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SandRidge Energy, Inc. Reports Financial and Operational Results for the First Quarter of 2013



SandRidge Energy, Inc. Reports Financial and Operational Results for the First
                               Quarter of 2013

Company Management in Conjunction With Expanded Board of Directors Reviews
Company's Strategy, Assets and Investment and Spending Plans

Mississippian Quarterly Production Grew to 39.5 MBoe per Day (46% Oil), a 10%
Increase from the Previous Period and a 105% Increase over the First Quarter
of 2012

Brought on 109 Mississippian Wells with an Average 30-day IP of 330 Boe per
Day during the First Quarter

Issues Revised 2013 Guidance, a 33% Reduction in Capital Expenditures from
2012

- Estimated Total Production of 32.7 MMBoe

- Estimated Mississippian Production of 16.2 MMBoe, 60% Growth

- Planned Capital Expenditures of $1.45 Billion, $700 Million Decrease from
2012

PR Newswire

OKLAHOMA CITY, May 7, 2013

OKLAHOMA CITY, May 7, 2013 /PRNewswire/ -- SandRidge Energy, Inc. (NYSE: SD)
today announced financial and operational results for the quarter ended March
31, 2013.

Strategic Direction

Over the last two months the SandRidge management team and Board of Directors
have been reviewing and analyzing the company's strategy, assets and spending
levels. This effort has resulted in notable changes to the 2013 business plan,
including an increasing focus on capital discipline, creating sustainable
returns and lowering risk levels. The company's development plans for its
assets, primarily the Mississippian Play, are being concentrated in its most
proven acreage, near existing infrastructure, with a higher proportion of
capital directed toward drilling producing wells. This focus on capital
efficiency has resulted in a reduction in the capital investment budget for
2013 and an extension of the company's liquidity, all while the company
continues to unlock value in its assets and generate meaningful production
growth. Additionally management and the Board have undertaken overhead cost
saving initiatives and reductions, the impact of which the company expects to
begin realizing in the last half of 2013.

Key Financial Results

  o Adjusted EBITDA of $270 million for first quarter 2013 compared to $185
    million in first quarter 2012.
  o Operating cash flow of $182 million for first quarter 2013 compared to
    $151 million in first quarter 2012.
  o Net loss applicable to common stockholders of $493 million, or $1.03 per
    diluted share, for first quarter 2013 compared to net loss applicable to
    common stockholders of $232 million, or $0.58 per diluted share, in first
    quarter 2012.
  o Adjusted net income of $2.0 million, or $0.00 per diluted share, for first
    quarter 2013 compared to adjusted net income of $21.2 million, or $0.04
    per diluted share, in first quarter 2012.

Adjusted net income available (loss applicable) to common stockholders,
adjusted EBITDA and 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.

Highlights

  o Maintained industry leading Mississippian well cost of $3.1 million during
    the first quarter
  o Completed three Mississippian wells with 30-day IPs over 1,000 Boe per day
    in the first quarter
  o Stacked pay testing program yields early success in three Oklahoma
    counties:  

       o Four successful horizontal tests in the following zones: Chester
         Sandstone, Middle and Lower Mississippian intervals
       o Initial production from the four wells exceeded the company's
         Mississippian type curve with an average 30-day IP of 462 Boe per day
         (201 Bopd)

  o Gulf of Mexico and Gulf Coast production averaged 32.4 MBoe per day during
    the first quarter
  o Ended the first quarter with approximately $2.1 billion of liquidity and a
    leverage ratio of 2.26x
  o Redeemed approximately $1.1 billion of senior notes resulting in a yearly
    interest expense reduction of approximately $100 million
  o Hedged production through the remainder of 2013:  

       o 86% (9.5 MMBbls) of estimated oil production hedged at $99 per barrel
       o 56% (43 Bcf) of estimated natural gas production hedged at $4.10 per
         MMBtu

Drilling and Operational Activities

SandRidge averaged 38 rigs operating during the first quarter of 2013 and
drilled 179 wells. A total of 169 operated wells were completed and brought on
production during the first quarter of 2013.

Mississippian Play. During the first quarter of 2013, SandRidge drilled 122
horizontal wells: 91 in Oklahoma and 31 in Kansas. SandRidge also drilled
seven disposal wells during the quarter. The company exited the quarter with
32 horizontal rigs operating in the play: 23 drilling wells in Oklahoma and
nine drilling wells in Kansas. Additionally, the company had two rigs drilling
disposal wells. The company's Mississippian assets produced 39.5 MBoe per day
during the first quarter (46% oil).

With the revised capital expenditure plan, the company expects to average 25
horizontal rigs and drill approximately 425 horizontal wells in 2013. As a
result of the reduced rig count and further optimization of its salt water
disposal system, the company now expects to drill 44 disposal wells in 2013.
Compared to the previous year, the revised capital budget yields a 27%
decrease in disposal wells while growing the horizontal well count by 7%.

Gulf of Mexico / Gulf Coast. During the first quarter of 2013, SandRidge
drilled and completed one well. The company also participated in the drilling
of one non-operated well and had four wells in progress at the end of the
quarter.  Additionally, SandRidge performed five recompletions and
participated in four non-operated recompletions during the quarter. The
company's Gulf of Mexico and Gulf Coast assets produced 32.4 MBoe per day
during the first quarter (46% oil).

Permian Basin. On February 26, 2013, the company closed the sale of its
Permian Basin assets other than those associated with SandRidge Permian Trust.
The divested assets produced approximately 1.15 MMBoe net during the first
quarter before the close of the sale. In the company's retained Permian
properties, 55 wells were drilled during the first quarter of 2013. SandRidge
plans to utilize three rigs and expects to drill approximately 220 wells in
2013, all for SandRidge Permian Trust. The company's retained Permian Basin
assets produced 5.6 MBoe per day during the first quarter (95% oil).

Other Operating Areas. During the first quarter, SandRidge's legacy West Texas
properties produced approximately 7.6 MBoe per day (99% natural gas).
Additionally, its legacy Mid-Continent assets produced 2.2 MBoe per day in the
first quarter (80% natural gas).

Additional 2013 Guidance detail is available on the company's website,
www.sandridgeenergy.com, under Investor Relations/Guidance.

Operational and Financial Statistics

Information regarding the company's production, pricing, costs and earnings is
presented below:

                                                  Three Months Ended March 31,
                                                  2013             2012
Production
Oil (MBbl) ^(1)                                   4,442            3,427
Natural gas (MMcf)                                27,321           15,746
Oil equivalent (MBoe)                             8,995            6,051
Daily production (MBoed)                          99.9             66.5
Average price per unit
Realized oil price per barrel - as reported ^(1)  $ 87.88          $ 89.99
Realized impact of derivatives per barrel ^(1)    3.15             (3.72)
Net realized price per barrel ^(1)                $ 91.03          $ 86.27
Realized natural gas price per Mcf - as reported  $ 3.21           $ 2.10
Realized impact of derivatives per Mcf            (0.02)           0.25
Net realized price per Mcf                        $ 3.19           $ 2.35
Realized price per Boe - as reported              $ 53.14          $ 56.42
Net realized price per Boe - including impact of  $ 54.65          $ 54.96
derivatives
Average cost per Boe
Lease operating                                   $ 14.73          $ 13.77
Production taxes                                  1.05             2.03
General and administrative
      General and administrative, excluding       6.63             6.43
      stock-based compensation ^(2)
      Stock-based compensation ^(3)               2.21             1.88
Depletion ^(4)                                    18.60            14.82
Lease operating cost per Boe
Mississippian                                     $ 9.18           $ 9.59
Permian Basin                                     13.68            13.16
Offshore                                          20.99            32.55
Earnings per share
Loss per share applicable to common stockholders
      Basic                                       $ (1.03)         $ (0.58)
      Diluted                                     (1.03)           (0.58)
Adjusted net (loss) income per share
(applicable) available to common stockholders
      Basic                                       $ (0.02)         $ 0.02
      Diluted                                     0.00             0.04
Weighted average number of common shares
outstanding (in thousands)
      Basic                                       477,826          400,597
      Diluted ^(5)                                569,126          500,116

^(1) Includes NGLs.
     Includes transaction costs, legal settlements, severance and consent
^(2) solicitation costs totaling $18.0 million and $2.9 million for the
     three-month periods ended March 31, 2013 and 2012, respectively.
^(3) Three-month period ended March 31, 2013 includes $7.6 million for the
     acceleration of certain stock awards.
^(4) Includes accretion of asset retirement
     obligation.
^(5) Includes shares considered antidilutive for calculating earnings per
     share in accordance with GAAP for certain periods presented.

 

Discussion of First Quarter 2013 Financial Results

Oil and natural gas revenue increased 40% to $478 million in the first quarter
of 2013 from $341 million in the same period of 2012 as a result of increases
in oil and natural gas production. Oil production increased 30% to 4.4 MMBbls
from first quarter 2012 production of 3.4 MMBbls and natural gas production
increased 74% to 27.3 Bcf from first quarter 2012 production of 15.7 Bcf.
Production increases were attributable to continued development of the
company's properties in the Mississippian play and production contributed by
properties acquired in the second quarter of 2012. The production increase was
partly offset by lower quarterly production from the company's Permian
properties resulting from the Permian divestiture that closed in the first
quarter of 2013. Realized reported prices, which exclude the impact of
derivative settlements, were $87.88 per barrel and $3.21 per Mcf during the
first quarter of 2013. Realized reported prices in the same period of 2012
were $89.99 per barrel and $2.10 per Mcf.

First quarter 2013 production expense was $14.73 per Boe compared to first
quarter 2012 production expense of $13.77 per Boe. The increase was primarily
due to additional costs related to offshore properties acquired during the
second quarter of 2012 as higher cost-per-unit offshore production volumes
comprised a larger percentage of total production during the 2013 period. In
SandRidge's primary onshore operations, production expense continued to
decrease as a result of improving efficiencies. In the company's Mississippian
play, first quarter production expense decreased 4% year-over-year from $9.59
to $9.18 per Boe.

Depletion per unit in the first quarter of 2013 was $18.60 per Boe compared to
$14.82 per Boe in the same period of 2012. The increase in rate per unit
primarily resulted from the addition of offshore properties acquired during
the second quarter of 2012 to the company's depletable asset base.

Capital Expenditures

The table below summarizes the company's capital expenditures for the quarters
ended March 31, 2013 and 2012:

                                                  Three Months Ended March 31,
                                                  2013            2012
                                                  (in thousands)
Drilling and production
            Mid-Continent                         $234,326        $219,451
            Permian Basin                         60,895          162,319
            Gulf of Mexico/Gulf Coast             52,077          1,827
            WTO/Tertiary/Other                    -               11,030
                                                  347,298         394,627
Leasehold and seismic
            Mid-Continent                         11,260          87,739
            Permian Basin                         360             2,956
            Gulf of Mexico/Gulf Coast             720             43
            WTO/Tertiary/Other                    868             1,820
                                                  13,208          92,558
Inventory                                         (2,966)         4,649
Total exploration and development                 357,540         491,834
Drilling and oil field services                   632             7,916
Midstream                                         15,221          23,975
Other - general                                   15,319          45,933
Total capital expenditures, excluding             388,712         569,658
acquisitions
Acquisitions                                      5,048           10,511
Total capital expenditures                        $393,760        $580,169
Plugging and abandonment                          $  40,114       $    3,421

 

Derivative Contracts

The tables below set forth the company's consolidated oil and natural gas
price and basis swaps and collars for the years 2013 through 2015 as of May 1,
2013 and include contracts that have been novated to, or the benefits of which
have been conveyed to, SandRidge sponsored royalty trusts.

                         Quarter Ending
                         6/30/2013   9/30/2013   12/31/2013
Oil (MMBbls):
 Swap Volume             3.27        3.12        3.10
 Swap                    $99.26      $99.27      $99.11
 Collar Volume           0.04        0.04        0.04
 Collar:  High           $102.50     $102.50     $102.50
 Collar:  Low            $80.00      $80.00      $80.00
 LLS Basis Volume        0.27        -           -
 Swap                    $12.51      -           -
Natural Gas (Bcf):
 Swap Volume             14.13       16.10       12.42
 Swap                    $4.08       $4.10       $4.11
 Collar Volume           1.71        1.72        1.72
 Collar:  High           $6.71       $6.71       $6.71
 Collar:  Low            $3.78       $3.78       $3.78
                         Year Ending
                         12/31/2013  12/31/2014  12/31/2015
Oil (MMBbls):
 Swap Volume             14.01       7.51        5.08
 Swap                    $98.68      $92.43      $83.69
 Collar Volume           0.17        -           -
 Collar:  High           $102.50     -           -
 Collar:  Low            $80.00      -           -
 Three-way Collar Volume -           8.21        2.92
 Call Price              -           $100.00     $103.13
 Put Price               -           $90.20      $90.82
 Short Put Price         -           $70.00      $73.13
 LLS Basis Volume        0.54        -           -
 Swap                    $13.83      -           -
Natural Gas (Bcf):
 Swap Volume             42.65       -           -
 Swap                    $4.10       -           -
 Collar Volume           6.86        0.94        1.01
 Collar:  High           $6.71       $7.78       $8.55
 Collar:  Low            $3.78       $4.00       $4.00

 

Balance Sheet

The company's capital structure at March 31, 2013 and December 31, 2012 is
presented below:

                                       March 31,              December 31,
                                       2013                   2012
                                       (in thousands)
Cash and cash equivalents              $        1,308,733     $      309,766
Current maturities of long-term debt   $                   -  $              -
Long-term debt (net of current
maturities)
  Senior credit facility               -                      -
  Senior Notes
   9.875% Senior Notes due 2016, net   -                      356,657
   8.0% Senior Notes due 2018          -                      750,000
   8.75% Senior Notes due 2020, net    444,275                444,127
   7.5% Senior Notes due 2021          1,179,230              1,179,328
   8.125% Senior Notes due 2022        750,000                750,000
   7.5% Senior Notes due 2023, net     821,038                820,971
     Total debt                        3,194,543              4,301,083
Stockholders' equity
  Preferred stock                      8                      8
  Common stock                         479                    476
  Additional paid-in capital           5,237,821              5,228,019
  Treasury stock, at cost              (8,974)                (8,602)
  Accumulated deficit                  (3,344,269)            (2,851,048)
   Total SandRidge Energy, Inc.        1,885,065              2,368,853
   stockholders' equity
  Noncontrolling interest              1,390,427              1,493,602
Total capitalization                   $        6,470,035     $   8,163,538

 

During the first quarter of 2013, the company's debt, net of cash balances,
decreased by approximately $2.1 billion as a result of closing the Permian
sale, redeeming $1.1 billion of senior notes, and funding the company's
drilling program. On May 1, 2013, the company had no amount drawn under its
$775 million senior credit facility and approximately $1.26 billion of cash,
leaving approximately $2 billion of available liquidity. The company was in
compliance with all applicable covenants contained in its debt agreements
during the three months ended March 31, 2013 and through and as of the date of
this release.

2013 Operational Guidance: The company is updating its guidance for 2013.

                                          Year Ending December 31, 2013
                                          Projection as of   Projection as of
                                          February 28, 2013  May 7, 2013
Production
      Oil (MMBbls)  ^(1)                  15.9               15.5
      Natural Gas (Bcf)                   110.4              103.2
      Total (MMBoe)                       34.3               32.7
Differentials
      Oil  ^(1)                           $8.50              $8.50
      Natural Gas                         0.45               0.45
Costs per Boe
      Lifting                             $14.50 - $16.50    $14.50 - $16.50
      Production Taxes                    1.00 - 1.20        1.00 - 1.20
      DD&A - oil & gas                    16.50 - 18.30      17.10 - 18.90
      DD&A - other                        1.80 - 2.00        2.00 - 2.20
      Total DD&A                          $18.30 - $20.30    $19.10 - $21.10
      G&A - cash                          4.00 - 4.45        4.10 - 4.55
      G&A - stock                         1.35 - 1.50        1.10 - 1.25
      Total G&A                           $5.35 - $5.95      $5.20 - $5.80
      Interest Expense                    $8.10 - $9.10      $8.30 - $9.30
EBITDA from Oilfield Services, Midstream  $30                $20
and Other ($ in millions) ^(2)
Adjusted Net Income Attributable to
Noncontrolling Interest ($ in millions)   $150               $140
^(3)
P&A Cash Cost ($ in millions)             $120               $120
Corporate Tax Rate ^(4)                   0%                 0%
Deferral Rate                             0%                 0%
Shares Outstanding at End of Period (in
millions)
      Common Stock                        498                498
      Preferred Stock (as converted)      90                 90
      Fully Diluted                       588                588
Capital Expenditures ($ in millions)
      Exploration and Production          $1,450             $1,230
      Land and Seismic                    100                100
      Total Exploration and Production    $1,550             $1,330
      Oil Field Services                  30                 15
      Midstream and Other                 170                105
      Total Capital Expenditures          $1,750             $1,450
      (excluding acquisitions)

^(1)  Includes NGLs.
      EBITDA from Oilfield Services, Midstream 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,
^(2)  Midstream and Other is Net Income from Oilfield Services, Midstream 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.
      Adjusted Net Income Attributable to Noncontrolling Interest is a
      non-GAAP financial measure as it excludes unrealized gain or loss on
      derivative contracts and gain or loss on sale of assets. The most
      directly comparable GAAP measure for Adjusted Net Income Attributable to
^(3)  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.
      As a result of the Permian divestiture, the company expects to incur
^(4)  cash income taxes of approximately $5 million in 2013 with a
      corresponding expense included in Net Income.

 

2013 Guidance Update:  The updated guidance gives effect to the revised
capital expenditure plan. SandRidge estimates production of approximately 32.7
MMBoe and capital expenditures of $1.45 billion in 2013. A majority of
SandRidge's planned capital expenditures will fund its Mississippian program,
where the company plans to drill approximately 425 horizontal producers and 44
disposal wells in 2013. The remaining 2013 drilling capital will be used in
the company's offshore properties and to drill approximately 220 wells
associated with the SandRidge Permian Trust development program. The G&A
guidance presented for 2013 excludes one-time items. The company
has implemented initiatives to reduce G&A expenses, targeting an annual
run-rate of $150 million by the fourth quarter of 2013. Additional 2013
Guidance detail is available on the company's website,
www.sandridgeenergy.com, under Investor Relations/Guidance.

Non-GAAP Financial Measures

Operating cash flow, adjusted EBITDA, adjusted net (loss applicable) income
available to common stockholders and adjusted net income attributable to
noncontrolling interest are non-GAAP financial measures.

The company defines operating cash flow as net cash provided by operating
activities before changes in operating assets and liabilities and adjusted for
cash received (paid) on financing derivatives. It defines EBITDA as net (loss)
income before income tax expense, interest expense and depreciation, depletion
and amortization and accretion of asset retirement obligations. Adjusted
EBITDA, as presented herein, is EBITDA excluding interest income, realized
losses on early settlements of derivative contracts, non-cash realized losses
on amended derivative contracts, non-cash realized (gains) losses on financing
derivative contracts, loss on sale of assets, transaction costs, legal
settlements, consent solicitation fees, severance, loss on extinguishment of
debt and other various non-cash items (including non-cash portion of
noncontrolling interest, stock-based compensation and unrealized losses on
derivative contracts).

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 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, 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 (loss
applicable) income available to common stockholders, which excludes unrealized
losses on derivative contracts, realized losses on early settlements of
derivative contracts, tax expense resulting from divestiture, financing
commitment fees, non-cash realized (gains) losses on financing derivative
contracts, transaction costs, legal settlements, consent solicitation fees,
loss on extinguishment of debt, non-cash realized losses on amended derivative
contracts, severance and loss on sale of assets 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 applicable) income
available to common stockholders 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
unrealized loss on commodity derivative contracts, legal settlements and loss
on sale of assets 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 applicable) income available to common stockholders, and adjusted net
income attributable to noncontrolling interest.

 

Reconciliation of Net Cash Provided by Operating Activities to Operating Cash
Flow
                                               Three Months Ended March 31,
                                               2013               2012
                                               (in thousands)
Net cash provided by operating activities      $121,457           $230,910
Add (deduct)
   Cash received (paid) on financing           3,208              (1,634)
   derivatives
   Changes in operating assets and             56,921             (77,787)
   liabilities
Operating cash flow                            $181,586           $151,489

 

Reconciliation of Net Loss to EBITDA and Adjusted EBITDA
                                                  Three Months Ended March 31,
                                                  2013            2012
                                                  (in thousands)
Net loss                                          $(479,340)      $(218,178)
Adjusted for
 Income tax expense                               4,429           71
 Interest expense ^(1)                            88,834          68,421
 Depreciation and amortization - other            15,336          14,513
 Depreciation and depletion - oil and natural     157,526         87,066
 gas
 Accretion of asset retirement obligation         9,779           2,607
EBITDA                                            (203,436)       (45,500)
 Interest income                                  (529)           (102)
 Stock-based compensation                         11,312          10,523
 Unrealized losses on derivative contracts        22,417          127,836
 Realized losses on early settlements of          29,623          -
 derivative contracts - Permian
 Non-cash realized losses on amended derivative   -               117,108
 contracts
 Non-cash realized (gains) losses on financing    (40)            1,344
 derivative contracts
 Other non-cash income                            (108)           (2,177)
 Loss on sale of assets ^(2)                      398,174         3,080
 Transaction costs                                624             2,901
 Legal settlements                                1,178           -
 Consent solicitation fees                        13,463          -
 Severance                                        10,397          -
 Loss on extinguishment of debt                   82,005          -
 Non-cash portion of noncontrolling interest      (95,227)        (29,594)
 ^(3)
Adjusted EBITDA                                   $ 269,853       $ 185,419

^(1) Excludes unrealized gains on interest rate swaps of $2.4 million and $1.4
     million for the three-month periods ended March 31, 2013 and 2012.
     Includes loss on sale of Permian oil and natural gas assets of
^(2) approximately $399.1 million for the three-month period ended March 31,
     2013.
     Represents depreciation and depletion, loss on sale of Permian
^(3) Properties, unrealized losses on commodity derivative contracts, legal
     settlement and income tax expense attributable to noncontrolling
     interests.

 

Reconciliation of Net Cash Provided by Operating Activities to Adjusted EBITDA
                                                  Three Months Ended March 31,
                                                  2013             2012
                                                  (in thousands)
Net cash provided by operating activities         $121,457         $230,910
Changes in operating assets and liabilities       56,921           (77,787)
Interest expense ^(1)                             88,834           68,421
Realized losses on early settlements of           29,623           -
derivative contracts - Permian
Transaction costs                                 624              2,901
Legal settlements                                 1,178            -
Consent solicitation fees                         13,463           -
Severance                                         2,781            -
Noncontrolling interest - SDT ^(2)                (11,303)         (13,922)
Noncontrolling interest - SDR ^(2)                (16,927)         -
Noncontrolling interest - PER ^(2)                (15,100)         (17,699)
Noncontrolling interest - Other ^(2)              22               73
Other non-cash items                              (1,720)          (7,478)
Adjusted EBITDA                                   $269,853         $185,419

^(1) Excludes unrealized gains on interest rate swaps of $2.4 million and $1.4
     million for the three-month periods ended March 31, 2013 and 2012.
     Excludes depreciation and depletion, loss on sale of Permian Properties,
^(2) unrealized losses on commodity derivative contracts, legal settlement and
     income tax expense attributable to noncontrolling interests.

 

Reconciliation of Loss Applicable to Common Stockholders to Adjusted Net (Loss
Applicable) Income Available to Common Stockholders
                                        Three Months Ended March 31,
                                        2013                   2012
                                        (in thousands, except per share data)
Loss applicable to common               $(493,221)             $(232,059)
stockholders
Tax expense resulting from              4,359                  -
divestiture
Unrealized losses on derivative         13,751                 105,817
contracts ^(1)
Realized losses on early settlements
of                                      29,623                 -

derivative contracts - Permian
Non-cash realized losses on amended     -                      117,108
derivative contracts
Non-cash realized (gains) losses on     (40)                   1,344
financing derivative contracts
Loss on sale of assets ^(1)             326,434                3,080
Transaction costs                       624                    2,901
Legal settlements ^(1)                  778                    -
Consent solicitation fees               13,463                 -
Severance                               10,397                 -
Financing commitment fees               -                      10,875
Loss on extinguishment of debt          82,005                 -
Other non-cash income                   (85)                   (1,785)
Effect of income taxes                  63                     79
Adjusted net (loss applicable) income   (11,849)               7,360
available to common stockholders
Preferred stock dividends               13,881                 13,881
Total adjusted net income               $     2,032            $   21,241
Weighted average number of common
shares outstanding
           Basic                        477,826                400,597
           Diluted ^(2)                 569,126                500,116
Total adjusted net (loss) income
           Per share - basic            $     (0.02)           $      0.02
           Per share - diluted          $      0.00            $      0.04

^(1) Excludes amounts attributable to noncontrolling interests.
     Weighted average fully diluted common shares outstanding for certain
^(2) 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 March 31,
                                            2013                 2012
                                            (in thousands)
Net (loss) income attributable to           $(51,919)            $  1,954
noncontrolling interest
Loss on sale of assets - Permian            71,740               -
Legal settlement                            400                  -
Unrealized loss on commodity derivative     8,666                22,019
contracts
         Adjusted net income
         attributable to noncontrolling     $ 28,887             $23,973
         interest

 

Conference Call Information

The company will host a conference call to discuss these results on Wednesday,
May 8, 2013 at 8:00 am CDT. The telephone number to access the conference call
from within the U.S. is 800-237-9752 and from outside the U.S. is
617-847-8706. The passcode for the call is 65503814. An audio replay of the
call will be available from May 8, 2013 until 11:59 pm CDT on June 7, 2013.
The number to access the conference call replay from within the U.S. is
888-286-8010 and from outside the U.S. is 617-801-6888. The passcode for the
replay is 81209355.

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

Conference Participation

SandRidge Energy, Inc. will participate in the following upcoming events:

  o May 13, 2013 – Susquehanna 2013 Energy Conference; NYC, NY
  o May 21, 2013 – Barclays High Yield Bond and Syndicated Loan Conference
    2013; Chicago, IL
  o June 3, 2013 – 2013 RBC Capital Markets' Energy and Power Conference; NYC,
    NY

At 8:00 am Central Time on the day of each presentation, the corresponding
slides and any webcast information will be accessible on the Investor
Relations portion of the company's website at www.sandridgeenergy.com. Please
check the website for updates regularly as this schedule is subject to change.
Also, please note that SandRidge Energy, Inc. intends for its website to be
used as a reliable source of information for all future events in which it may
participate as well as updated presentations regarding the company. Slides and
webcasts (where applicable) will be archived and available for at least 30
days after each use or presentation.

Second Quarter 2013 Earnings Release and Conference Call

August 6, 2013 (Tuesday) – Earnings press release after market close
August 7, 2013 (Wednesday) – Earnings conference call at 8:00 am CDT

 

SandRidge Energy, Inc. and Subsidiaries

Condensed Consolidated Statements of Operations

(in thousands, except per share data)
                                                  Three Months Ended March 31,
                                                  2013            2012
                                                  (Unaudited)
Revenues
 Oil and natural gas                              $ 478,017       $ 341,365
 Drilling and services                            17,370          29,309
 Midstream and marketing                          13,032          8,306
 Other                                            3,271           2,655
    Total revenues                                511,690         381,635
Expenses
 Production                                       132,501         83,310
 Production taxes                                 9,439           12,254
 Cost of sales                                    16,317          17,560
 Midstream and marketing                          11,803          7,954
 Depreciation and depletion - oil and natural gas 157,526         87,066
 Depreciation and amortization - other            15,336          14,513
 Accretion of asset retirement obligations        9,779           2,607
 General and administrative                       79,444          50,301
 Loss on derivative contracts                     40,897          254,646
 Loss on sale of assets                           398,174         3,080
    Total expenses                                871,216         533,291
    Loss from operations                          (359,526)       (151,656)
Other income (expense)
 Interest expense                                 (85,910)        (66,965)
 Loss on extinguishment of debt                   (82,005)        -
 Other income, net                                611             2,468
    Total other expense                           (167,304)       (64,497)
Loss before income taxes                          (526,830)       (216,153)
Income tax expense                                4,429           71
Net loss                                          (531,259)       (216,224)
 Less: net (loss) income attributable to          (51,919)        1,954
 noncontrolling interest
Net loss attributable to SandRidge Energy, Inc.   (479,340)       (218,178)
Preferred stock dividends                         13,881          13,881
    Loss applicable to SandRidge Energy, Inc.     $(493,221)      $(232,059)
    common stockholders
Loss per share
 Basic                                            $     (1.03)    $     (0.58)
 Diluted                                          $     (1.03)    $     (0.58)
Weighted average number of common shares
outstanding
 Basic                                            477,826         400,597
 Diluted                                          477,826         400,597

 

SandRidge Energy, Inc. and Subsidiaries

Condensed Consolidated Balance Sheets

(in thousands, except per share data)
                                                  March 31,    December 31,
                                                  2013         2012
                                                  (Unaudited)
ASSETS
Current assets
Cash and cash equivalents                         $1,308,733   $       309,766
Accounts receivable, net                          389,399      445,506
Derivative contracts                              25,693       71,022
Costs in excess of billings                       6,735        11,229
Prepaid expenses                                  40,159       31,319
Restricted deposit                                -            255,000
Other current assets                              18,439       19,043
             Total current assets                 1,789,158    1,142,885
Oil and natural gas properties, using full cost
method of accounting
  Proved                                          9,975,304    12,262,921
  Unproved                                        548,923      865,863
  Less: accumulated depreciation, depletion and   (5,384,132)  (5,231,182)
impairment
                                                  5,140,095    7,897,602
Other property, plant and equipment, net          595,511      582,375
Derivative contracts                              25,219       23,617
Other assets                                      128,328      144,252
             Total assets                         $7,678,311   $    9,790,731
LIABILITIES AND EQUITY
Current liabilities
Accounts payable and accrued expenses             $   672,372  $       766,544
Billings and estimated contract loss in excess of 5,798        15,546
costs incurred
Derivative contracts                              12,970       14,860
Asset retirement obligations                      91,113       118,504
Deposit on pending sale                           -            255,000
             Total current liabilities            782,253      1,170,454
Long-term debt                                    3,194,543    4,301,083
Derivative contracts                              40,384       59,787
Asset retirement obligations                      367,456      379,906
Other long-term obligations                       18,183       17,046
             Total liabilities                    4,402,819    5,928,276
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 March   3            3
   31, 2013 and December 31, 2012; aggregate
   liquidation preference of $265,000
   6.0% Convertible perpetual preferred stock;
   2,000 shares issued and outstanding at March   2            2
   31, 2013 and December 31, 2012; aggregate
   liquidation preference of $200,000
   7.0% Convertible perpetual preferred stock;
   3,000 shares issued and outstanding at March   3            3
   31, 2013 and December 31, 2012; aggregate
   liquidation preference of $300,000
  Common stock, $0.001 par value, 800,000 shares
authorized; 494,605 issued and 493,327            479          476
outstanding at March 31, 2013 and 491,578 issued
and 490,359 outstanding at December 31, 2012
Additional paid-in capital                        5,242,821    5,233,019
Additional paid-in capital - stockholder          (5,000)      (5,000)
receivable
Treasury stock, at cost                           (8,974)      (8,602)
Accumulated deficit                               (3,344,269)  (2,851,048)
             Total SandRidge Energy, Inc.         1,885,065    2,368,853
             stockholders' equity
Noncontrolling interest                           1,390,427    1,493,602
             Total equity                         3,275,492    3,862,455
             Total liabilities and equity         $7,678,311   $    9,790,731

 

SandRidge Energy, Inc. and Subsidiaries

Condensed Consolidated Statements of Cash Flows

(in thousands)
                                            Three Months Ended March 31, 
                                            2013               2012
                                            (Unaudited)
CASH FLOWS FROM OPERATING ACTIVITIES
 Net loss                                   $  (531,259)       $(216,224)
 Adjustments to reconcile net loss to net
 cash provided by operating activities
    Depreciation, depletion and             172,862            101,579
    amortization
    Accretion of asset retirement           9,779              2,607
    obligations
    Debt issuance costs amortization        3,008              2,538
    Amortization of discount, net of        672                635
    premium, on long-term debt
    Loss on extinguishment of debt          82,005             -
    Deferred income taxes                   4,359              -
    Unrealized loss on derivative contracts 22,417             127,836
    Realized loss on amended derivative     -                  117,108
    contracts
    Realized (gain) loss on financing       (3,190)            2,978
    derivative contracts
    Loss on sale of assets                  398,174            3,080
    Stock-based compensation                19,850             11,371
    Other                                   (299)              (385)
    Changes in operating assets and         (56,921)           77,787
    liabilities 
              Net cash provided by          121,457            230,910
              operating activities
CASH FLOWS FROM INVESTING ACTIVITIES
 Capital expenditures for property, plant   (421,876)          (601,841)
 and equipment
 Acquisitions of assets                     (5,048)            (10,511)
 Proceeds from sale of assets               2,559,374          269,008
              Net cash provided by (used    2,132,450          (343,344)
              in) investing activities
CASH FLOWS FROM FINANCING ACTIVITIES
 Repayments of borrowings                   (1,115,500)        (257)
 Premium on debt redemption                 (61,997)           -
 Debt issuance costs                        (91)               (7,223)
 Proceeds from the sale of royalty trust    -                  98,849
 units
 Noncontrolling interest distributions      (51,256)           (32,740)
 Stock-based compensation excess tax        -                  7
 benefit
 Purchase of treasury stock                 (12,041)           (7,144)
 Dividends paid - preferred                 (17,263)           (17,263)
 Cash received (paid) on settlement of      3,208              (1,634)
 financing derivative contracts
              Net cash (used in) provided   (1,254,940)        32,595
              by financing activities
NET INCREASE (DECREASE) IN CASH AND CASH    998,967            (79,839)
EQUIVALENTS
CASH AND CASH EQUIVALENTS, beginning of     309,766            207,681
year
CASH AND CASH EQUIVALENTS, end of year      $1,308,733         $ 127,842
Supplemental Disclosure of Cash Flow
Information
 Cash paid for interest, net of amounts     $  (127,181)       $  (57,174)
 capitalized
 Cash received for income taxes             476                83
Supplemental Disclosure of Noncash
Investing and Financing Activities
 Deposit on pending sale                    $  (255,000)       $              
                                                               -
 Change in accrued capital expenditures     $    (33,164)      $  (32,183)
 Change in preferred stock dividends        $      (3,382)     $    (3,382)
 payable
 Adjustment to oil and natural gas          $                  $   10,000
 properties for estimated contract loss     -
 Asset retirement costs capitalized         $        1,102     $     1,377

 

For further information, please contact:

Kevin R. White
Senior Vice President
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 net income and EBITDA, drilling plans, oil and
natural gas production, derivative transactions, shares outstanding, pricing
differentials, operating costs and capital spending, plugging and abandonment
costs, tax rates, liquidity, and descriptions of our development plans.  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 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 (a) Part I, Item 1A - "Risk
Factors" of our Annual Report on Form 10-K for the year ended December 31,
2011, (b) comparable "risk factors" sections of our Quarterly Reports on Form
10-Q filed thereafter, and (c) Part I, Item 1A - "Risk Factors" of our Annual
Report on Form 10-K for the year ended December 31, 2012.  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. is an oil and natural gas company headquartered in
Oklahoma City, Oklahoma with its principal focus on exploration and
production. SandRidge and its subsidiaries also own and operate gas gathering
and processing facilities and conduct marketing operations. In addition,
Lariat Services, Inc., a wholly-owned subsidiary of SandRidge, owns and
operates a drilling rig and related oil field services business. SandRidge
focuses its exploration and production activities in the Mid-Continent, Gulf
of Mexico, West Texas and Gulf Coast regions. SandRidge's internet address is
www.sandridgeenergy.com.

SOURCE SandRidge Energy, Inc.

Website: http://www.sandridgeenergy.com
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