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SandRidge Energy Second Quarter 2020 Results

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   |    Wednesday,August 05,2020

SandRidge Energy Inc. announced financial and operational results for the quarter ended June 30, 2020.

Results and highlights during the quarter:

• Produced 23.6 MBoepd for the quarter
• Incurred a net loss of $215.8 million, or $6.06 per share, driven largely by significantly challenged commodity prices, a non-cash ceiling test write down and an impairment charge to the value of the Company's office headquarters, and adjusted net loss of $7.4 million, or $0.21 per share
• Generated Adjusted EBITDA of $8.8 million for the quarter
• Decreased G&A and Adjusted G&A year-over-year by 57% and 58%, respectively, to $4.3 million, or $2.01 per boe, and $3.7 million, or $1.74 per boe
• Decreased LOE year-over-year by 65% to $8.7 million, or $4.04 per boe
• Entered into agreement to sell company headquarters for $35.5 million, which is expected to close in the third quarter of 2020
• Continued streak without a recordable Health, Safety and Environmental ("HS&E") incident for 22 months as of the end of the second quarter

Financial Results

For the quarter, the Company reported a net loss of $215.8 million, or $6.06 per share, and net cash provided by operating activities of $13.5 million. After adjusting for certain items, the Company's adjusted net loss amounted to $7.4 million, or $0.21 per share, operating cash flow totaled $6.1 million and adjusted EBITDA was $8.8 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.

Operational Results and Activity

Production totaled 2,151 MBoe (24% oil, 32% NGLs and 44% natural gas) for the quarter.

Mid-Continent Assets in Oklahoma and Kansas

Production in the Mississippian totaled 1,786 MBoe (19.6 MBoepd, 14% oil) and 143 MBoe (1.6 MBoepd, 32% oil) in the Northwest STACK during the quarter.

North Park Basin Assets in Colorado

Net production for North Park Basin totaled 222 MBoe (2.4 MBoepd, 100% oil) during the quarter.

Management and Board Update

The Company appointed Carl F. Giesler, Jr. to the position of President and CEO in April 2020 and to the Board of Directors (the "Board") as of July 29, 2020. Further, the Company appointed Salah I. Gamoudi to the position of Chief Financial Officer and Chief Accounting Officer in July 2020. It also announced in April 2020 the separation of employment of Michael A. Johnson from his position as Senior Vice President and Chief Financial Officer and John P. Suter from his position as Executive Vice President and Chief Operating Officer, effective July 2020.

Building Sale

On May 15, 2020, the Company signed an agreement to sell its corporate headquarters in Oklahoma City for $35.5 million. The sale is expected to close in the third quarter of 2020.

2020 Capital Expenditures and Operational Guidance

The Company reaffirms its 2020 capital expenditures and operational guidance previously published on May 18, 2020.

Liquidity and Capital Structure

The Company completed its semi-annual borrowing base redetermination at $75.0 million under its revolving credit facility in April 2020. As of June 30, 2020, the Company's total liquidity was $25.2 million, based on $13.5 million of cash and $11.7 million available under its credit facility. The Company currently has $59.0 million drawn on the facility and $4.3 million in outstanding letters of credit.

Given the anticipated third quarter proceeds from the May 2020 agreement to sell our corporate headquarters for $35.5 million as well as several initiatives expected to optimize free cash flow, including personnel and non-personnel cost reductions and entering into commodity derivative contracts for natural gas, and while we cannot give absolute assurance that our plans will succeed, we have concluded that management's plans are probable of being achieved to alleviate substantial doubt about our ability to continue as a going concern.