OKLAHOMA
CITY, March 6, 2024 /PRNewswire/ -- SandRidge
Energy, Inc. (the "Company" or "SandRidge") (NYSE:SD) today
announced financial and operational results for the quarter and
fiscal year ended December 31,
2023.
Recent Highlights
- On March 5, 2024, the Board of
Directors declared a $0.11 per share
cash dividend payable on March 29,
2024 to shareholders of record on March 15, 2024
- Generated net income of $60.9
million, or $1.65 per basic
share in 2023. Adjusted net income(1) was $69.0 million, or $1.87 per basic share (please see table below for
reconciliation of net income to adjusted net income)
- Generated adjusted EBITDA(1) of $93.2 million in 2023
- Generated approximately $89.2
million of free cash flow(1) in 2023, which
represents a conversion rate of approximately 96% relative to
adjusted EBITDA(1)
- Production averaged 16.9 MBoed in 2023, benefiting from the
Company's Production Optimization Program and the successful
conclusion of its high-return drilling and completion program,
which helped drive an approximately 10% increase in oil production
year-over-year
- In 2023, initiated return of capital program with $3.70 per share of cumulative dividends paid
through February 2024
Financial Results & Update
Profitability & Realized Pricing
For the full year 2023, the Company reported net income of
$60.9 million, or $1.65 per basic share, and net cash provided by
operating activities of $115.6
million. The Company's adjusted net income(1)
amounted to $69.0 million, or
$1.87 per basic share, adjusted
operating cash flow(1) totaled $103.5 million and adjusted EBITDA(1)
was $93.2 million for the year. The
Company defines and reconciles adjusted net income, adjusted EBITDA
and other non-GAAP financial measures to the most directly
comparable GAAP measure in supporting tables at the conclusion of
this press release.
For the fourth quarter 2023, the Company's net cash provided by
operating activity was $26.2 million,
and adjusted operating cash flow(1) totaled $22.2 million, with adjusted EBITDA of
$19.5 million. Adjusted net
income(1) amounted to $13.0
million, or $0.35 per basic
share, after adjusting for certain items, including a $14.0 million deferred tax expense related to
changes in the Company's valuation allowance, and net income of
$1.8 million or $0.05 per basic share.
Full year 2023 realized oil, natural gas, and natural gas
liquids prices, before the impact of derivatives,(2)
were $74.69 per Bbl, $1.71 per Mcf and $20.83 per Bbl, respectively.
Operating Costs
During the fourth quarter of 2023, lease operating expense
("LOE") was $9.9 million or
$6.73 per Boe compared to
$11.5 million, or $7.22 per Boe in the prior quarter. For the full
year 2023, LOE was $41.9 million, or $6.80 per Boe compared to $41.3
million, or $6.39 per Boe in the
prior year.
General and administrative expense ("G&A") was $2.7 million and $2.6
million for the fourth quarter and prior quarter,
respectively, and Adjusted G&A(1) was $2.2 million, or $1.49 per Boe compared to $2.1 million, or $1.35 per Boe over the same periods. For the full
year 2023, G&A was $10.7 million
compared to $9.4 million, in the
prior year, and Adjusted G&A(1) was $8.8 million, or $1.42 per Boe for the full year 2023 compared to
$7.9 million or $1.22 per Boe in the prior year.
Liquidity and Capital Structure
As of December 31, 2023, the
Company had $253.9 million of cash
and cash equivalents, including restricted cash. Adjusting for the
one-time dividend paid on February 20,
2024, our cash on hand balance was approximately
$200 million. The Company has no
outstanding term or revolving debt obligations.
Dividend Program
On March 5, 2024, the Board of
Directors declared a $0.11 per share
cash dividend payable on March 29,
2024 to shareholders of record on March 15, 2024. This declaration represents a 10%
increase in SandRidge's previous on-going quarterly dividend and is
consistent with plans announced on January
16, 2024 when the Board of Directors declared a one-time
dividend of $1.50 per share, which
was paid on February 20, 2024 with an
aggregate total payout of $55.6 million. SandRidge's on-going
$0.11 per share quarterly dividend is
subject to quarterly approval by the Board of Directors. Since
May 2023, the Company has paid
approximately $137.1 million in cash
dividends.
Operational Results & Update
Production
Production totaled 1,473 MBoe (16.0 MBoed, 16% oil, 57% natural
gas and 27% NGLs) for the fourth quarter and 6,152 MBoe (16.9
MBoed, 17% oil, 55% natural gas and 28% NGLs) for the full year of
2023. The higher oil content our recently-drilled wells targeting
the Meramec formation in the Northwest Stack play versus the
Company's base production was the primary driver of SandRidge's oil
production increasing by approximately 10% in 2023 versus 2022.
This increases the Company's oil as a percentage of total
production and enhances its commodity realizations. Revenues
totaled $33.9 million (53% oil, 22%
natural gas and 25% NGLs) for the fourth quarter and $148.6 million (53% oil, 23% natural gas and
24% NGLs) for the full year of 2023.
Production Optimization Program
The Company continues to optimize its stable, low-decline
production base, which has an estimated single-digit annual PDP
decline rate over the next ten years. The Company continuously
evaluates the potential for high-return projects that further
enhance its asset base. Such projects include, but are not limited
to, workovers, artificial lift improvements and conversions from
less efficient systems, recompletions of "behind pipe" pay in
vertical section of existing wells, and the restimulation of
existing intervals and previously bypassed unstimulated intervals
in existing wells. When evaluating these and other options, the
Company continues to ensure that all projects meet high rate of
return thresholds and remains capital disciplined as the commodity
price landscape changes.
Year End 2023 Estimated Proved Reserves
Proved reserves decreased from 74.3 MMBoe at December 31, 2022 to 55.7 MMBoe at December 31, 2023, primarily due to a decrease in
year-end SEC commodity prices for oil and natural gas, price
realizations and NGL yield which resulted in a decrease of 17.5
MMBoe, as well as 6.2 MMBoe from the Company's production during
2023, 1.4 MMBoe attributable to well shut-ins and other revisions,
and 0.1 MMBoe in sales. However, we also had positive revisions,
which included purchases of 1.8 MMBoe, extensions of 1.2 MMBoe, 1.9
MMBoe associated with well positive performance revisions, and 1.7
MMBoe associated with other commercial improvements.
|
Oil MBbls
|
|
NGLs MBbls
|
|
Gas MMcf
|
|
Equivalent
MBoe(3)
|
|
Standardized
Measure
$MM (4)
|
|
PV-10 $MM
(5)
|
|
Proved Reserves,
December 31, 2022
|
8,421
|
|
25,433
|
|
242,822
|
|
74,324
|
|
$
807
|
|
$
811
|
|
Revisions of previous
estimates, to include changes in prices(6)
|
(1,027)
|
|
(8,200)
|
|
(36,464)
|
|
(15,304)
|
|
|
|
|
|
Acquisitions of new
reserves
|
453
|
|
379
|
|
5,474
|
|
1,745
|
|
|
|
|
|
Extensions and
discoveries
|
283
|
|
357
|
|
3,431
|
|
1,211
|
|
|
|
|
|
Sales of reserves in
place
|
(26)
|
|
(49)
|
|
(427)
|
|
(147)
|
|
|
|
|
|
Production
|
(1,047)
|
|
(1,705)
|
|
(20,403)
|
|
(6,152)
|
|
|
|
|
|
Proved Reserves,
December 31, 2023
|
7,057
|
|
16,215
|
|
194,433
|
|
55,677
|
|
$
296
|
|
$
296
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Totals may not sum
or recalculate due to rounding
|
|
|
|
|
|
|
|
|
2024 Operational and Capital Expenditure
Guidance
In 2024, the Company plans to spend $8 - $11 million in
production optimization (non-D&C) capital. The Company also
plans to spend $35 - $43 million in lease operating expenses. Total
production for 2024 is projected to be 4.7 - 5.9 MMBoe. SandRidge
will remain vigilant in ensuring prudent capital allocation and
will continue to adapt appropriately to changing environments.
Other operational guidance details can be found on the "2024
Operational and Capital Expenditure Guidance" table below.
Outlook
SandRidge will continue to focus on growing the cash value and
generation capability of its asset base in a safe, responsible and
efficient manner, while exercising prudent capital allocations to
projects it believes provide high rates of returns in the current
commodity price outlook. These near-term projects will be focused
on artificial lift conversions to more efficient and cost-effective
systems and other capital-efficient workovers while preserving
future development and expanded well reactivations, benefited by
our 99% held by production acreage position that extends the option
value to initiate projects in favorable commodity price
environments, to achieve high rates of return. The Company will
continue to monitor forward-looking commodity prices, results,
costs and other factors that could influence returns on
investments, which will continue to shape its disciplined
development decisions in 2024 and beyond.
SandRidge will also continue to maintain the optionality to
execute on value accretive merger and acquisition opportunities
that could bring synergies, leverage the Company's core
competencies, complement its portfolio of assets, seek to further
utilize its approximately $1.6
billion of net operating losses ("NOLs"), or otherwise yield
attractive returns for its shareholders.
Environmental, Social, and Governance ("ESG")
SandRidge maintains its Environmental, Social, and Governance
("ESG") commitment, to include no routine flaring of produced
natural gas and transporting over 95% of its produced water via
pipeline instead of truck. Additionally, SandRidge maintains an
emphasis on the safety and training of our workforce. We have
personnel dedicated to the close monitoring of our safety standards
and daily operations.
Conference Call Information
The Company will host a conference call to discuss these results
on Thursday, March 7, 2024 at
10:00 am CT. The conference call can
be accessed by registering online in advance at
https://registrations.events/direct/Q4I231500 at which
time registrants will receive dial-in information as well as a
conference ID. At the time of the call, participants will dial in
using the participant number and conference ID provided upon
registration. The Company's latest presentation is available on the
Company's website at investors.sandridgeenergy.com.
A live audio webcast of the conference call will also be
available via SandRidge's website, investors.sandridgeenergy.com,
under Presentation & Events. The webcast will be archived for
replay on the Company's website for 30 days.
Contact Information
Investor Relations
SandRidge Energy, Inc.
1 E. Sheridan Ave. Suite 500
Oklahoma City, OK 73104
investors@sandridgeenergy.com
About SandRidge Energy, Inc.
SandRidge Energy, Inc. (NYSE: SD) is an independent oil and gas
company engaged in the development, acquisition and production of
oil and gas assets. Its primary area of operations is the
Mid-Continent region in Oklahoma
and Kansas. Further information
can be found at sandridgeenergy.com.
-Tables to Follow-
|
|
|
|
(1)
|
See "Non-GAAP Financial
Measures" section at the end of this press release for non-GAAP
financial measures definitions.
|
|
(2)
|
See "Operational and
Financial Statistics" section at the end of this press release for
impacts of derivatives on commodity price realizations.
|
|
(3)
|
Equivalent Boe are
calculated using an energy equivalent ratio of six Mcf of natural
gas to one Bbl of oil. Using an energy-equivalent ratio does not
factor in price differences and energy-equivalent prices may differ
significantly among produced products.
|
|
(4)
|
The present value of
estimated future cash inflows from proved oil, natural gas and NGL
reserves, less future development and production costs and future
income tax expenses and costs as of the date of estimation without
future escalation and without giving effect to hedging activities,
non-property related expenses such as general and administrative
expenses, debt service and depreciation, depletion and
amortization, discounted at 10% per annum to reflect timing of
future cash flows and using the same pricing assumptions as were
used to calculate PV-10. Standardized Measure differs from PV-10
because Standardized Measure includes the effect of future income
taxes on future net revenues.
|
|
(5)
|
The present value of
estimated future revenues to be generated from the production of
proved reserves, before income taxes, calculated in accordance with
SEC guidelines, net of estimated production and future development
costs, using prices and costs as of the date of estimation without
future escalation and without giving effect to hedging activities,
non-property related expenses such as general and administrative
expenses, debt service and depreciation, depletion and
amortization. PV-10 is calculated using an annual discount rate of
10%.
|
|
(6)
|
Revisions include
changes due to commodity prices, production costs, previous
quantity estimates, and other commercial factors. Primary factor
for revisions in years ended 2023, 2022 and 2021 were changes in
SEC prices, among other factors.
|
2024 Operational and Capital Expenditure
Guidance
Presented below is the Company's operational
and capital expenditure guidance for 2024:
|
2024
Guidance
|
|
Production
|
|
|
Oil
(MMBbls)
|
0.7 - 0.9
|
|
Natural Gas
Liquids (MMBbls)
|
1.3 - 1.7
|
|
Total Liquids
(MMBbls)
|
2.0 -
2.6
|
|
Natural Gas
(Bcf)
|
16.2 - 19.8
|
|
Total Production
(MMBoe)
|
4.7 -
5.9
|
|
|
|
Total Capital
Expenditures
|
|
|
Non-D&C /
Production Optimization
|
$8 - $11
million
|
|
|
|
Expenses
|
|
|
Lease Operating
Expenses ("LOE")
|
$35 - $43
million
|
|
Adjusted General
& Administrative ("G&A") Expenses (1)
|
$8 - $11
million
|
|
Severance and Ad
Valorem Taxes (% of Revenue)
|
6% - 7%
|
|
|
|
Price
Differentials
|
|
|
Oil (% of
WTI)
|
96% - 98%
|
|
NGL (% of
WTI)
|
25% - 30%
|
|
Natural Gas (%
of HH)
|
50% - 70%
|
|
|
|
|
(1)
|
Adjusted G&A
expense is a non-GAAP financial measure. The Company has defined
this measure at the conclusion of this press release under
"Non-GAAP Financial Measures."
|
Operational and Financial Statistics
Information regarding the Company's production, pricing, costs
and earnings is presented below:
|
Three Months Ended
December 31,
|
|
Year Ended December
31,
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
|
Production -
Total
|
|
|
|
|
|
|
|
|
Oil (MBbl)
|
231
|
|
269
|
|
1,047
|
|
949
|
|
Natural Gas
(MMcf)
|
5,030
|
|
5,389
|
|
20,403
|
|
21,101
|
|
NGL (MBbl)
|
404
|
|
431
|
|
1,705
|
|
1,997
|
|
Oil equivalent
(MBoe)
|
1,473
|
|
1,599
|
|
6,152
|
|
6,463
|
|
Daily production
(MBoed)
|
16.0
|
|
17.4
|
|
16.9
|
|
17.7
|
|
|
|
|
|
|
|
|
|
Average price per
unit
|
|
|
|
|
|
|
|
|
Realized oil price per
barrel - as reported
|
$
77.53
|
|
$
79.10
|
|
$
74.69
|
|
$
92.21
|
|
Realized impact of
derivatives per barrel
|
—
|
|
—
|
|
—
|
|
—
|
|
Net realized price per
barrel
|
$
77.53
|
|
$
79.10
|
|
$
74.69
|
|
$
92.21
|
|
|
|
|
|
|
|
|
|
Realized natural gas
price per Mcf - as reported
|
$
1.50
|
|
$
4.40
|
|
$
1.71
|
|
$
4.88
|
|
Realized impact of
derivatives per Mcf
|
—
|
|
0.44
|
|
0.29
|
|
0.09
|
|
Net realized price per
Mcf
|
$
1.50
|
|
$
4.84
|
|
$
2.00
|
|
$
4.97
|
|
|
|
|
|
|
|
|
|
Realized NGL price per
barrel - as reported
|
$
21.05
|
|
$
25.73
|
|
$
20.83
|
|
$
31.88
|
|
Realized impact of
derivatives per barrel
|
—
|
|
—
|
|
—
|
|
(0.16)
|
|
Net realized price per
barrel
|
$
21.05
|
|
$
25.73
|
|
$
20.83
|
|
$
31.72
|
|
|
|
|
|
|
|
|
|
Realized price per Boe
- as reported
|
$
23.03
|
|
$
35.09
|
|
$
24.16
|
|
$
39.34
|
|
Net realized price per
Boe - including impact of derivatives
|
$
23.03
|
|
$
36.59
|
|
$
25.11
|
|
$
39.58
|
|
|
|
|
|
|
|
|
|
Average cost per
Boe
|
|
|
|
|
|
|
|
|
Lease
operating
|
$
6.73
|
|
$
7.02
|
|
$
6.80
|
|
$
6.39
|
|
Production, ad valorem,
and other taxes
|
$
1.59
|
|
$
1.38
|
|
$
1.77
|
|
$
2.46
|
|
Depletion
(1)
|
$
2.88
|
|
$
2.02
|
|
$
2.54
|
|
$
1.79
|
|
|
|
|
|
|
|
|
|
Income per
share
|
|
|
|
|
|
|
|
|
Income per share
applicable to common stockholders
|
|
|
|
|
|
|
|
|
Basic
(2)
|
$
0.05
|
|
$
2.86
|
|
$
1.65
|
|
$
6.59
|
|
Diluted
|
$
0.05
|
|
$
2.83
|
|
$
1.64
|
|
$
6.52
|
|
|
|
|
|
|
|
|
|
Adjusted net income
(loss) per share available to common stockholders
|
|
|
|
|
|
|
|
|
Basic
|
$
0.35
|
|
$
1.03
|
|
$
1.87
|
|
$
4.67
|
|
Diluted
|
$
0.35
|
|
$
1.02
|
|
$
1.86
|
|
$
4.62
|
|
|
|
|
|
|
|
|
|
Weighted average number
of shares outstanding (in thousands)
|
|
|
|
|
|
|
|
|
Basic
|
37,038
|
|
36,850
|
|
36,939
|
|
36,745
|
|
Diluted
|
37,147
|
|
37,160
|
|
37,134
|
|
37,154
|
|
|
|
|
|
|
|
|
|
(1) Includes
accretion of asset retirement obligation.
|
|
|
|
|
|
|
|
|
(2) Includes
$14.0 million in deferred tax expense recorded in the fourth
quarter of 2023 resulting from valuation allowance
movement.
|
Capital Expenditures
The table below presents actual results of the Company's capital
expenditures for the year ended 2023:
|
Year
Ended
|
|
December 31,
2023
|
|
(In
thousands)
|
|
|
|
Drilling and
completion
|
$
18,132
|
|
Capital
workovers
|
4,346
|
|
Leasehold and
geophysical
|
(46)
|
|
Total Capital
Expenditures
|
$
22,432
|
|
(excluding acquisitions
on an accrual basis)
|
|
Capitalization
The Company's capital structure as of 2023 and 2022 is presented
below:
|
December 31,
2023
|
|
December 31,
2022
|
|
|
|
|
|
(In
thousands)
|
|
Cash, cash equivalents
and restricted cash
|
$
253,944
|
|
$
257,468
|
|
|
|
|
|
Long-term
debt
|
$
—
|
|
$
—
|
|
Total debt
|
—
|
|
—
|
|
|
|
|
|
Stockholders'
equity
|
|
|
|
|
Common stock
|
37
|
|
37
|
|
Additional paid-in
capital
|
1,071,021
|
|
1,151,689
|
|
Accumulated
deficit
|
(602,947)
|
|
(663,804)
|
|
Total SandRidge Energy,
Inc. stockholders' equity
|
468,111
|
|
487,922
|
|
|
|
|
|
Total
capitalization
|
$
468,111
|
|
$
487,922
|
|
SandRidge Energy,
Inc. and Subsidiaries
Consolidated
Statements of Operations
(In thousands,
except per share amounts)
|
|
|
Year Ended December
31,
|
|
2023
|
|
2022
|
|
2021
|
|
Revenues
|
|
|
|
|
|
|
Oil, natural gas and
NGL
|
$
148,641
|
|
$
254,258
|
|
$
168,882
|
|
Total
revenues
|
148,641
|
|
254,258
|
|
168,882
|
|
Expenses
|
|
|
|
|
|
|
Lease operating
expenses
|
41,862
|
|
41,286
|
|
35,999
|
|
Production, ad
valorem, and other taxes
|
10,870
|
|
15,880
|
|
9,918
|
|
Depreciation and
depletion—oil and natural gas
|
15,657
|
|
11,542
|
|
9,372
|
|
Depreciation and
amortization—other
|
6,518
|
|
6,342
|
|
6,073
|
|
General and
administrative
|
10,735
|
|
9,449
|
|
9,675
|
|
Restructuring
expenses
|
406
|
|
382
|
|
792
|
|
Employee termination
benefits
|
19
|
|
—
|
|
49
|
|
(Gain) loss on
derivative contracts
|
(1,447)
|
|
(5,975)
|
|
2,251
|
|
Gain on sale of
assets
|
—
|
|
—
|
|
(18,952)
|
|
Other operating
(income) expense
|
(157)
|
|
(99)
|
|
(382)
|
|
Total
expenses
|
84,463
|
|
78,807
|
|
54,795
|
|
Income (loss) from
operations
|
64,178
|
|
175,451
|
|
114,087
|
|
Other income
(expense)
|
|
|
|
|
|
|
Interest income
(expense), net
|
10,552
|
|
1,810
|
|
(404)
|
|
Other income
(expense), net
|
87
|
|
378
|
|
3,055
|
|
Total other income
(expense)
|
10,639
|
|
2,188
|
|
2,651
|
|
Income (loss) before
income taxes
|
74,817
|
|
177,639
|
|
116,738
|
|
Income tax
(benefit)
|
13,960
|
|
(64,529)
|
|
—
|
|
Net income
(loss)
|
$
60,857
|
|
$
242,168
|
|
$
116,738
|
|
Net income (loss) per
share
|
|
|
|
|
|
|
Basic
|
$
1.65
|
|
$
6.59
|
|
$
3.21
|
|
Diluted
|
$
1.64
|
|
$
6.52
|
|
$
3.13
|
|
Weighted average number
of common shares outstanding
|
|
|
|
|
|
|
Basic
|
36,939
|
|
36,745
|
|
36,393
|
|
Diluted
|
37,134
|
|
37,154
|
|
37,271
|
|
SandRidge Energy,
Inc. and Subsidiaries
Consolidated Balance
Sheets
(In thousands,
except share data)
|
|
|
December 31,
2023
|
|
December 31,
2022
|
|
ASSETS
|
|
|
|
|
Current
assets
|
|
|
|
|
Cash and cash
equivalents
|
$
252,407
|
|
$
255,722
|
|
Restricted cash -
other
|
1,537
|
|
1,746
|
|
Accounts receivable,
net
|
22,166
|
|
34,735
|
|
Derivative
contracts
|
—
|
|
4,429
|
|
Prepaid
expenses
|
430
|
|
523
|
|
Other current
assets
|
1,314
|
|
7,747
|
|
Total current
assets
|
277,854
|
|
304,902
|
|
Oil and natural gas
properties, using full cost method of accounting
|
|
|
|
|
Proved
|
1,538,724
|
|
1,507,690
|
|
Unproved
|
11,197
|
|
11,516
|
|
Less: accumulated
depreciation, depletion and impairment
|
(1,393,801)
|
|
(1,380,574)
|
|
156,120
|
|
138,632
|
|
Other property, plant
and equipment, net
|
86,493
|
|
92,244
|
|
Other assets
|
3,130
|
|
190
|
|
Deferred tax assets,
net of valuation allowance
|
50,569
|
|
64,529
|
|
Total
assets
|
$
574,166
|
|
$
600,497
|
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
|
|
Current
liabilities
|
|
|
|
|
Accounts payable and
accrued expenses
|
$
38,828
|
|
$
46,335
|
|
Asset retirement
obligations
|
9,851
|
|
16,074
|
|
Other current
liabilities
|
645
|
|
870
|
|
Total current
liabilities
|
49,324
|
|
63,279
|
|
Asset retirement
obligations
|
54,553
|
|
47,635
|
|
Other long-term
obligations
|
2,178
|
|
1,661
|
|
Total
liabilities
|
106,055
|
|
112,575
|
|
Stockholders'
Equity
|
|
|
|
|
Common stock, $0.001
par value; 250,000 shares authorized; 37,091 issued and outstanding
at
December 31, 2023 and 36,868 issued and outstanding at December 31,
2022
|
37
|
|
37
|
|
Additional paid-in
capital
|
1,071,021
|
|
1,151,689
|
|
Accumulated
deficit
|
(602,947)
|
|
(663,804)
|
|
Total stockholders'
equity
|
468,111
|
|
487,922
|
|
Total liabilities and
stockholders' equity
|
$
574,166
|
|
$
600,497
|
|
SandRidge Energy,
Inc. and Subsidiaries
Consolidated Cash
Flows
(In
thousands)
|
|
|
Year Ended December
31,
|
|
2023
|
|
2022
|
|
2021
|
|
(In
thousands)
|
|
CASH FLOWS FROM
OPERATING ACTIVITIES
|
|
|
|
|
|
|
Net Income
(loss)
|
$
60,857
|
|
$
242,168
|
|
$
116,738
|
|
Adjustments to
reconcile net income (loss) to net cash provided by operating
activities
|
|
|
|
|
|
|
Provision for expected
credit losses
|
—
|
|
—
|
|
(2,329)
|
|
Depreciation,
depletion and amortization
|
22,176
|
|
17,884
|
|
15,445
|
|
Deferred income
taxes
|
13,960
|
|
(64,529)
|
|
—
|
|
Debt issuance costs
amortization
|
—
|
|
—
|
|
57
|
|
Write off of debt
issuance costs
|
—
|
|
—
|
|
174
|
|
(Gain) loss on
derivative contracts
|
(1,447)
|
|
(5,975)
|
|
2,251
|
|
Settlement gains
(losses) on derivative contracts
|
5,876
|
|
1,525
|
|
(2,230)
|
|
(Gain) on sale of
assets
|
—
|
|
—
|
|
(18,952)
|
|
Stock-based
compensation
|
1,945
|
|
1,526
|
|
1,394
|
|
Other
|
159
|
|
153
|
|
144
|
|
Changes in operating
assets and liabilities increasing (decreasing) cash
|
|
|
|
|
|
|
Receivables
|
12,130
|
|
(13,211)
|
|
841
|
|
Prepaid
expenses
|
93
|
|
(1,507)
|
|
2,264
|
|
Other current
assets
|
2,203
|
|
(5,378)
|
|
—
|
|
Other assets and
liabilities, net
|
(56)
|
|
(129)
|
|
(1,212)
|
|
Accounts payable and
accrued expenses
|
(1,409)
|
|
(5,246)
|
|
(2,241)
|
|
Asset retirement
obligations
|
(909)
|
|
(2,585)
|
|
(2,084)
|
|
Net cash provided by
operating activities
|
115,578
|
|
164,696
|
|
110,260
|
|
CASH FLOWS FROM
INVESTING ACTIVITIES
|
|
|
|
|
|
|
Capital expenditures
for property, plant and equipment
|
(26,375)
|
|
(44,085)
|
|
(11,583)
|
|
Acquisitions of
assets
|
(11,232)
|
|
(1,431)
|
|
(3,545)
|
|
Purchase of other
property and equipment
|
(29)
|
|
(49)
|
|
(59)
|
|
Proceeds from sale of
assets
|
1,472
|
|
448
|
|
38,160
|
|
Net cash (used in)
provided by investing activities
|
(36,164)
|
|
(45,117)
|
|
22,973
|
|
CASH FLOWS FROM
FINANCING ACTIVITIES
|
|
|
|
|
|
|
Dividends paid to
shareholders
|
(81,515)
|
|
—
|
|
—
|
|
Repayments of
borrowings
|
—
|
|
—
|
|
(20,000)
|
|
Debt issuance
costs
|
—
|
|
—
|
|
(75)
|
|
Reduction of financing
lease liability
|
(588)
|
|
(541)
|
|
(1,024)
|
|
Proceeds from exercise
of stock options
|
94
|
|
77
|
|
23
|
|
Tax withholdings paid
in exchange for shares withheld on employee vested stock
awards
|
(929)
|
|
(1,177)
|
|
(899)
|
|
Cash received on
warrant exercises
|
—
|
|
6
|
|
—
|
|
Net cash (used in)
financing activities
|
(82,938)
|
|
(1,635)
|
|
(21,975)
|
|
NET (DECREASE) INCREASE
IN CASH, CASH EQUIVALENTS and RESTRICTED CASH
|
(3,524)
|
|
117,944
|
|
111,258
|
|
CASH, CASH EQUIVALENTS
and RESTRICTED CASH, beginning of year
|
257,468
|
|
139,524
|
|
28,266
|
|
CASH, CASH EQUIVALENTS
and RESTRICTED CASH, end of year
|
$
253,944
|
|
$
257,468
|
|
$
139,524
|
|
Supplemental Disclosure
of Cash Flow Information
|
|
|
|
|
|
|
Cash paid for
interest, net of amounts capitalized
|
$
(104)
|
|
$
(215)
|
|
$
(177)
|
|
Supplemental Disclosure
of Noncash Investing and Financing Activities
|
|
|
|
|
|
|
Capital expenditures
for property, plant and equipment in accounts payables and accrued
expenses
|
$
919
|
|
$
6,151
|
|
$
1,029
|
|
Right-of-use assets
obtained in exchange for financing lease obligations
|
$
760
|
|
$
713
|
|
$
1,258
|
|
Inventory material
transfers to oil and natural gas properties
|
$
1,289
|
|
$
—
|
|
$
—
|
|
Asset retirement
obligation capitalized
|
$
113
|
|
$
86
|
|
$
18
|
|
Asset retirement
obligation removed due to divestiture
|
$
(1,413)
|
|
$
(623)
|
|
$
(7,662)
|
|
Asset retirement
obligation revisions
|
$
(939)
|
|
$
2,656
|
|
$
6,800
|
|
Dividend
payable
|
$
263
|
|
$
—
|
|
$
—
|
Non-GAAP Financial Measures
This press release includes non-GAAP financial measures. These
non-GAAP measures are not alternatives to GAAP measures, and you
should not consider these non-GAAP measures in isolation or as a
substitute for analysis of our results as reported under GAAP.
Below is additional disclosure regarding each of the non-GAAP
measures used in this press release, including reconciliations to
their most directly comparable GAAP measure.
Reconciliation of Net Cash Provided by Operating
Activities to Adjusted Operating Cash Flow
The Company defines Adjusted operating cash flow as net cash
provided by operating activities before changes in operating assets
and liabilities as shown in the following table. Adjusted operating
cash flow is a supplemental financial measure 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 or incur new debt. The Company also uses this measure
because operating cash flow relates 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 allows the Company to compare
its operating performance and return on capital with those of other
companies without regard to financing methods and capital
structure. This measure should not be considered in isolation or as
a substitute for net cash provided by operating activities prepared
in accordance with GAAP.
|
Three Months Ended
December 31,
|
|
Year Ended December
31,
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
|
|
|
|
|
|
|
|
|
(In
thousands)
|
|
Net cash provided by
operating activities
|
$
26,219
|
|
$
30,066
|
|
$
115,578
|
|
$
164,696
|
|
Changes in operating
assets and liabilities
|
(4,012)
|
|
15,522
|
|
(12,052)
|
|
28,056
|
|
Adjusted operating cash
flow
|
$
22,207
|
|
$
45,588
|
|
$
103,526
|
|
$
192,752
|
Reconciliation of Free Cash Flow
The Company defines free cash flow as net cash provided by
operating activities plus net cash (used in) provided by investing
activities less the cash flow impact of acquisitions and
divestitures. Free cash flow is a supplemental financial measure
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 or incur new debt. This
measure should not be considered in isolation or as a substitute
for net cash provided by operating or investing activities prepared
in accordance with GAAP.
|
Three Months Ended
December 31,
|
|
Year Ended December
31,
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
|
|
|
|
|
|
|
|
|
(In
thousands)
|
|
Net cash provided by
operating activities
|
$
26,219
|
|
$
30,066
|
|
$
115,578
|
|
$
164,696
|
|
Net cash (used in)
provided by investing activities
|
(633)
|
|
(12,956)
|
|
(36,164)
|
|
(45,117)
|
|
Acquisition of
assets
|
—
|
|
—
|
|
11,232
|
|
1,431
|
|
Proceeds from sale of
assets
|
(61)
|
|
—
|
|
(1,472)
|
|
(448)
|
|
Free cash
flow
|
$
25,525
|
|
$
17,110
|
|
$
89,174
|
|
$
120,562
|
Reconciliation of Net Income to EBITDA and Adjusted
EBITDA
The Company defines EBITDA as net income before income tax
(benefit) expense, interest expense, depreciation and amortization
- other and depreciation and depletion - oil and natural gas.
Adjusted EBITDA, as presented herein, is EBITDA excluding items
that management believes affect the comparability of operating
results such as items whose timing and/or amount cannot be
reasonably estimated or are non-recurring, as shown in the
following tables.
Adjusted EBITDA is presented because management believes it
provides useful additional information used by the Company's
management and by securities analysts, investors, lenders, ratings
agencies and others who follow the industry for analysis of the
Company's financial and operating performance on a recurring basis
and the Company's ability to internally fund exploration and
development activities or incur new debt. In addition, management
believes that adjusted EBITDA is widely used by professional
research analysts and others in the valuation, comparison and
investment recommendations of companies in the oil and gas
industry. The Company's adjusted EBITDA may not be comparable to
similarly titled measures used by other companies.
|
Three Months Ended
December 31,
|
|
Year Ended December
31,
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
|
|
|
|
|
|
|
|
|
(In
thousands)
|
|
Net income
|
$
1,792
|
|
$
105,227
|
|
$
60,857
|
|
$
242,168
|
|
Adjusted for
|
|
|
|
|
|
|
|
|
Income tax
(benefit)(1)
|
13,960
|
|
(64,529)
|
|
13,960
|
|
(64,529)
|
|
Interest
expense
|
29
|
|
16
|
|
104
|
|
215
|
|
Depreciation and
amortization - other
|
1,648
|
|
1,622
|
|
6,518
|
|
6,342
|
|
Depreciation and
depletion - oil and natural gas
|
4,242
|
|
3,224
|
|
15,657
|
|
11,542
|
|
EBITDA
|
21,671
|
|
45,560
|
|
97,096
|
|
195,738
|
|
|
|
|
|
|
|
|
|
Stock-based
compensation
|
523
|
|
395
|
|
1,945
|
|
1,526
|
|
(Gain) loss on
derivative contracts
|
—
|
|
(2,781)
|
|
(1,447)
|
|
(5,975)
|
|
Net Cash (paid)
received upon settlement of derivative contracts
|
—
|
|
2,392
|
|
5,876
|
|
1,525
|
|
Restructuring (credits)
expenses
|
63
|
|
(336)
|
|
406
|
|
382
|
|
Interest
Income
|
(2,799)
|
|
(2,017)
|
|
(10,656)
|
|
(2,026)
|
|
Other
|
—
|
|
(2)
|
|
19
|
|
(1)
|
|
Adjusted
EBITDA
|
$
19,458
|
|
$
43,211
|
|
$
93,239
|
|
$
191,169
|
|
|
|
|
|
|
|
|
|
(1)
Represents deferred tax expense recorded in the fourth quarter of
2023 resulting from valuation allowance movement.
|
|
|
Reconciliation of Cash Provided by Operating Activities to
Adjusted EBITDA
|
Three Months Ended
December 31,
|
|
Year Ended December
31,
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
|
|
|
|
|
|
|
|
|
(In
thousands)
|
|
Net cash provided by
operating activities
|
$
26,219
|
|
$
30,066
|
|
$
115,578
|
|
$
164,696
|
|
Changes in operating
assets and liabilities
|
(4,012)
|
|
15,522
|
|
(12,052)
|
|
28,056
|
|
Interest
expense
|
29
|
|
16
|
|
104
|
|
215
|
|
Interest
Income
|
(2,799)
|
|
(2,017)
|
|
(10,656)
|
|
(2,026)
|
|
Other
|
21
|
|
(376)
|
|
265
|
|
228
|
|
Adjusted
EBITDA
|
$
19,458
|
|
$
43,211
|
|
$
93,239
|
|
$
191,169
|
Reconciliation of Net Income Available to
Common Stockholders to Adjusted Net Income Available to Common
Stockholders
The Company defines adjusted net income as net income excluding
items that management believes affect the comparability of
operating results and are typically excluded from published
estimates by the investment community, including items whose timing
and/or amount cannot be reasonably estimated or are non-recurring,
as shown in the following tables.
Management uses the supplemental measure of adjusted net income
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 net income available to common stockholders.
|
Three Months Ended
December 31, 2023
|
|
Three Months Ended
December 31, 2022
|
|
$
|
|
$/Diluted
Share
|
|
$
|
|
$/Diluted
Share
|
|
(In thousands,
except per share amounts)
|
|
Net income available to
common stockholders
|
$
1,792
|
|
$
0.05
|
|
$
105,227
|
|
$
2.83
|
|
(Gain) loss on
derivative contracts
|
—
|
|
—
|
|
(2,781)
|
|
(0.07)
|
|
Settlement gains
(losses) on derivative contracts
|
—
|
|
—
|
|
2,392
|
|
0.06
|
|
Restructuring (credits)
expenses
|
63
|
|
—
|
|
(336)
|
|
(0.01)
|
|
Interest
Income
|
(2,799)
|
|
(0.08)
|
|
(2,017)
|
|
(0.05)
|
|
Other
|
—
|
|
—
|
|
(2)
|
|
—
|
|
Income tax
(benefit)(1)
|
13,960
|
|
0.38
|
|
(64,529)
|
|
(1.74)
|
|
Adjusted net income
available to common stockholders
|
$
13,016
|
|
$
0.35
|
|
$
37,954
|
|
$
1.02
|
|
|
|
|
|
|
|
|
|
Basic
|
|
Diluted
|
|
Basic
|
|
Diluted
|
|
Weighted average number
of common shares outstanding
|
37,038
|
|
37,147
|
|
36,850
|
|
37,160
|
|
Total adjusted net
income per share
|
$
0.35
|
|
$
0.35
|
|
$
1.03
|
|
$
1.02
|
|
|
|
|
|
|
|
|
|
(1)
Represents deferred tax expense (benefit) recorded in the fourth
quarter of 2023 and 2022, respectively, resulting from valuation
allowance movement.
|
|
Year Ended December
31, 2023
|
|
Year Ended December
31, 2022
|
|
$
|
|
$/Diluted
Share
|
|
$
|
|
$/Diluted
Share
|
|
(In thousands,
except per share amounts)
|
|
Net income available to
common stockholders
|
$
60,857
|
|
$
1.64
|
|
$
242,168
|
|
$
6.52
|
|
(Gain) loss on
derivative contracts
|
(1,447)
|
|
(0.04)
|
|
(5,975)
|
|
(0.16)
|
|
Settlement gains
(losses) on derivative contracts
|
5,876
|
|
0.16
|
|
1,525
|
|
0.04
|
|
Restructuring
expenses
|
406
|
|
0.01
|
|
382
|
|
0.01
|
|
Income tax
(benefit)(1)
|
13,960
|
|
0.38
|
|
(64,529)
|
|
(1.74)
|
|
Interest
Income
|
(10,656)
|
|
(0.29)
|
|
(2,026)
|
|
(0.05)
|
|
Other
|
19
|
|
—
|
|
(1)
|
|
—
|
|
Adjusted net income
available to common stockholders
|
$
69,015
|
|
$
1.86
|
|
$
171,544
|
|
$
4.62
|
|
|
|
|
|
|
|
|
|
Basic
|
|
Diluted
|
|
Basic
|
|
Diluted
|
|
Weighted average number
of common shares outstanding
|
36,939
|
|
37,134
|
|
36,745
|
|
37,154
|
|
Total adjusted net
income per share
|
$
1.87
|
|
$
1.86
|
|
$
4.67
|
|
$
4.62
|
Reconciliation of G&A to Adjusted G&A
The Company reports and provides guidance on Adjusted G&A
per Boe because it believes this measure is commonly used by
management, analysts and investors as an indicator of cost
management and operating efficiency on a comparable basis from
period to period and to compare and make investment recommendations
of companies in the oil and gas industry. This non-GAAP measure
allows for the analysis of general and administrative spend without
regard to stock-based compensation programs and other non-recurring
cash items, if any, which can vary significantly between companies.
Adjusted G&A per Boe is not a measure of financial performance
under GAAP and should not be considered a substitute for general
and administrative expense per Boe. Therefore, the Company's
Adjusted G&A per Boe may not be comparable to other companies'
similarly titled measures.
The Company defines adjusted G&A as general and
administrative expense adjusted for certain non-cash stock-based
compensation and other non-recurring items, if any, as shown in the
following tables:
|
Three Months Ended
December 31, 2023
|
|
Three Months Ended
December 31, 2022
|
|
$
|
|
$/Boe
|
|
$
|
|
$/Boe
|
|
(In thousands,
except per Boe amounts)
|
|
General and
administrative
|
$
2,731
|
|
$
1.85
|
|
$
2,366
|
|
$
1.48
|
|
Stock-based
compensation
|
(523)
|
|
(0.36)
|
|
(395)
|
|
(0.25)
|
|
Adjusted
G&A
|
$
2,208
|
|
$
1.49
|
|
$
1,971
|
|
$
1.23
|
|
Year Ended December
31, 2023
|
|
Year Ended December
31, 2022
|
|
$
|
|
$/Boe
|
|
$
|
|
$/Boe
|
|
(In thousands,
except per Boe amounts)
|
|
General and
administrative
|
$
10,735
|
|
$
1.74
|
|
$
9,449
|
|
$
1.46
|
|
Stock-based
compensation
|
(1,945)
|
|
(0.32)
|
|
(1,526)
|
|
(0.24)
|
|
Adjusted
G&A
|
$
8,790
|
|
$
1.42
|
|
$
7,923
|
|
$
1.22
|
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 "2024
Operational and Capital Expenditure Guidance." These
forward-looking statements are neither historical facts nor
assurances of future performance and reflect SandRidge's current
beliefs and expectations regarding future events and operating
performance. The forward-looking statements include projections and
estimates of the Company's corporate strategies, future operations,
development plans and appraisal programs, drilling inventory and
locations, estimated oil, natural gas and natural gas liquids
production, price realizations and differentials, hedging program,
projected operating, general and administrative and other costs,
projected capital expenditures, tax rates, efficiency and cost
reduction initiative outcomes, liquidity and capital structure. 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
transact 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 and in comparable "Risk Factor"
sections of our Quarterly Reports on Form 10-Q filed after such
form 10-K. 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 independent oil and
gas company engaged in the development and acquisition of oil and
gas properties. Its primary areas of operation are the
Mid-Continent in Oklahoma and
Kansas. Further information can be
found at www.sandridgeenergy.com.
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