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
- 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
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
Guidance
|
|
Previous
Guidance
|
|
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.