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DEUTSCHE BANK 2011 LEVERAGED FINANCE CONFERENCE – Sandridge Energy, Inc.

Sandridge Energy, Inc. · Oct 12, 2011 · 30 slides

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Slides

  1. DEUTSCHE BANK 2011 LEVERAGED FINANCE CONFERENCE – Sandridge Energy, Inc. – slide 1
    Deutsche Bank 2011 Leveraged Finance Conference October 12, 2011
  2. DEUTSCHE BANK 2011 LEVERAGED FINANCE CONFERENCE – Sandridge Energy, Inc. – slide 2
    SandRidge: Low Risk, Shallow, Conventional Oil Financial and Operational Summary Operations Overview Permian Mid-Continent Market Value 228,000 net acres(c) Mississippian 7,900 locations 900,000 net acres(c) ( in millions, except…
  3. DEUTSCHE BANK 2011 LEVERAGED FINANCE CONFERENCE – Sandridge Energy, Inc. – slide 3
    Key Credit Highlights Oil:Gas price ratio at 20:1; likely to be wide for the near future due to shifts in market fundamentals Oil Focused Strategy 100% of drilling capex is oil directed Targeting 19% total production growth with 67%…
  4. DEUTSCHE BANK 2011 LEVERAGED FINANCE CONFERENCE – Sandridge Energy, Inc. – slide 4
    3 Year Strategy By the end of 2014, we anticipate: EBITDA 2 Billion (2014) Annual double digit production growth Capex funded within cash flow (EOY 2014) Total debt to EBITDA 2:1 5 www.SandRidgeEnergy.com
  5. DEUTSCHE BANK 2011 LEVERAGED FINANCE CONFERENCE – Sandridge Energy, Inc. – slide 5
    Oil Strategy Low Risk, Shallow, Conventional Horizontal Mississippian Oil Drilling Current 900,000 net acres (a) 4,000 locations 6,000 average TVD 3.0 MM average cost per well Central Basin Platform Oil Drilling Current…
  6. DEUTSCHE BANK 2011 LEVERAGED FINANCE CONFERENCE – Sandridge Energy, Inc. – slide 6
    Leading the Industry in Oil Dedicated Drilling Percentage of Rigs Dedicated to Oil(a) 100% 80% 60% 40% 20% 0% Number of Rigs Dedicated to Oil(a) 50 40 30 20 10 - (a) Excludes rigs dedicated to disposal,…
  7. DEUTSCHE BANK 2011 LEVERAGED FINANCE CONFERENCE – Sandridge Energy, Inc. – slide 7
    Lower Horsepower = Lower Costs (a) SandRidge Greater Rig Availability U.S. Pressure Pumping Report (b) 250,000 Fracturing Horsepower Days 200,000 150,000 100,000 SandRidge 50,000 Lowest Fracturing Horsepower…
  8. DEUTSCHE BANK 2011 LEVERAGED FINANCE CONFERENCE – Sandridge Energy, Inc. – slide 8
    Permian Basin Central Basin Platform Low Risk, Shallow, Conventional Oil Play High Rate of Return Oil Drilling Low Drilling Costs Proven History of Well Performance Low Acreage Costs ( 200,000 net acres) Certainty of Economic…
  9. DEUTSCHE BANK 2011 LEVERAGED FINANCE CONFERENCE – Sandridge Energy, Inc. – slide 9
    Permian Production Growth New SD High: 32,214 Boepd 35,000 (09/06/2011) 100 Spraberry Divestiture -1,600 BOEPD 90 30,000 80 25,000 Arena Acquisition 70 New Mexico 60 NET BOEPD 20,000 Properties Divestiture -1,500 BOEPD…
  10. DEUTSCHE BANK 2011 LEVERAGED FINANCE CONFERENCE – Sandridge Energy, Inc. – slide 10
    Central Basin Platform Economics 7,900 Potential Locations 180% 75 Mbbl (79% Crude) 160% 140% 47 Mmcf, dry 120% BTAX RoR 100% 83 Total Mboe 80% 60% 760M/well 40% 20% 65 Boepd 30 day IP 0% 60/4.00 80/5.00 STRIP…
  11. DEUTSCHE BANK 2011 LEVERAGED FINANCE CONFERENCE – Sandridge Energy, Inc. – slide 11
    What Makes Central Basin Platform a Great Play Economics Characteristics IRR(a) 78% Scale 200,000 net acres NPV per Well (MM)(a) 1.0 7,900 locations F&D (/Boe) 12.29 Type Curve EUR (Mboe/well) 83 Reservoir Knowledge Carbonate…
  12. DEUTSCHE BANK 2011 LEVERAGED FINANCE CONFERENCE – Sandridge Energy, Inc. – slide 12
    Mississippian Overview High Perm, Carbonate Oil Play Shallow oil target ( 6,000 average TVD) Extensive reservoir control from thousands of vertical wells with 30+ years of history Thick overall carbonate section 250 Attractive…
  13. DEUTSCHE BANK 2011 LEVERAGED FINANCE CONFERENCE – Sandridge Energy, Inc. – slide 13
    Mississippian Play 160 Miles KS OK 100 Miles 6.5 Million Acres SandRidge Focus Area 17,000 ( 7,500 within ) Vertical Mississippian producing wells SandRidge currently owns 900,000 net acres 136 SandRidge horizontal wells…
  14. DEUTSCHE BANK 2011 LEVERAGED FINANCE CONFERENCE – Sandridge Energy, Inc. – slide 14
    Mid-Continent Production Growth New SD High: 17,063 Boepd (09/14/2011) Oil Rigs * Last month of data is field estimate 15 www.SandRidgeEnergy.com
  15. DEUTSCHE BANK 2011 LEVERAGED FINANCE CONFERENCE – Sandridge Energy, Inc. – slide 15
    Mississippian Economics 4,000 Potential Locations 180% 211 Mbbl (100% Crude) 160% 140% 1,186 Mmcf 120% BTAX RoR 100% 409 Total Mboe 80% 60% 3.0 MM/well 40% 20% 244 Boepd 30 day IP 0% 60/4.00 80/5.00 STRIP 100/6.00…
  16. DEUTSCHE BANK 2011 LEVERAGED FINANCE CONFERENCE – Sandridge Energy, Inc. – slide 16
    What Makes Mississippian a Great Play Economics Characteristics IRR(a) 79% Scale 900,000 net acres(d) NPV per Well (MM)(a) 4.9 Early mover in the play F&D (/Boe) 9.17 Type Curve EUR (Mboe/well)(b) 409 Reservoir Knowledge…
  17. DEUTSCHE BANK 2011 LEVERAGED FINANCE CONFERENCE – Sandridge Energy, Inc. – slide 17
    2011 and 2012 Capital Expenditure Plans Expand holdings and activity in Mississippian and Central Basin Platform (CBP) Accelerate NAV (10 Year Inventory) 2011 Capex increased 500 Million to 1.8 Billion 275 MM for land acquisition…
  18. DEUTSCHE BANK 2011 LEVERAGED FINANCE CONFERENCE – Sandridge Energy, Inc. – slide 18
    2011 Funding Plan 2011 capital program is fully funded Closed 1.6 billion in cash proceeds with an additional 230 million pending 2011 surplus pre-funds 2012 by 490 million 790 million credit facility undrawn and over 300 million of…
  19. DEUTSCHE BANK 2011 LEVERAGED FINANCE CONFERENCE – Sandridge Energy, Inc. – slide 19
    2012 2014 Funding Plan (Three Year Cumulative) 2012 and 2013 Consensus CFFO Annual Capex: 1.8 - 2.1 billion No additional borrowing until 2013 Non-debt sources to include: Asset Sales, Joint Venture, additional Royalty Trusts and the…
  20. DEUTSCHE BANK 2011 LEVERAGED FINANCE CONFERENCE – Sandridge Energy, Inc. – slide 20
    Hedging 4.2 billion revenue locked in from 2011 2015 Contracts in place as of August 30, 2011: Year Ending 12/31/2011 12/31/2012 12/31/2013 12/31/2014 12/31/2015 Oil Swaps: (a) Volume (MMBbls) 9.06 11.15 13.81 7.14 4.50 Swap…
  21. DEUTSCHE BANK 2011 LEVERAGED FINANCE CONFERENCE – Sandridge Energy, Inc. – slide 21
    Capitalization ( in millions) Senior Notes Preferred Stock Floating Rate Sr Notes due 2014 350 8.5% Convertible Perpetual Preferred(a) 265 9.875% Sr Notes due 2016 354 6.0% Convertible Preferred(b) 200 8.0% Sr Notes due 2018 750 7.0%…
  22. DEUTSCHE BANK 2011 LEVERAGED FINANCE CONFERENCE – Sandridge Energy, Inc. – slide 22
    Capital Structure Overview ( in millions, except per unit measures) March 31 2011 June 30 2011 June 30 2011 Financial Metrics Actual Actual Pro Forma (a) Capitalization Cash & Cash Equivalents 9 5 503 Debt Current Maturities of…
  23. DEUTSCHE BANK 2011 LEVERAGED FINANCE CONFERENCE – Sandridge Energy, Inc. – slide 23
    Reserve & Production Metrics Proved Reserves (MMBoe) Average Daily Production (Boe/d) 600 546 65,479 60% 60,000 55,061 47,865 51% 46,304 400 360 54% 40% 40,000 253 37% 29,320 219 200 167 88% 20% 86% 52% 20,000 13% 46% 19%…
  24. DEUTSCHE BANK 2011 LEVERAGED FINANCE CONFERENCE – Sandridge Energy, Inc. – slide 24
    Bank Facility Facility Size 1,750 million Borrowing Base 790 million Maturity April 15, 2014 Redetermination April and September Security Senior Secured Pricing Base Rate: Prime Rate + 100 200 bps Eurodollar Rate: Libor + 200 300 bps…
  25. DEUTSCHE BANK 2011 LEVERAGED FINANCE CONFERENCE – Sandridge Energy, Inc. – slide 25
    SandRidge Benefits of a Royalty Trust Structure Allows for accelerated development of our large acreage position Cost effective way to develop PUDs using public cost of capital as a partner No opportunity cost of development given our…
  26. DEUTSCHE BANK 2011 LEVERAGED FINANCE CONFERENCE – Sandridge Energy, Inc. – slide 26
    Conclusions Defined strategy of developing low risk, shallow, conventional reservoirs Executing our two large core oil assets Management of risk via commodity hedges 3 year strategy Over 1 billion of current liquidity No debt…
  27. DEUTSCHE BANK 2011 LEVERAGED FINANCE CONFERENCE – Sandridge Energy, Inc. – slide 27
    Appendix
  28. DEUTSCHE BANK 2011 LEVERAGED FINANCE CONFERENCE – Sandridge Energy, Inc. – slide 28
    2011 Operational Guidance Production Differentials Oil(a) (MMBbls) 12.3 Oil(a) 13.00 Natural Gas (Bcf) 69.1 Natural Gas 0.75 Total (MMBoe) 23.9 Cost per Boe Capital Expenditures ( in millions) Lifting 14.10 - 15.50 Exploration and…
  29. DEUTSCHE BANK 2011 LEVERAGED FINANCE CONFERENCE – Sandridge Energy, Inc. – slide 29
    2012 Operational Guidance Production Oil(a) (MMBbls) 16.5 Natural Gas (Bcf) 67.4 Total (MMBoe) 27.7 Capital Expenditures ( in millions) Exploration and Production 1,550 Land and Seismic 170 Total Exploration and Production…
  30. DEUTSCHE BANK 2011 LEVERAGED FINANCE CONFERENCE – Sandridge Energy, Inc. – slide 30
    Contact: Kevin R. White, SVP Business Development Address: 123 Robert S. Kerr Avenue, Oklahoma City, OK 73102 Phone: 405-429-5515 Email: kwhiteSandRidgeEnergy.com Website: www.SandRidgeEnergy.com

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