Market Snapshot
  • U.S.
  • Europe
  • Asia
Ticker Volume Price Price Delta
DJIA 16,408.54 -16.31 -0.10%
S&P 500 1,864.85 2.54 0.14%
NASDAQ 4,095.52 9.29 0.23%
Ticker Volume Price Price Delta
STOXX 50 3,155.81 16.55 0.53%
FTSE 100 6,625.25 41.08 0.62%
DAX 9,409.71 91.89 0.99%
Ticker Volume Price Price Delta
NIKKEI 14,516.27 98.74 0.68%
TOPIX 1,173.37 6.78 0.58%
HANG SENG 22,760.24 64.23 0.28%

SandRidge Energy, Inc. Reports Financial and Operational Results for Second Quarter and First Six Months of 2013



 SandRidge Energy, Inc. Reports Financial and Operational Results for Second
                     Quarter and First Six Months of 2013

Mississippian Production Averaged 47.3 MBoe per Day in the Second Quarter, a
20% Increase from the Previous Quarter

Brought on 111 Mississippian Wells with an Average 30-day IP of 377 Boe per
Day during the Second Quarter

Decreased the Quarterly Average Mississippian Well Cost from $3.1 to $2.95
Million

Increasing 2013 Mississippian Production Guidance by 4% to 16.8 MMBoe and
Total Company Production Guidance by 2% to 33.3 MMBoe

PR Newswire

OKLAHOMA CITY, Aug. 6, 2013

OKLAHOMA CITY, Aug. 6, 2013 /PRNewswire/ -- SandRidge Energy, Inc. (NYSE: SD)
today provided an update on the execution of its 2013 development plan and
reported financial and operational results for the quarter and six months
ended June 30, 2013.

(Logo: http://photos.prnewswire.com/prnh/20120416/DA88110LOGO)

James Bennett, SandRidge's Chief Executive Officer and President, commented,
"In May the company announced changes to its 2013 development plan to reduce
and high grade its capital expenditures, lower costs and maximize returns. We
have concentrated our Mississippian drilling in six de-risked focus areas
where we have invested in infrastructure, and where we have developed a
comprehensive understanding of key reservoir characteristics. Through the
application of our detailed subsurface models and continuous learning and
improvement, we have realized increases in average per well and overall
production rates, along with decreases in well costs and lease operating
expenses. Because of these performance improvements we have increased our 2013
production guidance without changing our capital budget. Our G&A expense
reduction initiatives are taking hold and we are on track to achieving a $150
million run rate later this year. In addition, we continue to be encouraged by
our stacked pay testing program and the steady and valuable contribution of
our Southern Business Unit, which operates our Gulf of Mexico assets. Looking
forward, we will continue to leverage our competitive advantages in the
Mississippian to reduce costs, drive production increases and improve the NAV
of this large asset base."

Key Financial Results

Second Quarter

  o Adjusted EBITDA of $268 million for second quarter 2013 compared to $269
    million in second quarter 2012.
  o Adjusted operating cash flow of $176 million for second quarter 2013
    compared to $223 million in second quarter 2012.
  o Net loss applicable to common stockholders of $34 million, or $0.07 per
    diluted share, for second quarter 2013 compared to net income available to
    common stockholders of $804 million, or $1.46 per diluted share, in second
    quarter 2012.
  o Adjusted net income of $44.6 million, or $0.08 per diluted share, for
    second quarter 2013 compared to adjusted net income of $36.8 million, or
    $0.07 per diluted share, in second quarter 2012.

Six Months

  o Adjusted EBITDA of $537 million for the first six months of 2013 compared
    to $454 million in the first six months of 2012.
  o Adjusted operating cash flow of $358 million for the first six months of
    2013 compared to $374 million in the first six months of 2012.
  o Net loss applicable to common stockholders of $528 million, or $1.10 per
    diluted share, for the first six months of 2013 compared to net income
    available to common stockholders of $572 million, or $1.13 per diluted
    share, in the first six months of 2012.
  o Adjusted net income of $49.9 million, or $0.09 per diluted share, for the
    first six months of 2013 compared to adjusted net income of $58.1 million,
    or $0.11 per diluted share, in the first six months of 2012.

Adjusted net income available to common stockholders, adjusted EBITDA and
adjusted operating cash flow are non-GAAP financial measures. Each measure is
defined and reconciled to the most directly comparable GAAP measure under
"Non-GAAP Financial Measures" beginning on page 10.

Highlights

  o Mississippian daily average production grew 20% quarter over quarter and
    88% from the comparable period in 2012
  o Completed six second quarter Mississippian wells with 30-day IPs over
    1,000 Boe per day within Alfalfa and Grant counties
  o Updated 2013 production guidance generates 15% total growth and 26%
    liquids growth, pro forma for A&D activity
  o Stacked pay testing program continued to yield encouraging results during
    the second quarter:

       o Five Mississippian wells testing new zones in areas of existing
         production delivered an average 30-day IP of 255 Boe per day
       o Eight Mississippian wells drilled in the middle zone delivered an
         average 30-day IP of 708 Boe per day, and identified upper zone
         development potential
       o One Chester well was drilled in Woods County, with first production
         planned in the third quarter

  o Decreased the quarterly average Mississippian well cost from $3.1 to $2.95
    million primarily through the redesign of well site production facilities
  o Mississippian producer to disposal well ratio increased to 12.7 in the
    second quarter of 2013 from 4.6 in the second quarter of 2012
  o Continued to improve Mississippian capital efficiency: drilled 127
    horizontal wells and associated infrastructure and spent $224 million in
    the second quarter of 2013 versus drilling 91 horizontal wells and
    associated infrastructure and spending $216 million in the second quarter
    of 2012
  o Mississippian lease operating expense was $7.38 per Boe during the second
    quarter, a 20% sequential decrease and a 22% year-over-year decrease
  o Completed the drilling obligation for SandRidge Mississippian Trust I
    allowing SandRidge to resume drilling non-trust wells in the dedicated
    area of mutual interest
  o Successfully drilled and completed Green Canyon Block 108 Well #A21.  The
    well was drilled from the Bullwinkle production platform, reaching a
    measured depth of 14,562' and intersecting Pliocene reservoirs. First
    production is expected in the third quarter.
  o Recompleted six wells in the Gulf of Mexico adding a combined net
    production of 1,664 Boe per day
  o Decreased average Permian well cost from $700,000 in the fourth quarter of
    2012 to $600,000 in the second quarter of 2013
  o Current liquidity of $1.8 billion with cash balance of approximately $1.0
    billion. At June 30, no borrowings were outstanding under the credit
    facility and the leverage ratio was 2.35x.

Drilling and Operational Activities

Mississippian Play. During the second quarter of 2013, SandRidge drilled 127
horizontal wells: 86 in Oklahoma and 41 in Kansas. SandRidge also drilled 10
disposal wells during the quarter. The company averaged 26 horizontal rigs
operating in the play: 18 in Oklahoma and eight in Kansas. Additionally, the
company averaged two rigs drilling disposal wells. For the second half of
2013, the company plans to average approximately 22 horizontal rigs in the
Mississippian play: 17 in Oklahoma and five in Kansas. The company's
Mississippian assets produced 47.3 MBoe per day during the second quarter (50%
oil).

Gulf of Mexico / Gulf Coast. During the second quarter of 2013, SandRidge
drilled one well and participated in the drilling of one non-operated well.
Additionally, SandRidge performed eight recompletions and participated in
three non-operated recompletions during the quarter. The company's Gulf of
Mexico and Gulf Coast assets produced 28.7 MBoe per day during the quarter
(53% oil).

Permian Basin. In the first quarter of 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, 52 wells were drilled during the second quarter of 2013. SandRidge
plans to utilize three rigs and expects to drill approximately 215 wells in
2013, all for SandRidge Permian Trust. The company's retained Permian Basin
assets produced 6.0 MBoe per day during the quarter (96% oil).

Other Operating Areas. During the second quarter, SandRidge's other West Texas
properties produced approximately 7.2 MBoe per day (99% natural gas).
Additionally, its other Mid-Continent assets produced 2.2 MBoe per day in the
quarter (78% 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 June  Six Months Ended June
                                30,                      30,
                                2013          2012       2013        2012
Production
Oil (MBbl) ^(1)                 4,119         4,556      8,561       7,982
Natural gas (MMcf)              25,233        21,903     52,554      37,648
Oil equivalent (MBoe)           8,325         8,206      17,320      14,257
Daily production (MBoed)        91.5          90.2       95.7        78.3
Average price per unit
Realized oil price per barrel   $  87.35      $  85.35   $  87.62    $  87.34
- as reported ^(1)
Realized impact of derivatives  4.52          4.41       3.81        0.92
per barrel ^(1)
Net realized price per barrel   $  91.87      $  89.76   $  91.43    $  88.26
^(1)
Realized natural gas price per  $    3.74     $    1.87  $    3.47   $    1.96
Mcf - as reported
Realized impact of derivatives  (0.06)        0.52       (0.04)      0.41
per Mcf
Net realized price per Mcf      $    3.68     $    2.39  $    3.43   $    2.37
Realized price per Boe - as     $  54.57      $  52.37   $  53.83    $  54.09
reported
Net realized price per Boe -
including impact of             $  56.62      $  56.21   $  55.59    $  55.68
derivatives
Average cost per Boe
Lease operating                 $  14.03      $  14.93   $  14.39    $  14.43
Production taxes                0.79          1.34       0.92        1.63
General and administrative
 General and administrative,
 excluding stock-based          14.50         6.07       10.41       6.22
 compensation ^(2)
 Stock-based compensation ^(3)  6.31          1.45       4.18        1.63
Depletion ^(4)                  17.86         17.94      18.25       16.62
Lease operating cost per Boe
Mississippian                   $    7.38     $    9.44  $    8.19   $    9.51
Offshore                        22.99         21.51      21.94       22.09
Earnings per share
(Loss) earnings per share
applicable to common
stockholders
 Basic                          $   (0.07)    $    1.74  $   (1.10)  $    1.33
 Diluted                        (0.07)        1.46       (1.10)      1.13
Adjusted net income per share
available to common
stockholders
 Basic                          $    0.06     $    0.05  $    0.05   $    0.07
 Diluted                        0.08          0.07       0.09        0.11
Weighted average number of
common shares outstanding (in
thousands)
 Basic                          479,154       461,008    478,494     430,802
 Diluted ^(5)                   569,481       560,640    572,212     530,378

(1) Includes NGLs.
    Includes transaction costs, legal settlements, severance, annual incentive
    plan adoption effect and consent solicitation costs totaling $82.3 million
(2) and $99.5 million for the three and six-month periods ended June 30, 2013,
    respectively. Includes transaction costs totaling $11.7 million and $14.6
    million for the three and six-month periods ended June 30, 2012,
    respectively.
(3) Three and six-month periods ended June 30, 2013 include $45.4 million and
    $53.0 million, respectively, 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 Second Quarter 2013 Financial Results

Oil and natural gas revenue increased 6% to $454 million in the second quarter
of 2013 from $430 million in the same period of 2012 primarily as a result of
increases in natural gas production and prices received for oil and natural
gas production. Natural gas production increased 15% to 25.2 Bcf from second
quarter 2012 production of 21.9 Bcf primarily as a result of continued
development of the company's properties in the Mississippian play and
production contributed by offshore properties acquired in the second quarter
of 2012. The increase in natural gas production was partially offset by a 10%
decrease in oil production resulting from the Permian divestiture that closed
during the first quarter of 2013. Realized reported prices, which exclude the
impact of derivative settlements, were $87.35 per barrel and $3.74 per Mcf
during the second quarter of 2013 compared to $85.35 per barrel and $1.87 per
Mcf during the same period in 2012.

Second quarter 2013 production expense was $14.03 per Boe compared to second
quarter 2012 production expense of $14.93 per Boe. The decrease was primarily
attributable to improving efficiencies in SandRidge's primary onshore
operations in the Mississippian play where production expense decreased 22%
year over year from $9.44 to $7.38 per Boe. Mississippian production accounted
for 52% of the company's total production in second quarter 2013 compared to
28% in second quarter 2012.

General and administrative expenses totaled $173 million in the second quarter
of 2013 and included $128 million of severance costs, incentive plan costs,
consent solicitation fees and transaction costs. General and administrative
expenses for the same period of 2012 totaled $62 million and included $12
million of transaction costs.

 

Capital Expenditures

The table below summarizes the company's capital expenditures for the three
and six-month periods ended June 30, 2013 and 2012:

                               Three Months Ended June  Six Months Ended June
                               30,                      30,
                               2013        2012         2013       2012
                               (in thousands)
Drilling and production
  Mid-Continent                $224,319    $   215,985  $458,645   $   435,436
  Permian Basin                50,699      180,987      111,594    343,306
  Gulf of Mexico/Gulf Coast    61,915      51,505       113,992    53,332
  WTO/Tertiary/Other           -           5,143        -          16,173
                               336,933     453,620      684,231    848,247
Leasehold and seismic
  Mid-Continent                27,825      56,886       39,085     144,625
  Permian Basin                195         5,192        555        8,148
  Gulf of Mexico/Gulf Coast    629         9,886        1,349      9,929
  WTO/Tertiary/Other           1,039       846          1,907      2,666
                               29,688      72,810       42,896     165,368
Inventory                      (8,067)     (8,376)      (11,033)   (3,727)
Total exploration and          358,554     518,054      716,094    1,009,888
development
Drilling and oil field         883         5,836        1,515      13,752
services
Midstream                      15,111      17,754       30,332     41,729
Other - general                12,610      20,410       27,929     66,343
Total capital expenditures,    387,158     562,054      775,870    1,131,712
excluding acquisitions
Acquisitions                   3,554       751,064      8,602      761,575
Total capital expenditures     $390,712    $1,313,118   $784,472   $1,893,287
Plugging and abandonment       $  32,203   $            $  72,317  $    
                                           21,721                  25,142

 

Derivative Contracts

The tables below set forth the company's consolidated oil and natural gas
price and basis swaps and collars for the third and fourth quarters of 2013
and the years 2014 and 2015 as of August 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
                         9/30/2013   12/31/2013
Oil (MMBbls):
 Swap Volume             3.21        3.31
    Swap                 $99.21      $99.09
 Collar Volume           0.04        0.04
 Collar:  High           $102.50     $102.50
 Collar:  Low            $80.00      $80.00
Natural Gas (Bcf):
 Swap Volume             16.10       12.42
    Swap                 $4.10       $4.11
 Collar Volume           1.72        1.72
    Collar:  High        $6.71       $6.71
    Collar:  Low         $3.78       $3.78
                         Year Ending
                         12/31/2014  12/31/2015
Oil (MMBbls):
 Swap Volume             7.69        5.08
    Swap                 $92.52      $83.69
 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
Natural Gas (Bcf):
 Collar Volume           0.94        1.01
    Collar:  High        $7.78       $8.55
    Collar:  Low         $4.00       $4.00

 

Balance Sheet

The company's capital structure at June 30, 2013 and December 31, 2012 is
presented below:

                                        June 30,          December 31,
                                        2013              2012
                                        (in thousands)
Cash and cash equivalents               $1,094,341        $       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     444,425           444,127
   7.5% Senior Notes due 2021           1,179,128         1,179,328
   8.125% Senior Notes due 2022         750,000           750,000
   7.5% Senior Notes due 2023, net      821,107           820,971
     Total debt                         3,194,660         4,301,083
Stockholders' equity
  Preferred stock                       8                 8
  Common stock                          483               476
  Additional paid-in capital            5,275,402         5,228,019
  Treasury stock, at cost               (9,096)           (8,602)
  Accumulated deficit                   (3,378,587)       (2,851,048)
   Total SandRidge Energy, Inc.         1,888,210         2,368,853
   stockholders' equity
  Noncontrolling interest               1,388,088         1,493,602
Total capitalization                    $6,470,958        $    8,163,538

During the second quarter of 2013, the company's debt, net of cash balances,
increased by approximately $200 million as a result of funding the company's
drilling program. On August 1, 2013, the company had no amount drawn under its
$775 million senior credit facility and approximately $1.0 billion of cash,
leaving approximately $1.8 billion of available liquidity. The company was in
compliance with all applicable covenants contained in its debt agreements
during the six months ended June 30, 2013 and through and as of the date of
this release.

2013 Operational Guidance Update

The company is updating certain 2013 guidance provided on May 7, 2013.
Estimated production has increased from 32.7 MMBoe to 33.3 MMBoe due to
improved well performance primarily in the company's Mississippian assets. The
company has also adjusted its full year average oil differential from $8.50
per barrel to $9.50 per barrel to reflect higher projected NGL volumes along
with lower offshore oil price realizations driven by a decrease in projected
LLS premiums. G&A and interest expense decreased on a per unit basis due to
the increase in projected production. The G&A guidance presented for 2013
excludes one-time items. Additional 2013 Guidance detail is available on the
company's website, www.sandridgeenergy.com, under Investor
Relations/Guidance.  

                                            Year Ending December 31, 2013
                                            Projection as of  Projection as of
                                            May 7, 2013       August 6, 2013
Production
  Oil (MMBbls)  ^(1)                        15.5              16.3
  Natural Gas (Bcf)                         103.2             102.0
  Total (MMBoe)                             32.7              33.3
Differentials
  Oil  ^(1)                                 $8.50             $9.50
  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                          17.10 - 18.90     17.10 - 18.90
  DD&A - other                              2.00 - 2.20       2.00 - 2.20
  Total DD&A                                $19.10 - $21.10   $19.10 - $21.10
  G&A - cash                                4.10 - 4.55       4.05 - 4.50
  G&A - stock                               1.10 - 1.25       1.05 - 1.20
  Total G&A                                 $5.20 - $5.80     $5.10 - $5.70
  Interest Expense                          $8.30 - $9.30     $8.10 - $9.10
EBITDA from Oilfield Services, Midstream    $20               $20
and Other ($ in millions) ^(2)
Adjusted Net Income Attributable to
Noncontrolling Interest ($ in millions)     $140              $140
^(3)
P&A Cash Cost ($ in millions)               $120              $120
Corporate Tax Rate ^(4)                     0%                0%
Deferral Rate                               0%                0%
Capital Expenditures ($ in millions)
  Exploration and Production                $1,230            $1,230
  Land and Seismic                          100               100
  Total Exploration and Production          $1,330            $1,330
  Oil Field Services                        15                15
  Midstream and Other                       105               105
  Total Capital Expenditures (excluding     $1,450            $1,450
  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 cash
 (4) income taxes of approximately $5 million in 2013 with a corresponding
     expense included in Net Income.

 

Non-GAAP Financial Measures

Adjusted operating cash flow, adjusted EBITDA, adjusted net income available
to common stockholders and adjusted net income attributable to noncontrolling
interest are non-GAAP financial measures.

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

Adjusted operating cash flow and adjusted EBITDA are supplemental financial
measures used by the company's management and by securities analysts,
investors, lenders, rating agencies and others who follow the industry as an
indicator of the company's ability to internally fund exploration and
development activities and to service or incur additional debt. The company
also uses these measures because adjusted operating cash flow and adjusted
EBITDA relate to the timing of cash receipts and disbursements that the
company may not control and may not relate to the period in which the
operating activities occurred. Further, adjusted operating cash flow and
adjusted EBITDA allow the company to compare its operating performance and
return on capital with those of other companies without regard to financing
methods and capital structure. These measures should not be considered in
isolation or as a substitute for net cash provided by operating activities
prepared in accordance with generally accepted accounting principles ("GAAP").
Adjusted EBITDA should not be considered as a substitute for net income,
operating income, cash flows from operating activities or any other measure of
financial performance or liquidity presented in accordance with GAAP. Adjusted
EBITDA excludes some, but not all, items that affect net income and operating
income and these measures may vary among other companies. Therefore, the
company's adjusted EBITDA may not be comparable to similarly titled measures
used by other companies.

Management also uses the supplemental financial measure of adjusted net income
available to common stockholders, which excludes tax (benefit) expense
resulting from (acquisition) divestiture, asset impairment, unrealized gains
on derivative contracts, realized (gains) losses on early settlements of
derivative contracts, financing commitment fees, non-cash realized losses
(gains) on financing derivative contracts, transaction costs, legal
settlements, consent solicitation fees, effect of annual incentive plan
adoption, bargain purchase gain, loss on extinguishment of debt, non-cash
realized losses on amended derivative contracts, severance and (gain) loss on
sale of assets from (loss applicable) income available 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 income available to common stockholders is
not a measure of financial performance under GAAP and should not be considered
a substitute for (loss applicable) income available 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 (gain) loss on commodity derivative contracts, legal settlement and
loss on sale of assets attributable to third party ownership in less than
wholly-owned consolidated subsidiaries from net income (loss) 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 income (loss) attributable to
noncontrolling interest.

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

 

Reconciliation of Net Cash Provided by Operating Activities to Adjusted
Operating Cash Flow
                                Three Months Ended June  Six Months Ended June
                                30,                      30,
                                2013         2012 ^(1)   2013        2012 ^(1)
                                (in thousands)
Net cash provided by operating  $263,226     $186,797    $384,683    $417,706
activities
Add (deduct)
 Cash received (paid) on        2,520        (43,678)    5,728       (45,312)
 financing derivatives
 Changes in operating assets    (89,526)     79,399      (32,605)    1,612
 and liabilities
Adjusted operating cash flow    $176,220     $222,518    $357,806    $374,006

(1) Includes retrospective application of acquisition purchase price
    adjustments recorded in fourth quarter of 2012.

 

Reconciliation of Net (Loss) Income to EBITDA and Adjusted EBITDA
                                    Three Months Ended   Six Months Ended June
                                    June 30,             30,
                                    2013      2012 ^(1)  2013        2012 ^(1)
                                    (in thousands)
Net (loss) income                   $         $818,072   $(499,776)  $599,894
                                    (20,436)
Adjusted for
    Income tax expense (benefit)    508       (100,617)  4,937       (100,546)
    Interest expense ^(2)           61,809    71,252     150,643     139,673
    Depreciation and amortization   16,022    15,348     31,358      29,860
    - other
    Depreciation and depletion -    138,903   139,260    296,429     226,326
    oil and natural gas
    Accretion of asset retirement   9,800     7,965      19,579      10,572
    obligations
EBITDA                              206,606   951,280    3,170       905,779
    Asset impairment                15,643    -          15,643      -
    Interest income                 (650)     (438)      (1,179)     (540)
    Stock-based compensation        6,322     11,052     17,634      21,575
    Unrealized gains on             (85,937)  (582,975)  (63,520)    (455,138)
    derivative contracts
    Realized gains on early
    settlements of derivative       (655)     (57,292)   (655)       (57,292)
    contracts
    Realized losses on early
    settlements of derivative       -         -          29,623      -
    contracts - Permian
    Non-cash realized losses on     -         -          -           117,108
    amended derivative contracts
    Non-cash realized losses
    (gains) on financing derivative -         2,467      (40)        3,811
    contracts
    Other non-cash expense          2,555     926        2,447       (1,252)
    (income)
    (Gain) loss on sale of assets   (349)     300        397,825     3,380
    ^(3)
    Transaction costs               1,005     11,694     1,629       14,595
    Legal settlements               (97)      -          1,081       -
    Consent solicitation fees       7,356     -          20,819      -
    Effect of Annual Incentive      14,735    -          14,735      -
    Plan adoption
    Severance                       107,720   -          118,117     -
    Bargain purchase gain           -         (122,696)  -           (122,696)
    Loss on extinguishment of       -         -          82,005      -
    debt
    Non-cash portion of             (6,694)   54,447     (101,921)   24,853
    noncontrolling interest ^(4)
Adjusted EBITDA                     $267,560  $268,765   $ 537,413   $454,183
(1) Includes retrospective application of acquisition purchase price
    adjustments recorded in fourth quarter of 2012.
    Excludes unrealized gain on interest rate swaps of $2.2 million for the
(2) three-month period ended June 30, 2012. Excludes unrealized gains on
    interest rate swaps of $2.4 million and $3.6 million for the six-month
    periods ended June 30, 2013 and 2012, respectively.
(3) Includes loss on sale of Permian oil and natural gas assets of
    approximately $399.1 million for the six-month period ended June 30, 2013.
    Represents depreciation and depletion, loss on sale of Permian Properties,
(4) unrealized (gains) 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 June  Six Months Ended June
                                30,                      30,
                                2013         2012 ^(1)   2013        2012 ^(1)
                                (in thousands)
Net cash provided by operating  $263,226     $186,797    $384,683    $417,706
activities
Changes in operating assets     (89,526)     79,399      (32,605)    1,612
and liabilities
Interest expense ^(2)           61,809       71,252      150,643     139,673
Realized gains on early
settlements of derivative       (655)        (31,050)    (655)       (31,050)
contracts
Realized losses on early
settlements of derivative       -            -           29,623      -
contracts - Permian
Transaction costs               1,005        11,694      1,629       14,595
Legal settlements               (97)         -           1,081       -
Consent solicitation fees       7,356        -           20,819      -
Effect of Annual Incentive      14,735       -           14,735      -
Plan adoption
Severance                       62,306       -           65,087      -
Noncontrolling interest - SDT   (11,965)     (13,319)    (23,268)    (27,241)
^(3)
Noncontrolling interest - SDR   (20,089)     (12,870)    (37,016)    (12,870)
^(3)
Noncontrolling interest - PER   (19,743)     (18,404)    (34,843)    (36,103)
^(3)
Noncontrolling interest -       (17)         36          5           109
Other ^(3)
Other non-cash items            (785)        (4,770)     (2,505)     (12,248)
Adjusted EBITDA                 $267,560     $268,765    $537,413    $454,183
(1)        Includes retrospective application of acquisition purchase price
           adjustments recorded in fourth quarter of 2012.
           Excludes unrealized gain on interest rate swaps of $2.2 million for
(2)        the three-month period ended June 30, 2012. Excludes unrealized
           gains on interest rate swaps of $2.4 million and $3.6 million for
           the six-month periods ended June 30, 2013 and 2012, respectively.
           Excludes depreciation and depletion, loss on sale of Permian
(3)        Properties, unrealized (gains) losses on commodity derivative
           contracts, legal settlement and income tax expense attributable to
           noncontrolling interests.

 

Reconciliation of (Loss Applicable) Income Available to Common Stockholders to
Adjusted Net Income Available to Common Stockholders
                              Three Months Ended June  Six Months Ended June
                              30,                      30,
                              2013         2012 ^(1)   2013         2012 ^(1)
                              (in thousands, except per share data)
(Loss applicable) income
available to common           $(34,317)    $804,191    $(527,539)   $572,131
stockholders
Tax (benefit) expense
resulting from (acquisition)  (344)        (100,288)   4,015        (100,288)
divestiture
Asset impairment              15,643       -           15,643       -
Unrealized gains on           (77,633)     (515,144)   (63,882)     (409,327)
derivative contracts ^(2)
Realized gains on early
settlements of derivative     (655)        (57,292)    (655)        (57,292)
contracts
Realized losses on early
settlements of derivative     -            -           29,623       -
contracts - Permian
Non-cash realized losses on   -            -           -            117,108
amended derivative contracts
Non-cash realized losses
(gains) on financing          -            2,467       (40)         3,811
derivative contracts
(Gain) loss on sale of        (349)        300         326,085      3,380
assets ^(2)
Transaction costs             1,005        11,694      1,629        14,595
Legal settlements ^(2)        (49)         -           729          -
Consent solicitation fees     7,356        -           20,819       -
Effect of Annual Incentive    14,735       -           14,735       -
Plan adoption
Severance                     107,720      -           118,117      -
Financing commitment fees     -            -           -            10,875
Bargain purchase gain         -            (122,696)   -            (122,696)
Loss on extinguishment of     -            -           82,005       -
debt
Other non-cash income         (69)         -           (154)        (1,785)
Effect of income taxes        (2,290)      (274)       1,001        (190)
Adjusted net income
available to common           30,753       22,958      22,131       30,322
stockholders
Preferred stock dividends     13,881       13,881      27,763       27,763
Total adjusted net income     $ 44,634     $  36,839   $   49,894   $  58,085
Weighted average number of
common shares outstanding
     Basic                    479,154      461,008     478,494      430,802
     Diluted ^(3)             569,481      560,640     572,212      530,378
Total adjusted net income
     Per share - basic        $     0.06   $     0.05  $      0.05  $     0.07
     Per share - diluted      $     0.08   $     0.07  $      0.09  $     0.11

(1) Includes retrospective application of acquisition purchase price
    adjustments recorded in fourth quarter of 2012.
(2) Excludes amounts attributable to noncontrolling interests.
    Weighted average fully diluted common shares outstanding for certain
(3) periods presented includes shares that are considered antidilutive for
    calculating earnings per share in accordance with GAAP.

 

Reconciliation of Net Income (Loss) Attributable to Noncontrolling Interest to
Adjusted Net Income Attributable to Noncontrolling Interest
                                Three Months Ended      Six Months Ended June
                                June 30,                30,
                                2013        2012        2013         2012
                                (in thousands)
Net income (loss)
attributable to                 $45,121     $99,004     $ (6,798)    $100,958
noncontrolling interest
Loss on sale of assets -        -           -           71,740       -
Permian
Legal settlement                (48)        -           352          -
Unrealized (gain) loss on
commodity derivative            (8,304)     (67,830)    362          (45,811)
contracts
   Adjusted net income
   attributable to              $36,769     $31,174     $65,656      $  55,147
   noncontrolling interest

 

Conference Call Information

The company will host a conference call to discuss these results on Wednesday,
August 7, 2013 at 8:00 am CDT. The telephone number to access the conference
call from within the U.S. is 866-953-6859 and from outside the U.S. is
617-399-3483. The passcode for the call is 24228935. An audio replay of the
call will be available from August 7, 2013 until 11:59 pm CDT on September 6,
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 88319675.

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

Conference Participation

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

  o August 13, 2013 – Enercom's The Oil and Gas Conference^®; Denver, CO
  o September 11, 2013 – Barclays CEO Energy & Power Conference; New York, NY
  o October 1, 2013 – Johnson Rice & Company Energy Conference; New Orleans,
    LA

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.

Third Quarter 2013 Earnings Release and Conference Call

November 5, 2013 (Tuesday) – Earnings press release after market close
November 6, 2013 (Wednesday) – Earnings conference call at 8:00 am CST

 

SandRidge Energy, Inc. and Subsidiaries
Condensed Consolidated Statements of Operations
(in thousands, except per share data)
                                Three Months Ended June  Six Months Ended June
                                30,                      30,
                                2013          2012 ^(1)  2013        2012 ^(1)
                                (Unaudited)
Revenues
    Oil and natural gas         $454,282      $429,758   $ 932,299   $771,123
    Drilling and services       16,078        33,632     33,448      62,941
    Midstream and marketing     15,198        8,852      28,230      17,158
    Construction contract       23,253        -          23,253      -
    Other                       4,176         6,192      7,447       8,847
       Total revenues           512,987       478,434    1,024,677   860,069
Expenses
    Production                  116,811       122,481    249,312     205,791
    Production taxes            6,564         11,001     16,003      23,255
    Cost of sales               15,348        19,241     31,665      36,802
    Midstream and marketing     14,927        8,559      26,730      16,513
    Construction contract       23,253        -          23,253      -
    Depreciation and depletion  138,903       139,260    296,429     226,326
    - oil and natural gas
    Depreciation and            16,022        15,348     31,358      29,860
    amortization - other
    Accretion of asset          9,800         7,965      19,579      10,572
    retirement obligations
    Impairment                  15,643        -          15,643      -
    General and administrative  173,261       61,716     252,705     112,017
    Gain on derivative          (103,654)     (669,850)  (62,757)    (415,204)
    contracts
    (Gain) loss on sale of      (349)         300        397,825     3,380
    assets
       Total expenses           426,529       (283,979)  1,297,745   249,312
       Income (loss) from       86,458        762,413    (273,068)   610,757
       operations
Other income (expense)
    Interest expense            (61,159)      (68,569)   (147,069)   (135,534)
    Bargain purchase gain       -             122,696    -           122,696
    Loss on extinguishment of   -             -          (82,005)    -
    debt
    Other (expense) income, net (106)         (81)       505         2,387
       Total other (expense)    (61,265)      54,046     (228,569)   (10,451)
       income
Income (loss) before income     25,193        816,459    (501,637)   600,306
taxes
Income tax expense (benefit)    508           (100,617)  4,937       (100,546)
Net income (loss)               24,685        917,076    (506,574)   700,852
    Less: net income (loss)
    attributable to             45,121        99,004     (6,798)     100,958
    noncontrolling interest
Net (loss) income attributable  (20,436)      818,072    (499,776)   599,894
to SandRidge Energy, Inc.
Preferred stock dividends       13,881        13,881     27,763      27,763
       (Loss applicable) income
       available to SandRidge
       Energy, Inc. common      $ (34,317)    $804,191   $(527,539)  $572,131
       stockholders
(Loss) earnings per share
    Basic                       $             $          $           $    
                                (0.07)         1.74       (1.10)      1.33
    Diluted                     $             $          $           $    
                                (0.07)         1.46       (1.10)      1.13
Weighted average number of
common shares outstanding
    Basic                       479,154       461,008    478,494     430,802
    Diluted                     479,154       560,640    478,494     530,378
(1) Includes retrospective application of acquisition purchase price
    adjustments recorded in fourth quarter of 2012.

 

SandRidge Energy, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
(in thousands, except per share data)
                                                   June 30,     December 31,
                                                   2013         2012
                                                   (Unaudited)
ASSETS
Current assets
Cash and cash equivalents                          $1,094,341   $      
                                                                309,766
Accounts receivable, net                           412,140      445,506
Derivative contracts                               53,424       71,022
Costs in excess of billings and contract loss      5,057        11,229
Prepaid expenses                                   38,162       31,319
Restricted deposit                                 -            255,000
Other current assets                               38,866       19,043
       Total current assets                        1,641,990    1,142,885
Oil and natural gas properties, using full cost
method of accounting
  Proved                                           10,355,137   12,262,921
  Unproved                                         535,836      865,863
  Less: accumulated depreciation, depletion and    (5,515,168)  (5,231,182)
impairment
                                                   5,375,805    7,897,602
Other property, plant and equipment, net           567,910      582,375
Derivative contracts                               43,173       23,617
Other assets                                       124,758      144,252
       Total assets                                $7,753,636   $    9,790,731
LIABILITIES AND EQUITY
Current liabilities
Accounts payable and accrued expenses              $   746,944  $      
                                                                766,544
Accounts payable - related party                   55,098       -
Billings and contract loss in excess of costs      -            15,546
incurred
Derivative contracts                               1,798        14,860
Asset retirement obligations                       79,953       118,504
Deposit on pending sale                            -            255,000
       Total current liabilities                   883,793      1,170,454
Long-term debt                                     3,194,660    4,301,083
Derivative contracts                               11,717       59,787
Asset retirement obligations                       365,397      379,906
Other long-term obligations                        21,771       17,046
       Total liabilities                           4,477,338    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 June
       30,
        2013 and December 31, 2012; aggregate      3            3
       liquidation preference of $265,000
       6.0% Convertible perpetual preferred stock;
       2,000 shares issued and outstanding at June
       30,
        2013 and December 31, 2012; aggregate      2            2
       liquidation preference of $200,000
       7.0% Convertible perpetual preferred stock;
       3,000 shares issued and outstanding at June
       30,
        2013 and December 31, 2012; aggregate      3            3
       liquidation preference of $300,000
  Common stock, $0.001 par value, 800,000 shares
authorized; 490,929 issued and 489,616 outstanding
at June 30, 2013 and 491,578 issued and 490,359    483          476
outstanding at December 31, 2012
Additional paid-in capital                         5,280,402    5,233,019
Additional paid-in capital - stockholder           (5,000)      (5,000)
receivable
Treasury stock, at cost                            (9,096)      (8,602)
Accumulated deficit                                (3,378,587)  (2,851,048)
       Total SandRidge Energy, Inc. stockholders'  1,888,210    2,368,853
       equity
Noncontrolling interest                            1,388,088    1,493,602
       Total equity                                3,276,298    3,862,455
       Total liabilities and equity                $7,753,636   $    9,790,731

 

SandRidge Energy, Inc. and Subsidiaries
Condensed Consolidated Statements of Cash Flows
(in thousands)
                                             Six Months Ended June 30, 
                                             2013             2012 ^(1)
                                             (Unaudited)
CASH FLOWS FROM OPERATING ACTIVITIES
 Net (loss) income                           $  (506,574)     $  700,852
 Adjustments to reconcile net (loss) income
 to net cash provided by operating
 activities
     Depreciation, depletion and             327,787          256,186
 amortization
     Accretion of asset retirement           19,579           10,572
 obligations
     Impairment                              15,643           -
     Debt issuance costs amortization        5,369            5,401
     Amortization of discount, net of        789              1,285
 premium, on long-term debt
     Bargain purchase gain                   -                (122,696)
     Loss on extinguishment of debt          82,005           -
     Deferred income taxes                   4,015            (100,288)
     Unrealized gain on derivative           (63,520)         (455,138)
 contracts
     Realized loss on amended derivative     -                117,108
 contracts
     Realized gain on financing derivative   (5,299)          (21,125)
 contracts
     Loss on sale of assets                  397,825          3,380
     Stock-based compensation                72,415           23,277
     Other                                   2,044            504
     Changes in operating assets and         32,605           (1,612)
 liabilities 
             Net cash provided by operating  384,683          417,706
             activities
CASH FLOWS FROM INVESTING ACTIVITIES
 Capital expenditures for property, plant    (828,585)        (1,123,040)
 and equipment
 Acquisitions of assets                      (8,602)          (761,575)
 Proceeds from sale of assets                2,563,886        420,859
             Net cash provided by (used in)  1,726,699        (1,463,756)
             investing activities
CASH FLOWS FROM FINANCING ACTIVITIES
 Proceeds from borrowings                    -                750,000
 Repayments of borrowings                    (1,115,500)      (16,029)
 Premium on debt redemption                  (61,997)         -
 Debt issuance costs                         (91)             (27,316)
 Proceeds from issuance of royalty trust     -                587,086
 units
 Proceeds from sale of royalty trust units   -                123,549
 Noncontrolling interest distributions       (98,716)         (76,801)
 Stock-based compensation excess tax benefit -                8
 Purchase of treasury stock                  (28,468)         (7,980)
 Dividends paid - preferred                  (27,763)         (27,763)
 Cash received (paid) on settlement of       5,728            (45,312)
 financing derivative contracts
             Net cash (used in) provided by  (1,326,807)      1,259,442
             financing activities
NET INCREASE IN CASH AND CASH EQUIVALENTS    784,575          213,392
CASH AND CASH EQUIVALENTS, beginning of year 309,766          207,681
CASH AND CASH EQUIVALENTS, end of period     $ 1,094,341      $  421,073
Supplemental Disclosure of Cash Flow
Information
 Cash paid for interest, net of amounts      $  (156,800)     $ (120,563)
 capitalized
 Cash paid for income taxes                  $      (2,525)   $     (1,324)
Supplemental Disclosure of Non-cash
Investing and Financing Activities
 Deposit on pending sale                     $  (255,000)     $              -
 Change in accrued capital expenditures      $    (52,715)    $      8,672
 Adjustment to oil and natural gas           $                $    10,000
 properties for estimated contract loss      -
 Asset retirement costs capitalized          $        2,421   $      3,232
 Common stock issued in connection with      $                $  542,138
 acquisition                                 -

(1) Includes retrospective application of acquisition purchase price
    adjustments recorded in fourth quarter of 2012.

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
Sponsored Links
Advertisement
Advertisements
Sponsored Links
Advertisement