His company just lost $216 million or more than $6 a share in the second quarter of 2020. This after the firm sold its downtown Oklahoma City headquarters in a $35 million deal. Yet SandRidge Energy’s CEO Carl Giesler is confident of the company’s future, telling a Thursday morning conference call, “Yesterday’s earnings release reaffirmed our 2020 guidance for May. We’re even more confident now than before in our ability to achieve those targets.”
The company’s fifth CEO since coming out of bankruptcy in 2016 called the quarter the most challenging in the history of the oil and gas business.
“The double whammy on commodity prices, particularly oil and NGLs of the, one, the demand hit from COVID-19; and two, the supply shock from the decision by OPEC+ to ramp up production earlier in the year required debt responsiveness,” he said in opening remarks.
Giesler said despite the challenges, the efforts and initiatives of the company “manifested benefits more quickly than we had anticipated.”
“Nimbleness and rigid cash flow focus in managing the curtailment and then restoration of wells in response to commodity price fluctuations mitigated what otherwise likely would have been a more severe quarter-over-quarter production decline.”
Some workers that remain with the company have returned to their offices following a closure caused by the COVID-19 pandemic. However, the remaining staff is made up of low numbers of employees.
” On the corporate side, staffing will stand at just over 15 people at the start of the fourth quarter, down almost 90% from the beginning of the year. In-house, we retained only direct value-driving, core strategy setting oversight and controllables.”
The “leaner team” that Giesler referred to was one of several cost-savings steps taken by management. Other steps included changes on how the company goes about workovers, curtailment of uneconomic wells and how chemicals are used.
The earnings report came nearly a month after SandRidge sold its headquarters tower to the state of Oklahoma in a $35.5 million deal. Giesler said the sale should be closed in the third quarter.
“We expect that the approximate $35 million in proceeds from that sale, coupled with anticipated cash generation in the back half of this year, will put us close to a net cash position by year-end. Commodity prices, of course, will impact our cash flows.”
He also explained the company extended its hedge profile to cover more than 60% of its expected proved developed producing gas production through the end of 2021.