OKLAHOMA CITY, Aug. 8, 2018 /PRNewswire/ -- SandRidge Energy,
Inc. (the "Company" or "SandRidge") (NYSE:SD) today announced
financial and operational results for the quarter ended
June 30, 2018. For the second
quarter, the Company reported a net loss of $34 million, or $0.97 per share, and net cash provided by
operating activities of $26 million.
After adjusting for certain items, the Company's adjusted net loss
amounted to $2 million, or $0.05 per
share, operating cash flow totaled $24
million and adjusted EBITDA was $34
million for the quarter. The Company defines and reconciles
such non-GAAP financial measures to the most directly comparable
GAAP measure in supporting tables at the conclusion of this press
release under the "Non-GAAP Financial Measures" beginning on page
12.
As of August 2, 2018, the
Company's liquidity totaled $436
million, which includes $17
million of cash and $419
million of borrowing capacity under the credit facility, net
of outstanding letters of credit. The Company currently has no
funds drawn under its credit facility. During the quarter, the
Company sold the building adjacent to its corporate office
building, the Parkside Annex, for $10.75
million.
Highlights During and Subsequent to the Second
Quarter
- All five new North Park
wells exceed pre-drill production estimates with two achieving oil
rates in excess of 1,500 Bopd
- Five new wells online in the NW STACK with a combined 30-Day
IP rate averaging 584 Boepd (69% oil)
- Further reduced cash G&A and LOE costs to $30.6 million, down 22% from the second quarter
of 2017
- Strategic alternatives process moves to evaluation
phase
- New Board of Directors initiates thorough review of
Company's cost structure, asset development plan and potential for
monetization of non-core assets
Bill Griffin, President and CEO
commented, "Our second quarter performance further demonstrates the
Company's ability to stay focused on continuous improvement and
consistent operational execution through a period of change."
Mr. Griffin continued, "Our near-term course to strategically
deploy capital to create value and provide assurance for a clear,
organic growth plan is proving successful. This is best
demonstrated by the exciting results associated with our
North Park drilling program. We
recently brought five new Niobrara wells to sales, each with an
initial production rate exceeding our pre-drill projections. In
particular, four of these wells were drilled to test a twelve wells
per section spacing pattern and the average initial oil production
rate per well was 1,327 Bopd, which is 175% above type curve. This
outstanding performance provides additional support for testing
higher density spacing, which is scheduled to commence in the third
quarter of 2018. We also continue to selectively deploy
capital in the Mid-Continent, where we have commenced our
previously announced drilling program comprised of four Mississippi
Lime wells, which are expected to generate excellent returns, along
with continuation of our NW STACK delineation efforts with the
financial support provided under our drilling participation
agreement.
We have remained judicious in our capital spending as we advance
efforts to explore any and all strategic alternatives for
SandRidge. The Company has continued to make significant progress
to reverse production decline and establish a platform for
meaningful value growth and a strong balance sheet. Our
strategic process continues as we evaluate initial submittals, some
of which require reverse due diligence. The Board and
Management continue to work diligently to evaluate each and every
proposal, while weighing them against the present and future value
of the Company in light of our continued positive drilling
results."
Operational Results and Activity
During the quarter, production totaled 3.0 MMBoe (25% oil, 24%
NGLs and 51% natural gas). The Company averaged one rig in the NW
STACK targeting the Meramec and seven wells underwent completions
in the North Park Basin. Capital
expenditures totaled $37 million.
Niobrara Asset in North Park
Basin, Jackson County,
Colorado
During the first quarter, the Company laid out plans to drill
two spacing tests located on the eastern and western sides of the
field. The eastern area test utilizes a twelve wells per section
spacing pattern. The first two XRLs of the test, the Castle 5-17H20
and Castle 6-17H20, were announced earlier this year with an
average 30-Day IP of 1,109 Boepd (91% oil), 132% of type curve.
Four additional XRLs, targeting B, C and D benches, went to sales
subsequent to the second quarter with initial oil production rates
averaging 1,327 Bopd, 175% of type curve, all with less than thirty
days of production. The two remaining wells in the eastern area
spacing test are undergoing completion operations and updated well
results will be provided at a later date.
The western area is testing a twenty-three wells per section
pattern. The Company drilled the first well, the Peters 16-12H13,
at the beginning of the second quarter and it recently went to
sales with early rates of 832 Bopd, 109% of type curve. Given the
encouraging initial results, drilling operations on the remaining
wells of the western area spacing test will commence in the third
quarter with expected sales during the first quarter of 2019.
Net oil production in the North
Park Basin totaled 128 MBo (1.4 MBopd) for the second
quarter and gross current production is averaging over 6,000 Bopd,
inclusive of recent well outperformance.
Mid-Continent Assets in Oklahoma and Kansas
In the second quarter, production in the Miss Lime totaled 2.5
MMBoe (27 MBoepd, 17% oil) and NW STACK totaled 249 MBoe (2.7
MBoepd, 43% oil). The Company averaged one rig in the NW STACK
targeting the Meramec and drilled four wells under the previously
announced Drilling Participation Agreement. Two of the wells
drilled extend the play into SE Woodward
County, further delineating the successful core area.
Completion operations for the two step-out wells are underway with
first sales expected in the third quarter. Also during the
quarter, SandRidge brought six wells online with five having a
combined 30-Day IP averaging 584 Boepd (69% oil). Subsequent
to the quarter, the Company spud the first of four planned
Mississippian wells with an additional rig.
Other Operational Activities
During the second quarter, Permian Central Basin Platform
properties produced 113 MBoe (1.2 MBoepd, 80% oil, 13% NGLs, 7%
natural gas).
Conference Call Information
The Company will host a conference call to discuss these results
on Thursday, August 9, 2018 at
8:00 am CT. The telephone number to
access the conference call from within the U.S. is (833)
245-9650 and from outside the U.S. is (647) 689-4222. The
passcode for the call is 6365139. An audio replay of the call will
be available from August 9, 2018
until 11:59 pm CT on September 9, 2018. The number to access the
conference call replay from within the U.S. is (800) 585-8367 and
from outside the U.S. is (416) 621-4642. The passcode for the
replay is 6365139.
A live audio webcast of the conference call will also be
available via SandRidge's website, www.sandridgeenergy.com, under
Investor Relations/Presentation & Events. The webcast will be
archived for replay on the Company's website for 30 days.
2018 Operational and Capital Expenditure Guidance
As a result of realizing general and administrative ("G&A")
savings earlier in the year than expected, the Company lowered full
year adjusted G&A guidance from $41 - $44 million
to $40 - $42
million. In addition, the Company lowered LOE guidance from
$95 - $105
million to $92 - $95 million. Production taxes were also adjusted
to 5.30% - 5.70% from 4.80%. Presented below is the Company's
capital expenditure and updated operational guidance for 2018.
|
Updated
Guidance
|
|
Previous
Guidance
|
|
Projection as
of
|
|
Projection as
of
|
|
August 8,
2018
|
|
May 7,
2018
|
Production
|
|
|
|
Oil
(MMBbls)
|
3.4 - 3.6
|
|
3.4 - 3.6
|
Natural Gas Liquids
(MMBbls)
|
2.6 - 2.8
|
|
2.6 - 2.8
|
Total Liquids
(MMBbls)
|
6.0 - 6.4
|
|
6.0 - 6.4
|
Natural Gas
(Bcf)
|
31.5 -
33.0
|
|
31.5 -
33.0
|
Total
(MMBoe)
|
11.3 -
11.9
|
|
11.3 -
11.9
|
|
|
|
|
Price
Differential
|
|
|
|
Oil (per
Bbl)
|
$2.80
|
|
$2.80
|
Natural Gas Liquids
(realized % of NYMEX WTI)
|
36%
|
|
33%
|
Natural Gas (per
MMBtu)
|
$1.20
|
|
$1.20
|
|
|
|
|
Expenses
|
|
|
|
LOE
|
$92 - $95
million
|
|
$95 - $105
million
|
Adjusted G&A
Expense1
|
$40 - $42
million
|
|
$41 - $44
million
|
|
|
|
|
% of
Revenue
|
|
|
|
Production
Taxes
|
5.30% -
5.70%
|
|
4.80%
|
|
|
|
|
|
|
|
|
Capital
Expenditures ($ in millions)
|
|
Drilling and
Completion
|
|
|
|
Mid-Continent
|
$17 - $19
|
|
$17 - $19
|
North Park
Basin
|
65 - 73
|
|
65 - 73
|
Other2
|
34
|
|
34
|
Total Drilling and
Completion
|
$116 -
$126
|
|
$116 -
$126
|
|
|
|
|
Other
E&P
|
|
|
|
Land, G&G, and
Seismic
|
$15
|
|
$15
|
Infrastructure3
|
15
|
|
15
|
Workover
|
25
|
|
25
|
Capitalized G&A
and Interest
|
8
|
|
8
|
Total Other
Exploration and Production
|
$63
|
|
$63
|
|
|
|
|
General
Corporate
|
1
|
|
1
|
Total Capital
Expenditures
|
$180 -
$190
|
|
$180 -
$190
|
(excluding
acquisitions and plugging and abandonment)
|
|
|
|
|
|
1)
|
Adjusted G&A
expense is a non-GAAP financial measure. The Company has defined
this measure at the conclusion of this press release under
"Non-GAAP Financial Measures" beginning on page 12. Information to
reconcile this non-GAAP financial measure to the most directly
comparable GAAP financial measure is not available at this time, as
management is unable to forecast the excluded items for future
periods.
|
2)
|
Primarily 2017
Carryover
|
3)
|
Includes Production
Facilities, Pipeline ROW and Electrical
|
Operational and Financial Statistics
Information regarding the Company's production, pricing, costs
and earnings is presented below:
|
Three Months Ended
June 30,
|
|
Six Months Ended
June 30,
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
Production -
Total
|
|
|
|
|
|
|
|
Oil (MBbl)
|
755
|
|
|
1,042
|
|
|
1,681
|
|
|
2,176
|
|
NGL (MBbl)
|
700
|
|
|
907
|
|
|
1,400
|
|
|
1,794
|
|
Natural Gas
(MMcf)
|
8,977
|
|
|
11,267
|
|
|
18,464
|
|
|
23,033
|
|
Oil equivalent
(MBoe)
|
2,951
|
|
|
3,827
|
|
|
6,158
|
|
|
7,809
|
|
Daily production
(MBoed)
|
32.4
|
|
|
42.1
|
|
|
34.0
|
|
|
43.1
|
|
|
|
|
|
|
|
|
|
Average price per
unit
|
|
|
|
|
|
|
|
Realized oil price
per barrel - as reported
|
$
|
65.19
|
|
|
$
|
46.04
|
|
|
$
|
61.01
|
|
|
$
|
47.68
|
|
Realized impact of
derivatives per barrel
|
(16.44)
|
|
|
3.11
|
|
|
(12.01)
|
|
|
1.63
|
|
Net realized price
per barrel
|
$
|
48.75
|
|
|
$
|
49.15
|
|
|
$
|
49.00
|
|
|
$
|
49.31
|
|
|
|
|
|
|
|
|
|
Realized NGL price
per barrel - as reported
|
$
|
24.21
|
|
|
$
|
14.49
|
|
|
$
|
23.81
|
|
|
$
|
15.37
|
|
Realized impact of
derivatives per barrel
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Net realized price
per barrel
|
$
|
24.21
|
|
|
$
|
14.49
|
|
|
$
|
23.81
|
|
|
$
|
15.37
|
|
|
|
|
|
|
|
|
|
Realized natural gas
price per Mcf - as reported
|
$
|
1.46
|
|
|
$
|
2.08
|
|
|
$
|
1.65
|
|
|
$
|
2.23
|
|
Realized impact of
derivatives per Mcf
|
0.13
|
|
|
0.01
|
|
|
0.15
|
|
|
(0.04)
|
|
Net realized price
per Mcf
|
$
|
1.59
|
|
|
$
|
2.09
|
|
|
$
|
1.80
|
|
|
$
|
2.19
|
|
|
|
|
|
|
|
|
|
Realized price per
Boe - as reported
|
$
|
26.87
|
|
|
$
|
22.09
|
|
|
$
|
27.00
|
|
|
$
|
23.40
|
|
Net realized price
per Boe - including impact of derivatives
|
$
|
23.05
|
|
|
$
|
22.97
|
|
|
$
|
24.18
|
|
|
$
|
23.74
|
|
|
|
|
|
|
|
|
|
Average cost per
Boe
|
|
|
|
|
|
|
|
Lease
operating
|
$
|
7.04
|
|
|
$
|
6.59
|
|
|
$
|
7.39
|
|
|
$
|
6.43
|
|
Production
taxes
|
$
|
1.49
|
|
|
$
|
0.69
|
|
|
$
|
1.48
|
|
|
$
|
0.75
|
|
Depletion
(1)
|
$
|
10.49
|
|
|
$
|
7.70
|
|
|
$
|
9.57
|
|
|
$
|
7.23
|
|
|
|
|
|
|
|
|
|
Earnings per
share
|
|
|
|
|
|
|
|
(Loss) earnings per
share applicable to common stockholders
|
|
|
|
|
|
|
|
Basic
|
$
|
(0.97)
|
|
|
$
|
0.69
|
|
|
$
|
(2.15)
|
|
|
$
|
2.44
|
|
Diluted
|
$
|
(0.97)
|
|
|
$
|
0.69
|
|
|
$
|
(2.15)
|
|
|
$
|
2.42
|
|
|
|
|
|
|
|
|
|
Adjusted net (loss)
income per share available to common stockholders
|
|
|
|
|
|
|
|
Basic
|
$
|
(0.05)
|
|
|
$
|
0.23
|
|
|
$
|
0.11
|
|
|
$
|
0.95
|
|
Diluted
|
$
|
(0.05)
|
|
|
$
|
0.23
|
|
|
$
|
0.11
|
|
|
$
|
0.94
|
|
|
|
|
|
|
|
|
|
Weighted average
number of shares outstanding (in thousands)
|
|
|
|
|
|
|
|
Basic
|
35,017
|
|
|
34,076
|
|
|
34,800
|
|
|
30,458
|
|
Diluted
(2)
|
35,017
|
|
|
34,138
|
|
|
34,884
|
|
|
30,650
|
|
|
|
(1)
|
Includes accretion of
asset retirement obligation.
|
(2)
|
Includes shares
considered antidilutive for calculating loss per share in
accordance with GAAP.
|
Capital Expenditures
The table below presents actual results of the Company's capital
expenditures for the three and six months ended June 30, 2018 at the same level of detail as its
full year capital expenditure guidance.
|
Three Months
Ended
|
|
Six Months
Ended
|
|
June 30,
2018
|
|
June 30,
2018
|
|
(In
thousands)
|
|
(In
thousands)
|
|
|
|
|
Drilling and
Completion
|
|
|
|
Mid-Continent
|
$
|
1,474
|
|
|
$
|
3,391
|
|
North Park
Basin
|
12,240
|
|
|
20,474
|
|
Other1
|
9,092
|
|
|
24,657
|
|
Total Drilling and
Completion
|
22,806
|
|
|
48,522
|
|
|
|
|
|
Other
E&P
|
|
|
|
Land, G&G, and
Seismic
|
3,554
|
|
|
$
|
5,245
|
|
Infrastructure2
|
2,933
|
|
|
4,908
|
|
Workovers
|
6,378
|
|
|
12,746
|
|
Capitalized G&A
and Interest
|
1,761
|
|
|
3,277
|
|
Total Other
Exploration and Production
|
14,627
|
|
|
$
|
26,175
|
|
|
|
|
|
General
Corporate
|
—
|
|
|
$
|
—
|
|
|
|
|
|
Total Capital
Expenditures
|
$
|
37,432
|
|
|
$
|
74,697
|
|
(excluding
acquisitions and plugging and abandonment)
|
|
|
|
|
|
1)
|
Primarily 2017
Carryover
|
2)
|
Infrastructure -
Production Facilities, Pipeline ROW and Electrical
|
Derivative Contracts
In light of the high correlation between NGL and NYMEX WTI
prices, the Company manages a portion of its NGL price exposure
using NYMEX WTI contracts at a three-to-one (3:1) NGL to crude
ratio. The table below sets forth the Company's consolidated oil
and natural gas price swaps for 2018 and 2019 as of August 8, 2018:
|
|
Quarter
Ending
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3/31/2018
|
|
6/30/2018
|
|
9/30/2018
|
|
12/31/2018
|
|
FY
2018
|
WTI
Swaps:
|
|
|
|
|
|
|
|
|
|
|
Total Volume
(MMBbls)
|
|
1.05
|
|
1.00
|
|
0.92
|
|
0.83
|
|
3.80
|
Daily Volume
(MBblspd)
|
|
11.7
|
|
11.0
|
|
10.0
|
|
9.0
|
|
10.4
|
Swap Price
($/bbl)
|
|
$55.46
|
|
$55.50
|
|
$56.04
|
|
$56.12
|
|
$55.75
|
|
|
|
|
|
|
|
|
|
|
|
Natural Gas
Swaps:
|
|
|
|
|
|
|
|
|
|
|
Total Volume
(Bcf)
|
|
6.30
|
|
3.64
|
|
3.68
|
|
3.68
|
|
17.30
|
Daily Volume
(MMBtupd)
|
|
70.0
|
|
40.0
|
|
40.0
|
|
40.0
|
|
47.4
|
Swap Price
($/MMBtu)
|
|
$3.24
|
|
$3.11
|
|
$3.11
|
|
$3.11
|
|
$3.16
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3/31/2019
|
|
6/30/2019
|
|
9/30/2019
|
|
12/31/2019
|
|
FY
2019
|
WTI
Swaps:
|
|
|
|
|
|
|
|
|
|
|
Total Volume
(MMBbls)
|
|
0.45
|
|
0.46
|
|
0.46
|
|
0.46
|
|
1.83
|
Daily Volume
(MBblspd)
|
|
5.0
|
|
5.0
|
|
5.0
|
|
5.0
|
|
5.0
|
Swap Price
($/bbl)
|
|
$54.29
|
|
$54.29
|
|
$54.29
|
|
$54.29
|
|
$54.29
|
Capitalization
The Company's capital structure as of June 30, 2018 and
December 31, 2017 is presented below:
|
June 30,
2018
|
|
December 31,
2017
|
|
(In
thousands)
|
|
|
|
|
Cash, cash
equivalents and restricted cash
|
$
|
31,980
|
|
|
$
|
101,308
|
|
|
|
|
|
Credit
facility
|
$
|
—
|
|
|
$
|
—
|
|
Building
note
|
—
|
|
|
37,502
|
|
Total debt
|
—
|
|
|
37,502
|
|
|
|
|
|
Stockholders'
equity
|
|
|
|
Common
stock
|
35
|
|
|
36
|
|
Warrants
|
88,514
|
|
|
88,500
|
|
Additional paid-in
capital
|
1,053,595
|
|
|
1,038,324
|
|
Accumulated
deficit
|
(361,888)
|
|
|
(286,920)
|
|
Total SandRidge
Energy, Inc. stockholders' equity
|
780,256
|
|
|
839,940
|
|
|
|
|
|
Total
capitalization
|
$
|
780,256
|
|
|
$
|
877,442
|
|
SandRidge Energy,
Inc. and Subsidiaries
|
Condensed
Consolidated Statements of Operations (Unaudited)
|
(In thousands,
except per share amounts)
|
|
|
Three Months Ended
June 30,
|
|
Six Months Ended
June 30,
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
Revenues
|
|
|
|
|
|
|
|
Oil, natural gas and
NGL
|
$
|
79,304
|
|
|
$
|
84,546
|
|
|
$
|
166,270
|
|
|
$
|
182,695
|
|
Other
|
158
|
|
|
305
|
|
|
320
|
|
|
506
|
|
Total
revenues
|
79,462
|
|
|
84,851
|
|
|
166,590
|
|
|
183,201
|
|
Expenses
|
|
|
|
|
|
|
|
Production
|
20,785
|
|
|
25,209
|
|
|
45,498
|
|
|
50,232
|
|
Production
taxes
|
4,389
|
|
|
2,653
|
|
|
9,089
|
|
|
5,829
|
|
Depreciation and
depletion—oil and natural gas
|
30,961
|
|
|
29,477
|
|
|
58,958
|
|
|
56,457
|
|
Depreciation and
amortization—other
|
3,040
|
|
|
3,493
|
|
|
6,193
|
|
|
7,330
|
|
Impairment
|
—
|
|
|
446
|
|
|
4,170
|
|
|
2,977
|
|
General and
administrative
|
10,343
|
|
|
19,354
|
|
|
24,365
|
|
|
38,892
|
|
Accelerated vesting
upon change in control
|
6,545
|
|
|
—
|
|
|
6,545
|
|
|
—
|
|
Proxy
contest
|
7,191
|
|
|
—
|
|
|
7,598
|
|
|
—
|
|
Employee termination
benefits
|
1,043
|
|
|
4,415
|
|
|
32,630
|
|
|
4,815
|
|
Loss (gain) on
derivative contracts
|
30,104
|
|
|
(23,543)
|
|
|
48,434
|
|
|
(57,726)
|
|
Other operating
(expense) income
|
(1,254)
|
|
|
(1)
|
|
|
(1,238)
|
|
|
267
|
|
Total
expenses
|
113,147
|
|
|
61,503
|
|
|
242,242
|
|
|
109,073
|
|
(Loss) income from
operations
|
(33,685)
|
|
|
23,348
|
|
|
(75,652)
|
|
|
74,128
|
|
Other (expense)
income
|
|
|
|
|
|
|
|
Interest expense,
net
|
(651)
|
|
|
(946)
|
|
|
(1,599)
|
|
|
(1,885)
|
|
Gain on
extinguishment of debt
|
—
|
|
|
—
|
|
|
1,151
|
|
|
—
|
|
Other income,
net
|
217
|
|
|
1,055
|
|
|
1,090
|
|
|
2,025
|
|
Total other (expense)
income
|
(434)
|
|
|
109
|
|
|
642
|
|
|
140
|
|
(Loss) income before
income taxes
|
(34,119)
|
|
|
23,457
|
|
|
(75,010)
|
|
|
74,268
|
|
Income tax
benefit
|
(45)
|
|
|
(42)
|
|
|
(42)
|
|
|
(39)
|
|
Net (loss)
income
|
$
|
(34,074)
|
|
|
$
|
23,499
|
|
|
$
|
(74,968)
|
|
|
$
|
74,307
|
|
(Loss) earnings per
share
|
|
|
|
|
|
|
|
Basic
|
$
|
(0.97)
|
|
|
$
|
0.69
|
|
|
$
|
(2.15)
|
|
|
$
|
2.44
|
|
Diluted
|
$
|
(0.97)
|
|
|
$
|
0.69
|
|
|
$
|
(2.15)
|
|
|
$
|
2.42
|
|
Weighted average
number of common shares outstanding
|
|
|
|
|
|
|
|
Basic
|
35,017
|
|
|
34,076
|
|
|
34,800
|
|
|
30,458
|
|
Diluted
|
35,017
|
|
|
34,138
|
|
|
34,800
|
|
|
30,650
|
|
SandRidge Energy,
Inc. and Subsidiaries
|
Condensed
Consolidated Balance Sheets (Unaudited)
|
(In
thousands)
|
|
|
June 30,
2018
|
|
December 31,
2017
|
ASSETS
|
|
|
|
Current
assets
|
|
|
|
Cash and cash
equivalents
|
$
|
30,125
|
|
|
$
|
99,143
|
|
Restricted cash -
other
|
1,855
|
|
|
2,165
|
|
Accounts receivable,
net
|
58,992
|
|
|
71,277
|
|
Derivative
contracts
|
—
|
|
|
1,310
|
|
Prepaid
expenses
|
3,582
|
|
|
5,248
|
|
Other current
assets
|
411
|
|
|
15,954
|
|
Total current
assets
|
94,965
|
|
|
195,097
|
|
Oil and natural gas
properties, using full cost method of accounting
|
|
|
|
Proved
|
1,145,667
|
|
|
1,056,806
|
|
Unproved
|
87,268
|
|
|
100,884
|
|
Less: accumulated
depreciation, depletion and impairment
|
(515,822)
|
|
|
(460,431)
|
|
|
717,113
|
|
|
697,259
|
|
Other property, plant
and equipment, net
|
213,903
|
|
|
225,981
|
|
Other
assets
|
1,274
|
|
|
1,290
|
|
Total
assets
|
$
|
1,027,255
|
|
|
$
|
1,119,627
|
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
|
Current
liabilities
|
|
|
|
Accounts payable and
accrued expenses
|
$
|
120,550
|
|
|
$
|
139,155
|
|
Derivative
contracts
|
35,283
|
|
|
10,627
|
|
Asset retirement
obligations
|
39,981
|
|
|
41,017
|
|
Other current
liabilities
|
1,714
|
|
|
8,115
|
|
Total current
liabilities
|
197,528
|
|
|
198,914
|
|
Long-term
debt
|
—
|
|
|
37,502
|
|
Derivative
contracts
|
8,642
|
|
|
3,568
|
|
Asset retirement
obligations
|
38,204
|
|
|
36,527
|
|
Other long-term
obligations
|
2,625
|
|
|
3,176
|
|
Total
liabilities
|
246,999
|
|
|
279,687
|
|
Commitments and
contingencies
|
|
|
|
Stockholders'
Equity
|
|
|
|
Common stock, $0.001
par value; 250,000 shares authorized; 35,332 issued and outstanding
at June 30, 2018 and 35,650 issued and outstanding at December 31,
2017
|
35
|
|
|
36
|
|
Warrants
|
88,514
|
|
|
88,500
|
|
Additional paid-in
capital
|
1,053,595
|
|
|
1,038,324
|
|
Accumulated
deficit
|
(361,888)
|
|
|
(286,920)
|
|
Total stockholders'
equity
|
780,256
|
|
|
839,940
|
|
Total liabilities and
stockholders' equity
|
$
|
1,027,255
|
|
|
$
|
1,119,627
|
|
SandRidge Energy,
Inc. and Subsidiaries
|
Condensed
Consolidated Cash Flows (Unaudited)
|
(In
thousands)
|
|
|
Six Months Ended
June 30,
|
|
2018
|
|
2017
|
CASH FLOWS FROM
OPERATING ACTIVITIES
|
|
|
|
Net (loss)
income
|
$
|
(74,968)
|
|
|
$
|
74,307
|
|
Adjustments to
reconcile net (loss) income to net cash provided by operating
activities
|
|
|
|
Provision for
doubtful accounts
|
(6)
|
|
|
—
|
|
Depreciation,
depletion and amortization
|
65,151
|
|
|
63,787
|
|
Impairment
|
4,170
|
|
|
2,977
|
|
Debt issuance costs
amortization
|
235
|
|
|
195
|
|
Amortization of
premiums and discounts on debt
|
(47)
|
|
|
(153)
|
|
Gain on
extinguishment of debt
|
(1,151)
|
|
|
—
|
|
Loss (gain) on
derivative contracts
|
48,434
|
|
|
(57,726)
|
|
Cash (paid) received
on settlement of derivative contracts
|
(17,393)
|
|
|
2,706
|
|
Stock-based
compensation
|
21,909
|
|
|
9,654
|
|
Other
|
(1,563)
|
|
|
379
|
|
Changes in operating
assets and liabilities
|
11,346
|
|
|
7,806
|
|
Net cash provided by
operating activities
|
56,117
|
|
|
103,932
|
|
CASH FLOWS FROM
INVESTING ACTIVITIES
|
|
|
|
Capital expenditures
for property, plant and equipment
|
(95,328)
|
|
|
(88,904)
|
|
Acquisition of
assets
|
—
|
|
|
(48,236)
|
|
Proceeds from sale of
assets
|
13,563
|
|
|
14,756
|
|
Net cash used in
investing activities
|
(81,765)
|
|
|
(122,384)
|
|
CASH FLOWS FROM
FINANCING ACTIVITIES
|
|
|
|
Repayments of
borrowings
|
(36,304)
|
|
|
—
|
|
Debt issuance
costs
|
—
|
|
|
(1,488)
|
|
Cash paid for tax
withholdings on vested stock awards
|
(7,376)
|
|
|
(2,891)
|
|
Net cash used in
financing activities
|
(43,680)
|
|
|
(4,379)
|
|
NET DECREASE IN CASH,
CASH EQUIVALENTS and RESTRICTED CASH
|
(69,328)
|
|
|
(22,831)
|
|
CASH, CASH
EQUIVALENTS and RESTRICTED CASH, beginning of year
|
101,308
|
|
|
174,071
|
|
CASH, CASH
EQUIVALENTS and RESTRICTED CASH, end of period
|
$
|
31,980
|
|
|
$
|
151,240
|
|
Supplemental
Disclosure of Noncash Investing and Financing Activities
|
|
|
|
Change in accrued
capital expenditures
|
$
|
20,631
|
|
|
$
|
(8,340)
|
|
Equity issued for
debt
|
$
|
—
|
|
|
$
|
(268,779)
|
|
Non-GAAP Financial Measures
This press release includes non-GAAP financial
measures. These non-GAAP measures are not alternatives to
GAAP measures, and you should not consider
these non-GAAP measures in isolation or as a substitute
for analysis of our results as reported under GAAP. Below is
additional disclosure regarding each of
the non-GAAP measures used in this press release,
including reconciliations to their most directly comparable GAAP
measure.
Reconciliation of Cash Provided by Operating Activities to
Operating Cash Flow
The Company defines operating cash flow as net cash provided by
operating activities before changes in operating assets and
liabilities, as shown in the following table. Operating cash flow
is a supplemental financial measure used by the Company's
management and by securities analysts, investors, lenders, rating
agencies and others who follow the industry as an indicator of the
Company's ability to internally fund exploration and development
activities and to service or incur additional debt. The Company
also uses this measure because operating cash flow relates to the
timing of cash receipts and disbursements that the Company may not
control and may not relate to the period in which the operating
activities occurred. Further, operating cash flow allows the
Company to compare its operating performance and return on capital
with those of other companies without regard to financing methods
and capital structure. This measure should not be considered in
isolation or as a substitute for net cash provided by operating
activities prepared in accordance with GAAP.
|
Three Months Ended
June 30,
|
|
Six Months Ended
June 30,
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
|
(In
thousands)
|
Net cash provided by
operating activities
|
$
|
25,710
|
|
|
$
|
39,696
|
|
|
$
|
56,117
|
|
|
$
|
103,932
|
|
Changes in operating
assets and liabilities
|
(1,797)
|
|
|
3,471
|
|
|
(11,346)
|
|
|
(7,806)
|
|
Operating cash
flow
|
$
|
23,913
|
|
|
$
|
43,167
|
|
|
$
|
44,771
|
|
|
$
|
96,126
|
|
Reconciliation of Net (Loss) Income to EBITDA and Adjusted
EBITDA
The Company defines EBITDA as net (loss) income before income
tax benefit, interest expense, depreciation and amortization -
other and depreciation and depletion - oil and natural gas.
Adjusted EBITDA, as presented herein, is EBITDA excluding items
that the Company believes affect the comparability of operating
results such as items whose timing and/or amount cannot be
reasonably estimated or are non-recurring, as shown in the
following tables.
Adjusted EBITDA is presented because management believes it
provides useful additional information used by the Company's
management and by securities analysts, investors, lenders, ratings
agencies and others who follow the industry, for analysis of the
Company's financial and operating performance on a recurring basis
and the Company's ability to internally fund exploration and
development, and to service or incur additional debt. In addition,
management believes that adjusted EBITDA is widely used by
professional research analysts and others in the valuation,
comparison, and investment recommendations of companies in the oil
and gas exploration and production industry. The Company's adjusted
EBITDA may not be comparable to similarly titled measures used by
other companies.
|
Three Months Ended
June 30,
|
|
Six Months Ended
June 30,
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
|
(In
thousands)
|
Net (loss)
income
|
$
|
(34,074)
|
|
|
$
|
23,499
|
|
|
$
|
(74,968)
|
|
|
$
|
74,307
|
|
|
|
|
|
|
|
|
|
Adjusted
for
|
|
|
|
|
|
|
|
Income tax
benefit
|
(45)
|
|
|
(42)
|
|
|
(42)
|
|
|
(39)
|
|
Interest
expense
|
699
|
|
|
1,190
|
|
|
1,806
|
|
|
2,332
|
|
Depreciation and
amortization - other
|
3,040
|
|
|
3,493
|
|
|
6,193
|
|
|
7,330
|
|
Depreciation and
depletion - oil and natural gas
|
30,961
|
|
|
29,477
|
|
|
58,958
|
|
|
56,457
|
|
EBITDA
|
581
|
|
|
57,617
|
|
|
(8,053)
|
|
|
140,387
|
|
|
|
|
|
|
|
|
|
Asset
impairment
|
—
|
|
|
446
|
|
|
4,170
|
|
|
2,977
|
|
Stock-based
compensation
|
5,856
|
|
|
4,567
|
|
|
8,778
|
|
|
7,828
|
|
Loss (gain) on
derivative contracts
|
30,104
|
|
|
(23,543)
|
|
|
48,434
|
|
|
(57,726)
|
|
Cash (paid) received
upon settlement of derivative contracts
|
(11,274)
|
|
|
3,344
|
|
|
(17,393)
|
|
|
2,706
|
|
Employee termination
benefits
|
1,043
|
|
|
4,415
|
|
|
32,630
|
|
|
4,815
|
|
Proxy
contest
|
7,191
|
|
|
—
|
|
|
7,598
|
|
|
—
|
|
Acceleration of
performance units
|
1,232
|
|
|
—
|
|
|
1,232
|
|
|
—
|
|
Restructuring
costs
|
—
|
|
|
617
|
|
|
—
|
|
|
3,224
|
|
Gain on
extinguishment of debt
|
—
|
|
|
—
|
|
|
(1,151)
|
|
|
—
|
|
Other
|
(1,043)
|
|
|
(1,205)
|
|
|
(2,218)
|
|
|
(2,235)
|
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA
|
$
|
33,690
|
|
|
$
|
46,258
|
|
|
$
|
74,027
|
|
|
$
|
101,976
|
|
Reconciliation of Cash Provided by Operating Activities to
Adjusted EBITDA
|
Three Months Ended
June 30,
|
|
Six Months Ended
June 30,
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
|
|
|
|
|
(In
thousands)
|
Net cash provided by
operating activities
|
$
|
25,710
|
|
|
$
|
39,696
|
|
|
56,117
|
|
|
$
|
103,932
|
|
|
|
|
|
|
|
|
|
Changes in operating
assets and liabilities
|
(1,797)
|
|
|
3,471
|
|
|
(11,346)
|
|
|
(7,806)
|
|
Interest
expense
|
699
|
|
|
1,190
|
|
|
1,806
|
|
|
2,332
|
|
Employee termination
benefits (1)
|
862
|
|
|
2,590
|
|
|
19,499
|
|
|
2,990
|
|
Proxy
contest
|
7,191
|
|
|
—
|
|
|
7,598
|
|
|
—
|
|
Acceleration of
performance units
|
1,232
|
|
|
—
|
|
|
1,232
|
|
|
—
|
|
Restructuring
costs
|
—
|
|
|
617
|
|
|
—
|
|
|
3,224
|
|
Income tax
benefit
|
(45)
|
|
|
(42)
|
|
|
(42)
|
|
|
(39)
|
|
Other
|
(162)
|
|
|
(1,264)
|
|
|
(837)
|
|
|
(2,657)
|
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA
|
$
|
33,690
|
|
|
$
|
46,258
|
|
|
$
|
74,027
|
|
|
$
|
101,976
|
|
|
(1) Excludes
associated stock-based compensation.
|
Reconciliation of Net (Loss) Income Available to Common
Stockholders to Adjusted Net (Loss) Income Available to Common
Stockholders
The Company defines adjusted net (loss) income as net (loss)
income excluding items that the Company believes affect the
comparability of operating results and are typically excluded from
published estimates by the investment community, including items
whose timing and/or amount cannot be reasonably estimated or are
non-recurring, as shown in the following tables.
Management uses the supplemental measure of adjusted net (loss)
income as an indicator of the Company's operational trends and
performance relative to other oil and natural gas companies and
believes it is more comparable to earnings estimates provided by
securities analysts. Adjusted net (loss) income is not a measure of
financial performance under GAAP and should not be considered a
substitute for net (loss) income available to common
stockholders.
|
Three Months Ended
June 30, 2018
|
|
Three Months Ended
June 30, 2017
|
|
$
|
|
$/Diluted
Share
|
|
$
|
|
$/Diluted
Share
|
|
(In thousands,
except per share amounts)
|
Net (loss) income
available to common stockholders
|
$
|
(34,074)
|
|
|
$
|
(0.97)
|
|
|
$
|
23,499
|
|
|
$
|
0.69
|
|
|
|
|
|
|
|
|
|
Asset
impairment
|
—
|
|
|
—
|
|
|
446
|
|
|
0.01
|
|
Loss (gain) on
derivative contracts
|
30,104
|
|
|
0.86
|
|
|
(23,543)
|
|
|
(0.69)
|
|
Cash (paid) received
upon settlement of derivative contracts
|
(11,274)
|
|
|
(0.32)
|
|
|
3,344
|
|
|
0.10
|
|
Employee termination
benefits
|
1,043
|
|
|
0.03
|
|
|
4,415
|
|
|
0.13
|
|
Proxy
contest
|
7,191
|
|
|
0.21
|
|
|
—
|
|
|
—
|
|
Accelerated vesting
upon change in control
|
6,545
|
|
|
0.19
|
|
|
—
|
|
|
—
|
|
Restructuring
costs
|
—
|
|
|
—
|
|
|
617
|
|
|
0.02
|
|
Other
|
(1,324)
|
|
|
(0.05)
|
|
|
(790)
|
|
|
(0.03)
|
|
|
|
|
|
|
|
|
|
Adjusted net (loss)
income available to common stockholders
|
$
|
(1,789)
|
|
|
$
|
(0.05)
|
|
|
$
|
7,988
|
|
|
$
|
0.23
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
Diluted
(1)
|
|
Basic
|
|
Diluted
(1)
|
Weighted average
number of common shares outstanding
|
35,017
|
|
|
35,017
|
|
|
34,076
|
|
|
34,138
|
|
|
|
|
|
|
|
|
|
Total adjusted net
(loss) income per share
|
$
|
(0.05)
|
|
|
$
|
(0.05)
|
|
|
$
|
0.23
|
|
|
$
|
0.23
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended
June 30, 2018
|
|
Six Months Ended
June 30, 2017
|
|
$
|
|
$/Diluted
Share
|
|
$
|
|
$/Diluted
Share
|
|
(In thousands,
except per share amounts)
|
Net (loss) income
available to common stockholders
|
$
|
(74,968)
|
|
|
$
|
(2.15)
|
|
|
$
|
74,307
|
|
|
$
|
2.42
|
|
|
|
|
|
|
|
|
|
Asset
impairment
|
4,170
|
|
|
0.12
|
|
|
2,977
|
|
|
0.10
|
|
Loss (gain) on
derivative contracts
|
48,434
|
|
|
1.39
|
|
|
(57,726)
|
|
|
(1.88)
|
|
Cash (paid) received
upon settlement of derivative contracts
|
(17,393)
|
|
|
(0.50)
|
|
|
2,706
|
|
|
0.09
|
|
Employee termination
benefits
|
32,630
|
|
|
0.94
|
|
|
4,815
|
|
|
0.16
|
|
Proxy
contest
|
7,598
|
|
|
0.22
|
|
|
—
|
|
|
—
|
|
Accelerated vesting
upon change in control
|
6,545
|
|
|
0.19
|
|
|
—
|
|
|
—
|
|
Restructuring
costs
|
—
|
|
|
—
|
|
|
3,224
|
|
|
0.11
|
|
Gain on
extinguishment of debt
|
(1,151)
|
|
|
(0.03)
|
|
|
—
|
|
|
—
|
|
Other
|
(1,905)
|
|
|
(0.07)
|
|
|
(1,427)
|
|
|
(0.06)
|
|
|
|
|
|
|
|
|
|
Adjusted net income
available to common stockholders
|
$
|
3,960
|
|
|
$
|
0.11
|
|
|
$
|
28,876
|
|
|
$
|
0.94
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
Diluted
(1)
|
|
Basic
|
|
Diluted
(1)
|
Weighted average
number of common shares outstanding
|
34,800
|
|
|
34,884
|
|
|
30,458
|
|
|
30,650
|
|
|
|
|
|
|
|
|
|
Total adjusted net
income per share
|
$
|
0.11
|
|
|
$
|
0.11
|
|
|
$
|
0.95
|
|
|
$
|
0.94
|
|
|
|
|
|
|
|
|
|
(1)
Weighted average fully diluted common shares outstanding for
certain periods presented includes shares that are considered
antidilutive for calculating loss per share in accordance with GAAP.
|
Reconciliation of G&A to Adjusted G&A
The Company reports and provides guidance on Adjusted G&A
per Boe because it believes this measure is commonly used by
management, analysts and investors as an indicator of cost
management and operating efficiency on a comparable basis from
period to period, and to compare and make investment
recommendations of companies in the oil and gas industry. This
non-GAAP measure allows for the analysis of general and
administrative spend without regard to stock-based compensation
programs, and other non-recurring cash items which can vary
significantly between companies. Adjusted G&A per Boe is not a
measure of financial performance under GAAP and should not be
considered a substitute for general and administrative expense per
Boe. Therefore, the Company's Adjusted G&A per Boe may not be
comparable to other companies' similarly titled measures.
The Company defines adjusted G&A as general and
administrative expense adjusted for certain non-cash stock-based
compensation and other non-recurring items, as shown in the
following tables.
|
Three Months Ended
June 30, 2018
|
|
Three Months Ended
June 30, 2017
|
|
$
|
|
$/Boe
|
|
$
|
|
$/Boe
|
|
(In thousands,
except per Boe amounts)
|
General and
administrative
|
$
|
10,343
|
|
|
$
|
3.50
|
|
|
$
|
19,354
|
|
|
$
|
5.06
|
|
Stock-based
compensation (1)
|
(543)
|
|
|
(0.18)
|
|
|
(4,569)
|
|
|
(1.20)
|
|
Restructuring
costs
|
—
|
|
|
—
|
|
|
(617)
|
|
|
(0.16)
|
|
Adjusted
G&A
|
$
|
9,800
|
|
|
$
|
3.32
|
|
|
$
|
14,168
|
|
|
$
|
3.70
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended
June 30, 2018
|
|
Six Months Ended
June 30, 2017
|
|
$
|
|
$/Boe
|
|
$
|
|
$/Boe
|
|
(In thousands,
except per Boe amounts)
|
General and
administrative
|
$
|
24,365
|
|
|
$
|
3.96
|
|
|
$
|
38,892
|
|
|
$
|
4.98
|
|
Stock-based
compensation (1)
|
(3,465)
|
|
|
(0.57)
|
|
|
(7,829)
|
|
|
(1.01)
|
|
Restructuring
costs
|
—
|
|
|
—
|
|
|
(3,224)
|
|
|
(0.41)
|
|
Adjusted
G&A
|
$
|
20,900
|
|
|
$
|
3.39
|
|
|
$
|
27,839
|
|
|
$
|
3.56
|
|
|
|
|
|
|
|
|
|
(1) Three
and six-month periods ended June 30, 2018 exclude approximately
$5.5 million and $18.4 million, respectively, for the acceleration
of certain stock awards due to the
reduction in force in the first quarter of 2018 and the change in
control event in the second quarter of 2018. Three and six-month
periods ended June 30, 2017
exclude approximately $1.8 million for the acceleration of certain
stock awards.
|
For further information, please contact:
Johna Robinson
Investor Relations
SandRidge Energy, Inc.
123 Robert S. Kerr Avenue
Oklahoma City, OK 73102-6406
(405) 429-5515
Cautionary Note to Investors - This press release includes
"forward-looking statements" within the meaning of Section 27A of
the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended, including, but not
limited to, the information appearing under the heading "2018
Operational and Capital Expenditure Guidance." These statements
express a belief, expectation or intention and are generally
accompanied by words that convey projected future events or
outcomes. The forward-looking statements include projections and
estimates of the Company's corporate strategies, future operations,
and development plans and appraisal programs, drilling inventory
and locations, estimated oil, and natural gas and natural gas
liquids production, reserves, price realizations and differentials,
hedging program, projected operating, general and administrative
and other costs, projected capital expenditures, tax rates,
efficiency and cost reduction initiative outcomes, liquidity and
capital structure and infrastructure assessment and investment. We
have based these forward-looking statements on our current
expectations and assumptions and analyses made by us in light of
our experience and our perception of historical trends, current
conditions and expected future developments, as well as other
factors we believe are appropriate under the circumstances.
However, whether actual results and developments will conform with
our expectations and predictions is subject to a number of risks
and uncertainties, including the volatility of oil and natural gas
prices, our success in discovering, estimating, developing and
replacing oil and natural gas reserves, actual decline curves and
the actual effect of adding compression to natural gas wells, the
availability and terms of capital, the ability of counterparties to
transactions with us to meet their obligations, our timely
execution of hedge transactions, credit conditions of global
capital markets, changes in economic conditions, the amount and
timing of future development costs, the availability and demand for
alternative energy sources, regulatory changes, including those
related to carbon dioxide and greenhouse gas emissions, and other
factors, many of which are beyond our control. We refer you to the
discussion of risk factors in Part I, Item 1A - "Risk Factors" of
our Annual Report on Form 10-K and in comparable "Risk Factor"
sections of our Quarterly Reports on Form 10-Q filed after such
form 10-K. All of the forward-looking statements made in this press
release are qualified by these cautionary statements. The actual
results or developments anticipated may not be realized or, even if
substantially realized, they may not have the expected consequences
to or effects on our Company or our business or operations. Such
statements are not guarantees of future performance and actual
results or developments may differ materially from those projected
in the forward-looking statements. We undertake no obligation to
update or revise any forward-looking statements.
SandRidge Energy, Inc. (NYSE: SD) is an oil and natural gas
exploration and production company headquartered in Oklahoma City, Oklahoma with its principal
focus on developing high-return, growth oriented projects in
Oklahoma and Colorado. The majority of the Company's
production is generated from the Mississippi Lime formation in
Oklahoma and Kansas. Development activity is currently
focused on the Meramec formation in the NW STACK Play in
Oklahoma and multiple oil rich
Niobrara benches in the North Park
Basin in Colorado.
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SOURCE SandRidge Energy, Inc.