UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant
to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): August 5, 2015
SANDRIDGE ENERGY, INC.
(Exact name of registrant as specified in its charter)
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| Delaware
(State or Other Jurisdiction of
Incorporation or Organization) |
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1-33784
(Commission File
Number) |
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20-8084793
(I.R.S. Employer
Identification No.) |
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| 123 Robert S. Kerr Avenue
Oklahoma City, Oklahoma
(Address of Principal Executive Offices) |
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73102
(Zip Code) |
Registrant’s Telephone Number, including Area Code: (405) 429-5500
Not Applicable.
(Former
name or former address, if changed since last report)
Check the appropriate box below
if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Item 2.02 — Results of Operations and Financial Condition
On August 5, 2015, SandRidge Energy, Inc. (the “Company”) issued a press release announcing financial and operational results for the period
ended June 30, 2015. The press release is attached as Exhibit 99.1.
Item 5.02 — Departure of Directors or Certain Officers;
Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers
On July 31, 2015, the Board
of Directors of the Company approved the appointment of Julian Bott, age 52, as Executive Vice President and Chief Financial Officer. Mr. Bott is expected to join the Company on August 17, 2015.
Mr. Bott most recently served as Chief Financial Officer at Texas American Resources Company since 2009. Prior to that, he was Managing
Partner at Kensington Energy Partners from 2008 to 2009, and Principal and Chief Financial Officer at 3DMD Technologies Ltd. from 2004 to 2008. Mr. Bott served in various senior management capacities at TD Securities from 1996 to 2003 and in
senior positions in the Energy Group at Bankers Trust Company from 1984 to 1996. He holds a Bachelor of Arts in Economics from Harvard University and a Master of Business Administration from Rice University and has served on the Board of Directors
of EQT Midstream Partners, LP since May 2012.
On August 4, 2015, the Company and Mr. Bott entered into an employment agreement (the
“Employment Agreement”) to be effective as of August 17, 2015. Under the terms of the Employment Agreement, Mr. Bott will receive (a) an annual base salary equal to at least $425,000; (b) an annual bonus target for 2015
in an amount equal to 90% of his base salary; and (c) an award of long term incentive compensation in 2015 valued at 350% of his base salary. The preceding description is a summary only and is qualified in its entirety by reference to the
Employment Agreement, filed as Exhibit 10.1 to this Current Report on Form 8-K and incorporated herein by reference in response to this item.
Additionally, on August 17, 2015, Mr. Bott will be granted shares of the Company’s common stock, par value $.001 per share (the
“Common Stock”), valued at $250,000 and restricted stock units valued at $550,000. The restricted stock units, which will vest in equal installments on the first, second, third and fourth anniversaries of the grant date, will be payable in
cash or Common Stock, at the discretion of the Company, and subject to Mr. Bott being employed by the Company on the scheduled vesting dates. Each grant will be made under the SandRidge Energy, Inc. 2009 Incentive Plan.
Mr. Bott may also participate in other compensation and benefits programs generally available to the Company’s executive officers.
Eddie M. LeBlanc III, the Company’s current Executive Vice President and Chief Financial Officer, has informed the Company of his
intention to retire effective September 1, 2015. Mr. LeBlanc’s separation will be treated as a Termination without Cause under the terms of his employment agreement with the Company.
Item 9.01. Financial Statements and Exhibits
(d) Exhibits
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| 10.1 |
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Employment Agreement, effective as of August 4, 2015, between SandRidge Energy, Inc. and Julian Bott |
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| 99.1 |
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Press release issued August 5, 2015 announcing financial and operational results for the period ended June 30, 2015 |
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by
the undersigned thereunto duly authorized.
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SANDRIDGE ENERGY, INC. |
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(Registrant) |
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| Date: August 5, 2015 |
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By: |
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/s/ Philip T. Warman |
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Philip T. Warman |
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Senior Vice President, General Counsel and Corporate Secretary |
EXHIBIT INDEX
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| Exhibit
Number |
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Name of Exhibit |
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| 10.1 |
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Employment Agreement, effective as of August 4, 2015, between SandRidge Energy, Inc. and Julian Bott |
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| 99.1 |
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Press release issued August 5, 2015 announcing financial and operational results for the period ended June 30, 2015 |
Exhibit 10.1
EMPLOYMENT AGREEMENT
THIS AGREEMENT is made effective August 17, 2015 (the “Effective Date”), between SANDRIDGE ENERGY, INC., a Delaware
corporation (the “Company”), and Julian Bott, an individual (the “Executive”).
WITNESSETH:
WHEREAS, the Company and the Executive desire to set forth in their entirety the terms of their agreements relating to the employment of
Executive by the Company.
NOW, THEREFORE, in consideration of the mutual promises herein contained, the Company and the Executive agree
as follows:
1. Employment. The Company hereby employs the Executive and the Executive hereby accepts such employment subject to
the terms and conditions contained in this Agreement. The Executive is engaged as an employee of the Company and the Executive and the Company do not intend to create a joint venture, partnership or other relationship that might impose a fiduciary
obligation on the Executive or the Company in the performance of this Agreement, other than as an officer of the Company.
2.
Executive’s Duties. The Executive is employed on a full-time basis. Throughout the term of this Agreement, the Executive will use his or her best efforts and due diligence to assist the Company in the objective of achieving the most
profitable operation of the Company and the Company’s affiliated entities consistent with developing and maintaining a quality business operation and complying with applicable laws. Except as provided in paragraph 3, the Executive shall devote
his or her entire business skill, time, and effort diligently to the affairs of the Company in accordance with the duties assigned to the Executive, and the Executive shall perform all such duties, and otherwise conduct himself/herself, in a manner
reasonably calculated in good faith by him to promote the best interests of the Company.
2.1 Specific Duties and
Reporting. Under this Agreement, the Executive shall report to the Chief Executive Officer (CEO) of the Company, or his or her successor, who, for purposes of this Agreement, will be referred to as the “Executive’s
Supervisor.” This reporting relationship may change from time to time in the discretion of the Executive’s Supervisor or the Company’s Board of Directors (the “Board”). During the term of this Agreement, the Executive
will serve as the Executive Vice President, Chief Financial Officer (CFO) for the Company, with such titles, duties and authorities as the Executive’s Supervisor or the Board may from time to time prescribe. The Executive will perform all of
the services required to fully and faithfully execute the position in accordance with the reasonable directives that he may receive from time to time from the Executive’s Supervisor or the Company’s Board of Directors (the
“Board”).
2.2 Rules and Regulations. From time to time, the Company may issue policies and
procedures applicable to employees and the Executive. The Executive agrees to comply with such policies and procedures, which may be supplemented, modified, changed or adopted without notice in the sole discretion of the Company at any time. In the
event of a conflict between such policies and procedures and this Agreement, this Agreement will control unless compliance with this Agreement will violate any law or regulation applicable to the Company or its affiliated entities.
3. Other Activities. The Executive shall not engage in any business activity that, in the
judgment of the Board, conflicts with the Executive’s duties hereunder, whether or not such activity is pursued for gain, profit or other pecuniary advantage. In addition, except for the activities permitted under paragraph 3.1 of this
Agreement or approved by the Board or the Chief Executive Officer, in writing, the Executive will not: (a) engage in activities that require such substantial services on the part of the Executive that the Executive is unable to perform the
duties assigned to the Executive in accordance with this Agreement; (b) serve as an officer or director of any publicly held entity; or (c) directly or indirectly invest in, participate in or acquire an interest in any oil and gas
business, including, without limitation, businesses (i) producing oil and gas, (ii) drilling, owning or operating oil and gas leases or wells, (iii) providing services or materials to the oil and gas industry, or (iv) marketing
or refining oil or gas. The limitations in this paragraph 3 will not prohibit an investment by the Executive in publicly traded securities or the maintenance of investment interests owned prior to the Effective Date. The Executive is not restricted
from maintaining or making investments, or engaging in other businesses, enterprises or civic, charitable or public service functions if such activities, investments, businesses or enterprises do not result in a violation of clauses (a) through
(c) of this paragraph 3. Notwithstanding the foregoing, the Executive will be permitted to participate in the activities set forth in paragraph 3.1 that will be deemed to be approved by the Company, if such activities are undertaken in strict
compliance with this Agreement.
3.1 Royalty Interests and Gifts. The foregoing restriction in clause (c) will
not prohibit the ownership of royalty interests where the Executive owns or previously owned the surface of the land covered by the royalty interest and the ownership of the royalty interest is incidental to the ownership of the surface estate or
the ownership of royalty, overriding royalty or working interests that are received by gift or inheritance subject to disclosure by the Executive to the Company in writing.
4. Executive’s Compensation. The Company agrees to compensate the Executive as follows:
4.1 Base Salary. The Executive will be paid a base salary (the “Base Salary”) at an annual rate
of not less than $425,000, which will be paid to the Executive in regular installments in accordance with the Company’s customary payroll practices during the term of this Agreement.
4.2 Annual Bonus. The Executive will be eligible to participate in
SandRidge’s annual incentive plan as in effect from time to time. For 2015, the Executive’s target annual bonus will be 90% of the Base Salary. This bonus is anticipated to be paid in the first quarter of 2016. The Executive
recognizes and acknowledges that the award of bonus compensation is not guaranteed or promised in any way.
4.3
Long-Term Incentive. The Executive will be eligible to receive annual grants of long-term incentive awards under and subject to the terms of SandRidge’s equity or other long-term incentive plan (including any applicable award agreement) as
in effect from time to time. The target value of the awards granted in 2015 will equal 350% of the Base Salary. Executive recognizes and acknowledges that the award of equity compensation is not guaranteed or promised in any way.
4.4 Benefits. The Company sponsors a number of employee benefit plans, programs and arrangements for the benefit of its
employees, including retirement, medical, life and disability benefits. The Executive shall have the opportunity to participate in such plans, programs and arrangements to the same extent as other similarly-situated Company employees; however, any
participation in Company employee benefit plans, programs or arrangements is subject to the terms and conditions of the particular plan, program or arrangement, including any eligibility requirements, as they may exist from time to time. The
Executive recognizes and acknowledges that the Company has the right to amend, modify or terminate its employee benefit plans, programs and arrangements at any time.
4.5 Paid Time Off (“PTO”). The Executive shall be eligible for 30 days of PTO each continuous year of
employment during the term of this Agreement under the Company’s PTO policy. Such PTO shall be calculated from the Executive’s original date of hire. No additional compensation will be paid for failure to take PTO and no PTO may be carried
forward from one twelve month period to another.
5. Term. The employment relationship evidenced by this Agreement is an “at
will” employment relationship and the Company reserves the right to terminate the Executive at any time with or without cause. This Agreement shall continue in full force and effect unless and until (i) the Executive’s employment is
terminated by either party in accordance with Section 6, and (ii) all obligations and liabilities of the parties arising in connection with such termination or otherwise accruing under this Agreement have been fully satisfied. The
“Termination Date” shall be the effective date of Executive’s termination of employment. Notwithstanding any contrary provision in this Agreement, nothing in this Agreement constitutes a guarantee of continued employment but
instead provides for certain rights and benefits during the Executive’s employment with the Company and if such employment terminates. Notwithstanding the foregoing, the Executive shall not receive severance benefits under more than one plan,
program or policy with the Company or other agreement with the Company.
6. Termination.
6.1 Termination by Company. The Company will have the following rights to terminate Executive’s employment:
6.1.1 Termination without Cause. The Company may terminate Executive’s employment without Cause at any time by the
service of written notice of termination to the Executive specifying a Termination Date not sooner than ten days after the date of such notice. If the Executive is terminated without Cause (other than a CC Termination under paragraph 6.4 of this
Agreement or on account of Executive’s incapacity or death under paragraphs 6.5 and 6.6 of this Agreement), the Executive will receive as termination compensation a lump sum payment equal to twelve months’ Base Salary as in effect on the
Termination Date (or, if greater, the highest Base Salary in effect during the three year period ending on the Termination Date), which shall be paid within 60 days of the Termination Date. However, if, on the Termination Date, the Executive is a
“specified employee” as defined in regulations under Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”) and the termination compensation is “nonqualified deferred
compensation” that is subject to Section 409A, the payment will be made on the first payroll payment date that is more than six months following the Termination Date. The right to the termination compensation described above is subject to
the Executive’s execution and nonrevocation of the Company’s Separation Agreement and General Release, substantially in the form attached to this Agreement, which will operate as a release of all legally waivable claims against the Company
and its affiliates, employees and directors. The termination payment is further conditioned upon the Executive’s compliance with all of the provisions of this Agreement, including all post-employment obligations.
6.1.2 Termination for Cause. The Company may terminate the employment of the Executive hereunder at any time for Cause
(as hereinafter defined) (such a termination being referred to in this Agreement as a “Termination For Cause”), by giving the Executive written notice of such termination which shall take effect immediately upon the giving of
such notice to the Executive. As used in this Agreement, “Cause” means (A) the Executive’s material breach or threatened breach of this Agreement; (B) the Executive’s failure to substantially
perform the Executive’s duties hereunder; (C) the misappropriation or fraudulent conduct by the Executive with respect to the assets or operations of the Company or any of its subsidiaries or affiliated companies; (D) the
Executive’s willful disregard of the instructions of the Executive’s Supervisor or the Board or the Executive’s material neglect of duties or failure to act, other than by reason of disability or death; (E) the Executive’s
personal misconduct which, in the judgment of the Company,
could reasonably be expected to substantially injure the Company or its reputation; or (F) the conviction of the Executive for, or a plea of guilty or no contest to, a felony or any crime
involving fraud, theft, dishonesty, or moral turpitude. If the Executive’s employment is terminated for Cause, the Company will not have any obligation to provide any further payments or benefits to the Executive after the effective date of
such termination other than to the extent required by law.
6.2 Termination by Executive. The Executive may
voluntarily terminate his or her employment by the service of written notice of such termination to the Company specifying an effective date of such termination 30 days after the date of such notice. The Company may in its sole discretion, elect to
waive all or any part of the 30-day notice period with no further obligations being owed to the Executive by the Company. If the Executive terminates his or her employment, neither the Company nor the Executive will have any further obligations
hereunder, except as provided in paragraph 14.
6.3 Termination After Change in Control. If, during the term of this
Agreement there is a “Change in Control” and within two years thereafter there is a CC Termination (as hereafter defined), then the Executive will be entitled to a severance payment (in addition to any other rights and other amounts
payable to the Executive under paragraph 6.8 or under Company plans in which Executive is a participant) payable in a lump sum in cash in an amount equal to three times the sum of: (a) the Executive’s Base Salary in effect on the
Termination Date (or, if greater, the highest Base Salary in effect during the three year period ending on the Termination Date), and (b) the Executive’s Average Annual Bonus (as hereafter defined), which shall be paid within 60 days
following the CC Termination. The term “Average Annual Bonus” means (x) if the CC Termination occurs before the annual bonus is paid for the executive’s first year of employment, 90% of the Executive’s Base Salary as
in effect on the Effective Date, or (y) otherwise, the average annual bonus paid pursuant to paragraph 4.2 for the preceding three years (or such lesser number of years as the Executive may have been employed). If the foregoing amount is not
paid within 60 days after the CC Termination, the unpaid amount will bear interest at the per annum rate of twelve percent beginning on the 61st day after the CC Termination. However, if, on the date of the CC Termination, the Executive is a
“specified employee” as defined in regulations under Section 409A of the Code and the severance payment is “nonqualified deferred compensation” that is subject to Section 409A, the payment will be made on the first
payroll payment date that is more than six months following the date of the CC Termination. If a severance payment subject to Section 409A is not paid on the first payroll payment date that is more than six months following the date of the CC
Termination, the unpaid amount will bear interest at the per annum rate of twelve percent beginning on the day after the first payroll payment date that is more than six months following the date of the CC Termination. The right to the termination
compensation described above is subject to the Executive’s execution and nonrevocation of the Company’s Separation Agreement and General Release, substantially in the
form attached to this Agreement, which will operate as a release of all legally waivable claims against the Company and its affiliates, employees and directors. Such payment is further
conditioned upon the Executive’s compliance with all of the provisions of this Agreement, including all post-employment obligations.
6.3.1 Change in Control. For the purpose of this Agreement, a “Change in Control” shall mean that any
one of the following applies:
(a) The acquisition by any individual, entity or group (within the meaning of
Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) (a “Person”), of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act)
of 40% or more of either (i) the then-outstanding shares of the Company’s common stock (the “Outstanding Company Common Stock”) or (ii) the combined voting power of the then-outstanding voting securities of the
Company entitled to vote generally in the election of directors (the “Outstanding Company Voting Securities”). For purposes of this paragraph (a) the following acquisitions by a Person will not constitute a Change in Control:
(i) any acquisition directly from the Company; (ii) any acquisition by the Company; or (iii) any acquisition by any employee benefit plan (or related trust) sponsored or maintained by the Company or any entity controlled by the
Company.
(b) The individuals who, as of the Executive’s original date of hire constitute the Board (the
“Incumbent Board”) cease for any reason to constitute at least a majority of the Board. Any individual becoming a director subsequent to the date described in the preceding sentence whose election, or nomination for election by the
Company’s stockholders, is approved by a vote of at least a majority of the directors then comprising the Incumbent Board will be considered a member of the Incumbent Board, but any such individual whose initial assumption of office occurs as a
result of an actual or threatened election contest with respect to the election or removal of directors or other actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the Incumbent Board will be deemed a
member of the Incumbent Board only upon the third anniversary of such assumption of office.
(c) The consummation of a
reorganization, merger, consolidation or sale or other disposition of all or substantially all of the assets of the Company (a “Business Combination”), unless following such Business Combination: (i) the individuals and
entities who were the beneficial owners, respectively, of the Outstanding Company Common Stock and Outstanding Company Voting Securities immediately prior to such Business Combination beneficially own, directly or indirectly, more than 60% of,
respectively, the then-outstanding shares of common stock and the combined voting power of the then-outstanding voting securities entitled to vote generally in the election of directors, as the case may be,
of the entity resulting from such Business Combination (including, without limitation, a corporation that as a result of such transaction owns the Company or all or substantially all of the
Company’s assets either directly or through one or more subsidiaries) in substantially the same proportions to one another as their ownership, immediately prior to such Business Combination of the Outstanding Company Common Stock and
Outstanding Company Voting Securities, as the case may be, (ii) no Person (excluding any entity resulting from such Business Combination or any employee benefit plan (or related trust) of the Company or such entity resulting from such Business
Combination) beneficially owns, directly or indirectly, 40% or more of, respectively, the then-outstanding shares of common stock of the entity resulting from such Business Combination or the combined voting power of the then-outstanding voting
securities of such entity except to the extent that such ownership existed prior to the Business Combination and (iii) at least a majority of the members of the Board of the corporation resulting from such Business Combination were members of
the Incumbent Board at the time of the execution of the initial agreement, or of the action of the Board, providing for such Business Combination; or
(d) The approval by the stockholders of the Company of a complete liquidation or dissolution of the Company.
6.3.2 Legal Expenses After a CC Termination. The Company will pay or reimburse the Executive for reasonable legal fees
(including, without limitation, any and all court costs and reasonable attorneys’ fees and expenses) incurred by the Executive in connection with or as a result of any claim, action or proceeding brought by the Company or the Executive
following a CC Termination that entitles the Executive to a severance payment under paragraph 6.3; provided, however, that the Company will have no obligation to pay any such legal fees, if in the case of an action brought by the Executive, the
Company is successful in establishing with the court that the Executive’s action was frivolous or otherwise without any reasonable legal or factual basis.
6.4 CC Termination. The term “CC Termination” means any of the following: (a) the Executive’s
employment is terminated by the Company other than under paragraph 6.1.2, 6.5 or 6.6; (b) the Executive resigns as a result of a material diminution in the Executive’s authority, duties, or responsibilities, a material reduction in the
Executive’s then current Base Salary or a material reduction in the Executive’s then current benefits as provided in paragraph 4, a relocation of more than 50 miles from the Executive’s then current place of employment being required
by the Board or the Executive’s Supervisor, or a material breach by the Company under this Agreement; or (c) the Executive resigns in connection with a Change in Control as a result of the Company’s failure to obtain the assumption of
this Agreement, without limitation or reduction, by any successor to the Company or any parent corporation of the Company.
6.5 Incapacity of Executive. If the Executive suffers from a physical or
mental condition that qualifies the Executive for benefits under the Company’s Long Term Disability policy (or would qualify the Executive for benefits if the Executive was covered by the Long Term Disability policy), the Executive’s
employment may be terminated by the Company, in which event, the Company will pay Executive a lump sum equal to twelve months’ Base Salary in effect on the Termination Date (or, if greater, the highest Base Salary in effect during the three
year period ending on the Termination Date), which shall be paid within 60 days following the Termination Date. However, if, on the Termination Date, the Executive is a “specified employee” as defined in regulations under Section 409A
of the Code and the termination payment is “nonqualified deferred compensation” that is subject to Section 409A and is considered to be triggered by the Executive’s “separation from service,” such payment will be made
on the first payroll payment date which is more than six months following the Termination Date. Notwithstanding the foregoing, the amount payable hereunder will be reduced by any benefits payable under any disability plans provided by the Company
under paragraph 4.4 of this Agreement. The right to the compensation due under this paragraph 6.5 is subject to the execution and nonrevocation by the Executive or the Executive’s legal representative of the Company’s Separation Agreement
and General Release, substantially in the form attached to this Agreement, which will operate as a release of all legally waivable claims against the Company and its affiliates, employees and directors. In applying this paragraph, the Company will
comply with any applicable legal requirements, including the Americans with Disabilities Act.
6.6 Death of
Executive. If the Executive dies during the term of this Agreement, Executive’s employment will terminate without compensation to the Executive’s estate except the obligation to pay the Executive’s estate a lump sum equal to
twelve months’ Base Salary in effect on the date of death (or, if greater, the highest Base Salary in effect during the three year period ending on the date of death).
6.7 Effect of Termination. Subject to paragraph 14, the termination of Executive’s employment will terminate all
obligations of the Executive to render services on behalf of the Company. All keys, entry cards, credit cards, files, records, financial information, furniture, furnishings, computers, cellular phones, smart phones, equipment, supplies and other
items relating to the Company will remain the property of the Company. The Executive will have the right to retain and remove all personal property and effects that are owned by the Executive and located in the offices of the Company. All such
personal items will be removed from such offices no later than 14 days after the effective date of termination, and the Company is hereby authorized to discard any items remaining and to reassign the Executive’s office space after such date.
Prior to the effective date of termination, the Executive will cooperate with the Company to provide for the orderly separation of the Executive’s employment.
6.8 Equity Compensation Provisions. Notwithstanding any provision to the
contrary in any option agreement, restricted stock agreement, plan or other agreement relating to equity based compensation, in the event of a termination under paragraph 6.1.1 or 6.3 of this Agreement: (a) all units, stock options, incentive
stock options, performance shares, stock appreciation rights and restricted stock granted and held by Executive immediately prior to such termination (other than any sign-on grant of restricted stock) will immediately become 100% vested; and
(b) the Executive’s right to exercise any previously unexercised options will not terminate until the latest date on which such option would expire but for Executive’s termination of employment. To the extent the Company is unable to
provide for one or both of the foregoing rights the Company will provide in lieu thereof a lump-sum cash payment equal to the difference between the total value of such units, stock options, incentive stock options, performance shares, stock
appreciation rights and shares of restricted stock (the “Equity Compensation Rights”) with the foregoing rights as of the date of Executive’s termination of employment and the total value of the Equity Compensation Rights
without the foregoing rights as of the date of the Executive’s termination of employment. The foregoing amounts will be determined by the Board in good faith based on a valuation performed by an independent consultant selected by the Board and
the cash payment, if any, will be paid in a lump sum in the case of a termination under paragraph 6.1.1, at the same time as the severance payment is otherwise due under such paragraph (except for any cash payment made with respect to performance
shares or performance share units, which will be made when those awards otherwise would have been paid), and in the case of a termination under paragraph 6.3, at the same time the payment is due under such paragraph. The right to the foregoing
termination compensation under clauses (a) and (b) above is subject to the Executive’s execution and nonrevocation of the Company’s Separation Agreement and General Release, substantially in the form attached to this Agreement,
which will operate as a release of all legally waivable claims against the Company and its affiliates, employees and directors. Such payment is further conditioned upon the Executive’s compliance with all of the provisions of this Agreement,
including all post-employment obligations.
6.9 Application of Section 4999. If any amount payable to the
Executive under this Agreement or otherwise would constitute a “parachute payment” within the meaning of Section 280G of the Code and, but for this paragraph 6.9, would be subject to the excise tax imposed by Section 4999 of the
Code (the “Excise Tax”), then the Executive’s payments hereunder shall be reduced to the greatest amount that would not be subject to the Excise Tax if, after taking into account applicable federal, state, local and foreign
income and employment taxes, the Excise Tax, and any other applicable taxes, the Executive would retain a greater amount on an after-tax basis following such reduction.
6.10 Sole Source of Severance Benefits. This paragraph 6 is intended to be the Executive’s sole source of severance
benefits from the Company. If the Executive is or becomes eligible to receive severance under
another plan, program or policy with the Company or other agreement with the Company, the amount paid under paragraph 6 will be reduced by the severance amount paid under another plan, program or
policy with the Company or other agreement with the Company.
7. Confidentiality. The Executive recognizes that the nature of the
Executive’s services are such that the Executive will have access to information that constitutes trade secrets, is of a confidential nature, is of great value to the Company or is the foundation on which the success of the Company is
predicated. The Executive agrees not to disclose to any person other than the Company’s employees or the Company’s legal counsel or other parties authorized by the Company to receive confidential information (“Confidential
Information”) nor use for any purpose, other than the performance of this Agreement, any Confidential Information. Confidential Information includes data or material (regardless of form) that is: (a) a trade secret; (b) provided,
disclosed or delivered to Executive by the Company, any officer, director, employee, agent, attorney, accountant, consultant, or other person or entity employed by the Company in any capacity, any customer, borrower or business associate of the
Company or any public authority having jurisdiction over the Company of any business activity conducted by the Company; or (c) produced, developed, obtained or prepared by or on behalf of Executive or the Company (whether or not such
information was developed in the performance of this Agreement) with respect to the Company or any assets oil and gas prospects, business activities, officers, directors, employees, borrowers or customers of the foregoing. However, Confidential
Information will not include any information, data or material that at the time of disclosure or use was generally available to the public other than by a breach of this Agreement, was available to the party to whom disclosed on a non-confidential
basis by disclosure or access provided by the Company or a third party, or was otherwise developed or obtained independently by the person to whom disclosed without a breach of this Agreement. On request by the Company, the Company will be entitled
to a copy of any Confidential Information in the possession of the Executive. The provisions of this paragraph 7 will survive the termination, expiration or cancellation of Executive’s employment. The Executive will deliver to the Company all
originals and copies of the documents or materials containing Confidential Information by the 14th day following his or her termination. For purposes of paragraphs 7, 8, and 9 of this Agreement, the Company expressly includes any of the
Company’s subsidiaries or affiliates.
8. Non-Solicitation. The Executive agrees that during the Non-Solicitation Period (as
hereafter defined), Executive will not directly, either personally or by or through his or her agent, on behalf of himself/herself or on behalf of any other individual, association or entity, (i) use any of the Confidential Information for the
purposes of calling on or soliciting any established customer of the Company for providing to any such customer a product or service provided by the Company or any affiliate or subsidiary of the Company; (ii) solicit, influence or encourage any
established customer of the Company to (A) divert or direct business to the Executive or any person or entity by which or with which the Executive is employed, associated, affiliated or otherwise related, or (B) acquire any product or
service provided by the Company; or (iii) solicit, divert or attempt to solicit or divert any person or entity who has been identified and
contacted by the Company, either directly or through such entity’s agent(s), with respect to a possible acquisition by, or transaction with, the Company. For the purposes hereof, the term
“Non-Solicitation Period” shall mean a period of twelve months after Executive’s employment ceases for any reason.
9. Non-Interference. The Executive agrees that during the Non-Interference Period (as hereafter defined) he/she will not, directly or
indirectly, either personally or by or through his or her agent, on behalf of himself/herself or on behalf of any other individual, association or entity, hire, solicit or seek to hire any employee of the Company or any affiliate or subsidiary of
the Company, or any individual who was an employee of the Company or any affiliate or subsidiary of the Company during the twelve-month period prior to the Termination Date, or in any other manner attempt, directly or indirectly, to persuade any
such employee to discontinue his or her employment with the Company or any affiliate or subsidiary of the Company or to become employed in a business or activities likely to be competitive with the business of the Company or any affiliate or
subsidiary of the Company. For the purposes hereof, the term “Non-Interference Period” shall mean a period of twelve months after Executive’s employment ceases for any reason.
10. Severability. It is the desire and intent of the parties hereto that the provisions of this Agreement be enforced to the fullest
extent permissible under the laws and public policies applied in each jurisdiction in which enforcement is sought. Accordingly, if any particular provision of this Agreement shall be adjudicated by a court of competent jurisdiction to be invalid,
prohibited or unenforceable for any reason, such provision, as to such jurisdiction, shall be ineffective, without invalidating the remaining provisions of this Agreement or affecting the validity or enforceability of such provision in any other
jurisdiction. Notwithstanding the foregoing, if such provision could be more narrowly drawn so as not to be invalid, prohibited or unenforceable in such jurisdiction, it shall, as to such jurisdiction, be so narrowly drawn, without invalidating the
remaining provisions of this Agreement or affecting the validity or enforceability of such provision in any other jurisdiction.
11.
Remedies. The Executive acknowledges and understands that the provisions of this Agreement are of a special and unique nature, the loss of which cannot be adequately compensated for in damages by an action at law, and that the breach or
threatened breach of the provisions of this Agreement would cause the Company or any of its subsidiaries irreparable harm. In the event of a breach or threatened breach by the Executive of the provisions of this Agreement, the Company or any of its
subsidiaries or affiliates shall be entitled to an injunction restraining the Executive from such breach. In addition to the foregoing and not in any way in limitation thereof, or in limitation of any right or remedy otherwise available, if the
Executive violates any provision of paragraph 7, 8 or 9 hereof, any compensation or severance payments then or thereafter due from the Company to the Executive shall be terminated forthwith and the Company’s obligation to pay and the
Executive’s right to receive such compensation as severance payments shall terminate and be of no further force or effect, in each case without limiting or affecting the Executive’s obligations under paragraphs 7, 8 and 9 or the
Company’s or its subsidiaries’ or affiliates’ other rights or
remedies available at law or in equity. Nothing contained in this Agreement shall be construed as prohibiting the Company or any of its subsidiaries or affiliates from pursuing, or limiting the
Company’s or any of its subsidiaries’ or affiliates’ ability to pursue, any other remedies available for any breach or threatened breach of this Agreement by the Executive.
12. Proprietary Matters.
12.1 The Executive acknowledges and agrees that the Company owns all right, title and interest (including patent rights,
copyrights, trade secret rights, trademark rights and all other intellectual and industrial property rights) relating to any and all inventions (whether or not patentable), works of authorship, design, know-how, ideas and information made or
conceived or reduced to practice, in whole or in part, by the Executive during the term of this Agreement which are useful in, or directly or indirectly related to, the business of the Company or any Confidential Information (collectively, the
“Proprietary Rights”). The Executive further acknowledges and agrees that all such Proprietary Rights are “works made for hire” of which the Company is the author. The Executive agrees to promptly disclose and provide all
Proprietary Rights to the Company; provided, in the event the Proprietary Rights shall not be deemed to constitute “works made for hire,” or in the event the Executive should, by operation of law or otherwise, be deemed to retain any
rights in the Proprietary Rights, the Executive agrees to assign to the Company, without further consideration, the Executive’s entire right, title and interest in and to each and every such Proprietary Right.
12.2 The Executive hereby agrees to assist Company in obtaining and enforcing United States and/or foreign letters
patent and copyright registrations covering the Proprietary Rights and further agrees that Executive’s obligation to assist Company shall continue beyond the termination of Executive’s employment hereunder. If Company is unable because of
Executive’s mental or physical incapacity or for any other reason to secure Executive’s signature to apply for or to pursue any application for any United States or foreign letters patent or copyright registrations covering inventions
assigned to Company, then Executive hereby irrevocably designates and appoints Company and its duly authorized officers and agents as Executive’s agent and attorney-in-fact to act for and on Executive’s behalf to execute and file any such
applications and to do all other lawfully permitted acts to further the prosecution and issuance of letters patent or copyright registrations thereon with the same legal force and effect as if executed by Executive. Executive hereby waives and
quitclaims to Company any and all claims of any nature whatsoever which Executive now or hereafter may have for infringement of any patent or copyright resulting from any such application for letters patent or copyright registrations assigned
hereunder to Company. Executive will further assist Company in every lawful way to enforce any copyrights or patents obtained, including without limitation, testifying in any suit or proceeding involving any of the copyrights or patents or executing
any documents deemed necessary by Company, all without further consideration except as contemplated by the immediately following sentence but at the
expense of Company. If Executive is called upon to render such assistance after termination of Executive’s employment hereunder, then Executive shall be entitled to a fair and reasonable per
diem fee (which shall not be less than Executive’s equivalent daily Base Salary) in addition to reimbursement of any expenses incurred at the request of Company.
13. Governing Law and Venue. To the extent not preempted by federal law, the provisions of this Agreement shall be construed and
enforced in accordance with the laws of the State of Oklahoma, excluding any conflicts or choice of law rule or principle that might otherwise refer construction or interpretation of this provision to the substantive law of another jurisdiction.
Each party hereby agrees that Oklahoma City, Oklahoma is the proper venue for any litigation seeking to enforce any provision of this Agreement, and each party hereby waives any right it otherwise might have to defend, oppose, or object to, on the
basis of jurisdiction, venue, or forum nonconveniens, a suit filed by the other party in any federal or state court in Oklahoma City, Oklahoma to enforce any provision of this Agreement.
14. Survival. In the event of termination of employment, neither the Company nor the Executive will have any further obligations
hereunder, except for any obligations that expressly survive termination of employment including paragraphs 6, 7, 8, 9, 10, 11, 12 and 13.
15. Miscellaneous. The parties further agree as follows:
15.1 Time. Time is of the essence of each provision of this Agreement.
15.2 Notices. Any notice, payment, demand or communication required or permitted to be given by any provision of this
Agreement will be in writing and will be deemed to have been given when received by personal delivery, by facsimile, by overnight courier, or by certified mail, postage and charges prepaid, directed to the following address or to such other or
additional addresses as any party might designate by written notice to the other party:
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SandRidge Energy, Inc. |
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123 Robert S. Kerr Ave. |
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Oklahoma City, OK 73102 |
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Attn: R. Scott Griffin |
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to the Executive at the address set forth below such Executive’s signature hereto. |
15.3 Assignment. The Company may assign its rights and obligations under this Agreement
to any subsidiary or affiliate, and any entity to which this Agreement is assigned shall be treated as the Company for purposes of this Agreement. The Executive may not transfer or assign this Agreement or any of his or her rights or interests
herein, in whole or in part, to any other person or entity without the prior written consent of the Company.
15.4 Construction. If any provision of this Agreement or the application
thereof to any person or circumstances is determined, to any extent, to be invalid or unenforceable, the remainder of this Agreement, or the application of such provision to persons or circumstances other than those as to which the same is held
invalid or unenforceable, will not be affected thereby, and each term and provision of this Agreement will be valid and enforceable to the fullest extent permitted by law.
15.5 Entire Agreement. This Agreement constitutes the entire agreement between the parties hereto with respect to the
subject matter herein contained, and no modification hereof will be effective unless made by a supplemental written agreement executed by all of the parties hereto.
15.6 Binding Effect and Third Party Beneficiary. This Agreement shall be binding upon and inure to the benefit of the
parties hereto and their respective affiliates, officers, employees, agents, successors and assigns (including, in the case of the Company or any of its subsidiaries or affiliated companies, the successor to the business of the Company as a result
of the transfer of all or substantially all of the assets or capital stock of the Company or any of its subsidiaries or affiliates).
15.7 Supersession. This Agreement is the final, complete and exclusive expression of the agreement between the Company
and the Executive and supersedes and replaces in all respects any prior oral or written employment agreements. On execution of this Agreement by the Company and the Executive, the relationship between the Company and the Executive after the
effective date of this Agreement will be governed by the terms of this Agreement and not by any other agreements, oral or otherwise.
15.8 Non-Contravention. Executive represents and warrants to the Company that the execution and performance of this
Agreement will not violate, constitute a default under, or otherwise give rights to any third party, pursuant to the terms of any Agreement to which Executive is a party; ; provided, however, that the Company acknowledges that Executive has
provided the Company a copy of his Employment Agreement with Texas American Resources Company dated July 30, 2012 and Executive makes no representation or warranty with respect to the terms of that agreement.
15.9 Indemnity. EXECUTIVE AGREES TO INDEMNIFY AND HOLD HARMLESS THE COMPANY, ITS DIRECTORS, OFFICERS AND EMPLOYEES AND
AGENTS (THE “INDEMNIFIED PARTIES”) AGAINST ANY LOSS, CLAIM, DAMAGE, LIABILITY OR EXPENSE, AS INCURRED, (“LOSS”) TO WHICH THE INDEMNIFIED PARTIES MAY BECOME SUBJECT OR INCUR, INSOFAR AS SUCH LOSS ARISES OUT OF OR IS
BASED UPON ANY INACCURACY IN ANY REPRESENTATION OR WARRANTY GIVEN BY EXECUTIVE IN THIS AGREEMENT INCLUDING REPRESENTATIONS AND WARRANTIES MADE IN PARAGRAPH 15.8 AND TO REIMBURSE THE INDEMNIFIED PARTIES
FOR ANY AND ALL EXPENSES (INCLUDING THE FEES AND DISBURSEMENTS OF COUNSEL CHOSEN BY THE INDEMNIFIED PARTIES) AS SUCH EXPENSES ARE REASONABLY INCURRED BY THE INDEMNIFIED PARTIES IN CONNECTION WITH
INVESTIGATING, DEFENDING, SETTLING, COMPROMISING OR PAYING ANY SUCH LOSS.
15.10 Compliance with Section 409A of
the Code. This Agreement shall be interpreted to ensure that the payments to be made to the Executive are exempt from, or comply with, Section 409A of the Code; provided, however, that nothing in this Agreement shall be interpreted or
construed to transfer any liability for any tax (including a tax or penalty due as a result of a failure to comply with Section 409A) from the Executive to the Company or to any other individual or entity. Any payment to the Executive that is
subject to Section 409A and that is contingent on a termination of employment is contingent on a “separation from service” within the meaning of Section 409A. Each payment shall be considered to be a separate payment for purposes
of Section 409A. If, upon separation from service, the Executive is a “specified employee” within the meaning of Section 409A, any payment that is subject to Section 409A and would otherwise be paid within six months after
the Executive’s separation from service will instead be paid in the seventh month following the Executive’s separation from service to the extent required by Section 409A(a)(2)(B)(i). Any taxable reimbursement shall be paid no later
than December 31 of the year after the year in which the expense is incurred and shall comply with Treas. Reg. § 1.409A-3(i)(1)(iv). If the period during which the Executive has discretion to execute or revoke a release straddles two
calendar years, the Company shall make the payments that are conditioned upon the release no earlier than January 1st of the second of such calendar years, regardless of which taxable year the Executive delivers the executed release to the
Company.
15.11 Withholding of Taxes. The Company may withhold from any amounts payable under this Agreement all
taxes that the Company reasonably determines to be required to be withheld pursuant to any law, regulation, or ruling. However, it is the Executive’s obligation to pay all required taxes on any amounts paid under this Agreement, regardless of
the extent to which amounts are withheld.
15.12 Nonduplication of Benefits. No provision of this Agreement shall
require the Company to provide the Executive with any payment, benefit or grant that duplicates any payment, benefit or grant that the Executive is entitled to receive under another plan, program or policy with the Company or other agreement with
the Company.
IN WITNESS WHEREOF, the undersigned have executed this Agreement, effective the date first above
written.
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| SANDRIDGE ENERGY, INC. (the “Company”) |
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/s/ James D. Bennett |
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August 4, 2015 |
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| James D. Bennett |
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| President and Chief Executive Officer |
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EXECUTIVE
By signing below, I
acknowledge that I have been given the opportunity to review this Agreement carefully; that I have read, understand, and voluntarily agree to its terms; and that this Agreement is the sole and complete agreement relating to my employment and
supersedes any prior oral or written employment agreement (and including any provisions in any such prior agreement that would otherwise survive its termination or expiration).
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| /s/ Julian Bott |
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August 4, 2015 |
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| Julian Bott |
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Agreement Date
VIA HAND DELIVERY
Mr./Ms. Executive Name
Street Address
City, State Zipcode
Dear Executive:
Thank you for your service to SandRidge Energy, Inc., and its affiliates (“SandRidge” or the “Company”). This letter, when fully executed,
will constitute the Separation Agreement between you and SandRidge concerning the terms of your separation from employment with SandRidge (the “Separation Agreement”). The attached General Release is part of the Separation Agreement, and
terms that are defined in this Separation Agreement have the same meaning when used in the General Release.
| 1. |
Termination of Employment. SandRidge has made the decision to terminate your employment and your service as [Title], and any other position you hold with SandRidge, effective [Date], 2015 (the
“Separation Date”). |
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Final Payment. You have been paid or will be paid your earned salary through the Separation Date. Your final paycheck will include payment for accrued and unused paid time off (“PTO”). If you
believe the amount of your final paycheck is incorrect, you agree to contact SandRidge immediately. |
| 3. |
Severance Payment. Consistent with the terms of your Employment Agreement, and in consideration of your service to SandRidge and your execution of this Separation Agreement and the General Release
contained hereafter, SandRidge will provide you with a severance payment equal to number (#) months’ base salary. |
In some situations, the Company may place you on leave prior to your Separation Date if your employment loss is a result of a “mass
layoff” or “plant closing” which may be covered by the federal Worker Adjustment and Retraining Notification Act (“WARN”) for a period of up to 60 days (“WARN Leave”). If you
are placed on WARN Leave, all or a portion of the severance benefits you may be entitled to receive shall be considered to be payments provided by the Company pursuant to WARN. In that event, any
payment of a severance benefit that you may receive shall be reduced dollar-for-dollar by payments required to be made to you pursuant to WARN and all other severance benefits otherwise provided to you under this Separation Agreement will be offset
by benefits provided pursuant to WARN.
These severance amounts will not otherwise be “benefit bearing” and will not be
considered as compensation for purposes of the Company’s 401(k) plan, the non-qualified deferred compensation plan or for accrual of PTO or other leave.
You will receive the severance benefits only if you have returned an executed copy of this Separation Agreement and the accompanying
General Release during the 21/45-day period immediately following the date on which you receive this Separation Agreement and the General Release and you have not revoked the General Release within the seven-day revocation period provided in the
General Release. In order to receive or retain the severance benefits you must also return all SandRidge property within 14 days of your Separation Date (as described in paragraph 4, below) and comply with the covenants set forth in paragraphs 5
through 9, below.
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Return of SandRidge Property. If you have any Company property in your possession, you agree to return it to the People and Culture Department within 14 days of your Separation Date. SandRidge
property includes work product, electronic devices and other physical property of the Company. This includes equipment, supplies, keys, security items, credit cards, passwords, electronic devices, laptop computers, cellular phones and Blackberry
devices. You must also return all originals and any copies of Company records. This includes any disks, files, notebooks, etc. that you have personally generated or maintained with respect to the Company’s business, as well as any Company
records in your possession. |
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Continued Assistance. You will continue to cooperate with and assist SandRidge and its representatives and attorneys as requested with respect to any investigations, litigation, arbitration or other
dispute resolutions by being available for interviews, depositions and/or testimony with regard to any matters in which you are or have been involved or with respect to which you have relevant information. SandRidge will reimburse you for reasonable
expenses you may incur for travel in connection with this obligation to assist SandRidge. In addition, SandRidge will compensate you at a reasonable hourly rate for all time spent providing such assistance. |
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Confidential Information. During the course of your employment with SandRidge, you have had access to and gained knowledge of
confidential and proprietary information; therefore, you agree not to make any independent use of or disclose to any other person or organization any of the Company’s confidential,
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proprietary information unless you obtain the Company’s prior written consent. Confidential Information includes data or material (regardless of form) that is: (a) a trade secret;
(b) provided, disclosed or delivered to you by the Company, any officer, director, employee, agent, attorney, accountant, consultant, or other person or entity employed by the Company in any capacity, any customer, borrower or business
associate of the Company or any public authority having jurisdiction over the Company of any business activity conducted by the Company; or (c) produced, developed, obtained or prepared by you or on your behalf or the Company with respect to
the Company or any assets oil and gas prospects, business activities, officers, directors, employees, borrowers or customers of the foregoing. However, Confidential Information does not include any information, data or material that at the time of
disclosure or use was generally available to the public other than by a breach of this covenant, was available to the party to whom disclosed on a non-confidential basis by disclosure or access provided by the Company or a third party, or was
otherwise developed or obtained independently by the person to whom disclosed without a breach of this covenant. On request by the Company, the Company is entitled to a copy of any Confidential Information in your possession. |
If you are asked to testify, receive a subpoena, or provide information pertaining to the Company, you will immediately notify J. Matthew
Thompson, SandRidge Energy, Inc., 123 Robert S. Kerr Ave., Oklahoma City, Oklahoma 73102 by regular mail or email to mthompson@sandridgeenergy.com and provide a copy of the legal process documents so that, if appropriate, the Company may seek to
have the legal process quashed or a protective order granted.
You also agree that all such Confidential Information together with all
copies in any format thereof and notes and other summaries thereof are and will remain the sole property of SandRidge. You agree to return to SandRidge any such Confidential Information and all copies, notes or other summaries thereof which you may
have in your possession no later than the effective date of your separation. These obligations described in this paragraph apply whether you accept your severance payment or not. This commitment of confidentiality also applies to the terms of this
Separation Agreement, except for discussions with your spouse, your personal attorney and/or accountants, in connection with an application for unemployment insurance benefits or as needed to enforce our Agreement. Any disclosure by such individuals
will be deemed a disclosure by you and will have the same consequences as a breach of our agreements with you.
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No Influence or Solicitation of Employees or Business. You agree that, for the one-year period immediately following the Separation
Date, you will not, either personally or by or through his or her agent, on behalf of himself or herself or on behalf of any other individual, association, or entity (i) use any of the Confidential Information for the purposes of calling on any
customer of the Company or soliciting or inducing any such customers to acquire, or providing to any of such customers, any product or service provided by the Company or any affiliate or subsidiary of the Company; (ii) solicit, influence or
encourage any |
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established customer of the Company to divert or direct such customer’s business to you or any person or entity by which or with which you become employed, associated, affiliated or
otherwise related; (iii) solicit, divert or attempt to solicit or divert any entity which has been identified and contacted by the Company, either directly or through such entity’s agent(s), with respect to a possible acquisition by, or
transaction with, the Company; (iv) hire, solicit or seek to hire any employee of the Company, or any individual who was an employee of the Company during the twelve-month period prior to your termination of employment; or (v) in any other
manner attempt, directly or indirectly, to persuade any such employee to discontinue his or her status of employment with the Company or to become employed in a business or activities likely to be competitive with the business of the Company.
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Future Activities. You will not be employed or otherwise act as an expert witness or consultant or in any similar paid capacity in any litigation, arbitration, regulatory or agency hearing or other
adversarial or investigatory proceeding involving the Company. |
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Preserving Name and Reputation. You will not at any time in the future defame, disparage or make statements or disparaging remarks which could embarrass or cause harm to SandRidge’s name and
reputation or the names and reputation of any of its officers, directors, representatives, agents, employees or SandRidge’s current, former or prospective vendors, professional colleagues, professional organizations, associates or contractors,
or to the press or media. Disparagement means the form and substance of any communication, regardless of whether or not you believe it to be true, that tends to degrade or belittle SandRidge or subject it to ridicule or embarrassment. You agree this
paragraph is a material provision of this Separation Agreement and that in the event of breach, you will be liable for the return of the value of all consideration received as well as any other damages sustained by SandRidge. This paragraph does not
apply to statements made under penalty of perjury; however, you agree to give advance notice to SandRidge of such an event, to the extent practicable. |
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Exceptions to Restrictions on Communications, Confidentiality and Future Activities. Nothing in this Agreement is intended to prohibit you from reporting possible violations of federal law or regulation to
any governmental agency or entity, including but not limited to the Department of Justice, the Securities and Exchange Commission, Congress, and any agency Inspector General, or making other disclosures that are protected under the whistleblower
provisions of federal law or regulation. In addition, you do not need the prior authorization of the Company to make any such reports or disclosures, nor are you required to notify the Company that you have made such reports or disclosures. Further,
nothing in this Paragraph or elsewhere in this Agreement prevents or prohibits you from communicating with the Equal Employment Opportunity Commission (or a similar fair employment practices agency of your State of residence or employment) or with
other similarly situated employees. |
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Forfeiture. If you breach any of your obligations under this Separation Agreement, SandRidge will be entitled to stop payment of any benefit due under this Separation Agreement, has no further obligation
to pay any benefit due under this Separation Agreement, and will be entitled to recover any benefit paid under this Separation Agreement and to obtain all other relief provided by law or equity, including, but not limited to, injunctive relief.
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Additional Warranties. You represent and warrant that as of this date you have suffered no work related injury during your employment with SandRidge and that you have no intention of filing a claim for
worker’s compensation benefits arising from any incident occurring during your employment with the Company. You further represent that you have accounted to the Company for any and all hours worked through your Separation Date, and that you
have been paid for such hours worked at the appropriate rate. You also represent and warrant that you are not due any unpaid vacation or sick pay, except as provided in paragraph 2 with respect to PTO. |
| 13. |
No Admission/Offer of Compromise. By making this severance offer, SandRidge is not admitting liability or responsibility for any past due wages or other consideration. Any alleged responsibility or
liability on the part of the Company has been and continues to be denied. In addition, this severance offer constitutes an offer of compromise pursuant to the applicable rules of evidence. |
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Governing Law and Venue. To the extent not preempted by federal law, the provisions of this Separation Agreement, including the General Release, will be construed and enforced in accordance with the laws
of the State of Oklahoma, excluding any conflicts or choice of law rule or principle that might otherwise refer construction or interpretation of this provision to the substantive law of another jurisdiction. Each party hereby agrees that Oklahoma
City, Oklahoma, is the proper venue for any litigation seeking to enforce any provision of this Separation Agreement (including the General Release), and each party hereby waives any right it otherwise might have to defend, oppose, or object to, on
the basis of jurisdiction, venue, or forum non-conveniens, a suit filed by the other party in any federal or state court in Oklahoma City, Oklahoma, to enforce any provision of this Separation Agreement. |
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Severability. If any portion, provision or part of this Separation Agreement is held, determined or adjudicated to be invalid, unenforceable or void for any reason whatsoever, each such portion, provision
or part shall be severed from the remaining portions, provisions or parts of this Separation Agreement and shall not affect the validity or enforceability of such remaining portions, provisions or parts. |
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Entire Agreement. This Separation Agreement between you and SandRidge, if you execute this Agreement, will be in consideration of the
mutual promises described above. This Separation Agreement, including the General Release, will constitute the entire agreement between you and SandRidge with respect to your separation from employment. You agree that you have no additional rights
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any employment agreement or arrangement. There are no other agreements, written or oral, expressed or implied, between the parties concerning the subject matter of this Separation Agreement.
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We wish you the best of luck and every success in your future endeavors.
Sincerely,
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| SANDRIDGE ENERGY, INC. |
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| Agreed to on behalf of SandRidge Energy, Inc. |
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| R. Scott Griffin |
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| SVP – People and Culture |
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By signing below, I acknowledge that I have been given the opportunity to review this Separation Agreement carefully; that I
have read this Separation Agreement and understand its terms; and that I voluntarily agree to them.
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| ACCEPTED AND AGREED TO BY: |
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NOTICE
Various laws, including Title VII of the Civil Rights Act of 1964, the Civil Rights Act of 1866, as amended, the Pregnancy Discrimination Act of 1978, the
Equal Pay Act, the Civil Rights Act of 1991, the Age Discrimination in Employment Act, the Rehabilitation Act of 1973, the Americans with Disabilities Act Amendments Act, the Employee Retirement Income Security Act of 1974 and the Uniformed Services
Employment and Reemployment Rights Act (all as amended from time to time), prohibit employment discrimination based on sex, race, color, national origin, religion, age, disability, eligibility for covered employee benefits and military service
status. You may also have rights under laws such as the Older Worker Benefit Protection Act of 1990, the Worker Adjustment and Retraining Notification Act of 1988, the Fair Labor Standards Act, the Family and Medical Leave Act, the Occupational
Safety and Health Act and other federal, state and/or municipal statutes, orders or regulations pertaining to labor, employment and/or employee benefits. These laws are enforced through federal departments and agencies such as the United States
Department of Labor and the Equal Employment Opportunity Commission, and various state and municipal labor departments, fair employment boards, human rights commissions and similar agencies.
You have until the close of business 21/45 days from the date you received the Separation Agreement and this General Release to make your decision to agree to
the Separation Agreement and receive a severance payment. You may sign the Separation Agreement at any time during that period. If you do not accept the severance package and sign and return the Separation Agreement and this General Release within
21/45 days, you will not be eligible for the severance package.
BEFORE EXECUTING EITHER THE PROPOSED SEPARATION AGREEMENT OR THIS GENERAL RELEASE YOU
SHOULD REVIEW THESE DOCUMENTS CAREFULLY AND CONSULT AN ATTORNEY, IF YOU THINK YOU NEED TO.
You may revoke this General Release within seven days after
you sign it, and it will not become effective or enforceable until that revocation period has expired. Revocation must be in writing and received by the Company’s People and Culture Department, 123 Robert S. Kerr Ave., Oklahoma City, OK 73102
or via fax (405) 429-5967, Attn: R. Scott Griffin, within the seven-day period following your execution of this General Release.
GENERAL RELEASE
My employment with SandRidge or one of its affiliates (collectively the “Company”) is terminated effective on the Separation Date. In consideration
of the special severance package offered to me by SandRidge and the benefits that I will receive as reflected in the Separation Agreement, I,
, on behalf of myself and my heirs, assigns, executors, and administrators (collectively referred to as the
“Releasing Parties”), hereby release and discharge SandRidge and its subsidiaries, partners, and affiliates, including each of those entities’ predecessors, successors, affiliates, and partners and each of those entities’
employees, officers, directors and agents (collectively referred to as the “Released Parties”) from all claims, liabilities, demands, and causes of action, known or unknown, fixed or contingent, that I or the Releasing Parties may have or
claim to have against the Released Parties either as a result of my past employment with the Company and/or the severance of that relationship and/or otherwise, and hereby waive any and all rights I may have with respect to any such claims.
This General Release includes, but is not limited to, claims arising under Title VII of the Civil Rights Act of 1964, the Civil Rights Act of 1866, as
amended, the Pregnancy Discrimination Act of 1978, the Equal Pay Act, the Civil Rights Act of 1991, the Age Discrimination in Employment Act, the Rehabilitation Act of 1973, the Americans With Disabilities Act Amendments Act, the Employee Retirement
Income Security Act of 1974 and the Uniformed Services Employment and Reemployment Rights Act (all as amended from time to time). This General Release also includes, but is not limited to, any rights I may have under the Older Workers Benefit
Protection Act of 1990, the Worker Adjustment and Retraining Notification Act of 1988, the Fair Labor Standards Act, the Family and Medical Leave Act, the Occupational Safety and Health Act and any other federal, state and/or municipal statutes,
orders or regulations pertaining to labor, employment and/or employee benefits. This General Release also applies to any claims or rights I or the Releasing Parties may have growing out of any legal or equitable restrictions on the Company’s
rights not to continue an employment relationship with its employees, including any expressed or implied employment contracts, and to any claims I or the Releasing Parties may have against the Released Parties for fraudulent inducement or
misrepresentation, defamation (except as set forth in the Separation Agreement), wrongful termination or other retaliation claims in connection with workers’ compensation or alleged “whistleblower” status or on any other basis
whatsoever.
It is specifically agreed, however, that this General Release does not have any effect on any rights or claims that I may have against the
Released Parties that arise after the date I execute this General Release or on any of the Company’s obligations under the Separation Agreement. [Officers Only: In addition, this General Release does not have any effect on any coverage I may
have, or may be entitled to, under any directors’ and officers’ liability insurance policy for any action or inaction taken in my role as director or officer of the Company.]
I have received copies and carefully reviewed and fully understand all the provisions of the Separation Agreement
and General Release, including the foregoing NOTICE. I have not relied on any representation or statement, oral or written, by the Company or any of its representatives, which is not set forth in those documents.
The Separation Agreement, including this General Release and the foregoing NOTICE, set forth the entire agreement between me and the Company with respect to
this subject. I understand that my receipt and retention of the separation benefits covered by the Separation Agreement are contingent not only on my execution of this General Release, but also on my continued compliance with my other obligations
under the Separation Agreement.
I acknowledge that the Company gave me 21/45 days to consider whether I wish to accept or reject the separation benefits
I am eligible to receive under the Separation Agreement in exchange for this General Release. I also acknowledge that the Company advised me to seek independent legal advice as to these matters, if I chose to do so. I hereby represent and state that
I have taken such actions and obtained such information and independent legal or other advice, if any, that I believed were necessary for me to fully understand the effects and consequences of the Separation Agreement and this General Release prior
to signing those documents.
I acknowledge that I have been informed of my right to revoke this General Release within seven days after I sign it. I
represent and state that I fully understand how any such revocation is to be made and the consequences of any such revocation.
Date: , 2015
SCHEDULE 1
[TO BE USED IN THE EVENT OF A GROUP TERMINATION ONLY]
SandRidge Energy, Inc. Severance Agreement and General Release Agreement
The following demographic information provided in the two tables below is provided to you for review and consideration in connection with signing the
SEVERANCE AGREEMENT AND GENERAL RELEASE. This list represents job titles and ages of employees of SandRidge whose employment has recently terminated.
This list represents the job titles and ages of current employees of SandRidge whose employment has not recently terminated.
Those employees by job title and age are as follows:
Exhibit 99.1
SandRidge Energy, Inc. Updates Shareholders on Operations
and Reports Financial Results for Second Quarter and First Six Months of 2015
Adjusted EBITDA of $161 Million for the Second Quarter and
Adjusted Loss of $0.03 per Diluted Share
Second Quarter Total Production of 89.0 MBoepd (33% Oil, 17% NGLs), up 27% vs. Second Quarter 2014
Raising 2015 Production Guidance Range from 28.0-30.5 MMBoe to 29.0-30.5 MMBoe
Lowering 2015 LOE and Production Tax Guidance Ranges
Issued $1.25 Billion of Second Lien Notes and Amended Senior Credit Facility
$1.5 Billion of Liquidity at Second Quarter, $984 Million in Cash
Received Positive IRS Private Letter Ruling for CEBA Midstream, LP
Achieved Second Half 2015 Target of $2.4 Million Average Drilling and Completion Cost per Mississippian Lateral, Now Targeting $2.3
Million
Oklahoma City, Oklahoma, August 5, 2015 – SandRidge Energy, Inc. (NYSE: SD) today announced financial and operational results
for the quarter ended June 30, 2015. Additionally, presentation slides will be available on the Company’s website, www.sandridgeenergy.com, under Investor Relations/Events at 7 am ET on August 6th.
Strong second quarter production rates and drilling results supported an increase in the midpoint of
production volume guidance for the 2015 calendar year. New guidance introduced today estimates 2015 production to be between 29.0 and 30.5 MMBoe (vs. prior range of 28.0 to 30.5 MMBoe).
During the second quarter, CEBA Midstream, LP, SandRidge’s wholly-owned saltwater gathering and midstream subsidiary, received a favorable ruling from
the IRS providing that revenues earned by CEBA from its produced water gathering and disposal operations constitute “qualifying income” under regulations applicable to master limited partnerships.
SandRidge issued $1.25 billion of second lien notes on June 10, 2015. Concurrently, the Company revised its first lien credit facility, lowering its
borrowing base and providing for less restrictive financial covenants. The restated facility is subject to maintenance of a first lien leverage ratio (senior first lien secured debt/LTM pro forma EBITDA) of not more than 2.0 times and a minimum
current ratio (including available borrowing capacity) of at least 1.0 times. The borrowing base is currently $500 million.
As part of today’s
release, SandRidge is introducing standalone guidance for its Mid-Continent operations as well as updating full company guidance.
“With the
highgrading of our drilling program in 2015, production has outpaced expectations and we are raising the lower end of our production guidance by one million barrels, with a midpoint now at 29.8 MMBoe. Further, our per lateral well costs have
decreased by 20% year to date, including $290,000 of efficiency gains, which is $30,000 more than projected in the first quarter of 2015. These efficiencies evidence our team’s focus on continually improving the cost structure of the business
and will continue to drive value, as they are durable across any price environment. These cost reduction efforts, consistent production results and lower infrastructure spending preserve program returns.” said James Bennett, SandRidge’s
Chief Executive Officer and President.
“Our recent second lien financing greatly enhances our liquidity position, enabling continued progress on
both development of our large Mississippian play and expansion into other zones such as the oilier Chester. In addition, the recently received PLR for our CEBA Midstream business is an important step towards unlocking value in our material
infrastructure position. SandRidge has diverse options to create value for shareholders and expanded liquidity, assuring we are well positioned to capitalize on future opportunities.”
Key Financial Results
Second Quarter
| |
• |
|
Adjusted EBITDA, net of Noncontrolling Interest, was $161 million for second quarter 2015 compared to $202 million in second quarter 2014 |
| |
• |
|
Adjusted operating cash flow of $111 million for second quarter 2015 compared to $179 million in second quarter 2014 |
| |
• |
|
Adjusted net loss of $17.8 million, or $0.03 per diluted share, for second quarter 2015 compared to adjusted net income of $25.7 million, or $0.04 per diluted share, in second quarter 2014 |
Six Months
| |
• |
|
Adjusted EBITDA, net of Noncontrolling Interest, was $343 million in the first six months of 2015 compared to $371 million in the first six months of 2014, pro forma for divestitures |
| |
• |
|
Adjusted operating cash flow of $257 million in the first six months of 2015 compared to $306 million in the first six months of 2014 |
| |
• |
|
Adjusted net loss of $15.5 million, or $0.03 per diluted share, in the first six months of 2015 compared to adjusted net income of $61.3 million, or $0.11 per diluted share, in the first six months of 2014
|
Adjusted net (loss) income available to common stockholders, adjusted EBITDA, pro forma adjusted EBITDA and adjusted operating cash flow
are non-GAAP financial measures. Each measure is defined and reconciled to the most directly comparable GAAP measure under “Non-GAAP Financial Measures” beginning on page 9.
Financial / Other Highlights
| |
• |
|
Ended the second quarter with $1.5 billion in liquidity, $984 million in cash |
| |
• |
|
93% hedged on remaining projected 2015 liquids volumes, $50 WTI for the remainder of 2015 realizes $74.30 per barrel of oil |
| |
• |
|
Mark-to-market hedge position of $144 million as of June 30, 2015 |
| |
• |
|
Incurred a non-cash impairment charge of approximately $1.5 billion due to a ceiling test impairment, resulting from a significant decline in oil price |
Operational Highlights
Steve Turk,
SandRidge’s Chief Operating Officer noted, “Supporting competitive project returns, the team achieved $2.4 million Mississippian lateral costs ahead of plan and set a new cost target of $2.3 million in the remaining half of 2015.
Anticipated higher production, coupled with reduced lifting costs and improved field efficiencies led to a decreased operating cost guidance range. Recent multilateral results, including the Rusty 2710 long lateral, drilled for $1.8 million per
lateral with a 30-day IP rate of 1,646 Boepd, strengthen our commitment to develop this important technology. With a focus on innovation, our skilled technical team continues to enhance our full section development multilateral design. We expect
further cost and efficiency improvements going forward. Finally, Chester wells put to sales in the quarter averaged 338 Boepd (61% oil), which validates our plan to increase activity in this emerging multiple pay project during the second half of
2015.”
| |
• |
|
Average second quarter production of 89.0 MBoepd. This represents a 1% increase versus the first quarter of 2015 |
2
| |
• |
|
Original cost target of $2.4 million per Mississippian lateral achieved in the second quarter, with a new target of $2.3 million in the back half of the year |
| |
• |
|
Second quarter Mid-Continent lateral 30-day IP rates of 387 Boepd, 53% oil, 110% of Mississippian type curve |
Drilling and Operational Activities
Mid-Continent: During the second quarter of 2015, SandRidge drilled 43 laterals. The Company averaged seven horizontal rigs operating in the play. The
Company’s Mid-Continent assets produced 79.3 MBoepd during the second quarter (32% Oil, 18% NGLs, 50% Natural Gas). All references to the Mid-Continent are inclusive of the Company’s legacy Mid-Continent properties.
West Texas: During the second quarter, Permian Basin properties produced approximately 4.5 MBoepd (86% Oil, 10% NGLs, 4% Natural Gas). Legacy West
Texas Overthrust properties produced approximately 5.2 MBoepd (2% Oil, 98% Natural Gas).
3
Operational and Financial Statistics
Information regarding the Company’s production, pricing, costs and earnings is presented below:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Three Months Ended June 30, |
|
|
Six Months Ended June 30, |
|
| |
|
2015 |
|
|
2014 |
|
|
2015 |
|
|
2014 |
|
| Production - Total |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Oil (MBbl) |
|
|
2,691 |
|
|
|
2,398 |
|
|
|
5,342 |
|
|
|
5,283 |
|
| NGL (MBbl) |
|
|
1,349 |
|
|
|
748 |
|
|
|
2,637 |
|
|
|
1,390 |
|
| Natural gas (MMcf) |
|
|
24,342 |
|
|
|
19,240 |
|
|
|
48,075 |
|
|
|
40,833 |
|
| Oil equivalent (MBoe) |
|
|
8,097 |
|
|
|
6,353 |
|
|
|
15,992 |
|
|
|
13,479 |
|
| Daily production (MBoed) |
|
|
89.0 |
|
|
|
69.8 |
|
|
|
88.4 |
|
|
|
74.5 |
|
|
|
|
|
|
| Production - Mid-Continent (1) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Oil (MBbl) |
|
|
2,335 |
|
|
|
1,916 |
|
|
|
4,616 |
|
|
|
3,651 |
|
| NGL (MBbl) |
|
|
1,309 |
|
|
|
706 |
|
|
|
2,562 |
|
|
|
1,251 |
|
| Natural gas (MMcf) |
|
|
21,428 |
|
|
|
15,909 |
|
|
|
42,164 |
|
|
|
30,514 |
|
| Oil equivalent (MBoe) |
|
|
7,215 |
|
|
|
5,273 |
|
|
|
14,205 |
|
|
|
9,988 |
|
| Daily production (MBoed) |
|
|
79.3 |
|
|
|
58.0 |
|
|
|
78.5 |
|
|
|
55.2 |
|
|
|
|
|
|
| Average price per unit |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Realized oil price per barrel - as reported |
|
$ |
53.24 |
|
|
$ |
100.02 |
|
|
$ |
49.33 |
|
|
$ |
98.39 |
|
| Realized impact of derivatives per barrel |
|
|
26.41 |
|
|
|
(3.11 |
) |
|
|
34.58 |
|
|
|
(2.05 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Net realized price per barrel |
|
$ |
79.65 |
|
|
$ |
96.91 |
|
|
$ |
83.91 |
|
|
$ |
96.34 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Realized NGL price per barrel - as reported |
|
$ |
15.97 |
|
|
$ |
36.41 |
|
|
$ |
15.36 |
|
|
$ |
39.44 |
|
| Realized impact of derivatives per barrel |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Net realized price per barrel |
|
$ |
15.97 |
|
|
$ |
36.41 |
|
|
$ |
15.36 |
|
|
$ |
39.44 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Realized natural gas price per Mcf - as reported |
|
$ |
2.04 |
|
|
$ |
3.78 |
|
|
$ |
2.21 |
|
|
$ |
4.18 |
|
| Realized impact of derivatives per Mcf |
|
|
0.14 |
|
|
|
(0.29 |
) |
|
|
0.55 |
|
|
|
(0.40 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Net realized price per Mcf |
|
$ |
2.18 |
|
|
$ |
3.49 |
|
|
$ |
2.76 |
|
|
$ |
3.78 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Realized price per Boe - as reported |
|
$ |
26.50 |
|
|
$ |
53.50 |
|
|
$ |
25.65 |
|
|
$ |
55.29 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Net realized price per Boe - including impact of derivatives |
|
$ |
35.68 |
|
|
$ |
51.44 |
|
|
$ |
38.87 |
|
|
$ |
53.30 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Average cost per Boe |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Lease operating |
|
$ |
10.10 |
|
|
$ |
10.54 |
|
|
$ |
10.71 |
|
|
$ |
12.89 |
|
| Production taxes |
|
|
0.54 |
|
|
|
1.23 |
|
|
|
0.56 |
|
|
|
1.16 |
|
|
|
|
|
|
| General and administrative |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| General and administrative, excluding stock-based compensation |
|
$ |
3.81 |
|
|
$ |
4.26 |
|
|
$ |
3.94 |
|
|
$ |
4.36 |
|
| Stock-based compensation (2) |
|
|
0.93 |
|
|
|
0.76 |
|
|
|
0.72 |
|
|
|
0.86 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Total general and administrative |
|
$ |
4.74 |
|
|
$ |
5.02 |
|
|
$ |
4.66 |
|
|
$ |
5.22 |
|
|
|
|
|
|
| General and administrative - adjusted |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| General and administrative, excluding stock-based compensation (3) |
|
$ |
3.28 |
|
|
$ |
4.14 |
|
|
$ |
3.40 |
|
|
$ |
3.82 |
|
| Stock-based compensation (2)(4) |
|
|
0.42 |
|
|
|
0.72 |
|
|
|
0.43 |
|
|
|
0.72 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Total general and administrative - adjusted |
|
$ |
3.70 |
|
|
$ |
4.85 |
|
|
$ |
3.83 |
|
|
$ |
4.54 |
|
|
|
|
|
|
| Depletion (5) |
|
$ |
11.78 |
|
|
$ |
15.48 |
|
|
$ |
12.67 |
|
|
$ |
16.27 |
|
|
|
|
|
|
| Lease operating cost per Boe |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Mid-Continent (1) |
|
$ |
7.50 |
|
|
$ |
6.96 |
|
|
$ |
8.05 |
|
|
$ |
7.94 |
|
|
|
|
|
|
| Earnings per share |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Loss per share applicable to common stockholders |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Basic |
|
$ |
(2.78 |
) |
|
$ |
(0.10 |
) |
|
$ |
(4.98 |
) |
|
$ |
(0.41 |
) |
| Diluted |
|
|
(2.78 |
) |
|
|
(0.10 |
) |
|
|
(4.98 |
) |
|
|
(0.41 |
) |
|
|
|
|
|
| Adjusted net (loss) income per share available to common stockholders |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Basic |
|
$ |
(0.05 |
) |
|
$ |
0.02 |
|
|
$ |
(0.07 |
) |
|
$ |
0.07 |
|
| Diluted |
|
|
(0.03 |
) |
|
|
0.04 |
|
|
|
(0.03 |
) |
|
|
0.11 |
|
|
|
|
|
|
| Weighted average number of common shares outstanding (in thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Basic |
|
|
495,153 |
|
|
|
485,318 |
|
|
|
486,704 |
|
|
|
485,059 |
|
| Diluted (6) |
|
|
566,863 |
|
|
|
577,412 |
|
|
|
558,414 |
|
|
|
577,789 |
|
| (1) |
Includes legacy Mid-Continent properties. |
| (2) |
Expense for equity-classified stock-based awards. |
| (3) |
Excludes severance and shareholder litigation costs totaling $4.3 million and $8.5 million for the three and six-month periods ended June 30, 2015, respectively. Excludes transaction costs, severance and consent
solicitation costs totaling $0.8 million and $7.4 million for the three and six-month periods ended June 30, 2014, respectively. |
| (4) |
Three and six-month periods ended June 30, 2015 exclude $4.1 million and $4.7 million, respectively, for the acceleration of certain stock awards. Three and six-month periods ended June 30, 2014 exclude $0.3
million and $2.0 million, respectively, for the acceleration of certain stock awards. |
| (5) |
Includes accretion of asset retirement obligation. |
| (6) |
Includes shares considered antidilutive for calculating earnings per share in accordance with GAAP. |
4
Capital Expenditures
The table below summarizes the Company’s capital expenditures for the three and six-month periods ended June 30, 2015 and 2014:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Three Months Ended June, |
|
|
Six Months Ended June, |
|
| |
|
2015 |
|
|
2014 |
|
|
2015 |
|
|
2014 |
|
| |
|
(in thousands) |
|
|
|
|
|
|
| Drilling and production |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Mid-Continent |
|
$ |
146,665 |
|
|
$ |
241,037 |
|
|
$ |
424,606 |
|
|
$ |
406,888 |
|
| Permian Basin |
|
|
624 |
|
|
|
64,282 |
|
|
|
3,582 |
|
|
|
106,474 |
|
| Gulf of Mexico/Gulf Coast |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
22,975 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
147,289 |
|
|
|
305,319 |
|
|
|
428,188 |
|
|
|
536,337 |
|
| Leasehold and geophysical |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Mid-Continent |
|
|
2,294 |
|
|
|
53,444 |
|
|
|
26,586 |
|
|
|
80,036 |
|
| Permian Basin |
|
|
31 |
|
|
|
423 |
|
|
|
83 |
|
|
|
539 |
|
| Gulf of Mexico/Gulf Coast |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
159 |
|
| Other |
|
|
909 |
|
|
|
1,856 |
|
|
|
3,658 |
|
|
|
5,111 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,234 |
|
|
|
55,723 |
|
|
|
30,327 |
|
|
|
85,845 |
|
|
|
|
|
|
| Inventory |
|
|
918 |
|
|
|
(4,475 |
) |
|
|
(5,012 |
) |
|
|
(1,402 |
) |
|
|
|
|
|
| Total exploration and development |
|
|
151,441 |
|
|
|
356,567 |
|
|
|
453,503 |
|
|
|
620,780 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Drilling and oil field services |
|
|
597 |
|
|
|
6,655 |
|
|
|
2,472 |
|
|
|
7,275 |
|
| Midstream |
|
|
8,249 |
|
|
|
5,809 |
|
|
|
16,681 |
|
|
|
11,766 |
|
| Other - general |
|
|
7,279 |
|
|
|
7,907 |
|
|
|
15,100 |
|
|
|
12,889 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Total capital expenditures, excluding acquisitions |
|
|
167,566 |
|
|
|
376,938 |
|
|
|
487,756 |
|
|
|
652,710 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Acquisitions |
|
|
1,736 |
|
|
|
14,201 |
|
|
|
3,475 |
|
|
|
16,553 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Total capital expenditures |
|
$ |
169,302 |
|
|
$ |
391,139 |
|
|
$ |
491,231 |
|
|
$ |
669,263 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5
Derivative Contracts
The table below sets forth the Company’s consolidated oil and natural gas price swaps and collars for the years 2015 and 2016 as of August 5, 2015:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Quarter Ending |
|
| |
|
3/31/2015 |
|
|
6/30/2015 |
|
|
9/30/2015 |
|
|
12/31/2015 |
|
|
|
|
|
|
| Oil (MMBbls): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Swap Volume |
|
|
2.29 |
|
|
|
1.73 |
|
|
|
1.01 |
|
|
|
0.55 |
|
| Swap |
|
$ |
92.71 |
|
|
$ |
91.55 |
|
|
$ |
92.43 |
|
|
$ |
94.11 |
|
|
|
|
|
|
| Three-way Collar Volume |
|
|
0.72 |
|
|
|
0.73 |
|
|
|
1.56 |
|
|
|
1.56 |
|
| Call Price |
|
$ |
103.13 |
|
|
$ |
103.13 |
|
|
$ |
103.65 |
|
|
$ |
103.65 |
|
| Put Price |
|
$ |
90.82 |
|
|
$ |
90.82 |
|
|
$ |
90.03 |
|
|
$ |
90.03 |
|
| Short Put Price |
|
$ |
73.13 |
|
|
$ |
73.13 |
|
|
$ |
78.15 |
|
|
$ |
78.15 |
|
|
|
|
|
|
| Natural Gas (Bcf): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Swap Volume |
|
|
14.40 |
|
|
|
1.82 |
|
|
|
1.84 |
|
|
|
1.84 |
|
| Swap |
|
$ |
4.62 |
|
|
$ |
4.20 |
|
|
$ |
4.20 |
|
|
$ |
4.20 |
|
|
|
|
|
|
| Collar Volume |
|
|
0.25 |
|
|
|
0.25 |
|
|
|
0.25 |
|
|
|
0.25 |
|
| Collar: High |
|
$ |
8.55 |
|
|
$ |
8.55 |
|
|
$ |
8.55 |
|
|
$ |
8.55 |
|
| Collar: Low |
|
$ |
4.00 |
|
|
$ |
4.00 |
|
|
$ |
4.00 |
|
|
$ |
4.00 |
|
|
|
|
|
|
| Natural Gas Basis (Bcf) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Swap Volume |
|
|
9.65 |
|
|
|
15.47 |
|
|
|
15.64 |
|
|
|
15.64 |
|
| Swap |
|
$ |
(0.29 |
) |
|
$ |
(0.30 |
) |
|
$ |
(0.30 |
) |
|
$ |
(0.30 |
) |
|
|
|
|
|
|
|
|
|
| |
|
Year Ending |
|
| |
|
12/31/2015 |
|
|
12/31/2016 |
|
| Oil (MMBbls): |
|
|
|
|
|
|
|
|
| Swap Volume |
|
|
5.59 |
|
|
|
1.46 |
|
| Swap |
|
$ |
92.44 |
|
|
$ |
88.36 |
|
|
|
|
| Three-way Collar Volume |
|
|
4.58 |
|
|
|
2.56 |
|
| Call Price |
|
$ |
103.48 |
|
|
$ |
100.85 |
|
| Put Price |
|
$ |
90.28 |
|
|
$ |
90.00 |
|
| Short Put Price |
|
$ |
76.56 |
|
|
$ |
83.14 |
|
|
|
|
| Natural Gas (Bcf): |
|
|
|
|
|
|
|
|
| Swap Volume |
|
|
19.90 |
|
|
|
— |
|
| Swap |
|
$ |
4.51 |
|
|
|
— |
|
|
|
|
| Collar Volume |
|
|
1.01 |
|
|
|
— |
|
| Collar: High |
|
$ |
8.55 |
|
|
|
— |
|
| Collar: Low |
|
$ |
4.00 |
|
|
|
— |
|
|
|
|
| Natural Gas Basis (Bcf) |
|
|
|
|
|
|
|
|
| Swap Volume |
|
|
56.4 |
|
|
|
11.0 |
|
| Swap |
|
$ |
(0.30 |
) |
|
$ |
(0.38 |
) |
6
Balance Sheet
The Company’s capital structure at June 30, 2015 and December 31, 2014 is presented below:
|
|
|
|
|
|
|
|
|
| |
|
June 30,
2015 |
|
|
December 31,
2014 |
|
| |
|
(in thousands) |
|
|
|
|
| Cash and cash equivalents |
|
$ |
983,617 |
|
|
$ |
181,253 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Current maturities of long-term debt |
|
$ |
— |
|
|
$ |
— |
|
| Long-term debt (net of current maturities) |
|
|
|
|
|
|
|
|
| 8.75% Senior Secured Notes due 2020 |
|
|
1,250,000 |
|
|
|
— |
|
| Senior Unsecured Notes |
|
|
|
|
|
|
|
|
| 8.75% Senior Notes due 2020, net |
|
|
445,758 |
|
|
|
445,402 |
|
| 7.5% Senior Notes due 2021 |
|
|
1,149,175 |
|
|
|
1,178,486 |
|
| 8.125% Senior Notes due 2022 |
|
|
729,000 |
|
|
|
750,000 |
|
| 7.5% Senior Notes due 2023, net |
|
|
821,706 |
|
|
|
821,548 |
|
|
|
|
|
|
|
|
|
|
| Total debt |
|
|
4,395,639 |
|
|
|
3,195,436 |
|
|
|
|
| Stockholders’ equity |
|
|
|
|
|
|
|
|
| Preferred stock |
|
|
6 |
|
|
|
6 |
|
| Common stock |
|
|
514 |
|
|
|
477 |
|
| Additional paid-in capital |
|
|
5,250,285 |
|
|
|
5,201,524 |
|
| Treasury stock, at cost |
|
|
(6,776 |
) |
|
|
(6,980 |
) |
| Accumulated deficit |
|
|
(5,678,592 |
) |
|
|
(3,257,202 |
) |
|
|
|
|
|
|
|
|
|
| Total SandRidge Energy, Inc. stockholders’ equity |
|
|
(434,563 |
) |
|
|
1,937,825 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Noncontrolling interest |
|
|
850,135 |
|
|
|
1,271,995 |
|
|
|
|
| Total capitalization |
|
$ |
4,811,211 |
|
|
$ |
6,405,256 |
|
|
|
|
|
|
|
|
|
|
During the second quarter of 2015, the Company’s debt, net of cash balances, increased by approximately $53 million. On
June 30th, the Company had a $500 million undrawn senior credit facility. The Company was in compliance with all applicable covenants contained in its debt instruments during the second
quarter and through and as of the date of this release.
7
2015 Operational Guidance
The Company is raising its 2015 production guidance. Additionally, the Company is lowering its LOE, production tax and DD&A guidance. The Company is also
issuing standalone guidance for its Mid-Continent operations inclusive of its legacy Mid-Continent properties. Additional 2015 Guidance detail is available on the Company’s website, www.sandridgeenergy.com, under Investor
Relations/Guidance.
|
|
|
|
|
|
|
| |
|
Total Company |
|
Mid-Continent |
| |
|
Projection as of
May 6, 2015 |
|
Projection as of
August 5, 2015 |
|
Projection as of
August 5, 2015 |
|
|
|
|
| Production |
|
|
|
|
|
|
| Oil (MMBbls) |
|
9.0 - 10.0 |
|
9.3 - 10.0 |
|
7.9 - 8.6 |
| NGL (MMBbls) |
|
4.0 - 5.0 |
|
4.6 - 5.0 |
|
4.5 - 4.9 |
|
|
|
|
|
|
|
| Total Liquids (MMBbls) |
|
13.0 - 15.0 |
|
13.9 - 15.0 |
|
12.4 - 13.5 |
| Natural Gas (Bcf) |
|
89.5 - 93.5 |
|
90.5 - 93.5 |
|
78.4 - 81.4 |
|
|
|
|
|
|
|
| Total (MMBoe) |
|
28.0 - 30.5 |
|
29.0 - 30.5 |
|
25.5 - 27.0 |
|
|
|
|
| Price Realization |
|
|
|
|
|
|
| Oil (differential below NYMEX WTI) |
|
$3.75 |
|
$3.75 |
|
|
| NGL (realized % of NYMEX WTI) |
|
30% |
|
30% |
|
|
| Natural Gas (differential below NYMEX Henry Hub) |
|
$0.75 |
|
$0.75 |
|
|
|
|
|
|
| Costs per Boe |
|
|
|
|
|
|
| Lifting |
|
$12.25 - $13.00 |
|
$11.50 - $12.50 |
|
$8.75 - $9.75 |
| Production Taxes |
|
0.65 - 0.85 |
|
0.60 - 0.80 |
|
|
| DD&A - oil & gas |
|
11.50 - 13.50 |
|
11.00 - 12.00 |
|
|
| DD&A - other |
|
2.00 - 2.20 |
|
1.75 - 1.95 |
|
|
|
|
|
|
|
|
|
| Total DD&A |
|
$13.50 - $15.70 |
|
$12.75 - $13.95 |
|
|
| G&A - cash |
|
3.00 - 3.50 |
|
3.00 - 3.50 |
|
|
| G&A - stock |
|
0.50 - 0.75 |
|
0.50 - 0.75 |
|
|
|
|
|
|
|
|
|
| Total G&A |
|
$3.50 - $4.25 |
|
$3.50 - $4.25 |
|
|
|
|
|
|
| EBITDA from Oilfield Services and Other ($ in millions) (1) |
|
$10 |
|
$10 |
|
|
| Adjusted Net Income Attributable to Noncontrolling Interest ($ in millions)
(2) |
|
$60 |
|
$60 |
|
|
| Adjusted EBITDA Attributable to Noncontrolling Interest ($ in millions)
(3) |
|
$90 |
|
$90 |
|
|
|
|
|
|
| Capital Expenditures ($ in millions) |
|
|
|
|
|
|
| Exploration and Production |
|
$612 |
|
$612 |
|
|
| Land and Geophysical |
|
38 |
|
38 |
|
|
|
|
|
|
|
|
|
| Total Exploration and Production |
|
$650 |
|
$650 |
|
|
| Oil Field Services |
|
5 |
|
5 |
|
|
| Electrical/Midstream |
|
30 |
|
30 |
|
|
| General Corporate |
|
15 |
|
15 |
|
|
|
|
|
|
|
|
|
| Total Capital Expenditures (excluding acquisitions) |
|
$700 |
|
$700 |
|
|
| (1) |
EBITDA from Oilfield Services and Other is a non-GAAP financial measure as it excludes from net income interest expense, income tax expense and depreciation, depletion and amortization. The most directly comparable GAAP
measure for EBITDA from Oilfield Services and Other is Net Income from Oilfield Services and Other. Information to reconcile this non-GAAP financial measure to the most directly comparable GAAP financial measure is not available at this time, as
management is unable to forecast the excluded items for future periods and/or does not forecast the excluded items on a segment basis. |
| (2) |
Adjusted Net Income Attributable to Noncontrolling Interest is a non-GAAP financial measure as it excludes gain or loss due to changes in fair value of derivative
contracts and gain or loss on sale of assets. The most directly comparable GAAP measure for Adjusted Net Income Attributable to Noncontrolling Interest is Net Income Attributable to Noncontrolling Interest. Information to reconcile this non-GAAP
financial measure to the most directly comparable GAAP financial measure is not available at this time, as management is unable to forecast the excluded items for future periods. |
| (3) |
Adjusted EBITDA Attributable to Noncontrolling Interest is a non-GAAP financial measure as it excludes from net income interest expense, income tax expense,
depreciation, depletion and amortization, gain or loss due to changes in fair value of derivative contracts and gain or loss on sale of assets. The most directly comparable GAAP measure for Adjusted EBITDA Attributable to Noncontrolling Interest is
Net Income Attributable to Noncontrolling Interest. Information to reconcile this non-GAAP financial measure to the most directly comparable GAAP financial measure is not available at this time, as management is unable to forecast the excluded items
for future periods. |
8
Non-GAAP Financial Measures
Adjusted operating cash flow, adjusted EBITDA, pro forma adjusted EBITDA, adjusted net (loss) income, and adjusted net income attributable to noncontrolling
interest are non-GAAP financial measures.
The Company defines adjusted operating cash flow as net cash provided by operating activities before changes in
operating assets and liabilities and adjusted for cash paid on financing derivatives. It defines EBITDA as net loss before income tax expense (benefit), interest expense and depreciation, depletion and amortization and accretion of asset retirement
obligations. Adjusted EBITDA, as presented herein, is EBITDA excluding asset impairment, interest income, loss (gain) on derivative contracts net of cash received (paid) on settlement of derivative contracts, (gain) loss on sale of assets,
severance, oil field services – Permian exit costs, gain on extinguishment of debt and other various items (including non-cash portion of noncontrolling interest and stock-based compensation). Pro forma adjusted EBITDA, as presented herein, is
adjusted EBITDA excluding adjusted EBITDA attributable to properties or subsidiaries sold during the period.
Adjusted operating cash flow and adjusted
EBITDA are supplemental financial measures used by the Company’s management and by securities analysts, investors, lenders, rating agencies and others who follow the industry as an indicator of the Company’s ability to internally fund
exploration and development activities and to service or incur additional debt. The Company also uses these measures because adjusted operating cash flow and adjusted EBITDA relate to the timing of cash receipts and disbursements that the Company
may not control and may not relate to the period in which the operating activities occurred. Further, adjusted operating cash flow and adjusted EBITDA allow the Company to compare its operating performance and return on capital with those of other
companies without regard to financing methods and capital structure. These measures should not be considered in isolation or as a substitute for net cash provided by operating activities prepared in accordance with generally accepted accounting
principles (“GAAP”). Adjusted EBITDA should not be considered as a substitute for net income, operating income, cash flows from operating activities or any other measure of financial performance or liquidity presented in accordance with
GAAP. Adjusted EBITDA excludes some, but not all, items that affect net income and operating income and these measures may vary among other companies. Therefore, the Company’s adjusted EBITDA may not be comparable to similarly titled measures
used by other companies.
Management also uses the supplemental financial measure of adjusted net income, which excludes asset impairment, loss (gain) on
derivative contracts net of cash received (paid) on settlement of derivative contracts, (gain) loss on sale of assets, severance, oil field services – Permian exit costs, gain on extinguishment of debt and other non-cash items from loss
applicable to common stockholders. Management uses this financial measure as an indicator of the Company’s operational trends and performance relative to other oil and natural gas companies and believes it is more comparable to earnings
estimates provided by securities analysts. Adjusted net (loss) income is not a measure of financial performance under GAAP and should not be considered a substitute for loss applicable to common stockholders.
The supplemental measure of adjusted net income attributable to noncontrolling interest is used by the Company’s management to measure the impact on the
Company’s financial results of the ownership by third parties of interests in the Company’s less than wholly-owned consolidated subsidiaries. Adjusted net income attributable to noncontrolling interest excludes the portion of asset
impairment and loss (gain) on derivative contracts net of cash received (paid) on settlement of derivative contracts attributable to third party ownership in less than wholly-owned consolidated subsidiaries from net (loss) income attributable to
noncontrolling interest. Adjusted net income attributable to noncontrolling interest is not a measure of financial performance under GAAP and should not be considered a substitute for net (loss) income attributable to noncontrolling interest.
9
The tables below reconcile the most directly comparable GAAP financial measures to operating cash flow, EBITDA
and adjusted EBITDA, adjusted net (loss) income available to common stockholders and adjusted net income attributable to noncontrolling interest.
Reconciliation of Cash Provided by Operating Activities to Adjusted Operating Cash Flow
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Three Months Ended June, |
|
|
Six Months Ended June, |
|
| |
|
2015 |
|
|
2014 |
|
|
2015 |
|
|
2014 |
|
| |
|
(in thousands) |
|
|
|
|
|
|
| Net cash provided by operating activities |
|
$ |
228,899 |
|
|
$ |
140,341 |
|
|
$ |
318,994 |
|
|
$ |
230,792 |
|
|
|
|
|
|
| (Deduct) add |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Cash paid on financing derivatives |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(44,128 |
) |
| Changes in operating assets and liabilities |
|
|
(118,119 |
) |
|
|
38,587 |
|
|
|
(61,757 |
) |
|
|
119,734 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Adjusted operating cash flow |
|
$ |
110,780 |
|
|
$ |
178,928 |
|
|
$ |
257,237 |
|
|
$ |
306,398 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of Net Loss to EBITDA and Adjusted EBITDA
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Three Months Ended June, |
|
|
Six Months Ended June, |
|
| |
|
2015 |
|
|
2014 |
|
|
2015 |
|
|
2014 |
|
| |
|
(in thousands) |
|
|
|
|
|
|
| Net loss |
|
$ |
(1,368,482 |
) |
|
$ |
(32,894 |
) |
|
$ |
(2,403,435 |
) |
|
$ |
(169,230 |
) |
|
|
|
|
|
| Adjusted for |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Income tax expense (benefit) |
|
|
25 |
|
|
|
(1,194 |
) |
|
|
65 |
|
|
|
(1,067 |
) |
| Interest expense |
|
|
73,842 |
|
|
|
62,018 |
|
|
|
136,699 |
|
|
|
124,341 |
|
| Depreciation and amortization - other |
|
|
12,508 |
|
|
|
15,411 |
|
|
|
25,855 |
|
|
|
30,933 |
|
| Depreciation and depletion - oil and natural gas |
|
|
94,298 |
|
|
|
97,267 |
|
|
|
200,405 |
|
|
|
212,452 |
|
| Accretion of asset retirement obligations |
|
|
1,111 |
|
|
|
1,065 |
|
|
|
2,191 |
|
|
|
6,811 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| EBITDA |
|
|
(1,186,698 |
) |
|
|
141,673 |
|
|
|
(2,038,220 |
) |
|
|
204,240 |
|
|
|
|
|
|
| Asset impairment |
|
|
1,489,391 |
|
|
|
3,133 |
|
|
|
2,573,257 |
|
|
|
167,912 |
|
| Interest income |
|
|
(115 |
) |
|
|
(155 |
) |
|
|
(130 |
) |
|
|
(435 |
) |
| Stock-based compensation |
|
|
2,974 |
|
|
|
3,987 |
|
|
|
6,091 |
|
|
|
8,572 |
|
| Loss (gain) on derivative contracts |
|
|
33,004 |
|
|
|
85,292 |
|
|
|
(16,823 |
) |
|
|
127,783 |
|
| Cash received (paid) upon settlement of derivative contracts (1) |
|
|
74,366 |
|
|
|
(13,097 |
) |
|
|
211,323 |
|
|
|
(26,827 |
) |
| (Gain) loss on sale of assets |
|
|
(2,770 |
) |
|
|
36 |
|
|
|
(4,674 |
) |
|
|
17 |
|
| Severance |
|
|
7,562 |
|
|
|
813 |
|
|
|
10,529 |
|
|
|
8,922 |
|
| Oil field services - Permian exit costs |
|
|
711 |
|
|
|
— |
|
|
|
4,291 |
|
|
|
— |
|
| Gain on extinguishment of debt |
|
|
(17,934 |
) |
|
|
— |
|
|
|
(17,934 |
) |
|
|
— |
|
| Other |
|
|
1,390 |
|
|
|
(515 |
) |
|
|
2,613 |
|
|
|
(1,140 |
) |
| Non-cash portion of noncontrolling interest (2) |
|
|
(240,837 |
) |
|
|
(19,308 |
) |
|
|
(387,665 |
) |
|
|
(65,112 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Adjusted EBITDA |
|
$ |
161,044 |
|
|
$ |
201,859 |
|
|
$ |
342,658 |
|
|
$ |
423,932 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Less: EBITDA attributable to Gulf of Mexico properties |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(53,376 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Pro forma adjusted EBITDA |
|
$ |
161,044 |
|
|
$ |
201,859 |
|
|
$ |
342,658 |
|
|
$ |
370,556 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| (1) |
Excludes amounts paid upon early settlement of derivative contracts for the six months ended June 30, 2014. |
| (2) |
Represents depreciation and depletion, impairment, loss (gain) on commodity derivative contracts net of cash received (paid) on settlement and income tax expense attributable to noncontrolling interests.
|
10
Reconciliation of Cash Provided by Operating Activities to Adjusted EBITDA
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Three Months Ended June, |
|
|
Six Months Ended June, |
|
| |
|
2015 |
|
|
2014 |
|
|
2015 |
|
|
2014 |
|
| |
|
(in thousands) |
|
|
|
|
|
|
| Net cash provided by operating activities |
|
$ |
228,899 |
|
|
$ |
140,341 |
|
|
$ |
318,994 |
|
|
$ |
230,792 |
|
|
|
|
|
|
| Changes in operating assets and liabilities |
|
|
(118,119 |
) |
|
|
38,587 |
|
|
|
(61,757 |
) |
|
|
119,734 |
|
| Interest expense |
|
|
73,842 |
|
|
|
62,018 |
|
|
|
136,699 |
|
|
|
124,341 |
|
| Cash paid on early settlement of derivative contracts |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
25,434 |
|
| Severance |
|
|
3,451 |
|
|
|
521 |
|
|
|
5,848 |
|
|
|
6,943 |
|
| Oil field services - Permian exit costs |
|
|
634 |
|
|
|
— |
|
|
|
4,213 |
|
|
|
— |
|
| Noncontrolling interest - SDT (1) |
|
|
(5,932 |
) |
|
|
(5,154 |
) |
|
|
(12,618 |
) |
|
|
(11,691 |
) |
| Noncontrolling interest - SDR (1) |
|
|
(5,893 |
) |
|
|
(10,099 |
) |
|
|
(11,359 |
) |
|
|
(23,050 |
) |
| Noncontrolling interest - PER (1) |
|
|
(8,763 |
) |
|
|
(19,696 |
) |
|
|
(26,518 |
) |
|
|
(39,938 |
) |
| Noncontrolling interest - Other (1) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(4 |
) |
| Other |
|
|
(7,075 |
) |
|
|
(4,659 |
) |
|
|
(10,844 |
) |
|
|
(8,629 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Adjusted EBITDA |
|
$ |
161,044 |
|
|
$ |
201,859 |
|
|
$ |
342,658 |
|
|
$ |
423,932 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| (1) |
Excludes depreciation and depletion, impairment, loss (gain) on commodity derivative contracts net of cash received (paid) on settlement and income tax expense attributable to noncontrolling interests.
|
Reconciliation of Loss Applicable to Common Stockholders to Adjusted Net (Loss) Income Available to Common Stockholders
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Three Months Ended June, |
|
|
Six Months Ended June, |
|
| |
|
2015 |
|
|
2014 |
|
|
2015 |
|
|
2014 |
|
| |
|
(in thousands) |
|
|
|
|
|
|
| Loss applicable to common stockholders |
|
$ |
(1,375,556 |
) |
|
$ |
(46,775 |
) |
|
$ |
(2,421,390 |
) |
|
$ |
(196,993 |
) |
|
|
|
|
|
| Asset impairment(1) |
|
|
1,263,024 |
|
|
|
3,133 |
|
|
|
2,219,851 |
|
|
|
138,039 |
|
| Loss (gain) on derivative contracts(1) |
|
|
30,280 |
|
|
|
72,627 |
|
|
|
(15,488 |
) |
|
|
109,112 |
|
| Cash received (paid) upon settlement of derivative contracts (1) |
|
|
68,979 |
|
|
|
(9,778 |
) |
|
|
189,323 |
|
|
|
(22,580 |
) |
| (Gain) loss on sale of assets |
|
|
(2,770 |
) |
|
|
36 |
|
|
|
(4,674 |
) |
|
|
17 |
|
| Severance |
|
|
7,562 |
|
|
|
813 |
|
|
|
10,529 |
|
|
|
8,922 |
|
| Oil field services - Permian exit costs |
|
|
711 |
|
|
|
— |
|
|
|
4,291 |
|
|
|
— |
|
| Gain on extinguishment of debt |
|
|
(17,934 |
) |
|
|
— |
|
|
|
(17,934 |
) |
|
|
— |
|
| Other |
|
|
848 |
|
|
|
(285 |
) |
|
|
1,981 |
|
|
|
(1,250 |
) |
| Effect of income taxes |
|
|
21 |
|
|
|
(7,953 |
) |
|
|
57 |
|
|
|
(1,722 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Adjusted net (loss) income available to common stockholders |
|
|
(24,835 |
) |
|
|
11,818 |
|
|
|
(33,454 |
) |
|
|
33,545 |
|
| Preferred stock dividends |
|
|
7,074 |
|
|
|
13,881 |
|
|
|
17,955 |
|
|
|
27,763 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Total adjusted net (loss) income |
|
$ |
(17,761 |
) |
|
$ |
25,699 |
|
|
$ |
(15,499 |
) |
|
$ |
61,308 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Weighted average number of common shares outstanding |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Basic |
|
|
495,153 |
|
|
|
485,318 |
|
|
|
486,704 |
|
|
|
485,059 |
|
| Diluted (2) |
|
|
566,863 |
|
|
|
577,412 |
|
|
|
558,414 |
|
|
|
577,789 |
|
|
|
|
|
|
| Total adjusted net (loss) income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Per share - basic |
|
$ |
(0.05 |
) |
|
$ |
0.02 |
|
|
$ |
(0.07 |
) |
|
$ |
0.07 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Per share - diluted |
|
$ |
(0.03 |
) |
|
$ |
0.04 |
|
|
$ |
(0.03 |
) |
|
$ |
0.11 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| (1) |
Excludes amounts attributable to noncontrolling interests. |
| (2) |
Weighted average diluted common shares outstanding for certain periods presented includes shares that are considered antidilutive for calculating earnings per share in accordance with GAAP. |
11
Reconciliation of Net (Loss) Income Attributable to Noncontrolling Interest to Adjusted Net
Income Attributable to Noncontrolling Interest
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Three Months Ended June, |
|
|
Six Months Ended June, |
|
| |
|
2015 |
|
|
2014 |
|
|
2015 |
|
|
2014 |
|
| |
|
(in thousands) |
|
|
|
|
|
|
| Net (loss) income attributable to noncontrolling interest |
|
$ |
(220,249 |
) |
|
$ |
15,642 |
|
|
$ |
(337,170 |
) |
|
$ |
9,572 |
|
|
|
|
|
|
| Asset impairment |
|
|
226,367 |
|
|
|
— |
|
|
|
353,406 |
|
|
|
29,873 |
|
| Loss (gain) on derivative contracts |
|
|
2,724 |
|
|
|
12,665 |
|
|
|
(1,335 |
) |
|
|
18,671 |
|
| Cash received (paid) on settlement of derivative contracts |
|
|
5,387 |
|
|
|
(3,319 |
) |
|
|
22,000 |
|
|
|
(4,247 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Adjusted net income attributable to noncontrolling interest |
|
$ |
14,229 |
|
|
$ |
24,988 |
|
|
$ |
36,901 |
|
|
$ |
53,869 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
12
Conference Call Information
The Company will host a conference call to discuss these results on Thursday, August 6, 2015 at 8:00 am CT. The telephone number to access the conference
call from within the U.S. is (877) 201-0168 and from outside the U.S. is (647) 788-4901. The passcode for the call is 48621691. An audio replay of the call will be available from August 6, 2015 until 11:59 pm CT on September 5,
2015. The number to access the conference call replay from within the U.S. is (855) 859-2056 and from outside the U.S. is (404) 537-3406. The passcode for the replay is 48621691.
A live audio webcast of the conference call will also be available via SandRidge’s website, www.sandridgeenergy.com, under Investor
Relations/Presentations & Events. The webcast will be archived for replay on the Company’s website for 30 days.
Third Quarter 2015
Earnings Release and Conference Call
November 4, 2015 (Wednesday) – Earnings press release after market close
November 5, 2015 (Thursday) – Earnings conference call at 8:00 am CT
13
SandRidge Energy, Inc. and Subsidiaries
Condensed Consolidated Statements of Operations
(In thousands, except per share data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Three Months Ended June 30, |
|
|
Six Months Ended June 30, |
|
| |
|
2015 |
|
|
2014 |
|
|
2015 |
|
|
2014 |
|
| |
|
(unaudited) |
|
|
|
|
|
|
| Revenues |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Oil, natural gas and NGL |
|
$ |
214,532 |
|
|
$ |
339,906 |
|
|
$ |
410,264 |
|
|
$ |
745,222 |
|
| Drilling and services |
|
|
5,241 |
|
|
|
18,852 |
|
|
|
15,086 |
|
|
|
35,932 |
|
| Midstream and marketing |
|
|
8,606 |
|
|
|
14,874 |
|
|
|
17,370 |
|
|
|
32,784 |
|
| Other |
|
|
1,228 |
|
|
|
1,082 |
|
|
|
2,195 |
|
|
|
3,832 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Total revenues |
|
|
229,607 |
|
|
|
374,714 |
|
|
|
444,915 |
|
|
|
817,770 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Production |
|
|
81,776 |
|
|
|
66,953 |
|
|
|
171,274 |
|
|
|
173,809 |
|
| Production taxes |
|
|
4,382 |
|
|
|
7,840 |
|
|
|
8,896 |
|
|
|
15,647 |
|
| Cost of sales |
|
|
4,884 |
|
|
|
10,469 |
|
|
|
17,711 |
|
|
|
22,950 |
|
| Midstream and marketing |
|
|
7,724 |
|
|
|
13,254 |
|
|
|
15,831 |
|
|
|
29,254 |
|
| Depreciation and depletion - oil and natural gas |
|
|
94,298 |
|
|
|
97,267 |
|
|
|
200,405 |
|
|
|
212,452 |
|
| Depreciation and amortization - other |
|
|
12,508 |
|
|
|
15,411 |
|
|
|
25,855 |
|
|
|
30,933 |
|
| Accretion of asset retirement obligations |
|
|
1,111 |
|
|
|
1,065 |
|
|
|
2,191 |
|
|
|
6,811 |
|
| Impairment |
|
|
1,489,391 |
|
|
|
3,133 |
|
|
|
2,573,257 |
|
|
|
167,912 |
|
| General and administrative |
|
|
38,382 |
|
|
|
31,915 |
|
|
|
74,531 |
|
|
|
70,453 |
|
| Loss (gain) on derivative contracts |
|
|
33,004 |
|
|
|
85,292 |
|
|
|
(16,823 |
) |
|
|
127,783 |
|
| (Gain) loss on sale of assets |
|
|
(2,770 |
) |
|
|
36 |
|
|
|
(4,674 |
) |
|
|
17 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Total expenses |
|
|
1,764,690 |
|
|
|
332,635 |
|
|
|
3,068,454 |
|
|
|
858,021 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| (Loss) income from operations |
|
|
(1,535,083 |
) |
|
|
42,079 |
|
|
|
(2,623,539 |
) |
|
|
(40,251 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Other (expense) income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Interest expense |
|
|
(73,727 |
) |
|
|
(61,863 |
) |
|
|
(136,569 |
) |
|
|
(123,906 |
) |
| Gain on extinguishment of debt |
|
|
17,934 |
|
|
|
— |
|
|
|
17,934 |
|
|
|
— |
|
| Other income, net |
|
|
2,170 |
|
|
|
1,338 |
|
|
|
1,634 |
|
|
|
3,432 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Total other expense |
|
|
(53,623 |
) |
|
|
(60,525 |
) |
|
|
(117,001 |
) |
|
|
(120,474 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Loss before income taxes |
|
|
(1,588,706 |
) |
|
|
(18,446 |
) |
|
|
(2,740,540 |
) |
|
|
(160,725 |
) |
| Income tax expense (benefit) |
|
|
25 |
|
|
|
(1,194 |
) |
|
|
65 |
|
|
|
(1,067 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Net loss |
|
|
(1,588,731 |
) |
|
|
(17,252 |
) |
|
|
(2,740,605 |
) |
|
|
(159,658 |
) |
| Less: net (loss) income attributable to noncontrolling interest |
|
|
(220,249 |
) |
|
|
15,642 |
|
|
|
(337,170 |
) |
|
|
9,572 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Net loss attributable to SandRidge Energy, Inc. |
|
|
(1,368,482 |
) |
|
|
(32,894 |
) |
|
|
(2,403,435 |
) |
|
|
(169,230 |
) |
| Preferred stock dividends |
|
|
7,074 |
|
|
|
13,881 |
|
|
|
17,955 |
|
|
|
27,763 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Loss applicable to SandRidge Energy, Inc. common stockholders |
|
$ |
(1,375,556 |
) |
|
$ |
(46,775 |
) |
|
$ |
(2,421,390 |
) |
|
$ |
(196,993 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Loss per share |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Basic |
|
$ |
(2.78 |
) |
|
$ |
(0.10 |
) |
|
$ |
(4.98 |
) |
|
$ |
(0.41 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Diluted |
|
$ |
(2.78 |
) |
|
$ |
(0.10 |
) |
|
$ |
(4.98 |
) |
|
$ |
(0.41 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Weighted average number of common shares outstanding |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Basic |
|
|
495,153 |
|
|
|
485,318 |
|
|
|
486,704 |
|
|
|
485,059 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Diluted |
|
|
495,153 |
|
|
|
485,318 |
|
|
|
486,704 |
|
|
|
485,059 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
14
SandRidge Energy, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
(In thousands, except per share data)
|
|
|
|
|
|
|
|
|
| |
|
June 30,
2015 |
|
|
December 31,
2014 |
|
| |
|
(unaudited) |
|
| ASSETS |
|
|
|
|
|
|
|
|
| Current assets |
|
|
|
|
|
|
|
|
| Cash and cash equivalents |
|
$ |
983,617 |
|
|
$ |
181,253 |
|
| Accounts receivable, net |
|
|
237,720 |
|
|
|
330,077 |
|
| Derivative contracts |
|
|
120,575 |
|
|
|
291,414 |
|
| Prepaid expenses |
|
|
9,938 |
|
|
|
7,981 |
|
| Other current assets |
|
|
25,985 |
|
|
|
21,193 |
|
|
|
|
|
|
|
|
|
|
| Total current assets |
|
|
1,377,835 |
|
|
|
831,918 |
|
|
|
|
|
|
|
|
|
|
| Oil and natural gas properties, using full cost method of accounting |
|
|
|
|
|
|
|
|
| Proved |
|
|
12,199,049 |
|
|
|
11,707,147 |
|
| Unproved |
|
|
261,657 |
|
|
|
290,596 |
|
| Less: accumulated depreciation, depletion and impairment |
|
|
(9,131,153 |
) |
|
|
(6,359,149 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
3,329,553 |
|
|
|
5,638,594 |
|
|
|
|
|
|
|
|
|
|
| Other property, plant and equipment, net |
|
|
556,848 |
|
|
|
576,463 |
|
| Derivative contracts |
|
|
23,470 |
|
|
|
47,003 |
|
| Other assets |
|
|
147,342 |
|
|
|
165,247 |
|
|
|
|
|
|
|
|
|
|
| Total assets |
|
$ |
5,435,048 |
|
|
$ |
7,259,225 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| LIABILITIES AND EQUITY |
|
|
|
|
|
|
|
|
| Current liabilities |
|
|
|
|
|
|
|
|
| Accounts payable and accrued expenses |
|
$ |
494,675 |
|
|
$ |
683,392 |
|
| Derivative contracts |
|
|
102 |
|
|
|
— |
|
| Deferred tax liability |
|
|
52,763 |
|
|
|
95,843 |
|
| Other current liabilities |
|
|
3,791 |
|
|
|
5,216 |
|
|
|
|
|
|
|
|
|
|
| Total current liabilities |
|
|
551,331 |
|
|
|
784,451 |
|
| Long-term debt |
|
|
4,395,639 |
|
|
|
3,195,436 |
|
| Derivative contracts |
|
|
26 |
|
|
|
— |
|
| Asset retirement obligations |
|
|
57,084 |
|
|
|
54,402 |
|
| Other long-term obligations |
|
|
15,396 |
|
|
|
15,116 |
|
|
|
|
|
|
|
|
|
|
| Total liabilities |
|
|
5,019,476 |
|
|
|
4,049,405 |
|
|
|
|
|
|
|
|
|
|
| Commitments and contingencies |
|
|
|
|
|
|
|
|
| Equity |
|
|
|
|
|
|
|
|
| SandRidge Energy, Inc. stockholders’ equity |
|
|
|
|
|
|
|
|
| Preferred stock, $0.001 par value, 50,000 shares authorized |
|
|
|
|
|
|
|
|
| 8.5% Convertible perpetual preferred stock; 2,650 shares issued and outstanding at June 30, 2015 and December 31, 2014;
aggregate liquidation preference of $265,000 |
|
|
3 |
|
|
|
3 |
|
| 7.0% Convertible perpetual preferred stock; 3,000 shares issued and outstanding at June 30, 2015 and December 31, 2014;
aggregate liquidation preference of $300,000 |
|
|
3 |
|
|
|
3 |
|
| Common stock, $0.001 par value; 1,800,000 shares authorized, 519,269 issued and 517,958 outstanding at June 30, 2015; 800,000
shares authorized, 485,932 issued and 484,819 outstanding at December 31, 2014 |
|
|
514 |
|
|
|
477 |
|
| Additional paid-in capital |
|
|
5,252,785 |
|
|
|
5,204,024 |
|
| Additional paid-in capital - stockholder receivable |
|
|
(2,500 |
) |
|
|
(2,500 |
) |
| Treasury stock, at cost |
|
|
(6,776 |
) |
|
|
(6,980 |
) |
| Accumulated deficit |
|
|
(5,678,592 |
) |
|
|
(3,257,202 |
) |
|
|
|
|
|
|
|
|
|
| Total SandRidge Energy, Inc. stockholders’ equity |
|
|
(434,563 |
) |
|
|
1,937,825 |
|
| Noncontrolling interest |
|
|
850,135 |
|
|
|
1,271,995 |
|
|
|
|
|
|
|
|
|
|
| Total equity |
|
|
415,572 |
|
|
|
3,209,820 |
|
|
|
|
|
|
|
|
|
|
| Total liabilities and equity |
|
$ |
5,435,048 |
|
|
$ |
7,259,225 |
|
|
|
|
|
|
|
|
|
|
15
SandRidge Energy, Inc. and Subsidiaries
Condensed Consolidated Statements of Cash Flows
(In thousands)
|
|
|
|
|
|
|
|
|
| |
|
Six Months Ended June 30, |
|
| |
|
2015 |
|
|
2014 |
|
| |
|
(unaudited) |
|
| CASH FLOWS FROM OPERATING ACTIVITIES |
|
|
|
|
|
|
|
|
| Net loss |
|
$ |
(2,740,605 |
) |
|
$ |
(159,658 |
) |
| Adjustments to reconcile net loss to net cash provided by operating activities |
|
|
|
|
|
|
|
|
| Depreciation, depletion and amortization |
|
|
226,260 |
|
|
|
243,385 |
|
| Accretion of asset retirement obligations |
|
|
2,191 |
|
|
|
6,811 |
|
| Impairment |
|
|
2,573,257 |
|
|
|
167,912 |
|
| Debt issuance costs amortization |
|
|
4,636 |
|
|
|
4,703 |
|
| Amortization of discount, net of premium, on long-term debt |
|
|
285 |
|
|
|
258 |
|
| Gain on extinguishment of debt |
|
|
(17,934 |
) |
|
|
— |
|
| Write off of debt issuance costs |
|
|
7,108 |
|
|
|
— |
|
| (Gain) loss on derivative contracts |
|
|
(16,823 |
) |
|
|
127,783 |
|
| Cash received (paid) on settlement of derivative contracts |
|
|
211,323 |
|
|
|
(52,261 |
) |
| (Gain) loss on sale of assets |
|
|
(4,674 |
) |
|
|
17 |
|
| Stock-based compensation |
|
|
11,533 |
|
|
|
11,625 |
|
| Other |
|
|
680 |
|
|
|
(49 |
) |
| Changes in operating assets and liabilities |
|
|
61,757 |
|
|
|
(119,734 |
) |
|
|
|
|
|
|
|
|
|
| Net cash provided by operating activities |
|
|
318,994 |
|
|
|
230,792 |
|
|
|
|
|
|
|
|
|
|
| CASH FLOWS FROM INVESTING ACTIVITIES |
|
|
|
|
|
|
|
|
| Capital expenditures for property, plant and equipment |
|
|
(636,822 |
) |
|
|
(656,699 |
) |
| Acquisitions of assets |
|
|
(3,475 |
) |
|
|
(16,553 |
) |
| Proceeds from sale of assets |
|
|
11,462 |
|
|
|
707,799 |
|
|
|
|
|
|
|
|
|
|
| Net cash (used in) provided by investing activities |
|
|
(628,835 |
) |
|
|
34,547 |
|
|
|
|
|
|
|
|
|
|
| CASH FLOWS FROM FINANCING ACTIVITIES |
|
|
|
|
|
|
|
|
| Proceeds from borrowings |
|
|
2,190,000 |
|
|
|
— |
|
| Repayments of borrowings |
|
|
(940,000 |
) |
|
|
— |
|
| Debt issuance costs |
|
|
(39,129 |
) |
|
|
— |
|
| Proceeds from the sale of royalty trust units |
|
|
— |
|
|
|
22,119 |
|
| Noncontrolling interest distributions |
|
|
(84,690 |
) |
|
|
(103,142 |
) |
| Acquisition of ownership interest |
|
|
— |
|
|
|
(2,730 |
) |
| Stock-based compensation excess tax benefit |
|
|
— |
|
|
|
2 |
|
| Purchase of treasury stock |
|
|
(2,714 |
) |
|
|
(5,602 |
) |
| Dividends paid - preferred |
|
|
(11,262 |
) |
|
|
(27,763 |
) |
| Cash paid on settlement of financing derivative contracts |
|
|
— |
|
|
|
(44,128 |
) |
|
|
|
|
|
|
|
|
|
| Net cash provided by (used in) financing activities |
|
|
1,112,205 |
|
|
|
(161,244 |
) |
|
|
|
|
|
|
|
|
|
| NET INCREASE IN CASH AND CASH EQUIVALENTS |
|
|
802,364 |
|
|
|
104,095 |
|
| CASH AND CASH EQUIVALENTS, beginning of year |
|
|
181,253 |
|
|
|
814,663 |
|
|
|
|
|
|
|
|
|
|
| CASH AND CASH EQUIVALENTS, end of period |
|
$ |
983,617 |
|
|
$ |
918,758 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Supplemental Disclosure of Cash Flow Information |
|
|
|
|
|
|
|
|
| Cash paid for interest, net of amounts capitalized |
|
$ |
(177,245 |
) |
|
$ |
(120,339 |
) |
| Cash paid for income taxes |
|
$ |
(95 |
) |
|
$ |
(1,932 |
) |
|
|
|
| Supplemental Disclosure of Noncash Investing and Financing Activities |
|
|
|
|
|
|
|
|
| Change in accrued capital expenditures |
|
$ |
149,066 |
|
|
$ |
3,989 |
|
| Equity issued for debt exchange |
|
$ |
(31,396 |
) |
|
$ |
— |
|
| Preferred stock dividends paid in common stock |
|
$ |
(6,693 |
) |
|
$ |
— |
|
16
For further information, please contact:
Duane M. Grubert
EVP – Investor Relations and Strategy
SandRidge Energy, Inc.
123 Robert S. Kerr Avenue
Oklahoma City, OK 73102-6406
(405) 429-5515
Cautionary Note to Investors - This press release includes “forward-looking statements” within the meaning of Section 27A of the Securities
Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, including, but not limited to, the information appearing under the heading “Operational Guidance.” These statements express a belief,
expectation or intention and are generally accompanied by words that convey projected future events or outcomes. The forward-looking statements include projections and estimates of the Company’s corporate strategies, future operations, net
income and EBITDA, drilling plans, oil, and natural gas and natural gas liquids production, price realizations and differentials, operating, general and administrative and other costs, capital expenditures, tax rates, efficiency and cost reduction
initiative outcomes, infrastructure utilization and investment, and development plans and appraisal programs. We have based these forward-looking statements on our current expectations and assumptions and analyses made by us in light of our
experience and our perception of historical trends, current conditions and expected future developments, as well as other factors we believe are appropriate under the circumstances. However, whether actual results and developments will conform with
our expectations and predictions is subject to a number of risks and uncertainties, including the volatility of oil and natural gas prices, our success in discovering, estimating, developing and replacing oil and natural gas reserves, actual decline
curves and the actual effect of adding compression to natural gas wells, the availability and terms of capital, the ability of counterparties to transactions with us to meet their obligations, our timely execution of hedge transactions, credit
conditions of global capital markets, changes in economic conditions, the amount and timing of future development costs, the availability and demand for alternative energy sources, regulatory changes, including those related to carbon dioxide and
greenhouse gas emissions, and other factors, many of which are beyond our control. We refer you to the discussion of risk factors in Part I, Item 1A - “Risk Factors” of our Annual Report on Form 10-K for the year ended
December 31, 2014. All of the forward-looking statements made in this press release are qualified by these cautionary statements. The actual results or developments anticipated may not be realized or, even if substantially realized, they may
not have the expected consequences to or effects on our Company or our business or operations. Such statements are not guarantees of future performance and actual results or developments may differ materially from those projected in the
forward-looking statements. We undertake no obligation to update or revise any forward-looking statements.
SandRidge Energy, Inc. (NYSE: SD) is an
oil and natural gas exploration and production company headquartered in Oklahoma City, Oklahoma with its principal focus on developing high-return, growth-oriented projects in the Mid-Continent region of the United States. In addition, SandRidge
owns and operates a saltwater gathering and disposal system and a drilling rig and related oil field services business.
17