Drilling & Completions | Quarterly / Earnings Reports | Debt | First Quarter (1Q) Update | Deals - Acquisition, Mergers, Divestitures | Financial Results | Capital Markets | Drilling Activity

SandRidge Energy First Quarter 2021 Results

Share Print Bookmark    |    Wednesday,May 12,2021

SandRidge Energy Inc. announced financial and operational results for the quarter ended March 31, 2021.

Highlights:

• Improved net cash¹ by $48.2 million to a net cash position of $56.5 million compared to a net cash position of $8.3 million at the end of the prior quarter, the increase was primarily due to the sale of North Park Basin
• Adjusted EBITDA² was $21.7 million compared to $9.1 million in the prior quarter, primarily due to commodity price increases
• Total production was 18.2 MBoed compared to 21.1 MBoed in the prior quarter. Produced 17.5 MBoed from our Mid-Continent assets, compared to 19.0 MBoed in the prior quarter
• Net income was $35.0 million, or $0.97 per share. Adjusted net income² was $17.4 million, or $0.48 per share
• G&A was $2.1 million, or $1.27 per boe compared to $3.0 million, or $1.57 per boe in the prior quarter. G&A included $0.4 million related to one time savings. Adjusted G&A² was $1.9 million, or $1.14 per boe compared to $2.8 million, or $1.44 per boe in the prior quarter
• LOE was $8.0 million or $4.85 per boe compared to $11.0 million, or $5.69 per boe in the prior quarter. Mid-Continent represented $7.1 million or $4.47 per boe compared to $9.0 million or $5.15 per boe in the prior quarter
• Realized oil, natural gas, and natural gas liquids prices before the impact of derivatives were $53.99, $1.85 and $17.00, respectively, compared to $38.18, $1.56 and $9.12, in the prior quarter
• Closed on the sale of North Park Basin for a purchase price of $47 million. Net proceeds were $39.7 million in cash as a result of customary effective date to closing date adjustments. The sale resulted in a $19.7 million gain.
• Closed on the acquisition of the overriding royalty interests held by SandRidge Mississippian Royalty Trust I for a net purchase price of $3.6 million, which management believes approximates a PV-55 valuation and a 2-year cash on cash payback at early April strip pricing
• Continued streak without a recordable Health, Safety and Environmental ("HS&E") incident for 31 months as of the end of the quarter

Financials

For the quarter, the Company reported a net income of $35.0 million, or $0.97 per share, and net cash provided by operating activities of $14.3 million. After adjusting for certain items, the Company's adjusted net income amounted to $17.4 million, or $0.48 per share, operating cash flow totaled $19.6 million and adjusted EBITDA was $21.7 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 on pages 9-12.

Operational Results and Activity

Production totaled 1,641 MBoe (18.2 MBoed, 17.6% oil, 31.7% NGLs and 50.7% natural gas) for the quarter.

Production in the Mid-Continent totaled 1,574 MBoe (17.5 MBoed, 14.0% oil, 33.1% NGLs and 52.9% natural gas) during the quarter.

Management believes the unaudited proved developed PV-10 reserve value of its Mid-Continent assets to be approximately $233 million, with an effective date of April 1, 2021, as routinely updated for the quarter from the Company's engineered year-end 2020 reserves, consistent with standard industry reserve practice, including performance and commercial updates for price differentials, operating expenses and other commercials, based on the historical trailing 12 month averages ending December 2020, using May 5, 2021 Nymex strip pricing, and including the subsequent acquisition of the overriding royalty interests of SandRidge Mississippian Trust I.

Net production for North Park Basin totaled 67 MBoe (0.7 MBoed, 100.0% oil) for 36 days during the quarter in which the Company owned the assets.

Overriding Royalty Interest Acquisition

On April 22, 2021, the Company announced the acquisition of all the overriding royalty interest assets of SandRidge Mississippian Trust I (the "Trust"). The gross purchase price is $4.9 million (net $3.6 million, given the Company's 26.9% ownership of the Trust).

North Park Basin Sale

On February 5, 2021, the Company sold all of its oil and natural gas properties and related assets of the North Park Basin in Colorado for a purchase price of $47 million. The sale closed for net proceeds of $39.7 million in cash as a result of customary effective date to closing date adjustments.

2021 Capital Expenditures and Operational Guidance

The Company reaffirms its 2021 capital expenditures and operational guidance previously published on March 3, 2021.

Liquidity and Capital Structure

As of March 31, 2021, the Company's total liquidity was $83.9 million, based on $73.9 million of cash, excluding restricted cash and $10.0 million available under its credit facility.

As of May 7, 2021, the Company's cash on hand, excluding restricted cash, was approximately $81.2 million.