OKLAHOMA
CITY, Aug. 7, 2024 /PRNewswire/ -- SandRidge
Energy, Inc. (the "Company" or "SandRidge") (NYSE: SD) today
announced financial and operational results for the three and
six-month periods ended June 30, 2024.
Recent Highlights
- On August 6, 2024, the Board of
Directors declared a $0.11 per share
cash dividend payable on August 30,
2024 to shareholders of record on August 16, 2024
- On July 29, 2024, the Company
announced the entry into a purchase and sale agreement to acquire
certain producing assets and leasehold interest in the Cherokee play of the Western Anadarko Basin for cash consideration
of $144 million, before customary
closing adjustments
- Second quarter net income was $8.8
million, or $0.24 per basic
share. Adjusted net income(1) was $6.4 million, or $0.17 per basic share
- Adjusted EBITDA(1) of $12.9
million for the three-month period ended June 30,
2024
- As of June 30, 2024, the Company had $211.3 million of cash and cash equivalents,
including restricted cash
- Approximately $2.5 million in
interest income for the quarter ended June 30, 2024
- Generated $23.5 million of free
cash flow(1) for the six-month period ended
June 30, 2024 which represents an approximate 85% conversion
rate relative to adjusted EBITDA(1)
Financial Results & Update
Profitability
Dollars in thousands
(except per share data)
|
2Q24
|
1Q24
|
Change
vs 1Q24
|
2Q23
|
Change
vs 2Q23
|
Net income
|
$ 8,794
|
$
11,125
|
$
(2,331)
|
$
16,637
|
$
(7,843)
|
Net Income per
share
|
$
0.24
|
$
0.30
|
$ (0.06)
|
$
0.45
|
$ (0.21)
|
Net cash provided by
operating activities
|
$
11,412
|
$
15,681
|
$
(4,269)
|
$
24,005
|
$
(12,593)
|
Adjusted net
income(1)
|
$ 6,353
|
$ 8,394
|
$
(2,041)
|
$
14,049
|
$
(7,696)
|
Adjusted net income per
share(1)
|
$
0.17
|
$
0.23
|
$ (0.06)
|
$
0.38
|
$ (0.21)
|
Adjusted operating cash
flow(1)
|
$
15,384
|
$
17,455
|
$
(2,071)
|
$
22,585
|
$
(7,201)
|
Adjusted
EBITDA(1)
|
$
12,934
|
$
14,717
|
$
(1,783)
|
$
19,980
|
$
(7,046)
|
Free cash
flow(1)
|
$ 8,967
|
$
14,539
|
$
(5,572)
|
$ 9,055
|
$
(88)
|
Free cash flow represents a conversion rate of approximately 85%
relative to adjusted EBITDA for the six months ended June 30, 2024.
Operational Results & Update
Production, Revenue & Realized Prices
|
2Q24
|
1Q24
|
Change
vs 1Q24
|
2Q23
|
Change
vs 2Q23
|
Production
|
|
|
|
|
|
MBoe
|
1,363
|
1,376
|
(13)
|
1,593
|
(230)
|
MBoed
|
15.0
|
15.1
|
(0.1)
|
17.5
|
(2.5)
|
Oil as percentage of
production
|
14 %
|
15 %
|
(1) %
|
18 %
|
(4) %
|
Natural gas as
percentage of production
|
54 %
|
58 %
|
(4) %
|
54 %
|
— %
|
NGLs as percentage of
production
|
32 %
|
27 %
|
5 %
|
28 %
|
4 %
|
|
|
|
|
|
|
Revenues
|
|
|
|
|
|
Oil, natural gas and
NGL revenues
|
$25,977
|
$30,283
|
$(4,306)
|
$33,419
|
$(7,442)
|
Oil as percentage of
revenues
|
57 %
|
51 %
|
6 %
|
59 %
|
(2) %
|
Natural gas as
percentage of revenues
|
11 %
|
20 %
|
(9) %
|
20 %
|
(9) %
|
NGLs as percentage of
revenues
|
32 %
|
29 %
|
3 %
|
21 %
|
11 %
|
|
|
|
|
|
|
Realized
Prices
|
|
|
|
|
|
Realized oil price per
barrel
|
$79.54
|
$75.08
|
$4.46
|
$68.02
|
$11.52
|
Realized natural gas
price per Mcf
|
$0.66
|
$1.25
|
$(0.59)
|
$1.31
|
$(0.65)
|
Realized NGL price per
barrel
|
$18.99
|
$23.65
|
$(4.66)
|
$15.97
|
$3.02
|
Realized price per
Boe
|
$19.06
|
$22.01
|
$(2.95)
|
$20.99
|
$(1.93)
|
Operating Costs
During the second quarter of 2024, lease operating expense
("LOE") was $8.7 million or
$6.41 per Boe. The Company continues
to focus on its operating costs and on safely maximizing the value
of its asset base through prudent expenditure programs, cost
management efforts, and continuous pursuit of efficiency in the
field.
Production Optimization Program
The Company remains focused on optimizing its stable,
low-decline production base, which has an estimated single-digit
annual PDP decline rate over the next ten years. SandRidge
continuously evaluates the potential for high-return projects that
further enhance its asset base. Such projects include, but are not
limited to, workovers, artificial lift improvements and conversions
from less efficient systems, recompletions of "behind pipe" pay in
vertical section of existing wells, and the restimulation of
existing intervals and previously bypassed unstimulated intervals
in existing wells. When evaluating these and other options, the
Company ensures that all projects meet high rate of return
thresholds and remains capital disciplined as the commodity price
landscape changes.
Liquidity & Capital Structure
As of June 30, 2024, the Company had $211.3 million of cash and cash equivalents,
including restricted cash, diversified across multiple significant,
well-capitalized financial institutions. The Company has no
outstanding term or revolving debt obligations.
Dividend Program
Dollars in
thousands
|
Total
|
2Q24
|
1Q24
|
4Q23
|
3Q23
|
2Q23
|
Special
dividends(1)
|
$
130,207
|
$
—
|
$
55,868
|
$
—
|
$
—
|
$
74,339
|
Quarterly
dividends(1)
|
$
15,639
|
$ 4,103
|
$ 4,096
|
$ 3,721
|
$ 3,719
|
$
—
|
Total
dividends(1)
|
$
145,846
|
$ 4,103
|
$
59,964
|
$ 3,721
|
$ 3,719
|
$
74,339
|
|
(1) Includes
dividends payable on unvested restricted stock awards
|
|
Total
|
2Q24
|
1Q24
|
4Q23
|
3Q23
|
2Q23
|
Special dividends per
share
|
$
3.50
|
$
—
|
$
1.50
|
$
—
|
$
—
|
$
2.00
|
Quarterly dividends per
share
|
$
0.42
|
$
0.11
|
$
0.11
|
$
0.10
|
$
0.10
|
$
—
|
Total dividends per
share
|
$
3.92
|
$
0.11
|
$
1.61
|
$
0.10
|
$
0.10
|
$
2.00
|
On August 6, 2024, the Board of
Directors declared a $0.11 per share
cash dividend payable on August 30,
2024 to shareholders of record on August 16, 2024.
Acquisitions
On July 29, 2024, SandRidge
announced the entry into a definitive agreement to acquire certain
producing assets and leasehold interests in the Cherokee play of the Western Anadarko Basin for cash consideration
of $144 million, before customary
purchase price adjustments. The Company also entered into a Joint
Development Agreement ("JDA") governing its participation in the
future development of certain of the acquired leasehold
interests.
The acquisition includes 42 producing wells, 4 drilled
uncompleted ("DUC") wells which may be completed in 2024 and
leasehold interest in 11 drilling and spacing units
("DSUs") focused in Ellis and
Roger Mills counties in
Oklahoma. Upon closing, the
Company will work with its joint development partner, who has a
demonstrable history of successful operations in the Cherokee play, to plan and initiate a drilling
campaign, potentially as early as the fourth quarter of this year.
SandRidge will assume operatorship of the new wells after they are
producing.
The oily PDP production and new development associated with the
acquisition is projected to meaningfully increase SandRidge's
EBITDA and cash flow on a pro forma basis, while maintaining its
planned quarterly dividend.(1)
The acquisition effective date is July 1,
2024 and the transaction is anticipated to close during the
third quarter of 2024. SandRidge expects to fund the transaction
with cash on hand.
On June 13, 2024, the Company
closed on a separate acquisition of producing oil and gas assets
intermediately adjacent to its assets in Alfalfa, Grant, and Woods counties in Oklahoma for approximately $2 million, subject to customary post-closing
adjustments.
Outlook
SandRidge remains focused on growing the value of its asset base
in a safe, responsible and efficient manner, while exercising
prudent capital allocations to projects that provide high rates of
returns in the current commodity price environment. These
standalone projects include (1) artificial lift conversions to more
efficient and cost-effective systems, (2) high-graded re-fracturing
and recompletion and (3) opportunistic leasing that could bolster
future development and complement the recently acquired
Cherokee assets. The Company's
incumbent leasehold remains approximately 99% held by production,
which cost-effectively maintains its development option over a
reasonable tenor. These assets have higher relative gas content for
which prices are not yet at optimal levels to resume development or
material reactivations. However, SandRidge will continue to monitor
forward-looking commodity prices, project results, costs and other
factors that could influence returns on investments over an
expanded portfolio. These and other factors will continue to shape
the Company's development decisions in 2024 and beyond. More
information and updated guidance will be provided, subject to
closing the acquisition, before the end of the third quarter.
SandRidge remains vigilant in evaluating further merger and
acquisition opportunities, with consideration of its strong balance
sheet and commitment to its capital return program.
Environmental, Social, & Governance ("ESG")
SandRidge maintains its Environmental, Social, and Governance
("ESG") commitment, to include no routine flaring of produced
natural gas and transporting over 95% of its produced water via
pipeline instead of truck. Additionally, SandRidge maintains an
emphasis on the safety and training of our workforce. The Company
has personnel dedicated to the close monitoring of our safety
standards and daily operations.
Conference Call Information
The Company will host a conference call to discuss these results
on Thursday, August 8, 2024 at
1:00 pm CT. The conference call can
be accessed by registering online in advance at
https://registrations.events/direct/Q4I231503145728 at which
time registrants will receive dial-in information as well as a
conference ID. At the time of the call, participants will dial in
using the participant number and conference ID provided upon
registration. The Company's latest presentation is available on the
Company's website at investors.sandridgeenergy.com.
A live audio webcast of the conference call will also be
available via SandRidge's website, investors.sandridgeenergy.com,
under Presentation & Events. The webcast will be archived for
replay on the Company's website for at least 30 days.
Contact Information
Investor Relations
SandRidge Energy, Inc.
1 E. Sheridan Ave. Suite 500
Oklahoma City, OK 73104
investors@sandridgeenergy.com
About SandRidge Energy, Inc.
SandRidge Energy, Inc. (NYSE: SD) is an independent oil and gas
company engaged in the development, acquisition, and production of
oil and gas assets. Its primary area of operations is the
Mid-Continent region in Oklahoma
and Kansas. Further information
can be found at sandridgeenergy.com.
-Tables to Follow-
|
|
|
(1)
|
See "Non-GAAP Financial
Measures" section at the end of this press release for non-GAAP
financial measures definitions.
|
Operational and Financial Statistics
Information regarding the Company's production, pricing, costs
and earnings is presented below (unaudited):
|
Three Months
Ended
June
30,
|
|
Six Months
Ended
June
30,
|
|
2024
|
|
2023
|
|
2024
|
|
2023
|
Production -
Total
|
|
|
|
|
|
|
|
Oil (MBbl)
|
185
|
|
288
|
|
393
|
|
549
|
Natural Gas
(MMcf)
|
4,443
|
|
5,185
|
|
9,250
|
|
10,097
|
NGL (MBbl)
|
437
|
|
441
|
|
804
|
|
861
|
Oil equivalent
(MBoe)
|
1,363
|
|
1,593
|
|
2,739
|
|
3,093
|
Daily production
(MBoed)
|
15.0
|
|
17.5
|
|
15.0
|
|
17.1
|
|
|
|
|
|
|
|
|
Average price per
unit
|
|
|
|
|
|
|
|
Realized oil price per
barrel - as reported
|
$
79.54
|
|
$
68.02
|
|
$
77.18
|
|
$
70.99
|
Realized impact of
derivatives per barrel
|
—
|
|
—
|
|
—
|
|
—
|
Net realized price per
barrel
|
$
79.54
|
|
$
68.02
|
|
$
77.18
|
|
$
70.99
|
|
|
|
|
|
|
|
|
Realized natural gas
price per Mcf - as reported
|
$
0.66
|
|
$
1.31
|
|
$
0.97
|
|
$
2.00
|
Realized impact of
derivatives per Mcf
|
—
|
|
—
|
|
—
|
|
0.58
|
Net realized price per
Mcf
|
$
0.66
|
|
$
1.31
|
|
$
0.97
|
|
$
2.58
|
|
|
|
|
|
|
|
|
Realized NGL price per
barrel - as reported
|
$
18.99
|
|
$
15.97
|
|
$
21.11
|
|
$
20.19
|
Realized impact of
derivatives per barrel
|
—
|
|
—
|
|
—
|
|
—
|
Net realized price per
barrel
|
$
18.99
|
|
$
15.97
|
|
$
21.11
|
|
$
20.19
|
|
|
|
|
|
|
|
|
Realized price per Boe
- as reported
|
$
19.06
|
|
$
20.99
|
|
$
20.54
|
|
$
24.76
|
Net realized price per
Boe - including impact of derivatives
|
$
19.06
|
|
$
20.99
|
|
$
20.54
|
|
$
26.66
|
|
|
|
|
|
|
|
|
Average cost per
Boe
|
|
|
|
|
|
|
|
Lease
operating
|
$
6.41
|
|
$
5.53
|
|
$
7.17
|
|
$
6.63
|
Production, ad valorem,
and other taxes
|
$
1.35
|
|
$
1.72
|
|
$
1.36
|
|
$
2.10
|
Depletion
(1)
|
$
3.19
|
|
$
2.35
|
|
$
3.08
|
|
$
2.33
|
|
|
|
|
|
|
|
|
Earnings per
share
|
|
|
|
|
|
|
|
Earnings per share
applicable to common stockholders
|
|
|
|
|
|
|
|
Basic
|
$
0.24
|
|
$
0.45
|
|
$
0.54
|
|
$
1.10
|
Diluted
|
$
0.24
|
|
$
0.45
|
|
$
0.54
|
|
$
1.09
|
|
|
|
|
|
|
|
|
Adjusted net income per
share available to common stockholders
|
|
|
|
|
|
|
|
Basic
|
$
0.17
|
|
$
0.38
|
|
$
0.40
|
|
$
1.08
|
Diluted
|
$
0.17
|
|
$
0.38
|
|
$
0.40
|
|
$
1.07
|
|
|
|
|
|
|
|
|
Weighted average number
of shares outstanding (in thousands)
|
|
|
|
|
|
|
|
Basic
|
37,083
|
|
36,892
|
|
37,063
|
|
36,876
|
Diluted
|
37,158
|
|
37,097
|
|
37,108
|
|
37,085
|
|
(1) Includes accretion
of asset retirement obligation.
|
Capital Expenditures
The table below presents actual results of the Company's capital
expenditures for the six months ended June 30, 2024
(unaudited):
|
Six Months
Ended
|
|
June 30,
2024
|
|
(In
thousands)
|
|
|
Drilling, completion,
and capital workovers
|
$
2,468
|
Leasehold and
geophysical
|
900
|
Capital expenditures
(on an accrual basis)
|
$
3,368
|
(excluding acquisitions
and plugging and abandonment)
|
|
Capitalization
The Company's capital structure as of June 30, 2024 and December
31, 2023 is presented below:
|
June 30,
2024
|
|
December 31,
2023
|
|
|
|
|
|
(In
thousands)
|
Cash, cash equivalents
and restricted cash
|
$
211,292
|
|
$
253,944
|
|
|
|
|
Long-term
debt
|
$
—
|
|
$
—
|
Total debt
|
—
|
|
—
|
|
|
|
|
Stockholders'
equity
|
|
|
|
Common stock
|
37
|
|
37
|
Additional paid-in
capital
|
1,007,798
|
|
1,071,021
|
Accumulated
deficit
|
(583,028)
|
|
(602,947)
|
Total SandRidge Energy,
Inc. stockholders' equity
|
424,807
|
|
468,111
|
|
|
|
|
Total
capitalization
|
$
424,807
|
|
$
468,111
|
SandRidge Energy, Inc. and
Subsidiaries
|
Condensed
Consolidated Income Statements (Unaudited)
|
(In thousands,
except per share amounts)
|
|
|
Three Months Ended
June 30,
|
|
Six Months Ended
June 30,
|
|
2024
|
|
2023
|
|
2024
|
|
2023
|
Revenues
|
|
|
|
|
|
|
|
Oil, natural gas and
NGL
|
$
25,977
|
|
$
33,419
|
|
$
56,260
|
|
$
76,566
|
Total
revenues
|
25,977
|
|
33,419
|
|
56,260
|
|
76,566
|
Expenses
|
|
|
|
|
|
|
|
Lease operating
expenses
|
8,738
|
|
8,802
|
|
19,630
|
|
20,496
|
Production, ad
valorem, and other taxes
|
1,841
|
|
2,740
|
|
3,737
|
|
6,491
|
Depreciation and
depletion — oil and natural gas
|
4,350
|
|
3,744
|
|
8,426
|
|
7,198
|
Depreciation and
amortization — other
|
1,664
|
|
1,615
|
|
3,342
|
|
3,233
|
General and
administrative
|
3,050
|
|
2,476
|
|
6,382
|
|
5,385
|
Restructuring
expenses
|
81
|
|
262
|
|
81
|
|
301
|
Employee termination
benefits
|
—
|
|
—
|
|
—
|
|
19
|
(Gain) loss on
derivative contracts
|
—
|
|
—
|
|
—
|
|
(1,447)
|
Other operating
(income) expense, net
|
33
|
|
(27)
|
|
24
|
|
(121)
|
Total
expenses
|
19,757
|
|
19,612
|
|
41,622
|
|
41,555
|
Income from
operations
|
6,220
|
|
13,807
|
|
14,638
|
|
35,011
|
Other income
(expense)
|
|
|
|
|
|
|
|
Interest income
(expense), net
|
2,491
|
|
2,828
|
|
5,189
|
|
5,327
|
Other income
(expense), net
|
83
|
|
2
|
|
92
|
|
57
|
Total other income
(expense)
|
2,574
|
|
2,830
|
|
5,281
|
|
5,384
|
Income (loss) before
income taxes
|
8,794
|
|
16,637
|
|
19,919
|
|
40,395
|
Income tax (benefit)
expense
|
—
|
|
—
|
|
—
|
|
—
|
Net income
(loss)
|
$
8,794
|
|
$
16,637
|
|
$
19,919
|
|
$
40,395
|
Net income (loss) per
share
|
|
|
|
|
|
|
|
Basic
|
$
0.24
|
|
$
0.45
|
|
$
0.54
|
|
$
1.10
|
Diluted
|
$
0.24
|
|
$
0.45
|
|
$
0.54
|
|
$
1.09
|
Weighted average number
of common shares outstanding
|
|
|
|
|
|
|
|
Basic
|
37,083
|
|
36,892
|
|
37,063
|
|
36,876
|
Diluted
|
37,158
|
|
37,097
|
|
37,108
|
|
37,085
|
SandRidge Energy, Inc. and
Subsidiaries
|
Condensed
Consolidated Balance Sheets (Unaudited)
|
(In
thousands)
|
|
|
June 30,
2024
|
|
December 31,
2023
|
ASSETS
|
|
|
|
Current
assets
|
|
|
|
Cash and cash
equivalents
|
$
209,908
|
|
$
252,407
|
Restricted cash -
other
|
1,384
|
|
1,537
|
Accounts receivable,
net
|
23,264
|
|
22,166
|
Prepaid
expenses
|
1,674
|
|
430
|
Other current
assets
|
932
|
|
1,314
|
Total current
assets
|
237,162
|
|
277,854
|
Oil and natural gas
properties, using full cost method of accounting
|
|
|
|
Proved
|
1,545,318
|
|
1,538,724
|
Unproved
|
9,861
|
|
11,197
|
Less: accumulated
depreciation, depletion and impairment
|
(1,399,863)
|
|
(1,393,801)
|
|
155,316
|
|
156,120
|
Other property, plant
and equipment, net
|
83,312
|
|
86,493
|
Other assets
|
3,212
|
|
3,130
|
Deferred tax assets,
net of valuation allowance
|
50,569
|
|
50,569
|
Total
assets
|
$
529,571
|
|
$
574,166
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
|
Current
liabilities
|
|
|
|
Accounts payable and
accrued expenses
|
$
35,694
|
|
$
38,828
|
Asset retirement
obligations
|
9,789
|
|
9,851
|
Other current
liabilities
|
674
|
|
645
|
Total current
liabilities
|
46,157
|
|
49,324
|
Asset retirement
obligations
|
56,544
|
|
54,553
|
Other long-term
obligations
|
2,063
|
|
2,178
|
Total
liabilities
|
104,764
|
|
106,055
|
Stockholders'
Equity
|
|
|
|
Common stock, $0.001 par value; 250,000 shares authorized; 37,182
issued and outstanding at June 30, 2024 and 37,091 issued and
outstanding at December 31, 2023
|
37
|
|
37
|
Additional paid-in
capital
|
1,007,798
|
|
1,071,021
|
Accumulated
deficit
|
(583,028)
|
|
(602,947)
|
Total stockholders'
equity
|
424,807
|
|
468,111
|
Total liabilities and
stockholders' equity
|
$
529,571
|
|
$
574,166
|
SandRidge Energy, Inc. and
Subsidiaries
|
Condensed
Consolidated Statements of Cash Flows (Unaudited)
|
(In
thousands)
|
|
|
Six Months Ended
June 30,
|
|
2024
|
|
2023
|
CASH FLOWS FROM
OPERATING ACTIVITIES
|
|
|
|
Net income
|
$
19,919
|
|
$
40,395
|
Adjustments to
reconcile net income to net cash provided by operating
activities
|
|
|
|
Depreciation,
depletion, and amortization
|
11,768
|
|
10,431
|
(Gain) loss on
derivative contracts
|
—
|
|
(1,447)
|
Settlement gains
(losses) on derivative contracts
|
—
|
|
5,876
|
Stock-based
compensation
|
1,072
|
|
946
|
Other
|
80
|
|
77
|
Changes in operating
assets and liabilities
|
(5,746)
|
|
7,574
|
Net cash provided by
operating activities
|
27,093
|
|
63,852
|
CASH FLOWS FROM
INVESTING ACTIVITIES
|
|
|
|
Capital expenditures
for property, plant and equipment
|
(3,575)
|
|
(24,327)
|
Acquisition of
assets
|
(2,103)
|
|
—
|
Purchase of other
property and equipment
|
(12)
|
|
(31)
|
Proceeds from sale of
assets
|
571
|
|
1,334
|
Net cash used in
investing activities
|
(5,119)
|
|
(23,024)
|
CASH FLOWS FROM
FINANCING ACTIVITIES
|
|
|
|
Dividends paid to
shareholders
|
(64,003)
|
|
(73,823)
|
Reduction of financing
lease liability
|
(396)
|
|
(261)
|
Proceeds from exercise
of stock options
|
—
|
|
26
|
Tax withholdings paid
in exchange for shares withheld on employee vested stock
awards
|
(227)
|
|
(211)
|
Net cash used in
financing activities
|
(64,626)
|
|
(74,269)
|
NET (DECREASE) INCREASE
IN CASH, CASH EQUIVALENTS and RESTRICTED CASH
|
(42,652)
|
|
(33,441)
|
CASH, CASH EQUIVALENTS
and RESTRICTED CASH, beginning of year
|
253,944
|
|
257,468
|
CASH, CASH EQUIVALENTS
and RESTRICTED CASH, end of period
|
$
211,292
|
|
$
224,027
|
Supplemental Disclosure
of Cash Flow Information
|
|
|
|
Cash paid for
interest, net of amounts capitalized
|
$
(64)
|
|
$
(54)
|
Supplemental Disclosure
of Noncash Investing and Financing Activities
|
|
|
|
Capital expenditures
for property, plant and equipment in accounts payables and accrued
expenses
|
$
641
|
|
$
1,775
|
Right-of-use assets
obtained in exchange for financing lease obligations
|
$
230
|
|
$
260
|
Inventory material
transfers to oil and natural gas properties
|
$
71
|
|
$
1,205
|
Asset retirement
obligation capitalized
|
$
—
|
|
$
12
|
Change in dividends
payable
|
$
(65)
|
|
$
(557)
|
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 Net Cash Provided by Operating
Activities to Adjusted Operating Cash Flow
The Company defines Adjusted operating cash flow as net cash
provided by operating activities before changes in operating assets
and liabilities as shown in the following table. Adjusted 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 or incur new 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, Adjusted 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,
|
|
2024
|
|
2023
|
|
2024
|
|
2023
|
|
|
|
|
|
|
|
|
|
(In
thousands)
|
Net cash provided by
operating activities
|
$
11,412
|
|
$
24,005
|
|
$
27,093
|
|
$
63,852
|
Changes in operating
assets and liabilities
|
3,972
|
|
(1,420)
|
|
5,746
|
|
(7,574)
|
Adjusted operating cash
flow
|
$
15,384
|
|
$
22,585
|
|
$
32,839
|
|
$
56,278
|
Reconciliation of Free Cash Flow
The Company defines free cash flow as net cash provided by
operating activities plus net cash (used in) provided by investing
activities less the cash flow impact of acquisitions and
divestitures. Free 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 or incur new debt. This
measure should not be considered in isolation or as a substitute
for net cash provided by operating or investing activities prepared
in accordance with GAAP.
|
Three Months Ended
June 30,
|
|
Six Months Ended
June 30,
|
|
2024
|
|
2023
|
|
2024
|
|
2023
|
|
|
|
|
|
|
|
|
|
(In
thousands)
|
Net cash provided by
operating activities
|
$
11,412
|
|
$
24,005
|
|
$
27,093
|
|
$
63,852
|
Net cash used in
investing activities
|
(4,015)
|
|
(13,616)
|
|
(5,119)
|
|
(23,024)
|
Acquisition of
assets
|
2,103
|
|
—
|
|
2,103
|
|
—
|
Proceeds from sale of
assets
|
(533)
|
|
(1,334)
|
|
(571)
|
|
(1,334)
|
Free cash
flow
|
$
8,967
|
|
$
9,055
|
|
$
23,506
|
|
$
39,494
|
Reconciliation of Net Income to EBITDA and Adjusted
EBITDA
The Company defines EBITDA as net 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 management 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 activities or incur new 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,
|
|
2024
|
|
2023
|
|
2024
|
|
2023
|
|
|
|
|
|
|
|
|
|
(In
thousands)
|
Net Income
|
$
8,794
|
|
$
16,637
|
|
$
19,919
|
|
$
40,395
|
Adjusted for
|
|
|
|
|
|
|
|
Depreciation and
depletion - oil and natural gas
|
4,350
|
|
3,744
|
|
8,426
|
|
7,198
|
Depreciation and
amortization - other
|
1,664
|
|
1,615
|
|
3,342
|
|
3,233
|
Interest
expense
|
31
|
|
22
|
|
64
|
|
54
|
EBITDA
|
14,839
|
|
22,018
|
|
31,751
|
|
50,880
|
|
|
|
|
|
|
|
|
Stock-based
compensation
|
536
|
|
550
|
|
1,072
|
|
946
|
(Gain) loss on
derivative contracts
|
—
|
|
—
|
|
—
|
|
(1,447)
|
Settlement gains
(losses) on derivative contracts
|
—
|
|
—
|
|
—
|
|
5,876
|
Employee termination
benefits
|
—
|
|
—
|
|
—
|
|
19
|
Restructuring
expenses
|
81
|
|
262
|
|
81
|
|
301
|
Interest
income
|
(2,522)
|
|
(2,850)
|
|
(5,253)
|
|
(5,381)
|
Adjusted
EBITDA
|
$
12,934
|
|
$
19,980
|
|
$
27,651
|
|
$
51,194
|
Reconciliation of Net Cash Provided by Operating
Activities to Adjusted EBITDA
|
Three Months Ended
June 30,
|
|
Six Months Ended
June 30,
|
|
2024
|
|
2023
|
|
2024
|
|
2023
|
|
|
|
|
|
|
|
|
|
(In
thousands)
|
Net cash provided by
operating activities
|
$
11,412
|
|
$
24,005
|
|
$
27,093
|
|
$
63,852
|
Changes in operating
assets and liabilities
|
3,972
|
|
(1,420)
|
|
5,746
|
|
(7,574)
|
Interest
expense
|
31
|
|
22
|
|
64
|
|
54
|
Employee termination
benefits
|
—
|
|
—
|
|
—
|
|
19
|
Interest
income
|
(2,522)
|
|
(2,850)
|
|
(5,253)
|
|
(5,381)
|
Other
|
41
|
|
223
|
|
1
|
|
224
|
Adjusted
EBITDA
|
$
12,934
|
|
$
19,980
|
|
$
27,651
|
|
$
51,194
|
Reconciliation of Net Income Available to
Common Stockholders to Adjusted Net Income Available to Common
Stockholders
The Company defines adjusted net income as net income excluding
items that management 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
June 30, 2024
|
|
Three Months Ended
June 30, 2023
|
|
$
|
|
$/Diluted
Share
|
|
$
|
|
$/Diluted
Share
|
|
(In thousands,
except per share amounts)
|
Net income available to
common stockholders
|
$
8,794
|
|
$
0.24
|
|
$
16,637
|
|
$
0.45
|
Restructuring
expenses
|
81
|
|
—
|
|
262
|
|
0.01
|
Interest
income
|
(2,522)
|
|
(0.07)
|
|
(2,850)
|
|
(0.08)
|
Adjusted net income
available to common stockholders
|
$
6,353
|
|
$
0.17
|
|
$
14,049
|
|
$
0.38
|
|
|
|
|
|
|
|
|
|
Basic
|
|
Diluted
|
|
Basic
|
|
Diluted
|
Weighted average number
of common shares outstanding
|
37,083
|
|
37,158
|
|
36,892
|
|
37,097
|
Total adjusted net
income per share
|
$
0.17
|
|
$
0.17
|
|
$
0.38
|
|
$
0.38
|
|
Six Months Ended
June 30, 2024
|
|
Six Months Ended
June 30, 2023
|
|
$
|
|
$/Diluted
Share
|
|
$
|
|
$/Diluted
Share
|
|
(In thousands,
except per share amounts)
|
Net income available to
common stockholders
|
$
19,919
|
|
$
0.54
|
|
$
40,395
|
|
$
1.09
|
(Gain) loss on
derivative contracts
|
—
|
|
—
|
|
(1,447)
|
|
(0.04)
|
Settlement gains
(losses) on derivative contracts
|
—
|
|
—
|
|
5,876
|
|
0.16
|
Employee termination
benefits
|
—
|
|
—
|
|
19
|
|
—
|
Restructuring
expenses
|
81
|
|
—
|
|
301
|
|
0.01
|
Interest
income
|
(5,253)
|
|
(0.14)
|
|
(5,381)
|
|
(0.15)
|
Adjusted net income
available to common stockholders
|
$
14,747
|
|
$
0.40
|
|
$
39,763
|
|
$
1.07
|
|
|
|
|
|
|
|
|
|
Basic
|
|
Diluted
|
|
Basic
|
|
Diluted
|
Weighted average number
of common shares outstanding
|
37,063
|
|
37,108
|
|
36,876
|
|
37,085
|
Total adjusted net
income per share
|
$
0.40
|
|
$
0.40
|
|
$
1.08
|
|
$
1.07
|
Reconciliation of General and Administrative 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, 2024
|
|
Three Months Ended
June 30, 2023
|
|
$
|
|
$/Boe
|
|
$
|
|
$/Boe
|
|
(In thousands,
except per Boe amounts)
|
General and
administrative
|
$
3,050
|
|
$
2.24
|
|
$
2,476
|
|
$
1.55
|
Stock-based
compensation
|
(536)
|
|
(0.39)
|
|
(550)
|
|
(0.34)
|
Adjusted
G&A
|
$
2,514
|
|
$
1.85
|
|
$
1,926
|
|
$
1.21
|
|
Six Months Ended
June 30, 2024
|
|
Six Months Ended
June 30, 2023
|
|
$
|
|
$/Boe
|
|
$
|
|
$/Boe
|
|
(In thousands,
except per Boe amounts)
|
General and
administrative
|
$
6,382
|
|
$
2.33
|
|
$
5,385
|
|
$
1.74
|
Stock-based
compensation
|
(1,072)
|
|
(0.39)
|
|
(946)
|
|
(0.30)
|
Adjusted
G&A
|
$
5,310
|
|
$
1.94
|
|
$
4,439
|
|
$
1.44
|
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 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, anticipated financial impacts of
the proposed transaction, 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 and the
Company's unaudited proved developed PV-10 reserve value of its
Mid-Continent assets. 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
possibility that the transaction does not close or that the closing
may be delayed because conditions to the closing may not be
satisfied, the performance of the acquired interests, 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, except as required by
law.
SandRidge Energy, Inc. (NYSE: SD) is an independent oil and
gas company engaged in the development, acquisition and production
of oil and gas properties. Its primary area of operations is the
Mid-Continent region in Oklahoma
and Kansas. Further information
can be found at www.sandridgeenergy.com.
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