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 oncapital 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 oAdjusted EBITDA of $270 million for first quarter 2013 compared to $185 million in first quarter 2012. oOperating cash flow of $182 million for first quarter 2013 compared to $151 million in first quarter 2012. oNet 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. oAdjusted 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 oMaintained industry leading Mississippian well cost of $3.1 million during the first quarter oCompleted three Mississippian wells with 30-day IPs over 1,000 Boe per day in the first quarter oStacked pay testing program yields early success in three Oklahoma counties: oFour successful horizontal tests in the following zones: Chester Sandstone, Middle and Lower Mississippian intervals oInitial 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) oGulf of Mexico and Gulf Coast production averaged 32.4 MBoe per day during the first quarter oEnded the first quarter with approximately $2.1 billion of liquidity and a leverage ratio of 2.26x oRedeemed approximately $1.1 billion of senior notes resulting in a yearly interest expense reduction of approximately $100 million oHedged production through the remainder of 2013: o86% (9.5 MMBbls) of estimated oil production hedged at $99 per barrel o56% (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 fourwells in progress at the end of the quarter. Additionally, SandRidge performed five recompletions and participated infour 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 hasimplemented initiatives to reduce G&A expenses, targeting anannual 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: oMay 13, 2013 – Susquehanna 2013 Energy Conference; NYC, NY oMay 21, 2013 – Barclays High Yield Bond and Syndicated Loan Conference 2013; Chicago, IL oJune 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 websiteat 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
SandRidge Energy, Inc. Reports Financial and Operational Results for the First Quarter of 2013
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