OKLAHOMA CITY, May 18, 2020 /PRNewswire/ -- SandRidge Energy,
Inc. (the "Company" or "SandRidge") (NYSE:SD) today announced
financial and operational results for the quarter ended
March 31, 2020.
Results and highlights during the quarter:
- Produced 28.2 MBoepd for the quarter
- Incurred a net loss of $13
million, or $0.36 per share,
driven largely by a non-cash ceiling test write down, and adjusted
net loss of $7 million, or
$0.21 per share
- Generated Adjusted EBITDA of $20
million for the quarter
- Decreased G&A and Adjusted G&A year-over-year by 45%
and 40%, respectively, to $5.5
million, or $2.14 per boe, and
$5.4 million, or $2.09 per boe
- Decreased LOE year-over-year by 31% to $15.6 million, or $6.09 per boe
- Reduced borrowings under the Company's credit facility to
$46 million at quarter end from
$57.5 million at 2019 year
end
Subsequent Key Events
Initiatives Related to COVID-19 and Oil Price
Movements
Due to the uncertainties presented by COVID-19 and recent steep
downdraft in commodity prices, the Company implemented several
proactive initiatives to optimize its cash flow, including:
- Corporate personnel reductions and other cost management
efforts that will lower Adjusted G&A expense to the new 2020
guidance of $11 - $15 million (down from the 2019 actual of
$29 million and the prior 2020
guidance of $18 - $20 million provided in February 2020)
- Field personnel reductions and other operational measures that
will lower LOE to the new 2020 guidance of $48 - $54 million
(down from the 2019 actual of $91
million and the prior 2020 guidance of $72 - $78 million
provided in February 2020)
- Reduced planned capital expenditures for 2020 to $4 - $9 million
(down from the 2019 actual of $162
million and the prior 2020 guidance of $25 - $30 million
provided in February 2020)
- A comprehensive well review to optimize cash flow in the
current low commodity price environment
- The execution of 30,000 MMBtu/d gas hedges for May through
October, 2020 at $2.11 per MMBtu and
a further 10,000 MMBtu/d gas hedges for July through October of
this year at $2.23 per MMBtu
Initiatives Related to Liquidity
The Company completed its semi-annual borrowing base
redetermination at $75 million under
its revolving credit facility in April
2020. It also signed an agreement to sell its corporate
headquarters for $35.5 million in
May 2020.
Given the anticipated third quarter proceeds from the
May 2020 agreement to sell its
corporate headquarters for $35.5
million as well as the expected increased cash flow from the
recently implemented cost and capex initiatives, together with
other levers available to the Company, management believes the
Company will have sufficient funds or access to other capital to
operate as a going concern in the current challenging commodity
price environment.
Initiatives Related to Management
The Company appointed Carl F. Giesler,
Jr. President and CEO in April
2020. It also announced a reduction in the size of its
executive team that will occur in July
2020.
Carl Giesler, President and CEO,
commented, "With the onset of the COVID-19 pandemic, we initiated
work-from-home policies and other best practices, in line with
federal, state and local guidelines, to ensure the health and
continued productivity of our employees. Additionally, with the
sharp downturn in commodity prices, we took swift measures to
maximize the cash flow and liquidity of our business. We
implemented steep decreases in personnel and other savings
measures, and we sharply curtailed planned capex for the year. We
will only spend capital required for safety or mechanical integrity
or for low spend, quick payback cash flow enhancing "small ball"
workovers and other projects. We believe our cost savings
initiatives coupled with our restricted planned capex should enable
us to generate positive operational free cash flow even in this
historically challenged commodity price environment.
"We would be remiss not to highlight the truly remarkable effort
of our employees. We anticipate production for 2020 to remain close
to prior guidance despite substantial reductions to our expected
G&A, LOE and capex for the year. Additionally, we have
continued our streak of no recordable incidents for 21 months.
These feats would not be possible without their hard work, focus
and professionalism in spite of the hardships and challenges from
COVID-19 and the recent significant changes to our
organization."
Financial Results
For the first quarter, the Company reported a net loss of
$13 million, or $0.36 per share, and net cash provided by
operating activities of $18 million.
After adjusting for certain items, the Company's adjusted net loss
amounted to $7 million, or
$0.21 per share, operating cash flow
totaled $17 million and adjusted
EBITDA was $20 million for the
quarter. The Company defines and reconciles adjusted net income,
adjusted EBITDA and other non-GAAP financial measures to the most
directly comparable GAAP measure in supporting tables at the
conclusion of this press release beginning on page 11.
Operational Results and Activity
Production totaled 2.6 MMBoe (27% oil, 30% NGLs and 43% natural
gas) for the quarter.
North Park Basin Asset in
Jackson County, Colorado
Net production for North Park
Basin totaled 328 MBo (3.6 MBopd) during the
quarter.
Mid-Continent Assets in Oklahoma and Kansas
Production in the Mississippian totaled 2.1 MMBoe (22.9 MBoepd,
14% oil) and 178 MBoe (2.0 MBoepd, 34% oil) in the Northwest STACK
during the quarter.
Building Sale
On May 15, 2020, the Company
signed an agreement to sell its corporate headquarters in
Oklahoma City for $35.5 million. The sale is expected to close in
the third quarter of 2020.
2020 Revised Capital Expenditures and Operational
Guidance
In 2020, the Company plans to spend $4 - $9 million in
total capital expenditures. Total production for 2020 is projected
to be 7.1 - 8.2 MMBoe given current commodity prices and the
outlook for prices for the remainder of the year. The year over
year production decline is expected to primarily be driven by
natural decline rates and permanent well shut-ins, as well as
temporary well shut-ins that can be quickly reactivated as prices
justify. Other operational guidance detail can be found on
the "Revised 2020 Operational and Capital Expenditure Guidance"
table below. With this plan, the Company intends to reduce
debt and maintain a manageable balance sheet.
Liquidity and Capital Structure
As of May 12, 2020, the Company's
total liquidity was $26 million,
based on $2 million of cash and
$24 million available under its
credit facility, net of outstanding letters of credit. The Company
currently has $48 million drawn on
the facility. Additionally, on that date, the Company's oil and gas
hedges had a mark-to-market value of $5
million.
Conference Call Information
The Company will host a conference call to discuss these results
on Tuesday, May 19, 2020 at
10:00 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 8675415. An audio replay of the call will
be available from May 19, 2020 until
11:59 pm CT on May 26, 2020. The number to access the conference
call replay is (800) 585-8367 or (416) 621-4642. The passcode for
the replay is 8675415.
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.
Revised 2020 Operational and Capital Expenditure
Guidance
Presented below is the Company's updated operational and capital
expenditure guidance for 2020.
|
|
|
|
|
|
|
Revised
Guidance
|
|
Previous
Guidance
|
|
Delta from
Midpoint
|
|
As
of
|
|
As
of
|
|
|
|
May 18,
2020
|
|
February 26,
2020
|
|
|
Production(1)
|
|
|
|
|
|
Oil
(MMBbls)
|
1.8 - 2.0
|
|
1.9 - 2.2
|
|
-7%
|
Natural Gas
Liquids (MMBbls)
|
2.0 - 2.4
|
|
1.7 - 2.0
|
|
19%
|
Total Liquids
(MMBbls)
|
3.8 - 4.4
|
|
3.6 - 4.2
|
|
5%
|
Natural Gas
(Bcf)
|
20.0 -
23.0
|
|
24.5 -
26.5
|
|
-16%
|
Total
(MMBoe)
|
7.1 - 8.2
|
|
7.7 - 8.6
|
|
-6%
|
|
|
|
|
|
|
Price
Differentials to NYMEX(1)
|
|
|
|
|
|
Oil (per
Bbl)
|
($4.25)
|
|
($3.85)
|
|
-10%
|
Natural Gas
(per MMBtu)
|
($1.25)
|
|
($1.30)
|
|
4%
|
|
|
|
|
|
|
Expenses
|
|
|
|
|
|
LOE
|
$48 - $54
million
|
|
$72 - $78
million
|
|
-32%
|
Adjusted
G&A Expense (2)
|
$11 - $15
million
|
|
$18 - $20
million
|
|
-32%
|
|
|
|
|
|
|
% of
Revenue
|
|
|
|
|
|
Severance and
Ad Valorem Taxes
|
7.0% -
7.5%
|
|
7.0% -
7.5%
|
|
—
|
|
|
|
|
|
|
Capital
Expenditures
|
|
|
|
|
|
Capital
Expenditures
(excluding acquisitions and plugging and
abandonment)
|
$4 - $9
million
|
|
$25 - $30
million
|
|
-76%
|
|
|
1.
|
Given current
commodity prices and the outlook for prices for the reminder of the
year.
|
2.
|
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 11. 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.
|
Operational and Financial Statistics
Information regarding the Company's production, pricing, costs
and earnings is presented below:
|
Three Months Ended
March 31,
|
|
2020
|
|
2019
|
Production -
Total
|
|
|
|
Oil (MBbl)
|
682
|
|
|
849
|
|
NGL (MBbl)
|
769
|
|
|
875
|
|
Natural Gas
(MMcf)
|
6,695
|
|
|
8,620
|
|
Oil equivalent
(MBoe)
|
2,567
|
|
|
3,161
|
|
Daily production
(MBoed)
|
28.2
|
|
|
35.1
|
|
|
|
|
|
Average price per
unit
|
|
|
|
Realized oil price
per barrel - as reported
|
$
|
42.01
|
|
|
$
|
50.84
|
|
Realized impact of
derivatives per barrel
|
6.00
|
|
|
—
|
|
Net realized price
per barrel
|
$
|
48.01
|
|
|
$
|
50.84
|
|
|
|
|
|
Realized NGL price
per barrel - as reported
|
$
|
7.72
|
|
|
$
|
14.98
|
|
Realized impact of
derivatives per barrel
|
—
|
|
|
—
|
|
Net realized price
per barrel
|
$
|
7.72
|
|
|
$
|
14.98
|
|
|
|
|
|
Realized natural gas
price per Mcf - as reported
|
$
|
0.83
|
|
|
$
|
1.95
|
|
Realized impact of
derivatives per Mcf
|
—
|
|
|
0.59
|
|
Net realized price
per Mcf
|
$
|
0.83
|
|
|
$
|
2.54
|
|
|
|
|
|
Realized price per
Boe - as reported
|
$
|
15.64
|
|
|
$
|
23.11
|
|
Net realized price
per Boe - including impact of derivatives
|
$
|
17.23
|
|
|
$
|
24.72
|
|
|
|
|
|
Average cost per
Boe
|
|
|
|
Lease
operating
|
$
|
6.09
|
|
|
$
|
7.21
|
|
Production, ad
valorem, and other taxes
|
$
|
1.25
|
|
|
$
|
1.61
|
|
Depletion
(1)
|
$
|
9.68
|
|
|
$
|
11.54
|
|
|
|
|
|
Loss per
share
|
|
|
|
Loss per share
applicable to common stockholders
|
|
|
|
Basic
|
$
|
(0.36)
|
|
|
$
|
(0.15)
|
|
Diluted
|
$
|
(0.36)
|
|
|
$
|
(0.15)
|
|
|
|
|
|
Adjusted net loss per
share available to common stockholders
|
|
|
|
Basic
|
$
|
(0.21)
|
|
|
$
|
—
|
|
Diluted
|
$
|
(0.21)
|
|
|
$
|
—
|
|
|
|
|
|
Weighted average
number of shares outstanding (in thousands)
|
|
|
|
Basic
|
35,551
|
|
|
35,322
|
|
Diluted
|
35,551
|
|
|
35,322
|
|
|
|
|
|
(1)
Includes accretion of asset retirement obligation.
|
Capital Expenditures
The table below presents actual results of the Company's capital
expenditures for the three months ended March 31, 2020.
|
Three Months
Ended
|
|
March 31,
2020
|
|
(In
thousands)
|
|
|
Total Capital
Expenditures
|
$
|
1,927
|
(excluding
acquisitions and plugging and abandonment)
|
|
Derivative Contracts
The table below sets forth the Company's hedge position for 2020
as of May 18, 2020:
|
|
Quarter
Ending
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3/31/2020
|
|
6/30/2020
|
|
9/30/2020
|
|
12/31/2020
|
|
FY
2020
|
WTI
Swaps:
|
|
|
|
|
|
|
|
|
|
|
Total Volume
(MBbls)
|
|
273.0
|
|
182.0
|
|
-
|
|
-
|
|
455.0
|
Swap Price
($/Bbl)
|
|
$61.05
|
|
$60.00
|
|
-
|
|
-
|
|
$60.63
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3/31/2020
|
|
6/30/2020
|
|
9/30/2020
|
|
12/31/2020
|
|
FY
2020
|
Natural Gas
Swaps:
|
|
|
|
|
|
|
|
|
|
|
Total Volume
(Bcf)
|
|
-
|
|
1.83
|
|
3.68
|
|
1.24
|
|
6.75
|
Swap Price
($/MMBtu)
|
|
-
|
|
$2.11
|
|
$2.14
|
|
$2.14
|
|
$2.13
|
Capitalization
The Company's capital structure as of March 31, 2020 and
December 31, 2019 is presented below:
|
March 31,
2020
|
|
December 31,
2019
|
|
|
|
|
|
(In
thousands)
|
|
|
|
|
Cash, cash
equivalents and restricted cash
|
$
|
7,741
|
|
|
$
|
5,968
|
|
|
|
|
|
Credit
facility
|
$
|
46,000
|
|
|
$
|
57,500
|
|
Total debt
|
46,000
|
|
|
57,500
|
|
|
|
|
|
Stockholders'
equity
|
|
|
|
Common
stock
|
36
|
|
|
36
|
|
Warrants
|
88,520
|
|
|
88,520
|
|
Additional paid-in
capital
|
1,059,437
|
|
|
1,059,253
|
|
Accumulated
deficit
|
(758,027)
|
|
|
(745,357)
|
|
Total SandRidge
Energy, Inc. stockholders' equity
|
389,966
|
|
|
402,452
|
|
|
|
|
|
Total
capitalization
|
$
|
435,966
|
|
|
$
|
459,952
|
|
SandRidge Energy,
Inc. and Subsidiaries
Condensed
Consolidated Statements of Operations (Unaudited)
(In thousands,
except per share amounts)
|
|
|
Three Months Ended
March 31,
|
|
2020
|
|
2019
|
Revenues
|
|
|
|
Oil, natural gas and
NGL
|
$
|
40,139
|
|
|
$
|
73,048
|
|
Other
|
190
|
|
|
188
|
|
Total
revenues
|
40,329
|
|
|
73,236
|
|
Expenses
|
|
|
|
Lease operating
expenses
|
15,642
|
|
|
22,779
|
|
Production, ad valorem,
and other taxes
|
3,199
|
|
|
5,080
|
|
Depreciation and
depletion—oil and natural gas
|
24,855
|
|
|
36,465
|
|
Depreciation and
amortization—other
|
2,634
|
|
|
2,943
|
|
Impairment
|
7,970
|
|
|
—
|
|
General and
administrative
|
5,483
|
|
|
9,939
|
|
Employee termination
benefits
|
3,254
|
|
|
—
|
|
(Gain) loss on
derivative contracts
|
(10,226)
|
|
|
209
|
|
Other operating
expense
|
277
|
|
|
82
|
|
Total
expenses
|
53,088
|
|
|
77,497
|
|
(Loss) income from
operations
|
(12,759)
|
|
|
(4,261)
|
|
Other (expense)
income
|
|
|
|
Interest expense,
net
|
(637)
|
|
|
(585)
|
|
Other income (expense),
net
|
76
|
|
|
(431)
|
|
Total other
expense
|
(561)
|
|
|
(1,016)
|
|
Loss before income
taxes
|
(13,320)
|
|
|
(5,277)
|
|
Income tax
benefit
|
(650)
|
|
|
—
|
|
Net loss
|
$
|
(12,670)
|
|
|
$
|
(5,277)
|
|
Loss per
share
|
|
|
|
Basic
|
$
|
(0.36)
|
|
|
$
|
(0.15)
|
|
Diluted
|
$
|
(0.36)
|
|
|
$
|
(0.15)
|
|
Weighted average
number of common shares outstanding
|
|
|
|
Basic
|
35,551
|
|
|
35,322
|
|
Diluted
|
35,551
|
|
|
35,322
|
|
SandRidge Energy,
Inc. and Subsidiaries
Condensed
Consolidated Balance Sheets (Unaudited)
(In
thousands)
|
|
|
March 31,
2020
|
|
December 31,
2019
|
ASSETS
|
|
|
|
Current
assets
|
|
|
|
Cash and cash
equivalents
|
$
|
6,287
|
|
|
$
|
4,275
|
|
Restricted cash -
other
|
1,454
|
|
|
1,693
|
|
Accounts receivable,
net
|
21,039
|
|
|
28,644
|
|
Derivative
contracts
|
6,253
|
|
|
114
|
|
Prepaid
expenses
|
3,096
|
|
|
3,342
|
|
Other current
assets
|
527
|
|
|
538
|
|
Total current
assets
|
38,656
|
|
|
38,606
|
|
Oil and natural gas
properties, using full cost method of accounting
|
|
|
|
Proved
|
1,487,721
|
|
|
1,484,359
|
|
Unproved
|
24,298
|
|
|
24,603
|
|
Less: accumulated
depreciation, depletion and impairment
|
(1,160,486)
|
|
|
(1,129,622)
|
|
|
351,533
|
|
|
379,340
|
|
Other property, plant
and equipment, net
|
181,851
|
|
|
188,603
|
|
Other
assets
|
953
|
|
|
1,140
|
|
Total
assets
|
$
|
572,993
|
|
|
$
|
607,689
|
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
|
Current
liabilities
|
|
|
|
Accounts payable and
accrued expenses
|
$
|
55,033
|
|
|
$
|
64,937
|
|
Asset retirement
obligation
|
21,728
|
|
|
22,119
|
|
Other current
liabilities
|
1,252
|
|
|
1,367
|
|
Total current
liabilities
|
78,013
|
|
|
88,423
|
|
Long-term
debt
|
46,000
|
|
|
57,500
|
|
Asset retirement
obligation
|
52,115
|
|
|
52,897
|
|
Other long-term
obligations
|
6,899
|
|
|
6,417
|
|
Total
liabilities
|
183,027
|
|
|
205,237
|
|
Stockholders'
Equity
|
|
|
|
C Common stock,
$0.001 par value; 250,000 shares authorized; 35,810 issued and
outstanding at March 31, 2020 and 35,772 issued and
outstanding at December 31, 2019
|
36
|
|
|
36
|
|
Warrants
|
88,520
|
|
|
88,520
|
|
Additional paid-in
capital
|
1,059,437
|
|
|
1,059,253
|
|
Accumulated
deficit
|
(758,027)
|
|
|
(745,357)
|
|
Total stockholders'
equity
|
389,966
|
|
|
402,452
|
|
Total liabilities and
stockholders' equity
|
$
|
572,993
|
|
|
$
|
607,689
|
|
SandRidge Energy,
Inc. and Subsidiaries
Condensed
Consolidated Cash Flows (Unaudited)
(In
thousands)
|
|
|
Three Months Ended
March 31,
|
|
|
2020
|
|
2019
|
CASH FLOWS FROM
OPERATING ACTIVITIES
|
|
|
|
|
Net loss
|
|
$
|
(12,670)
|
|
|
$
|
(5,277)
|
|
Adjustments to
reconcile net loss to net cash provided by operating
activities
|
|
|
|
|
Provision for doubtful
accounts
|
|
283
|
|
|
72
|
|
Depreciation,
depletion, and amortization
|
|
27,489
|
|
|
39,408
|
|
Impairment
|
|
7,970
|
|
|
—
|
|
Debt issuance costs
amortization
|
|
159
|
|
|
117
|
|
(Gain) loss on
derivative contracts
|
|
(10,226)
|
|
|
209
|
|
Cash received on
settlement of derivative contracts
|
|
4,087
|
|
|
5,078
|
|
Stock-based
compensation
|
|
169
|
|
|
996
|
|
Other
|
|
156
|
|
|
(35)
|
|
Changes in operating
assets and liabilities
|
|
686
|
|
|
(8,998)
|
|
Net cash provided by
operating activities
|
|
18,103
|
|
|
31,570
|
|
CASH FLOWS FROM
INVESTING ACTIVITIES
|
|
|
|
|
Capital expenditures
for property, plant and equipment
|
|
(5,452)
|
|
|
(62,254)
|
|
Acquisition of
assets
|
|
—
|
|
|
326
|
|
Proceeds from sale of
assets
|
|
989
|
|
|
341
|
|
Net cash used in
investing activities
|
|
(4,463)
|
|
|
(61,587)
|
|
CASH FLOWS FROM
FINANCING ACTIVITIES
|
|
|
|
|
Proceeds from
borrowings
|
|
21,000
|
|
|
39,596
|
|
Repayments of
borrowings
|
|
(32,500)
|
|
|
(19,596)
|
|
Reduction of financing
lease liability
|
|
(366)
|
|
|
(293)
|
|
Cash paid for tax
withholdings on vested stock awards
|
|
(1)
|
|
|
—
|
|
Net cash (used in)
provided by financing activities
|
|
(11,867)
|
|
|
19,707
|
|
NET INCREASE
(DECREASE) IN CASH, CASH EQUIVALENTS and RESTRICTED CASH
|
|
1,773
|
|
|
(10,310)
|
|
CASH, CASH
EQUIVALENTS and RESTRICTED CASH, beginning of year
|
|
5,968
|
|
|
19,645
|
|
CASH, CASH
EQUIVALENTS and RESTRICTED CASH, end of period
|
|
$
|
7,741
|
|
|
$
|
9,335
|
|
|
|
|
|
|
Supplemental
Disclosure of Cash Flow Information
|
|
|
|
|
Cash paid for
interest, net of amounts capitalized
|
|
$
|
(540)
|
|
|
$
|
(408)
|
|
Cash received for
income taxes
|
|
$
|
616
|
|
|
$
|
—
|
|
Supplemental
Disclosure of Noncash Investing and Financing Activities
|
|
|
|
|
Purchase of PP&E
in accounts payable
|
|
$
|
1,066
|
|
|
$
|
43,425
|
|
Right-of-use assets
obtained in exchange for financing lease obligations
|
|
$
|
67
|
|
|
$
|
1,992
|
|
|
|
|
|
|
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
March 31,
|
|
2020
|
|
2019
|
|
|
|
|
|
(In
thousands)
|
Net cash provided by
operating activities
|
$
|
18,103
|
|
|
$
|
31,570
|
|
Changes in operating
assets and liabilities
|
(686)
|
|
|
8,998
|
|
Operating cash
flow
|
$
|
17,417
|
|
|
$
|
40,568
|
|
Reconciliation of Net Loss to EBITDA and Adjusted
EBITDA
The Company defines EBITDA as net 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
March 31,
|
|
2020
|
|
2019
|
|
|
|
|
|
(In
thousands)
|
Net loss
|
$
|
(12,670)
|
|
|
$
|
(5,277)
|
|
|
|
|
|
Adjusted
for
|
|
|
|
Income tax (benefit)
expense
|
(650)
|
|
|
—
|
|
Interest
expense
|
644
|
|
|
612
|
|
Depreciation and
amortization - other
|
2,634
|
|
|
2,943
|
|
Depreciation and
depletion - oil and natural gas
|
24,855
|
|
|
36,465
|
|
EBITDA
|
14,813
|
|
|
34,743
|
|
|
|
|
|
Asset
impairment
|
7,970
|
|
|
—
|
|
Stock-based
compensation (1)
|
128
|
|
|
996
|
|
(Gain) loss on
derivative contracts
|
(10,226)
|
|
|
209
|
|
Cash received upon
settlement of derivative contracts
|
4,087
|
|
|
5,078
|
|
Employee termination
benefits
|
3,254
|
|
|
—
|
|
Other
|
107
|
|
|
(91)
|
|
|
|
|
|
Adjusted
EBITDA
|
$
|
20,133
|
|
|
$
|
40,935
|
|
|
|
1.
|
Excludes non-cash
stock-based compensation included in employee termination
benefits.
|
Reconciliation of Cash Provided by Operating Activities to
Adjusted EBITDA
|
Three Months Ended
March 31,
|
|
2020
|
|
2019
|
|
|
|
|
|
(In
thousands)
|
Net cash provided by
operating activities
|
$
|
18,103
|
|
|
$
|
31,570
|
|
|
|
|
|
Changes in operating
assets and liabilities
|
(686)
|
|
|
8,998
|
|
Interest
expense
|
644
|
|
|
612
|
|
Employee termination
benefits (1)
|
3,214
|
|
|
—
|
|
Income tax (benefit)
expense
|
(650)
|
|
|
—
|
|
Other
|
(492)
|
|
|
(245)
|
|
|
|
|
|
Adjusted
EBITDA
|
$
|
20,133
|
|
|
$
|
40,935
|
|
|
|
|
|
|
|
1.
|
Excludes associated
stock-based compensation.
|
Reconciliation of Net Loss Available to
Common Stockholders to Adjusted Net Loss Available to Common
Stockholders
The Company defines adjusted net loss as net loss 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 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 is not a measure of financial
performance under GAAP and should not be considered a substitute
for net loss available to common stockholders.
|
Three Months Ended
March 31, 2020
|
|
Three Months Ended
March 31, 2019
|
|
$
|
|
$/Diluted
Share
|
|
$
|
|
$/Diluted
Share
|
|
|
|
|
|
|
|
|
|
(In thousands,
except per share amounts)
|
Net loss available to
common stockholders
|
$
|
(12,670)
|
|
|
$
|
(0.35)
|
|
|
$
|
(5,277)
|
|
|
$
|
(0.15)
|
|
|
|
|
|
|
|
|
|
Asset
impairment
|
7,970
|
|
|
0.22
|
|
|
—
|
|
|
—
|
|
(Gain) loss on
derivative contracts
|
(10,226)
|
|
|
(0.29)
|
|
|
209
|
|
|
0.01
|
|
Cash received upon
settlement of derivative contracts
|
4,087
|
|
|
0.11
|
|
|
5,078
|
|
|
0.14
|
|
Employee termination
benefits
|
3,254
|
|
|
0.09
|
|
|
—
|
|
|
—
|
|
Other
|
113
|
|
|
0.01
|
|
|
(64)
|
|
|
—
|
|
|
|
|
|
|
|
|
|
Adjusted net loss
available to common stockholders
|
$
|
(7,472)
|
|
|
$
|
(0.21)
|
|
|
$
|
(54)
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
Diluted
|
|
Basic
|
|
Diluted
|
Weighted average
number of common shares outstanding
|
35,551
|
|
|
35,551
|
|
|
35,322
|
|
|
35,322
|
|
|
|
|
|
|
|
|
|
Total adjusted net
loss per share
|
$
|
(0.21)
|
|
|
$
|
(0.21)
|
|
|
$
|
—
|
|
|
$
|
—
|
|
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, 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
March 31, 2020
|
|
Three Months Ended
March 31, 2019
|
|
$
|
|
$/Boe
|
|
$
|
|
$/Boe
|
|
|
|
|
|
|
|
|
|
(In thousands,
except per Boe amounts)
|
General and
administrative
|
$
|
5,483
|
|
|
$
|
2.14
|
|
|
$
|
9,939
|
|
|
$
|
3.14
|
|
Stock-based
compensation (1)
|
(128)
|
|
|
(0.05)
|
|
|
(996)
|
|
|
(0.31)
|
|
Adjusted
G&A
|
$
|
5,355
|
|
|
$
|
2.09
|
|
|
$
|
8,943
|
|
|
$
|
2.83
|
|
|
|
|
|
|
|
|
|
|
|
1.
|
Excludes non-cash
stock-based compensation included in employee termination
benefits.
|
For further information, please contact:
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 "Revised
2020 Operational and Capital Expenditure Guidance." 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. 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 areas of operation are the
Mid-Continent in Oklahoma and
Kansas and the North Park Basin in Colorado. Further information can be found at
www.sandridgeenergy.com.
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SOURCE SandRidge Energy, Inc.