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Seventh Annual Investor Analyst Meeting – Sandridge Energy, Inc.

Sandridge Energy, Inc. · Mar 4, 2014 · 115 slides

Investor presentation from the Shale Experts oil & gas presentation and slide database. Every page is imaged and its text indexed for search across operators, plays, basins and time.

Slides

  1. Seventh Annual Investor Analyst Meeting – Sandridge Energy, Inc. – slide 1
    Tuesday, March 4, 2014 New York Stock Exchange 112
  2. Seventh Annual Investor Analyst Meeting – Sandridge Energy, Inc. – slide 2
    Tuesday, March 4, 2014 New York Stock Exchange AGENDA Introduction Duane Grubert EVP Investor Relations & Strategy SandRidge Overview James Bennett Page 1 Looking Ahead President & Chief Executive Officer Corporate Finance…
  3. Seventh Annual Investor Analyst Meeting – Sandridge Energy, Inc. – slide 3
    AGENDA Corporate Reserves Lance Galvin Page 39 Overview SVP Corporate Reservoir Engineering Northern Midcontinent Geology Doug Johnson Page 55 Stacked Pay SVP Geology Midcontinent Drilling Program Paul Stark Page 62 Updates and…
  4. Seventh Annual Investor Analyst Meeting – Sandridge Energy, Inc. – slide 4
    James Bennett President & Chief Executive Officer 11
  5. Seventh Annual Investor Analyst Meeting – Sandridge Energy, Inc. – slide 5
    SANDRIDGE MISSION Premier Midcontinent Company MISSION STATEMENT Our Mission at SandRidge is to create the premier, high-return, growth-oriented, resource conversion company, focused in the Midcontinent region of the United…
  6. Seventh Annual Investor Analyst Meeting – Sandridge Energy, Inc. – slide 6
    SANDRIDGE COMPANY OVERVIEW MARKET VALUE ( in millions) Market Cap (02/21/2014) 3,168 Net Debt(a)(b) 1,645 Preferred Stock 765 Enterprise Value 5,579 ASSET OVERVIEW(b)(c) Q413 Production (MBoe/d) 66.2 Proved Reserves…
  7. Seventh Annual Investor Analyst Meeting – Sandridge Energy, Inc. – slide 7
    REFINED BUSINESS MODEL FOCUSED INNOVATION Strategy, Execution and Team Mindset of Culture are Focused Continuous Improvement COMPETITIVE ADVANTAGE UPSIDES Established Infrastructure, Multi-zones, Appraisal Sizable Leasehold…
  8. Seventh Annual Investor Analyst Meeting – Sandridge Energy, Inc. – slide 8
    ACTIONABLE GROWTH WITH UPSIDES FOCUSED Significant Acreage Position Stacked Oily Pay Zones Improving Already Strong Returns 55
  9. Seventh Annual Investor Analyst Meeting – Sandridge Energy, Inc. – slide 9
    MULTIYEAR PRODUCTION GROWTH ACTIONABLE Confidence in Asset Base and Execution GROWTH Confident in multi-year drilling program Existing focus area position 2016 Activity provides sufficient locations PDP base decline is…
  10. Seventh Annual Investor Analyst Meeting – Sandridge Energy, Inc. – slide 10
    2013 COMPARISON Improvements and Efficiencies Drive Outperformance FOCUSED Robust 35% production growth despite a 30% rig count reduction in Q213 Improved type curve 8% improvement to first year production Drilling…
  11. Seventh Annual Investor Analyst Meeting – Sandridge Energy, Inc. – slide 11
    CAPITAL EFFICIENCY IMPROVEMENTS FOCUSED IN THE MIDCONTINENT Drilling More Wells for Less Capital Realizing Efficiencies from Early Infrastructure Investment (a) Total Midcontinent drilling and production capital expenditures (b)…
  12. Seventh Annual Investor Analyst Meeting – Sandridge Energy, Inc. – slide 12
    INNOVATION / UPSIDE INNOVATION Appraisal Program Increases Focus Area Appraisal Drilling Success Adds Sumner County, KS More acres commercialized through focus and innovation Total focus area is now 670K acres in OK and KS…
  13. Seventh Annual Investor Analyst Meeting – Sandridge Energy, Inc. – slide 13
    SANDRIDGE MIDCONTINENT WATER DISPOSAL BUSINESS Unlock Value Through Infrastructure UPSIDES Midcontinent produced water disposal business represents a valuable midstream asset Nations largest produced water disposal system Currently…
  14. Seventh Annual Investor Analyst Meeting – Sandridge Energy, Inc. – slide 14
    LARGEST SWD SYSTEM IN THE NATION Broad Footprint UPSIDES 980 Mbwpd current volumes System 50% utilized 160 SWD wells 900 miles of installed pipelines Map does not show other SWD assets in NW Kansas or West Texas 1111
  15. Seventh Annual Investor Analyst Meeting – Sandridge Energy, Inc. – slide 15
    LARGEST SWD SYSTEM IN THE NATION Growing Volumes UPSIDES 980 Mbwpd current volumes System 50% utilized 160 SWD wells 900 miles of installed pipelines 66% volume growth in 2013 Map does not show other SWD assets in NW Kansas…
  16. Seventh Annual Investor Analyst Meeting – Sandridge Energy, Inc. – slide 16
    MATURE SUBSYSTEMS IDENTIFIED Northern Alfalfa County UPSIDES 33 SWD wells 160 miles of pipe 240 MBwpd current volumes 1313
  17. Seventh Annual Investor Analyst Meeting – Sandridge Energy, Inc. – slide 17
    MATURE SUBSYSTEMS IDENTIFIED Produced Water Production Profile UPSIDES Attractive midstream characteristics Shallow decline rates Assumes no additional infill drilling or well connects Six similar mature subsystems…
  18. Seventh Annual Investor Analyst Meeting – Sandridge Energy, Inc. – slide 18
    SANDRIDGE MISSION Premier Midcontinent Company MISSION STATEMENT Our Mission at SandRidge is to create the premier, high-return, growth-oriented, resource conversion company, focused in the Midcontinent region of the United…
  19. Seventh Annual Investor Analyst Meeting – Sandridge Energy, Inc. – slide 19
    Eddie LeBlanc Chief Financial Officer 1616
  20. Seventh Annual Investor Analyst Meeting – Sandridge Energy, Inc. – slide 20
    SOLID FUNDED PLAN FUNDING Capital program, debt service, and current obligations of the company are completely covered by: Growing cash flows Current cash balance Conventional reserve based borrowings 1717
  21. Seventh Annual Investor Analyst Meeting – Sandridge Energy, Inc. – slide 21
    CREDIT PROFILE FUNDING 2.3 Bln Pro Forma liquidity at year end 1.55 Bln Pro Forma cash Fully undrawn credit facility of 775 MM Not requesting a change to 775 MM borrowing base until Fall 2014 or Spring 2015 Significant oil hedges…
  22. Seventh Annual Investor Analyst Meeting – Sandridge Energy, Inc. – slide 22
    DEBT MATURITY SUMMARY FUNDING First Note Maturity in 2020 a) Excludes Credit Facility amounts 1919
  23. Seventh Annual Investor Analyst Meeting – Sandridge Energy, Inc. – slide 23
    2014 OPERATIONAL GUIDANCE FUNDING PRODUCTION PRICE REALIZATIONS Oil (MMBbls) 11.9 Oil (differential below WTI) 2.50 Natural Gas Liquids (MMBbls) 3.6 NGLs (realized % of WTI) 33% Total Liquids (MMBbls) 15.5 Gas (differential below…
  24. Seventh Annual Investor Analyst Meeting – Sandridge Energy, Inc. – slide 24
    2014 EBITDA GUIDANCE FUNDING 2014 EBITDA 2014 AT MIDPOINT Assumed price deck: GUIDANCE OF GUIDANCE 95/Bbl NYMEX WTI PRODUCTION ( in Millions) Oil (MMBbls) 11.9 4.25/Mcf NYMEX Henry Hub Natural Gas Liquids (MMBbls) 3.6 Natural Gas…
  25. Seventh Annual Investor Analyst Meeting – Sandridge Energy, Inc. – slide 25
    CONSOLIDATED HEDGE POSITION FUNDING 2014 94% of Liquids Volumes Hedged 65% of Natural Gas Volumes Hedged 4.3 MMBbls 53.2 Bcf 98.31/Bbl 4.26/Mcf 8.0 MMBbls 0.9 Bcf 90.21-100.00/BBL 4.00-7.78/Mcf 95% of liquids revenue…
  26. Seventh Annual Investor Analyst Meeting – Sandridge Energy, Inc. – slide 26
    FUNDING VISIBILITY FUNDED ( in Millions) Use of Funds Currently Cash Generation Borrowing Capacity Created Funds Available Increase Borrowing Base Capex Liquidity Cash flow from Operations PDP growth creates increased borrowing…
  27. Seventh Annual Investor Analyst Meeting – Sandridge Energy, Inc. – slide 27
    SOLID FUNDED PLAN FUNDING FUNDED The 3 year capital program, debt service, and current obligations of the company are completely covered by: Growing cash flows Current cash balance Conventional reserve based borrowings We will…
  28. Seventh Annual Investor Analyst Meeting – Sandridge Energy, Inc. – slide 28
    David Lawler Chief Operating Officer 2525
  29. Seventh Annual Investor Analyst Meeting – Sandridge Energy, Inc. – slide 29
    PREMIUM PERFORMANCE 2013 Metrics FOCUSED Safely and Efficiently Converting Resources to Shareholder Value Improved safety performance, achieving a Total Recordable Incident Rate of 0.68 Outperformed production guidance, delivering…
  30. Seventh Annual Investor Analyst Meeting – Sandridge Energy, Inc. – slide 30
    PREMIUM PERFORMANCE Creating Value FOCUSED Increasing Reserves and Expanding Asset Base Improved Mississippian PUD Type Curve Boe by 3%, Oil by 10% Strong Reserves Growth on Current Asset Base Increased proved reserves by 45% on…
  31. Seventh Annual Investor Analyst Meeting – Sandridge Energy, Inc. – slide 31
    MATERIAL WELL COST REDUCTION Mississippian Leader FOCUSED Q4 2013 Drilling and Completion (D&C) costs of 2.9 MM 1 MM decrease in capital since Q1 2012 75% increase in Electric Submersible Pump (ESP) utilization Expect to sustain sub…
  32. Seventh Annual Investor Analyst Meeting – Sandridge Energy, Inc. – slide 32
    SIGNIFICANT OPERATING COST REDUCTION Mississippian Leader FOCUSED 28% reduction in lease operating expenses (LOE) since Q1 2012 Trucking less than 1% of total produced water, down 5.5% from early 2012 Converting ESP wells to local…
  33. Seventh Annual Investor Analyst Meeting – Sandridge Energy, Inc. – slide 33
    THREE YEAR OUTLOOK INNOVATION Value Enhancing Themes Expanding Resource Base Improving Ultimate Recovery Multi-zone oil development Natural fracture corridor mapping Producing from six different Midcontinent formations Seismic,…
  34. Seventh Annual Investor Analyst Meeting – Sandridge Energy, Inc. – slide 34
    MIDCONTINENT INNOVATION MultiZone Program Prolific Regional Formations Marmaton Chester Upper Mississippian Middle Mississippian Lower Mississippian Woodford 3131
  35. Seventh Annual Investor Analyst Meeting – Sandridge Energy, Inc. – slide 35
    NEW FOCUS AREA INNOVATION Sumner County, KS Expanding Resource Base with Appraisal Success 5 Well Appraisal Program 1 Well In Progress 5 Well Material Results 601 Boe/d average 30 day IP 90% above 2013 PUD Type Curve 30 day IP 117…
  36. Seventh Annual Investor Analyst Meeting – Sandridge Energy, Inc. – slide 36
    IMPROVING WELL PERFORMANCE INNOVATION Identifying Factors Supporting Increased Production Combination of Reservoir Quality and Natural Fractures Driving Higher Rates Locations selected based on key reservoir characteristics, production…
  37. Seventh Annual Investor Analyst Meeting – Sandridge Energy, Inc. – slide 37
    SECTIONAL DEVELOPMENT CONCEPT INNOVATION 34% More Reservoir Section for 26% Less Capex Improved Capital Efficiency POTENTIAL DEVELOPMENT COST REDUCTION OF 26% Competent reservoir rock allows multiple laterals 12.3 MM 9.1 MM Open hole…
  38. Seventh Annual Investor Analyst Meeting – Sandridge Energy, Inc. – slide 38
    DRIVING RETURNS INNOVATION Premium Artificial Lift Technology Latest Technology Increasing IRR and EUR Developed 3-step well management process to efficiently maximize IRR and EUR Delivers greater production and value over the life of…
  39. Seventh Annual Investor Analyst Meeting – Sandridge Energy, Inc. – slide 39
    TARGETING BREAKOUT ECONOMICS INNOVATION Innovations Could Yield Breakout Economics Already strong well economics improving as costs come down Breakout innovations on well design could both: Enhance returns Expand focus areas Value…
  40. Seventh Annual Investor Analyst Meeting – Sandridge Energy, Inc. – slide 40
    MULTIYEAR PRODUCTION GROWTH ACTIONABLE Confidence in Asset Base and Execution GROWTH Confident in multi-year drilling program Existing focus area position 2016 Activity provides sufficient locations PDP base decline is…
  41. Seventh Annual Investor Analyst Meeting – Sandridge Energy, Inc. – slide 41
    2014 2016 CAPEX GUIDANCE FOCUSED Capex Remains Flat; Trust Obligation Eliminated After 2014 3838
  42. Seventh Annual Investor Analyst Meeting – Sandridge Energy, Inc. – slide 42
    Lance Galvin SVP Corporate Reservoir Engineering 3939
  43. Seventh Annual Investor Analyst Meeting – Sandridge Energy, Inc. – slide 43
    DRIVING RESERVE INCREASES MULTI-YEAR Increases Value GROWTH Enhanced Type Curve Process Dissecting the Play +3% Boe Improvement in PUD Type Curve Miss Reserve Base Underpins Growth Plan Innovation Upside Growing Production and…
  44. Seventh Annual Investor Analyst Meeting – Sandridge Energy, Inc. – slide 44
    MAINTAINING STRONG ACREAGE POSITION COMPETITIVE Expanding Focus Area ADVANTAGE Total Mississippian Leasehold 2.6MM gross & 1.8MM net acres 1.3MM in KS, 0.5MM in OK 21% HBP or 380M net acres 53% in OK, 8% in KS 2013: +172M acres…
  45. Seventh Annual Investor Analyst Meeting – Sandridge Energy, Inc. – slide 45
    DISSECTING THE PLAY Area Specific EURs FOCUSED 237 MBoe 542 MBoe KS OK 388 MBoe 257 MBoe YE 2013 PUD Type Curve Oil (Mbo) 118 NGLs (MBbls) 64 Liquids (MBbls) 182 Gas - Shrunk (MMcf) 1,185 MBoe (31% Oil, 17% NGL, 52% Gas)…
  46. Seventh Annual Investor Analyst Meeting – Sandridge Energy, Inc. – slide 46
    2014 MISSISSIPPIAN PUD TYPE CURVE 380 MBoe, 48% Liquids FOCUSED Oil: 118 MBo YE 2013 IP (Bo/day) 235 GAS DRILLING A MIX OF PUD & NON-PUD WELLS Initial Decline 85% B Factor 1.41 YE 2012 Expected to result in an EUR of 350-380 MBoe NGL:…
  47. Seventh Annual Investor Analyst Meeting – Sandridge Energy, Inc. – slide 47
    ROBUST MISSISSIPPIAN DRILLING ECONOMICS MULTI-YEAR PUD Type Curve GROWTH Multi-Year Growth Catalysts Consistently Strong IRR Improving Drilling & Completing Efficiencies 2.4MM PV10 with 2.9MM Capex per well 90/4 Nymex strip as…
  48. Seventh Annual Investor Analyst Meeting – Sandridge Energy, Inc. – slide 48
    APPLYING SEISMIC TECHNOLOGY INNOVATION Understanding The Rock 3D SEISMIC REVEALS FRACTURES / FAULTING 2013 - 730 square miles of 3D data acquired 2014 - 1,070 square miles of new 3D data to acquire KS OK 100 MILES 2013…
  49. Seventh Annual Investor Analyst Meeting – Sandridge Energy, Inc. – slide 49
    FRACTURE FAIRWAYS ARE KEY INNOVATION Understanding Reservoir Trends SEISMIC REVEALS FRACTURES VISUALIZING FRACTURE KS FAIRWAYS & POROSITY IN 3D OK MULTIPLE MIGRATION EVENTS SOURCE MISSISSIPPIAN OIL HALO ZONE OF OIL SATURATED…
  50. Seventh Annual Investor Analyst Meeting – Sandridge Energy, Inc. – slide 50
    RESERVOIR CHARACTERIZATION TECHNOLOGY COMPETITIVE We know what makes a good well ADVANTAGE Integrating Key Data Single Zone Porosity Model Seismic Vertical & Horizontal Logs Image Logs in Horizontal Laterals Pressure Data Offset…
  51. Seventh Annual Investor Analyst Meeting – Sandridge Energy, Inc. – slide 51
    MISSISSIPPIAN WELL PERFORMANCE MULTI-YEAR Continued Improvement GROWTH Avg Boepd 4848
  52. Seventh Annual Investor Analyst Meeting – Sandridge Energy, Inc. – slide 52
    MISSISSIPPIAN WELL EURS MULTI-YEAR Continued Improvement GROWTH COMMERCIAL 4949
  53. Seventh Annual Investor Analyst Meeting – Sandridge Energy, Inc. – slide 53
    GROWING PROVED RESERVES MULTI-YEAR Supports Production Growth GROWTH ANNUALLY PRODUCING ONLY 6% OF RESERVE BASE 16 YEAR R/P 5050
  54. Seventh Annual Investor Analyst Meeting – Sandridge Energy, Inc. – slide 54
    GROWING RESERVE BASE MULTI-YEAR Added 5 Years of Production GROWTH Liquids (MBbls) Gas (MMcf) Net Resv (MBoe) PV10 (M)* Year End 2012 (Excl. Permian Sale) 169,204 1,186,813 367,006 4,310,862 Permian Divested Production (927)…
  55. Seventh Annual Investor Analyst Meeting – Sandridge Energy, Inc. – slide 55
    2013 RESERVE METRICS Focused On The Mississippian Play FOCUSED Pro Forma 2013 Excluding Gulf of Mexico Proved Reserves* SEC Pricing - 93.42 / 3.67 RESERVES PV10 434% Reserve Replacement Liquids Gas Equivalent % MM % MMBbls Bcf…
  56. Seventh Annual Investor Analyst Meeting – Sandridge Energy, Inc. – slide 56
    LINE OF SIGHT GROWTH MULTI-YEAR Significant Production Increases From Reserves + Resources GROWTH MISSISSIPPIAN HORIZONTAL PRODUCTION & FORECAST VOLUMES Midcontinent 9.4Bln PV10 with 8,600 Locations to Drill Total Reserves & Resources…
  57. Seventh Annual Investor Analyst Meeting – Sandridge Energy, Inc. – slide 57
    DRIVING RESERVE INCREASES MULTI-YEAR Increases Value GROWTH Enhanced Type Curve Process Miss Reserve Base Underpins Growth Plan 2013 Corporate Reserve Metrics Future Growth with Reserves & Resources 5454
  58. Seventh Annual Investor Analyst Meeting – Sandridge Energy, Inc. – slide 58
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  59. Seventh Annual Investor Analyst Meeting – Sandridge Energy, Inc. – slide 59
    MIDCONTINENT GEOLOGIC SYSTEM Vast Deposits of Oil and Gas FOCUSED LATE DEVONIAN 365 MILLION YEARS AGO MIDDLE MISSISSIPPIAN 340 MILLION YEARS AGO EARLY PENNSYLVANIAN 315 MILLION YEARS AGO g h f A A b c A d e ORGANIC-RICH…
  60. Seventh Annual Investor Analyst Meeting – Sandridge Energy, Inc. – slide 60
    NORTHERN MIDCONTINENT Stacked Oil Reservoirs FOCUSED Regional Gamma Ray Log Cross-Section Penn-Marmaton Pre-Penn Unconformity Chester Woodford Mississippian Non-Shale Shale Multiple and stacked reservoirs in the Northern…
  61. Seventh Annual Investor Analyst Meeting – Sandridge Energy, Inc. – slide 61
    NORTHERN MIDCONTINENT SHELF FOCUS Oil Rich Region FOCUSED Northern Midcontinent characteristics Proven oil and liquids-rich gas from legacy vertical reservoirs OK/KS OIL RICHNESS Stacked and overlapping horizontal targets NORTHERN…
  62. Seventh Annual Investor Analyst Meeting – Sandridge Energy, Inc. – slide 62
    NORTHERN MIDCONTINENT Material Oil Relative to Other Midcontinent Basins FOCUSED Greater Oil Yield than Other Basins to the South and at Shallower Depth Translating into Lower Capex Midcontinent Upside High oil concentration in legacy…
  63. Seventh Annual Investor Analyst Meeting – Sandridge Energy, Inc. – slide 63
    NORTHERN MIDCONTINENT Horizontal Development Just Getting Started FOCUSED In three years Mississippian horizontal production exceeds decades of legacy vertical production by a factor of 5 Just getting started: Mississippian: In year…
  64. Seventh Annual Investor Analyst Meeting – Sandridge Energy, Inc. – slide 64
    NORTHERN MIDCONTINENT Prolific Oil Producing Region FOCUSED Multiple reservoirs with proven legacy vertical production Mississippian focus is the starting point Technology transfer from the Mississippian to other reservoirs…
  65. Seventh Annual Investor Analyst Meeting – Sandridge Energy, Inc. – slide 65
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  66. Seventh Annual Investor Analyst Meeting – Sandridge Energy, Inc. – slide 66
    MARMATON Encouraging Early Results UPSIDES Vertical Test Well Identified Potential Widespread Horizontal Development In Pennsylvanian Geologic team constructed regional Marmaton model Drilled vertical appraisal well 30 day IP: 425…
  67. Seventh Annual Investor Analyst Meeting – Sandridge Energy, Inc. – slide 67
    CHESTER High Oil Cut Horizontal Development UPSIDES Significant Development Potential First mover in horizontal oil Chester play in North Central Oklahoma Strong production rates established in first five wells Average 30 day IP: 337…
  68. Seventh Annual Investor Analyst Meeting – Sandridge Energy, Inc. – slide 68
    MISSISSIPPIAN: UPPER, MIDDLE, & LOWER OilRich Carbonate Formation FOCUSED Increasing Hydrocarbon Recovery Thick, oil-bearing section Gross thickness ranges from 200 to 700 In-place oil ranges from 10 to 85 MMBoe/section Matrix…
  69. Seventh Annual Investor Analyst Meeting – Sandridge Energy, Inc. – slide 69
    MISSISSIPPIAN: UPPER & LOWER Stacked Pay Development FOCUSED Unique Production Trends The Upper and Lower Miss zones appear to be distinct OIL (Boe/d) reservoirs based on unique: Production profiles Reservoir pressure trends…
  70. Seventh Annual Investor Analyst Meeting – Sandridge Energy, Inc. – slide 70
    WOODFORD New Resource Potential UPSIDES Learnings Lead to Improved Results Industry Woodford Activity Update excluding SandRidge Wells 84 wells with reported completions in North Central Oklahoma 10 industry wells in Garfield and…
  71. Seventh Annual Investor Analyst Meeting – Sandridge Energy, Inc. – slide 71
    WOODFORD Refining Geologic Model UPSIDES Focusing on High-Graded Acreage Extensive data collection and modeling work completed during the testing program Identified 4 desirable characteristics Productive interval above the Woodford…
  72. Seventh Annual Investor Analyst Meeting – Sandridge Energy, Inc. – slide 72
    MULTIZONE DRILLING LOCATIONS Many Years of Drilling Ahead FOCUSED High-Graded Locations to Drill 4,510 wells Emerging Un-Risked Locations 8,000 wells development Marmaton Upper Miss HZ Wells to Sales 1 HZ Wells to Sales 849 Locations…
  73. Seventh Annual Investor Analyst Meeting – Sandridge Energy, Inc. – slide 73
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  74. Seventh Annual Investor Analyst Meeting – Sandridge Energy, Inc. – slide 74
    APPRAISAL SUCCESS INNOVATION Added Sumner County, KS to Focus Area Expanding Resource Base High rate Mississippian production established Geologic target Thick pay interval (300) Reservoir enhanced by natural fracturing High oil…
  75. Seventh Annual Investor Analyst Meeting – Sandridge Energy, Inc. – slide 75
    STIMULATION INITIATIVES INNOVATION Performance Enhancement with New Design Dendritic Stimulation + Open Hole Packer Systems + ESPs at 90 Cycling of pump schedule creates Planar (Original Design) Dendritic (Test Program) additional…
  76. Seventh Annual Investor Analyst Meeting – Sandridge Energy, Inc. – slide 76
    STIMULATION INITIATIVES INNOVATION Performance Enhancement Case Study Direct Offset Update Technical Design Changes: Dendritic Open hole packer system 10-stage stimulation 90 ESP installation Drill and complete cost of 2.93 MM 180…
  77. Seventh Annual Investor Analyst Meeting – Sandridge Energy, Inc. – slide 77
    STIMULATION INITIATIVES INNOVATION Decreased Cost, Increased Reservoir Exposure Open Hole Sleeve Open Hole Packer Completion Systems 95% of current program Saves 60 M per well Stimulation takes less than 2 days versus original…
  78. Seventh Annual Investor Analyst Meeting – Sandridge Energy, Inc. – slide 78
    MULTILATERAL DEVELOPMENT INNOVATION Prototype 1: Trilateral Game Changing Development Scheme and Completion Technology Drilled 1st trilateral in September, 2013 Efficiently developed entire section for 5 MM, or 44% less than typical 3…
  79. Seventh Annual Investor Analyst Meeting – Sandridge Energy, Inc. – slide 79
    MULTILATERAL DEVELOPMENT INNOVATION Prototype 2 & 3: Stacked and Dual Laterals Game Changing Development Schemes and Completion Technology Prototype 3: Dual Lateral Development Cost effective laterals from a single vertical wellbore…
  80. Seventh Annual Investor Analyst Meeting – Sandridge Energy, Inc. – slide 80
    RESOURCE EXPANSION INNOVATION EUR Initiatives and Capital Efficiency Successful appraisal results in Sumner County, KS adds to focus area 90% above 2013 PUD Type Curve 30 day IP Project area includes 117 M acres Three subsurface…
  81. Seventh Annual Investor Analyst Meeting – Sandridge Energy, Inc. – slide 81
    Craig johnson 7878
  82. Seventh Annual Investor Analyst Meeting – Sandridge Energy, Inc. – slide 82
    MIDCONTINENT INFRASTRUCTURE COMPETITIVE Salt Water Disposal System Overview ADVANTAGE 865 miles of pipeline across 10 counties 153 active disposal wells Well disposal capacity of over 2 million barrels of water per day Current…
  83. Seventh Annual Investor Analyst Meeting – Sandridge Energy, Inc. – slide 83
    SALT WATER DISPOSAL SYSTEM COMPETITIVE Vital to Economic Success of the Play ADVANTAGE Well Volumes Increased 250% Over 2 Years Operating efficiently and disposing over 99% of produced water A key factor in lowering Midcontinent LOE to…
  84. Seventh Annual Investor Analyst Meeting – Sandridge Energy, Inc. – slide 84
    MULTIWELL PAD OPERATIONS INNOVATION Creating Value and Reducing Drilling Days Dual SAVINGS PER WELL VS. SINGLE WELL PAD DUAL QUAD (M) (M) Quad Location 35 65 Drilling 40 85 Completion 15 25 Facilities (a) 85 100 Total (b)…
  85. Seventh Annual Investor Analyst Meeting – Sandridge Energy, Inc. – slide 85
    WELL SITE FACILITIES: PRODUCTION & SWD INNOVATION Centralized and Shared Wellhead Separation Equipment Tank 8282
  86. Seventh Annual Investor Analyst Meeting – Sandridge Energy, Inc. – slide 86
    INFRASTRUCTURE OPTIMIZATION INNOVATION New Designs Improve Capex Efficiency FOCUSED Reduced infrastructure costs by 71% in 2 years Centralized pads reduced costs by 38% in 2013, gross savings of 16.5 MM System integration and…
  87. Seventh Annual Investor Analyst Meeting – Sandridge Energy, Inc. – slide 87
    SHARED WELLSITE FACILITIES INNOVATION Significant IRR Improvement: 2 Wells, 1 Battery Means 2 & 3: Improving Results in a Great Area Dual well pad with shared facilities and ESPs COMPETITOR CASE STUDY Average cost of 2.6 MM per well,…
  88. Seventh Annual Investor Analyst Meeting – Sandridge Energy, Inc. – slide 88
    MIDCONTINENT LEADER Lowest Capital and Operating Costs FOCUSED Competitive advantage produced water disposal system Delivering maximum production rates with ESPs Allowing wells to operate at very low LOE Growing capacity with low…
  89. Seventh Annual Investor Analyst Meeting – Sandridge Energy, Inc. – slide 89
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  90. Seventh Annual Investor Analyst Meeting – Sandridge Energy, Inc. – slide 90
    ARTIFICIAL LIFT INNOVATION Successfully Pushing Limits of Technology Electric Submersible Pumps (ESPs) and Beam Pumps Maximize Value Present and Future Well Optimization Early adopter of new low volume/low pressure ESP technology (Flex…
  91. Seventh Annual Investor Analyst Meeting – Sandridge Energy, Inc. – slide 91
    STEP 1: HIGH VOLUME ESP EXAMPLE INNOVATION Performance Versus Gas Lift Significant Production Enhancement Average Per Well D&C CAPEX Cumulative Gross Revenue AT DAY 70 Means 2 & 3 2.6 MM 3.8 MM with ESPs Competitor Well 4.2 MM 1.9…
  92. Seventh Annual Investor Analyst Meeting – Sandridge Energy, Inc. – slide 92
    STEP 2 & Step 3: LOW VOLUME ESP EXAMPLES INNOVATION Performance Versus Gas Lift Significant Production Enhancement Through Low Flow ESP Technology Step 2: Flex 10 Bpd Reduced back pressure by 700 psi Improved PV10 by 393 M; Added…
  93. Seventh Annual Investor Analyst Meeting – Sandridge Energy, Inc. – slide 93
    STEP 3: BEAM PUMP EXAMPLE INNOVATION Improving Performance of 53 Wells Conversions providing repeatable results 535 potential gas lift to beam pump conversion candidates 18% reduction in LOE when compared to gas lift 53 wells…
  94. Seventh Annual Investor Analyst Meeting – Sandridge Energy, Inc. – slide 94
    ARTIFICIAL LIFT INNOVATION Automated Data Capture and Reporting Automated Exception Report Directs Optimization Program ESP SPEED OPTIMIZATION Gas Well ESP Type Speed (Hz) Total Fluid SWD Run PIP Up Thrust Sales Utilizing business…
  95. Seventh Annual Investor Analyst Meeting – Sandridge Energy, Inc. – slide 95
    ARTIFICIAL LIFT Technology and Conversion Innovation FOCUSED Applying the right technology at the right time to maximize value Increasing value with gas lift to ESP/beam pump conversions of early well set Automated exception…
  96. Seventh Annual Investor Analyst Meeting – Sandridge Energy, Inc. – slide 96
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  97. Seventh Annual Investor Analyst Meeting – Sandridge Energy, Inc. – slide 97
    ELECTRICAL DISTRIBUTION SYSTEM COMPETITIVE Largest in the Region ADVANTAGE Critical to Increased ESP Utilization and SWD System 781 miles of active power line 5 operated substations 65 megawatts of power demand Access to over 110…
  98. Seventh Annual Investor Analyst Meeting – Sandridge Energy, Inc. – slide 98
    BENEFITS OF OWNERSHIP COMPETITIVE Speed and Reliability ADVANTAGE Expedite construction Rapid deployment of assets Accelerate rights of way Direct contractor management Improve reliability Determine construction standards Manage…
  99. Seventh Annual Investor Analyst Meeting – Sandridge Energy, Inc. – slide 99
    POWER SOURCE OPTIONS INNOVATION Internal Capability to Construct Custom Solutions PERMANENT POWER MICRO GRID SITE GENERATION Utility company provided power Large centralized generation Smaller site generation Large distribution…
  100. Seventh Annual Investor Analyst Meeting – Sandridge Energy, Inc. – slide 100
    MIDCONTINENT ELECTRICAL SYSTEM COMPETITIVE Regional Resource Leader ADVANTAGE Power is critical for artificial lift and salt water disposal programs Access to regional electrical capacity Economic solutions for capacity constrained…

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