Feb. 28 (Bloomberg) -- SandRidge Energy Inc., the energy producer facing shareholder calls to oust its chief executive officer and most of the board, posted a fourth-quarter loss as higher production costs countered rising output.
The loss narrowed to $302 million, or 63 cents a share, from a loss of $389 million, or 97 cents, a year earlier, the Oklahoma City-based company said in a statement today. Excluding one-time costs such as losses on oil and natural gas contracts and asset impairments, SandRidge earned 3 cents more than the 3-cent average of 25 analysts’ estimates compiled by Bloomberg.
The results “look like a beat” and may reduce some of the pressure for a board shakeup, Ben Wyatt, an analyst with Stephens Inc. in Fort Worth, Texas, said in an interview. “Putting in a good quarter can definitely go a long way,” said Wyatt, who rates SandRidge’s shares the equivalent of a hold and doesn’t own any.
TPG-Axon Capital Management LP, the company’s third-largest shareholder, has asked shareholders to remove the board of directors and fire CEO Tom Ward because of the company’s “disastrous” performance. A new board might sell SandRidge to a larger operator, or bring in a new CEO to generate a profit out of SandRidge’s oil and gas fields, TPG-Axon said in filings.
Revenue rose to $1.4 billion from $373.8 million a year earlier. Sales of oil and gas increased 51 percent to $500 million as SandRidge increased output from its 1.8 million acres in the Mississippi Lime formation in Oklahoma and Kansas.
“This is the best financial position the company has ever been in,” Chief Executive Officer Tom Ward said in an interview today after the results were announced.
Production increased 61 percent to the equivalent of 9.8 million barrels of oil compared to a year ago, according to the statement. The company will be able to fund its drilling in 2013 after agreeing to sell 225,000 acres in the Permian Basin for $2.6 billion, Ward said.
SandRidge lowered its 2013 production forecast 13 percent to 34.3 million barrels of oil equivalent because of the Permian sale, Ward said. The company maintained its forecast for $1.75 billion in capital spending.
Production expenses rose to $13.67 barrels of oil equivalent from $13.20 a year earlier primarily due to offshore properties acquired in the second quarter of 2012, according to the statement. Ward said costs will improve as SandRidge concentrates on drilling in the Mississippi Lime, where drilling is cheaper.
Ward declined to discuss the shareholder campaign against him. The company said Feb. 20 the dissidents are using “false, misleading and inflammatory statements” and urged shareholders to keep the current board in place.
The results were announced after the close of regular trading. The shares rose 0.4 percent to $5.70 at the close in New York. They’ve fallen 10 percent this year.
(SandRidge has scheduled a conference call to discuss the results tomorrow at 9 a.m. New York time, accessible at EVTS <GO>)
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