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 January 8, 2015 - 4:36 PM EST
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SandRidge Energy, Inc. Updates Shareholders on Financial Results for Third Quarter 2014 and First Nine Months of 2014

Reported Adjusted Earnings of $0.07 per Diluted Share and Adjusted EBITDA of $225 Million for the Third Quarter Restated 2013-2014 Quarterly Financial Results to Incorporate New Accounting Treatment Will Announce 2015 Capex Plans In February Fully Undrawn Borrowing Base is $1.2 Billion with Current Facility of $900 Million

OKLAHOMA CITY, Jan. 8, 2015 /PRNewswire/ -- SandRidge Energy, Inc. (the "Company") (NYSE: SD) today announced financial results for the quarter that ended September 30, 2014. The Company also filed restated results for quarterly periods in 2013 and 2014.

SandRidge Energy, Inc. logo

Eddie LeBlanc, SandRidge's Chief Financial Officer and Executive Vice-President, commented, "Today's release of financial results for the third quarter of 2014 complements our November 2014 operating results press release. As the result of discussions with the SEC, we are now accruing a portion of the annual CO2 under delivery penalty each quarter which we previously recorded at the end of each year. Restated financial statements are included in amended historic quarterly and annual reports we are filing today. Importantly, annual results and cash flows remain unchanged."

Key Financial Results

Third Quarter 

  • Adjusted EBITDA, pro forma for divestitures and net of Noncontrolling Interest, was $225 million in the third quarter of 2014 compared to $160 million in the third quarter of 2013, 41% year-over-year growth.
  • Adjusted operating cash flow of $203 million for third quarter 2014 compared to $227 million in third quarter 2013.
  • Adjusted net income of $43.0 million, or $0.07 per diluted share, for third quarter 2014 compared to adjusted net income of $31.7 million, or $0.06 per diluted share, in third quarter 2013.

Nine Months

  • Adjusted EBITDA, pro forma for divestitures and net of Noncontrolling Interest, was $596 million in the first nine months of 2014 compared to $418 million in the first nine months of 2013, 42% year-over-year growth.
  • Adjusted operating cash flow of $509 million for first nine months of 2014 compared to $569 million in first nine months of 2013. Included in the first nine months of 2014 results is $70 million of cash paid to unwind hedges related to the Gulf of Mexico divestiture.
  • Adjusted net income of $109.2 million, or $0.19 per diluted share, for first nine months of 2014 compared to adjusted net income of $64.9 million, or $0.11 per diluted share, in first nine months of 2013.

Adjusted net income available to common stockholders, 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 7.

As previously discussed in a Form 8-K filed on November 4, 2014, the Company has been in discussions with the Securities and Exchange Commission regarding certain accounting matters.  As a result of these discussions, the Company restated its 2013 Annual Report on Form 10-K and its Quarterly Reports on Form 10-Q for the quarters ended March 31, 2014 and June 30, 2014. For the three month periods ended, March 31, 2013 and 2014 and June 30, 2013 and 2014, an estimated CO2 under delivery shortfall penalty was recorded in each quarter. The effect of the restatement for 2013 is to transfer a portion of the annual CO2 under delivery shortfall penalty accrual that was previously recorded at year-end to the quarter-end periods within such year. The change in accounting treatment impacts the first, second and third quarters of 2013 by approximately $8 million of net income per quarter, while rendering no change to the 2013 annual net income. The first and second quarters of 2014 are also impacted by approximately $8 million of net income per quarter.

Additionally, the Company also revised the recording of the Century Plant construction contract to account for it under the full cost method of accounting rather than the completed contract method of accounting for the year ended 2012. This resulted in eliminating an equal amount of income and expense from the 2012 Condensed Consolidated Statements of Operations and had no impact on total assets, total liabilities, net income or retained earnings.  

These restatements along with our Form 10-Q for the three month period ended September 30, 2014, which also included restated financial information related to the delivery shortfall penalty accrued for the three month period ended September 30, 2013, were filed on January 8, 2015.

James Bennett, SandRidge's Chief Executive Officer and President, stated, "As highlighted in our November third quarter operations update, we're expanding our low cost multilateral program and successfully extending our Mid-Continent resource base with Chester and Woodford production. Since the operating update, oil prices have fallen sharply; however, SandRidge is defensively positioned for 2015. We have an enviable hedge position on the vast majority of our liquids production, have no bond maturities until 2020 and at quarter end $1.4 billion of liquidity. Importantly, our Mid-Continent drilling program continues to generate commercial returns, even at current commodity prices. Given the market backdrop, we are high grading our development plans and are already reducing our rig count and capex levels. We anticipate announcing 2015 capital plans and full year guidance in February. Meanwhile, our teams are focused on continued well cost reductions, now further supported by likely lower service costs ahead."

Operational and Financial Statistics

Information regarding the Company's production, pricing, costs and earnings is presented below:


Three Months Ended September 30,


Nine Months Ended September 30,

2014


2013


2014


2013

Production









Oil (MBbl)


2,644


3,372


7,927


10,902

NGL (MBbl)


1,109


577


2,500


1,608

Natural gas (MMcf)


21,501


25,788


62,335


78,342

Oil equivalent (MBoe)


7,337


8,247


20,816


25,567

Daily production (MBoed)


79.7


89.6


76.2


93.7













Production - Pro Forma (1)









Oil (MBbl)


2,644


2,278


7,254


6,629

NGL (MBbl)


1,109


453


2,447


1,009

Natural gas (MMcf)


21,501


18,525


58,760


52,921

Oil equivalent (MBoe)


7,337


5,819


19,495


16,458

Daily production (MBoed)


79.7


63.3


71.4


60.3













Average price per unit









Realized oil price per barrel - as reported


$                94.60


$              105.87


$                97.12


$                98.39

Realized impact of derivatives per barrel


0.26


(6.21)


(1.27)


1.10

Net realized price per barrel


$                94.86


$                99.66


$                95.85


$                99.49













Realized NGL price per barrel - as reported


$                35.84


$                36.35


$                37.84


$                34.49

Realized impact of derivatives per barrel


-


-


-


-

Net realized price per barrel


$                35.84


$                36.35


$                37.84


$                34.49













Realized natural gas price per Mcf - as reported


$                 3.24


$                 3.15


$                 3.86


$                 3.36

Realized impact of derivatives per Mcf


0.13


0.30


(0.22)


0.08

Net realized price per Mcf


$                 3.37


$                 3.45


$                 3.64


$                 3.44













Realized price per Boe - as reported


$                49.01


$                55.68


$                53.08


$                54.43

Net realized price per Boe - including impact of derivatives


$                49.48


$                54.08


$                51.95


$                55.11













Average cost per Boe









Lease operating (2) 


$                11.27


$                15.11


$                12.32


$                15.25

Production taxes


1.14


1.07


1.15


0.97













General and administrative










General and administrative, excluding stock-based compensation


$                 2.77


$                 4.01


$                 3.80


$                 8.35


Stock-based compensation


0.58


0.84


0.76


3.10


Total general and administrative


$                 3.35


$                 4.85


$                 4.56


$                11.45













General and administrative - adjusted










General and administrative, excluding stock-based compensation (3)


$                 2.76


$                 3.68


$                 3.44


$                 4.35


Stock-based compensation (4)


0.55


0.64


0.66


0.96


Total general and administrative - adjusted


$                 3.31


$                 4.32


$                 4.10


$                 5.31













Depletion (5)


$                15.49


$                17.72


$                15.99


$                18.07













Lease operating cost per Boe









Mid-Continent


$                 7.87


$                 7.02


$                 7.76


$                 7.77













Earnings per share









Earnings (loss) per share applicable to common stockholders










Basic


$                 0.30


$                (0.20)


$                (0.11)


$                (1.33)


Diluted


0.27


(0.20)


(0.11)


(1.33)













Adjusted net income per share available to common stockholders










Basic


$                 0.07


$                 0.04


$                 0.14


$                 0.05


Diluted


0.07


0.06


0.19


0.11













Weighted average number of common shares outstanding (in thousands)










Basic


485,458


483,582


485,194


480,209


Diluted (6)


575,912


573,716


578,125


571,354



(1)

Excludes production attributable to Permian properties (sold first quarter 2013) and Gulf of Mexico properties (sold first quarter 2014).

(2)

Expense for three and nine-month periods ended September 30, 2013 has been restated for quarterly accrual of CO2delivery shortfall penalty.

(3)

Excludes transaction costs, legal settlements, severance and consent solicitation costs totaling$0.1 million and $7.5 million for the three and nine-month periods ended September 30, 2014, respectively.  Excludes  transaction costs, legal settlements, severance, annual incentive plan adoption effect and consent solicitation costs totaling $2.7 million and $102.2 million for the three and nine-month periods ended September 30, 2013, respectively.

(4)

Excludes $0.2 million and $2.2 million for the three and nine-month periods ended September 30, 2014, respectively, and $1.7 million and $54.7 million for the three and nine-month periods ended September 30, 2013, respectively, for the acceleration of stock awards.

(5)

Includes accretion of asset retirement obligation.

(6)

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 and nine-month periods ended September 30, 2014 and 2013:





Three Months Ended September 30,


Nine Months Ended September 30,




2014


2013


2014


2013






(in thousands)













Drilling and production










Mid-Continent


$           336,171


$           188,374


$           743,059


$           647,019


Permian Basin


49,314


44,309


155,788


155,903


Gulf of Mexico/Gulf Coast


-


47,708


22,975


161,700






385,485


280,391


921,822


964,622

Leasehold and seismic










Mid-Continent


47,260


13,526


127,296


52,611


Permian Basin


85


-


624


-


Gulf of Mexico/Gulf Coast 


-


723


159


2,072


WTO/Other


2,255


1,370


7,366


3,832






49,600


15,619


135,445


58,515













Inventory


674


(3,351)


(728)


(14,384)













Total exploration and development


435,759


292,659


1,056,539


1,008,753













Drilling and oil field services


3,603


3,142


10,877


4,657

Midstream


14,045


16,551


25,810


46,883

Other - general 


14,422


10,230


27,311


38,159













Total capital expenditures, excluding acquisitions


467,829


322,582


1,120,537


1,098,452













Acquisitions


367


6,925


16,920


15,527













Total capital expenditures


$           468,196


$           329,507


$        1,137,457


$        1,113,979

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 January 6, 2015 and includes contracts that have been novated to or the benefits of which have been conveyed to SandRidge sponsored royalty trusts.






Year Ending






2015


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


$83.13









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




21.9


-


Swap




($0.27)


-

Selected Balance Sheet Data

The Company's capital structure at September 30, 2014 and December 31, 2013 is presented below (in thousands):



September 30, 


December 31,


2014


2013






(in thousands)









Cash and cash equivalents


$         590,246


$       814,663









Long-term debt (net of current maturities)






Senior Notes







8.75% Senior Notes due 2020, net


445,232


444,736



7.5% Senior Notes due 2021


1,178,598


1,178,922



8.125% Senior Notes due 2022


750,000


750,000



7.5% Senior Notes due 2023, net


821,471


821,249



  Total debt 


3,195,301


3,194,907









Stockholders' equity






Preferred stock


8


8


Common stock


483


483


Additional paid-in capital


5,289,124


5,294,551


Treasury stock, at cost


(6,823)


(8,770)


Accumulated deficit


(3,511,498)


(3,460,462)



Total SandRidge Energy, Inc. stockholders' equity


1,771,294


1,825,810










Noncontrolling interest


1,266,482


1,349,817









Total capitalization


$      6,233,077


$    6,370,534

During the third quarter of 2014, the Company's debt, net of cash balances, increased by approximately $330 million as a result of funding the Company's drilling program. The Company had no amount drawn under its senior credit facility.

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) received on financing derivatives. It defines EBITDA as net income (loss) before income tax (benefit) 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) loss on sale of assets, transaction costs, legal settlements, consent solicitation costs, severance, loss on extinguishment of debt and other various non-cash items (including non-cash portion of noncontrolling interest and stock-based compensation). Pro forma adjusted EBITDA, as presented herein, is adjusted EBITDA excluding adjusted EBITDA attributable to properties or subsidiaries sold during the period.

Adjusted operating cash flow and adjusted EBITDA are supplemental financial measures used by the Company's management and by securities analysts, investors, lenders, rating agencies and others who follow the industry as an indicator of the Company's ability to internally fund exploration and development activities and to service or incur additional debt. The Company also uses these measures because adjusted operating cash flow and adjusted EBITDA relate to the timing of cash receipts and disbursements that the Company may not control and may not relate to the period in which the operating activities occurred. Further, adjusted operating cash flow and adjusted EBITDA allow the Company to compare its operating performance and return on capital with those of other companies without regard to financing methods and capital structure. These measures should not be considered in isolation or as a substitute for net cash provided by operating activities prepared in accordance with generally accepted accounting principles ("GAAP"). Adjusted EBITDA should not be considered as a substitute for net income, operating income, cash flows from operating activities or any other measure of financial performance or liquidity presented in accordance with GAAP. Adjusted EBITDA excludes some, but not all, items that affect net income and operating income and these measures may vary among other companies. Therefore, the Company's adjusted EBITDA may not be comparable to similarly titled measures used by other companies.

Management also uses the supplemental financial measure of adjusted net income, which excludes tax (benefit) expense adjustment, asset impairment, (gain) loss on derivative contracts net of cash received (paid) on settlement of derivative contracts, (gain) loss on sale of assets, transaction costs, legal settlements, consent solicitation costs, loss on extinguishment of debt, severance and other non-cash items from income available (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, (gain) loss on derivative contracts net of cash (paid) received on settlement of derivative contracts, legal settlement and loss on sale of assets 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 Net Cash Provided by Operating Activities to Adjusted Operating Cash Flow




Three Months Ended September 30,


Nine Months Ended September 30,



2014


2013 (restated)


2014


2013 (restated)






(in thousands)













Net cash provided by operating activities


$          164,892


$          210,324


$           395,684


$           595,007













Add (deduct)










Cash (paid) received on financing derivatives


-


(629)


(44,128)


5,099


Changes in operating assets and liabilities


37,881


17,483


157,615


(31,150)













Adjusted operating cash flow


$          202,773


$          227,178


$           509,171


$           568,956

 

Reconciliation of Net Income (Loss) to EBITDA, Adjusted EBITDA and Pro Forma Adjusted EBITDA






Three Months Ended September 30,


Nine Months Ended September 30,






2014


2013 (restated)


2014


2013 (restated)






(in thousands)













Net income (loss)


$          157,338


$           (81,447)


$           (11,892)


$          (597,251)













Adjusted for










Income tax (benefit) expense


(1,064)


2,363


(2,131)


7,300


Interest expense (1)


59,893


61,793


184,234


212,436


Depreciation and amortization - other


14,417


15,270


45,350


46,628


Depreciation and depletion - oil and natural gas


112,569


137,639


325,021


434,068


Accretion of asset retirement obligations


1,116


8,472


7,927


28,051

EBITDA


344,269


144,090


548,509


131,232














Asset impairment


54


687


167,966


16,330


Interest income


(110)


(408)


(545)


(1,587)


Stock-based compensation


3,438


5,135


12,010


22,769


(Gain) loss on derivative contracts


(132,575)


132,808


(4,792)


70,051


Cash received (paid) upon settlement of derivative contracts (2)


3,445


(12,496)


(23,382)


18,396


Other non-cash expense (income)


533


(328)


(1,044)


(276)


(Gain) loss on sale of assets (3)


(995)


539


(978)


398,364


Transaction costs


162


589


399


2,218


Legal settlements


-


-


23


1,081


Consent solicitation costs


146


1,516


323


22,335


Effect of Annual Incentive Plan adoption


-


-


-


14,735


Severance


5


2,258


8,927


120,375


Loss on extinguishment of debt


-


-


-


82,005


Non-cash portion of noncontrolling interest (4)


6,594


(30,174)


(58,518)


(132,095)













Adjusted EBITDA


$          224,966


$          244,216


$           648,898


$           765,933













Pro forma adjustments






















Less EBITDA attributable to











Permian properties sold (2013)


-


-


-


(50,574)



Gulf of Mexico properties sold (2014)


-


(84,427)


(53,376)


(296,946)













Pro forma adjusted EBITDA


$          224,966


$          159,789


$           595,522


$           418,413



(1)

Excludes unrealized gains on interest rate swaps of $2.4 million for the nine-month period ended September 30, 2013.

(2)

Excludes amounts paid upon early settlement of derivative contracts.

(3)

Includes loss on the Permian divestiture of approximately $398.9 million for the nine-month period ended September 30, 2013.

(4)

Represents depreciation and depletion, impairment, loss on sale of Permian Properties (2013), (gain) loss on commodity derivative contracts net of cash (paid) received on settlement, legal settlement and income tax expense attributable to noncontrolling interests.

Reconciliation of Net Cash Provided by Operating Activities to Adjusted EBITDA






Three Months Ended September 30,


Nine Months Ended September 30,






2014


2013 (restated)


2014


2013 (restated)






(in thousands)













Net cash provided by operating activities


$          164,892


$          210,324


$           395,684


$           595,007













Changes in operating assets and liabilities


37,881


17,483


157,615


(31,150)

Interest expense (1)


59,893


61,793


184,234


212,436

Cash paid on early settlement of derivative contracts


-


-


25,434


29,300

Transaction costs


162


589


399


2,218

Legal settlements


-


-


23


1,081

Consent solicitation costs


146


1,516


323


22,335

Effect of Annual Incentive Plan adoption


-


-


-


14,735

Severance


(168)


598


6,775


65,685

Noncontrolling interest - SDT (2)


(5,670)


(8,841)


(17,361)


(32,109)

Noncontrolling interest - SDR (2)


(9,201)


(15,648)


(32,251)


(52,664)

Noncontrolling interest - PER (2)


(18,697)


(21,908)


(58,635)


(56,751)

Noncontrolling interest - Other (2)


-


31


(4)


36

Other non-cash items


(4,272)


(1,721)


(13,338)


(4,226)













Adjusted EBITDA


$          224,966


$          244,216


$           648,898


$           765,933



(1)

Excludes unrealized gains on interest rate swaps of $2.4 million for the nine-month period ended September 30, 2013.

(2)

Excludes depreciation and depletion, impairment, loss on sale of Permian Properties (2013), (gain) loss on commodity derivative contracts net of cash (paid) received on settlement, legal settlement and income tax expense attributable to noncontrolling interests.

Reconciliation of Income Available (Loss Applicable) to Common Stockholders to Adjusted Net Income Available to Common Stockholders






Three Months Ended September 30,


Nine Months Ended September 30,






2014


2013 (restated)


2014


2013 (restated)






(in thousands)

























Income available (loss applicable) to common stockholders


$          145,957


$           (95,328)


$           (51,036)


$          (638,895)













Tax (benefit) expense adjustment


(1,160)


687


(1,160)


4,702

Asset impairment (1)


54


687


138,093


16,330

(Gain) loss on derivative contracts (1)


(116,719)


112,580


(7,608)


53,403

Cash received (paid) upon settlement of derivative contracts (1)


4,079


(8,695)


(18,501)


18,255

(Gain) loss on sale of assets (1)


(995)


575


(978)


326,660

Transaction costs


162


589


399


2,218

Legal settlements (1)


-


-


23


729

Consent solicitation costs


146


1,516


323


22,335

Effect of Annual Incentive Plan adoption


-


-


-


14,735

Severance


5


2,258


8,927


120,375

Loss on extinguishment of debt


-


-


-


82,005

Other non-cash income


(3)


-


(1,690)


(2,549)

Effect of income taxes


55


2,918


3,235


2,929













Adjusted net income available to common stockholders


31,581


17,787


70,027


23,232

Preferred stock dividends


11,381


13,881


39,144


41,644













Total adjusted net income


$            42,962


$            31,668


$           109,171


$            64,876













Weighted average number of common shares outstanding






















Basic


485,458


483,582


485,194


480,209


Diluted (2)


575,912


573,716


578,125


571,354













Total adjusted net income










Per share - basic


$                0.07


$                0.04


$                0.14


$                0.05


Per share - diluted


$                0.07


$                0.06


$                0.19


$                0.11



(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 Income Attributable to Noncontrolling Interest to Adjusted Net Income Attributable to Noncontrolling Interest






Three Months Ended September 30,


Nine Months Ended September 30,






2014


2013


2014


2013






(in thousands)













Net income attributable to noncontrolling interest


$            40,162


$            16,191


$            49,733


$              9,393













Asset impairment


-


-


29,873


-

Loss on sale of assets - Permian


-


(36)


-


71,704

Legal settlement


-


-


-


352

(Gain) loss on derivative contracts


(15,856)


20,228


2,816


16,648

Cash (paid) received on settlement of derivative contracts


(634)


(3,801)


(4,881)


141














Adjusted net income attributable to noncontrolling interest


$            23,672


$            32,582


$            77,541


$            98,238

Conference Participation

SandRidge Energy, Inc. will participate in the following upcoming events:

  • January 8, 2015 – Goldman Sachs' Global Energy Conference; Miami, FL
  • January 14, 2015 – Global Hunter Securities' Southern California Energy 1x1 Day; Los Angeles, CA
  • March 24, 2015 – Howard Weil Energy Conference; New Orleans, LA

At 8:00 am Central Time on the day of each presentation, the corresponding slides and any webcast information will be accessible on the Investor Relations portion of the Company's website at www.sandridgeenergy.com. Please check the website for updates regularly as this schedule is subject to change. Also, please note that SandRidge Energy, Inc. intends for its website to be used as a reliable source of information for all future events in which it may participate as well as updated presentations regarding the Company. Slides and webcasts (where applicable) will be archived and available for at least 30 days after each use or presentation.

Fourth Quarter 2014 Earnings Release and Conference Call

February 26, 2015 (Thursday) – Earnings press release after market close
February 27, 2015 (Friday) – Earnings conference call at 8:00 am CST

 

SANDRIDGE ENERGY, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share amounts)




















Three Months Ended September 30,


Nine Months Ended September 30,







2014


2013 (restated)


2014


2013 (restated)







(Unaudited)

Revenues










Oil, natural gas and NGL

$         359,613


$         459,211


$      1,104,835


$      1,391,510


Drilling and services

21,348


16,149


57,280


49,597


Midstream and marketing

11,922


14,624


44,706


42,854


Construction contract

-


-


-


23,253


Other

1,224


3,619


5,056


11,066



Total revenues

394,107


493,603


1,211,877


1,518,280














Expenses










Production

82,664


124,571


256,473


389,911


Production taxes

8,380


8,816


24,027


24,819


Cost of sales

15,992


13,773


38,942


45,438


Midstream and marketing

11,405


13,224


40,659


39,954


Construction contract

-


-


-


23,253


Depreciation and depletion - oil and natural gas

112,569


137,639


325,021


434,068


Depreciation and amortization - other

14,417


15,270


45,350


46,628


Accretion of asset retirement obligations

1,116


8,472


7,927


28,051


Impairment

54


687


167,966


16,330


General and administrative

24,584


37,714


86,115


172,301


Employee termination benefits

5


2,256


8,927


120,374


(Gain) loss on derivative contracts

(132,575)


132,808


(4,792)


70,051


(Gain) loss on sale of assets

(995)


539


(978)


398,364



Total expenses

137,616


495,769


995,637


1,809,542



Income (loss) from operations

256,491


(2,166)


216,240


(291,262)














Other income (expense)









Interest expense

(59,783)


(61,385)


(183,689)


(208,454)


Loss on extinguishment of debt

-


-


-


(82,005)


Other (expense) income, net

(273)


658


3,159


1,163



Total other expense

(60,056)


(60,727)


(180,530)


(289,296)

Income (loss) before income taxes

196,435


(62,893)


35,710


(580,558)

Income tax (benefit) expense  

(1,064)


2,363


(2,131)


7,300

Net income (loss) 

197,499


(65,256)


37,841


(587,858)


Less: net income attributable to noncontrolling interest

40,161


16,191


49,733


9,393

Net income (loss) attributable to SandRidge Energy, Inc.

157,338


(81,447)


(11,892)


(597,251)

Preferred stock dividends 

11,381


13,881


39,144


41,644



Income available (loss applicable) to SandRidge Energy, Inc. 










common stockholders

$         145,957


$          (95,328)


$          (51,036)


$        (638,895)

Income (loss) per share









Basic



$              0.30


$             (0.20)


$             (0.11)


$             (1.33)


Diluted



$              0.27


$             (0.20)


$             (0.11)


$             (1.33)

Weighted average number of common shares outstanding









Basic



485,458


483,582


485,194


480,209


Diluted



575,911


483,582


485,194


480,209

 

SANDRIDGE ENERGY, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except per share data)







September 30,


December 31,







2014


2013 (revised)







(Unaudited)

ASSETS


Current assets





Cash and cash equivalents

$         590,246


$         814,663

Accounts receivable, net

330,543


349,218

Derivative contracts

53,919


12,779

Prepaid expenses


6,794


39,253

Other current assets

23,223


25,910



Total current assets


1,004,725


1,241,823

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





Proved 

11,252,074


10,972,816


Unproved

300,224


531,606


Less: accumulated depreciation, depletion and impairment

(6,250,457)


(5,762,969)







5,301,841


5,741,453

Other property, plant and equipment, net


578,864


566,222

Derivative contracts


15,891


14,126

Other assets


77,068


121,171



Total assets


$      6,978,389


$      7,684,795










LIABILITIES AND EQUITY




Current liabilities





Accounts payable and accrued expenses


$         652,649


$         812,488

Derivative contracts

-


34,267

Asset retirement obligations

-


87,063

Other current liabilities


18,549


-



Total current liabilities


671,198


933,818

Long-term debt


3,195,301


3,194,907

Derivative contracts


-


20,564

Asset retirement obligations


57,696


337,054

Other long-term obligations


16,418


22,825



Total liabilities


3,940,613


4,509,168

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 September 30,





 2014 and December 31, 2013; aggregate liquidation preference of $265,000

3


3


6.0% Convertible perpetual preferred stock; 2,000 shares issued and outstanding at September 30,





 2014 and December 31, 2013; aggregate liquidation preference of $200,000

2


2


7.0% Convertible perpetual preferred stock; 3,000 shares issued and outstanding at September 30,





 2014 and December 31, 2013; aggregate liquidation preference of $300,000

3


3

Common stock, $0.001 par value, 800,000 shares authorized; 491,262 issued and 490,224 outstanding at




September 30, 2014 and 491,609 issued and 490,290 outstanding at December 31, 2013

483


483

Additional paid-in capital

5,292,874


5,298,301

Additional paid-in capital - stockholder receivable

(3,750)


(3,750)

Treasury stock, at cost

(6,823)


(8,770)

Accumulated deficit

(3,511,498)


(3,460,462)



Total SandRidge Energy, Inc. stockholders' equity

1,771,294


1,825,810

Noncontrolling interest


1,266,482


1,349,817



Total equity


3,037,776


3,175,627



Total liabilities and equity


$      6,978,389


$      7,684,795

 

SANDRIDGE ENERGY, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)
















Nine Months Ended September 30, 







2014


2013 (restated)







(Unaudited)

CASH FLOWS FROM OPERATING ACTIVITIES





Net income (loss)

$           37,841


$        (587,858)


Adjustments to reconcile net income (loss) to net cash provided by operating activities






Depreciation, depletion and amortization


370,371


480,696



Accretion of asset retirement obligations


7,927


28,051



Impairment


167,966


16,330



Debt issuance costs amortization


7,045


7,730



Amortization of discount, net of premium, on long-term debt

394


913



Loss on extinguishment of debt


-


82,005



Deferred income tax provision


-


4,702



(Gain) loss on derivative contracts


(4,792)


70,051



Cash paid on settlement of derivative contracts

(48,816)


(17,943)



(Gain) loss on sale of assets


(978)


398,364



Stock-based compensation


15,853


79,317



Other


488


1,499



Changes in operating assets and liabilities 

(157,615)


31,150





Net cash provided by operating activities

395,684


595,007

CASH FLOWS FROM INVESTING ACTIVITIES





Capital expenditures for property, plant and equipment

(1,071,465)


(1,163,539)


Acquisitions of assets


(16,920)


(15,527)


Proceeds from sale of assets


714,294


2,567,355





Net cash (used in) provided by investing activities

(374,091)


1,388,289

CASH FLOWS FROM FINANCING ACTIVITIES





Repayments of borrowings


-


(1,115,500)


Premium on debt redemption


-


(61,997)


Debt issuance costs


-


(91)


Proceeds from sale of royalty trust units


22,119


28,985


Noncontrolling interest distributions


(150,440)


(153,002)


Acquisition of ownership interest


(2,730)


-


Stock-based compensation excess tax benefit

14


(4)


Purchase of treasury stock


(8,278)


(31,270)


Repurchase of common stock


(17,542)


-


Dividends paid - preferred


(45,025)


(45,025)


Cash (paid) received on settlement of financing derivative contracts

(44,128)


5,099





Net cash used in financing activities


(246,010)


(1,372,805)

NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS

(224,417)


610,491

CASH AND CASH EQUIVALENTS, beginning of year

814,663


309,766

CASH AND CASH EQUIVALENTS, end of period

$         590,246


$         920,257










Supplemental Disclosure of Cash Flow Information





Cash paid for interest, net of amounts capitalized

$        (209,939)


$        (248,233)


Cash paid for income taxes


$               (543)


$            (2,911)










Supplemental Disclosure of Noncash Investing and Financing Activities





Deposit on pending sale


$                     -


$        (255,000)


Change in accrued capital expenditures

$          (49,072)


$            65,087


Asset retirement costs capitalized


$              3,398


$              4,145

 

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. 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 statements about the Company's future capital spending, drilling and development plans, estimates of oil and natural gas production, rates of return, derivative transactions, liquidity, debt maturities and operating costs. 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 amended Annual Report on Form 10-K/A for the year ended December 31, 2013. 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 Company headquartered in Oklahoma City, Oklahoma with its principal focus on exploration and production. SandRidge and its subsidiaries also own and operate gas gathering and processing facilities, saltwater gathering and electrical infrastructure facilities and conduct marketing operations. In addition, Lariat Services, Inc., a wholly-owned subsidiary of SandRidge, owns and operates a drilling rig and related oil field services business. SandRidge focuses its exploration and production activities in the Mid-Continent region of the United States. SandRidge's internet address is www.sandridgeenergy.com.

Logo - http://photos.prnewswire.com/prnh/20120416/DA88110LOGO

 

To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/sandridge-energy-inc-updates-shareholders-on-financial-results-for-third-quarter-2014-and-first-nine-months-of-2014-300018189.html

SOURCE SandRidge Energy, Inc.


Source: PR Newswire (January 8, 2015 - 4:36 PM EST)

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