reserve engineering firms, Cawley, Gillespie & Associates, Inc. (Mid-Continent – Mississippian Lime), Ryder Scott Company, L.P. (North Park Basin - Niobrara) and Netherland, Sewell & Associates, Inc. (Permian Basin Trust properties – Grayburg/San Andres) engineered 94% of the Company's year end 2016 proved reserves in accordance with SEC guidelines. SEC pricing used in the preparation of the December 31, 2016 reserves was $42.75 per Bbl for oil and $2.48 per MMBtu for natural gas, before adjustments.
|
Oil MBbls |
NGLs MBbls |
Gas MMcf |
Equivalent MBoe (1) |
Standardized $MM | |||||||
|
Proved Reserves, December 31, 2015 |
77,911 |
61,075 |
1,113,840 |
324,626 |
$1,315 | ||||||
|
Production |
(5,529) |
(4,357) |
(56,895) |
(19,369) |
|||||||
|
Sale of assets |
(387) |
0 |
(145,267) |
(24,598) |
|||||||
|
Change in accounting for Trusts |
(6,971) |
(3,695) |
(50,508) |
(19,084) |
|||||||
|
Performance Revisions |
(14,796) |
(21,717) |
(349,244) |
(94,720) |
|||||||
|
Pricing Revisions |
(1,510) |
876 |
(68,865) |
(12,112) |
|||||||
|
Extensions & Additions |
4,166 |
1,425 |
21,720 |
9,210 |
|||||||
|
Proved Reserves, December 31, 2016 |
52,884 |
33,607 |
464,782 |
163,955 |
$438 | ||||||
|
(1) |
Equivalent Boe are calculated using an energy equivalent ratio of six Mcf of natural gas to one Bbl of oil. Using an energy-equivalent ratio does not factor in price differences and energy-equivalent prices may differ significantly among produced products. | ||||||||||
|
SEC Proved Reserves and NYMEX Strip-based Proved Reserves | ||||||||
|
YE 2016@SEC Pricing (1) |
YE 2016@NYMEX Strip Pricing (2) | |||||||
|
Equivalent |
Standardized |
Equivalent |
PV-10 $MM | |||||
|
Developed |
120,705 |
$407 |
139,550 |
$736 | ||||
|
Undeveloped |
43,250 |
$31 |
44,700 |
$210 | ||||
|
Total Proved |
163,955 |
$438 |
184,250 |
$946 | ||||
|
(1) |
SEC Pricing remains flat for reserve life at $42.75/Bo & $2.48/Mcf | ||||||||
|
(2) |
NYMEX Strip pricing as of December 30, 2016, shown in table below | ||||||||
|
NYMEX Strip Pricing (as of 12/30/2016) | ||||
|
Year |
Oil |
Gas | ||
|
2017 |
$ 56.26 |
$ 3.63 | ||
|
2018 |
56.54 |
3.14 | ||
|
2019 |
56.08 |
2.87 | ||
|
2020 |
56.05 |
2.88 | ||
|
2021 |
56.23 |
2.90 | ||
|
2022 |
56.57 |
2.93 | ||
|
2023+ |
57.98 |
3.46 | ||
Key Financial Results
Upon emergence from Chapter 11 reorganization, the Company elected to adopt fresh start accounting effective October 1, 2016, to coincide with the timing of its normal fourth quarter reporting. Under the principles of fresh start accounting, a new reporting entity was created, and, as a result, the Company allocated the reorganization value of the Company to its individual assets, including property, plant and equipment, based on their estimated fair values. Also, upon application of fresh start accounting, the Company made an accounting policy election to present transportation costs as a reduction from revenue. As a result of the application of fresh start accounting and the effects of the implementation of the plan of reorganization, the financial statements on or after October 1, 2016 will not be comparable with the financial statements prior to that date. References to the "Successor" refer to SandRidge subsequent to adoption of fresh start accounting. References to the "Predecessor" refer to SandRidge prior to adoption of fresh start accounting. Additionally, references to the "fourth quarter 2016" herein refer to operational activities, production, revenue, and production expenses of the Successor.
Fourth Quarter
Full Year
Hedging
During and after the fourth quarter, SandRidge added oil and natural gas hedge positions in both 2017 and 2018. For the calendar year of 2017, the Company now has approximately 3.3 million barrels of oil hedged at an average WTI price of $52.24 as well as 32.9 billion cubic feet of natural gas hedged at an average price of $3.20 per MMBtu. For 2018, the Company has approximately 1.8 million barrels of oil hedged at an average WTI price of $55.34 as well as 3.7 billion cubic feet of natural gas hedged at an average price of $3.12.
Conference Call Information
The Company will host a conference call to discuss these results on Thursday, February 23, 2017 at 8:00 am CST. The telephone number to access the conference call from within the U.S. is (877) 201-0168 and from outside the U.S. is (647) 788-4901. The passcode for the call is 53513467. An audio replay of the call will be available from February 23, 2017 until 11:59 pm CDT on March 23, 2017. The number to access the conference call replay from within the U.S. is (800) 585-8367 and from outside the U.S. is (416) 621-4642. The passcode for the replay is 53513467.
A live audio webcast of the conference call will also be available via SandRidge's website, www.sandridgeenergy.com, under Investor Relations/Events. The webcast will be archived for replay on the Company's website for 30 days.
|
2017 Capital Expenditure and Operational Guidance | |||||
|
Total Company |
|||||
|
Projection as of |
|||||
|
February 22, 2017 |
|||||
|
Production |
|||||
|
Oil (MMBbls) |
4.0 - 4.2 |
||||
|
Natural Gas Liquids (MMBbls) |
3.0 - 3.2 |
||||
|
Total Liquids (MMBbls) |
7.0 - 7.4 |
||||
|
Natural Gas (Bcf) |
42.0 - 43.5 |
||||
|
Total (MMBoe) |
14.0 - 14.7 |
||||
|
Price Realization |
|||||
|
Oil (differential below NYMEX WTI) |
$2.75 |
||||
|
Natural Gas Liquids (realized % of NYMEX WTI) |
26% |
||||
|
Natural Gas (differential below NYMEX Henry Hub) |
$1.00 |
||||
|
Costs per Boe |
|||||
|
LOE |
$8.00 - $9.00 |
||||
|
Adjusted G&A - Cash1 |
$4.25 - $4.50 |
||||
|
% of Revenue |
|||||
|
Production Taxes |
2.75% - 3.00% |
||||
|
Capital Expenditures ($ in millions) | |||||
|
Drilling and Completion |
|||||
|
Mid-Continent |
$65 - $70 |
||||
|
North Park Basin |
20 - 25 |
||||
|
Other2 |
24 |
||||
|
Total Drilling and Completion |
$109 - $119 |
||||
|
Other E&P |
|||||
|
Land, G&G, and Seismic |
$40 |
||||
|
Infrastructure3 |
7 |
||||
|
Workover |
37 |
||||
|
Capitalized G&A and Interest |
15 |
||||
|
Total Other Exploration and Production |
$99 |
||||
|
General Corporate |
2 |
||||
|
Total Capital Expenditures (excluding acquisitions and plugging and abandonment) |
$210 - $220 |
||||
|
1) |
Adjusted G&A - Cash is a non-GAAP financial measure as it excludes from G&A non-cash compensation, severance, bad debt allowance, and other non-recurring items. The most directly comparable GAAP measure for Adjusted G&A - cash is General and Administrative Expense. Information to reconcile this non-GAAP financial measure to the most directly comparable GAAP financial measure is not available at this time, as management is unable to forecast the excluded items for future periods. | ||||
|
2) |
2016 Carryover, Coring, and Non-Op | ||||
|
3) |
Facilities - Electrical, SWD, Gathering, Pipeline ROW | ||||
2016 Actual Results vs. 2016 Capital Expenditure and Operational Guidance
The table below presents the actual results of the Company's operations and capital expenditures for the full year of 2016 in comparison to its previous guidance, last provided on November 8, 2016.
|
FY 2016 Actuals |
FY 2016 Guidance |
Delta | |||||||
|
Production |
|||||||||
|
Oil (MMBbls) |
5.5 |
5.5 |
- | ||||||
|
Natural Gas Liquids (MMBbls) |
4.4 |
4.2 |
0.2 | ||||||
|
Total Liquids (MMBbls) |
9.9 |
9.7 |
0.2 | ||||||
|
Natural Gas (Bcf) |
56.9 |
57.2 |
(0.3) | ||||||
|
Total (MMBoe) |
19.4 |
19.2 |
0.2 | ||||||
|
Cost per Boe |
|||||||||
|
LOE1 |
$ 7.98 |
$ 8.90 |
$(0.92) | ||||||
|
DD&A - Oil & Gas |
6.23 |
6.00 |
0.23 | ||||||
|
DD&A - Other |
1.64 |
1.43 |
0.21 | ||||||
|
Adj G&A - Cash |
$ 3.55 |
$ 3.80 |
$(0.25) | ||||||
|
Capital Expenditures ($ in Millions) | |||||||||
|
Drilling and Completion |
|||||||||
|
Mid-Continent |
$ 42 |
$ 45 |
$ (3) | ||||||
|
North Park Basin |
57 |
58 |
(0) | ||||||
|
Other2 |
19 |
25 |
(6) | ||||||
|
Total Drilling and Completion |
$ 119 |
$ 128 |
$ (9) | ||||||
|
Other E&P |
|||||||||
|
Land, G&G, and Seismic |
$ 13 |
$ 13 |
$ 0 | ||||||
|
Infrastructure3 |
18 |
21 |
(3) | ||||||
|
Workovers |
26 |
39 |
(13) | ||||||
|
Capitalized G&A and Interest |
25 |
25 |
(1) | ||||||
|
Total Other Exploration and Production |
$ 81 |
$ 98 |
$ (16) | ||||||
|
General Corporate |
$ 3 |
$ 5 |
$ (2) | ||||||
|
Total Capital Expenditures (excluding acquisitions and plugging and abandonment) |
$ 202 |
$ 230 |
$ (28) | ||||||
|
(1) |
One quarter of new accounting policy election to present transportation costs as a reduction from revenue | ||||||||
|
(2) |
2015 Carryover, JV Penalty, Rig Penalty, Non-Op, SWD | ||||||||
|
(3) |
Facilities - Electrical, SWD, Gathering, Pipelines | ||||||||
Operational and Financial Statistics
Information regarding the Company's production, pricing, costs and earnings is presented below:
|
Successor |
Predecessor |
Predecessor | |||||||||||
|
Combined |
Period from |
Period from |
Three Months |
||||||||||
|
Year Ended |
October 2, 2016 through |
January 1, 2016 through |
Ended |
Year Ended | |||||||||
|
December 31, 2016 |
December 31, 2016 |
October 1, 2016 |
December 31, 2015 | ||||||||||
|
Production - Total |
|||||||||||||
|
Oil (MBbl) |
5,529 |
1,214 |
4,315 |
1,996 |
9,600 | ||||||||
|
NGL (MBbl) |
4,357 |
999 |
3,358 |
1,161 |
5,044 | ||||||||
|
Natural gas (MMcf) |
56,895 |
12,771 |
44,124 |
20,972 |
92,105 | ||||||||
|
Oil equivalent (MBoe) |
19,369 |
4,342 |
15,027 |
6,652 |
29,995 | ||||||||
|
Daily production (MBoed) |
52.9 |
47.2 |
54.8 |
72.3 |
82.2 | ||||||||
|
Production - Mid-Continent |
|||||||||||||
|
Oil (MBbl) |
4,513 |
916 |
3,597 |
1,699 |
8,253 | ||||||||
|
NGL (MBbl) |
4,284 |
983 |
3,301 |
1,125 |
4,889 | ||||||||
|
Natural gas (MMcf) |
56,038 |
12,708 |
43,330 |
18,199 |
80,491 | ||||||||
|
Oil equivalent (MBoe) |
18,137 |
4,017 |
14,120 |
5,858 |
26,558 | ||||||||
|
Daily production (MBoed) |
49.6 |
43.7 |
51.5 |
63.7 |
72.8 | ||||||||
|
Average price per unit |
|||||||||||||
|
Realized oil price per barrel - as reported |
$ 39.09 |
$ 47.03 |
$ 36.85 |
$ 39.27 |
$ 45.83 | ||||||||
|
Realized impact of derivatives per barrel |
12.74 |
7.56 |
14.20 |
23.75 |
30.97 | ||||||||
|
Net realized price per barrel |
$ 51.83 |
$ 54.59 |
$ 51.05 |
$ 63.02 |
$ 76.80 | ||||||||
|
Realized NGL price per barrel - as reported |
$ 13.15 |
$ 14.77 |
$ 12.67 |
$ 13.25 |
$ 14.36 | ||||||||
|
Realized impact of derivatives per barrel |
- |
- |
- |
- |
- | ||||||||
|
Net realized price per barrel |
$ 13.15 |
$ 14.77 |
$ 12.67 |
$ 13.25 |
$ 14.36 | ||||||||
|
Realized natural gas price per Mcf - as reported |
$ 1.84 |
$ 2.07 |
$ 1.78 |
$ 1.82 |
$ 2.12 | ||||||||
|
Realized impact of derivatives per Mcf |
(0.03) |
(0.11) |
(0.01) |
0.09 |
0.33 | ||||||||
|
Net realized price per Mcf |
$ 1.81 |
$ 1.96 |
$ 1.77 |
$ 1.91 |
$ 2.45 | ||||||||
|
Realized price per Boe - as reported |
$ 19.53 |
$ 22.64 |
$ 18.63 |
$ 19.85 |
$ 23.59 | ||||||||
|
Net realized price per Boe - including impact of derivatives |
$ 23.08 |
$ 24.41 |
$ 22.70 |
$ 27.23 |
$ 34.51 | ||||||||
|
Average cost per Boe |
|||||||||||||
|
Lease operating(1) |
$ 7.98 |
$ 5.76 |
$ 8.63 |
$ 9.70 |
$ 10.29 | ||||||||
|
Production taxes |
0.45 |
0.61 |
0.41 |
0.43 |
0.51 | ||||||||
|
General and administrative |
|||||||||||||
|
General and administrative, excluding stock-based compensation |
$ 6.11 |
$ 3.01 |
$ 7.00 |
$ 5.74 |
$ 4.40 | ||||||||
|
Stock-based compensation |
1.98 |
2.09 |
1.94 |
0.48 |
0.61 | ||||||||
|
Total general and administrative |
$ 8.09 |
$ 5.10 |
$ 8.94 |
$ 6.22 |
$ 5.01 | ||||||||
|
General and administrative - adjusted |
|||||||||||||
|
General and administrative, excluding stock-based compensation (2) |
$ 3.55 |
$ 3.08 |
$ 3.69 |
$ 5.32 |
$ 3.80 | ||||||||
|
Stock-based compensation (3) |
0.70 |
0.67 |
0.71 |
0.40 |
0.43 | ||||||||
|
Total general and administrative - adjusted |
$ 4.25 |
$ 3.75 |
$ 4.40 |
$ 5.72 |
$ 4.23 | ||||||||
|
Depletion (4) |
$ 6.56 |
$ 8.31 |
$ 6.05 |
$ 8.14 |
$ 10.81 | ||||||||
|
Lease operating cost per Boe |
|||||||||||||
|
Mid-Continent |
$ 6.95 |
$ 4.70 |
$ 7.58 |
$ 7.36 |
$ 7.66 | ||||||||
|
Earnings per share |
|||||||||||||
|
Earnings (loss) per share applicable to common stockholders |
|||||||||||||
|
Basic |
$ (17.61) |
$ 2.01 |
$ (1.13) |
$ (7.16) | |||||||||
|
Diluted |
$ (17.61) |
$ 2.01 |
$ (1.13) |
$ (7.16) | |||||||||
|
Adjusted net income per share available to common stockholders |
|||||||||||||
|
Basic |
$ 1.53 |
$ (0.13) |
$ (0.16) |
$ (0.35) | |||||||||
|
Diluted |
$ 0.86 |
$ (0.13) |
$ (0.09) |
$ (0.21) | |||||||||
|
Weighted average number of shares outstanding (in thousands) |
|||||||||||||
|
Basic |
18,967 |
708,928 |
586,801 |
521,936 | |||||||||
|
Diluted (5) |
33,573 |
708,928 |
805,368 |
641,608 | |||||||||
|
(1) |
In concert with an accounting policy election to present transportation costs as a reduction from revenue, the Company's Lease Operating Expenses are now represented net of said transportation costs and therefore, presented lower than previous quarters | ||||||||||||
|
(2) |
Excludes severance, doubtful receivable write-off (recovery) and restructuring costs totaling ($0.3) million and $49.8 million for the Successor and Predecessor 2016 periods, respectively. Excludes severance, legal settlements and shareholder litigation totaling $2.8 million and $17.8 million for the three-month period and year ended December 31, 2015, respectively. | ||||||||||||
|
(3) |
Successor and Predecessor 2016 periods exclude $6.2 million and $18.5 million, respectively, for employee incentive and retention and the acceleration of certain stock awards. Three-month period and year ended December 31, 2015 exclude $0.6 million and $5.4 million, respectively, for the acceleration of certain stock awards. | ||||||||||||
|
(4) |
Includes accretion of asset retirement obligation. | ||||||||||||
|
(5) |
Includes shares considered antidilutive for calculating earnings per share in accordance with GAAP for certain periods presented. | ||||||||||||
Capital Expenditures
The table below summarizes the Company's capital expenditures for 2016 and 2015 periods:
|
Successor |
Predecessor |
Predecessor | |||||||||||
|
Combined |
Period from |
Period from |
Three Months |
||||||||||
|
Year Ended |
October 2, 2016 through |
January 1, 2016 through |
Ended |
Year Ended | |||||||||
|
December 31, 2016 |
December 31, 2016 |
October 1, 2016 |
December 31, 2015 | ||||||||||
|
(in thousands) | |||||||||||||
|
Drilling and production |
|||||||||||||
|
Mid-Continent |
$ 97,057 |
$ 17,212 |
$ 79,845 |
$ 80,557 |
$ 592,346 | ||||||||
|
Rockies |
82,628 |
10,464 |
72,164 |
- |
- | ||||||||
|
Other |
(27) |
(92) |
65 |
1,457 |
5,714 | ||||||||
|
179,658 |
27,584 |
152,074 |
82,014 |
598,060 | |||||||||
|
Leasehold and geophysical |
|||||||||||||
|
Mid-Continent |
6,135 |
8,906 |
(2,771) |
13,496 |
55,930 | ||||||||
|
Rockies |
3,089 |
1,728 |
1,361 |
- |
- | ||||||||
|
Other |
4,157 |
983 |
3,174 |
1,939 |
6,330 | ||||||||
|
13,381 |
11,617 |
1,764 |
15,435 |
62,260 | |||||||||
|
Inventory |
650 |
(1,139) |
1,789 |
(942) |
(4,298) | ||||||||
|
Total exploration and development |
193,689 |
38,062 |
155,627 |
96,507 |
656,022 | ||||||||
|
Drilling and oil field services |
23 |
- |
23 |
1,900 |
4,632 | ||||||||
|
Midstream |
5,986 |
2,901 |
3,085 |
1,155 |
21,555 | ||||||||
|
Other - general |
2,755 |
83 |
2,672 |
999 |
19,406 | ||||||||
|
Total capital expenditures, excluding acquisitions |
202,453 |
41,046 |
161,407 |
100,561 |
701,615 | ||||||||
|
Acquisitions |
1,327 |
- |
1,327 |
237,935 |
241,165 | ||||||||
|
Total capital expenditures |
$ 203,780 |
$ 41,046 |
$ 162,734 |
$ 338,496 |
$ 942,780 | ||||||||
Derivative Contracts
Subsequent to December 31, 2016, the Company entered into additional oil and gas swap contracts for the calendar years of 2017 and 2018.The table below sets forth the Company's consolidated oil and natural gas price swaps and collars for 2017 as of February 22, 2017:
|
Quarter Ending |
||||||||||||
|
3/31/2017 |
6/30/2017 |
9/30/2017 |
12/31/2017 |
FY 2017 | ||||||||
|
Oil (MMBbls): |
||||||||||||
|
Swap Volume |
0.81 |
0.82 |
0.83 |
0.83 |
3.29 | |||||||
|
Swap |
$52.24 |
$52.24 |
$52.24 |
$52.24 |
$52.24 | |||||||
|
Natural Gas (Bcf): |
||||||||||||
|
Swap Volume |
8.10 |
8.19 |
8.28 |
8.28 |
32.85 | |||||||
|
Swap |
$3.20 |
$3.20 |
$3.20 |
$3.20 |
$3.20 | |||||||
|
3/31/2018 |
6/30/2018 |
9/30/2018 |
12/31/2018 |
FY 2018 | ||||||||
|
Oil (MMBbls): |
||||||||||||
|
Swap Volume |
0.45 |
0.46 |
0.46 |
0.46 |
1.83 | |||||||
|
Swap |
$55.34 |
$55.34 |
$55.34 |
$55.34 |
$55.34 | |||||||
|
Natural Gas (Bcf): |
||||||||||||
|
Swap Volume |
0.90 |
0.91 |
0.92 |
0.92 |
3.65 | |||||||
|
Swap |
$3.12 |
$3.12 |
$3.12 |
$3.12 |
$3.12 | |||||||
Balance Sheet
The Company's capital structure as of December 31, 2016 and 2015 is presented below.
|
Successor |
Predecessor | ||||||
|
December 31, |
December 31, | ||||||
|
2016 |
2015 | ||||||
|
(in thousands) | |||||||
|
Cash, cash equivalents and restricted cash |
$ 174,071 |
$ 435,588 | |||||
|
Successor |
|||||||
|
First lien facility |
$ - |
$ - | |||||
|
Building note |
36,528 |
- | |||||
|
Mandatorily convertible 0% notes (1) |
268,780 |
- | |||||
|
Predecessor |
|||||||
|
Senior credit facility |
- | ||||||
|
Senior Notes |
|||||||
|
8.75% Senior Secured Notes due 2020 |
- |
1,265,814 | |||||
|
Senior Unsecured Notes |
|||||||
|
8.75% Senior Notes due 2020, net |
- |
389,232 | |||||
|
7.5% Senior Notes due 2021 |
- |
751,087 | |||||
|
8.125% Senior Notes due 2022 |
- |
518,693 | |||||
|
7.5% Senior Notes due 2023, net |
- |
534,869 | |||||
|
Convertible Senior Unsecured Notes |
|||||||
|
8.125% Convertible Senior Notes due 2022, net |
- |
78,290 | |||||
|
7.5% Convertible Senior Notes due 2023, net |
- |
24,393 | |||||
|
Total debt |
305,308 |
3,562,378 | |||||
|
Stockholders' equity (deficit) |
|||||||
|
Preferred stock (Predecessor) |
- |
6 | |||||
|
Common stock (1) |
20 |
630 | |||||
|
Warrants (Successor) |
88,381 |
- | |||||
|
Additional paid-in capital |
758,498 |
5,299,886 | |||||
|
Treasury stock, at cost |
- |
(5,742) | |||||
|
Accumulated deficit |
(333,982) |
(6,992,697) | |||||
|
Total SandRidge Energy, Inc. stockholders' equity (deficit) |
512,917 |
(1,697,917) | |||||
|
Noncontrolling interest |
- |
510,184 | |||||
|
Total capitalization |
$ 818,225 |
$ 2,374,645 | |||||
|
(1) |
Mandatorily convertible 0% notes converted to approximately 14.1 million shares of Successor common stock in February 2016. | ||||||
|
SandRidge Energy, Inc. and Subsidiaries | ||||||||||||||
|
Consolidated Statements of Operations | ||||||||||||||
|
(In thousands) | ||||||||||||||
|
Successor |
Predecessor |
Predecessor | ||||||||||||
|
Combined |
Period from |
Period from |
Three Months |
|||||||||||
|
Year Ended |
October 2, 2016 through |
January 1, 2016 through |
Ended |
Year Ended | ||||||||||
|
December 31, 2016 |
December 31, 2016 |
October 1, 2016 |
December 31, 2015 | |||||||||||
|
Revenues |
||||||||||||||
|
Oil, natural gas and NGL |
$ 378,278 |
$ 98,307 |
$ 279,971 |
$ 132,035 |
$ 707,434 | |||||||||
|
Other |
13,987 |
149 |
13,838 |
11,607 |
61,275 | |||||||||
|
Total revenues |
392,265 |
98,456 |
293,809 |
143,642 |
768,709 | |||||||||
|
Expenses |
||||||||||||||
|
Production |
154,605 |
24,997 |
129,608 |
64,543 |
308,701 | |||||||||
|
Production taxes |
8,750 |
2,643 |
6,107 |
2,892 |
15,440 | |||||||||
|
Depreciation and depletion - oil and natural gas |
120,584 |
33,971 |
86,613 |
53,007 |
319,913 | |||||||||
|
Depreciation and amortization - other |
25,245 |
3,922 |
21,323 |
10,148 |
47,382 | |||||||||
|
Accretion of asset retirement obligations |
6,455 |
2,090 |
4,365 |
1,154 |
4,477 | |||||||||
|
Impairment |
1,037,281 |
319,087 |
718,194 |
886,844 |
4,534,689 | |||||||||
|
General and administrative |
125,928 |
9,837 |
116,091 |
28,951 |
137,715 | |||||||||
|
Employee termination benefits |
30,690 |
12,334 |
18,356 |
12,451 |
12,451 | |||||||||
|
Loss (gain) on derivative contracts |
30,475 |
25,652 |
4,823 |
(14,027) |
(73,061) | |||||||||
|
Loss on settlement of contract |
90,184 |
- |
90,184 |
50,976 |
50,976 | |||||||||
|
Other operating expenses |
4,616 |
268 |
4,348 |
6,109 |
52,704 | |||||||||
|
Total expenses |
1,634,813 |
434,801 |
1,200,012 |
1,103,048 |
5,411,387 | |||||||||
|
Loss from operations |
(1,242,548) |
(336,345) |
(906,203) |
(959,406) |
(4,642,678) | |||||||||
|
Other (expense) income |
||||||||||||||
|
Interest expense |
(126,471) |
(372) |
(126,099) |
(107,852) |
(321,421) | |||||||||
|
Gain on extinguishment of debt |
41,179 |
- |
41,179 |
282,498 |
641,131 | |||||||||
|
Gain on reorganization items, net |
2,430,599 |
- |
2,430,599 |
- |
- | |||||||||
|
Other income, net |
4,076 |
2,744 |
1,332 |
832 |
2,040 | |||||||||
|
Total other income |
2,349,383 |
2,372 |
2,347,011 |
175,478 |
321,750 | |||||||||
|
Income (loss) before income taxes |
1,106,835 |
(333,973) |
1,440,808 |
(783,928) |
(4,320,928) | |||||||||
|
Income tax expense |
20 |
9 |
11 |
33 |
123 | |||||||||
|
Net income (loss) |
1,106,815 |
(333,982) |
1,440,797 |
(783,961) |
(4,321,051) | |||||||||
|
Less: net loss attributable to noncontrolling interest |
- |
- |
- |
(130,263) |
(623,506) | |||||||||
|
Net income (loss) attributable to SandRidge Energy, Inc. |
1,106,815 |
(333,982) |
1,440,797 |
(653,698) |
(3,697,545) | |||||||||
|
Preferred stock dividends |
16,321 |
- |
16,321 |
10,881 |
37,950 | |||||||||
|
Income (loss) applicable to SandRidge Energy, Inc. |
||||||||||||||
|
common stockholders |
$ 1,090,494 |
$ (333,982) |
$ 1,424,476 |
$ (664,579) |
$(3,735,495) | |||||||||
|
(Loss) earnings per share |
||||||||||||||
|
Basic |
$ (17.61) |
$ 2.01 |
$ (1.13) |
$ (7.16) | ||||||||||
|
Diluted |
$ (17.61) |
$ 2.01 |
$ (1.13) |
$ (7.16) | ||||||||||
|
Weighted average number of common shares outstanding |
||||||||||||||
|
Basic |
18,967 |
708,928 |
586,801 |
521,936 | ||||||||||
|
Diluted |
18,967 |
708,928 |
586,801 |
521,936 | ||||||||||
|
SandRidge Energy, Inc. and Subsidiaries | |||||||||
|
Condensed Consolidated Balance Sheets | |||||||||
|
(In thousands) | |||||||||
|
Successor |
Predecessor | ||||||||
|
December 31, |
December 31, | ||||||||
|
2016 |
2015 | ||||||||
|
Current assets |
$ 257,176 |
$ 674,088 | |||||||
|
Total assets |
$ 1,081,392 |
$ 2,922,027 | |||||||
|
Current liabilities |
$ 213,706 |
$ 437,389 | |||||||
|
Total liabilities |
568,475 |
4,109,760 | |||||||
|
Total liabilities and stockholders' equity (deficit) |
$ 1,081,392 |
$ 2,922,027 | |||||||
|
SandRidge Energy, Inc. and Subsidiaries | ||||||||||||
|
Condensed Consolidated Cash Flows | ||||||||||||
|
(In thousands) | ||||||||||||
|
Successor |
Predecessor |
|||||||||||
|
Combined |
Period from |
Period from |
||||||||||
|
Year Ended |
October 2, 2016 through |
January 1, 2016 through |
Year Ended | |||||||||
|
December 31, 2016 |
December 31, 2016 |
October 1, 2016 |
December 31, 2015 | |||||||||
|
Net cash (used in) provided by operating activities |
$ (46,482) |
$ 65,595 |
$ (112,077) |
$ 373,537 | ||||||||
|
Net cash used in investing activities |
(207,525) |
(39,835) |
(167,690) |
(1,039,640) | ||||||||
|
Net cash (used in) provided by financing activities |
(7,510) |
(415,061) |
407,551 |
920,438 | ||||||||
|
NET (DECREASE) INCREASE IN CASH, CASH EQUIVALENTS and RESTRICTED CASH |
(261,517) |
(389,301) |
127,784 |
254,335 | ||||||||
|
CASH, CASH EQUIVALENTS and RESTRICTED CASH, beginning of period |
435,588 |
563,372 |
435,588 |
181,253 | ||||||||
|
CASH, CASH EQUIVALENTS and RESTRICTED CASH, end of period |
$ 174,071 |
$ 174,071 |
$ 563,372 |
$ 435,588 | ||||||||
Non-GAAP Financial Measures
Adjusted operating cash flow, adjusted EBITDA, pro forma adjusted EBITDA, adjusted net loss net debt and PV-10 of the Company's proved reserves are non-GAAP financial measures.
The Company defines adjusted operating cash flow as net cash provided by (used in) operating activities before changes in operating assets and liabilities. It defines EBITDA as net loss before income tax expense, interest expense and depreciation, depletion and amortization and accretion of asset retirement obligations. Adjusted EBITDA, as presented herein, is EBITDA excluding asset impairment, interest income, loss (gain) on derivative contracts net of cash received upon settlement of derivative contracts, loss on settlement of contract, loss (gain) on sale of assets, legal settlements, severance, oil field services – exit costs, gain on extinguishment of debt, restructuring costs, reorganization items and other various items (including non-cash portion of noncontrolling interest and stock-based compensation). Pro forma adjusted EBITDA, as presented herein, is adjusted EBITDA excluding adjusted EBITDA attributable to properties or subsidiaries sold during the period. Current net debt, as presented herein, is current long-term debt, less current cash and cash equivalents. PV-10, as presented herein, represents the present value of estimated future cash inflows from proved oil, natural gas and NGL reserves, less future development and production costs, discounted at 10% per annum to reflect timing of future cash flows. The PV-10 of the Company's SEC proved reserves is calculated using 12-month average prices for the years ended December 31, 2016, 2015 and 2014. The PV-10 of the Company's SEC proved reserves differs from standardized measure because it does not include the effects of income taxes on future net revenues. The PV-10 of the Company's NYMEX strip-based proved reserves is calculated using NYMEX forward closing prices for oil and natural gas as of December 30, 2016. The PV-10 of the Company's NYMEX strip-based reserves differs from standardized measure because it reflects the estimated proved reserves economically recoverable based on forward NYMEX strip prices rather than SEC pricing and does not include the effects of income taxes on future net revenues.
Adjusted operating cash flow and adjusted EBITDA are supplemental financial measures used by the Company's management and by securities analysts, investors, lenders, rating agencies and others who follow the industry as an indicator of the Company's ability to internally fund exploration and development activities and to service or incur additional debt. The Company also uses these measures because adjusted operating cash flow and adjusted EBITDA relate to the timing of cash receipts and disbursements that the Company may not control and may not relate to the period in which the operating activities occurred. Further, adjusted operating cash flow and adjusted EBITDA allow the Company to compare its operating performance and return on capital with those of other companies without regard to financing methods and capital structure. These measures should not be considered in isolation or as a substitute for net cash provided by operating activities prepared in accordance with generally accepted accounting principles ("GAAP"). Adjusted EBITDA should not be considered as a substitute for net income, operating income, cash flows from operating activities or any other measure of financial performance or liquidity presented in accordance with GAAP. Adjusted EBITDA excludes some, but not all, items that affect net income and operating income and these measures may vary among other companies. Therefore, the Company's adjusted EBITDA may not be comparable to similarly titled measures used by other companies.
Management also uses the supplemental financial measure of adjusted net income (loss), which excludes asset impairment, (loss) gain on derivative contracts net of cash received on settlement of derivative contracts, loss on settlement of contract, gain on sale of assets, severance, oil field services – exit costs, gain on extinguishment of debt, restructuring costs, reorganization items, employee incentive and retention and other non-cash items from loss applicable to common stockholders. Management uses this financial measure as an indicator of the Company's operational trends and performance relative to other oil and natural gas companies and believes it is more comparable to earnings estimates provided by securities analysts. Adjusted net income (loss) is not a measure of financial performance under GAAP and should not be considered a substitute for loss applicable to common stockholders.
The Company also uses the term net debt to determine the extent to which the Company's outstanding debt obligations would be satisfied by its cash and cash equivalents on hand. Management believes this metric is useful to investors in determining the Company's current leverage position following recent significant events subsequent to the period.
PV-10 is used by the industry and by management as a reserve asset value measure to compare against past reserve bases and the reserve bases of other business entities. It is useful because its calculation is not dependent on the taxpaying status of the entity. The Company believes the PV-10 of SEC reserves is an important financial measure used by investors and the industry to compare a company's reserves to those of its peers without the effects of tax characteristics which can differ among comparable companies. The Company believes the PV-10 of NYMEX strip-based reserves is useful to investors to illustrate the potential value of proved reserves that are economically recoverable in the current commodity price environment rather than SEC prices. Neither the PV-10 of the Company's SEC reserves, the PV-10 of its NYMEX strip-based reserves nor the Standardized Measure represents an estimate of fair market value of the Company's oil and natural gas properties.
The tables below reconcile the most directly comparable GAAP financial measures to operating cash flow, EBITDA, adjusted EBITDA, adjusted net loss and PV-10 of proved reserves.
|
Reconciliation of Cash (Used in) Provided by Operating Activities to Adjusted Operating Cash Flow | |||||||||||||
|
Successor |
Predecessor |
Predecessor | |||||||||||
|
Combined |
Period from |
Period from |
Three Months |
||||||||||
|
Year Ended |
October 2, 2016 through |
January 1, 2016 through |
Ended |
Year Ended | |||||||||
|
December 31, 2016 |
December 31, 2016 |
October 1, 2016 |
December 31, 2015 | ||||||||||
|
(in thousands) | |||||||||||||
|
Net cash (used in) provided by operating activities |
$ (46,482) |
$ 65,595 |
$ (112,077) |
$ 12,651 |
$ 373,537 | ||||||||
|
Changes in operating assets and liabilities |
37,759 |
(13,437) |
51,196 |
(68,466) |
(127,550) | ||||||||
|
Adjusted operating cash flow |
$ (8,723) |
$ 52,158 |
$ (60,881) |
$ (55,815) |
$ 245,987 | ||||||||
|
Reconciliation of Net Income (Loss) to EBITDA and Adjusted EBITDA | |||||||||||||
|
Successor |
Predecessor |
Predecessor | |||||||||||
|
Combined |
Period from |
Period from |
Three Months |
||||||||||
|
Year Ended |
October 2, 2016 through |
January 1, 2016 through |
Ended |
Year Ended | |||||||||
|
December 31, 2016 |
December 31, 2016 |
October 1, 2016 |
December 31, 2015 | ||||||||||
|
(in thousands) | |||||||||||||
|
Net income (loss) |
$ 1,106,815 |
$ (333,982) |
$ 1,440,797 |
$ (653,698) |
$(3,697,545) | ||||||||
|
Adjusted for |
|||||||||||||
|
Income tax expense |
20 |
9 |
11 |
33 |
123 | ||||||||
|
Interest expense |
129,107 |
1,590 |
127,517 |
108,303 |
322,502 | ||||||||
|
Depreciation and amortization - other |
25,245 |
3,922 |
21,323 |
10,148 |
47,382 | ||||||||
|
Depreciation and depletion - oil and natural gas |
120,584 |
33,971 |
86,613 |
53,007 |
319,913 | ||||||||
|
Accretion of asset retirement obligations |
6,455 |
2,090 |
4,365 |
1,154 |
4,477 | ||||||||
|
EBITDA |
1,388,226 |
(292,400) |
1,680,626 |
(481,053) |
(3,003,148) | ||||||||
|
Asset impairment |
1,037,281 |
319,087 |
718,194 |
886,844 |
4,534,689 | ||||||||
|
Interest income |
(2,636) |
(1,218) |
(1,418) |
(451) |
(1,081) | ||||||||
|
Stock-based compensation |
6,257 |
1,966 |
4,291 |
2,171 |
11,465 | ||||||||
|
Loss (gain) on derivative contracts |
30,475 |
25,652 |
4,823 |
(14,027) |
(73,061) | ||||||||
|
Cash received upon settlement of derivative contracts (1) |
80,306 |
13,455 |
66,851 |
49,123 |
327,702 | ||||||||
|
Loss on settlement of contract |
90,184 |
- |
90,184 |
50,976 |
50,976 | ||||||||
|
(Gain) loss on sale of assets |
(2,481) |
313 |
(2,794) |
(606) |
1,491 | ||||||||
|
Severance |
29,875 |
12,334 |
17,541 |
(115) |
11,704 | ||||||||
|
Oil field services - exit costs |
2,428 |
- |
2,428 |
83 |
4,436 | ||||||||
|
Gain on extinguishment of debt |
(41,179) |
- |
(41,179) |
(282,498) |
(641,131) | ||||||||
|
Restructuring costs |
23,669 |
4,804 |
18,865 |
- |
- | ||||||||
|
Gain on reorganization items, net |
(2,430,599) |
- |
(2,430,599) |
- |
- | ||||||||
|
Employee incentive and retention |
22,984 |
2,843 |
20,141 |
- |
- | ||||||||
|
Other |
3,277 |
(15,755) |
19,032 |
3,062 |
11,732 | ||||||||
|
Non-cash portion of noncontrolling interest (2) |
- |
- |
- |
(146,268) |
(708,238) | ||||||||
|
Adjusted EBITDA |
$ 238,067 |
$ 71,081 |
$ 166,986 |
$ 67,241 |
$ 527,536 | ||||||||
|
Less: EBITDA attributable to WTO properties (2016) |
1,990 |
- |
1,990 |
11,932 |
61,434 | ||||||||
|
Pro forma adjusted EBITDA |
$ 240,057 |
$ 71,081 |
$ 168,976 |
$ 79,173 |
$ 588,970 | ||||||||
|
(1) |
Excludes amounts received upon early settlement of contracts for 2016 period. | ||||||||||
|
(2) |
Represents depreciation and depletion, impairment, gain on commodity derivative contracts net of cash received on settlement and income tax expense attributable to noncontrolling interests in the 2015 period. | ||||||||||
|
Reconciliation of Cash (Used in) Provided by Operating Activities to Adjusted EBITDA | |||||||||||||
|
Successor |
Predecessor |
Predecessor | |||||||||||
|
Combined |
Period from |
Period from |
Three Months |
||||||||||
|
Year Ended |
October 2, 2016 through |
January 1, 2016 through |
Ended |
Year Ended | |||||||||
|
December 31, 2016 |
December 31, 2016 |
October 1, 2016 |
December 31, 2015 | ||||||||||
|
(in thousands) | |||||||||||||
|
Net cash (used in) provided by operating activities |
$ (46,482) |
$ 65,595 |
$ (112,077) |
$ 12,651 |
$ 373,537 | ||||||||
|
Changes in operating assets and liabilities |
37,759 |
(13,437) |
51,196 |
(68,466) |
(127,550) | ||||||||
|
Interest expense |
129,107 |
1,590 |
127,517 |
108,303 |
322,502 | ||||||||
|
Cash received on early settlement of derivative contracts |
(17,894) |
- |
(17,894) |
- |
- | ||||||||
|
Contractual maturity reached on previous early settlements |
17,893 |
5,756 |
12,137 |
- |
- | ||||||||
|
Cash paid on early conversion of convertible notes |
33,452 |
- |
33,452 |
30,033 |
32,741 | ||||||||
|
Cash paid on settlement of contract |
11,000 |
- |
11,000 |
24,889 |
24,889 | ||||||||
|
Gain (loss) on convertible notes derivative liability |
1,324 |
- |
1,324 |
(20,523) |
(10,377) | ||||||||
|
Severance (1) |
20,511 |
8,048 |
12,463 |
(687) |
6,317 | ||||||||
|
Oil field services - exit costs (1) |
2,386 |
- |
2,386 |
63 |
4,338 | ||||||||
|
Restructuring costs |
23,669 |
4,804 |
18,865 |
- |
- | ||||||||
|
Cash paid for reorganization items |
12,483 |
- |
12,483 |
- |
- | ||||||||
|
Employee incentive and retention |
22,984 |
2,843 |
20,141 |
- |
- | ||||||||
|
Noncontrolling interest - SDT (2) |
- |
- |
- |
(6,760) |
(25,997) | ||||||||
|
Noncontrolling interest - SDR (2) |
- |
- |
- |
(4,216) |
(20,493) | ||||||||
|
Noncontrolling interest - PER (2) |
- |
- |
- |
(5,028) |
(38,240) | ||||||||
|
Other |
(10,125) |
(4,118) |
(6,007) |
(3,018) |
(14,131) | ||||||||
|
Adjusted EBITDA |
$ 238,067 |
$ 71,081 |
$ 166,986 |
$ 67,241 |
$ 527,536 | ||||||||
|
(1) |
Excludes associated stock-based compensation. | |
|
(2) |
Excludes depreciation and depletion, impairment, gain on commodity derivative contracts net of cash received on settlement and income tax expense attributable to noncontrolling interests for 2015 period. | |
|
Reconciliation of Net Income Available (Loss Applicable) to Common Stockholders to Adjusted Net Income Available (Loss Applicable) to Common Stockholders | |||||||||||||
|
Successor |
Predecessor |
Predecessor | |||||||||||
|
Combined |
Period from |
Period from |
Three Months |
||||||||||
|
Year Ended |
October 2, 2016 through |
January 1, 2016 through |
Ended |
Year Ended | |||||||||
|
December 31, 2016 |
December 31, 2016 |
October 1, 2016 |
December 31, 2015 | ||||||||||
|
(in thousands) | |||||||||||||
|
Income available (loss applicable) to common stockholders |
$ 1,090,494 |
$ (333,982) |
$ 1,424,476 |
$ (664,579) |
$(3,735,495) | ||||||||
|
Asset impairment (1) |
1,037,281 |
319,087 |
718,194 |
751,120 |
3,878,804 | ||||||||
|
Loss (gain) on derivative contracts (1) |
30,475 |
25,652 |
4,823 |
(13,485) |
(67,411) | ||||||||
|
Cash received upon settlement of derivative contracts (1)(2) |
80,306 |
13,455 |
66,851 |
41,540 |
291,203 | ||||||||
|
(Gain) loss on convertible notes derivative liability |
(1,324) |
- |
(1,324) |
20,523 |
10,377 | ||||||||
|
Loss on settlement of contract |
90,184 |
- |
90,184 |
50,976 |
50,976 | ||||||||
|
(Gain) loss on sale of assets |
(2,481) |
313 |
(2,794) |
(606) |
1,491 | ||||||||
|
Severance |
29,875 |
12,334 |
17,541 |
(115) |
11,704 | ||||||||
|
Oil field services - exit costs |
2,428 |
- |
2,428 |
83 |
4,436 | ||||||||
|
Gain on extinguishment of debt |
(41,179) |
- |
(41,179) |
(282,498) |
(641,131) | ||||||||
|
Restructuring costs |
23,669 |
4,804 |
18,865 |
- |
- | ||||||||
|
Gain on reorganization items, net |
(2,430,599) |
- |
(2,430,599) |
- |
- | ||||||||
|
Employee incentive and retention |
22,984 |
2,843 |
20,141 |
- |
- | ||||||||
|
Other |
4,024 |
(15,494) |
19,518 |
3,484 |
10,381 | ||||||||
|
Effect of income taxes |
22 |
10 |
12 |
24 |
101 | ||||||||
|
Adjusted net (loss) income applicable to common stockholders |
(63,841) |
29,022 |
(92,863) |
(93,533) |
(184,564) | ||||||||
|
Preferred stock dividends (3) |
- |
- |
- |
10,881 |
37,950 | ||||||||
|
Effect of convertible debt, net of income taxes (3) |
- |
- |
- |
9,151 |
11,707 | ||||||||
|
Total adjusted net (loss) income |
$ (63,841) |
$ 29,022 |
$ (92,863) |
$ (73,501) |
$ (134,907) | ||||||||
|
Weighted average number of common shares outstanding |
|||||||||||||
|
Basic |
18,967 |
708,928 |
586,801 |
521,936 | |||||||||
|
Diluted |
33,573 |
708,928 |
805,368 |
641,608 | |||||||||
|
Total adjusted net income (loss) |
|||||||||||||
|
Per share - basic |
$ 1.53 |
$ (0.13) |
$ (0.16) |
$ (0.35) | |||||||||
|
Per share - diluted |
$ 0.86 |
$ (0.13) |
$ (0.09) |
$ (0.21) | |||||||||
|
(1) |
Excludes amounts attributable to noncontrolling interests for 2015 period. |
|
(2) |
Excludes amounts received for early settlement of contracts for 2016 period. |
|
(3) |
Not considered dilutive securities in 2016 periods. |
|
Reconciliation of Standardized Measure of Discounted Net Cash Flows to PV-10 | ||||||||||||
|
Successor |
Predecessor | |||||||||||
|
December 31, |
December 31, | |||||||||||
|
2016 |
2015 | |||||||||||
|
(in millions) | ||||||||||||
|
Standarized measure of discounted net cash flows(1) |
$ 438 |
$ 1,314 | ||||||||||
|
Present value of future net income tax expense discounted at 10% |
- |
1 | ||||||||||
|
PV-10(2) |
$ 438 |
$ 1,315 | ||||||||||
|
Effects of calculating reserves and pricing using strip pricing |
508 |
|||||||||||
|
PV-10 of strip-based proved reserves |
$ 946 |
|||||||||||
|
(1) |
Includes approximately $225 million attributable to SandRidge noncontrolling interests at December 31, 2015. | |
|
(2) |
Includes approximately $226 million attributable to SandRidge noncontrolling interests at December 31, 2015. | |
For further information, please contact:
Duane M. Grubert
EVP – Investor Relations and Strategy
SandRidge Energy, Inc.
123 Robert S. Kerr Avenue
Oklahoma City, OK 73102-6406
(405) 429-5515
Cautionary Note to Investors - This press release includes "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, including, but not limited to, the information appearing under the heading "Operational Guidance." These statements express a belief, expectation or intention and are generally accompanied by words that convey projected future events or outcomes. The forward-looking statements include projections and estimates of the Company's corporate strategies, future operations, drilling plans, oil, and natural gas and natural gas liquids production, price realizations and differentials, reserves, operating, general and administrative and other costs, capital expenditures, tax rates, infrastructure investment, and development plans and appraisal programs. We have based these forward-looking statements on our current expectations and assumptions and analyses made by us in light of our experience and our perception of historical trends, current conditions and expected future developments, as well as other factors we believe are appropriate under the circumstances. However, whether actual results and developments will conform with our expectations and predictions is subject to a number of risks and uncertainties, including the volatility of oil and natural gas prices, our success in discovering, estimating, developing and replacing oil and natural gas reserves, actual decline curves and the actual effect of adding compression to natural gas wells, the availability and terms of capital, the ability of counterparties to transactions with us to meet their obligations, our timely execution of hedge transactions, credit conditions of global capital markets, changes in economic conditions, the amount and timing of future development costs, the availability and demand for alternative energy sources, regulatory changes, including those related to carbon dioxide and greenhouse gas emissions, and other factors, many of which are beyond our control. We refer you to the discussion of risk factors in Part I, Item 1A - "Risk Factors" of our Annual Report on Form 10-K for the year ended December 31, 2015 and in comparable "Risk Factor" sections of our Quarterly Reports on Form 10-Q filed after such form 10-K. All of the forward-looking statements made in this press release are qualified by these cautionary statements. The actual results or developments anticipated may not be realized or, even if substantially realized, they may not have the expected consequences to or effects on our Company or our business or operations. Such statements are not guarantees of future performance and actual results or developments may differ materially from those projected in the forward-looking statements. We undertake no obligation to update or revise any forward-looking statements.
SandRidge Energy, Inc. (NYSE: SD) is an oil and natural gas exploration and production company headquartered in Oklahoma City, Oklahoma with its principal focus on developing high-return, growth-oriented projects in the U.S. Mid-Continent and Niobrara Shale.
SOURCE SandRidge Energy, Inc.
Article Date
2/22/2017SandRidge Energy, Inc. Announces New $600 Million Reserve Based Credit Facility with $425 Million Borrowing Base and Conversion of its $264 Million Mandatorily Convertible Notes
Source: PR Newswire
Orignial Article: http://www.prnewswire.com...
OKLAHOMA CITY, Feb. 13, 2017 /PRNewswire/ -- SandRidge Energy, Inc. (NYSE: SD) today announced that it has entered into a new $600 million reserve based credit facility with a $425 million borrowing base (the "Refinancing") effective February 10, 2017.
The Refinancing amended the terms of the prior credit facility and provides the Company with, among other things:
Conversion of Mandatorily Convertible Notes
The Company also announced that the Refinancing triggered a mandatory conversion under the terms of the Company's indenture governing the 0.00% convertible senior subordinated notes due 2020 (the "Notes"). Upon settlement of the mandatory conversion, the remaining $264 million principal amount of outstanding Notes will convert into approximately 14.1 million shares of the Company's common stock, bringing the total amount of shares outstanding to approximately 35.9 million shares. Settlement is expected to occur on February 15, 2017.
Additional information regarding the new credit facility and its terms is contained in a Current Report on Form 8-K filed with the Securities and Exchange Commission on February 13, 2017.
About SandRidge Energy, Inc.
SandRidge Energy, Inc. (NYSE: SD) is an oil and natural gas exploration and production company headquartered in Oklahoma City, Oklahoma with its principal focus on developing high-return, growth-oriented projects in the U.S. Mid-Continent and Niobrara Shale.
CONTACT:
Duane M. Grubert
EVP – Investor Relations and Strategy
SandRidge Energy, Inc.
123 Robert S. Kerr Avenue
Oklahoma City, OK 73102
+1 (405) 429-5515
SOURCE SandRidge Energy, Inc.
Article Date
2/13/2017SandRidge Energy, Inc. Announces 2016 Fourth Quarter and Full-Year Financial and Operational Results Release Date and Conference Call Information
Source: PR Newswire
Orignial Article: http://www.prnewswire.com...
OKLAHOMA CITY, Jan. 23, 2017 /PRNewswire/ -- SandRidge Energy, Inc. (NYSE: SD) will release its 2016 fourth quarter and full-year financial and operational results after the close of trading on the New York Stock Exchange on Wednesday, February 22, 2017.
The company will host a conference call to discuss these results on Thursday, February 23, 2017 at 8:00am CT. The telephone number to access the conference call from within the U.S. is (877) 201-0168 and from outside the U.S. is (647) 788-4901. The passcode for the call is 53513467. An audio replay of the call will be available from February 23, 2017 until 11:59pm CT on March 23, 2017. The number to access the conference call replay from within the U.S. is (800) 585-8367 and from outside the U.S. is (416) 621-4642. The passcode for the replay is 53513467.
A live audio webcast of the conference call will also be available via SandRidge's website, www.sandridgeenergy.com, under Investor Relations/Presentations & Events. The webcast will be archived for replay on the company's website for 30 days.
About SandRidge Energy, Inc.
SandRidge Energy, Inc. (NYSE: SD) is an oil and natural gas exploration and production company headquartered in Oklahoma City, Oklahoma with its principal focus on developing high-return, growth-oriented projects in the U.S. Mid-Continent and Niobrara Shale.
CONTACT:
Duane M. Grubert
EVP – Investor Relations and Strategy
SandRidge Energy, Inc.
123 Robert S. Kerr Avenue
Oklahoma City, OK 73102
+1 (405) 429-5515
SOURCE SandRidge Energy, Inc.
Article Date
1/23/2017SandRidge Energy, Inc. Updates Shareholders on Operations and Reports Financial Results for Third Quarter and First Nine Months of 2016
Source: PR Newswire
Orignial Article: http://www.prnewswire.com...
OKLAHOMA CITY, Nov. 8, 2016 /PRNewswire/ -- SandRidge Energy, Inc. (the "Company") (NYSE:SD) today announced financial and operational results for the quarter ended September 30, 2016.
Production in the third quarter was 4.6 MMBoe (49.6 MBoepd, 28% oil, 24% NGLs, 48% natural gas). One drilling rig was active in Oklahoma during the entire quarter, and one drilling rig was active for part of the quarter in the North Park Basin of Colorado, with well completion activity continuing into the fourth quarter. Capital expenditures were $52 million during the third quarter, bringing the total amount invested to $161 million through the third quarter of 2016, excluding acquisitions. Capital expenditure and operational guidance, noted below, has been updated for 2016 in addition to introducing 2017 capital expenditure guidance.
The Company reported a net loss of $404 million and net cash from operating activities of $75 million for the third quarter of 2016. When adjusting these reported amounts for items that are typically excluded by the investment community on the basis that such items affect the comparability of results, the Company's "adjusted net income" amounted to $25 million and "adjusted operating cash flow" totaled $32 million. Earnings before interest, income taxes, depreciation, depletion, and amortization, adjusted for certain other items, otherwise referred to as "adjusted EBITDA", for the third quarter was $65 million.
The Company has defined and reconciled adjusted net income, adjusted operating cash flow and adjusted EBITDA to the most directly comparable U.S. generally accepted accounting principles (GAAP) financial measures in supporting tables at the conclusion of this press release under the "Non-GAAP Financial Measures" beginning on page 15.
James Bennett, SandRidge President and CEO said, "2016 has been a watershed year for SandRidge. The Company successfully restructured its balance sheet and currently has no cash interest burden and over $500 million of liquidity. We intend to conserve capital by reducing our 2016 capital expenditures from our original plan of $285 million to $220-240 million. Our multi and extended lateral program is more capital efficient every quarter. In the Mid-Continent, recent drilling and completion costs are below $2 million per lateral, with the completion of a dual two-mile extended lateral, the equivalent of four one-mile laterals in a single well, for $1.7 million per lateral. Recent drilling activity included our first Niobrara two-mile extended lateral, which demonstrates an attractive and repeatable combination of well costs and oil productivity. With an inventory of 1,300 proved and probable Niobrara laterals, we will resume Niobrara drilling in early 2017, further targeting additional productive Niobrara oil benches, tighter well spacing, and higher oil recoveries per well. We will continue using extended laterals in both of our plays."
Highlights during and subsequent to the third quarter include:
Relisted October 4th on NYSE with Ticker Symbol "SD"
Continuing to Improve Capital Efficiency by Expanding Use of Multi and Extended Laterals1
First Niobrara Extended Lateral and First Niobrara Test of an Additional Bench Drilled in Third Quarter, Completed and Flowing Back in Fourth Quarter
North Park Niobrara Type Curve of 315 MBoe (86% Oil) EUR per Single Lateral
Drilled Six Mid-Continent Laterals and Three North Park Basin Laterals in Third Quarter
John Suter, SVP of Operations, Named Successor to Steve Turk who is Retiring as COO
Third Quarter Production of 4.6 MMBoe (49.6 MBoepd, 28% Oil, 24% NGLs, 48% Natural Gas)
Hedge Positions Added for Remainder of 2016 and in 2017 and 2018
Updating 2016 Guidance and Introducing 2017 Capital Expenditure Guidance
Total Liquidity of $536 Million Including Unrestricted Cash of $111 Million and $425 Million Available Under Senior Credit Facility as of October 31st
|
(1) A "lateral" is defined as a single one-mile section lateral whereas an "extended lateral" is defined as a two-mile lateral drilled across two sections, and a "multilateral" defined as two or more one-mile laterals drilled within a one-mile section. |
Bennett went on to say, "SandRidge expects to create value with competitive project IRRs from both the high-graded harvest of our Mid-Continent position and the portfolio diversification and potential long term oil growth of our emerging North Park Niobrara project and non-Mississippian targets in the Mid-Continent. Our larger goals are to increase oil weighting, reduce cost structure, and effectively manage a portfolio of competitive projects already in hand, while looking for additional opportunities to create resource value. We plan to achieve all of this while protecting our balance sheet, liquidity and minimizing cash flow outspend."
COO Steve Turk Retiring, SandRidge Names John Suter to Become New COO
Effective December 31st, SandRidge Chief Operating Officer (COO) Steve Turk, 65, will retire, after having served in this leadership role since March 2015. John Suter, 56, now Senior Vice President of Operations, is being promoted to COO effective December 1st.
James Bennett, SandRidge CEO and President said, "I want to thank Steve for his contributions to SandRidge during his tenure with the company. His extensive experience and informed decision making approach have provided consistent, steady leadership. Through our succession planning program, John's promotion to COO is something we have prepared for. John has taken on additional responsibilities across all of our operating areas in recent months and we expect the transition to be seamless."
Mr. Suter joined SandRidge in April 2015 as Senior Vice President of Mid-Continent Operations, bringing with him extensive experience in the exploration and production sector, including most recently serving as Vice President of the Woodford business unit at American Energy Partners, LP from November 2013. From May 2010 to September 2013, he served as Vice President of Operations for Chesapeake Energy Corporation's Western Division, and before that, as Chesapeake's District Manager for the Barnett Shale and Southern Oklahoma assets. Before joining Chesapeake Energy, Mr. Suter served in various operational roles at Continental Resources, Inc., Cabot Oil & Gas Corporation and Petro-Lewis Corporation. He holds a Bachelor of Science degree in Petroleum Engineering from Texas Tech University.
Mid-Continent Assets in Oklahoma and Kansas
Multi and Extended Lateral Development
In 2013, SandRidge pioneered Mississippian multilateral technology, the technique of drilling two to four laterals from a single vertical wellbore. In late 2014, the Company's expanded development included extended laterals.
Since inception of the multi and extended lateral program, the Company has drilled and completed 123 laterals using multilateral design and 50 laterals using extended lateral design. Most notably, SandRidge has uniquely applied the full section development multilateral design, where three or more laterals are drilled from a single wellbore. Both multi and extended laterals enable the Company to reduce drilling and completion costs and decrease operating expenses with common well site facilities and artificial lift equipment.
In the first nine months of 2016, SandRidge drilled and completed 17 laterals using multi and extended lateral designs in the Mid-Continent, including 100% Mississippian multi and extended lateral drilling. The previously reported Dettle 2408 1-29 20H, the first Mississippian dual extended lateral (two two-mile laterals), produced a 30-Day IP of 1,099 Boepd2 (60% oil) and was drilled and completed for $6.8 million ($1.7 million per lateral).
Another example, the Earl 2414 1-11H 14H, a Chester extended lateral development well, was drilled for $4.3 million ($2.1 million per lateral), and produced a 30-Day IP of 560 Boepd (62% oil), matching expectations.
In the third quarter, the Richey 2407 1-21H, a Mississippian full section development well exceeded expectations with a 30-Day IP of 688 Boepd (66% oil) and was drilled and completed for a total of $5.3 million ($1.8 million per lateral).
Most recently, technical teams applied extended lateral drilling technology in the Company's North Park Basin asset by drilling and completing an extended lateral Niobrara well, the Castle 1-17H 20. Although early, initial rates are outperforming expectations. The Company plans to drill 100% multi and extended laterals in 2017 across both the North Park Basin and Mid-Continent assets.
|
(2) Calculated as the highest consecutive 30-Day average production rate during the early life of a well. |
Niobrara Asset in North Park Basin, Jackson County, Colorado
SandRidge drilled 10 wells with 11 total laterals in the North Park Basin in 2016. The goal for the first five wells was to test initial drilling and completion techniques in the new basin and to prove production performance. The first five wells demonstrated consistent performance to establish the play. The Company's first Niobrara well, the Gregory 1-9H, exceeded type curve production expectations with a previously reported 30-Day IP of 550 Boepd (89% oil). The well has been online for over seven months, averaged 310 Boepd (84% oil) during the month of October, and has produced a total of ~75 MBo. In the second quarter, four additional laterals were drilled, completed, and brought online, with an average 30-Day IP of 460 Boepd. Averaging 91% oil, all four wells met or exceeded type curve performance estimates and indicated consistent performance in this area of development.
The goal for the second five well package was to test concepts related to various targeting, drilling and completion techniques. In the second quarter, a grouping of three laterals utilizing batch drilling and zipper frac completions improved cycle times. This lateral grouping, now under evaluation, used a combination of crosslinked gel and slickwater frac systems. In the third quarter, three additional laterals were drilled. The first Niobrara extended lateral, the Castle 1-17H 20, and a lateral testing a shallower Niobrara bench, the Hebron 4-18H, were completed and brought online in the fourth quarter. Results for this five well pilot program are expected to be reported in the fourth quarter earnings release.
Drilling and completion cost reductions have been an ongoing focus throughout the year. Drilling efficiencies, such as mud and bit system advances, reduced overall drilling cycle times by 69% since the beginning of the program. Current spud to rig release cycle time is averaging 11 days. Additionally, further cost reductions from extended lateral drilling are expected to deliver wells costs of less than $7 million ($3.5 million per lateral) in 2017, supported by the highlighted recent extended lateral Castle 1-17H 20.
Construction of the Big Horn Central Tank Battery (CTB), which became operational in mid-October, has further advanced our field development. This facility will be the prototype for future full field development and supports all 11 laterals drilled in 2016. Future facility expansion will support production for up to 70 laterals at the Big Horn CTB, and the shared gathering concept will reduce the overall drilling footprint, wellsite facility costs and operating costs. Additionally, the Company completed a summer construction program building roads, pads and flow lines in advance of continued 2017 development. Aiding future well placement, a 64 square mile 3D seismic survey, planned for early 2017 will be merged with and is complementary to the existing 54 square mile 3D survey.
Other Operational Updates
Key Financial Results
Third Quarter
Nine Months
Hedging Update
During and after the third quarter, SandRidge added oil and natural gas hedge positions through the remainder of 2016, while also adding positions in both 2017 and 2018. For the calendar year of 2017, the Company now has approximately 2.6 million barrels of oil hedged at an average WTI price of $51.45 as well as 29.2 billion cubic feet of natural gas hedged at an average price of $3.19 per MMBtu. For 2018, the Company has approximately 1.1 million barrels of oil hedged at an average WTI price of $55.10.
Guidance Update
Capital expenditures in 2016 are now anticipated to be $220 to $240 million for the full year (midpoint reduced $10 million vs prior guidance), with production estimates ranging from 19.0 to 19.4 MMBoe (100 MBoe greater than prior guidance midpoint). The production estimate includes a 200 MBoe contingency for potential weather downtime as was experienced in late 2015.
The Company is in the process of developing its capital expenditures budget for 2017 and, in the current pricing environment, expects that total capital expenditures will be less than $200 million in 2017.
Restructuring Details and Liquidity
New Board Appointments
Effective October 4, 2016, the composition of SandRidge Energy's five person Board of Directors consisted of:
John V. Genova (Chairman) earned his Bachelor of Science degree in Chemical and Petroleum Refining Engineering from the Colorado School of Mines in 1976. He joined Exxon in the Company's Baton Rouge Refinery in 1976. At Exxon, he held a number of positions of increasing responsibility in the Refining, Supply and Natural Gas functions. Immediately following the public announcement of the Exxon and Mobil merger, Mr. Genova led the development of a $20 billion integrated natural gas project proposal for Saudi Arabia and served as the lead Exxon/Mobil merger natural gas negotiator with the European Commission. Following approval of the Exxon and Mobil merger, he was named Director, International Gas Marketing, ExxonMobil International Limited. Subsequently, he was appointed Executive Assistant to the Chairman, Lee Raymond, and the General Manager of Corporate Planning of Exxon Mobil Corporation on April 1, 2002. In this position, he served as an Officer of ExxonMobil. In April 2004, Mr. Genova became a Director of the Board of Encore Acquisition Company and served on the Audit Committee until the company's merger with Denbury Resources in early 2010. In May 2008, Mr. Genova was appointed as President and CEO of Sterling Chemicals where he led the creation of significant value before successfully completing the sale of the company to Eastman Chemical.
James D. Bennett has served as President and Chief Executive Officer of the Company since June 2013. Prior to commencing service in his current positions, he served as President and Chief Financial Officer from March 2013 until June 2013 and Executive Vice President and Chief Financial Officer from January 2011 until March 2013. Prior to joining the Company, Mr. Bennett was Managing Director for White Deer Energy, a private equity fund focused on the exploration and production, oilfield service and equipment, and midstream sectors of the oil and gas industry. From 2006 to 2009, Mr. Bennett was employed by GSO Capital Partners L.P., where he served in various capacities, including as its Managing Director. Mr. Bennett graduated with a B.B.A. with a major in finance from Texas Tech University. Mr. Bennett has served on the boards of directors of the general partner of Cheniere Energy Partners L.P. and PostRock Energy Corporation.
Michael (Mike) L. Bennett, no relation to James Bennett, has over thirty-six years of experience in the chemical industry and serves as a member of the board of directors and the audit committee of Alliant Energy, Chairman of the board of directors of OCI N.V., and Chairman of the board of directors of OCI Partners LP. Mr. Bennett served as President and CEO of Terra Industries, Inc. from 2001 until its sale to CF Industries in 2010. He is a past Chairman of The Fertilizer Institute and the Methanol Institute.
William (Bill) M. Griffin, Jr. is an independent energy advisor with over thirty-five years of technical and leadership experience with active public and privately owned upstream energy organizations. Mr. Griffin most recently served as President and Chief Executive Officer of privately held Petro Harvester Oil & Gas. Mr. Griffin's background also includes senior leadership positions as President of Ironwood Oil & Gas, Senior Vice President of El Paso Exploration and Production Company and Vice President of Sonat Exploration Company. In addition to the board of Petro Harvester, Mr. Griffin has also served as a director for Black Warrior Methane Corporation and Four Star Oil & Gas Company. Mr. Griffin began his career with Texas Oil & Gas Corporation and is a registered professional engineer with a B.S. in mechanical engineering from Texas A&M University.
David J. Kornder has over twenty-five years of experience and has previously served as Chief Executive Officer of Cornerstone Natural Resources, LLC, Chief Financial Officer of Petrie Parkman & Co., an energy investment bank, and as Executive Vice President and Chief Financial Officer of Patina Oil & Gas Corporation from 1996 through its acquisition by Noble Energy, Inc. in May 2005. Prior to that, Mr. Kornder began his career at Deloitte & Touche LLP.
Conference Call Details
The Company will host a conference call to discuss these results on Wednesday, November 9, 2016 at 8:00 am CT. The telephone number to access the conference call from within the U.S. is (877) 201-0168 and from outside the U.S. is (647) 788-4901. The passcode for the call is 86082124. An audio replay of the call will be available from November 9, 2016 until 11:59 pm CT on December 9, 2016. The number to access the conference call replay from within the U.S. is (855) 859-2056 and from outside the U.S. is (404) 537-3406. The passcode for the replay is 86082124.
Operational and Financial Statistics
Information regarding the Company's production, pricing, costs and earnings is presented below:
|
Three Months Ended September 30, |
Nine Months Ended September 30, | ||||||||||
|
2016 |
2015 |
2016 |
2015 | ||||||||
|
Production - Total |
|||||||||||
|
Oil (MBbl) |
1,282 |
2,262 |
4,315 |
7,604 | |||||||
|
NGL (MBbl) |
1,103 |
1,246 |
3,358 |
3,883 | |||||||
|
Natural gas (MMcf) |
13,079 |
23,058 |
44,124 |
71,133 | |||||||
|
Oil equivalent (MBoe) |
4,565 |
7,351 |
15,027 |
23,343 | |||||||
|
Daily production (MBoed) |
49.6 |
79.9 |
54.8 |
85.5 | |||||||
|
Production - Mid-Continent |
|||||||||||
|
Oil (MBbl) |
998 |
1,938 |
3,597 |
6,554 | |||||||
|
NGL (MBbl) |
1,084 |
1,202 |
3,301 |
3,764 | |||||||
|
Natural gas (MMcf) |
13,016 |
20,128 |
43,330 |
62,292 | |||||||
|
Oil equivalent (MBoe) |
4,250 |
6,495 |
14,119 |
20,700 | |||||||
|
Daily production (MBoed) |
46.2 |
70.6 |
51.5 |
75.8 | |||||||
|
Average price per unit |
|||||||||||
|
Realized oil price per barrel - as reported |
$ 42.82 |
$ 43.33 |
$ 36.85 |
$ 47.55 | |||||||
|
Realized impact of derivatives per barrel |
10.93 |
28.85 |
14.20 |
32.87 | |||||||
|
Net realized price per barrel |
$ 53.75 |
$ 72.18 |
$ 51.05 |
$ 80.42 | |||||||
|
Realized NGL price per barrel - as reported |
$ 13.90 |
$ 13.29 |
$ 12.67 |
$ 14.69 | |||||||
|
Realized impact of derivatives per barrel |
- |
- |
- |
- | |||||||
|
Net realized price per barrel |
$ 13.90 |
$ 13.29 |
$ 12.67 |
$ 14.69 | |||||||
|
Realized natural gas price per Mcf - as reported |
$ 2.27 |
$ 2.19 |
$ 1.78 |
$ 2.20 | |||||||
|
Realized impact of derivatives per Mcf |
0.05 |
0.09 |
(0.01) |
0.41 | |||||||
|
Net realized price per Mcf |
$ 2.32 |
$ 2.28 |
$ 1.77 |
$ 2.61 | |||||||
|
Realized price per Boe - as reported |
$ 21.89 |
$ 22.46 |
$ 18.63 |
$ 24.65 | |||||||
|
Net realized price per Boe - including impact of derivatives |
$ 25.10 |
$ 31.61 |
$ 22.70 |
$ 36.58 | |||||||
|
Average cost per Boe |
|||||||||||
|
Lease operating |
$ 8.68 |
$ 9.91 |
$ 8.63 |
$ 10.46 | |||||||
|
Production taxes |
0.50 |
0.50 |
0.41 |
0.54 | |||||||
|
General and administrative |
|||||||||||
|
General and administrative, excluding stock-based compensation |
$ 3.99 |
$ 4.17 |
$ 7.00 |
$ 4.01 | |||||||
|
Stock-based compensation |
2.40 |
0.49 |
1.94 |
0.65 | |||||||
|
Total general and administrative |
$ 6.38 |
$ 4.66 |
$ 8.95 |
$ 4.66 | |||||||
|
General and administrative - adjusted |
|||||||||||
|
General and administrative, excluding stock-based compensation (1) |
$ 3.88 |
$ 3.29 |
$ 3.69 |
$ 3.37 | |||||||
|
Stock-based compensation (2) |
0.98 |
0.48 |
0.71 |
0.44 | |||||||
|
Total general and administrative - adjusted |
$ 4.86 |
$ 3.77 |
$ 4.40 |
$ 3.81 | |||||||
|
Depletion (3) |
$ 6.07 |
$ 9.20 |
$ 6.05 |
$ 11.58 | |||||||
|
Lease operating cost per Boe |
|||||||||||
|
Mid-Continent |
$ 7.76 |
$ 7.09 |
$ 7.58 |
$ 7.75 | |||||||
|
(1) |
Excludes severance, doubtful receivable write-off and restructuring costs totaling $0.5 million and $49.8 million for the three and nine-month periods ended September 30, 2016, respectively. Excludes severance, legal settlements and shareholder litigation totaling $6.4 million and $14.9 million for the three and nine-month periods ended September 30, 2015, respectively. | ||||||||||
|
(2) |
Three and nine-month periods ended September 30, 2016 exclude $6.5 million and $18.5 million,respectively, for employee incentive and retention and the acceleration of certain stock awards. Three and nine-month periods ended September 30, 2015 exclude $0.1 million and $4.8 million, respectively, for the acceleration of certain stock awards. | ||||||||||
|
(3) |
Includes accretion of asset retirement obligation. | ||||||||||
Capital Expenditures
The table below summarizes the Company's capital expenditures for the three and nine-month periods ended September 30, 2016 and 2015:
|
Three Months Ended September 30, |
Nine Months Ended September 30, | ||||||||||
|
2016 |
2015 |
2016 |
2015 | ||||||||
|
(in thousands) | |||||||||||
|
Drilling and production |
|||||||||||
|
Mid-Continent |
$ 16,273 |
$ 87,183 |
$ 79,845 |
$ 511,789 | |||||||
|
Rockies |
31,368 |
- |
72,164 |
- | |||||||
|
Other |
(496) |
675 |
65 |
4,257 | |||||||
|
47,145 |
87,858 |
152,074 |
516,046 | ||||||||
|
Leasehold and geophysical |
|||||||||||
|
Mid-Continent |
3,166 |
15,848 |
(2,771) |
42,434 | |||||||
|
Rockies |
594 |
- |
1,361 |
- | |||||||
|
Other |
116 |
651 |
3,174 |
4,391 | |||||||
|
3,876 |
16,499 |
1,764 |
46,825 | ||||||||
|
Inventory |
(443) |
1,656 |
1,789 |
(3,356) | |||||||
|
Total exploration and development |
50,578 |
106,013 |
155,627 |
559,515 | |||||||
|
Drilling and oil field services |
(248) |
259 |
23 |
2,732 | |||||||
|
Midstream |
1,166 |
3,719 |
3,085 |
20,400 | |||||||
|
Other - general |
279 |
3,306 |
2,672 |
18,405 | |||||||
|
Total capital expenditures, excluding acquisitions |
51,775 |
113,297 |
161,407 |
601,052 | |||||||
|
Acquisitions |
(70) |
(244) |
1,327 |
3,231 | |||||||
|
Total capital expenditures |
$ 51,705 |
$ 113,053 |
$ 162,734 |
$ 604,283 | |||||||
Derivative Contracts
Subsequent to September 30, 2016, the Company entered into additional oil and gas swap contracts for the remainder of 2016, as well as for the calendar years of 2017 and 2018. The table below sets forth the Company's consolidated oil and natural gas price swaps and collars for 2016 as of November 8, 2016:
|
4Q 2016 |
||||||||||||
|
Oil (MMBbls): |
||||||||||||
|
Swap Volume |
1.29 |
|||||||||||
|
Swap |
$56.45 |
|||||||||||
|
Natural Gas (Bcf): |
||||||||||||
|
Swap Volume |
10.92 |
|||||||||||
|
Swap |
$2.86 |
|||||||||||
|
Natural Gas Basis (Bcf) |
||||||||||||
|
Swap Volume |
0.92 |
|||||||||||
|
Swap |
$(0.38) |
|||||||||||
|
Quarter Ending |
||||||||||||
|
3/31/2017 |
6/30/2017 |
9/30/2017 |
12/31/2017 |
FY 2017 | ||||||||
|
Oil (MMBbls): |
||||||||||||
|
Swap Volume |
0.63 |
0.64 |
0.64 |
0.64 |
2.56 | |||||||
|
Swap |
$51.45 |
$51.45 |
$51.45 |
$51.45 |
$51.45 | |||||||
|
Natural Gas (Bcf): |
||||||||||||
|
Swap Volume |
7.20 |
7.28 |
7.36 |
7.36 |
29.20 | |||||||
|
Swap |
$3.19 |
$3.19 |
$3.19 |
$3.19 |
$3.19 | |||||||
|
3/31/2018 |
6/30/2018 |
9/30/2018 |
12/31/2018 |
FY 2018 | ||||||||
|
Oil (MMBbls): |
||||||||||||
|
Swap Volume |
0.27 |
0.27 |
0.28 |
0.28 |
1.10 | |||||||
|
Swap |
$55.10 |
$55.10 |
$55.10 |
$55.10 |
$55.10 | |||||||
Balance Sheet
The Company's capital structure, pro forma for its restructuring and as of October 31, 2016 is presented below.
|
Proforma Capital Structure |
$ in Millions | ||
|
Debt at Principal Value |
as of Jun 30, 2016 |
Restructuring |
Pro Forma |
|
Secured Debt1 |
$ - |
$ 35 |
$ 35 |
|
8.75% Second Lien Secured Notes due 2020 |
1,328 |
(1,328) |
- |
|
Unsecured Notes: |
|||
|
8.75% Senior Unsecured Notes due 2020 |
$ 396 |
$ (396) |
$ - |
|
7.50% Senior Unsecured Notes due 2021 |
758 |
(758) |
- |
|
8.125% Senior Unsecured Notes due 2022 |
528 |
(528) |
- |
|
7.50% Senior Unsecured Notes due 2023 |
544 |
(544) |
- |
|
Sub-Total Unsecured Notes |
$ 2,225 |
$ (2,225) |
$ - |
|
Unsecured Convertible Notes: |
|||
|
8.125% Senior Unsecured Convertible Notes due 2022 |
$ 41 |
$ (41) |
$ - |
|
7.50% Senior Unsecured Convertible Notes due 2023 |
47 |
(47) |
- |
|
Total Senior Debt |
$ 3,641 |
$ (3,606) |
$ 35 |
|
0.00% Convertible Senior Subordinated Notes Due 20202 |
$ - |
$ 278 |
$ 278 |
|
Total Debt |
$ 3,641 |
$ (3,328) |
$ 313 |
|
Liquidity |
|||
|
RBL Borrowing Base3 |
$ 500 |
$ (75) |
$ 425 |
|
RBL Available |
- |
425 |
425 |
|
Cash |
634 |
(523) |
111 |
|
Total Liquidity |
$ 634 |
$ (98) |
$ 536 |
|
1) Secured by mortgages on the Company's non-oil and gas real property. | |||
|
2) $3.7 million par value of conversions as of October 31st. | |||
|
3) Excludes approximately $10 million of letters of credit. | |||
2016 Operational Guidance Update
The Company is providing an update to its previously disclosed 2016 capital budgeting guidance from $225 to $255 million, estimating that it will now spend $220 to $240 million for the full year with total production ranging from 19.0 to 19.4 MMBoe. Capital expenditure, production, and other operational guidance detail for the full year of 2016 can be found below.
|
Total Company |
Total Company | |||||
|
Projection as of |
Projection as of | |||||
|
September 28, 2016 |
November 8, 2016 | |||||
|
Production |
||||||
|
Oil (MMBbls) |
5.3 - 5.5 |
5.4 - 5.5 | ||||
|
Natural Gas Liquids (MMBbls) |
4.1 - 4.3 |
4.1 - 4.3 | ||||
|
Total Liquids (MMBbls) |
9.4 - 9.8 |
9.5 - 9.8 | ||||
|
Natural Gas (Bcf) |
56.7 - 56.8 |
57.0 - 57.3 | ||||
|
Total (MMBoe) |
18.9 - 19.3 |
19.0 - 19.4 | ||||
|
Price Realization |
||||||
|
Oil (differential below NYMEX WTI) |
$3.75 |
$3.75 | ||||
|
Natural Gas Liquids (realized % of NYMEX WTI) |
27% |
30% | ||||
|
Natural Gas (differential below NYMEX Henry Hub) |
$0.50 |
$0.50 | ||||
|
Costs per Boe |
||||||
|
LOE |
$9.00 - $9.20 |
$8.80 - $9.00 | ||||
|
DD&A - oil & gas1 |
5.10 - 5.50 |
5.80 - 6.20 | ||||
|
DD&A - other |
1.40 - 1.45 |
1.40 - 1.45 | ||||
|
Total DD&A |
$6.50 - $6.95 |
$7.20 - $7.65 | ||||
|
Adjusted G&A - Cash2 |
$4.25 - $4.50 |
$3.70 - $3.90 | ||||
|
% of Revenue |
||||||
|
Production Taxes |
2.00% - 2.25% |
2.00% - 2.25% | ||||
|
Corporate Tax Rate |
0% |
0% | ||||
|
Deferral Tax Rate |
0% |
0% | ||||
|
Capital Expenditures ($ in millions) | ||||||
|
Drilling and Completing |
Previous |
New | ||||
|
Mid-Continent |
$45 - $50 |
$42.5 - $47.5 | ||||
|
North Park Basin |
55 - 60 |
55 - 60 | ||||
|
Other3 |
25 - 30 |
25 | ||||
|
Total Drilling and Completing |
$125 - $140 |
$122.5 - $132.5 | ||||
|
Other E&P |
||||||
|
Land, G&G, and Seismic |
$10 - $15 |
$10 - $15 | ||||
|
Infrastructure4 |
25 - 30 |
20 - 22.5 | ||||
|
Workover |
35 - 40 |
37.5 - 40 | ||||
|
Capitalized G&A and Interest |
25 |
25 | ||||
|
Total Other Exploration and Production |
$95 - $110 |
$92.5 - $102.5 | ||||
|
General Corporate |
$5 |
$5 | ||||
|
Total Capital Expenditures (excluding acquisitions and abandonment liabilities) |
$225 - $255 |
$220 - $240 | ||||
|
1) |
May be materially affected at year end by application of Fresh Start accounting. | |||||
|
2) |
Adjusted G&A - Cash is a non-GAAP financial measure as it excludes from G&A non-cash compensation, severance, bad debt allowance, shareholder litigation costs, restructuring costs, and other non-recurring items. Incentive compensation plan normalized to be consistent with prior year compensation plans. The most directly comparable GAAP measure for Adjusted G&A - cash is General and Administrative Expense. Information to reconcile this non-GAAP financial measure to the most directly comparable GAAP financial measure is not available at this time, as management is unable to forecast the excluded items for future periods. | |||||
|
3) |
2015 Carryover, JV Penalty, Rig Penalty, Non-Op, SWD | |||||
|
4) |
Facilities - Electrical, SWD, Gathering, Pipelines |
|||||
|
SandRidge Energy, Inc. and Subsidiaries (Debtor-in-Possession) | ||||||||||||
|
Condensed Consolidated Statements of Operations | ||||||||||||
|
(In thousands) | ||||||||||||
|
Three Months Ended September 30, |
Nine Months Ended September 30, | |||||||||||
|
2016 |
2015 |
2016 |
2015 | |||||||||
|
(unaudited) | ||||||||||||
|
Revenues |
||||||||||||
|
Oil, natural gas and NGL |
$ 99,934 |
$ 165,135 |
$ 279,971 |
$ 575,399 | ||||||||
|
Midstream and marketing |
3,004 |
8,838 |
10,545 |
26,208 | ||||||||
|
Drilling and services |
886 |
4,572 |
2,342 |
19,658 | ||||||||
|
Other |
232 |
1,607 |
951 |
3,802 | ||||||||
|
Total revenues |
104,056 |
180,152 |
293,809 |
625,067 | ||||||||
|
Expenses |
||||||||||||
|
Production |
39,640 |
72,884 |
129,608 |
244,158 | ||||||||
|
Production taxes |
2,278 |
3,652 |
6,107 |
12,548 | ||||||||
|
Cost of sales |
563 |
4,323 |
5,302 |
22,034 | ||||||||
|
Midstream and marketing |
- |
6,633 |
1,840 |
22,464 | ||||||||
|
Depreciation and depletion - oil and natural gas |
26,335 |
66,501 |
86,613 |
266,906 | ||||||||
|
Depreciation and amortization - other |
7,514 |
11,379 |
21,323 |
37,234 | ||||||||
|
Accretion of asset retirement obligations |
1,390 |
1,132 |
4,365 |
3,323 | ||||||||
|
Impairment |
354,451 |
1,074,588 |
718,194 |
3,647,845 | ||||||||
|
General and administrative |
29,145 |
34,233 |
134,447 |
108,764 | ||||||||
|
(Gain) loss on derivative contracts |
(338) |
(42,211) |
4,823 |
(59,034) | ||||||||
|
Loss on settlement of contract |
- |
- |
90,184 |
- | ||||||||
|
Loss (gain) on sale of assets |
416 |
6,771 |
(2,794) |
2,097 | ||||||||
|
Total expenses |
461,394 |
1,239,885 |
1,200,012 |
4,308,339 | ||||||||
|
Loss from operations |
(357,338) |
(1,059,733) |
(906,203) |
(3,683,272) | ||||||||
|
Other (expense) income |
||||||||||||
|
Interest expense (excludes $36.9 million and $74.5 million of contractual interest expense on debt subject to compromise for the three and nine-month periods ended September 30, 2016, respectively) |
(3,343) |
(77,000) |
(126,099) |
(213,569) | ||||||||
|
Gain on extinguishment of debt |
- |
340,699 |
41,179 |
358,633 | ||||||||
|
Reorganization items, net |
(42,754) |
- |
(243,672) |
- | ||||||||
|
Other (expense) income, net |
(898) |
(426) |
1,332 |
1,208 | ||||||||
|
Total other (expense) income |
(46,995) |
263,273 |
(327,260) |
146,272 | ||||||||
|
Loss before income taxes |
(404,333) |
(796,460) |
(1,233,463) |
(3,537,000) | ||||||||
|
Income tax expense |
4 |
25 |
11 |
90 | ||||||||
|
Net loss |
(404,337) |
(796,485) |
(1,233,474) |
(3,537,090) | ||||||||
|
Less: net loss attributable to noncontrolling interest |
- |
(156,073) |
- |
(493,243) | ||||||||
|
Net loss attributable to SandRidge Energy, Inc. |
(404,337) |
(640,412) |
(1,233,474) |
(3,043,847) | ||||||||
|
Preferred stock dividends |
- |
9,114 |
16,321 |
27,069 | ||||||||
|
Loss applicable to SandRidge Energy, Inc. common stockholders |
||||||||||||
|
$ (404,337) |
$ (649,526) |
$ (1,249,795) |
$ (3,070,916) | |||||||||
|
SandRidge Energy, Inc. and Subsidiaries (Debtor-in-Possession) | ||||||||
|
Condensed Consolidated Balance Sheets | ||||||||
|
(In thousands) | ||||||||
|
September 30, |
December 31, | |||||||
|
2016 |
2015 | |||||||
|
(unaudited) | ||||||||
|
ASSETS |
||||||||
|
Current assets |
||||||||
|
Cash and cash equivalents |
$ 652,680 |
$ 435,588 | ||||||
|
Accounts receivable, net |
61,446 |
127,387 | ||||||
|
Derivative contracts |
10,192 |
84,349 | ||||||
|
Prepaid expenses |
12,514 |
6,833 | ||||||
|
Other current assets |
1,003 |
19,931 | ||||||
|
Total current assets |
737,835 |
674,088 | ||||||
|
Oil and natural gas properties, using full cost method of accounting |
||||||||
|
Proved |
12,093,492 |
12,529,681 | ||||||
|
Unproved |
322,580 |
363,149 | ||||||
|
Less: accumulated depreciation, depletion and impairment |
(11,637,538) |
(11,149,888) | ||||||
|
778,534 |
1,742,942 | |||||||
|
Other property, plant and equipment, net |
357,528 |
491,760 | ||||||
|
Derivative contracts |
70 |
- | ||||||
|
Other assets |
12,537 |
13,237 | ||||||
|
Total assets |
$ 1,886,504 |
$ 2,922,027 | ||||||
|
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) |
||||||||
|
Current liabilities |
||||||||
|
Accounts payable and accrued expenses |
$ 140,448 |
$ 428,417 | ||||||
|
Derivative contracts |
2,982 |
573 | ||||||
|
Asset retirement obligations |
8,573 |
8,399 | ||||||
|
Total current liabilities |
152,003 |
437,389 | ||||||
|
Long-term debt |
- |
3,562,378 | ||||||
|
Derivative contracts |
935 |
- | ||||||
|
Asset retirement obligations |
62,896 |
95,179 | ||||||
|
Other long-term obligations |
3 |
14,814 | ||||||
|
Liabilities subject to compromise |
4,346,188 |
- | ||||||
|
Total liabilities |
4,562,025 |
4,109,760 | ||||||
|
Commitments and contingencies |
||||||||
|
Equity (deficit) |
||||||||
|
SandRidge Energy, Inc. stockholders' equity (deficit) |
||||||||
|
Preferred stock, $0.001 par value, 50,000 shares authorized |
||||||||
|
8.5% Convertible perpetual preferred stock; 2,650 shares issued and outstanding at |
||||||||
|
September 30, 2016 and December 31, 2015; aggregate liquidation preference of $265,000 |
3 |
3 | ||||||
|
7.0% Convertible perpetual preferred stock; 2,597 shares issued and outstanding at |
||||||||
|
September 30, 2016: aggregate liquidation preference of $259,700; 2,770 shares issued |
||||||||
|
and outstanding at December 31, 2015: aggregate liquidation preference of $277,000 |
3 |
3 | ||||||
|
Common stock, $0.001 par value; 1,800,000 shares authorized; 720,936 issued and |
||||||||
|
719,425 outstanding at September 30, 2016 and 635,584 issued and 633,471 outstanding at |
||||||||
|
December 31, 2015 |
718 |
630 | ||||||
|
Additional paid-in capital |
5,315,655 |
5,301,136 | ||||||
|
Additional paid-in capital - stockholder receivable |
(1,250) |
(1,250) | ||||||
|
Treasury stock, at cost |
(5,218) |
(5,742) | ||||||
|
Accumulated deficit |
(7,985,411) |
(6,992,697) | ||||||
|
Total SandRidge Energy, Inc. stockholders' deficit |
(2,675,500) |
(1,697,917) | ||||||
|
Noncontrolling interest |
(21) |
510,184 | ||||||
|
Total stockholders' deficit |
(2,675,521) |
(1,187,733) | ||||||
|
Total liabilities and stockholders' deficit |
$ 1,886,504 |
$ 2,922,027 | ||||||
|
SandRidge Energy, Inc. and Subsidiaries (Debtor-in-Possession) | ||||||||
|
Condensed Consolidated Statements of Cash Flows | ||||||||
|
(In thousands) | ||||||||
|
Nine Months Ended September 30, | ||||||||
|
2016 |
2015 | |||||||
|
(unaudited) | ||||||||
|
CASH FLOWS FROM OPERATING ACTIVITIES |
||||||||
|
Net loss |
$ (1,233,474) |
$ (3,537,090) | ||||||
|
Adjustments to reconcile net loss to net cash (used in) provided by operating activities |
||||||||
|
Provision for doubtful accounts |
16,704 |
- | ||||||
|
Depreciation, depletion and amortization |
107,936 |
304,140 | ||||||
|
Accretion of asset retirement obligations |
4,365 |
3,323 | ||||||
|
Impairment |
718,194 |
3,647,845 | ||||||
|
Reorganization items, net |
231,836 |
- | ||||||
|
Debt issuance costs amortization |
4,996 |
8,324 | ||||||
|
Amortization of discount, net of premium, on debt |
2,734 |
1,053 | ||||||
|
Gain on extinguishment of debt |
(41,179) |
(358,633) | ||||||
|
Write off of debt issuance costs |
- |
7,108 | ||||||
|
Gain on debt derivatives |
(1,324) |
(10,146) | ||||||
|
Cash paid for early conversion of convertible notes |
(33,452) |
(2,708) | ||||||
|
Loss (gain) on derivative contracts |
4,823 |
(59,034) | ||||||
|
Cash received on settlement of derivative contracts |
72,608 |
278,581 | ||||||
|
Loss on settlement of contract |
90,184 |
- | ||||||
|
Cash paid on settlement of contract |
(11,000) |
- | ||||||
|
(Gain) loss on sale of assets |
(2,794) |
2,097 | ||||||
|
Stock-based compensation |
9,075 |
15,170 | ||||||
|
Other |
(466) |
1,772 | ||||||
|
Changes in operating assets and liabilities |
(3,805) |
59,084 | ||||||
|
Net cash (used in) provided by operating activities |
(64,039) |
360,886 | ||||||
|
CASH FLOWS FROM INVESTING ACTIVITIES |
||||||||
|
Capital expenditures for property, plant and equipment |
(186,452) |
(761,905) | ||||||
|
Acquisition of assets |
(1,328) |
(3,231) | ||||||
|
Proceeds from sale of assets |
20,090 |
35,387 | ||||||
|
Net cash used in investing activities |
(167,690) |
(729,749) | ||||||
|
CASH FLOWS FROM FINANCING ACTIVITIES |
||||||||
|
Proceeds from borrowings |
489,198 |
2,190,000 | ||||||
|
Repayments of borrowings |
(40,000) |
(1,034,466) | ||||||
|
Debt issuance costs |
(333) |
(48,021) | ||||||
|
Noncontrolling interest distributions |
- |
(115,301) | ||||||
|
Purchase of treasury stock |
(44) |
(3,198) | ||||||
|
Dividends paid - preferred |
- |
(11,262) | ||||||
|
Net cash provided by financing activities |
448,821 |
977,752 | ||||||
|
NET INCREASE IN CASH AND CASH EQUIVALENTS |
217,092 |
608,889 | ||||||
|
CASH AND CASH EQUIVALENTS, beginning of year |
435,588 |
181,253 | ||||||
|
CASH AND CASH EQUIVALENTS, end of period |
$ 652,680 |
$ 790,142 | ||||||
|
Supplemental Disclosure of Cash Flow Information |
||||||||
|
Cash paid for reorganization items |
$ (11,836) |
$ - | ||||||
|
Supplemental Disclosure of Noncash Investing and Financing Activities |
||||||||
|
Cumulative effect of adoption of ASU 2015-02 |
$ (247,566) |
$ - | ||||||
|
Property, plant and equipment transferred in settlement of contract |
$ (215,635) |
$ - | ||||||
|
Change in accrued capital expenditures |
$ 25,045 |
$ 160,853 | ||||||
|
Equity issued for debt |
$ 4,409 |
$ (35,147) | ||||||
|
Preferred stock dividends paid in common stock |
$ - |
$ (16,188) | ||||||
Non-GAAP Financial Measures
Adjusted operating cash flow, adjusted EBITDA, pro forma adjusted EBITDA and adjusted net loss are non-GAAP financial measures.
The Company defines adjusted operating cash flow as net cash provided by (used in) operating activities before changes in operating assets and liabilities. It defines EBITDA as net loss before income tax expense, interest expense and depreciation, depletion and amortization and accretion of asset retirement obligations. Adjusted EBITDA, as presented herein, is EBITDA excluding asset impairment, interest income, loss (gain) on derivative contracts net of cash received upon settlement of derivative contracts, loss on settlement of contract, loss (gain) on sale of assets, legal settlements, severance, oil field services – exit costs, gain on extinguishment of debt, restructuring costs, reorganization items and other various items (including non-cash portion of noncontrolling interest and stock-based compensation). Pro forma adjusted EBITDA, as presented herein, is adjusted EBITDA excluding adjusted EBITDA attributable to properties or subsidiaries sold during the period.
Adjusted operating cash flow and adjusted EBITDA are supplemental financial measures used by the Company's management and by securities analysts, investors, lenders, rating agencies and others who follow the industry as an indicator of the Company's ability to internally fund exploration and development activities and to service or incur additional debt. The Company also uses these measures because adjusted operating cash flow and adjusted EBITDA relate to the timing of cash receipts and disbursements that the Company may not control and may not relate to the period in which the operating activities occurred. Further, adjusted operating cash flow and adjusted EBITDA allow the Company to compare its operating performance and return on capital with those of other companies without regard to financing methods and capital structure. These measures should not be considered in isolation or as a substitute for net cash provided by operating activities prepared in accordance with generally accepted accounting principles ("GAAP"). Adjusted EBITDA should not be considered as a substitute for net income, operating income, cash flows from operating activities or any other measure of financial performance or liquidity presented in accordance with GAAP. Adjusted EBITDA excludes some, but not all, items that affect net income and operating income and these measures may vary among other companies. Therefore, the Company's adjusted EBITDA may not be comparable to similarly titled measures used by other companies.
Management also uses the supplemental financial measure of adjusted net income (loss), which excludes asset impairment, (loss) gain on derivative contracts net of cash received on settlement of derivative contracts, loss on settlement of contract, gain on sale of assets, severance, oil field services – exit costs, gain on extinguishment of debt, restructuring costs, reorganization items, employee incentive and retention and other non-cash items from loss applicable to common stockholders. Management uses this financial measure as an indicator of the Company's operational trends and performance relative to other oil and natural gas companies and believes it is more comparable to earnings estimates provided by securities analysts. Adjusted net income (loss) is not a measure of financial performance under GAAP and should not be considered a substitute for loss applicable to common stockholders.
The tables below reconcile the most directly comparable GAAP financial measures to operating cash flow, EBITDA and adjusted EBITDA and adjusted net loss.
|
Reconciliation of Cash Provided by (Used in) Operating Activities to Adjusted Operating Cash Flow | |||||||||||
|
Three Months Ended September 30, |
Nine Months Ended September 30, | ||||||||||
|
2016 |
2015 |
2016 |
2015 | ||||||||
|
(in thousands) | |||||||||||
|
Net cash provided by (used in) operating activities |
$ 75,002 |
$ 41,892 |
$ (64,039) |
$ 360,886 | |||||||
|
Changes in operating assets and liabilities |
(43,215) |
2,673 |
3,805 |
(59,084) | |||||||
|
Adjusted operating cash flow |
$ 31,787 |
$ 44,565 |
$ (60,234) |
$ 301,802 | |||||||
|
Reconciliation of Net Loss to EBITDA and Adjusted EBITDA | |||||||||||
|
Three Months Ended September 30, |
Nine Months Ended September 30, | ||||||||||
|
2016 |
2015 |
2016 |
2015 | ||||||||
|
(in thousands) | |||||||||||
|
Net loss |
$ (404,337) |
$ (640,412) |
$ (1,233,474) |
$ (3,043,847) | |||||||
|
Adjusted for |
|||||||||||
|
Income tax expense |
4 |
25 |
11 |
90 | |||||||
|
Interest expense |
3,589 |
77,501 |
127,517 |
214,198 | |||||||
|
Depreciation and amortization - other |
7,514 |
11,379 |
21,323 |
37,234 | |||||||
|
Depreciation and depletion - oil and natural gas |
26,335 |
66,501 |
86,613 |
266,906 | |||||||
|
Accretion of asset retirement obligations |
1,390 |
1,132 |
4,365 |
3,323 | |||||||
|
EBITDA |
(365,505) |
(483,874) |
(993,645) |
(2,522,096) | |||||||
|
Asset impairment |
354,451 |
1,074,588 |
718,194 |
3,647,845 | |||||||
|
Interest income |
(246) |
(501) |
(1,418) |
(629) | |||||||
|
Stock-based compensation |
1,247 |
3,203 |
4,291 |
9,294 | |||||||
|
(Gain) loss on derivative contracts |
(338) |
(42,211) |
4,823 |
(59,034) | |||||||
|
Cash received upon settlement of derivative contracts (1) |
20,393 |
67,258 |
66,851 |
278,581 | |||||||
|
Loss on settlement of contract |
- |
- |
90,184 |
- | |||||||
|
Loss (gain) on sale of assets |
416 |
6,771 |
(2,794) |
2,097 | |||||||
|
Legal settlement |
- |
5,122 |
- |
4,994 | |||||||
|
Severance |
55 |
1,290 |
17,541 |
11,819 | |||||||
|
Oil field services - exit costs |
12 |
62 |
2,428 |
4,353 | |||||||
|
Gain on extinguishment of debt |
- |
(340,699) |
(41,179) |
(358,633) | |||||||
|
Restructuring costs |
421 |
- |
18,865 |
- | |||||||
|
Reorganization items, net |
42,754 |
- |
243,672 |
- | |||||||
|
Employee incentive and retention |
9,724 |
- |
20,141 |
- | |||||||
|
Other |
1,351 |
935 |
19,032 |
3,676 | |||||||
|
Non-cash portion of noncontrolling interest (2) |
- |
(174,304) |
- |
(561,969) | |||||||
|
Adjusted EBITDA |
$ 64,735 |
$ 117,640 |
$ 166,986 |
$ 460,298 | |||||||
|
Less: EBITDA attributable to WTO properties (2016) |
- |
16,644 |
1,990 |
49,502 | |||||||
|
Pro forma adjusted EBITDA |
$ 64,735 |
$ 134,284 |
$ 168,976 |
$ 509,800 | |||||||
|
(1) |
Excludes amounts received upon early settlement of contracts for 2016 period. | ||||||||||
|
(2) |
Represents depreciation and depletion, impairment, gain on commodity derivative contracts net of cash received on settlement and income tax expense attributable to noncontrolling interests in the 2015 period. | ||||||||||
|
Reconciliation of Cash Provided by (Used in) Operating Activities to Adjusted EBITDA | |||||||||||
|
Three Months Ended September 30, |
Nine Months Ended September 30, | ||||||||||
|
2016 |
2015 |
2016 |
2015 | ||||||||
|
(in thousands) | |||||||||||
|
Net cash provided by (used in) operating activities |
$ 75,002 |
$ 41,892 |
$ (64,039) |
$ 360,886 | |||||||
|
Changes in operating assets and liabilities |
(43,215) |
2,673 |
3,805 |
(59,084) | |||||||
|
Interest expense |
3,589 |
77,501 |
127,517 |
214,199 | |||||||
|
Cash received on early settlement of derivative contracts |
- |
- |
(17,894) |
- | |||||||
|
Contractual maturity reached on previous early settlements |
5,756 |
- |
12,137 |
- | |||||||
|
Cash paid on early conversion of convertible notes |
- |
2,709 |
33,452 |
2,709 | |||||||
|
Cash paid on settlement of contract |
- |
- |
11,000 |
- | |||||||
|
Legal settlements |
- |
5,122 |
- |
4,994 | |||||||
|
Severance (1) |
77 |
1,156 |
12,463 |
7,004 | |||||||
|
Oil field services - exit costs (1) |
13 |
62 |
2,386 |
4,275 | |||||||
|
Restructuring costs |
421 |
- |
18,865 |
- | |||||||
|
Cash paid for reorganization items |
11,836 |
- |
11,836 |
- | |||||||
|
Employee incentive and retention |
9,724 |
- |
20,141 |
- | |||||||
|
Noncontrolling interest - SDT (2) |
- |
(6,619) |
- |
(19,237) | |||||||
|
Noncontrolling interest - SDR (2) |
- |
(4,918) |
- |
(16,277) | |||||||
|
Noncontrolling interest - PER (2) |
- |
(6,694) |
- |
(33,212) | |||||||
|
Other |
1,532 |
4,756 |
(4,683) |
(5,959) | |||||||
|
Adjusted EBITDA |
$ 64,735 |
$ 117,640 |
$ 166,986 |
$ 460,298 | |||||||
|
(1) |
Excludes associated stock-based compensation. |
||||||||||
|
(2) |
Excludes depreciation and depletion, impairment, gain on commodity derivative contracts net of cash received on settlement and income tax expense attributable to noncontrolling interests for 2015 period. | ||||||||||
|
Reconciliation of Net Loss Applicable to Common Stockholders to Adjusted Net Income Available (Loss Applicable) to Common Stockholders | |||||||||||
|
Three Months Ended September 30, |
Nine Months Ended September 30, | ||||||||||
|
2016 |
2015 |
2016 |
2015 | ||||||||
|
(in thousands) | |||||||||||
|
Loss applicable to common stockholders |
$ (404,337) |
$ (649,526) |
$ (1,249,795) |
$ (3,070,916) | |||||||
|
Asset impairment (1) |
354,451 |
907,834 |
718,194 |
3,127,684 | |||||||
|
(Gain) loss on derivative contracts (1) |
(338) |
(38,438) |
4,823 |
(53,926) | |||||||
|
Cash received upon settlement of derivative contracts (1)(2) |
20,393 |
60,342 |
66,851 |
249,665 | |||||||
|
Loss on settlement of contract |
- |
- |
90,184 |
- | |||||||
|
Loss (gain) on sale of assets |
416 |
6,771 |
(2,794) |
2,097 | |||||||
|
Legal settlements |
- |
5,122 |
- |
4,994 | |||||||
|
Severance |
55 |
1,290 |
17,541 |
11,819 | |||||||
|
Oil field services - exit costs |
12 |
62 |
2,428 |
4,353 | |||||||
|
Gain on extinguishment of debt |
- |
(340,699) |
(41,179) |
(358,633) | |||||||
|
Restructuring costs |
421 |
- |
18,865 |
- | |||||||
|
Reorganization items, net |
42,754 |
- |
243,672 |
- | |||||||
|
Employee incentive and retention |
9,724 |
- |
20,141 |
- | |||||||
|
Other |
1,780 |
(10,306) |
18,194 |
(8,243) | |||||||
|
Effect of income taxes |
4 |
19 |
10 |
76 | |||||||
|
Adjusted net income available (loss applicable) to common stockholders |
25,335 |
(57,529) |
(92,865) |
(91,030) | |||||||
|
Preferred stock dividends (3) |
- |
9,114 |
- |
27,069 | |||||||
|
Effect of convertible debt, net of income taxes (3) |
- |
2,918 |
- |
2,918 | |||||||
|
Total adjusted net income (loss) |
$ 25,335 |
$ (45,497) |
$ (92,865) |
$ (61,043) | |||||||
|
(1) |
Excludes amounts attributable to noncontrolling interests for 2015 period. | ||||||||||
|
(2) |
Excludes amounts received for early settlement of contracts for 2016 period. | ||||||||||
|
(3) |
Not considered dilutive securities in 2016 periods. | ||||||||||
For further information, please contact:
Duane M. Grubert
EVP – Investor Relations and Strategy
SandRidge Energy, Inc.
123 Robert S. Kerr Avenue
Oklahoma City, OK 73102-6406
(405) 429-5515
Cautionary Note to Investors - This press release includes "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, including, but not limited to, the information appearing under the heading "Operational Guidance." These statements express a belief, expectation or intention and are generally accompanied by words that convey projected future events or outcomes. The forward-looking statements include projections and estimates of the Company's corporate strategies, future operations, net income and EBITDA, drilling plans, oil, and natural gas and natural gas liquids production, price realizations and differentials, reserves, operating, general and administrative and other costs, capital expenditures, tax rates, efficiency and cost reduction initiative outcomes, infrastructure utilization and investment, and development plans and appraisal programs. We have based these forward-looking statements on our current expectations and assumptions and analyses made by us in light of our experience and our perception of historical trends, current conditions and expected future developments, as well as other factors we believe are appropriate under the circumstances. However, whether actual results and developments will conform with our expectations and predictions is subject to a number of risks and uncertainties, including the volatility of oil and natural gas prices, our success in discovering, estimating, developing and replacing oil and natural gas reserves, actual decline curves and the actual effect of adding compression to natural gas wells, the availability and terms of capital, the ability of counterparties to transactions with us to meet their obligations, our timely execution of hedge transactions, credit conditions of global capital markets, changes in economic conditions, the amount and timing of future development costs, the availability and demand for alternative energy sources, regulatory changes, including those related to carbon dioxide and greenhouse gas emissions, and other factors, many of which are beyond our control. We refer you to the discussion of risk factors in Part I, Item 1A - "Risk Factors" of our Annual Report on Form 10-K for the year ended December 31, 2015 and in comparable "Risk Factor" sections of our Quarterly Reports on Form 10-Q filed after such form 10-K. All of the forward-looking statements made in this press release are qualified by these cautionary statements. The actual results or developments anticipated may not be realized or, even if substantially realized, they may not have the expected consequences to or effects on our Company or our business or operations. Such statements are not guarantees of future performance and actual results or developments may differ materially from those projected in the forward-looking statements. We undertake no obligation to update or revise any forward-looking statements.
SandRidge Energy, Inc. (NYSE: SD) is an oil and natural gas exploration and production company headquartered in Oklahoma City, Oklahoma with its principal focus on developing high-return, growth-oriented projects in the U.S. Mid-Continent and Niobrara Shale.
SOURCE SandRidge Energy, Inc.
Article Date
11/8/201610/4/2016 - SandRidge Energy Emerges from Reorganization with Approximately $525 Million of Liquidity
SandRidge Energy Emerges from Reorganization with Approximately $525 Million of Liquidity
Source: PR Newswire
Orignial Article: http://www.prnewswire.com...
OKLAHOMA CITY, Oct. 4, 2016 /PRNewswire/ -- SandRidge Energy, Inc. ("SandRidge" or the "Company") (NYSE:SD) today announced it has emerged from Chapter 11, having satisfied all the necessary provisions of its Plan of Reorganization (the "Plan"). SandRidge received approval to relist on the New York Stock Exchange in conjunction with its emergence and resumed trading of newly issued common stock on October 4, 2016, under the ticker symbol "SD".
Combining its unrestricted cash balance with the availability under its first lien credit facility following emergence, SandRidge exits its restructuring with approximately $525 million in total liquidity.
New Capital Structure Summary
SandRidge's new capital structure consists of a $425 million first lien revolving credit facility ("RBL") (maturing in 2020) and approximately $282 million in mandatorily convertible notes, bearing no interest and converting at any time at the option of the holders or mandatorily at the earlier of certain events or four years from the effective date of the Plan. As previously disclosed, SandRidge's pre-petition second lien secured and general unsecured claim holders receive 100% of the newly issued common equity in the reorganized company. A summary of the Company's new capital structure is presented below:
Unrestricted Cash
New Revolving Credit Facility
Mandatorily Convertible Notes
Building Note
Common Equity
Warrants
|
1) |
Excludes approximately $10 million of letters of credit |
Pro Forma Capital Structure Details
In accordance with the Plan, approximately $3.7 billion in pre-petition funded debt has been eliminated, in large part, through the equitization of debt. Details of the Company's pro forma capital structure and liquidity are outlined here below:
|
Pro Forma Capital Structure after Emergence |
$ Millions | ||
|
Debt at Principal Value |
as of Jun 30, 2016 |
Restructuring |
Pro Forma |
|
Building Note1 |
$ - |
$ 35 |
$ 35 |
|
8.75% Second Lien Secured Notes due 2020 |
1,328 |
(1,328) |
- |
|
Unsecured Notes: |
|||
|
8.75% Senior Unsecured Notes due 2020 |
$ 396 |
$ (396) |
$ - |
|
7.50% Senior Unsecured Notes due 2021 |
758 |
(758) |
- |
|
8.125% Senior Unsecured Notes due 2022 |
528 |
(528) |
- |
|
7.50% Senior Unsecured Notes due 2023 |
544 |
(544) |
- |
|
Sub-Total Unsecured Notes |
$ 2,225 |
$ (2,225) |
$ - |
|
Unsecured Convertible Notes: |
|||
|
8.125% Senior Unsecured Convertible Notes due 2022 |
$ 41 |
$ (41) |
$ - |
|
7.50% Senior Unsecured Convertible Notes due 2023 |
47 |
(47) |
- |
|
Total Debt (Excl. RBL)2 |
$ 3,641 |
$ (3,606) |
$ 35 |
|
0.00% Convertible Senior Subordinated Notes Due 20203 |
$ - |
$ 282 |
$ 282 |
|
Total Debt (Excl. RBL) and Mandatorily Convertible Notes and Building Note |
$ 3,641 |
$ (3,324) |
$ 317 |
|
Liquidity |
|||
|
RBL Borrowing Base4 |
$ 500 |
$ (75) |
$ 425 |
|
RBL Available |
- |
425 |
425 |
|
Cash |
634 |
(534) |
100 |
|
Total Liquidity |
$ 634 |
$ (109) |
$ 525 |
|
1) |
Secured by mortgages on the Company's headquarters facility and certain other non-oil and gas real property | |||
|
2) |
$3.7 billion of total debt reduction includes $89 million of accrued interest not presented above net of new $35 million Building Note and $10 million of cash consideration | |||
|
3) |
Make-Whole Amount applicable if note accelerated following an event of default or redeemed at the option of the Company | |||
|
4) |
Excludes approximately $10 million of letters of credit | |||
New Board of Directors
Pursuant to the Plan, SandRidge has appointed a new Board of Directors effective today. The new Board of Directors consists of five members including: James Bennett, Michael Bennett, John Genova, William (Bill) Griffin, and David Kornder.
Listing on the NYSE
In connection with its emergence, SandRidge also received approval from the New York Stock Exchange ("NYSE") for its common stock to be listed for trading on the NYSE. The common stock began trading on the NYSE on October 4, 2016. The trading symbol for the common stock is "SD," which is the same trading symbol used for the Company's common stock when it previously was listed on the NYSE. In connection with its application to list on the NYSE, the Company relied on adjustments to its historical financial data, which were included in its application and are available to the public upon request.
Details of the restructuring, the securities issued pursuant to the Plan and the debt and other agreements entered into as part of the Plan will be provided in a Form 8-K and other filings filed or to be filed with the Security and Exchange Commission. You can get these documents for free by visiting EDGAR at the SEC website at www.sec.gov.
In addition, court filings and other documents related to the restructuring are available on a separate website administered by the Company's claims agent, Prime Clerk, at https://cases.primeclerk.com/sandridge.
About SandRidge Energy, Inc.
SandRidge Energy, Inc. is an oil and natural gas exploration and production company headquartered in Oklahoma City, Oklahoma with its principal focus on developing high-return, growth-oriented projects in the U.S. Mid-Continent and Niobrara Shale.
For further information, please contact:
Duane M. Grubert
EVP – Investor Relations and Strategy
SandRidge Energy, Inc.
123 Robert S. Kerr Avenue
Oklahoma City, OK 73102-6406
(405) 429-5515
Forward-Looking Statements
In this press release, all statements that are not purely historical facts are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements may be identified by the words "believe," "expect," "anticipate," "project," "plan," "estimate," "intend," "potential" and other similar expressions. Forward-looking statements are based on currently available business, economic, financial and other information and reflect management's current beliefs, expectations and views with respect to future developments and their potential effects on SandRidge. Actual results could vary materially depending on risks and uncertainties that may affect SandRidge and its business. SandRidge's actual actions and results may differ materially from what is expressed or implied by these statements due to a variety of factors, including (a) the ability of SandRidge to perform well and compete effectively upon its emergence from bankruptcy, (b) the impact of restrictions in SandRidge 's exit financing on its ability to make capital investments and pursue strategic growth opportunities, (c) the ability of SandRidge to continue to attract and retain qualified employees following emergence, and (d) other risks and uncertainties listed from time to time in SandRidge's filings with the Securities and Exchange Commission. SandRidge assumes no obligation to update any forward-looking statement made in this press release to reflect subsequent events or circumstances or actual outcomes.
SOURCE SandRidge Energy, Inc.
Article Date
10/4/2016SandRidge Energy Files "Pre-Arranged" Reorganization Under Chapter 11, Announcing Restructuring Support Agreement with Creditors Holding Over Two-Thirds of its $4.1 Billion in Funded Debt Obligations
Source: PR Newswire
OKLAHOMA CITY, May 16, 2016 /PRNewswire/ -- SandRidge Energy, Inc. ("SandRidge" or the "Company") (OTC PINK: SDOC) today announced that it has voluntarily filed petitions under Chapter 11 of the U.S. Bankruptcy Code in the United States Bankruptcy Court for the Southern District of Texas (the "Chapter 11") to consummate a "pre-arranged" reorganization through a restructuring support agreement (the "Restructuring Support Agreement" or the "Agreement") entered into with holders of approximately (i) 98% in principal amount outstanding under the Company's reserve-based lending facility ("RBL"), (ii) 79% in principal amount of the Company's second lien notes, and (iii) 55% in principal amount of the Company's senior unsecured notes.
The Restructuring Support Agreement contemplates an RBL facility and the equitization of approximately $3.7 billion of other funded indebtedness. Under the Agreement, the Company's pro forma capital structure will consist of (i) $425 million in first lien RBL debt (maturing in 2020), and (ii) $300 million in mandatorily convertible debt that will accrue interest on a non-cash basis and convert into equity in the reorganized Company at the earlier of certain conversion events or four years from the effective date of the Chapter 11 plan of reorganization (the "Plan").
The Company projects having ample liquidity to fund its ongoing operations and its capital programs throughout the Chapter 11 and upon emergence thereafter, without the need for debtor-in-possession financing or other additional capital.
As part of the Chapter 11, SandRidge has filed "first day" motions that, when granted, will enable the Company's day-to-day operations to continue as usual. Specifically, the Company requested authority to pay operating expenses associated with production activities, joint interest billings for non-operated properties, royalty and working interest owners, and lienholders, as well as employee wages and benefits without change or interruption. Additionally, the Company will pay all suppliers and vendors in full under normal terms for goods and services provided during the Chapter 11 cases.
"We are pleased that our creditors recognize the long-term value SandRidge and its employees can create with an improved balance sheet. The new capital structure will allow the Company to concentrate on oil and gas exploration and development in our active Oklahoma and Colorado project areas," said James Bennett, SandRidge President and CEO. "We look forward to completing this next phase of the process quickly with minimal disruption to our business."
Jeff Serota, SandRidge Chairman of the Board and Chairman of the Restructuring Committee of the Board, remarked, "Constructive dialogue with each major funded debt constituency and an efficient negotiating process have led to today's announcement. We appreciate the efforts of our creditors and their advisors and commend the diligent efforts of management and our employees, as well as our advisors and Restructuring Committee in getting to this point."
Court filings and other information related to the restructuring proceedings are available at a website administered by the Company's claims agent, Prime Clerk, at https://cases.primeclerk.com/sandridge or via the information call center at (844) 276-3028 (toll free) or 1+(917) 962-8498 (international). Additional information regarding the Restructuring Support Agreement is contained in a Current Report on Form 8-K filed with the Securities and Exchange Commission on May 16, 2016. The Company has also posted FAQs on its website at www.sandridgeenergy.com/restructuring.
Kirkland & Ellis LLP is serving as legal counsel to SandRidge and Houlihan Lokey, Inc. is serving as financial advisor.
This press release is not intended to be, and should not in any way be construed as, a solicitation of votes of noteholders or other investors regarding the Chapter 11 Plan.
About SandRidge Energy, Inc.
SandRidge Energy, Inc. (OTC PINK: SDOC) is an oil and natural gas exploration and production company headquartered in Oklahoma City, Oklahoma with its principal focus on developing high-return, growth-oriented projects in the U.S. Mid-Continent and Niobrara Shale.
CONTACT:
Prime Clerk
(844) 276-3028 (toll free)
1+(917) 962-8498 (international)
Email: sandridgeinfo@primeclerk.com
Cautionary Note to Investors - This press release includes "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These statements express a belief, expectation or intention and are generally accompanied by words that convey projected future events or outcomes. The forward-looking statements include creating long-term value, improving the balance sheet, emerging as a stronger company, timing of restructuring and its impact on investors, operations, employees, vendors and leaseholders. We have based these forward-looking statements on our current expectations and assumptions and analyses made by us in light of our experience and our perception of historical trends, current conditions and expected future developments, as well as other factors we believe are appropriate under the circumstances. However, whether actual results and developments will conform with our expectations and predictions is subject to a number of risks and uncertainties, including whether or not the Company will be successful in the restructuring; the sufficiency of the Company's cash flow and access to liquidity and the ability of the Company to continue as a going concern; whether the bankruptcy court will approve first day motions and the plan of reorganization as proposed, including with respect to the latter, the treatment of the claims of the senior noteholders, trade creditors and equity holders, among others; the debtors' ability to obtain court approval with respect to motions in the Chapter 11 proceeding; court rulings in the Chapter 11 proceeding and the outcome of the Chapter 11 proceeding in general; the length of time the debtors will operate under Chapter 11, including whether the Company will be successful in exiting bankruptcy within the planned timeline; risks associated with third-party motions in the Chapter 11 proceeding, which may interfere with the consummation of the plan of reorganization; the potential adverse effects of the Chapter 11 proceeding on the debtors' liquidity, results of operations, or business prospects; the ability of the Company to execute its business plan; increased legal costs related to the Chapter 11 proceeding and other litigation; government and regulatory actions, potential limitations on our ability to maintain contracts and other critical business relationships; requirements for adequate liquidity to fund our operations in the future, including obtaining sufficient financing on acceptable terms; and other matters related to the potential restructuring and our indebtedness, as well as the volatility of oil and natural gas prices, our success in discovering, estimating, developing and replacing oil and natural gas reserves, actual decline curves and the actual effect of adding compression to natural gas wells, the availability and terms of capital, the ability of counterparties to transactions with us to meet their obligations, our timely execution of hedge transactions, credit conditions of global capital markets, changes in economic conditions, the amount and timing of future development costs, the availability and demand for alternative energy sources, regulatory changes, including those related to carbon dioxide and greenhouse gas emissions, and other factors, many of which are beyond our control. All of the forward-looking statements made in this press release are qualified by these cautionary statements. The actual results or developments anticipated may not be realized or, even if substantially realized, they may not have the expected consequences to or effects on our Company or our business or operations. Such statements are not guarantees of future performance and actual results or developments may differ materially from those projected in the forward-looking statements. We undertake no obligation to update or revise any forward-looking statements.
Logo - http://photos.prnewswire.com/prnh/20120416/DA88110LOGO
SOURCE SandRidge Energy, Inc.
Article Date
5/16/2016SandRidge Energy, Inc. Updates Shareholders on Operations and Reports Financial Results for Fourth Quarter and Fiscal Year 2015
Source: PR Newswire
Orignial Article: http://www.prnewswire.com...
OKLAHOMA CITY, March 29, 2016 /PRNewswire/ -- SandRidge Energy, Inc. (OTC PINK: SDOC) today announced financial and operational results for the quarter and fiscal year ended December 31, 2015.
James Bennett, SandRidge President and CEO noted, "In 2016 we will be reducing capital spending by around 60% compared to 2015, ensuring liquidity while advancing our operations with one rig in each of our plays. Combining high-graded development of our Mid-Continent assets with our emerging Niobrara play is resulting in a more diversified company with improved capital efficiencies. We've also reduced our G&A expense in order to match our ongoing activity as we preserve and extend capabilities while managing optionality in this challenging environment."
Previously Announced Fourth Quarter Highlights
Completed Acquisition of North Park Basin Niobrara Shale Oil Assets for $190 Million Adds 1.0 MBoepd of Production and 28 MMBoe of Proved Reserves (81% Oil) and Materially Expands Drilling Inventory
Acquisition of Piñon Gathering System Eliminates ~$40 Million of Annual Expenses
Bond Repurchases and Exchanges Address $400 Million of Debt
The Company currently has two rigs running in the Mississippian and one rig running in the Niobrara, and expects to run one rig in each area starting in May, consistent with a $285 million capital program guidance introduced today. Capital expenditures for 2016 and for future periods are highly dependent on numerous factors including changes in commodity prices and available liquidity and may differ materially from guidance.
Key Financial Results
Fourth Quarter
Full Year
Adjusted net (loss) income available to common stockholders, adjusted EBITDA, pro forma adjusted EBITDA and operating cash flow are non-GAAP financial measures. Each measure is defined and reconciled to the most directly comparable GAAP measure under "Non-GAAP Financial Measures" beginning page 9.
Financial Highlights - Subsequent to Fourth Quarter
Revolver Draw and Hiring of Advisors
On January 22, 2016, the Company borrowed $489 million under its Senior Credit Facility, bringing the total amount outstanding to approximately $500 million, including letters of credit. Following the funding of this borrowing, the Company's cash balance was approximately $855 million. On that same day, the Company also announced that it had retained Kirkland & Ellis, LLP and Houlihan Lokey, Inc. as its legal and financial advisors, respectively, to assist the Company in analyzing and considering financial, transactional, and strategic alternatives.
Drilling and Operational Activities
Proved Reserves
The Company's estimated consolidated proved reserves as of December 31, 2015 were 325 MMBoe. These reserves and their related PV-10 value of $1,315 million are based primarily on 3rd party engineering reports prepared by Cawley Gillespie and Associates, Inc., Ryder Scott, and Netherland Sewell and Associates. In aggregate, 3rd party engineers evaluated properties representing 90% of the Company's reserves and 95% of PV-10 at December 31, 2015 with their estimates based on the definitions and disclosure guidelines of the United States Securities and Exchange Commission (SEC) for Oil and Gas Reporting (SEC regulations).
Year end 2015 reserves and PV-10 were estimated utilizing 12-month average prices and costs, as directed by the SEC. An average Plains Posted oil price of $46.79 per barrel and an average natural gas price of $2.59 per MMBtu were used in calculating the estimated discounted future net cash flows of proved reserves. These prices were then adjusted for quality, transportation fees, geographical differentials, marketing bonuses or deductions and other factors affecting wellhead prices.
During 2015, the Company added proved reserves of 73 MMBoe from discoveries and extensions, and the acquisition of its North Park Basin Niobrara asset. The Company's year end reserves reflect approximately 235 MMBoe of negative revisions for the year, the largest component of which is pricing revisions of approximately 205 MMBoe. All of the Company's estimated proved undeveloped reserves at December 31, 2015 are expected to be developed within the next five years. The Company has identified 2,460 3P drilling locations in its Mid-Continent focus area, and over 1,300 drilling locations in its Niobrara asset.
|
SEC Reserves and Value | |||||||||||||||||||||||||||||||||
|
Net Resv |
Liquids |
Oil |
NGL |
Gas |
PV-10 | ||||||||||||||||||||||||||||
|
(MBoe) (1) |
(MBbls) |
(MBbls) |
(MBbls) |
(MMcf) |
(in millions) (2) | ||||||||||||||||||||||||||||
|
Year End 2014 ($91.48 / $4.35) |
515,855 |
217,817 |
126,031 |
91,786 |
1,788,233 |
$ 5,516 | |||||||||||||||||||||||||||
|
Acquisitions |
27,566 |
24,907 |
22,447 |
2,460 |
15,952 |
||||||||||||||||||||||||||||
|
Production |
(29,995) |
(14,644) |
(9,600) |
(5,044) |
(92,104) |
||||||||||||||||||||||||||||
|
Extensions |
45,809 |
18,998 |
9,741 |
9,257 |
160,865 |
||||||||||||||||||||||||||||
|
Revisions |
(234,609) |
(108,092) |
(70,708) |
(37,384) |
(759,106) |
||||||||||||||||||||||||||||
|
Year End 2015 ($46.79 / $2.59) |
324,626 |
138,986 |
77,911 |
61,075 |
1,113,840 |
$ 1,315 | |||||||||||||||||||||||||||
|
WTO Sale Adjustments |
(24,598) |
(387) |
(387) |
- |
(145,267) |
(13) | |||||||||||||||||||||||||||
|
Pro Forma Year End 2015 ($46.79 / $2.59) |
300,028 |
138,599 |
77,524 |
61,075 |
968,573 |
$ 1,302 | |||||||||||||||||||||||||||
|
(1) |
Includes approximately 19,116 MBoe and 27,594 MBoe attributable to noncontrolling interests at December 31, 2015 and 2014, respectively. | ||||||||||||||||||||||||||||||||
|
(2) |
Includes PV-10 attributable to noncontrolling interests of approximately $226 million and $645 million at December 31, 2015 and 2014, respectively. | ||||||||||||||||||||||||||||||||
|
Standardized Measure of Discounted Net Cash Flows to PV-10 Reconciliation | |||||
|
2015 |
2014 | ||||
|
(in millions) |
(in millions) | ||||
|
Standardized measure of discounted net cash flows (1) |
$ 1,314.6 |
$ 4,087.8 | |||
|
Present value of future net income tax expense discounted at 10% |
0.4 |
1,428.6 | |||
|
PV-10 (2) |
$ 1,315.0 |
$ 5,516.4 | |||
|
(1) |
Includes approximately $225 million and $643 million attributable to SandRidge noncontrolling interests at December 31, 2015 and 2014, respectively. | |||||||||||||||||||||||||||||
|
(2) |
Includes approximately $226 million and $645 million attributable to SandRidge noncontrolling interests at December 31, 2015 and 2014, respectively. | |||||||||||||||||||||||||||||
Operational Highlights - Subsequent to Fourth Quarter
Commencement of North Park Basin Niobrara Development
In the fourth quarter, SandRidge entered into a purchase and sales agreement to acquire assets from EE3, LLC, a North Park Basin, Colorado operator producing 1.0 MBoepd from 16 wells with 136,000 net acres of Niobrara Shale oil development potential. SandRidge spud its first operated well, the Gregory, in January and began its initial production in March. The Company intends to drill 22 laterals on its North Park leasehold in 2016.
Termination of West Texas CO2 Treating Agreement
Subsequent to the fourth quarter of 2015, the Company executed and closed an agreement to settle all claims between itself and a third party arising out of a 30-year agreement for the removal of CO2 from natural gas volumes produced by the Company in the Piñon field in west Texas. Under the terms of the settlement, the Company transferred substantially all of its exploration and production and midstream assets in the Piñon field to a wholly-owned subsidiary of Occidental Petroleum Corporation along with $11 million cash. SandRidge was released from all past, current, and future claims and obligations related to the gas treating agreement, which contained minimum CO2 volume commitments until 2041, and the parties agreed to dismiss pending litigation between them related thereto.
Operational and Financial Statistics
Information regarding the Company's production, pricing, costs and earnings is presented below:
|
Three Months Ended December 31, |
Year Ended December 31, | ||||||||
|
2015 |
2014 |
2015 |
2014 | ||||||
|
Production - Total |
|||||||||
|
Oil (MBbl) |
1,996 |
2,949 |
9,600 |
10,876 | |||||
|
NGL (MBbl) |
1,161 |
1,294 |
5,044 |
3,794 | |||||
|
Natural gas (MMcf) |
20,972 |
23,362 |
92,105 |
85,697 | |||||
|
Oil equivalent (MBoe) |
6,652 |
8,137 |
29,995 |
28,953 | |||||
|
Daily production (MBoed) |
72.3 |
88.4 |
82.2 |
79.3 | |||||
|
Production - Mid-Continent |
|||||||||
|
Oil (MBbl) |
1,699 |
2,522 |
8,253 |
8,371 | |||||
|
NGL (MBbl) |
1,125 |
1,251 |
4,889 |
3,565 | |||||
|
Natural gas (MMcf) |
18,199 |
20,221 |
80,491 |
68,925 | |||||
|
Oil equivalent (MBoe) |
5,858 |
7,143 |
26,558 |
23,423 | |||||
|
Daily production (MBoed) |
63.7 |
77.6 |
72.8 |
64.2 | |||||
|
Average price per unit |
|||||||||
|
Realized oil price per barrel - as reported |
$ 39.27 |
$ 70.32 |
$ 45.83 |
$ 89.86 | |||||
|
Realized impact of derivatives per barrel |
23.75 |
19.38 |
30.97 |
4.32 | |||||
|
Net realized price per barrel |
$ 63.02 |
$ 89.70 |
$ 76.80 |
$ 94.18 | |||||
|
Realized NGL price per barrel - as reported |
$ 13.25 |
$ 24.85 |
$ 14.36 |
$ 33.41 | |||||
|
Realized impact of derivatives per barrel |
- |
- |
- |
- | |||||
|
Net realized price per barrel |
$ 13.25 |
$ 24.85 |
$ 14.36 |
$ 33.41 | |||||
|
Realized natural gas price per Mcf - as reported |
$ 1.82 |
$ 3.28 |
$ 2.12 |
$ 3.70 | |||||
|
Realized impact of derivatives per Mcf |
0.09 |
0.14 |
0.33 |
(0.12) | |||||
|
Net realized price per Mcf |
$ 1.91 |
$ 3.42 |
$ 2.45 |
$ 3.58 | |||||
|
Realized price per Boe - as reported |
$ 19.85 |
$ 38.84 |
$ 23.59 |
$ 49.08 | |||||
|
Net realized price per Boe - including impact of derivatives |
$ 27.23 |
$ 46.29 |
$ 34.51 |
$ 50.36 | |||||
|
Average cost per Boe |
|||||||||
|
Lease operating |
$ 9.70 |
$ 11.01 |
$ 10.29 |
$ 11.95 | |||||
|
Production taxes |
0.43 |
0.95 |
0.51 |
1.10 | |||||
|
General and administrative |
|||||||||
|
General and administrative, excluding stock-based compensation |
$ 5.74 |
$ 2.91 |
$ 4.40 |
$ 3.55 | |||||
|
Stock-based compensation (1) |
0.48 |
0.51 |
0.61 |
0.69 | |||||
|
Total general and administrative |
$ 6.22 |
$ 3.42 |
$ 5.01 |
$ 4.24 | |||||
|
General and administrative - adjusted |
|||||||||
|
General and administrative, excluding stock-based compensation (2) |
$ 5.32 |
$ 2.87 |
$ 3.80 |
$ 3.28 | |||||
|
Stock-based compensation (1)(3) |
0.40 |
0.51 |
0.43 |
0.62 | |||||
|
Total general and administrative - adjusted |
$ 5.72 |
$ 3.38 |
$ 4.23 |
$ 3.90 | |||||
|
Depletion (4) |
$ 8.14 |
$ 13.57 |
$ 10.81 |
$ 15.31 | |||||
|
Lease operating cost per Boe |
|||||||||
|
Mid-Continent |
$ 7.36 |
$ 8.35 |
$ 7.66 |
$ 8.13 | |||||
|
Earnings per share |
|||||||||
|
(Loss) income per share applicable to common stockholders |
|||||||||
|
Basic |
$ (1.13) |
$ 0.55 |
$ (7.16) |
$ 0.42 | |||||
|
Diluted |
(1.13) |
0.48 |
(7.16) |
0.42 | |||||
|
Adjusted net (loss) income per share available to common stockholders |
|||||||||
|
Basic |
$ (0.16) |
$ 0.07 |
$ (0.35) |
$ 0.21 | |||||
|
Diluted |
(0.09) |
0.08 |
(0.21) |
0.26 | |||||
|
Weighted average number of common shares outstanding (in thousands) |
|||||||||
|
Basic |
586,801 |
463,174 |
521,936 |
479,644 | |||||
|
Diluted (5) |
805,368 |
551,304 |
641,608 |
571,453 | |||||
|
(1) |
Expense for equity-classified stock-based awards | ||||||||||
|
(2) |
Excludes severance, legal settlements and shareholder litigation costs totaling $2.8 million and $17.8 million for the three-month period and year ended December 31, 2015, respectively. Excludes severance, transaction costs and shareholder litigation costs totaling $0.3 million and $7.9 million for the three-month period and year ended December 31, 2014, respectively. | ||||||||||
|
(3) |
Three-month period and year ended December 31, 2015 exclude $0.6 million and $5.4 million, respectively, for the acceleration of certain stock awards. Year ended December 31, 2014 excludes $2.2 million for the acceleration of certain stock awards. | ||||||||||
|
(4) |
Includes accretion of asset retirement obligation. | ||||||||||
|
(5) |
Includes shares considered antidilutive for calculating earnings per share in accordance with GAAP for certain periods presented. | ||||||||||
Capital Expenditures
The table below summarizes the Company's capital expenditures for the three and twelve-month periods ended December 31, 2015 and 2014:
|
Three Months Ended December 31, |
Year Ended December 31, | ||||||||
|
2015 |
2014 |
2015 |
2014 | ||||||
|
(in thousands) | |||||||||
|
Drilling and production |
|||||||||
|
Mid-Continent |
$ 80,557 |
$370,768 |
$592,346 |
$1,113,827 | |||||
|
Permian Basin |
1,457 |
24,722 |
5,714 |
180,510 | |||||
|
Gulf of Mexico/Gulf Coast |
- |
- |
- |
22,975 | |||||
|
82,014 |
395,490 |
598,060 |
1,317,312 | ||||||
|
Leasehold and geophysical |
|||||||||
|
Mid-Continent |
13,496 |
50,389 |
55,930 |
177,685 | |||||
|
Gulf of Mexico/Gulf Coast |
- |
- |
- |
159 | |||||
|
Other |
1,939 |
3,596 |
6,330 |
11,586 | |||||
|
15,435 |
53,985 |
62,260 |
189,430 | ||||||
|
Inventory |
(942) |
2,086 |
(4,298) |
1,358 | |||||
|
Total exploration and development |
96,507 |
451,561 |
656,022 |
1,508,100 | |||||
|
Drilling and oil field services |
1,900 |
7,508 |
4,632 |
18,385 | |||||
|
Midstream |
1,155 |
18,796 |
21,555 |
44,606 | |||||
|
Other - general |
999 |
10,487 |
19,406 |
37,798 | |||||
|
Total capital expenditures, excluding acquisitions |
100,561 |
488,352 |
701,615 |
1,608,889 | |||||
|
Acquisitions |
237,935 |
1,464 |
241,165 |
18,384 | |||||
|
Total capital expenditures |
$338,496 |
$489,816 |
$942,780 |
$1,627,273 | |||||
Derivative Contracts
The table below sets forth the Company's consolidated oil and natural gas price swaps and collars for 2016 as of March 29, 2016:
|
Quarter Ending |
|||||||||||
|
3/31/2016 |
6/30/2016 |
9/30/2016 |
12/31/2016 |
FY2016 | |||||||
|
Oil (MMBbls) |
|||||||||||
|
Swap Volume |
0.36 |
0.36 |
0.37 |
0.37 |
1.46 | ||||||
|
Swap |
$88.36 |
$88.36 |
$88.36 |
$88.36 |
$88.36 | ||||||
|
Three-way Collar Volume |
0.91 |
0.91 |
0.37 |
0.37 |
2.56 | ||||||
|
Call Price |
$101.35 |
$101.35 |
$99.63 |
$99.63 |
$100.85 | ||||||
|
Put Price |
$90.00 |
$90.00 |
$90.00 |
$90.00 |
$90.00 | ||||||
|
Short Put Price |
$83.39 |
$83.39 |
$82.50 |
$82.50 |
$83.14 | ||||||
|
Natural Gas (Bcf) |
|||||||||||
|
Swap Volume |
- |
- |
- |
- |
- | ||||||
|
Swap |
- |
- |
- |
- |
- | ||||||
|
Collar Volume |
- |
- |
- |
- |
- | ||||||
|
Collar: High |
- |
- |
- |
- |
- | ||||||
|
Collar: Low |
- |
- |
- |
- |
- | ||||||
|
Natural Gas Basis (Bcf) |
|||||||||||
|
Swap Volume |
2.73 |
2.73 |
2.76 |
2.76 |
10.98 | ||||||
|
Swap |
(0.38) |
(0.38) |
(0.38) |
(0.38) |
(0.38) | ||||||
Balance Sheet
The Company's capital structure at December 31, 2015 and December 31, 2014 is presented below:
|
December 31, | ||||||
|
2015 |
2014 | |||||
|
(in thousands) | ||||||
|
Cash and cash equivalents |
$ 435,588 |
$ 181,253 | ||||
|
Current maturities of long-term debt |
$ - |
$ - | ||||
|
Long-term debt (net of current maturities) |
||||||
|
8.75% Senior Secured Notes due 2020 |
1,301,098 |
- | ||||
|
Senior Unsecured Notes |
||||||
|
8.75% Senior Notes due 2020, net |
392,666 |
445,402 | ||||
|
7.5% Senior Notes due 2021 |
759,711 |
1,178,486 | ||||
|
8.125% Senior Notes due 2022 |
527,737 |
750,000 | ||||
|
7.5% Senior Notes due 2023, net |
541,572 |
821,548 | ||||
|
Convertible Senior Unsecured Notes |
||||||
|
8.125% Convertible Senior Notes due 2022, net |
82,294 |
- | ||||
|
7.5% Convertible Senior Notes due 2023, net |
26,428 |
- | ||||
|
Total debt |
3,631,506 |
3,195,436 | ||||
|
Stockholders' (deficit) equity |
||||||
|
Preferred stock |
6 |
6 | ||||
|
Common stock |
630 |
477 | ||||
|
Additional paid-in capital |
5,299,886 |
5,201,524 | ||||
|
Treasury stock, at cost |
(5,742) |
(6,980) | ||||
|
Accumulated deficit |
(6,992,697) |
(3,257,202) | ||||
|
Total SandRidge Energy, Inc. stockholders' (deficit) equity |
(1,697,917) |
1,937,825 | ||||
|
Noncontrolling interest |
510,184 |
1,271,995 | ||||
|
Total capitalization |
$2,443,773 |
$6,405,256 | ||||
Non-GAAP Financial Measures
Adjusted operating cash flow, adjusted EBITDA, pro forma adjusted EBITDA, adjusted net (loss) income, and adjusted net income attributable to noncontrolling interest are non-GAAP financial measures.
The Company defines adjusted operating cash flow as net cash provided by operating activities before changes in operating assets and liabilities and adjusted for cash paid on financing derivatives. It defines EBITDA as net (loss) income before income tax expense (benefit), interest expense and depreciation, depletion and amortization and accretion of asset retirement obligations. Adjusted EBITDA, as presented herein, is EBITDA excluding asset impairment, interest income, gain on derivative contracts net of cash received on settlement of derivative contracts, loss on settlement of contract, (gain) loss on sale of assets, legal settlements, severance, oil field services – Permian exit costs, gain on extinguishment of debt and other various items (including non-cash portion of noncontrolling interest and stock-based compensation). Pro forma adjusted EBITDA, as presented herein, is adjusted EBITDA excluding adjusted EBITDA attributable to properties or subsidiaries sold during or after the period.
Adjusted operating cash flow and adjusted EBITDA are supplemental financial measures used by the Company's management and by securities analysts, investors, lenders, rating agencies and others who follow the industry as an indicator of the Company's ability to internally fund exploration and development activities and to service or incur additional debt. The Company also uses these measures because adjusted operating cash flow and adjusted EBITDA relate to the timing of cash receipts and disbursements that the Company may not control and may not relate to the period in which the operating activities occurred. Further, adjusted operating cash flow and adjusted EBITDA allow the Company to compare its operating performance and return on capital with those of other companies without regard to financing methods and capital structure. These measures should not be considered in isolation or as a substitute for net cash provided by operating activities prepared in accordance with generally accepted accounting principles ("GAAP"). Adjusted EBITDA should not be considered as a substitute for net income, operating income, cash flows from operating activities or any other measure of financial performance or liquidity presented in accordance with GAAP. Adjusted EBITDA excludes some, but not all, items that affect net income and operating income and these measures may vary among other companies. Therefore, the Company's adjusted EBITDA may not be comparable to similarly titled measures used by other companies.
Management also uses the supplemental financial measure of adjusted net (loss) income, which excludes asset impairment, gain on derivative contracts net of cash received on settlement of derivative contracts, loss on convertible notes derivative liabilities, loss on settlement of contract, (gain) loss on sale of assets, legal settlements, severance, oil field services – Permian exit costs, gain on extinguishment of debt and other non-cash items from loss applicable to common stockholders. Management uses this financial measure as an indicator of the Company's operational trends and performance relative to other oil and natural gas companies and believes it is more comparable to earnings estimates provided by securities analysts. Adjusted net (loss) income is not a measure of financial performance under GAAP and should not be considered a substitute for loss applicable to common stockholders.
The supplemental measure of adjusted net income attributable to noncontrolling interest is used by the Company's management to measure the impact on the Company's financial results of the ownership by third parties of interests in the Company's less than wholly-owned consolidated subsidiaries. Adjusted net income attributable to noncontrolling interest excludes the portion of asset impairment and gain on derivative contracts net of cash received on settlement of derivative contracts attributable to third party ownership in less than wholly-owned consolidated subsidiaries from net (loss) income attributable to noncontrolling interest. Adjusted net income attributable to noncontrolling interest is not a measure of financial performance under GAAP and should not be considered a substitute for net (loss) income attributable to noncontrolling interest.
The tables below reconcile the most directly comparable GAAP financial measures to operating cash flow, EBITDA and adjusted EBITDA, adjusted net (loss) income available to common stockholders and adjusted net income attributable to noncontrolling interest.
|
Reconciliation of Cash Provided by Operating Activities to Adjusted Operating Cash Flow | |||||||||||
|
Three Months Ended December 31, |
Year Ended December 31, | ||||||||||
|
2015 |
2014 |
2015 |
2014 | ||||||||
|
(in thousands) | |||||||||||
|
Net cash provided by operating activities |
$ 12,651 |
$225,430 |
$373,537 |
$621,114 | |||||||
|
(Deduct) add |
|||||||||||
|
Cash paid on financing derivatives |
- |
- |
- |
(44,128) | |||||||
|
Changes in operating assets and liabilities |
(68,466) |
(22,890) |
(127,550) |
134,725 | |||||||
|
Adjusted operating cash flow |
$(55,815) |
$202,540 |
$245,987 |
$711,711 | |||||||
|
Reconciliation of Net (Loss) Income to EBITDA, Adjusted EBITDA, and Pro Forma Adjusted EBITDA | |||||||||||
|
Three Months Ended December 31, |
Year Ended December 31, | ||||||||||
|
2015 |
2014 |
2015 |
2014 | ||||||||
|
(in thousands) | |||||||||||
|
Net (loss) income |
$(653,698) |
$265,177 |
$(3,697,545) |
$253,285 | |||||||
|
Adjusted for |
|||||||||||
|
Income tax expense (benefit) |
33 |
(162) |
123 |
(2,293) | |||||||
|
Interest expense |
108,303 |
60,478 |
322,502 |
244,712 | |||||||
|
Depreciation and amortization - other |
10,148 |
14,286 |
47,382 |
59,636 | |||||||
|
Depreciation and depletion - oil and natural gas |
53,007 |
109,274 |
319,913 |
434,295 | |||||||
|
Accretion of asset retirement obligations |
1,154 |
1,165 |
4,477 |
9,092 | |||||||
|
EBITDA |
(481,053) |
450,218 |
(3,003,148) |
998,727 | |||||||
|
Asset impairment |
886,844 |
24,802 |
4,534,689 |
192,768 | |||||||
|
Interest income |
(451) |
(58) |
(1,081) |
(603) | |||||||
|
Stock-based compensation |
2,171 |
3,494 |
11,465 |
15,504 | |||||||
|
Gain on derivative contracts |
(14,027) |
(329,219) |
(73,061) |
(334,011) | |||||||
|
Cash received upon settlement of derivative contracts (1) |
49,123 |
60,611 |
327,702 |
37,229 | |||||||
|
Loss on settlement of contract |
50,976 |
- |
50,976 |
- | |||||||
|
(Gain) loss on sale of assets |
(606) |
988 |
1,491 |
10 | |||||||
|
Legal settlements |
3 |
- |
4,997 |
23 | |||||||
|
Severance |
(115) |
(53) |
11,704 |
8,874 | |||||||
|
Oil field services - Permian exit costs |
83 |
- |
4,436 |
- | |||||||
|
Gain on extinguishment of debt |
(282,498) |
- |
(641,131) |
- | |||||||
|
Other |
3,059 |
187 |
6,735 |
(135) | |||||||
|
Non-cash portion of noncontrolling interest (2) |
(146,268) |
13,465 |
(708,238) |
(45,053) | |||||||
|
Adjusted EBITDA |
$ 67,241 |
$224,435 |
$ 527,536 |
$873,333 | |||||||
|
Less: EBITDA attributable to WTO properties (2016) |
11,932 |
14,262 |
61,434 |
52,835 | |||||||
|
Less: EBITDA attributable to Gulf of Mexico properties (2014) |
- |
- |
- |
(53,376) | |||||||
|
Pro forma adjusted EBITDA |
$ 79,173 |
$238,697 |
$ 588,970 |
$872,792 | |||||||
|
(1) |
Excludes amounts paid upon early settlement of derivative contracts for the year ended December 31, 2014. | ||||||||||
|
(2) |
Represents depreciation and depletion, impairment, (gain) loss on commodity derivative contracts net of cash received (paid) on settlement and income tax expense attributable to noncontrolling interests. | ||||||||||
|
Reconciliation of Cash Provided by Operating Activities to Adjusted EBITDA | |||||||||||
|
Three Months Ended December 31, |
Year Ended December 31, | ||||||||||
|
2015 |
2014 |
2015 |
2014 | ||||||||
|
(in thousands) | |||||||||||
|
Net cash provided by operating activities |
$12,651 |
$225,430 |
$373,537 |
$621,114 | |||||||
|
Changes in operating assets and liabilities |
(68,466) |
(22,890) |
(127,550) |
134,725 | |||||||
|
Interest expense |
108,303 |
60,478 |
322,502 |
244,712 | |||||||
|
Cash paid on early settlement of derivative contracts |
- |
- |
- |
25,434 | |||||||
|
Cash paid on early conversion of convertible notes |
30,033 |
- |
32,741 |
- | |||||||
|
Cash paid on settlement of contract |
24,889 |
- |
24,889 |
- | |||||||
|
Loss on convertible notes derivative liability |
(20,523) |
- |
(10,377) |
- | |||||||
|
Legal settlements |
3 |
- |
4,997 |
23 | |||||||
|
Severance |
(687) |
(53) |
6,317 |
6,722 | |||||||
|
Oil field services - Permian exit costs |
63 |
- |
4,338 |
- | |||||||
|
Noncontrolling interest - SDT (1) |
(6,760) |
(7,051) |
(25,997) |
(24,412) | |||||||
|
Noncontrolling interest - SDR (1) |
(4,216) |
(9,010) |
(20,493) |
(41,261) | |||||||
|
Noncontrolling interest - PER (1) |
(5,028) |
(19,353) |
(38,240) |
(77,988) | |||||||
|
Noncontrolling interest - Other (1) |
- |
- |
- |
(4) | |||||||
|
Other |
(3,021) |
(3,116) |
(19,128) |
(15,732) | |||||||
|
Adjusted EBITDA |
$67,241 |
$224,435 |
$527,536 |
$873,333 | |||||||
|
(1) |
Excludes depreciation and depletion, impairment, (gain) loss on commodity derivative contracts net of cash received (paid) on settlement and income tax expense attributable to noncontrolling interests. | ||||||||||
|
Reconciliation of (Loss Applicable) Income Available to Common Stockholders to Adjusted Net (Loss) Income Available to Common Stockholders | |||||||||||
|
Three Months Ended December 31, |
Year Ended December 31, | ||||||||||
|
2015 |
2014 |
2015 |
2014 | ||||||||
|
(in thousands) | |||||||||||
|
(Loss applicable) income available to common stockholders |
$(664,579) |
$254,295 |
$(3,735,495) |
$203,260 | |||||||
|
Tax benefit adjustment |
- |
- |
- |
(1,160) | |||||||
|
Asset impairment (1) |
751,120 |
24,802 |
3,878,804 |
162,895 | |||||||
|
Gain on derivative contracts (1) |
(13,485) |
(297,028) |
(67,411) |
(304,636) | |||||||
|
Cash received upon settlement of derivative contracts (1) |
41,540 |
50,109 |
291,203 |
31,609 | |||||||
|
Loss on convertible notes derivative liability |
20,523 |
- |
10,377 |
- | |||||||
|
Loss on settlement of contract |
50,976 |
- |
50,976 |
- | |||||||
|
(Gain) loss on sale of assets |
(606) |
988 |
1,491 |
10 | |||||||
|
Legal settlements |
3 |
- |
4,997 |
23 | |||||||
|
Severance |
(115) |
(53) |
11,704 |
8,874 | |||||||
|
Oil field services - Permian exit costs |
83 |
- |
4,436 |
- | |||||||
|
Gain on extinguishment of debt |
(282,498) |
- |
(641,131) |
- | |||||||
|
Other |
3,481 |
267 |
5,384 |
(701) | |||||||
|
Effect of income taxes |
24 |
(114) |
101 |
(330) | |||||||
|
Adjusted net (loss) income available to common stockholders |
(93,533) |
33,266 |
(184,564) |
99,844 | |||||||
|
Preferred stock dividends |
10,881 |
10,882 |
37,950 |
50,025 | |||||||
|
Effect of convertible debt, net of income taxes |
9,151 |
- |
11,707 |
- | |||||||
|
Total adjusted net (loss) income |
$ (73,501) |
$ 44,148 |
$ (134,907) |
$149,869 | |||||||
|
Weighted average number of common shares outstanding |
|||||||||||
|
Basic |
586,801 |
463,174 |
521,936 |
479,644 | |||||||
|
Diluted (2) |
805,368 |
551,304 |
641,608 |
571,453 | |||||||
|
Total adjusted net (loss) income |
|||||||||||
|
Per share - basic |
$ (0.16) |
$ 0.07 |
$ (0.35) |
$ 0.21 | |||||||
|
Per share - diluted |
$ (0.09) |
$ 0.08 |
$ (0.21) |
$ 0.26 | |||||||
|
(1) |
Excludes amounts attributable to noncontrolling interests. | ||||||||||
|
(2) |
Weighted average fully diluted common shares outstanding for certain periods presented includes shares that are considered antidilutive for calculating earnings per share in accordance with GAAP. | ||||||||||
|
Reconciliation of Net (Loss) Income Attributable to Noncontrolling Interest to Adjusted Net Income Attributable to Noncontrolling Interest | |||||||||||
|
Three Months Ended December 31, |
Year Ended December 31, | ||||||||||
|
2015 |
2014 |
2015 |
2014 | ||||||||
|
(in thousands) | |||||||||||
|
Net (loss) income attributable to noncontrolling interest |
$(130,263) |
$48,880 |
$(623,506) |
$ 98,613 | |||||||
|
Asset impairment |
135,724 |
- |
655,885 |
29,873 | |||||||
|
Gain on derivative contracts |
(542) |
(32,191) |
(5,650) |
(29,375) | |||||||
|
Cash received on settlement of derivative contracts |
7,583 |
10,502 |
36,499 |
5,620 | |||||||
|
Adjusted net income attributable to noncontrolling interest |
$ 12,502 |
$27,191 |
$ 63,228 |
$104,731 | |||||||
|
SandRidge Energy, Inc. and Subsidiaries | ||||||||||
|
Condensed Consolidated Statements of Operations | ||||||||||
|
(In thousands, except per share data) | ||||||||||
|
Three Months Ended December 31, |
Year Ended December 31, | |||||||||
|
2015 |
2014 |
2015 |
2014 | |||||||
|
Revenues |
||||||||||
|
Oil, natural gas and NGL |
$ 132,035 |
$ 316,044 |
$ 707,434 |
$ 1,420,879 | ||||||
|
Drilling and services |
2,466 |
18,808 |
22,124 |
76,088 | ||||||
|
Midstream and marketing |
7,601 |
10,952 |
33,809 |
55,658 | ||||||
|
Other |
1,540 |
1,077 |
5,342 |
6,133 | ||||||
|
Total revenues |
143,642 |
346,881 |
768,709 |
1,558,758 | ||||||
|
Expenses |
||||||||||
|
Production |
64,543 |
89,615 |
308,701 |
346,088 | ||||||
|
Production taxes |
2,892 |
7,704 |
15,440 |
31,731 | ||||||
|
Cost of sales |
2,360 |
17,213 |
24,394 |
56,155 | ||||||
|
Midstream and marketing |
4,355 |
9,246 |
26,819 |
49,905 | ||||||
|
Depreciation and depletion - oil and natural gas |
53,007 |
109,274 |
319,913 |
434,295 | ||||||
|
Depreciation and amortization - other |
10,148 |
14,286 |
47,382 |
59,636 | ||||||
|
Accretion of asset retirement obligations |
1,154 |
1,165 |
4,477 |
9,092 | ||||||
|
Impairment |
886,844 |
24,802 |
4,534,689 |
192,768 | ||||||
|
General and administrative |
41,402 |
27,823 |
150,166 |
122,865 | ||||||
|
Gain on derivative contracts |
(14,027) |
(329,219) |
(73,061) |
(334,011) | ||||||
|
Loss on settlement of contract |
50,976 |
- |
50,976 |
- | ||||||
|
(Gain) loss on sale of assets |
(606) |
988 |
1,491 |
10 | ||||||
|
Total expenses |
1,103,048 |
(27,103) |
5,411,387 |
968,534 | ||||||
|
(Loss) income from operations |
(959,406) |
373,984 |
(4,642,678) |
590,224 | ||||||
|
Other (expense) income |
||||||||||
|
Interest expense |
(107,852) |
(60,420) |
(321,421) |
(244,109) | ||||||
|
Gain on extinguishment of debt |
282,498 |
- |
641,131 |
- | ||||||
|
Other income, net |
832 |
331 |
2,040 |
3,490 | ||||||
|
Total other income (expense) |
175,478 |
(60,089) |
321,750 |
(240,619) | ||||||
|
(Loss) income before income taxes |
(783,928) |
313,895 |
(4,320,928) |
349,605 | ||||||
|
Income tax expense (benefit) |
33 |
(162) |
123 |
(2,293) | ||||||
|
Net (loss) income |
(783,961) |
314,057 |
(4,321,051) |
351,898 | ||||||
|
Less: net (loss) income attributable to noncontrolling interest |
(130,263) |
48,880 |
(623,506) |
98,613 | ||||||
|
Net (loss) income attributable to SandRidge Energy, Inc. |
(653,698) |
265,177 |
(3,697,545) |
253,285 | ||||||
|
Preferred stock dividends |
10,881 |
10,882 |
37,950 |
50,025 | ||||||
|
(Loss applicable) income available to SandRidge Energy, Inc. common stockholders |
||||||||||
|
$ (664,579) |
$ 254,295 |
$ (3,735,495) |
$ 203,260 | |||||||
|
(Loss) income per share |
||||||||||
|
Basic |
$ (1.13) |
$ 0.55 |
$ (7.16) |
$ 0.42 | ||||||
|
Diluted |
$ (1.13) |
$ 0.48 |
$ (7.16) |
$ 0.42 | ||||||
|
Weighted average number of common shares outstanding |
||||||||||
|
Basic |
586,801 |
463,174 |
521,936 |
479,644 | ||||||
|
Diluted |
586,801 |
551,304 |
521,936 |
499,743 | ||||||
|
SandRidge Energy, Inc. and Subsidiaries | ||||||||
|
Condensed Consolidated Balance Sheets | ||||||||
|
(In thousands, except per share data) | ||||||||
|
December 31, | ||||||||
|
2015 |
2014 | |||||||
|
ASSETS |
||||||||
|
Current assets |
||||||||
|
Cash and cash equivalents |
$ 435,588 |
$ 181,253 | ||||||
|
Accounts receivable, net |
127,387 |
330,077 | ||||||
|
Derivative contracts |
84,349 |
291,414 | ||||||
|
Prepaid expenses |
6,833 |
7,981 | ||||||
|
Other current assets |
19,931 |
21,193 | ||||||
|
Total current assets |
674,088 |
831,918 | ||||||
|
Oil and natural gas properties, using full cost method of accounting |
||||||||
|
Proved |
12,529,681 |
11,707,147 | ||||||
|
Unproved |
363,149 |
290,596 | ||||||
|
Less: accumulated depreciation, depletion and impairment |
(11,149,888) |
(6,359,149) | ||||||
|
1,742,942 |
5,638,594 | |||||||
|
Other property, plant and equipment, net |
491,760 |
576,463 | ||||||
|
Derivative contracts |
- |
47,003 | ||||||
|
Other assets |
82,365 |
165,247 | ||||||
|
Total assets |
$ 2,991,155 |
$ 7,259,225 | ||||||
|
LIABILITIES AND STOCKHOLDERS' (DEFICIT) EQUITY |
||||||||
|
Current liabilities |
||||||||
|
Accounts payable and accrued expenses |
$ 428,417 |
$ 683,392 | ||||||
|
Derivative contracts |
573 |
- | ||||||
|
Asset retirement obligations |
8,399 |
- | ||||||
|
Deferred tax liability |
- |
95,843 | ||||||
|
Other current liabilities |
- |
5,216 | ||||||
|
Total current liabilities |
437,389 |
784,451 | ||||||
|
Long-term debt |
3,631,506 |
3,195,436 | ||||||
|
Asset retirement obligations |
95,179 |
54,402 | ||||||
|
Other long-term obligations |
14,814 |
15,116 | ||||||
|
Total liabilities |
4,178,888 |
4,049,405 | ||||||
|
Commitments and contingencies |
||||||||
|
Equity |
||||||||
|
SandRidge Energy, Inc. stockholders' (deficit) equity |
||||||||
|
Preferred stock, $0.001 par value, 50,000 shares authorized |
||||||||
|
8.5% Convertible perpetual preferred stock; 2,650 shares issued and outstanding at December 31, 2015 and 2014; aggregate liquidation preference of $265,000 |
3 |
3 | ||||||
|
7.0% Convertible perpetual preferred stock; 2,770 shares issued and outstanding at December 31, 2015, aggregate liquidation preference of $277,000; 3,000 shares issued and outstanding at December 31, 2014, aggregate liquidation preference of $300,000 |
3 |
3 | ||||||
|
Common stock, $0.001 par value; 1,800,000 shares authorized, 635,584 issued and 633,471 outstanding at December 31, 2015; 800,000 shares authorized, 485,932 issued and 484,819 outstanding at December 31, 2014 |
630 |
477 5,204,024 | ||||||
|
Additional paid-in capital |
5,301,136 |
|||||||
|
Additional paid-in capital - stockholder receivable |
(1,250) |
(2,500) | ||||||
|
Treasury stock, at cost |
(5,742) |
(6,980) | ||||||
|
Accumulated deficit |
(6,992,697) |
(3,257,202) | ||||||
|
Total SandRidge Energy, Inc. stockholders' (deficit) equity |
(1,697,917) |
1,937,825 | ||||||
|
Noncontrolling interest |
510,184 |
1,271,995 | ||||||
|
Total stockholders' (deficit) equity |
(1,187,733) |
3,209,820 | ||||||
|
Total liabilities and stockholders' (deficit) equity |
$ 2,991,155 |
$ 7,259,225 | ||||||
|
SandRidge Energy, Inc. and Subsidiaries | ||||||||
|
Condensed Consolidated Statements of Cash Flows | ||||||||
|
(In thousands) | ||||||||
|
Year Ended December 31, | ||||||||
|
2015 |
2014 | |||||||
|
CASH FLOWS FROM OPERATING ACTIVITIES |
||||||||
|
Net (loss) income |
$ (4,321,051) |
$ 351,898 | ||||||
|
Adjustments to reconcile net (loss) income to net cash provided by operating activities |
||||||||
|
Depreciation, depletion and amortization |
367,295 |
493,931 | ||||||
|
Accretion of asset retirement obligations |
4,477 |
9,092 | ||||||
|
Impairment |
4,534,689 |
192,768 | ||||||
|
Debt issuance costs amortization |
11,884 |
9,425 | ||||||
|
Amortization of discount, net of premium, on long-term debt |
3,130 |
529 | ||||||
|
Gain on extinguishment of debt |
(641,131) |
- | ||||||
|
Write off of debt issuance costs |
7,108 |
- | ||||||
|
Loss on convertible notes derivative liability |
10,377 |
- | ||||||
|
Cash paid on early conversion of convertible notes |
(32,741) |
- | ||||||
|
Gain on derivative contracts |
(73,061) |
(334,011) | ||||||
|
Cash received on settlement of derivative contracts |
327,702 |
11,796 | ||||||
|
Loss on settlement of contract |
50,976 |
- | ||||||
|
Cash paid on settlement of contract |
(24,889) |
- | ||||||
|
Loss on sale of assets |
1,491 |
10 | ||||||
|
Stock-based compensation |
18,380 |
19,994 | ||||||
|
Other |
1,351 |
407 | ||||||
|
Changes in operating assets and liabilities increasing (decreasing) cash |
||||||||
|
Receivables |
201,907 |
(63,492) | ||||||
|
Prepaid expenses |
1,148 |
9,549 | ||||||
|
Other current assets |
12,710 |
3,164 | ||||||
|
Other assets and liabilities, net |
2,239 |
(1,132) | ||||||
|
Accounts payable and accrued expenses |
(86,470) |
(66,492) | ||||||
|
Asset retirement obligations |
(3,984) |
(16,322) | ||||||
|
Net cash provided by operating activities |
373,537 |
621,114 | ||||||
|
CASH FLOWS FROM INVESTING ACTIVITIES |
||||||||
|
Capital expenditures for property, plant and equipment |
(879,201) |
(1,553,332) | ||||||
|
Acquisitions of assets |
(216,943) |
(18,384) | ||||||
|
Proceeds from sale of assets |
56,504 |
714,475 | ||||||
|
Net cash used in investing activities |
(1,039,640) |
(857,241) | ||||||
|
CASH FLOWS FROM FINANCING ACTIVITIES |
||||||||
|
Proceeds from borrowings |
2,065,000 |
- | ||||||
|
Repayments of borrowings |
(939,466) |
- | ||||||
|
Debt issuance costs |
(53,244) |
(3,947) | ||||||
|
Proceeds from the sale of royalty trust units |
- |
22,119 | ||||||
|
Noncontrolling interest distributions |
(138,305) |
(193,807) | ||||||
|
Acquisition of ownership interest |
- |
(2,730) | ||||||
|
Stock-based compensation excess tax benefit |
- |
14 | ||||||
|
Purchase of treasury stock |
(3,535) |
(8,702) | ||||||
|
Repurchase of common stock |
- |
(111,827) | ||||||
|
Dividends paid - preferred |
(11,262) |
(55,525) | ||||||
|
Cash received on shareholder receivable |
1,250 |
1,250 | ||||||
|
Cash paid on settlement of financing derivative contracts |
- |
(44,128) | ||||||
|
Net cash provided by (used in) financing activities |
920,438 |
(397,283) | ||||||
|
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS |
254,335 |
(633,410) | ||||||
|
CASH AND CASH EQUIVALENTS, beginning of year |
181,253 |
814,663 | ||||||
|
CASH AND CASH EQUIVALENTS, end of period |
$ 435,588 |
$ 181,253 | ||||||
|
Supplemental Disclosure of Cash Flow Information |
||||||||
|
Cash paid for interest, net of amounts capitalized |
$ (296,386) |
$ (235,793) | ||||||
|
Cash (paid) received for income taxes |
$ (88) |
$ 1,928 | ||||||
|
Supplemental Disclosure of Noncash Investing and Financing Activities |
||||||||
|
Change in accrued capital expenditures |
$ 177,586 |
$ (55,557) | ||||||
|
Equity issued for debt |
$ (63,299) |
$ - | ||||||
|
Preferred stock dividends paid in common stock |
$ (16,188) |
$ - | ||||||
|
Long-term debt issued, including derivative and net of discount, |
$ (50,310) |
$ - | ||||||
For further information, please contact:
Duane M. Grubert
EVP – Investor Relations and Strategy
SandRidge Energy, Inc.
123 Robert S. Kerr Avenue
Oklahoma City, OK 73102-6406
(405) 429-5515
Cautionary Note to Investors - This press release includes "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, including, but not limited to, the information appearing under the heading "Operational Guidance." These statements express a belief, expectation or intention and are generally accompanied by words that convey projected future events or outcomes. The forward-looking statements include projections and estimates of the Company's corporate strategies, future operations, drilling plans and capital expenditures. We have based these forward-looking statements on our current expectations and assumptions and analyses made by us in light of our experience and our perception of historical trends, current conditions and expected future developments, as well as other factors we believe are appropriate under the circumstances. However, whether actual results and developments will conform with our expectations and predictions is subject to a number of risks and uncertainties, including the volatility of oil and natural gas prices, our success in discovering, estimating, developing and replacing oil and natural gas reserves, actual decline curves and the actual effect of adding compression to natural gas wells, the availability and terms of capital, the ability of counterparties to transactions with us to meet their obligations, our timely execution of hedge transactions, credit conditions of global capital markets, changes in economic conditions, the amount and timing of future development costs, the availability and demand for alternative energy sources, regulatory changes, including those related to carbon dioxide and greenhouse gas emissions, and other factors, many of which are beyond our control. We refer you to the discussion of risk factors in Part I, Item 1A - "Risk Factors" of our Annual Report on Form 10-K for the year ended December 31, 2014 and in comparable "Risk Factor" sections of our Quarterly Reports on Form 10-Q filed after the date of this press release. All of the forward-looking statements made in this press release are qualified by these cautionary statements. The actual results or developments anticipated may not be realized or, even if substantially realized, they may not have the expected consequences to or effects on our Company or our business or operations. Such statements are not guarantees of future performance and actual results or developments may differ materially from those projected in the forward-looking statements. We undertake no obligation to update or revise any forward-looking statements.
SandRidge Energy, Inc. (OTC PINK: SDOC) is an oil and natural gas exploration and production company headquartered in Oklahoma City, Oklahoma with its principal focus on developing high-return, growth-oriented projects in the U.S. Mid-Continent and Niobrara Shale.
Logo - http://photos.prnewswire.com/prnh/20120416/DA88110LOGO
SOURCE SandRidge Energy, Inc.
Article Date
3/29/2016SandRidge Energy, Inc. Announces 2015 Fourth Quarter and Full-Year Financial and Operational Results Release Date
Source: PR Newswire
Orignial Article: http://www.prnewswire.com...
OKLAHOMA CITY, March 21, 2016 /PRNewswire/ -- SandRidge Energy, Inc. (the "Company") (OTC PINK: SDOC) will release its 2015 fourth quarter and full-year financial and operational results after the close of trading on the New York Stock Exchange on Tuesday, March 29, 2016.
About SandRidge Energy, Inc.
SandRidge Energy, Inc. (OTC PINK: SDOC) is an oil and natural gas exploration and production company headquartered in Oklahoma City, Oklahoma with its principal focus on developing high-return, growth-oriented projects in the U.S. Mid-Continent and Niobrara Shale.
CONTACT:
Duane M. Grubert
EVP – Investor Relations and Strategy
SandRidge Energy, Inc.
123 Robert S. Kerr Avenue
Oklahoma City, OK 73102
+1 (405) 429-5515
Logo - http://photos.prnewswire.com/prnh/20120416/DA88110LOGO
SOURCE SandRidge Energy, Inc.
Article Date
3/21/20162/17/2016 - SandRidge Energy, Inc. Elects to Exercise Grace Period for Payment of Senior Notes Interest
SandRidge Energy, Inc. Elects to Exercise Grace Period for Payment of Senior Notes Interest
Source: PR Newswire
OKLAHOMA CITY, Feb. 17, 2016 /PRNewswire/ -- SandRidge Energy, Inc. (the "Company") (OTC PINK: SDOC) announced today that it elected to exercise its grace period and defer making approximately $21.7 million in interest payments due February 16, 2016, on its outstanding $543.6 million principal amount of 7.5% senior notes due 2023 and its outstanding $46.9 million principal amount of 7.5% senior convertible notes due 2023. The Company has sufficient liquidity to make these interest payments, but has elected to use the 30-day grace period in connection with its ongoing discussions with stakeholders. Entry into the grace period does not constitute an event of default under the indenture governing the notes.
"With a strong cash balance, we will continue operations without interruption, including paying employees, vendors and service providers," said James Bennett, SandRidge President and CEO. "Today's actions will preserve liquidity and flexibility as we continue to engage in constructive dialogue with our stakeholders."
Cautionary Note to Investors
This press release includes "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These statements express a belief, expectation or intention and are generally accompanied by words that convey projected future events or outcomes. The forward-looking statements include continuing operations without interruption and continuing payments to employees, vendors and service providers. We have based these forward-looking statements on our current expectations and assumptions and analyses made by us in light of our experience and our perception of historical trends, current conditions and expected future developments, as well as other factors we believe are appropriate under the circumstances. However, whether actual results and developments will conform with our expectations and predictions is subject to a number of risks and uncertainties, including government and regulatory actions, potential limitations on our ability to maintain contracts and other critical business relationships; requirements for adequate liquidity to fund our operations in the future, including obtaining sufficient financing on acceptable terms; and other matters related to the potential restructuring and our indebtedness, as well as the volatility of oil and natural gas prices, our success in discovering, estimating, developing and replacing oil and natural gas reserves, actual decline curves and the actual effect of adding compression to natural gas wells, the availability and terms of capital, the ability of counterparties to transactions with us to meet their obligations, our timely execution of hedge transactions, credit conditions of global capital markets, changes in economic conditions, the amount and timing of future development costs, the availability and demand for alternative energy sources, regulatory changes, including those related to carbon dioxide and greenhouse gas emissions, and other factors, many of which are beyond our control. All of the forward-looking statements made in this press release are qualified by these cautionary statements. The actual results or developments anticipated may not be realized or, even if substantially realized, they may not have the expected consequences to or effects on our Company or our business or operations. Such statements are not guarantees of future performance and actual results or developments may differ materially from those projected in the forward-looking statements. We undertake no obligation to update or revise any forward-looking statements.
About SandRidge Energy, Inc.
SandRidge Energy, Inc. (OTC PINK: SDOC) is an oil and natural gas exploration and production company headquartered in Oklahoma City, Oklahoma with its principal focus on developing high-return, growth-oriented projects in the U.S. Mid-Continent and Niobrara Shale.
www.sandridgeenergy.com
CONTACT:
Duane Grubert
EVP – Investor Relations & Strategy
SandRidge Energy, Inc.
123 Robert S. Kerr Avenue
Oklahoma City, OK 73102
+1 (405) 429-5515
Logo - http://photos.prnewswire.com/prnh/20120416/DA88110LOGO
SOURCE SandRidge Energy, Inc.
Article Date
2/17/2016SandRidge Energy, Inc. Announces Settlement and Termination of Obligations Under Gas Treating and CO2 Delivery Agreement
Source: PR Newswire
Orignial Article: http://www.prnewswire.com...
OKLAHOMA CITY, Jan. 22, 2016 /PRNewswire/ -- SandRidge Energy, Inc. (the "Company") (OTC PINK: SDOC) today announced that it and a third party have agreed to settle all claims between them arising out of a 30-year agreement for the removal of CO2 from natural gas volumes produced by the Company in the Piñon field in west Texas. Under the terms of the settlement, which was executed and closed simultaneously on January 21, 2016, the Company transferred substantially all of its exploration and production and midstream assets in the Piñon field to a wholly-owned subsidiary of Occidental Petroleum Corporation along with $11 million cash. SandRidge was released from all past, current, and future claims and obligations related to the gas treating agreement, which contained minimum CO2 volume commitments until 2041, and the parties agreed to dismiss pending litigation between them related thereto.
The exploration and production assets, which were 99% gas, represented approximately 6% of the Company's total production and 17% of its total lease operating expense in the third quarter of 2015. As of December 31, 2015, the assets included 24,598 MBoe of proved reserves with a present value of approximately $13.3 million based on SEC pricing. Midstream assets comprised 370 miles of gathering lines acquired from a third party in the fourth quarter of 2015, 100 miles of CO2 pipelines and other related pipeline and processing infrastructure. The agreement also includes the transfer of seismic data covering more than 1,300 square miles of the West Texas Overthrust region (WTO) and other properties in the WTO region. The transaction is expected to lower the Company's operating expenses by approximately $39 million in 2016.
The settlement releases the Company from significant deficiency payments. The Company's Form 10-Q for the third quarter of 2015, and as of September 30, 2015, discloses the amounts the Company would have paid under the agreements for annual delivery deficiency payments for the contract years from 2012 through 2019, a portion of which has already been accrued, and the potential penalty the Company would have had to pay in 2020 to eliminate CO2 volume requirements for contract years 2020 through 2041.
James Bennett, President and CEO, commented, "After many months of focused effort, I am pleased to announce the closing of an agreement that brings an end to our west Texas CO2 delivery obligations and associated deficiency payments. In this transaction we are eliminating a significant liability while also improving our annual cash flows, both of which are consistent with our stated business objectives. With significantly lower operating expenses, we can move forward with renewed attention to the development of our Mid-Continent and Niobrara assets."
About SandRidge Energy, Inc.
SandRidge Energy, Inc. (OTC PINK: SDOC) is an oil and natural gas exploration and production company headquartered in Oklahoma City, Oklahoma with its principal focus on developing high-return, growth-oriented projects in the U.S. Mid-Continent and Niobrara Shale.
CONTACT:
Duane Grubert
EVP – Investor Relations & Strategy
SandRidge Energy, Inc.
123 Robert S. Kerr Avenue
Oklahoma City, OK 73102
+1 (405) 429-5515
Logo - http://photos.prnewswire.com/prnh/20120416/DA88110LOGO
SOURCE SandRidge Energy, Inc.
Article Date
1/22/2016SandRidge Energy, Inc. Announces Suspension of Semi-Annual Preferred Stock Dividend
Source: PR Newswire
Orignial Article: http://www.prnewswire.com...
OKLAHOMA CITY, Jan. 8, 2016 /PRNewswire/ -- SandRidge Energy, Inc. (the "Company") (OTC PINK: SDOC) today announced that its Board of Directors has decided to suspend payment of the $4.25 per share semi-annual dividend on shares of its 8.5% Convertible Perpetual Preferred Stock.
The dividend suspension follows the prior suspension of dividend payments on shares of the Company's 7.0% Convertible Perpetual Preferred Stock announced on September 28, 2015 and reflects the Company's continued focus on preservation of liquidity, prudent capital allocation and support of long-term enterprise value.
The Company has 2,650,000 shares of 8.5% Convertible Perpetual Preferred Stock outstanding and will continue to re-evaluate the dividend payment policy on a semi-annual basis.
The suspension of its dividend does not affect the Company's business operations and does not cause an event of default under any of its debt agreements.
About SandRidge Energy, Inc.
SandRidge Energy, Inc. (OTC PINK: SDOC) is an oil and natural gas exploration and production company headquartered in Oklahoma City, Oklahoma with its principal focus on developing high-return, growth oriented projects in the Mid-Continent region of the United States. In addition, SandRidge owns and operates a saltwater gathering and disposal system and a drilling rig and related oil field services business.
CONTACT:
Duane Grubert
EVP – Investor Relations & Strategy
SandRidge Energy, Inc.
123 Robert S. Kerr Avenue
Oklahoma City, OK 73102
+1 (405) 429-5515
Logo - http://photos.prnewswire.com/prnh/20120416/DA88110LOGO
SOURCE SandRidge Energy, Inc.
Article Date
1/8/2016Projects & Assets
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