OKLAHOMA
CITY, Aug. 3, 2022 /PRNewswire/ -- SandRidge
Energy, Inc. (the "Company" or "SandRidge") (NYSE: SD) today
announced financial and operational results for the three and
six-month periods ended June 30, 2022.
Recent Highlights
- Generated Adjusted EBITDA(1) of $53.7 million in the second quarter compared to
$39.4 million in the prior
quarter
- Second quarter net income was $48.5
million, or $1.32 per basic
share. Adjusted net income(1) was $48.9 million, or $1.33 per basic share.
- Second quarter 2022 production of 17.8 MBoed was consistent
with first quarter 2022, despite no new completion activity
- Successfully drilled the first two wells of its previously
announced 2022 capital development program during the second
quarter with completions and first production commencing during the
third quarter
- As of June 30, 2022, the
Company returned 29 wells to production in the first half of
2022 that were previously curtailed due to the 2020 commodity price
downturn. The Company has returned a total of 158 wells to
production since the beginning of 2021
- Second quarter adjusted G&A(1) of $1.8 million, or $1.09 per Boe, compared to $2.2 million, or $1.35 per Boe in the prior quarter
- Updated 2022 operational and capital expenditure guidance to
include the addition of three new wells to the Company's drilling
and completion program in addition to expanded well reactivation
activity
- The Company had no open hedge positions as of June 30, 2022
Financial Results & Update
Profitability & Realized Pricing
For the three-months ended June 30, 2022, the Company
reported net income of $48.5 million,
or $1.32 per basic share, and net
cash provided by operating activities of $47.0 million. After adjusting for certain items,
the Company's adjusted net income(1) amounted to
$48.9 million, or $1.33 per basic share, adjusted operating cash
flow(1) totaled $53.3
million and adjusted EBITDA(1) was $53.7 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.
Second quarter realized oil, natural gas, and natural gas
liquids prices, before the impact of derivatives,(2)
were $109.06, $5.30 and $35.96,
respectively, compared to $92.35,
$3.84 and $33.73 in the prior quarter.
Operating Costs
During the second quarter of 2022, lease operating expense
("LOE") was $9.5 million or
$5.87 per Boe compared to
$10.9 million, or $6.76 per Boe in the prior quarter.
For the three months ended June 30, 2022, general and
administrative expense ("G&A") was $2.2
million, or $1.34 per Boe
compared to $2.5 million, or
$1.57 per Boe for the three months
ended March 31, 2022. Adjusted
G&A(1) was $1.8
million, or $1.09 per Boe
during the second quarter of 2022 compared to $2.2 million, or $1.35 per Boe during the first quarter of
2022.
Operational Results & Update
Production
Production totaled 1,620 MBoe (17.8 MBoed, 12.8% oil, 33.4% NGLs
and 53.8% natural gas) for the three-months ended June 30,
2022 compared to 1,606 MBoe (17.8 MBoed, 13.3% oil, 32.8% NGLs, and
53.9% natural gas) in the first quarter. This consistent
quarter-over-quarter production profile was a result of the
Company's ongoing well reactivation program. The first of the
Company's planned 2022 completions are being turned to production
during the third quarter.
2022 Development Program
During the second quarter, SandRidge successfully drilled the
first two wells of its previously announced 2022 capital
development program with completions and first production
commencing during the third quarter. The third well is currently in
the drilling phase. The Company announced an increase to its
planned 2022 drilling and completion activity from nine wells to
twelve wells.
Well Reactivation & Rod Pump Conversion Program
During the second quarter of 2022, the Company continued
returning wells to production that were previously curtailed due to
the commodity price downturn in the first half of 2020 and, in many
cases, improving their production potential through capital
improvements. Improved commodity pricing resulting in high rates of
return, along with low execution risk, support the Company's belief
that these projects represent a superior use of capital. During the
second quarter of 2022, the Company brought 19 wells back online,
bringing the total for the first half of 2022 to 29 and the total
since the beginning of 2021 to 158. Throughout 2022, SandRidge
currently expects to return approximately 54 wells to production
and complete approximately 36 artificial lift conversions. The
Company continues to evaluate its inventory of such projects.
Environmental, Social, and Governance ("ESG")
SandRidge maintains its Environmental, Social, and Governance
("ESG") commitment, to include no routine flaring of produced
natural gas. The Company continues to explore the technical and
commercial viability of Carbon Capture, Utilization, and
Sequestration ("CCUS") across its owned and operated assets through
its partnership with the University of
Oklahoma.
Recently announced Operational and Capital Expenditure
Guidance
As a result of current and expected commodity prices enhancing
project returns, the Company now plans to spend $40-$50 million in
drilling and completions ("D&C") capital and $16-$20 million in
non-D&C capital for well reactivations and rod pump
conversions. Total production for 2022 is projected to be 5.9-7.1
MMBoe, representing an approximately 5% increase at the midpoint
vs. its prior production guidance. In addition to the benefit of
added production this year, increased activity in the second half
of 2022 is expected to contribute an approximately 13% uplift in
2023 volumes. The table below outlines changes to the Company's
full year 2022 guidance in further detail.
|
Six Months Ended
June 30, 2022
|
|
Updated 2022E
Guidance(3)
|
Production
|
|
|
|
Oil (MMBbls)
|
0.4
|
|
0.9 - 1.1
|
Natural Gas Liquids
(MMBbls)
|
1.1
|
|
1.9 - 2.3
|
Total Liquids
(MMBbls)
|
1.5
|
|
2.8 -
3.4
|
Natural Gas
(Bcf)
|
10.4
|
|
18.4 - 22.4
|
Total
(MMBoe)
|
3.2
|
|
5.9 -
7.1
|
|
|
|
|
Capital
Expenditures
|
|
|
|
Drilling &
Completions ("D&C")
|
$16.2
million
|
|
$40 - $50
million
|
Non-D&C
|
$5.6 million
|
|
$16 - $20
million
|
Total Capital
Expenditures
|
$21.8
million
|
|
$56 - $70
million
|
|
|
|
|
Expenses
|
|
|
|
Lease Operating
Expenses ("LOE")
|
$20.4
million
|
|
$39 - $47
million
|
|
|
|
|
Price
Differentials
|
|
|
|
Oil (% of
WTI)
|
99 %
|
|
~97% - 99%
|
NGLs (% of
WTI)
|
34 %
|
|
~33% - 37%
|
Natural Gas (% of Henry
Hub)
|
75 %
|
|
~75% - 80%
|
Liquidity and Capital Structure
As of June 30, 2022, the Company had $205.2 million of cash and cash equivalents,
including restricted cash. The Company has no outstanding term or
revolving debt obligations.
Conference Call Information
The Company will host a conference call to discuss these results
on Thursday, August 4, 2022 at
10:00 am CT. To join the live
conference call, please dial 877-407-8293 (U.S. and Canada) or 201-689-8349 (international) ten to
fifteen minutes prior to the scheduled call time. Participants can
also click here for instant telephone access to the event. The
link will become active approximately fifteen minutes prior to the
start of the conference call.
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 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, production, 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 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.
|
(3)
|
No changes were made to
Adjusted G&A or Severance and Ad Valorem tax guidance versus
the original ranges published on March 9, 2022.
|
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,
|
|
2022
|
|
2021
|
|
2022
|
|
2021
|
Production -
Total
|
|
|
|
|
|
|
|
Oil (MBbl)
|
207
|
|
227
|
|
421
|
|
515
|
NGL (MBbl)
|
541
|
|
613
|
|
1,067
|
|
1,134
|
Natural Gas
(MMcf)
|
5,231
|
|
5,356
|
|
10,426
|
|
10,349
|
Oil equivalent
(MBoe)
|
1,620
|
|
1,733
|
|
3,226
|
|
3,374
|
Daily production
(MBoed)
|
17.8
|
|
19.0
|
|
17.8
|
|
18.6
|
|
|
|
|
|
|
|
|
Average price per
unit
|
|
|
|
|
|
|
|
Realized oil price per
barrel - as reported
|
$
109.06
|
|
$
64.73
|
|
$
100.57
|
|
$
58.70
|
Realized impact of
derivatives per barrel
|
—
|
|
—
|
|
—
|
|
—
|
Net realized price per
barrel
|
$
109.06
|
|
$
64.73
|
|
$
100.57
|
|
$
58.70
|
|
|
|
|
|
|
|
|
Realized NGL price per
barrel - as reported
|
$
35.96
|
|
$
17.33
|
|
$
34.86
|
|
$
17.18
|
Realized impact of
derivatives per barrel(1)
|
—
|
|
—
|
|
(0.29)
|
|
—
|
Net realized price per
barrel
|
$
35.96
|
|
$
17.33
|
|
$
34.57
|
|
$
17.18
|
|
|
|
|
|
|
|
|
Realized natural gas
price per Mcf - as reported
|
$
5.30
|
|
$
1.66
|
|
$
4.57
|
|
$
1.75
|
Realized impact of
derivatives per Mcf (1)
|
—
|
|
—
|
|
(0.07)
|
|
—
|
Net realized price per
Mcf
|
$
5.30
|
|
$
1.66
|
|
$
4.50
|
|
$
1.75
|
|
|
|
|
|
|
|
|
Realized price per Boe
- as reported
|
$
43.07
|
|
$
19.74
|
|
$
39.45
|
|
$
20.10
|
Net realized price per
Boe - including impact of derivatives
|
$
43.07
|
|
$
19.74
|
|
$
39.11
|
|
$
20.10
|
|
|
|
|
|
|
|
|
Average cost per
Boe
|
|
|
|
|
|
|
|
Lease
operating
|
$
5.87
|
|
$
5.33
|
|
$
6.32
|
|
$
5.09
|
Production, ad valorem,
and other taxes
|
$
2.96
|
|
$
1.46
|
|
$
2.76
|
|
$
1.40
|
Depletion
(2)
|
$
1.74
|
|
$
1.27
|
|
$
1.62
|
|
$
1.39
|
|
|
|
|
|
|
|
|
Earnings per share
(3)
|
|
|
|
|
|
|
|
Earnings per share
applicable to common stockholders
|
|
|
|
|
|
|
|
Basic
|
$
1.32
|
|
$
0.45
|
|
$
2.27
|
|
$
1.42
|
Diluted
|
$
1.30
|
|
$
0.44
|
|
$
2.24
|
|
$
1.38
|
|
|
|
|
|
|
|
|
Adjusted net income per
share available to common stockholders
|
|
|
|
|
|
|
|
Basic
|
$
1.33
|
|
$
0.45
|
|
$
2.29
|
|
$
0.94
|
Diluted
|
$
1.32
|
|
$
0.45
|
|
$
2.26
|
|
$
0.91
|
|
|
|
|
|
|
|
|
Weighted average number
of shares outstanding (in thousands)
|
|
|
|
|
|
|
|
Basic
|
36,699
|
|
36,416
|
|
36,667
|
|
36,187
|
Diluted
|
37,185
|
|
37,345
|
|
37,107
|
|
37,283
|
|
|
|
|
|
|
|
|
(1) There were no open
commodity derivative contracts as of June 30, 2022.
|
|
(2) Includes
accretion of asset retirement obligation.
|
|
|
|
|
|
|
|
(3) Earnings per
share amounts for the six months ended June 30, 2021 was impacted
by the $19.7 million gain recognized on the sale of our North Park
Basin
assets in Colorado. See below for the section of this release that
reconciles Net Income (Loss) Available to Common Stockholders to
Adjusted Net Income (Loss)
Available to Common Stockholders.
|
Capital Expenditures
The table below presents actual results of the Company's capital
expenditures for the three and six months ended June 30,
2022.
|
Three Months
Ended
|
|
Six Months
Ended
|
|
June 30,
2022
|
|
June 30,
2022
|
|
(In
thousands)
|
|
(In
thousands)
|
|
|
|
|
Drilling, completion
and capital workovers(1)
|
$
15,468
|
|
$
21,159
|
Other capital
expenditures
|
342
|
|
629
|
Total Capital
Expenditures
|
$
15,810
|
|
$
21,788
|
(excluding acquisitions
and plugging and abandonment)
|
|
|
|
|
|
|
|
(1) The Company
capitalized $4.5 million in inventory purchases, net of inventory
utilized during 2022 on drilling, completion, capital workover and
well reactivation activities.
|
Capitalization
The Company's capital structure as of June 30, 2022 and
December 31, 2021 is presented below:
|
June 30,
2022
|
|
December 31,
2021
|
|
|
|
|
|
(In
thousands)
|
Cash, cash equivalents
and restricted cash
|
$
205,185
|
|
$
139,524
|
|
|
|
|
Stockholders'
equity
|
|
|
|
Common stock
|
$
37
|
|
$
37
|
Warrants
|
88,520
|
|
88,520
|
Additional paid-in
capital
|
1,063,326
|
|
1,062,737
|
Accumulated
deficit
|
(822,756)
|
|
(905,972)
|
Total SandRidge Energy,
Inc. stockholders' equity
|
329,127
|
|
245,322
|
|
|
|
|
Total
capitalization
|
$
329,127
|
|
$
245,322
|
SandRidge Energy,
Inc. and Subsidiaries
Condensed
Consolidated Income Statements (Unaudited)
(In thousands,
except per share amounts)
|
|
|
Three Months Ended
June 30,
|
|
Six Months Ended
June 30,
|
|
2022
|
|
2021
|
|
2022
|
|
2021
|
Revenues
|
|
|
|
|
|
|
|
Oil, natural gas and
NGL
|
$
69,760
|
|
$
34,196
|
|
$
127,247
|
|
$
67,819
|
Total
revenues
|
69,760
|
|
34,196
|
|
127,247
|
|
67,819
|
Expenses
|
|
|
|
|
|
|
|
Lease operating
expenses
|
9,512
|
|
9,232
|
|
20,374
|
|
17,186
|
Production, ad valorem,
and other taxes
|
4,799
|
|
2,534
|
|
8,909
|
|
4,710
|
Depreciation and
depletion—oil and natural gas
|
2,826
|
|
2,193
|
|
5,227
|
|
4,698
|
Depreciation and
amortization—other
|
1,563
|
|
1,475
|
|
3,138
|
|
2,969
|
General and
administrative
|
2,171
|
|
2,522
|
|
4,701
|
|
4,612
|
Restructuring
expenses
|
433
|
|
256
|
|
642
|
|
2,310
|
Employee termination
benefits
|
—
|
|
—
|
|
—
|
|
49
|
Loss on derivative
contracts
|
—
|
|
—
|
|
1,064
|
|
—
|
Gain on sale of
assets
|
—
|
|
—
|
|
—
|
|
(19,713)
|
Other operating income,
net
|
(51)
|
|
(65)
|
|
(115)
|
|
(113)
|
Total
expenses
|
21,253
|
|
18,147
|
|
43,940
|
|
16,708
|
Income from
operations
|
48,507
|
|
16,049
|
|
83,307
|
|
51,111
|
Other income
(expense)
|
|
|
|
|
|
|
|
Interest expense,
net
|
(27)
|
|
(84)
|
|
(179)
|
|
(131)
|
Other income,
net
|
12
|
|
287
|
|
88
|
|
315
|
Total other income
(expense)
|
(15)
|
|
203
|
|
(91)
|
|
184
|
Income before income
taxes
|
48,492
|
|
16,252
|
|
83,216
|
|
51,295
|
Income tax expense
(benefit)
|
—
|
|
—
|
|
—
|
|
—
|
Net income
|
$
48,492
|
|
$
16,252
|
|
$
83,216
|
|
$
51,295
|
Net income per
share
|
|
|
|
|
|
|
|
Basic
|
$
1.32
|
|
$
0.45
|
|
$
2.27
|
|
$
1.42
|
Diluted
|
$
1.30
|
|
$
0.44
|
|
$
2.24
|
|
$
1.38
|
Weighted average number
of common shares outstanding
|
|
|
|
|
|
|
|
Basic
|
36,699
|
|
36,416
|
|
36,667
|
|
36,187
|
Diluted
|
37,185
|
|
37,345
|
|
37,107
|
|
37,283
|
SandRidge Energy,
Inc. and Subsidiaries
Condensed
Consolidated Balance Sheets (Unaudited)
(In
thousands)
|
|
|
June 30,
2022
|
|
December 31,
2021
|
ASSETS
|
|
|
|
Current
assets
|
|
|
|
Cash and cash
equivalents
|
$
203,442
|
|
$
137,260
|
Restricted cash -
other
|
1,743
|
|
2,264
|
Accounts receivable,
net
|
32,187
|
|
21,505
|
Prepaid
expenses
|
3,198
|
|
626
|
Other current
assets
|
80
|
|
80
|
Total current
assets
|
240,650
|
|
161,735
|
Oil and natural gas
properties, using full cost method of accounting
|
|
|
|
Proved
|
1,477,699
|
|
1,454,016
|
Unproved
|
11,487
|
|
12,255
|
Less: accumulated
depreciation, depletion and impairment
|
(1,376,147)
|
|
(1,373,217)
|
|
113,039
|
|
93,054
|
Other property, plant
and equipment, net
|
94,851
|
|
97,791
|
Other assets
|
268
|
|
332
|
Total
assets
|
$
448,808
|
|
$
352,912
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
|
Current
liabilities
|
|
|
|
Accounts payable and
accrued expenses
|
$
56,635
|
|
$
45,779
|
Asset retirement
obligation
|
17,256
|
|
17,606
|
Derivative
contracts
|
—
|
|
21
|
Other current
liabilities
|
702
|
|
627
|
Total current
liabilities
|
74,593
|
|
64,033
|
Asset retirement
obligation
|
43,482
|
|
41,762
|
Other long-term
obligations
|
1,606
|
|
1,795
|
Total
liabilities
|
119,681
|
|
107,590
|
Stockholders'
Equity
|
|
|
|
C Common stock,
$0.001 par value; 250,000 shares authorized; 36,742 issued and
outstanding at June 30, 2022 and 36,675 issued and outstanding
at December 31, 2021
|
37
|
|
37
|
Warrants
|
88,520
|
|
88,520
|
Additional paid-in
capital
|
1,063,326
|
|
1,062,737
|
Accumulated
deficit
|
(822,756)
|
|
(905,972)
|
Total stockholders'
equity
|
329,127
|
|
245,322
|
Total liabilities and
stockholders' equity
|
$
448,808
|
|
$
352,912
|
SandRidge Energy,
Inc. and Subsidiaries
Condensed
Consolidated Cash Flows (Unaudited)
(In
thousands)
|
|
|
Six Months Ended
June 30,
|
|
|
2022
|
|
2021
|
CASH FLOWS FROM
OPERATING ACTIVITIES
|
|
|
|
|
Net Income
|
|
$
83,216
|
|
$
51,295
|
Adjustments to
reconcile net income to net cash provided by operating
activities
|
|
|
|
|
Provision for doubtful
accounts
|
|
—
|
|
21
|
Depreciation,
depletion, and amortization
|
|
8,365
|
|
7,667
|
Debt issuance costs
amortization
|
|
—
|
|
36
|
Loss on derivative
contracts
|
|
1,064
|
|
—
|
Cash paid on
settlement of derivative contracts
|
|
(1,085)
|
|
—
|
Gain on sale of
assets
|
|
—
|
|
(19,713)
|
Stock-based
compensation
|
|
754
|
|
799
|
Other
|
|
76
|
|
71
|
Changes in operating
assets and liabilities
|
|
(13,234)
|
|
(6,945)
|
Net cash provided by
operating activities
|
|
79,156
|
|
33,231
|
CASH FLOWS FROM
INVESTING ACTIVITIES
|
|
|
|
|
Capital expenditures
for property, plant and equipment
|
|
(11,959)
|
|
(4,389)
|
Acquisition of
assets
|
|
(1,431)
|
|
(3,545)
|
Purchase of other
property and equipment
|
|
(49)
|
|
(59)
|
Proceeds from sale of
assets
|
|
306
|
|
37,900
|
Net cash provided by
(used in) investing activities
|
|
(13,133)
|
|
29,907
|
CASH FLOWS FROM
FINANCING ACTIVITIES
|
|
|
|
|
Reduction of financing
lease liability
|
|
(197)
|
|
(122)
|
Debt issuance
costs
|
|
—
|
|
(81)
|
Proceeds from exercise
of stock options
|
|
70
|
|
21
|
Cash paid for tax
obligations on vested stock awards
|
|
(235)
|
|
(613)
|
Net cash used in
financing activities
|
|
(362)
|
|
(795)
|
NET INCREASE IN CASH,
CASH EQUIVALENTS and RESTRICTED CASH
|
|
65,661
|
|
62,343
|
CASH, CASH EQUIVALENTS
and RESTRICTED CASH, beginning of year
|
|
139,524
|
|
28,266
|
CASH, CASH EQUIVALENTS
and RESTRICTED CASH, end of period
|
|
$
205,185
|
|
$
90,609
|
Supplemental Disclosure
of Cash Flow Information
|
|
|
|
|
Cash paid for
interest, net of amounts capitalized
|
|
$
(167)
|
|
$
(106)
|
Supplemental Disclosure
of Noncash Investing and Financing Activities
|
|
|
|
|
Purchase of PP&E
in accounts payable
|
|
$
10,858
|
|
$
1,260
|
Right-of-use assets
obtained in exchange for financing lease obligations
|
|
$
117
|
|
$
363
|
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
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 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, 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
June 30,
|
|
Six Months Ended
June 30,
|
|
2022
|
|
2021
|
|
2022
|
|
2021
|
|
|
|
|
|
|
|
|
|
(In
thousands)
|
Net cash provided by
operating activities
|
$
46,963
|
|
$
18,900
|
|
$
79,156
|
|
$
33,231
|
Changes in operating
assets and liabilities
|
6,355
|
|
1,640
|
|
13,234
|
|
6,945
|
Adjusted operating cash
flow
|
$
53,318
|
|
$
20,540
|
|
$
92,390
|
|
$
40,176
|
Reconciliation of Net Income (Loss) to EBITDA and Adjusted
EBITDA
The Company defines EBITDA as net income (loss) 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 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 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,
|
|
2022
|
|
2021
|
|
2022
|
|
2021
|
|
|
|
|
|
|
|
|
|
(In
thousands)
|
Net Income
|
$
48,492
|
|
$
16,252
|
|
$
83,216
|
|
$
51,295
|
Adjusted for
|
|
|
|
|
|
|
|
Interest
expense
|
28
|
|
86
|
|
180
|
|
134
|
Depreciation and
amortization - other
|
1,563
|
|
1,475
|
|
3,138
|
|
2,969
|
Depreciation and
depletion - oil and natural gas
|
2,826
|
|
2,193
|
|
5,227
|
|
4,698
|
EBITDA
|
52,909
|
|
20,006
|
|
91,761
|
|
59,096
|
|
|
|
|
|
|
|
|
Stock-based
compensation (1)
|
398
|
|
564
|
|
754
|
|
783
|
Loss on derivative
contracts
|
—
|
|
—
|
|
1,064
|
|
—
|
Gain on sale of
assets
|
—
|
|
—
|
|
—
|
|
(19,713)
|
Cash paid upon
settlement of derivative contracts
|
—
|
|
—
|
|
(1,085)
|
|
—
|
Employee termination
benefits
|
—
|
|
—
|
|
—
|
|
49
|
Restructuring
expenses
|
433
|
|
256
|
|
642
|
|
2,310
|
Other
|
(2)
|
|
(2)
|
|
(2)
|
|
(3)
|
Adjusted
EBITDA
|
$
53,738
|
|
$
20,824
|
|
$
93,134
|
|
$
42,522
|
(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
June 30,
|
|
Six Months Ended
June 30,
|
|
2022
|
|
2021
|
|
2022
|
|
2021
|
|
|
|
|
|
|
|
|
|
(In
thousands)
|
Net cash provided by
operating activities
|
$
46,963
|
|
$
18,900
|
|
$
79,156
|
|
$
33,231
|
Changes in operating
assets and liabilities
|
6,355
|
|
1,640
|
|
13,234
|
|
6,945
|
Interest
expense
|
28
|
|
86
|
|
180
|
|
134
|
Employee termination
benefits (1)
|
—
|
|
—
|
|
—
|
|
49
|
Other
|
392
|
|
198
|
|
564
|
|
2,163
|
Adjusted
EBITDA
|
$
53,738
|
|
$
20,824
|
|
$
93,134
|
|
$
42,522
|
(1)
|
Excludes associated
stock-based compensation.
|
Reconciliation of Net Income (Loss) Available to Common
Stockholders to Adjusted Net Income (Loss) Available to Common
Stockholders
The Company defines adjusted net income (loss) as net income
(loss) 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
(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 income (loss) is not a measure of
financial performance under GAAP and should not be considered a
substitute for net income (loss) available to common
stockholders.
|
Three Months Ended
June 30, 2022
|
|
Three Months Ended
June 30, 2021
|
|
$
|
|
$/Diluted
Share
|
|
$
|
|
$/Diluted
Share
|
|
(In thousands,
except per share amounts)
|
Net income available to
common stockholders
|
$
48,492
|
|
$
1.30
|
|
$
16,252
|
|
$
0.44
|
Restructuring
expenses
|
433
|
|
0.02
|
|
256
|
|
0.01
|
Other
|
(2)
|
|
—
|
|
(2)
|
|
—
|
Adjusted net income
available to common stockholders
|
$
48,923
|
|
$
1.32
|
|
$
16,506
|
|
$
0.45
|
|
|
|
|
|
|
|
|
|
Basic
|
|
Diluted
|
|
Basic
|
|
Diluted
|
Weighted average number
of common shares
outstanding
|
36,699
|
|
37,185
|
|
36,416
|
|
37,345
|
Total adjusted net
income per share
|
$
1.33
|
|
$
1.32
|
|
$
0.45
|
|
$
0.45
|
|
|
|
|
|
|
|
|
|
Six Months Ended
June 30, 2022
|
|
Six Months Ended
June 30, 2021
|
|
$
|
|
$/Diluted
Share
|
|
$
|
|
$/Diluted
Share
|
|
(In thousands,
except per share amounts)
|
Net income available to
common stockholders
|
$
83,216
|
|
$
2.24
|
|
$
51,295
|
|
$
1.38
|
Loss on derivative
contracts
|
1,064
|
|
0.03
|
|
—
|
|
—
|
Gain on sale of
assets
|
—
|
|
—
|
|
(19,713)
|
|
(0.53)
|
Cash paid upon
settlement of derivative contracts
|
(1,085)
|
|
(0.03)
|
|
—
|
|
—
|
Employee termination
benefits
|
—
|
|
—
|
|
49
|
|
—
|
Restructuring
expenses
|
642
|
|
0.02
|
|
2,310
|
|
0.06
|
Other
|
(2)
|
|
—
|
|
(3)
|
|
—
|
Adjusted net income
available to common stockholders
|
$
83,835
|
|
$
2.26
|
|
$
33,938
|
|
$
0.91
|
|
|
|
|
|
|
|
|
|
Basic
|
|
Diluted
|
|
Basic
|
|
Diluted
|
Weighted average number
of common shares
outstanding
|
36,667
|
|
37,107
|
|
36,187
|
|
37,283
|
Total adjusted net
income per share
|
$
2.29
|
|
$
2.26
|
|
$
0.94
|
|
$
0.91
|
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
June 30, 2022
|
|
Three Months Ended
June 30, 2021
|
|
$
|
|
$/Boe
|
|
$
|
|
$/Boe
|
|
(In thousands,
except per Boe amounts)
|
General and
administrative
|
$
2,171
|
|
$
1.34
|
|
$
2,522
|
|
$
1.46
|
Stock-based
compensation
|
(398)
|
|
(0.25)
|
|
(564)
|
|
(0.33)
|
Adjusted
G&A
|
$
1,773
|
|
$
1.09
|
|
$
1,958
|
|
$
1.13
|
|
Six Months Ended
June 30, 2022
|
|
Six Months Ended
June 30, 2021
|
|
$
|
|
$/Boe
|
|
$
|
|
$/Boe
|
|
(In thousands,
except per Boe amounts)
|
General and
administrative(1)
|
$
4,701
|
|
$
1.46
|
|
$
4,612
|
|
$
1.37
|
Stock-based
compensation(2)
|
(754)
|
|
(0.23)
|
|
(783)
|
|
(0.23)
|
Adjusted
G&A
|
$
3,947
|
|
$
1.23
|
|
$
3,829
|
|
$
1.14
|
(1)
|
General and
administrative was impacted by a $0.4 million legal retainer refund
that was recorded as a credit, reducing general and administrative
expense for six months ended June 30, 2021.
|
(2)
|
Excludes non-cash
stock-based compensation included in employee termination
benefits.
|
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
10-K/A 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, production, and acquisition
of oil and gas properties. Its primary areas of operation are the
Mid-Continent in Oklahoma and
Kansas. Further information can be
found at www.sandridgeenergy.com.
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SOURCE SandRidge Energy, Inc.