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.
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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
&
Working Interest (WI)
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|
Counterparty
|
|
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SandRidge
|
Development
Costs
|
|
90% of
costs
|
|
|
10% of
costs
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WI at Spud
|
|
80% of WI
|
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|
20% of WI
|
Key highlights and benefits to SandRidge of the wellbore-only
NW STACK Drilling Participation Agreement:
- 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
Mid-Continent Assets in Oklahoma
- 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
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
- 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
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
- 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
First Six Months of 2017
- 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
Capitalization & Liquidity
- 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
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.
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Updated
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Previous
|
|
Total
Company
|
|
Total
Company
|
|
Projection as
of
|
|
Projection as
of
|
|
August 2,
2017
|
|
May 10,
2017
|
Production
|
|
|
|
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Oil
(MMBbls)
|
4.1 -
4.3
|
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4.0 - 4.2
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Natural Gas Liquids
(MMBbls)
|
3.1 -
3.3
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3.0 - 3.2
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Total Liquids
(MMBbls)
|
7.2 -
7.6
|
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7.0 - 7.4
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Natural Gas
(Bcf)
|
42.0 -
43.5
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42.0 -
43.5
|
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Total
(MMBoe)
|
14.2 -
14.9
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|
14.0 -
14.7
|
|
|
|
|
|
Price
Realization
|
|
|
|
|
Oil (differential
below NYMEX WTI)
|
$2.75
|
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$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
(excluding acquisitions and plugging and
abandonment)
|
$250 -
$260
|
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$210 -
$220
|
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(1)
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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.
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(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:
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|
|
|
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, 2017
|
|
December
31, 2016
|
|
(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.
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SOURCE SandRidge Energy, Inc.