OKLAHOMA CITY, May 6, 2015 /PRNewswire/ -- SandRidge
Energy, Inc. (NYSE: SD) today announced financial and operational
results for the quarter ended March 31,
2015. Additionally, presentation slides will be available on
the Company's website, www.sandridgeenergy.com, under Investor
Relations/Events at 7 am EDT on
May 7.
SandRidge produced 7.9 MMBoe in the first quarter of 2015, 50%
crude oil/natural gas liquids. First quarter production averaged
87.7 MBoepd. This represents a 1% decrease in average daily
production versus the full fourth quarter of 2014.
Cost improvement initiatives including vendor cost reductions,
durable process efficiencies, and increased use of multilateral
well designs, resulted in an estimated $2.7
million per lateral cost in the first quarter of 2015. The
Company is on track to achieve the $2.4
million per lateral target in the second half of 2015. These
well costs preserve attractive economics exceeding those
experienced with higher oil prices and costs during 2014.
"We continue to reduce activity as we wind down from a rig count
of 35 at the close of 2014 to an average of seven rigs in the back
half of 2015. While we had capital expenditures of $322 million in the first quarter, we are
reducing spending sharply in the second half of this year in line
with our guidance of $700 million.
This fiscal discipline coupled with operational efficiency gains
provide options to improve our balance sheet as we actively
evaluate alternatives to bring our cash generation and debt levels
in line," said James Bennett,
SandRidge's Chief Executive Officer and President.
"Our operational teams continue to execute by maintaining our
cost leadership in the Mid-Continent, bringing wells online with
initial production rates that exceed our type curve and by further
improving our innovative multilateral programs," Bennett continued.
"We are also excited to welcome strong, new operational leaders to
our team who will continue to push the envelope on cost reductions,
operational efficiencies and innovation."
Key Financial Results
- Adjusted EBITDA, net of Noncontrolling Interest, was
$182 million for first quarter 2015
compared to $169 million in first
quarter 2014, pro forma for divestitures
- Adjusted operating cash flow of $146
million for first quarter 2015 compared to $127 million in first quarter 2014
- Adjusted net income of $2.3
million, or $0.00 per diluted
share, for first quarter 2015 compared to adjusted net income of
$29.5 million, or $0.05 per diluted share, in first quarter
2014
Adjusted net 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 first quarter with $725
million in liquidity and a senior secured leverage ratio of
0.22 times (senior secured debt/LTM pro
forma EBITDA)
- 100% hedged on remaining projected 2015 oil volumes,
$60 WTI for remainder of 2015
realizes $82.79 per barrel
- Mark-to-market hedge position of $251
million as of March 31,
2015
- Incurred a non-cash impairment charge of approximately
$1.1 billion due to a ceiling test
write-down, resulting from significant decreases in oil prices
beginning in the latter half of 2014 and continuing into 2015
Operational Highlights
Steve Turk, SandRidge's Chief
Operating Officer noted, "I'm excited about the pace of our
material cost reduction realizations. In the quarter, the
operational teams have already realized $350,000 of our $600,000 per lateral cost reduction target
through a combination of service contract negotiations, durable
operational efficiencies and increased multilateral drilling. We're
now drilling laterals for an estimated $2.7
million and see no obstacles in attaining a $2.4 million per lateral cost in the second half
of the year. A specific example of continuous improvement with
durable benefits is the six day reduction in spud to rig release
cycle times, now down to just fourteen days. We are also expanding
our successful multilateral development learnings to two-mile long
laterals and are seeing early encouraging results. Our Chester
program added six new wells during the quarter with an average
30-day IP of 452 Boepd and a 48% oil cut, with significant running
room. We are on target to meet our production guidance for the
year while improving efficiency and expanding our
play."
- Now running seven rigs to drill producing wells vs 35 rigs at
year end 2014 (which included four rigs drilling saltwater disposal
wells)
- First quarter Mid-Continent lateral 30-day IP rates of 402
Boepd, 52% oil, 115% of type curve
- Multilateral program now delivering an average of 106% of the
90-day cumulative type curve Boe production
Drilling and Operational Activities
Mid-Continent: During the first quarter of 2015,
SandRidge drilled 116 laterals. The Company averaged 24 horizontal
rigs operating in the play. The Company's Mid-Continent assets
produced 76.2 MBoepd during the first quarter (33% Oil, 18% NGLs,
49% Natural Gas).
Permian Basin: During the first quarter, SandRidge's
Permian properties produced approximately 4.7 MBoepd (87% Oil, 8%
NGLs, 5% Natural Gas).
Other Operating Areas: During the first quarter,
SandRidge's legacy west Texas
properties produced approximately 5.4 MBoepd (1% Oil, 99% Natural
Gas). Additionally, its legacy Mid-Continent assets produced 1.5
MBoepd in the quarter (13% Oil, 16% NGLs, 71% Natural Gas).
Royalty Trust: As of March 31,
2015, the Company had fulfilled its drilling obligation to
the SandRidge Mississippian Trust II (SDR) by drilling and
completing 206 equivalent Trust Development Wells. Completing the
obligation to SDR marks the conclusion of all drilling obligations
on the part of SandRidge to the three Company sponsored royalty
trusts.
Operational and Financial Statistics
Information regarding the Company's production, pricing, costs
and earnings is presented below:
|
|
|
Three Months Ended
March 31,
|
|
|
|
2015
|
|
2014
|
Production
|
|
|
|
|
Oil (MBbl)
|
|
2,651
|
|
2,885
|
NGL (MBbl)
|
|
1,288
|
|
642
|
Natural gas
(MMcf)
|
|
23,733
|
|
21,593
|
Oil equivalent
(MBoe)
|
|
7,895
|
|
7,126
|
Daily production
(MBoed)
|
|
87.7
|
|
79.2
|
|
|
|
|
|
|
Average price per
unit
|
|
|
|
|
Realized oil price
per barrel - as reported
|
|
$ 45.35
|
|
$ 97.03
|
Realized impact of
derivatives per barrel
|
|
42.88
|
|
(1.17)
|
Net realized price
per barrel
|
|
$ 88.23
|
|
$ 95.86
|
|
|
|
|
|
|
Realized NGL price
per barrel - as reported
|
|
$ 14.71
|
|
$ 42.97
|
Realized impact of
derivatives per barrel
|
|
0.00
|
|
0.00
|
Net realized price
per barrel
|
|
$ 14.71
|
|
$ 42.97
|
|
|
|
|
|
|
Realized natural gas
price per Mcf - as reported
|
|
$ 2.38
|
|
$ 4.53
|
Realized impact of
derivatives per Mcf
|
|
0.98
|
|
(0.48)
|
Net realized price
per Mcf
|
|
$ 3.36
|
|
$ 4.05
|
|
|
|
|
|
|
Realized price per
Boe - as reported
|
|
$ 24.79
|
|
$ 56.87
|
Net realized price
per Boe - including impact of derivatives
|
|
$ 42.14
|
|
$ 54.95
|
|
|
|
|
|
|
Average cost per
Boe
|
|
|
|
|
Lease
operating
|
|
$ 11.34
|
|
$ 15.00
|
Production
taxes
|
|
0.57
|
|
1.10
|
|
|
|
|
|
|
General and
administrative
|
|
|
|
|
|
General and
administrative, excluding stock-based compensation
|
|
$ 4.07
|
|
$ 4.46
|
|
Stock-based
compensation (1)
|
|
0.51
|
|
0.95
|
|
Total general and
administrative
|
|
$ 4.58
|
|
$ 5.41
|
|
|
|
|
|
|
General and
administrative - adjusted
|
|
|
|
|
|
General and
administrative, excluding stock-based compensation
(2)
|
|
$ 3.53
|
|
$ 3.53
|
|
Stock-based
compensation (1)(3)
|
|
0.44
|
|
0.72
|
|
Total general and
administrative - adjusted
|
|
$ 3.97
|
|
$ 4.25
|
|
|
|
|
|
|
Depletion
(4)
|
|
$ 13.58
|
|
$ 16.97
|
|
|
|
|
|
|
Lease operating
cost per Boe
|
|
|
|
|
Mid-Continent
|
|
$ 8.35
|
|
$ 8.81
|
|
|
|
|
|
|
Earnings per
share
|
|
|
|
|
Loss per share
applicable to common stockholders
|
|
|
|
|
|
Basic
|
|
$ (2.19)
|
|
$ (0.31)
|
|
Diluted
|
|
$ (2.19)
|
|
$ (0.31)
|
|
|
|
|
|
|
Adjusted net (loss)
income per share available to common stockholders
|
|
|
|
|
|
Basic
|
|
$ (0.02)
|
|
$ 0.03
|
|
Diluted
|
|
$ 0.00
|
|
$ 0.05
|
|
|
|
|
|
|
Weighted average
number of common shares outstanding (in thousands)
|
|
|
|
|
|
Basic
|
|
478,165
|
|
484,798
|
|
Diluted
(5)
|
|
549,875
|
|
575,949
|
|
|
(1)
|
Expense for
equity-classified stock-based awards.
|
(2)
|
Excludes severance
and stockholder litigation costs totaling approximately $4.2
million and $6.6 million for the three-month periods ended March
31, 2015 and 2014, respectively.
|
(3)
|
Three-month periods
ended March 31, 2015 and 2014 exclude $0.6 million and $1.7
million, respectively, for the acceleration of certain stock
awards.
|
(4)
|
Includes accretion of
asset retirement obligation.
|
(5)
|
Includes shares
considered antidilutive for calculating earnings per share in
accordance with GAAP for certain periods presented.
|
Capital Expenditures
The table below summarizes the Company's capital expenditures
for the three-month period ended March 31,
2015 and 2014:
|
|
|
Three Months Ended
March 31,
|
|
|
|
2015
|
|
2014
|
|
|
|
(in
thousands)
|
|
|
|
|
|
|
Drilling and
production
|
|
|
|
|
|
Mid-Continent
|
|
$277,941
|
|
$165,851
|
|
Permian
Basin
|
|
2,958
|
|
42,192
|
|
Gulf of Mexico/Gulf
Coast
|
|
-
|
|
22,975
|
|
|
|
280,899
|
|
231,018
|
Leasehold and
geophysical
|
|
|
|
|
|
Mid-Continent
|
|
24,292
|
|
26,592
|
|
Permian
Basin
|
|
52
|
|
116
|
|
Gulf of Mexico/Gulf
Coast
|
|
-
|
|
159
|
|
Other
|
|
2,748
|
|
3,255
|
|
|
|
27,092
|
|
30,122
|
|
|
|
|
|
|
Inventory
|
|
(5,930)
|
|
3,073
|
|
|
|
|
|
|
Total exploration and
development
|
|
302,061
|
|
264,213
|
|
|
|
|
|
|
Drilling and oil
field services
|
|
1,875
|
|
620
|
Midstream
|
|
8,432
|
|
5,957
|
Other -
general
|
|
7,823
|
|
4,982
|
|
|
|
|
|
|
Total capital
expenditures, excluding acquisitions
|
|
320,191
|
|
275,772
|
|
|
|
|
|
|
Acquisitions
|
|
1,738
|
|
2,352
|
|
|
|
|
|
|
Total capital
expenditures
|
|
$321,929
|
|
$278,124
|
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 May 6, 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)
|
|
|
|
|
|
Balance Sheet
The Company's capital structure at March
31, 2015 and December 31, 2014
is presented below:
|
|
March 31,
|
|
December 31,
|
|
2015
|
|
2014
|
|
|
|
|
|
(in
thousands)
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$ 11,821
|
|
$ 181,253
|
|
|
|
|
|
|
|
|
Long-term debt (net
of current maturities)
|
|
|
|
|
|
Senior credit
facility
|
|
$ 175,000
|
|
$
-
|
|
Senior
Notes
|
|
|
|
|
|
|
8.75% Senior Notes
due 2020, net
|
|
445,580
|
|
445,402
|
|
|
7.5% Senior Notes due
2021
|
|
1,178,372
|
|
1,178,486
|
|
|
8.125% Senior Notes
due 2022
|
|
750,000
|
|
750,000
|
|
|
7.5% Senior Notes due
2023, net
|
|
821,626
|
|
821,548
|
|
|
Total
debt
|
|
3,370,578
|
|
3,195,436
|
|
|
|
|
|
|
|
|
Stockholders'
equity
|
|
|
|
|
|
Preferred
stock
|
|
6
|
|
6
|
|
Common
stock
|
|
479
|
|
477
|
|
Additional paid-in
capital
|
|
5,205,388
|
|
5,201,524
|
|
Treasury stock, at
cost
|
|
(7,278)
|
|
(6,980)
|
|
Accumulated
deficit
|
|
(4,303,036)
|
|
(3,257,202)
|
|
|
Total SandRidge
Energy, Inc. stockholders' equity
|
|
895,559
|
|
1,937,825
|
|
|
|
|
|
|
|
|
|
Noncontrolling
interest
|
|
1,111,358
|
|
1,271,995
|
|
|
|
|
|
|
|
|
Total
capitalization
|
|
$5,377,495
|
|
$ 6,405,256
|
During the first quarter of 2015, the Company's debt, net of
cash balances, increased by approximately $345 million as a result of funding the Company's
drilling program. On March
31st, the Company had $175
million drawn under its $900
million senior credit facility. The Company was in
compliance with all applicable covenants contained in its debt
instruments during the first quarter and through and as of the date
of this release.
2015 Operational Guidance
The Company is updating its 2015 guidance to reflect a lower
DD&A projection in conjunction with its first quarter 2015
ceiling test write-down. Additional 2015 Guidance detail is
available on the Company's website, www.sandridgeenergy.com, under
Investor Relations/Guidance.
|
|
Projection as of
|
|
Projection as of
|
|
May 6, 2015
|
|
February 26, 2015
|
Production
|
|
|
|
|
Oil
(MMBbls)
|
9.0 - 10.0
|
|
9.0 - 10.0
|
|
Natural Gas Liquids
(MMBbls)
|
4.0 - 5.0
|
|
4.0 - 5.0
|
|
Total Liquids
(MMBbls)
|
13.0 -
15.0
|
|
13.0 -
15.0
|
|
Natural Gas
(Bcf)
|
89.5 -
93.5
|
|
89.5 -
93.5
|
|
Total
(MMBoe)
|
28.0 -
30.5
|
|
28.0 -
30.5
|
|
|
|
|
Price
Realization
|
|
|
|
|
Oil (differential
below NYMEX WTI)
|
$3.75
|
|
$3.75
|
|
Natural Gas Liquids
(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
|
|
$12.25 -
$13.00
|
|
Production
Taxes
|
0.65 -
0.85
|
|
0.65 -
0.85
|
|
DD&A - oil &
gas
|
11.50 -
13.50
|
|
12.00 -
15.00
|
|
DD&A -
other
|
2.00 -
2.20
|
|
2.00 -
2.20
|
|
Total
DD&A
|
$13.50 -
$15.70
|
|
$14.00 -
$17.20
|
|
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 -
$4.25
|
|
|
|
|
EBITDA from Oil Field
Services and Other ($ 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
|
|
$90
|
|
|
|
|
Corporate Tax
Rate
|
0%
|
|
0%
|
Deferral
Rate
|
0%
|
|
0%
|
|
|
|
|
Capital Expenditures
($ 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 Oil Field
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 Oil Field Services and
Other is Net Income from Oil Field 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.
|
Non-GAAP Financial Measures
Adjusted operating cash flow, adjusted EBITDA, pro forma
adjusted EBITDA, adjusted net 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, 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, (gain) loss on derivative contracts
net of cash received (paid) on settlement of derivative contracts,
gain on sale of assets, severance, oil field services – Permian
exit costs 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 asset impairment, (gain) loss on
derivative contracts net of cash received (paid) on settlement of
derivative contracts, gain on sale of assets, severance, oil
field services – Permian exit costs 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 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 (gain) loss 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 attributable to
noncontrolling interest. Adjusted net income attributable to
noncontrolling interest is not a measure of financial performance
under GAAP and should not be considered a substitute for net income
attributable to noncontrolling interest.
The tables below reconcile the most directly comparable GAAP
financial measures to operating cash flow, EBITDA and adjusted
EBITDA, adjusted net 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
March 31,
|
|
|
|
2015
|
|
2014
|
|
|
|
(in
thousands)
|
|
|
|
|
|
|
Net cash provided by
operating activities
|
|
$ 90,095
|
|
$ 90,451
|
|
|
|
|
|
|
Add
(deduct)
|
|
|
|
|
|
Cash paid on
financing derivatives
|
|
-
|
|
(44,128)
|
|
Changes in operating
assets and liabilities
|
|
56,359
|
|
81,147
|
|
|
|
|
|
|
Adjusted operating
cash flow
|
|
$146,454
|
|
$127,470
|
Reconciliation of
Net Loss to EBITDA and Adjusted EBITDA
|
|
|
|
|
Three Months Ended
March 31,
|
|
|
|
2015
|
|
2014
|
|
|
|
(in
thousands)
|
|
|
|
|
|
|
Net loss
|
|
$(1,034,953)
|
|
$(136,336)
|
|
|
|
|
|
|
Adjusted
for
|
|
|
|
|
|
Income tax
expense
|
|
40
|
|
127
|
|
Interest
expense
|
|
62,857
|
|
62,323
|
|
Depreciation and
amortization - other
|
|
13,347
|
|
15,522
|
|
Depreciation and
depletion - oil and natural gas
|
|
106,107
|
|
115,185
|
|
Accretion of asset
retirement obligations
|
|
1,080
|
|
5,746
|
EBITDA
|
|
(851,522)
|
|
62,567
|
|
|
|
|
|
|
|
Asset
impairment
|
|
1,083,866
|
|
164,779
|
|
Interest
income
|
|
(15)
|
|
(280)
|
|
Stock-based
compensation
|
|
3,119
|
|
4,585
|
|
(Gain) loss on
derivative contracts
|
|
(49,827)
|
|
42,491
|
|
Cash received (paid)
upon settlement of derivative contracts (1)
|
|
136,958
|
|
(13,730)
|
|
Gain on sale of
assets
|
|
(1,904)
|
|
(19)
|
|
Severance
|
|
2,967
|
|
8,109
|
|
Oil field services -
Permian exit costs
|
|
3,579
|
|
-
|
|
Other
|
|
1,224
|
|
(625)
|
|
Non-cash portion of
noncontrolling interest (2)
|
|
(146,827)
|
|
(45,804)
|
|
|
|
|
|
|
Adjusted
EBITDA
|
|
$ 181,618
|
|
$ 222,073
|
|
|
|
|
|
|
Less: EBITDA
attributable to Gulf of Mexico properties
|
|
-
|
|
(53,376)
|
|
|
|
|
|
|
Pro forma adjusted
EBITDA
|
|
$ 181,618
|
|
$ 168,697
|
|
|
(1)
|
Excludes amounts paid
upon early settlement of derivative contracts.
|
(2)
|
Represents
depreciation and depletion, impairment, loss on derivative
contracts net of cash (paid) received on settlement and income tax
expense attributable to noncontrolling interests.
|
Reconciliation of
Cash Provided by Operating Activities to Adjusted
EBITDA
|
|
|
|
|
Three Months Ended
March 31,
|
|
|
|
|
2015
|
|
2014
|
|
|
|
|
(in
thousands)
|
|
|
|
|
|
|
|
|
Net cash provided by
operating activities
|
|
$ 90,095
|
|
$ 90,451
|
|
|
|
|
|
|
|
|
Changes in operating
assets and liabilities
|
|
56,359
|
|
81,147
|
|
Interest
expense
|
|
62,857
|
|
62,323
|
|
Cash paid on early
settlement of derivative contracts
|
|
-
|
|
25,434
|
|
Severance
|
|
2,398
|
|
6,422
|
|
Oil field services -
Permian exit costs
|
|
3,579
|
|
-
|
|
Noncontrolling
interest - SDT (1)
|
|
(6,687)
|
|
(6,537)
|
|
Noncontrolling
interest - SDR (1)
|
|
(5,464)
|
|
(12,951)
|
|
Noncontrolling
interest - PER (1)
|
|
(17,755)
|
|
(20,242)
|
|
Noncontrolling
interest - Other (1)
|
|
-
|
|
(4)
|
|
Other
|
|
(3,764)
|
|
(3,970)
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA
|
|
$181,618
|
|
$222,073
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Excludes depreciation
and depletion, impairment, loss on derivative contracts net of cash
(paid) received on settlement and income tax expense attributable
to noncontrolling interests.
|
Reconciliation
of Loss Applicable to Common Stockholders to Adjusted Net
Income Available to Common Stockholders
|
|
|
|
|
Three Months Ended
March 31,
|
|
|
|
2015
|
|
2014
|
|
|
|
(in thousands,
except per share data)
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss applicable to
common stockholders
|
|
$(1,045,834)
|
|
$(150,217)
|
|
|
|
|
|
|
Asset impairment
(1)
|
|
956,827
|
|
134,906
|
(Gain) loss on
derivative contracts (1)
|
|
(45,768)
|
|
36,485
|
Cash received (paid)
upon settlement of derivative contracts (1)
|
|
120,345
|
|
(12,802)
|
Gain on sale of
assets (1)
|
|
(1,904)
|
|
(19)
|
Severance
|
|
2,967
|
|
8,109
|
Oil field services -
Permian exit costs
|
|
3,579
|
|
-
|
Other
|
|
1,134
|
|
(965)
|
Effect of income
taxes
|
|
36
|
|
148
|
|
|
|
|
|
|
Adjusted net income
available to common stockholders
|
|
(8,618)
|
|
15,645
|
Preferred stock
dividends
|
|
10,881
|
|
13,881
|
|
|
|
|
|
|
Total adjusted net
income
|
|
$ 2,263
|
|
$ 29,526
|
|
|
|
|
|
|
Weighted average
number of common shares outstanding
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
478,165
|
|
484,798
|
|
Diluted
(2)
|
|
549,875
|
|
575,949
|
|
|
|
|
|
|
Total adjusted net
income
|
|
|
|
|
|
Per share -
basic
|
|
$ (0.02)
|
|
$ 0.03
|
|
Per share -
diluted
|
|
$ 0.00
|
|
$ 0.05
|
|
|
(1)
|
Excludes amounts
attributable to noncontrolling interests.
|
(2)
|
Weighted average
fully diluted common shares outstanding for certain periods
presented includes shares that are considered antidilutive for
calculating earnings per share in accordance with GAAP.
|
Reconciliation of
Net Loss Attributable to Noncontrolling Interest to Adjusted
Net Income Attributable to Noncontrolling Interest
|
|
|
|
|
Three Months Ended
March 31,
|
|
|
|
2015
|
|
2014
|
|
|
|
(in
thousands)
|
|
|
|
|
|
|
Net loss attributable
to noncontrolling interest
|
|
$(116,921)
|
|
$ (6,070)
|
|
|
|
|
|
|
Asset
impairment
|
|
127,039
|
|
29,873
|
(Gain) loss on
derivative contracts
|
|
(4,059)
|
|
6,006
|
Cash received (paid)
on settlement of derivative contracts
|
|
16,613
|
|
(928)
|
|
|
|
|
|
|
|
Adjusted net income
attributable to noncontrolling interest
|
|
$ 22,672
|
|
$28,881
|
Conference Call Information
The Company will host a conference call to discuss these results
on Thursday, May 7, 2015 at
8:00 am CDT. 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 15423121. An audio replay of the call will
be available from May 7, 2015 until
11:59 pm CDT on June 6, 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 15423121.
A live audio webcast of the conference call will also be
available via SandRidge's website, www.sandridgeenergy.com, under
Investor Relations/Events. The webcast will be archived for
replay on the Company's website for 30 days.
Second Quarter 2015 Earnings Release and Conference
Call
August 5, 2015 (Wednesday) –
Earnings press release after market close
August 6, 2015 (Thursday) – Earnings
conference call at 8:00 am CDT
SandRidge Energy,
Inc. and Subsidiaries
|
Condensed
Consolidated Statements of Operations
|
(In thousands,
except per share data)
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
March 31,
|
|
|
|
|
2015
|
|
2014
|
|
|
|
|
|
|
|
Revenues
|
|
|
|
|
|
Oil, natural gas and
NGL
|
$ 195,732
|
|
$ 405,316
|
|
Drilling and
services
|
9,845
|
|
17,080
|
|
Midstream and
marketing
|
8,764
|
|
17,910
|
|
Other
|
967
|
|
2,750
|
|
|
Total
revenues
|
|
215,308
|
|
443,056
|
|
|
|
|
|
|
|
Expenses
|
|
|
|
|
|
Production
|
89,498
|
|
106,856
|
|
Production
taxes
|
4,514
|
|
7,807
|
|
Cost of
sales
|
12,827
|
|
12,481
|
|
Midstream and
marketing
|
8,107
|
|
16,000
|
|
Depreciation and
depletion - oil and natural gas
|
106,107
|
|
115,185
|
|
Depreciation and
amortization - other
|
13,347
|
|
15,522
|
|
Accretion of asset
retirement obligations
|
1,080
|
|
5,746
|
|
Impairment
|
1,083,866
|
|
164,779
|
|
General and
administrative
|
36,149
|
|
38,538
|
|
(Gain) loss on
derivative contracts
|
(49,827)
|
|
42,491
|
|
Gain on sale of
assets
|
(1,904)
|
|
(19)
|
|
|
Total
expenses
|
|
1,303,764
|
|
525,386
|
|
|
Loss from
operations
|
|
(1,088,456)
|
|
(82,330)
|
|
|
|
|
|
|
|
Other (expense)
income
|
|
|
|
|
|
Interest
expense
|
(62,842)
|
|
(62,043)
|
|
Other (expense)
income, net
|
|
(536)
|
|
2,094
|
|
|
Total other
expense
|
|
(63,378)
|
|
(59,949)
|
Loss before income
taxes
|
(1,151,834)
|
|
(142,279)
|
Income tax
expense
|
40
|
|
127
|
Net
loss
|
|
(1,151,874)
|
|
(142,406)
|
|
Less: net loss
attributable to noncontrolling interest
|
|
(116,921)
|
|
(6,070)
|
Net loss attributable
to SandRidge Energy, Inc.
|
|
(1,034,953)
|
|
(136,336)
|
Preferred stock
dividends
|
10,881
|
|
13,881
|
|
|
Loss applicable to
SandRidge Energy, Inc. common
stockholders
|
|
$(1,045,834)
|
|
$(150,217)
|
Loss per
share
|
|
|
|
|
|
Basic
|
|
$ (2.19)
|
|
$ (0.31)
|
|
Diluted
|
|
$ (2.19)
|
|
$ (0.31)
|
Weighted average
number of common shares outstanding
|
|
|
|
|
Basic
|
|
478,165
|
|
484,798
|
|
Diluted
|
|
478,165
|
|
484,798
|
SandRidge Energy,
Inc. and Subsidiaries
|
Condensed Consolidated Balance
Sheets
|
(In thousands,
except per share data)
|
|
|
|
|
|
March 31,
|
|
December 31,
|
|
|
|
|
2015
|
|
2014
|
|
|
|
|
|
ASSETS
|
|
Current
assets
|
|
|
|
|
Cash and cash
equivalents
|
$ 11,821
|
|
$ 181,253
|
Accounts receivable,
net
|
309,037
|
|
330,077
|
Derivative
contracts
|
209,059
|
|
291,414
|
Prepaid
expenses
|
|
9,893
|
|
7,981
|
Other current
assets
|
7,299
|
|
21,193
|
|
|
Total current
assets
|
|
547,109
|
|
831,918
|
Oil and natural gas
properties, using full cost method of accounting
|
|
|
|
|
|
Proved
|
12,020,208
|
|
11,707,147
|
|
Unproved
|
285,942
|
|
290,596
|
|
Less: accumulated
depreciation, depletion and impairment
|
(7,548,398)
|
|
(6,359,149)
|
|
|
|
|
4,757,752
|
|
5,638,594
|
Other property, plant
and equipment, net
|
|
579,249
|
|
576,463
|
Derivative
contracts
|
|
42,347
|
|
47,003
|
Other
assets
|
|
130,748
|
|
165,247
|
|
|
Total
assets
|
|
$6,057,205
|
|
$7,259,225
|
|
|
|
|
|
|
|
LIABILITIES AND
EQUITY
|
|
|
|
Current
liabilities
|
|
|
|
|
Accounts payable and
accrued expenses
|
|
$ 538,151
|
|
$ 683,392
|
Derivative
contracts
|
119
|
|
-
|
Deferred tax
liability
|
64,517
|
|
95,843
|
Other current
liabilities
|
|
4,846
|
|
5,216
|
|
|
Total current
liabilities
|
|
607,633
|
|
784,451
|
Long-term
debt
|
|
3,370,578
|
|
3,195,436
|
Asset retirement
obligations
|
|
55,966
|
|
54,402
|
Other long-term
obligations
|
|
16,111
|
|
15,116
|
|
|
Total
liabilities
|
|
4,050,288
|
|
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
March 31, 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
March 31,
2015 and December 31, 2014; aggregate liquidation preference of
$300,000
|
|
3
|
|
3
|
Common
stock, $0.001 par value, 800,000 shares authorized; 485,095 issued
and 483,772 outstanding at
March 31,
2015 and 485,932 issued and 484,819 outstanding at December 31,
2014
|
|
479
|
|
477
|
Additional paid-in
capital
|
5,207,888
|
|
5,204,024
|
Additional paid-in
capital - stockholder receivable
|
(2,500)
|
|
(2,500)
|
Treasury stock, at
cost
|
(7,278)
|
|
(6,980)
|
Accumulated
deficit
|
(4,303,036)
|
|
(3,257,202)
|
|
|
Total SandRidge
Energy, Inc. stockholders' equity
|
|
895,559
|
|
1,937,825
|
Noncontrolling
interest
|
|
1,111,358
|
|
1,271,995
|
|
|
Total
equity
|
|
2,006,917
|
|
3,209,820
|
|
|
Total liabilities and
equity
|
|
$6,057,205
|
|
$7,259,225
|
SandRidge Energy,
Inc. and Subsidiaries
|
Condensed Consolidated Statements of
Cash Flows
|
(In
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
March 31,
|
|
|
|
|
|
2015
|
|
2014
|
|
|
|
|
|
|
CASH FLOWS FROM
OPERATING ACTIVITIES
|
|
|
|
|
Net loss
|
$(1,151,874)
|
|
$ (142,406)
|
|
Adjustments to
reconcile net loss to net cash provided by operating
activities
|
|
|
|
|
|
Depreciation,
depletion and amortization
|
119,454
|
|
130,707
|
|
|
Accretion of asset
retirement obligations
|
1,080
|
|
5,746
|
|
|
Impairment
|
1,083,866
|
|
164,779
|
|
|
Debt issuance costs
amortization
|
2,225
|
|
2,361
|
|
|
Amortization of
discount, net of premium, on long-term debt
|
142
|
|
129
|
|
|
Write off of debt
issuance costs
|
2,221
|
|
-
|
|
|
(Gain) loss on
derivative contracts
|
(49,827)
|
|
42,491
|
|
|
Cash received (paid)
on settlement of derivative contracts
|
136,957
|
|
(39,164)
|
|
|
Gain on sale of
assets
|
(1,904)
|
|
(19)
|
|
|
Stock-based
compensation
|
4,024
|
|
6,786
|
|
|
Other
|
90
|
|
188
|
|
|
Changes in operating
assets and liabilities
|
(56,359)
|
|
(81,147)
|
|
|
|
|
Net cash provided by
operating activities
|
90,095
|
|
90,451
|
CASH FLOWS FROM
INVESTING ACTIVITIES
|
|
|
|
|
Capital expenditures
for property, plant and equipment
|
(377,052)
|
|
(331,016)
|
|
Acquisitions of
assets
|
(1,739)
|
|
(2,352)
|
|
Proceeds from sale of
assets
|
2,755
|
|
707,366
|
|
|
|
|
Net cash (used in)
provided by investing activities
|
(376,036)
|
|
373,998
|
CASH FLOWS FROM
FINANCING ACTIVITIES
|
|
|
|
|
Proceeds from
borrowings
|
420,000
|
|
-
|
|
Repayments of
borrowings
|
(245,000)
|
|
-
|
|
Debt issuance
costs
|
(1,905)
|
|
-
|
|
Proceeds from the
sale of royalty trust units
|
-
|
|
22,119
|
|
Noncontrolling
interest distributions
|
(43,716)
|
|
(53,118)
|
|
Acquisition of
ownership interest
|
-
|
|
(2,730)
|
|
Stock-based
compensation excess tax benefit
|
-
|
|
2
|
|
Purchase of treasury
stock
|
(1,609)
|
|
(4,350)
|
|
Dividends paid -
preferred
|
(11,261)
|
|
(17,263)
|
|
Cash paid on
settlement of financing derivative contracts
|
-
|
|
(44,128)
|
|
|
|
|
Net cash provided by
(used in) financing activities
|
116,509
|
|
(99,468)
|
NET (DECREASE)
INCREASE IN CASH AND CASH EQUIVALENTS
|
(169,432)
|
|
364,981
|
CASH AND CASH
EQUIVALENTS, beginning of year
|
181,253
|
|
814,663
|
CASH AND CASH
EQUIVALENTS, end of period
|
$ 11,821
|
|
$1,179,644
|
|
|
|
|
|
|
|
|
Supplemental
Disclosure of Cash Flow Information
|
|
|
|
|
Cash paid for
interest, net of amounts capitalized
|
$ (90,286)
|
|
$ (92,896)
|
|
|
|
|
|
|
|
|
Supplemental
Disclosure of Noncash Investing and Financing Activities
|
|
|
|
|
Change in accrued
capital expenditures
|
$ 56,861
|
|
$ 55,242
|
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 net
income and EBITDA, drilling plans, oil and natural gas production,
derivative transactions, pricing differentials, operating costs,
general and administrative costs, capital spending, tax rates, and
descriptions of our 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. The Company owns and operates the nation's largest
saltwater gathering and disposal system. In addition, SandRidge
owns and operates a drilling rig and related oil field services
business.
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SOURCE SandRidge Energy, Inc.