SandRidge Energy, Inc. (fka SDOCQ)

[DLP]

SandRidge Energy, Inc. Updates Shareholders on Operations for Third Quarter 2014
Total Company Production of 80 MBoe per day, up 14% Quarter-over-Quarter, Supports Increased Production Guidance
Multilaterals are 20% of Drilling Program; Chester and Woodford Success Continues
Share Repurchase of 27.4 Million Shares at $4.06 per Share, 5.6% of Shares Outstanding
Substantial Majority of Production Through 2015 Hedged Over $90 per Bbl
Fully Undrawn Borrowing Base Increased to $1.2 Billion with Facility Limit of $900 Million
2014 Capex Guidance Increasing $75 Million to $1.55 Billion , Includes New Land and 3D Seismic Data
PR Newswire
OKLAHOMA CITY , Nov. 5, 2014
OKLAHOMA CITY , Nov. 5, 2014 /PRNewswire/ -- SandRidge Energy, Inc. (the "Company") (NYSE: SD) today announced operational results for the quarter ended September 30, 2014 . Additionally, presentation slides will be available on the Company's website, www.sandridgeenergy.com, under Investor Relations/Events at 6:00 am CST on November 6 .
"We have had another active and successful quarter of high return growth, with our teams continuing to innovate and create shareholder value," noted James Bennett , SandRidge CEO and President. "In addition to production growth, we have advanced our multilateral skillset. Given our drilling success, including new Chester and Woodford production, we've added some late-2014 capital for land and 3D seismic investment, and have also raised the midpoint of production guidance from 28.5 to 28.7 MMBoe. Our operations are running well and are supportive of our 2015 program, for which we are currently developing our capital budget."
-- Mid-Continent production grew 19% to 67 MBoe per day in the third quarter
and 39% year-over-year. Total Company production grew to 80 MBoe per day,
a 14% growth quarter-over-quarter.

-- 122 Q3 Mid-Continent laterals had an average 30-day IP of 368 Boe per day
(16% above type curve).

-- Five laterals across three counties averaged 30-day IPs over 1,000 Boe
per day during the quarter.

-- Multilaterals made up 21% of the third quarter drilling program. Capital
efficiencies continue to drive increased returns with multilateral costs
averaging $2.4 million per lateral (versus $2.9 million on a single
Mid-Continent lateral) with IPs of 273 Boe per day and a shallower
decline than type curve. While still early in the program, multilateral
projects are indicating 30% better returns than the Mississippian single
lateral type curve predicts.

-- Continued progress developing the Chester with ten wells in the third
quarter producing 67% oil with 30 day IPs averaging 252 Boe per day. A
three rig program is planned for the remainder of 2014.

-- Second Woodford success utilizing new geologic model in the third quarter
producing 88% oil with 30-day IP of 382 Boe per day. A two rig program is
planned for the remainder of 2014.

-- Guidance for capex increased $75 million for the year to $1.55 billion ,
primarily associated with late year leasehold and 3D seismic investment.
Key Financial Activities
"Investors are clearly concerned about the impact of lower ongoing oil prices. Beyond solid operating results, SandRidge has been proactive by repurchasing shares, expanding our borrowing base, and building valuable hedge positions in 2014 and 2015, all in addition to continued focus on capital efficiency in our drilling program," noted James Bennett , SandRidge CEO and President.
"Separately, yesterday, we announced that our current discussions with the SEC regarding the timing for accruing the Company's CO(2) underdelivery penalty will result in a delay in the filing of our Form 10-Q and have led the Company's Audit Committee to conclude that certain financial statements should not be relied upon at this time. While we are disappointed in the distraction caused by this unfortunate development, it is important to note that this is likely only a change to the timing of accruals of the penalty and does not materially impact our core business. Our team is working diligently to resolve this matter with the SEC as quickly as possible, and we will still host our regularly scheduled conference call to update our investors on operating progress."
-- Fully undrawn borrowing base increased to $1.2 billion from $775 million ,
with the facility limit set by the Company at $900 million . The increased
facility limit, in addition to the $590 million of cash at quarter end,
gives the Company approximately $1.5 billion of current liquidity,
expandable to $1.8 billion upon written request, provides ample
liquidity.

-- SandRidge estimates over 90% of its anticipated liquids production (NGL
barrels converted at a 3:1 ratio) for the fourth quarter of 2014, is
hedged above $93 /Bbl. Additionally, approximately 10.2 MMBbls of liquids
production in 2015 is hedged above $90 /Bbl.

-- To date, SandRidge has invested a total of $111.3 million of its $200
million authorized share repurchase program. This represents 5.6% of the
shares outstanding purchased at an average price of $4.06 per share. Of
the total, third quarter repurchases comprised 3.5 million shares at
average price of $4.99 per share, or 0.7% of the shares outstanding. The
buyback program is complementary to the Company's drilling program in
delivering per share growth.

-- On November 4, 2014 , the Company filed a Form 8-K and issued a press
release disclosing details surrounding a routine review by the Securities
and Exchange Commission (the "SEC") of its 2012 Annual Report on Form
10-K. The Company currently anticipates that its Quarterly Report on Form
10-Q for the third quarter of 2014 will not be filed timely, but, rather,
will be completed and filed as soon as possible following the resolution
of the SEC's review.
Additional Operational Activities
-- Industry leading costs of $2.9 million dollars per Mid-Continent lateral
continue to see savings through cost efficiency initiatives including pad
drilling, commingled facilities, and innovative multilateral drilling.

-- The Company continues to invest in and improve upon its electrical
infrastructure system. Recent improvements such as the addition of
auto-restarts on all new wells, a new substation in Garfield County and
other system-wide upgrades support additional electrical submersible pump
usage and enhance production reliability.

-- In the third quarter, the Company drilled seven saltwater disposal wells
in support of oil and gas production growth. Saltwater disposal rates
increased to 1.2 MMBbls of water per day in the third quarter.
Mid-Continent: During the third quarter of 2014, SandRidge drilled 129 laterals: 95 in Oklahoma and 34 in Kansas . The Company averaged 33 horizontal rigs operating in the play: 25 in Oklahoma and 8 in Kansas . Additionally, the Company averaged two rigs drilling saltwater disposal wells. The Company's Mid-Continent assets produced 66.8 MBoe per day during the third quarter (35% oil, 17% NGLs, 48% natural gas).
Permian Basin : In the Company's Permian properties, 40 wells were drilled during the third quarter for SandRidge Permian Trust . The Company's Permian Basin assets produced 5.6 MBoe per day during the quarter (86% oil, 9% NGLs, 5% natural gas).
Other Operating Areas: During the third quarter, SandRidge's legacy west Texas properties produced approximately 5.8 MBoe per day (1% oil, 99% natural gas). Additionally, its legacy Mid-Continent assets produced 1.6 MBoe per day in the quarter (11% oil, 16% NGLs, 73% natural gas).
Royalty Trusts: At September 30, 2014 , the Company was obligated to drill nine development wells for SandRidge Mississippian Trust II (SDR) and 26 development wells for SandRidge Permian Trust (PER). The Company will complete its drilling obligations for PER in the fourth quarter of 2014 and expects to complete its drilling obligations for SDR in the first quarter of 2015.
Operational and Financial Statistics
Information regarding the Company's production, pricing, and costs is presented below:
Three Months Ended Nine Months Ended
September 30, 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

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