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SANDRIDGE ENERGY, INC. ANNOUNCES FINANCIAL AND OPERATING RESULTS FOR THE QUARTER AND YEAR ENDED DECEMBER 31, 2021; PROVIDES FULL YEAR 2022 OPERATIONAL AND CAPITAL EXPENDITURE GUIDANCE

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OKLAHOMA CITY, March 9, 2022 /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, 2021.

SandRidge Energy, Inc. logo. (PRNewsFoto/SandRidge Energy, Inc.)
SandRidge Energy, Inc. logo. (PRNewsFoto/SandRidge Energy, Inc.)

Recent Highlights

  • 2021 net cash(1) increased by $131.3 million year-over-year to $139.5 million, which represents net cash of $3.80 per share of common stock issued and outstanding as of December 31, 2021

  • Generated Adjusted EBITDA of $113.5 million in 2021 compared to $53.4 million in the prior year

  • Generated net income of $116.7 million, or $3.21 per share in 2021. Adjusted net income was $96.3 million, or $2.65 per share

  • Announced 2022 operational and capital expenditure guidance, including the drilling and completion of 9 new wells on the Company's Northwest Stack acreage and the continuation of its high-return well reactivation program

  • Decreased Adjusted G&A(2) by $5.8 million to $8.3 million, or $1.22 per Boe, from $14.1 million, or $1.62 per Boe, in the prior year

  • As of December 31, 2021, the Company returned 129 wells to production that were previously curtailed due to the 2020 commodity price downturn contributing to a flat Mid-Continent production profile over the course of the year

  • Decreased 2021 LOE by $7.4 million to $36.0 million, or $5.30 per Boe, from $43.4 million, or $4.99 per Boe, in the prior year

Financial Results & Update

Profitability & Realized Pricing

For the quarter, the Company reported net income of $36.8 million, or $1.01 per share, and net cash provided by operating activities of $43.9 million. After adjusting for certain items, the Company's adjusted net income(2) amounted to $32.9 million, or $0.90 per share, operating cash flow(2) totaled $37.3 million and adjusted EBITDA was $37.5 million for the quarter. 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.

Fourth quarter realized oil, natural gas, and natural gas liquids prices, before the impact of derivatives,(3) were $75.72, $3.94 and $28.39, respectively, compared to $69.40, $2.89 and $26.93 in the prior quarter.

For the full year 2021, the Company reported net income of $116.7 million, or $3.21 per share, and net cash provided by operating activities of $110.3 million. After adjusting for certain items, the Company's adjusted net income amounted to $96.3 million, or $2.65 per share, operating cash flow totaled $112.7 million and adjusted EBITDA was $113.5 million for the year.

Operating Costs

During the fourth quarter of 2021, lease operating expense ("LOE") was $9.7 million or $5.74 per Boe compared to $9.1 million, or $5.27 per Boe in the prior quarter.

For the three months ended December 31, 2021, general and administrative expense ("G&A") was $2.8 million, or $1.67 per Boe compared to $2.2 million, or $1.29 per Boe in the prior quarter. Adjusted G&A(2) was $2.5 million, or $1.46 per Boe during the fourth quarter of 2021 compared to $2.0 million, or $1.15 per Boe in the prior quarter.

Share Repurchase Program

The Company did not repurchase any shares during the fourth quarter, under the Program announced in August 2021, which authorizes the Company to purchase an aggregate of $25.0 million of the Company's common stock, in accordance with Rule 10b-18 of the Exchange Act. Subject to applicable rules and regulations, repurchases under the Program can be made from time to time in open markets at the Company's discretion, and in compliance with safe harbor provisions, or in privately negotiated transactions. The Program does not require any specific number of shares be acquired and can be discontinued by the Company's Board of Directors at any time.

Operational Results & Update

Production

Production totaled 1,697 MBoe (18.4 MBoed, 13% oil, 34% NGLs and 53% natural gas) for the quarter and 6,793 MBoe (18.6 MBoed, 14% oil, 33% NGLs and 53% natural gas) for the full year of 2021. Total production includes North Park Basin prior to February 5, 2021.

Production in the Mid-Continent totaled 1,697 MBoe (18.4 MBoed, 13% oil, 34% NGLs and 53% natural gas) for the quarter and 6,726 MBoe (18.4 MBoed, 13% oil, 34% NGLs and 53% natural gas) for the full year of 2021.

2022 Development Program

The Company plans to drill and complete 9 new wells with high rates of return on its previously delineated Northwest Stack acreage in 2022. Sustained increases in commodity prices, along with SandRidge's position as a low-cost operator in the area, will help the Company deliver strong full-cycle returns through its budgeted drilling program. In addition to these new wells, the Company plans to continue its well reactivation program throughout the year. These development plans are reflected in the 2022 Operational and Capital Expenditure Guidance section of this press release.

Well Reactivation Program

During the fourth quarter of 2021, the Company continued returning wells to production that were previously curtailed due to the commodity price downturn in the first half of 2020 and, in many cases, improving their production potential through modest capital improvements. Focused efforts to improve operating costs, along with commodity prices rebounding from their 2020 lows, have bolstered the economics of these well reactivation projects. High rates of return and low execution risk support the Company's belief that these projects represent an efficient use of capital. As of December 31, 2021, the Company brought 129 wells back online. Approximately 108 of these wells required workovers to return to service and accounted for capital expenditures of $7.0 million and expense dollars of $1.2 million. The balance of the wells required little to no expense to reactivate.

Proved Developed PV-10

As outlined in the table below under "Year End 2021 Estimated Proved Reserves," SandRidge's SEC proved developed reserve PV-10 is approximately $433.0 million. Management believes the unaudited proved developed PV-10 reserve value of SandRidge's Mid-Continent assets to be approximately $546.0 million,(4) with an effective date of January 1, 2022, as routinely updated from the Company's engineered year-end reserves, consistent with standard industry reserve practice using NYMEX strip pricing as of March 2, 2022.

Environmental, Social, and Governance ("ESG")

SandRidge maintains its Environmental, Social, and Governance ("ESG") commitment. The Company continues to investigate the technical feasibility and commercial viability of Carbon Capture, Utilization, and Sequestration ("CCUS") potential across the Company's owned and operated infrastructure footprint through its previously announced partnership with the University of Oklahoma. Additionally, SandRidge maintains its commitment to not engage in the routine flaring of produced natural gas.

Year End 2021 Estimated Proved Reserves

Proved reserves increased from 36.9 MMBoe at December 31, 2020 to 71.3 MMBoe at December 31, 2021, primarily as a result of positive revisions of 43.3 MMBoe associated with the increase in year-end SEC commodity prices for oil and natural gas, reduction in expenses, improved realizations and other improvements, 2021 well reactivation program and purchases of 1.4 MMBoe of proved reserves. The Company also recorded 2021 production totaling 6.8 MMBoe and a decrease of 3.6 MMBoe primarily due to the sale of NPB assets.


Oil MBbls


NGLs MBbls


Gas MMcf


Equivalent MBoe(5)


Standardized
Measure /PV-
10 $MM

Proved Reserves, December 31, 2020

8,485


11,245


102,893


36,879


$ 105

Revisions of previous estimates(6)

3,627


14,924


148,736


43,340



Acquisitions of new reserves

135


438


5,235


1,446



Sales of reserves in place

(3,440)


(28)


(716)


(3,587)



Production

(957)


(2,266)


(21,417)


(6,793)



Proved Reserves, December 31, 2021

7,850


24,313


234,731


71,285


$ 433











2022 Operational and Capital Expenditure Guidance

In 2022, the Company plans to spend $34 - $42 million in drilling and completions ("D&C") capital and $7 - $8 million in non-D&C capital. Total production for 2022 is projected to be 5.6 - 6.8 MMBoe. Other operational guidance details can be found on the "2022 Operational and Capital Expenditure Guidance" table below.

Liquidity and Capital Structure

As of December 31, 2021, the Company had $139.5 million of cash and cash equivalents, including restricted cash. As of March 7, 2022, the Company's cash on hand, including restricted cash, was approximately $161.0 million. The Company repaid its outstanding term loan and terminated its credit facility in early September. As of March 9, 2022, the Company had no remaining term or revolving debt obligations.

Conference Call Information

The Company will host a conference call to discuss these results as well as an updated investor presentation on Thursday, March 10, 2022 at 10:00 am CT. The conference call can be accessed by registering online at https://conferencingportals.com/event/zyeigzBU 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 presentation will be made available on the Company's website at http://investors.sandridgeenergy.com/Investor-Relations/.

A live audio webcast of the conference call will also be available via SandRidge's website, www.sandridgeenergy.com, under Investor Relations/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 and acquisition of oil and gas properties. Its primary area of operations is the Mid-Continent region in Oklahoma and Kansas. Further information can be found at www.sandridgeenergy.com.

-Tables to Follow-




(1)

Net Cash is defined as total cash and cash equivalents less total debt.

(2)

See "Non-GAAP Financial Measures" section at the end of this press release for non-GAAP financial measures definitions.

(3)

See "Operational and Financial Statistics" section at the end of this press release for impacts of derivatives on commodity price realizations.

(4)

Management's internal unaudited proved developed reserve PV-10, utilizing forward-looking pricing and other assumptions, do not reflect audited or engineered SEC historical price-based reserves, as routinely updated from the Company's year-end reserves, consistent with industry practice. Pricing assumptions include March 2, 2022 NYMEX strip pricing (next twelve months average WTI of $94.08 per Bbl and average Henry Hub of $4.90 per Mcf) as well as price realizations and lease operating expense, based on a historical twelve-month trailing average.

(5)

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.

(6)

Revisions include changes due to previous quantity estimates, pricing, and productions costs.

2022 Operational and Capital Expenditure Guidance

Presented below is the Company's operational and capital expenditure guidance for 2022.


2022 Guidance

Production


Oil (MMBbls)

0.9 - 1.1

Natural Gas Liquids (MMBbls)

1.8 - 2.2

Total Liquids (MMBbls)

2.7 - 3.3

Natural Gas (Bcf)

17.5 - 21.0

Total (MMBoe)

5.6 - 6.8



Capital Expenditures


Drilling & Completions ("D&C")

$34 - $42 million

Non-D&C

$7 - $8 million

Total Capital Expenditures (excl. acquisitions and plugging and abandonment)

$41 - $50 million



Expenses


Lease Operating Expenses ("LOE")

$33 - $41 million

Adjusted General & Administrative ("G&A") Expenses (1)

$8.5 - $11.5 million

Severance and Ad Valorem Taxes (% of Revenue)

6.0% - 7.0%



Price Differentials


Oil (% of WTI)

~97%

NGL (% of WTI)

~30%

Natural Gas (% of HH)

~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,


2021


2020


2021


2020

Production - Total (1)








Oil (MBbl)

223


428


957


2,084

NGL (MBbl)

581


598


2,267


2,694

Natural Gas (MMcf)

5,358


5,474


21,417


23,552

Oil equivalent (MBoe)

1,697


1,938


6,793


8,703

Daily production (MBoed)

18.4


21.1


18.6


23.8









Average price per unit








Realized oil price per barrel - as reported

$ 75.72


$ 38.18


$ 65.10


$ 35.33

Realized impact of derivatives per barrel




4.77

Net realized price per barrel

$ 75.72


$ 38.18


$ 65.10


$ 40.10









Realized NGL price per barrel - as reported

$ 28.39


$ 9.12


$ 22.42


$ 6.67

Realized impact of derivatives per barrel

(0.57)



(0.14)


Net realized price per barrel

$ 27.82


$ 9.12


$ 22.28


$ 6.67









Realized natural gas price per Mcf - as reported

$ 3.94


$ 1.56


$ 2.60


$ 0.97

Realized impact of derivatives per Mcf

(0.36)


(0.98)


(0.09)


(0.17)

Net realized price per Mcf

$ 3.58


$ 0.58


$ 2.51


$ 0.80









Realized price per Boe - as reported

$ 32.11


$ 15.64


$ 24.86


$ 13.15

Net realized price per Boe - including impact of derivatives

$ 30.80


$ 12.90


$ 24.53


$ 13.83









Average cost per Boe








Lease operating

$ 5.74


$ 5.69


$ 5.30


$ 4.99

Production, ad valorem, and other taxes

$ 1.76


$ 1.16


$ 1.46


$ 1.11

Depletion (2)

$ 1.52


$ 2.38


$ 1.38


$ 5.79









Income (loss) per share








Income (loss) per share applicable to common stockholders








Basic

$ 1.01


$ (0.01)


$ 3.21


$ (7.77)

Diluted

$ 0.99


$ (0.01)


$ 3.13


$ (7.77)









Adjusted net income (loss) per share available to common stockholders








Basic

$ 0.90


$ 0.06


$ 2.65


$ (0.20)

Diluted

$ 0.89


$ 0.06


$ 2.58


$ (0.20)









Weighted average number of shares outstanding (in thousands)








Basic

36,618


35,808


36,393


35,689

Diluted

37,031


35,808


37,271


35,689









(1) Includes North Park Basin prior to February 5.








(2) Includes accretion of asset retirement obligation.








Capital Expenditures

The table below presents actual results of the Company's capital expenditures for the three months and year ended December 31, 2021.


Three Months Ended


Year Ended


December 31, 2021


December 31, 2021


(In thousands)


(In thousands)





Drilling, completion and capital workovers

$ 3,671


$ 10,045

Other capital expenditures

438


905

Total Capital Expenditures

$ 4,109


$ 10,950

(excluding acquisitions and plugging and abandonment)




Derivative Contracts

The table below sets forth the Company's open derivative contracts as of December 31, 2021.



Notional


Units


Weighted Average
Fixed Price per Unit

NGL Price Swaps: January 2022 - February 2022


1,042,000


Gallons


$ 1.20

Natural Gas Price Swaps: January 2022 - February 2022


720,000


MMBtu


$ 4.07

Capitalization

The Company's capital structure as of December 31, 2021 and December 31, 2020 is presented below:


December 31, 2021


December 31, 2020






(In thousands)

Cash, cash equivalents and restricted cash

$ 139,524


$ 28,266





Credit facility

$ —


$ 20,000

Total debt


20,000





Stockholders' equity




Common stock

37


36

Warrants

88,520


88,520

Additional paid-in capital

1,062,737


1,062,220

Accumulated deficit

(905,972)


(1,022,710)

Total SandRidge Energy, Inc. stockholders' equity

245,322


128,066





Total capitalization

$ 245,322


$ 148,066

SandRidge Energy, Inc. and Subsidiaries
Consolidated Statements of Operations
(In thousands, except per share amounts)




Year Ended December 31,



2021


2020


2019

Revenues







Oil, natural gas and NGL


$ 168,882


$ 114,450


$ 266,104

Other



526


741

Total revenues


168,882


114,976


266,845

Expenses







Lease operating expenses


35,999


43,431


90,938

Production, ad valorem, and other taxes


9,918


9,634


19,394

Depreciation and depletion—oil and natural gas


9,372


50,349


146,874

Depreciation and amortization—other


6,073


7,736


11,684

Impairment



256,399


409,574

General and administrative


9,675


15,327


32,058

Restructuring expenses


792


2,733


Employee termination benefits


49


8,433


4,792

Loss (gain) on derivative contracts


2,251


(5,765)


(1,094)

(Gain) loss on sale of assets


(18,952)


(100)


Other operating (income) expense


(382)


306


(608)

Total expenses


54,795


388,483


713,612

Income (loss) from operations


114,087


(273,507)


(446,767)

Other income (expense)







Interest expense, net


(404)


(1,998)


(2,974)

Other income (expense), net


3,055


(2,494)


436

Total other income (expense)


2,651


(4,492)


(2,538)

Income (loss) before income taxes


116,738


(277,999)


(449,305)

Income tax expense (benefit)



(646)


Net income (loss)


$ 116,738


$ (277,353)


$ (449,305)

Net income (loss) per share







Basic


$ 3.21


$ (7.77)


$ (12.68)

Diluted


$ 3.13


$ (7.77)


$ (12.68)

Weighted average number of common shares outstanding







Basic


36,393


35,689


35,427

Diluted


37,271


35,689


35,427

SandRidge Energy, Inc. and Subsidiaries
Consolidated Balance Sheets
(In thousands)



December 31, 2021


December 31, 2020

ASSETS




Current assets




Cash and cash equivalents

$ 137,260


$ 22,130

Restricted cash - other

2,264


6,136

Accounts receivable, net

21,505


19,576

Prepaid expenses

626


2,890

Other current assets

80


80

Total current assets

161,735


50,812

Oil and natural gas properties, using full cost method of accounting




Proved

1,454,016


1,463,950

Unproved

12,255


17,964

Less: accumulated depreciation, depletion and impairment

(1,373,217)


(1,375,692)


93,054


106,222

Other property, plant and equipment, net

97,791


103,118

Other assets

332


680

Total assets

$ 352,912


$ 260,832





LIABILITIES AND STOCKHOLDERS' EQUITY




Current liabilities




Accounts payable and accrued expenses

$ 45,779


$ 51,426

Asset retirement obligation

17,606


16,467

Derivative contracts

21


Other current liabilities

627


984

Total current liabilities

64,033


68,877

Long-term debt