SandRidge Energy, Inc. Updates Shareholders on Operations and Reports Financial Results for Second Quarter and First Six Months of 2015

Adjusted EBITDA of $161 Million for the Second Quarter and Adjusted Loss of $0.03 per Diluted Share

Second Quarter Total Production of 89.0 MBoepd (33% Oil, 17% NGLs), up 27% vs. Second Quarter 2014

Raising 2015 Production Guidance Range from 28.0-30.5 MMBoe to 29.0-30.5 MMBoe

Lowering 2015 LOE and Production Tax Guidance Ranges

Issued $1.25 Billion of Second Lien Notes and Amended Senior Credit Facility

$1.5 Billion of Liquidity at Second Quarter, $984 Million in Cash

Received Positive IRS Private Letter Ruling for CEBA Midstream, LP

Achieved Second Half 2015 Target of $2.4 Million Average Drilling and Completion Cost per Mississippian Lateral, Now Targeting $2.3 Million

Aug 05, 2015, 16:15 ET from SandRidge Energy, Inc.

OKLAHOMA CITY, Aug. 5, 2015 /PRNewswire/ -- SandRidge Energy, Inc. (NYSE: SD) today announced financial and operational results for the quarter ended June 30, 2015. Additionally, presentation slides will be available on the Company's website, www.sandridgeenergy.com, under Investor Relations/Events at 7 am ET on August 6th.

Strong second quarter production rates and drilling results supported an increase in the midpoint of production volume guidance for the 2015 calendar year. New guidance introduced today estimates 2015 production to be between 29.0 and 30.5 MMBoe (vs. prior range of 28.0 to 30.5 MMBoe).

During the second quarter, CEBA Midstream, LP, SandRidge's wholly-owned saltwater gathering and midstream subsidiary, received a favorable ruling from the IRS providing that revenues earned by CEBA from its produced water gathering and disposal operations constitute "qualifying income" under regulations applicable to master limited partnerships.

SandRidge issued $1.25 billion of second lien notes on June 10, 2015. Concurrently, the Company revised its first lien credit facility, lowering its borrowing base and providing for less restrictive financial covenants. The restated facility is subject to maintenance of a first lien leverage ratio (senior first lien secured debt/LTM pro forma EBITDA) of not more than 2.0 times and a minimum current ratio (including available borrowing capacity) of at least 1.0 times. The borrowing base is currently $500 million.

As part of today's release, SandRidge is introducing standalone guidance for its Mid-Continent operations as well as updating full company guidance.

"With the highgrading of our drilling program in 2015, production has outpaced expectations and we are raising the lower end of our production guidance by one million barrels, with a midpoint now at 29.8 MMBoe. Further, our per lateral well costs have decreased by 20% year to date, including $290,000 of efficiency gains, which is $30,000 more than projected in the first quarter of 2015. These efficiencies evidence our team's focus on continually improving the cost structure of the business and will continue to drive value, as they are durable across any price environment. These cost reduction efforts, consistent production results and lower infrastructure spending preserve program returns." said James Bennett, SandRidge's Chief Executive Officer and President.

"Our recent second lien financing greatly enhances our liquidity position, enabling continued progress on both development of our large Mississippian play and expansion into other zones such as the oilier Chester. In addition, the recently received PLR for our CEBA Midstream business is an important step towards unlocking value in our material infrastructure position. SandRidge has diverse options to create value for shareholders and expanded liquidity, assuring we are well positioned to capitalize on future opportunities."

Key Financial Results

Second Quarter

  • Adjusted EBITDA, net of Noncontrolling Interest, was $161 million for second quarter 2015 compared to $202 million in second quarter 2014
  • Adjusted operating cash flow of $111 million for second quarter 2015 compared to $179 million in second quarter 2014
  • Adjusted net loss of $17.8 million, or $0.03 per diluted share, for second quarter 2015 compared to adjusted net income of $25.7 million, or $0.04 per diluted share, in second quarter 2014

Six Months

  • Adjusted EBITDA, net of Noncontrolling Interest, was $343 million in the first six months of 2015 compared to $371 million in the first six months of 2014, pro forma for divestitures
  • Adjusted operating cash flow of $257 million in the first six months of 2015 compared to $306 million in the first six months of 2014
  • Adjusted net loss of $15.5 million, or $0.03 per diluted share, in the first six months of 2015 compared to adjusted net income of $61.3 million, or $0.11 per diluted share, in the first six months of 2014

Adjusted net (loss) income available to common stockholders, adjusted EBITDA, pro forma adjusted EBITDA and adjusted operating cash flow are non-GAAP financial measures. Each measure is defined and reconciled to the most directly comparable GAAP measure under "Non-GAAP Financial Measures" beginning on page 9.

Financial / Other Highlights

  • Ended the second quarter with $1.5 billion in liquidity, $984 million in cash
  • 93% hedged on remaining projected 2015 liquids volumes, $50 WTI for the remainder of 2015 realizes $74.30 per barrel of oil
  • Mark-to-market hedge position of $144 million as of June 30, 2015
  • Incurred a non-cash impairment charge of approximately $1.5 billion due to a ceiling test impairment, resulting from a significant decline in oil price

Operational Highlights

Steve Turk, SandRidge's Chief Operating Officer noted, "Supporting competitive project returns, the team achieved $2.4 million Mississippian lateral costs ahead of plan and set a new cost target of $2.3 million in the remaining half of 2015. Anticipated higher production, coupled with reduced lifting costs and improved field efficiencies, led to a decreased operating cost guidance range. Recent multilateral results, including the Rusty 2710 long lateral, drilled for $1.8 million per lateral with a 30-day IP rate of 1,646 Boepd, strengthen our commitment to develop this important technology. With a focus on innovation, our skilled technical team continues to enhance our full section development multilateral design. We expect further cost and efficiency improvements going forward. Finally, Chester wells put to sales in the quarter averaged 338 Boepd (61% oil), which validates our plan to increase activity in this emerging multiple pay project during the second half of 2015."

  • Average second quarter production of 89.0 MBoepd. This represents a 1% increase versus the first quarter of 2015
  • Original cost target of $2.4 million per Mississippian lateral achieved in the second quarter, with a new target of $2.3 million in the back half of the year
  • Second quarter Mid-Continent lateral 30-day IP rates of 387 Boepd, 53% oil, 110% of Mississippian type curve

Drilling and Operational Activities

Mid-Continent: During the second quarter of 2015, SandRidge drilled 43 laterals. The Company averaged seven horizontal rigs operating in the play. The Company's Mid-Continent assets produced 79.3 MBoepd during the second quarter (32% Oil, 18% NGLs, 50% Natural Gas). All references to the Mid-Continent are inclusive of the Company's legacy Mid-Continent properties.

West Texas: During the second quarter, Permian Basin properties produced approximately 4.5 MBoepd (86% Oil, 10% NGLs, 4% Natural Gas). Legacy West Texas Overthrust properties produced approximately 5.2 MBoepd (2% Oil, 98% Natural Gas).

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,

2015

2014

2015

2014

Production - Total

Oil (MBbl)

2,691

2,398

5,342

5,283

NGL (MBbl)

1,349

748

2,637

1,390

Natural gas (MMcf)

24,342

19,240

48,075

40,833

Oil equivalent (MBoe)

8,097

6,353

15,992

13,479

Daily production (MBoed)

89.0

69.8

88.4

74.5

Production - Mid-Continent (1)

Oil (MBbl)

2,335

1,916

4,616

3,651

NGL (MBbl)

1,309

706

2,562

1,251

Natural gas (MMcf)

21,428

15,909

42,164

30,514

Oil equivalent (MBoe)

7,215

5,273

14,205

9,988

Daily production (MBoed)

79.3

58.0

78.5

55.2

Average price per unit

Realized oil price per barrel - as reported

$  53.24

$100.02

$  49.33

$  98.39

Realized impact of derivatives per barrel

26.41

(3.11)

34.58

(2.05)

Net realized price per barrel

$  79.65

$  96.91

$  83.91

$  96.34

Realized NGL price per barrel - as reported

$  15.97

$  36.41

$  15.36

$  39.44

Realized impact of derivatives per barrel

-

-

-

-

Net realized price per barrel

$  15.97

$  36.41

$  15.36

$  39.44

Realized natural gas price per Mcf - as reported

$    2.04

$    3.78

$    2.21

$    4.18

Realized impact of derivatives per Mcf

0.14

(0.29)

0.55

(0.40)

Net realized price per Mcf

$    2.18

$    3.49

$    2.76

$    3.78

Realized price per Boe - as reported

$  26.50

$  53.50

$  25.65

$  55.29

Net realized price per Boe - including impact of derivatives

$  35.68

$  51.44

$  38.87

$  53.30

Average cost per Boe

Lease operating 

$  10.10

$  10.54

$  10.71

$  12.89

Production taxes

0.54

1.23

0.56

1.16

General and administrative

General and administrative, excluding stock-based compensation

$    3.81

$    4.26

$    3.94

$    4.36

Stock-based compensation (2)

0.93

0.76

0.72

0.86

Total general and administrative

$    4.74

$    5.02

$    4.66

$    5.22

General and administrative - adjusted

General and administrative, excluding stock-based compensation (3)

$    3.28

$    4.14

$    3.40

$    3.82

Stock-based compensation (2)(4)

0.42

0.72

0.43

0.72

Total general and administrative - adjusted

$    3.70

$    4.85

$    3.83

$    4.54

Depletion (5)

$  11.78

$  15.48

$  12.67

$  16.27

Lease operating cost per Boe

Mid-Continent (1)

$    7.50

$    6.96

$    8.05

$    7.94

Earnings per share

Loss per share applicable to common stockholders

Basic

$   (2.78)

$   (0.10)

$   (4.98)

$   (0.41)

Diluted

(2.78)

(0.10)

(4.98)

(0.41)

Adjusted net (loss) income per share available to common stockholders

Basic

$   (0.05)

$    0.02

$   (0.07)

$    0.07

Diluted

(0.03)

0.04

(0.03)

0.11

Weighted average number of common shares outstanding (in thousands)

Basic

495,153

485,318

486,704

485,059

Diluted (6)

566,863

577,412

558,414

577,789

(1)

Includes legacy Mid-Continent properties.

(2)

Expense for equity-classified stock-based awards.

(3)

Excludes severance and shareholder litigation costs totaling $4.3 million and $8.5 million for the three and six-month periods ended June 30, 2015, respectively. Excludes transaction costs, severance and consent solicitation costs totaling $0.8 million and $7.4 million for the three and six-month periods ended June 30, 2014, respectively.

(4)

Three and six-month periods ended June 30, 2015 exclude $4.1 million and $4.7 million, respectively, for the acceleration of certain stock awards. Three and six-month periods ended June 30, 2014 exclude $0.3 million and $2.0 million, respectively, for the acceleration of certain stock awards.

(5)

Includes accretion of asset retirement obligation.

(6)

Includes shares considered antidilutive for calculating earnings per share in accordance with GAAP.

 

Capital Expenditures

The table below summarizes the Company's capital expenditures for the three and six-month periods ended June 30, 2015 and 2014: 

 

Three Months Ended June,

Six Months Ended June,

2015

2014

2015

2014

(in thousands)

Drilling and production

Mid-Continent

$146,665

$241,037

$424,606

$406,888

Permian Basin

624

64,282

3,582

106,474

Gulf of Mexico/Gulf Coast

-

-

-

22,975

147,289

305,319

428,188

536,337

Leasehold and geophysical

Mid-Continent

2,294

53,444

26,586

80,036

Permian Basin

31

423

83

539

Gulf of Mexico/Gulf Coast 

-

-

-

159

Other

909

1,856

3,658

5,111

3,234

55,723

30,327

85,845

Inventory

918

(4,475)

(5,012)

(1,402)

Total exploration and development

151,441

356,567

453,503

620,780

Drilling and oil field services

597

6,655

2,472

7,275

Midstream

8,249

5,809

16,681

11,766

Other - general 

7,279

7,907

15,100

12,889

Total capital expenditures, excluding acquisitions

167,566

376,938

487,756

652,710

Acquisitions

1,736

14,201

3,475

16,553

Total capital expenditures

$169,302

$391,139

$491,231

$669,263

 

Derivative Contracts

The table below sets forth the Company's consolidated oil and natural gas price swaps and collars for the years 2015 and 2016 as of August 5, 2015:

 

Quarter Ending

3/31/2015

6/30/2015

9/30/2015

12/31/2015

Oil (MMBbls):

Swap Volume

2.29

1.73

1.01

0.55

Swap

$92.71

$91.55

$92.43

$94.11

Three-way Collar Volume

0.72

0.73

1.56

1.56

Call Price 

$103.13

$103.13

$103.65

$103.65

Put Price 

$90.82

$90.82

$90.03

$90.03

Short Put Price 

$73.13

$73.13

$78.15

$78.15

Natural Gas (Bcf):

Swap Volume

14.40

1.82

1.84

1.84

Swap

$4.62

$4.20

$4.20

$4.20

Collar Volume

0.25

0.25

0.25

0.25

Collar:  High

$8.55

$8.55

$8.55

$8.55

Collar:  Low

$4.00

$4.00

$4.00

$4.00

Natural Gas Basis (Bcf)

Swap Volume

9.65

15.47

15.64

15.64

Swap

$(0.29)

$(0.30)

$(0.30)

$(0.30)

Year Ending

12/31/2015

12/31/2016

Oil (MMBbls):

Swap Volume

5.59

1.46

Swap

$92.44

$88.36

Three-way Collar Volume

4.58

2.56

Call Price 

$103.48

$100.85

Put Price 

$90.28

$90.00

Short Put Price 

$76.56

$83.14

Natural Gas (Bcf):

Swap Volume

19.90

-

Swap

$4.51

-

Collar Volume

1.01

-

Collar:  High

$8.55

-

Collar:  Low

$4.00

-

Natural Gas Basis (Bcf)

Swap Volume

56.4

11.0

Swap

$(0.30)

$(0.38)

 

Balance Sheet

The Company's capital structure at June 30, 2015 and December 31, 2014 is presented below:

 

June 30,

December 31,

2015

2014

(in thousands)

Cash and cash equivalents

$   983,617

$       181,253

Current maturities of long-term debt

$           -

$               -

Long-term debt (net of current maturities)

8.75% Senior Secured Notes due 2020

1,250,000

-

Senior Unsecured Notes

8.75% Senior Notes due 2020, net

445,758

445,402

7.5% Senior Notes due 2021

1,149,175

1,178,486

8.125% Senior Notes due 2022

729,000

750,000

7.5% Senior Notes due 2023, net

821,706

821,548

  Total debt 

4,395,639

3,195,436

Stockholders' equity

Preferred stock

6

6

Common stock

514

477

Additional paid-in capital

5,250,285

5,201,524

Treasury stock, at cost

(6,776)

(6,980)

Accumulated deficit

(5,678,592)

(3,257,202)

Total SandRidge Energy, Inc. stockholders' equity

(434,563)

1,937,825

Noncontrolling interest

850,135

1,271,995

Total capitalization

$4,811,211

$    6,405,256

 

During the second quarter of 2015, the Company's debt, net of cash balances, increased by approximately $53 million. On June 30th, the Company had a $500 million undrawn senior credit facility. The Company was in compliance with all applicable covenants contained in its debt instruments during the second quarter and through and as of the date of this release.

2015 Operational Guidance

The Company is raising its 2015 production guidance. Additionally, the Company is lowering its LOE, production tax and DD&A guidance. The Company is also issuing standalone guidance for its Mid-Continent operations inclusive of its legacy Mid-Continent properties. Additional 2015 Guidance detail is available on the Company's website, www.sandridgeenergy.com, under Investor Relations/Guidance.   

 

Total Company

Mid-Continent

Projection as of

Projection as of

Projection as of

May 6, 2015

August 5, 2015

August 5, 2015

Production

Oil (MMBbls)

9.0 - 10.0

9.3 - 10.0

7.9 - 8.6

NGL (MMBbls)

4.0 - 5.0

4.6 - 5.0

4.5 - 4.9

Total Liquids (MMBbls)

13.0 - 15.0

13.9 - 15.0

12.4 - 13.5

Natural Gas (Bcf)

89.5 - 93.5

90.5 - 93.5

78.4 - 81.4

Total (MMBoe)

28.0 - 30.5

29.0 - 30.5

25.5 - 27.0

Price Realization

Oil (differential below NYMEX WTI)

$3.75

$3.75

NGL (realized % of NYMEX WTI)

30%

30%

Natural Gas (differential below NYMEX Henry Hub)

$0.75

$0.75

Costs per Boe

Lifting 

$12.25 - $13.00

$11.50 - $12.50

$8.75 - $9.75

Production Taxes

0.65 - 0.85

0.60 - 0.80

DD&A - oil & gas

11.50 - 13.50

11.00 - 12.00

DD&A - other

2.00 - 2.20

1.75 - 1.95

Total DD&A

$13.50 - $15.70

$12.75 - $13.95

G&A - cash

3.00 - 3.50

3.00 - 3.50

G&A - stock

0.50 - 0.75

0.50 - 0.75

Total G&A

$3.50 - $4.25

$3.50 - $4.25

EBITDA from Oilfield Services and Other ($ in millions) (1)

$10

$10

Adjusted Net Income Attributable to Noncontrolling Interest ($ in millions) (2)

$60

$60

Adjusted EBITDA Attributable to Noncontrolling Interest ($ in millions) (3)

$90

$90

Capital Expenditures ($ in millions)

Exploration and Production

$612

$612

Land and Geophysical

38

38

Total Exploration and Production

$650

$650

Oil Field Services

5

5

Electrical/Midstream

30

30

General Corporate

15

15

Total Capital Expenditures (excluding acquisitions)

$700

$700

(1)

EBITDA from Oilfield Services and Other is a non-GAAP financial measure as it excludes from net income interest expense, income tax expense and depreciation, depletion and amortization. The most directly comparable GAAP measure for EBITDA from Oilfield Services and Other is Net Income from Oilfield Services and Other. 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 and/or does not forecast the excluded items on a segment basis.

(2) 

Adjusted Net Income Attributable to Noncontrolling Interest is a non-GAAP financial measure as it excludes gain or loss due to changes in fair value of derivative contracts and gain or loss on sale of assets. The most directly comparable GAAP measure for Adjusted Net Income Attributable to Noncontrolling Interest is Net Income Attributable to Noncontrolling Interest. 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.

(3) 

Adjusted EBITDA Attributable to Noncontrolling Interest is a non-GAAP financial measure as it excludes from net income interest expense, income tax expense, depreciation, depletion and amortization, gain or loss due to changes in fair value of derivative contracts and gain or loss on sale of assets. The most directly comparable GAAP measure for Adjusted EBITDA Attributable to Noncontrolling Interest is Net Income Attributable to Noncontrolling Interest. 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.

 

Non-GAAP Financial Measures

Adjusted operating cash flow, adjusted EBITDA, pro forma adjusted EBITDA, adjusted net (loss) income, and adjusted net income attributable to noncontrolling interest are non-GAAP financial measures.

The Company defines adjusted operating cash flow as net cash provided by operating activities before changes in operating assets and liabilities and adjusted for cash paid on financing derivatives. It defines EBITDA as net loss before income tax expense (benefit), interest expense and depreciation, depletion and amortization and accretion of asset retirement obligations. Adjusted EBITDA, as presented herein, is EBITDA excluding asset impairment, interest income, loss (gain) on derivative contracts net of cash received (paid) on settlement of derivative contracts, (gain) loss on sale of assets, severance, oil field services – Permian exit costs, gain on extinguishment of debt and other various items (including non-cash portion of noncontrolling interest and stock-based compensation). Pro forma adjusted EBITDA, as presented herein, is adjusted EBITDA excluding adjusted EBITDA attributable to properties or subsidiaries sold during the period.

Adjusted operating cash flow and adjusted EBITDA are supplemental financial measures 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 these measures because adjusted operating cash flow and adjusted EBITDA relate 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 and adjusted EBITDA allow the Company to compare its operating performance and return on capital with those of other companies without regard to financing methods and capital structure. These measures should not be considered in isolation or as a substitute for net cash provided by operating activities prepared in accordance with generally accepted accounting principles ("GAAP"). Adjusted EBITDA should not be considered as a substitute for net income, operating income, cash flows from operating activities or any other measure of financial performance or liquidity presented in accordance with GAAP. Adjusted EBITDA excludes some, but not all, items that affect net income and operating income and these measures may vary among other companies. Therefore, the Company's adjusted EBITDA may not be comparable to similarly titled measures used by other companies.

Management also uses the supplemental financial measure of adjusted net income, which excludes asset impairment, loss (gain) on derivative contracts net of cash received (paid) on settlement of derivative contracts, (gain) loss on sale of assets, severance, oil field services – Permian exit costs, gain on extinguishment of debt and other non-cash items from loss applicable to common stockholders. Management uses this financial measure 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 loss applicable to common stockholders.

The supplemental measure of adjusted net income attributable to noncontrolling interest is used by the Company's management to measure the impact on the Company's financial results of the ownership by third parties of interests in the Company's less than wholly-owned consolidated subsidiaries. Adjusted net income attributable to noncontrolling interest excludes the portion of asset impairment and loss (gain) on derivative contracts net of cash received (paid) on settlement of derivative contracts attributable to third party ownership in less than wholly-owned consolidated subsidiaries from net (loss) income attributable to noncontrolling interest. Adjusted net income attributable to noncontrolling interest is not a measure of financial performance under GAAP and should not be considered a substitute for net (loss) income attributable to noncontrolling interest.

The tables below reconcile the most directly comparable GAAP financial measures to operating cash flow, EBITDA and adjusted EBITDA, adjusted net (loss) income available to common stockholders and adjusted net income attributable to noncontrolling interest.

 

Reconciliation of Cash Provided by Operating Activities to Adjusted Operating Cash Flow

Three Months Ended June,

Six Months Ended June,

2015

2014

2015

2014

(in thousands)

Net cash provided by operating activities

$228,899

$140,341

$318,994

$230,792

(Deduct) add

Cash paid on financing derivatives

-

-

-

(44,128)

Changes in operating assets and liabilities

(118,119)

38,587

(61,757)

119,734

Adjusted operating cash flow

$110,780

$178,928

$257,237

$306,398

 

Reconciliation of Net Loss to EBITDA and Adjusted EBITDA

Three Months Ended June,

Six Months Ended June,

2015

2014

2015

2014

(in thousands)

Net loss

$(1,368,482)

$ (32,894)

$(2,403,435)

$(169,230)

Adjusted for

Income tax expense (benefit)

25

(1,194)

65

(1,067)

Interest expense

73,842

62,018

136,699

124,341

Depreciation and amortization - other

12,508

15,411

25,855

30,933

Depreciation and depletion - oil and natural gas

94,298

97,267

200,405

212,452

Accretion of asset retirement obligations

1,111

1,065

2,191

6,811

EBITDA

(1,186,698)

141,673

(2,038,220)

204,240

Asset impairment

1,489,391

3,133

2,573,257

167,912

Interest income

(115)

(155)

(130)

(435)

Stock-based compensation

2,974

3,987

6,091

8,572

Loss (gain) on derivative contracts

33,004

85,292

(16,823)

127,783

Cash received (paid) upon settlement of derivative contracts (1)

74,366

(13,097)

211,323

(26,827)

(Gain) loss on sale of assets 

(2,770)

36

(4,674)

17

Severance

7,562

813

10,529

8,922

Oil field services - Permian exit costs

711

-

4,291

-

Gain on extinguishment of debt

(17,934)

-

(17,934)

-

Other

1,390

(515)

2,613

(1,140)

Non-cash portion of noncontrolling interest (2)

(240,837)

(19,308)

(387,665)

(65,112)

Adjusted EBITDA

$    161,044

$201,859

$    342,658

$ 423,932

Less: EBITDA attributable to Gulf of Mexico properties

-

-

-

(53,376)

Pro forma adjusted EBITDA

$    161,044

$201,859

$    342,658

$ 370,556

 

(1)

Excludes amounts paid upon early settlement of derivative contracts for the six months ended June 30, 2014.

(2)

Represents depreciation and depletion, impairment, loss (gain) on commodity derivative contracts net of cash received (paid) on settlement and income tax expense attributable to noncontrolling interests.

 

 

Reconciliation of Cash Provided by Operating Activities to Adjusted EBITDA

Three Months Ended June,

Six Months Ended June,

2015

2014

2015

2014

(in thousands)

Net cash provided by operating activities

$228,899

$140,341

$318,994

$230,792

Changes in operating assets and liabilities

(118,119)

38,587

(61,757)

119,734

Interest expense

73,842

62,018

136,699

124,341

Cash paid on early settlement of derivative contracts

-

-

-

25,434

Severance

3,451

521

5,848

6,943

Oil field services - Permian exit costs

634

-

4,213

-

Noncontrolling interest - SDT (1)

(5,932)

(5,154)

(12,618)

(11,691)

Noncontrolling interest - SDR (1)

(5,893)

(10,099)

(11,359)

(23,050)

Noncontrolling interest - PER (1)

(8,763)

(19,696)

(26,518)

(39,938)

Noncontrolling interest - Other (1)

-

-

-

(4)

Other

(7,075)

(4,659)

(10,844)

(8,629)

Adjusted EBITDA

$161,044

$201,859

$342,658

$423,932

(1)

Excludes depreciation and depletion, impairment, loss (gain) on commodity derivative contracts net of cash received (paid) on settlement and income tax expense attributable to noncontrolling interests.

 

Reconciliation of Loss Applicable to Common Stockholders to Adjusted Net (Loss) Income Available to Common Stockholders

Three Months Ended June,

Six Months Ended June,

2015

2014

2015

2014

(in thousands)

Loss applicable to common stockholders

$(1,375,556)

$(46,775)

$(2,421,390)

$(196,993)

Asset impairment (1)

1,263,024

3,133

2,219,851

138,039

Loss (gain) on derivative contracts (1)

30,280

72,627

(15,488)

109,112

Cash received (paid) upon settlement of derivative contracts (1)

68,979

(9,778)

189,323

(22,580)

(Gain) loss on sale of assets

(2,770)

36

(4,674)

17

Severance

7,562

813

10,529

8,922

Oil field services - Permian exit costs

711

-

4,291

-

Gain on extinguishment of debt

(17,934)

-

(17,934)

-

Other

848

(285)

1,981

(1,250)

Effect of income taxes

21

(7,953)

57

(1,722)

Adjusted net (loss) income available to common stockholders

(24,835)

11,818

(33,454)

33,545

Preferred stock dividends

7,074

13,881

17,955

27,763

Total adjusted net (loss) income

$     (17,761)

$ 25,699

$     (15,499)

$   61,308

Weighted average number of common shares outstanding

Basic

495,153

485,318

486,704

485,059

Diluted (2)

566,863

577,412

558,414

577,789

Total adjusted net (loss) income

Per share - basic

$        (0.05)

$     0.02

$        (0.07)

$      0.07

Per share - diluted

$        (0.03)

$     0.04

$        (0.03)

$      0.11

(1)

Excludes amounts attributable to noncontrolling interests.

(2)

Weighted average diluted common shares outstanding for certain periods presented includes shares that are considered antidilutive for calculating earnings per share in accordance with GAAP.

 

Reconciliation of Net (Loss) Income Attributable to Noncontrolling Interest to Adjusted Net Income Attributable to Noncontrolling Interest

Three Months Ended June,

Six Months Ended June,

2015

2014

2015

2014

(in thousands)

Net (loss) income attributable to noncontrolling interest

$(220,249)

$15,642

$(337,170)

$  9,572

Asset impairment

226,367

-

353,406

29,873

Loss (gain) on derivative contracts

2,724

12,665

(1,335)

18,671

Cash received (paid) on settlement of derivative contracts

5,387

(3,319)

22,000

(4,247)

Adjusted net income attributable to noncontrolling interest

$   14,229

$24,988

$   36,901

$53,869

 

Conference Call Information

The Company will host a conference call to discuss these results on Thursday, August 6, 2015 at 8:00 am CT. The telephone number to access the conference call from within the U.S. is (877) 201-0168 and from outside the U.S. is (647) 788-4901. The passcode for the call is 48621691. An audio replay of the call will be available from August 6, 2015 until 11:59 pm CT on September 5, 2015. The number to access the conference call replay from within the U.S. is (855) 859-2056 and from outside the U.S. is (404) 537-3406. The passcode for the replay is 48621691.

A live audio webcast of the conference call will also be available via SandRidge's website, www.sandridgeenergy.com, under Investor Relations/Presentations & Events. The webcast will be archived for replay on the Company's website for 30 days.

Third Quarter 2015 Earnings Release and Conference Call

November 4, 2015 (Wednesday) – Earnings press release after market close November 5, 2015 (Thursday) – Earnings conference call at 8:00 am CT

 

SandRidge Energy, Inc. and Subsidiaries

Condensed Consolidated Statements of Operations

(In thousands, except per share data)

Three Months Ended June 30,

Six Months Ended June 30,

2015

2014

2015

2014

(unaudited)

Revenues

Oil, natural gas and NGL

$    214,532

$339,906

$    410,264

$ 745,222

Drilling and services

5,241

18,852

15,086

35,932

Midstream and marketing

8,606

14,874

17,370

32,784

Other

1,228

1,082

2,195

3,832

Total revenues

229,607

374,714

444,915

817,770

Expenses

Production

81,776

66,953

171,274

173,809

Production taxes

4,382

7,840

8,896

15,647

Cost of sales

4,884

10,469

17,711

22,950

Midstream and marketing

7,724

13,254

15,831

29,254

Depreciation and depletion - oil and natural gas

94,298

97,267

200,405

212,452

Depreciation and amortization - other

12,508

15,411

25,855

30,933

Accretion of asset retirement obligations

1,111

1,065

2,191

6,811

Impairment

1,489,391

3,133

2,573,257

167,912

General and administrative

38,382

31,915

74,531

70,453

Loss (gain) on derivative contracts

33,004

85,292

(16,823)

127,783

(Gain) loss on sale of assets

(2,770)

36

(4,674)

17

Total expenses

1,764,690

332,635

3,068,454

858,021

(Loss) income from operations

(1,535,083)

42,079

(2,623,539)

(40,251)

Other (expense) income

Interest expense

(73,727)

(61,863)

(136,569)

(123,906)

Gain on extinguishment of debt

17,934

-

17,934

-

Other income, net

2,170

1,338

1,634

3,432

Total other expense

(53,623)

(60,525)

(117,001)

(120,474)

Loss before income taxes

(1,588,706)

(18,446)

(2,740,540)

(160,725)

Income tax expense (benefit)

25

(1,194)

65

(1,067)

Net loss 

(1,588,731)

(17,252)

(2,740,605)

(159,658)

Less: net (loss) income attributable to noncontrolling interest

(220,249)

15,642

(337,170)

9,572

Net loss attributable to SandRidge Energy, Inc.

(1,368,482)

(32,894)

(2,403,435)

(169,230)

Preferred stock dividends 

7,074

13,881

17,955

27,763

Loss applicable to SandRidge Energy, Inc. common stockholders

$(1,375,556)

$ (46,775)

$(2,421,390)

$(196,993)

Loss per share

Basic

$        (2.78)

$    (0.10)

$        (4.98)

$     (0.41)

Diluted

$        (2.78)

$    (0.10)

$        (4.98)

$     (0.41)

Weighted average number of common shares outstanding

Basic

495,153

485,318

486,704

485,059

Diluted

495,153

485,318

486,704

485,059

 

SandRidge Energy, Inc. and Subsidiaries

Condensed Consolidated Balance Sheets

(In thousands, except per share data)

June 30,

December 31,

2015

2014

(unaudited)

ASSETS

Current assets

Cash and cash equivalents

$   983,617

$       181,253

Accounts receivable, net

237,720

330,077

Derivative contracts

120,575

291,414

Prepaid expenses

9,938

7,981

Other current assets

25,985

21,193

Total current assets

1,377,835

831,918

Oil and natural gas properties, using full cost method of accounting

Proved

12,199,049

11,707,147

Unproved

261,657

290,596

Less: accumulated depreciation, depletion and impairment

(9,131,153)

(6,359,149)

3,329,553

5,638,594

Other property, plant and equipment, net

556,848

576,463

Derivative contracts

23,470

47,003

Other assets

147,342

165,247

Total assets

$5,435,048

$    7,259,225

LIABILITIES AND EQUITY

Current liabilities

Accounts payable and accrued expenses

$   494,675

$       683,392

Derivative contracts

102

-

Deferred tax liability

52,763

95,843

Other current liabilities

3,791

5,216

Total current liabilities

551,331

784,451

Long-term debt

4,395,639

3,195,436

Derivative contracts

26

-

Asset retirement obligations

57,084

54,402

Other long-term obligations

15,396

15,116

Total liabilities

5,019,476

4,049,405

Commitments and contingencies

Equity

SandRidge Energy, Inc. stockholders' equity

Preferred stock, $0.001 par value, 50,000 shares authorized

8.5% Convertible perpetual preferred stock; 2,650 shares issued and outstanding at

 June 30, 2015 and December 31, 2014; aggregate liquidation preference of $265,000

3

3

7.0% Convertible perpetual preferred stock; 3,000 shares issued and outstanding at

 June 30, 2015 and December 31, 2014; aggregate liquidation preference of $300,000

3

3

  Common stock, $0.001 par value; 1,800,000 shares authorized, 519,269 issued and 517,958 

outstanding at June 30, 2015; 800,000 shares authorized, 485,932 issued and 484,819

outstanding at December 31, 2014

514

477

Additional paid-in capital

5,252,785

5,204,024

Additional paid-in capital - stockholder receivable

(2,500)

(2,500)

Treasury stock, at cost

(6,776)

(6,980)

Accumulated deficit

(5,678,592)

(3,257,202)

Total SandRidge Energy, Inc. stockholders' equity

(434,563)

1,937,825

Noncontrolling interest

850,135

1,271,995

Total equity

415,572

3,209,820

Total liabilities and equity

$5,435,048

$    7,259,225

 

SandRidge Energy, Inc. and Subsidiaries

Condensed Consolidated Statements of Cash Flows

(In thousands)

Six Months Ended June 30,

2015

2014

(unaudited)

CASH FLOWS FROM OPERATING ACTIVITIES

Net loss

$(2,740,605)

$(159,658)

Adjustments to reconcile net loss to net cash provided by operating activities

Depreciation, depletion and amortization

226,260

243,385

Accretion of asset retirement obligations

2,191

6,811

Impairment

2,573,257

167,912

Debt issuance costs amortization

4,636

4,703

Amortization of discount, net of premium, on long-term debt

285

258

Gain on extinguishment of debt

(17,934)

-

Write off of debt issuance costs

7,108

-

(Gain) loss on derivative contracts

(16,823)

127,783

Cash received (paid) on settlement of derivative contracts

211,323

(52,261)

(Gain) loss on sale of assets

(4,674)

17

Stock-based compensation

11,533

11,625

Other

680

(49)

Changes in operating assets and liabilities

61,757

(119,734)

  Net cash provided by operating activities

318,994

230,792

CASH FLOWS FROM INVESTING ACTIVITIES

Capital expenditures for property, plant and equipment

(636,822)

(656,699)

Acquisitions of assets

(3,475)

(16,553)

Proceeds from sale of assets

11,462

707,799

  Net cash (used in) provided by investing activities

(628,835)

34,547

CASH FLOWS FROM FINANCING ACTIVITIES

Proceeds from borrowings

2,190,000

-

Repayments of borrowings

(940,000)

-

Debt issuance costs

(39,129)

-

Proceeds from the sale of royalty trust units

-

22,119

Noncontrolling interest distributions

(84,690)

(103,142)

Acquisition of ownership interest

-

(2,730)

Stock-based compensation excess tax benefit

-

2

Purchase of treasury stock

(2,714)

(5,602)

Dividends paid - preferred

(11,262)

(27,763)

Cash paid on settlement of financing derivative contracts

-

(44,128)

  Net cash provided by (used in) financing activities

1,112,205

(161,244)

NET INCREASE IN CASH AND CASH EQUIVALENTS

802,364

104,095

CASH AND CASH EQUIVALENTS, beginning of year

181,253

814,663

CASH AND CASH EQUIVALENTS, end of period

$     983,617

$  918,758

Supplemental Disclosure of Cash Flow Information

Cash paid for interest, net of amounts capitalized

$   (177,245)

$(120,339)

Cash paid for income taxes

$            (95)

$    (1,932)

Supplemental Disclosure of Noncash Investing and Financing Activities

Change in accrued capital expenditures

$     149,066

$     3,989

Equity issued for debt exchange

$     (31,396)

$             -

Preferred stock dividends paid in common stock

$       (6,693)

$             -

 

For further information, please contact:

Duane M. Grubert EVP – Investor Relations and Strategy 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 "Operational 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, net income and EBITDA, drilling plans, oil, and natural gas and natural gas liquids production, price realizations and differentials, operating, general and administrative and other costs, capital expenditures, tax rates, efficiency and cost reduction initiative outcomes, infrastructure utilization and investment, and development plans and appraisal programs. 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 for the year ended December 31, 2014. 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 the Mid-Continent region of the United States. In addition, SandRidge owns and operates a saltwater gathering and disposal system and a drilling rig and related oil field services business.

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SOURCE SandRidge Energy, Inc.



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