OKLAHOMA
CITY, Nov. 6, 2023 /PRNewswire/ -- SandRidge
Energy, Inc. (the "Company" or "SandRidge") (NYSE: SD) today
announced financial and operational results for the three and
nine-month periods ended September 30, 2023.
Recent Highlights
- On November 2, 2023, the Company
declared a $0.10 per share cash
dividend payable on November 27, 2023
to shareholders of record on November 13,
2023
- Third quarter net income was $18.7
million, or $0.51 per basic
share. Adjusted net income(1) was $16.2 million, or $0.44 per basic share
- Adjusted EBITDA(1) of $22.6
million and $73.8 million for
the three and nine-month periods ended September 30, 2023
- Net cash provided by operating activities of $25.5 million and $89.4
million for the three and nine-month periods ended
September 30, 2023
- Generated $24.2 million and
$63.6 million of free cash
flow(1) for the three and nine-month periods ended
September 30, 2023. These represent a
conversion rate of over 85% relative to adjusted
EBITDA(1) for the three and nine-month periods
ended September 30, 2023
- Approximately $2.5 million in interest income during the
third quarter bringing the total for the first nine months of 2023
to approximately $7.9 million
- Third quarter G&A was $2.6
million, or $1.65 per Boe and
adjusted G&A(1) was approximately $2.1 million, or $1.35 per Boe
Financial Results & Update
Profitability & Realized Pricing
For the three months ended September 30, 2023, the Company
reported net income of $18.7 million,
or $0.51 per basic share, and net
cash provided by operating activities of $25.5 million. After adjusting for certain items,
the Company's adjusted net income(1) amounted to
$16.2 million, or $0.44 per basic share, adjusted operating cash
flow(1) totaled $25.0
million and adjusted EBITDA(1) was $22.6 million for the quarter. The Company
defines and reconciles adjusted net income, adjusted operating cash
flow, adjusted EBITDA, and other non-GAAP financial measures to the
most directly comparable Generally Accepted Accounting Principles
in the United States ("GAAP")
measure in supporting tables at the conclusion of this press
release.
For the three and nine-month periods ended September 30, 2023, the Company generated
approximately $24.2 million and
$63.6 million of free cash
flow(1). These represent a conversion rate of over 85%
relative to adjusted EBITDA for the three and nine-month
periods ended September 30, 2023.
Third quarter realized oil, natural gas, and natural gas liquids
prices, before the impact of derivatives(2), were
$79.83 per Bbl, $1.36 per Mcf and $21.89 per Bbl, respectively. Realized oil,
natural gas, and natural gas liquids prices, before the impact of
derivatives(2), for the nine months ended September 30, 2023 were $73.88 per Bbl, $1.78 per Mcf and $20.77 per Bbl, respectively.
Operating Costs
During the third quarter of 2023, lease operating expense
("LOE") was $11.5 million or
$7.22 per Boe. Recent increases in
operating costs were primarily due to inflationary pressures and
higher production costs associated with more producing wells from
our well reactivations and prior development program as well as
increased ownership interest from our recent acquisition.
For the three months ended September 30, 2023, general and
administrative expense ("G&A") was $2.6
million, or $1.65 per Boe.
Adjusted G&A(1) was $2.1
million, or $1.35 per Boe.
Liquidity and Capital Structure
As of September 30, 2023, the Company had $232.2 million of cash and cash equivalents,
including restricted cash, diversified across multiple significant,
well-capitalized financial institutions. The Company has no
outstanding term or revolving debt obligations.
Dividend Program
On November 2, 2023, the Board of
Directors of the Company declared a $0.10 per share cash dividend payable on
November 27, 2023 to shareholders of
record on November 13, 2023. This
declaration is consistent with the Company's on-going cash dividend
program, which is subject to quarterly approval by the Board of
Directors, announced on May 12, 2023.
On June 7, 2023, SandRidge paid
a one-time cash dividend of $2.00 per
share.
Operational Results & Update
Production
Production totaled 1,586 MBoe (17.2 MBoed, 17% oil, 55% natural
gas and 28% NGLs) for the three months ended September 30,
2023 compared to 1,638 MBoe (17.8 MBoed, 16% oil, 54% natural
gas and 30% NGLs) for the three months ended September 30, 2022. SandRidge's recent capital
development program has helped to sustain production levels despite
no new wells coming online in the third quarter, while increasing
oil content as a percentage of total production.
Development Program
The Company continues to benefit from its capital development
program which concluded in the second quarter of 2023. The higher
oil content of its recently-drilled wells targeting the Meramec
formation in the Northwest Stack play versus the Company's base
production was the primary driver of SandRidge's oil production
increasing by approximately 20% in the first nine months of 2023
versus the same period in 2022. This increases the Company's oil as
a percentage of total production and enhances its commodity
realizations. SandRidge maintains option value with its acreage
position being ~99% held by production and will continue to monitor
opportunities for future development, with its primary focus being
to generate high rates of return.
Base Production Declines
During the first nine months of 2023, SandRidge completed 12
artificial lift conversions as the Company continues to focus on
high return and value-adding projects that provide benefits such as
lowering forward-looking costs, enhancing or reactivating
production on existing wells, and further supporting its modest
decline profile. These focused efforts over recent quarters have
helped lower SandRidge's expected annual base PDP decline to an
average of ~8% over the next ten years. The Company continues to
ensure that all projects meet high rate of return thresholds and
remains capital disciplined as the commodity price landscape
changes.
Outlook
SandRidge will continue to focus on growing the cash value and
generation capability of its asset base in a safe, responsible and
efficient manner, while exercising prudent capital allocations to
projects it believes provide high rates of returns in the current
commodity price outlook. These near-term projects will be focused
on artificial lift conversions to more efficient and cost-effective
systems, other capital-efficient workovers, and limited well
reactivations, while preserving future development, and expanded
well reactivations, benefited by our 99% held by production acreage
position that extends the option value to initiate projects in
favorable commodity price environments, to achieve high rates of
return. The Company will continue to monitor forward-looking
commodity prices, results, costs and other factors that could
influence returns on investments, which will continue to shape its
disciplined development decisions in 2023 and beyond.
SandRidge will also continue to maintain the optionality to
execute on value accretive merger and acquisition opportunities
that could bring synergies, leverage the Company's core
competencies, complement its portfolio of assets, further utilize
its approximately $1.6 billion of net
operating losses ("NOLs"), or otherwise yield attractive returns
for its shareholders.
Environmental, Social, and Governance ("ESG")
SandRidge maintains its Environmental, Social, and Governance
("ESG") commitment, to include no routine flaring of produced
natural gas and transporting approximately 96% of its produced
water via pipeline instead of truck. Additionally, SandRidge
maintains an emphasis on the safety and training of our workforce.
We have personnel dedicated to the close monitoring of our safety
standards and daily operations.
Conference Call Information
The Company will host a conference call to discuss these results
on Tuesday, November 7, 2023 at
1:00 pm CT. The conference call can
be accessed by registering online in advance at
https://conferencingportals.com/event/mIkSnMey at which time
registrants will receive dial-in information as well as a
conference ID. At the time of the call, participants will dial in
using the participant number and conference ID provided upon
registration. The Company's latest presentation is available on the
Company's website at
investors.sandridgeenergy.com/Investor-Relations/events.
A live audio webcast of the conference call will also be
available via SandRidge's website, investors.sandridgeenergy.com,
under Presentation & Events. The webcast will be archived for
replay on the Company's website for at least 30 days.
Contact Information
Investor Relations
SandRidge Energy, Inc.
1 E. Sheridan Ave. Suite 500
Oklahoma City, OK 73104
investors@sandridgeenergy.com
About SandRidge Energy, Inc.
SandRidge Energy, Inc. (NYSE: SD) is an independent oil and gas
company engaged in the development and acquisition of oil and gas
properties. Its primary area of operations is the Mid-Continent
region in Oklahoma and
Kansas. Further information can be
found at www.sandridgeenergy.com.
-Tables to Follow-
|
|
|
|
(1)
|
See "Non-GAAP Financial
Measures" section at the end of this press release for non-GAAP
financial measures definitions.
|
|
(2)
|
See "Operational and
Financial Statistics" section at the end of this press release for
impacts of derivatives on commodity price realizations.
|
Operational and Financial Statistics
Information regarding the Company's production, pricing, costs
and earnings is presented below (unaudited):
|
Three Months
Ended
September
30,
|
|
Nine Months
Ended
September
30,
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
|
Production -
Total
|
|
|
|
|
|
|
|
|
Oil (MBbl)
|
267
|
|
259
|
|
816
|
|
680
|
|
Natural Gas
(MMcf)
|
5,276
|
|
5,286
|
|
15,373
|
|
15,712
|
|
NGL (MBbl)
|
440
|
|
499
|
|
1,301
|
|
1,566
|
|
Oil equivalent
(MBoe)
|
1,586
|
|
1,638
|
|
4,679
|
|
4,864
|
|
Daily production
(MBoed)
|
17.2
|
|
17.8
|
|
17.1
|
|
17.8
|
|
|
|
|
|
|
|
|
|
Average price per
unit
|
|
|
|
|
|
|
|
|
Realized oil price per
barrel - as reported
|
$
79.83
|
|
$
92.24
|
|
$
73.88
|
|
$
97.41
|
|
Realized impact of
derivatives per barrel
|
—
|
|
—
|
|
—
|
|
—
|
|
Net realized price per
barrel
|
$
79.83
|
|
$
92.24
|
|
$
73.88
|
|
$
97.41
|
|
|
|
|
|
|
|
|
|
Realized natural gas
price per Mcf - as reported
|
$
1.36
|
|
$
5.99
|
|
$
1.78
|
|
$
5.05
|
|
Realized impact of
derivatives per Mcf
|
—
|
|
0.04
|
|
0.38
|
|
(0.04)
|
|
Net realized price per
Mcf
|
$
1.36
|
|
$
6.03
|
|
$
2.16
|
|
$
5.01
|
|
|
|
|
|
|
|
|
|
Realized NGL price per
barrel - as reported
|
$
21.89
|
|
$
30.79
|
|
$
20.77
|
|
$
33.56
|
|
Realized impact of
derivatives per barrel
|
—
|
|
—
|
|
—
|
|
(0.20)
|
|
Net realized price per
barrel
|
$
21.89
|
|
$
30.79
|
|
$
20.77
|
|
$
33.36
|
|
|
|
|
|
|
|
|
|
Realized price per Boe
- as reported
|
$
24.04
|
|
$
43.28
|
|
$
24.52
|
|
$
40.74
|
|
Net realized price per
Boe - including impact of derivatives
|
$
24.04
|
|
$
43.42
|
|
$
25.77
|
|
$
40.56
|
|
|
|
|
|
|
|
|
|
Average cost per
Boe
|
|
|
|
|
|
|
|
|
Lease
operating
|
$
7.22
|
|
$
5.92
|
|
$
6.83
|
|
$
6.18
|
|
Production, ad valorem,
and other taxes
|
$
1.28
|
|
$
2.91
|
|
$
1.82
|
|
$
2.81
|
|
Depletion
(1)
|
$
2.66
|
|
$
1.89
|
|
$
2.44
|
|
$
1.71
|
|
|
|
|
|
|
|
|
|
Earnings per
share
|
|
|
|
|
|
|
|
|
Earnings per share
applicable to common stockholders
|
|
|
|
|
|
|
|
|
Basic
|
$
0.51
|
|
$
1.46
|
|
$
1.60
|
|
$
3.73
|
|
Diluted
|
$
0.50
|
|
$
1.45
|
|
$
1.59
|
|
$
3.69
|
|
|
|
|
|
|
|
|
|
Adjusted net income per
share available to common stockholders
|
|
|
|
|
|
|
|
|
Basic
|
$
0.44
|
|
$
1.35
|
|
$
1.52
|
|
$
3.64
|
|
Diluted
|
$
0.44
|
|
$
1.35
|
|
$
1.51
|
|
$
3.60
|
|
|
|
|
|
|
|
|
|
Weighted average number
of shares outstanding (in thousands)
|
|
|
|
|
|
|
|
|
Basic
|
36,969
|
|
36,797
|
|
36,906
|
|
36,710
|
|
Diluted
|
37,161
|
|
37,150
|
|
37,123
|
|
37,121
|
|
|
|
|
|
|
|
|
|
(1) Includes accretion
of asset retirement obligation.
|
Capital Expenditures
The table below presents actual results of the Company's capital
expenditures for the nine-months ended September 30, 2023
(unaudited):
|
Nine Months
Ended
|
|
September 30,
2023
|
|
(In
thousands)
|
|
|
|
Drilling and
completion
|
$
18,181
|
|
Capital
workovers
|
3,592
|
|
Leasehold and
geophysical
|
(109)
|
|
Total Capital
Expenditures
|
$
21,664
|
|
(excluding acquisitions
and plugging and abandonment)
|
|
Capitalization
The Company's capital structure as of September 30, 2023
and December 31, 2022 is presented below:
|
September 30,
2023
|
|
December 31,
2022
|
|
(In
thousands)
|
|
Cash, cash equivalents
and restricted cash
|
$
232,243
|
|
$
257,468
|
|
|
|
|
|
Long-term
debt
|
$
—
|
|
$
—
|
|
Total debt
|
—
|
|
—
|
|
|
|
|
|
Stockholders'
equity
|
|
|
|
|
Common stock
|
37
|
|
37
|
|
Additional paid-in
capital
|
1,074,219
|
|
1,151,689
|
|
Accumulated
deficit
|
(604,739)
|
|
(663,804)
|
|
Total SandRidge Energy,
Inc. stockholders' equity
|
469,517
|
|
487,922
|
|
|
|
|
|
Total
capitalization
|
$
469,517
|
|
$
487,922
|
|
SandRidge Energy,
Inc. and Subsidiaries
Condensed
Consolidated Income Statements (Unaudited)
(In thousands,
except per share amounts)
|
|
|
|
|
|
Three Months Ended
September 30,
|
|
Nine Months
Ended September 30,
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
|
Revenues
|
|
|
|
|
|
|
|
|
Oil, natural gas and
NGL
|
$
38,149
|
|
$
70,899
|
|
$
114,715
|
|
$
198,146
|
|
Total
revenues
|
38,149
|
|
70,899
|
|
114,715
|
|
198,146
|
|
Expenses
|
|
|
|
|
|
|
|
|
Lease operating
expenses
|
11,450
|
|
9,693
|
|
31,946
|
|
30,067
|
|
Production, ad valorem,
and other taxes
|
2,031
|
|
4,768
|
|
8,522
|
|
13,677
|
|
Depreciation and
depletion — oil and natural gas
|
4,217
|
|
3,091
|
|
11,415
|
|
8,318
|
|
Depreciation and
amortization — other
|
1,637
|
|
1,582
|
|
4,870
|
|
4,720
|
|
General and
administrative
|
2,619
|
|
2,382
|
|
8,004
|
|
7,083
|
|
Restructuring
expenses
|
42
|
|
76
|
|
343
|
|
718
|
|
Employee termination
benefits
|
—
|
|
—
|
|
19
|
|
—
|
|
Gain on derivative
contracts
|
—
|
|
(4,258)
|
|
(1,447)
|
|
(3,194)
|
|
Other operating
(income) expense
|
(31)
|
|
(25)
|
|
(152)
|
|
(140)
|
|
Total
expenses
|
21,965
|
|
17,309
|
|
63,520
|
|
61,249
|
|
Income from
operations
|
16,184
|
|
53,590
|
|
51,195
|
|
136,897
|
|
Other income
(expense)
|
|
|
|
|
|
|
|
|
Interest income
(expense), net
|
2,455
|
|
(12)
|
|
7,782
|
|
(191)
|
|
Other income,
net
|
31
|
|
147
|
|
88
|
|
235
|
|
Total other income
(expense)
|
2,486
|
|
135
|
|
7,870
|
|
44
|
|
Income before income
taxes
|
18,670
|
|
53,725
|
|
59,065
|
|
136,941
|
|
Income tax (benefit)
expense
|
—
|
|
—
|
|
—
|
|
—
|
|
Net income
|
$
18,670
|
|
$
53,725
|
|
$
59,065
|
|
$
136,941
|
|
Net income per
share
|
|
|
|
|
|
|
|
|
Basic
|
$
0.51
|
|
$
1.46
|
|
$
1.60
|
|
$
3.73
|
|
Diluted
|
$
0.50
|
|
$
1.45
|
|
$
1.59
|
|
$
3.69
|
|
Weighted average number
of common shares outstanding
|
|
|
|
|
|
|
|
|
Basic
|
36,969
|
|
36,797
|
|
36,906
|
|
36,710
|
|
Diluted
|
37,161
|
|
37,150
|
|
37,123
|
|
37,121
|
|
SandRidge Energy,
Inc. and Subsidiaries
Condensed
Consolidated Balance Sheets (Unaudited)
(In
thousands)
|
|
|
|
|
|
September 30,
2023
|
|
December 31,
2022
|
|
ASSETS
|
|
|
|
|
Current
assets
|
|
|
|
|
Cash and cash
equivalents
|
$
230,706
|
|
$
255,722
|
|
Restricted cash -
other
|
1,537
|
|
1,746
|
|
Accounts receivable,
net
|
25,657
|
|
34,735
|
|
Derivative
contracts
|
—
|
|
4,429
|
|
Prepaid
expenses
|
926
|
|
523
|
|
Other current
assets
|
1,479
|
|
7,747
|
|
Total current
assets
|
260,305
|
|
304,902
|
|
Oil and natural gas
properties, using full cost method of accounting
|
|
|
|
|
Proved
|
1,538,863
|
|
1,507,690
|
|
Unproved
|
11,189
|
|
11,516
|
|
Less: accumulated
depreciation, depletion and impairment
|
(1,388,781)
|
|
(1,380,574)
|
|
161,271
|
|
138,632
|
|
Other property, plant
and equipment, net
|
87,824
|
|
92,244
|
|
Other assets
|
3,172
|
|
190
|
|
Deferred tax
assets
|
64,529
|
|
64,529
|
|
Total
assets
|
$
577,101
|
|
$
600,497
|
|
|
|
|
|
LIABILITIES AND
SHAREHOLDERS' EQUITY
|
|
|
|
|
Current
liabilities
|
|
|
|
|
Accounts payable and
accrued expenses
|
$
38,937
|
|
$
46,335
|
|
Asset retirement
obligation
|
15,574
|
|
16,074
|
|
Other current
liabilities
|
659
|
|
870
|
|
Total current
liabilities
|
55,170
|
|
63,279
|
|
Asset retirement
obligation
|
50,382
|
|
47,635
|
|
Other long-term
obligations
|
2,032
|
|
1,661
|
|
Total
liabilities
|
107,584
|
|
112,575
|
|
Shareholders'
Equity
|
|
|
|
|
Common stock, $0.001
par value; 250,000 shares authorized; 37,091 issued and
outstanding at September 30, 2023 and 36,868 issued and
outstanding at December 31,
2022
|
37
|
|
37
|
|
Additional paid-in
capital
|
1,074,219
|
|
1,151,689
|
|
Accumulated
deficit
|
(604,739)
|
|
(663,804)
|
|
Total shareholders'
equity
|
469,517
|
|
487,922
|
|
Total liabilities and
shareholders' equity
|
$
577,101
|
|
$
600,497
|
|
SandRidge Energy,
Inc. and Subsidiaries
Condensed
Consolidated Statements of Cash Flows (Unaudited)
(In
thousands)
|
|
|
|
Nine Months Ended
September
30,
|
|
2023
|
|
2022
|
|
CASH FLOWS FROM
OPERATING ACTIVITIES
|
|
|
|
|
Net income
|
$
59,065
|
|
$
136,941
|
|
Adjustments to
reconcile net income to net cash provided by operating
activities
|
|
|
|
|
Depreciation,
depletion, and amortization
|
16,285
|
|
13,038
|
|
Gain on derivative
contracts
|
(1,447)
|
|
(3,194)
|
|
Realized settlement
gains (losses) on derivative contracts
|
5,876
|
|
(867)
|
|
Stock-based
compensation
|
1,422
|
|
1,131
|
|
Other
|
118
|
|
115
|
|
Changes in operating
assets and liabilities
|
8,040
|
|
(12,534)
|
|
Net cash provided by
operating activities
|
89,359
|
|
134,630
|
|
CASH FLOWS FROM
INVESTING ACTIVITIES
|
|
|
|
|
Capital expenditures
for property, plant and equipment
|
(25,681)
|
|
(31,129)
|
|
Acquisition of
assets
|
(11,232)
|
|
(1,431)
|
|
Purchase of other
property and equipment
|
(29)
|
|
(49)
|
|
Proceeds from sale of
assets
|
1,411
|
|
448
|
|
Net cash used in
investing activities
|
(35,531)
|
|
(32,161)
|
|
CASH FLOWS FROM
FINANCING ACTIVITIES
|
|
|
|
|
Dividends paid to
shareholders
|
(77,804)
|
|
—
|
|
Reduction of financing
lease liability
|
(414)
|
|
(295)
|
|
Proceeds from exercise
of stock options
|
94
|
|
77
|
|
Proceeds from exercise
of warrants
|
—
|
|
5
|
|
Tax withholdings paid
in exchange for shares withheld on employee vested stock
awards
|
(929)
|
|
(1,177)
|
|
Net cash used in
financing activities
|
(79,053)
|
|
(1,390)
|
|
NET (DECREASE) INCREASE
IN CASH, CASH EQUIVALENTS and RESTRICTED CASH
|
(25,225)
|
|
101,079
|
|
CASH, CASH EQUIVALENTS
and RESTRICTED CASH, beginning of year
|
257,468
|
|
139,524
|
|
CASH, CASH EQUIVALENTS
and RESTRICTED CASH, end of period
|
$
232,243
|
|
$
240,603
|
|
Supplemental Disclosure
of Cash Flow Information
|
|
|
|
|
Cash paid for
interest, net of amounts capitalized
|
$
(75)
|
|
$
(198)
|
|
Supplemental Disclosure
of Noncash Investing and Financing Activities
|
|
|
|
|
Capital expenditures
for property, plant and equipment in accounts payables and
accrued
expenses
|
$
888
|
|
$
8,153
|
|
Right-of-use assets
obtained in exchange for financing lease obligations
|
$
443
|
|
$
538
|
|
Inventory material
transfers to oil and natural gas properties
|
$
1,246
|
|
$
—
|
|
Asset retirement
obligation capitalized
|
$
12
|
|
$
—
|
|
Asset retirement
obligation removed due to divestiture
|
$
(137)
|
|
$
—
|
|
Dividend
payable
|
$
253
|
|
$
—
|
Non-GAAP Financial Measures
This press release includes non-GAAP financial
measures. These non-GAAP measures are not alternatives to
GAAP measures, and you should not consider
these non-GAAP measures in isolation or as a substitute
for analysis of our results as reported under GAAP. Below is
additional disclosure regarding each of
the non-GAAP measures used in this press release,
including reconciliations to their most directly comparable GAAP
measure.
Reconciliation of Net Cash Provided by Operating
Activities to Adjusted Operating Cash Flow
The Company defines Adjusted operating cash flow as net cash
provided by operating activities before changes in operating assets
and liabilities as shown in the following table. Adjusted Operating
cash flow is a supplemental financial measure used by the Company's
management and by securities analysts, investors, lenders, rating
agencies and others who follow the industry as an indicator of the
Company's ability to internally fund exploration and development
activities or incur new debt. The Company also uses this measure
because operating cash flow relates to the timing of cash receipts
and disbursements that the Company may not control and may not
relate to the period in which the operating activities occurred.
Further, Adjusted operating cash flow allows the Company to compare
its operating performance and return on capital with those of other
companies without regard to financing methods and capital
structure. This measure should not be considered in isolation or as
a substitute for net cash provided by operating activities prepared
in accordance with GAAP.
|
Three Months Ended
September 30,
|
|
Nine Months
Ended September 30,
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
|
|
|
|
|
|
|
|
|
(In
thousands)
|
|
Net cash provided by
operating activities
|
$
25,507
|
|
$
55,474
|
|
$
89,359
|
|
$
134,630
|
|
Changes in operating
assets and liabilities
|
(466)
|
|
(700)
|
|
(8,040)
|
|
12,534
|
|
Adjusted operating cash
flow
|
$
25,041
|
|
$
54,774
|
|
$
81,319
|
|
$
147,164
|
Reconciliation of Free Cash Flow
The Company defines free cash flow as net cash provided by
operating activities plus net cash (used in) provided by investing
activities less the cash flow impact of acquisitions and
divestitures. Free cash flow is a supplemental financial measure
used by the Company's management and by securities analysts,
investors, lenders, rating agencies and others who follow the
industry as an indicator of the Company's ability to internally
fund exploration and development activities or incur new debt. This
measure should not be considered in isolation or as a substitute
for net cash provided by operating or investing activities prepared
in accordance with GAAP.
|
Three Months Ended
September 30,
|
|
Nine Months
Ended September 30,
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
|
|
|
|
|
|
|
|
|
(In
thousands)
|
|
Net cash provided by
operating activities
|
$
25,507
|
|
$
55,474
|
|
$
89,359
|
|
$
134,630
|
|
Net cash used in
investing activities
|
(12,507)
|
|
(19,028)
|
|
(35,531)
|
|
(32,161)
|
|
Acquisition of
assets
|
11,232
|
|
—
|
|
11,232
|
|
1,431
|
|
Proceeds from sale of
assets
|
(77)
|
|
(142)
|
|
(1,411)
|
|
(448)
|
|
Free cash
flow
|
$
24,155
|
|
$
36,304
|
|
$
63,649
|
|
$
103,452
|
Reconciliation of Net Income to EBITDA and Adjusted
EBITDA
The Company defines EBITDA as net income before income tax
(benefit) expense, interest expense, depreciation and amortization
- other and depreciation and depletion - oil and natural gas.
Adjusted EBITDA, as presented herein, is EBITDA excluding items
that management believes affect the comparability of operating
results such as items whose timing and/or amount cannot be
reasonably estimated or are non-recurring, as shown in the
following tables.
Adjusted EBITDA is presented because management believes it
provides useful additional information used by the Company's
management and by securities analysts, investors, lenders, ratings
agencies and others who follow the industry for analysis of the
Company's financial and operating performance on a recurring basis
and the Company's ability to internally fund exploration and
development activities or incur new debt. In addition, management
believes that adjusted EBITDA is widely used by professional
research analysts and others in the valuation, comparison and
investment recommendations of companies in the oil and gas
industry. The Company's adjusted EBITDA may not be comparable to
similarly titled measures used by other companies.
|
Three Months Ended
September
30,
|
|
Nine Months
Ended September
30,
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
|
|
|
|
|
|
|
|
|
(In
thousands)
|
|
Net Income
|
$
18,670
|
|
$
53,725
|
|
$
59,065
|
|
$
136,941
|
|
Adjusted for
|
|
|
|
|
|
|
|
|
Interest
expense
|
21
|
|
19
|
|
75
|
|
199
|
|
Depreciation and
amortization - other
|
1,637
|
|
1,582
|
|
4,870
|
|
4,720
|
|
Depreciation and
depletion - oil and natural gas
|
4,217
|
|
3,091
|
|
11,415
|
|
8,318
|
|
EBITDA
|
24,545
|
|
58,417
|
|
75,425
|
|
150,178
|
|
|
|
|
|
|
|
|
|
Stock-based
compensation
|
476
|
|
377
|
|
1,422
|
|
1,131
|
|
Gain on derivative
contracts
|
—
|
|
(4,258)
|
|
(1,447)
|
|
(3,194)
|
|
Realized settlement of
derivative contracts
|
—
|
|
218
|
|
5,876
|
|
(867)
|
|
Employee termination
benefits
|
—
|
|
—
|
|
19
|
|
—
|
|
Restructuring
expenses
|
42
|
|
76
|
|
343
|
|
718
|
|
Interest
income
|
(2,476)
|
|
(6)
|
|
(7,857)
|
|
(8)
|
|
Adjusted
EBITDA
|
$
22,587
|
|
$
54,824
|
|
$
73,781
|
|
$
147,958
|
Reconciliation of Net Cash Provided by Operating
Activities to Adjusted EBITDA
|
Three Months Ended
September 30,
|
|
Nine Months
Ended September 30,
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
|
|
|
|
|
|
|
|
|
(In
thousands)
|
|
Net cash provided by
operating activities
|
$
25,507
|
|
$
55,474
|
|
$
89,359
|
|
$
134,630
|
|
Changes in operating
assets and liabilities
|
(466)
|
|
(700)
|
|
(8,040)
|
|
12,534
|
|
Interest
expense
|
21
|
|
19
|
|
75
|
|
199
|
|
Employee termination
benefits
|
—
|
|
—
|
|
19
|
|
—
|
|
Interest
income
|
(2,476)
|
|
(6)
|
|
(7,857)
|
|
(8)
|
|
Other
|
1
|
|
37
|
|
225
|
|
603
|
|
Adjusted
EBITDA
|
$
22,587
|
|
$
54,824
|
|
$
73,781
|
|
$
147,958
|
Reconciliation of Net Income Available to
Common Stockholders to Adjusted Net Income Available to Common
Stockholders
The Company defines adjusted net income as net income excluding
items that management believes affect the comparability of
operating results and are typically excluded from published
estimates by the investment community, including items whose timing
and/or amount cannot be reasonably estimated or are non-recurring,
as shown in the following tables.
Management uses the supplemental measure of adjusted net income
as an indicator of the Company's operational trends and performance
relative to other oil and natural gas companies and believes it is
more comparable to earnings estimates provided by securities
analysts. Adjusted net income is not a measure of financial
performance under GAAP and should not be considered a substitute
for net income available to common stockholders.
|
Three Months Ended
September 30,
2023
|
|
Three Months Ended
September 30,
2022
|
|
$
|
|
$/Diluted
Share
|
|
$
|
|
$/Diluted
Share
|
|
(In thousands,
except per share amounts)
|
|
Net income available to
common stockholders
|
$
18,670
|
|
$
0.50
|
|
$
53,725
|
|
$
1.45
|
|
Gain on derivative
contracts
|
—
|
|
—
|
|
(4,258)
|
|
(0.11)
|
|
Realized settlement
gains on derivative contracts
|
—
|
|
—
|
|
218
|
|
0.01
|
|
Restructuring
expenses
|
42
|
|
—
|
|
76
|
|
—
|
|
Interest
income
|
(2,476)
|
|
(0.06)
|
|
(6)
|
|
—
|
|
Adjusted net income
available to common stockholders
|
$
16,236
|
|
$
0.44
|
|
$
49,755
|
|
$
1.35
|
|
|
|
|
|
|
|
|
|
Basic
|
|
Diluted
|
|
Basic
|
|
Diluted
|
|
Weighted average number
of common shares
outstanding
|
36,969
|
|
37,161
|
|
36,797
|
|
37,150
|
|
Total adjusted net
income per share
|
$
0.44
|
|
$
0.44
|
|
$
1.35
|
|
$
1.35
|
|
Nine Months Ended
September 30,
2023
|
|
Nine Months Ended
September 30,
2022
|
|
$
|
|
$/Diluted
Share
|
|
$
|
|
$/Diluted
Share
|
|
(In thousands,
except per share amounts)
|
|
Net income available to
common stockholders
|
$
59,065
|
|
$
1.59
|
|
$
136,941
|
|
$
3.69
|
|
Gain on derivative
contracts
|
(1,447)
|
|
(0.04)
|
|
(3,194)
|
|
(0.09)
|
|
Realized settlement
gains (losses) on derivative
contracts
|
5,876
|
|
0.16
|
|
(867)
|
|
(0.02)
|
|
Employee termination
benefits
|
19
|
|
—
|
|
—
|
|
—
|
|
Restructuring
expenses
|
343
|
|
0.01
|
|
718
|
|
0.02
|
|
Interest
income
|
(7,857)
|
|
(0.21)
|
|
(8)
|
|
—
|
|
Adjusted net income
available to common
stockholders
|
$
55,999
|
|
$
1.51
|
|
$
133,590
|
|
$
3.60
|
|
|
|
|
|
|
|
|
|
Basic
|
|
Diluted
|
|
Basic
|
|
Diluted
|
|
Weighted average number
of common shares
outstanding
|
36,906
|
|
37,123
|
|
36,710
|
|
37,121
|
|
Total adjusted net
income per share
|
$
1.52
|
|
$
1.51
|
|
$
3.64
|
|
$
3.60
|
Reconciliation of General and Administrative to Adjusted
G&A
The Company reports and provides guidance on Adjusted G&A
per Boe because it believes this measure is commonly used by
management, analysts and investors as an indicator of cost
management and operating efficiency on a comparable basis from
period to period and to compare and make investment recommendations
of companies in the oil and gas industry. This non-GAAP measure
allows for the analysis of general and administrative spend without
regard to stock-based compensation programs and other non-recurring
cash items, if any, which can vary significantly between companies.
Adjusted G&A per Boe is not a measure of financial performance
under GAAP and should not be considered a substitute for general
and administrative expense per Boe. Therefore, the Company's
Adjusted G&A per Boe may not be comparable to other companies'
similarly titled measures.
The Company defines adjusted G&A as general and
administrative expense adjusted for certain non-cash stock-based
compensation and other non-recurring items, if any, as shown in the
following tables:
|
Three Months Ended
September 30,
2023
|
|
Three Months Ended
September 30,
2022
|
|
$
|
|
$/Boe
|
|
$
|
|
$/Boe
|
|
(In thousands,
except per Boe amounts)
|
|
General and
administrative
|
$
2,619
|
|
$
1.65
|
|
$
2,382
|
|
$
1.45
|
|
Stock-based
compensation
|
(476)
|
|
(0.30)
|
|
(377)
|
|
(0.23)
|
|
Adjusted
G&A
|
$
2,143
|
|
$
1.35
|
|
$
2,005
|
|
$
1.22
|
|
|
|
|
|
|
|
|
|
Nine Months Ended
September 30,
2023
|
|
Nine Months Ended
September 30,
2022
|
|
$
|
|
$/Boe
|
|
$
|
|
$/Boe
|
|
(In thousands,
except per Boe amounts)
|
|
General and
administrative(1)
|
$
8,004
|
|
$
1.71
|
|
$
7,083
|
|
$
1.46
|
|
Stock-based
compensation
|
(1,422)
|
|
(0.30)
|
|
(1,131)
|
|
(0.23)
|
|
Adjusted
G&A
|
$
6,582
|
|
$
1.41
|
|
$
5,952
|
|
$
1.23
|
|
|
|
|
|
|
|
|
|
(1) General
and administrative was impacted by a $0.4 million legal retainer
refund received, related to the 2016 bankruptcy, that was recorded
as a credit
reducing general and administrative
expense for the nine-month period ended September 30,
2022.
|
Cautionary Note to Investors - This press release includes
"forward-looking statements" within the meaning of Section 27A of
the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended. These forward-looking
statements are neither historical facts nor assurances of future
performance and reflect SandRidge's current beliefs and
expectations regarding future events and operating performance. The
forward-looking statements include projections and estimates of the
Company's corporate strategies, future operations, development
plans and appraisal programs, drilling inventory and locations,
estimated oil, natural gas and natural gas liquids production,
price realizations and differentials, hedging program, projected
operating, general and administrative and other costs, projected
capital expenditures, tax rates, efficiency and cost reduction
initiative outcomes, liquidity and capital structure and the
Company's unaudited proved developed PV-10 reserve value of its
Mid-Continent assets. We have based these forward-looking
statements on our current expectations and assumptions and analyses
made by us in light of our experience and our perception of
historical trends, current conditions and expected future
developments, as well as other factors we believe are appropriate
under the circumstances. However, whether actual results and
developments will conform with our expectations and predictions is
subject to a number of risks and uncertainties, including the
volatility of oil and natural gas prices, our success in
discovering, estimating, developing and replacing oil and natural
gas reserves, actual decline curves and the actual effect of adding
compression to natural gas wells, the availability and terms of
capital, the ability of counterparties to transactions with us to
meet their obligations, our timely execution of hedge transactions,
credit conditions of global capital markets, changes in economic
conditions, the amount and timing of future development costs, the
availability and demand for alternative energy sources, regulatory
changes, including those related to carbon dioxide and greenhouse
gas emissions, and other factors, many of which are beyond our
control. We refer you to the discussion of risk factors in Part I,
Item 1A - "Risk Factors" of our Annual Report on Form 10-K and in
comparable "Risk Factor" sections of our Quarterly Reports on Form
10-Q filed after such form 10-K. All of the forward-looking
statements made in this press release are qualified by these
cautionary statements. The actual results or developments
anticipated may not be realized or, even if substantially realized,
they may not have the expected consequences to or effects on our
Company or our business or operations. Such statements are not
guarantees of future performance and actual results or developments
may differ materially from those projected in the forward-looking
statements. We undertake no obligation to update or revise any
forward-looking statements.
SandRidge Energy, Inc. (NYSE: SD) is an independent oil and
gas company engaged in the development and acquisition of oil and
gas properties. Its primary area of operations is the Mid-Continent
region in Oklahoma and
Kansas. Further information can be
found at www.sandridgeenergy.com.
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SOURCE SANDRIDGE ENERGY, INC.