SandRidge Posts 2Q21 Results, Announces Share Repurchase Program

Oklahoma City-based SandRidge Energy, Inc. announced its financial and operational results for the three and six month periods ended June 30, 2021, according to a company press release.

The company’s Board of Directors approved the initiation of a share repurchase program as a means of opportunistically returning capital to shareholders. Under the program, SandRidge may repurchase up to $25 million worth of its outstanding common stock beginning as early as August 16, 2021. The program does not require any specific number of shares to be acquired. Additionally, the program can be discontinued by the company’s Board of Directors at any time.

SandRidge also reported that 2Q21 net cash increased by $14.1 million quarter-over-quarter to $70.6 million. Total cash and cash equivalents were reported at $90.6 million as of June 30, 2021.

The company reported second quarter net production at 19.0 MBoed from its Mid-Continent assets, compared to 17.5 MBoed in the prior quarter, up by 1.5 MBoed despite no new drilling or completions activity in the first half of 2021. Total second quarter net production was 19.0 MBoed compared to 18.2 MBoed in the prior quarter.

SandRidge also reported 2Q21 net income at $16.3 million for the quarter, or $0.45 per share. Adjusted net income was $16.5 million, or $0.45 per share.

As of June 30, 2021, the Company returned 49 wells to production that were previously curtailed due to the 2020 commodity price downturn, resulting in average incremental production of 0.8 MBoed in the first half of 2021. Focused efforts to improve operating costs, along with commodity prices rebounding from their 2020 lows, have bolstered the economics of these well reactivation projects. High rates of return and low execution risk support the Company’s belief that these projects represent an efficient use of capital. As of June 30, 2021, the Company brought forty-nine wells back online, resulting in average incremental production of 0.8 MBoed in the first half of 2021. Approximately 30 of these wells required workovers to return to service and accounted for capital expenditures of $0.6 million and expense dollars of $0.8 million. The balance of the wells required little to no expense to reactivate.

Second quarter realized oil, natural gas, and natural gas liquids prices, before the impact of derivatives, were $64.73, $1.66 and $17.33, respectively, compared to $53.99, $1.85 and $17.00 in the prior quarter.

The company reported that as of June 30, 2021, it did not have any open derivatives contracts.

SandRidge also announced updated production, expense, and capital expenditure guidance for 2021. Due to the incorporation of the well reactivation program into its 2021 plans, the company is updating production, expense and capital expenditures guidance for 2021. The Company is also updating 2021 commodity price realization guidance to midpoints of 95% and 27% of WTI for oil and NGLs, respectively, and 60% of Henry Hub for natural gas. All other guidance figures remain unchanged from the Company’s May 11, 2021 update.

During 2Q21, SandRidge closed on the acquisition of all overriding royalty interests held by SandRidge Mississippian Royalty Trust I for a net purchase price of $3.6 million.

Subsequent to the sale of its North Park Basin assets in 1Q21, the Company is no longer engaged in the routine flaring of produced natural gas. All of SandRidge’s operations are now focused in the Mid-Continent region of Oklahoma and Kansas.

For the three-months ended June 30, 2021, the Company reported net income of $16.3 million, or $0.45 per share, and net cash provided by operating activities of $18.9 million. After adjusting for certain items, the Company’s adjusted net income amounted to $16.5 million, or $0.45 per share, operating cash flow totaled $20.5 million and adjusted EBITDA was $20.8 million for the quarter.

Second quarter realized oil, natural gas, and natural gas liquids prices, before the impact of derivatives, were $64.73, $1.66 and $17.33, respectively, compared to $53.99, $1.85 and $17.00 in the prior quarter.

For the six-months ended June 30, 2021, the Company reported net income of $51.3 million, or $1.42 per share, and net cash provided by operating activities of $33.2 million. After adjusting for certain items, to include the one-time gain of $19.7 million related to the sale of the North Park Basin assets, the Company’s adjusted net income amounted to $33.9 million, or $0.94 per share, operating cash flow totaled $40.2 million and adjusted EBITDA was $42.5 million for the six months period ended.

During the second quarter of 2021, lease operating expense was $9.2 million or $5.33 per Boe compared to $8.0 million, or $4.85 per Boe in the prior quarter. Mid-Continent represented $9.2 million or $5.33 per Boe compared to $7.1 million or $4.47 per Boe in the prior quarter. Increased expenses were driven in part by workover activity associated with the Company’s well reactivation program.

For the three months ended June 30, 2021, general and administrative expense was $2.5 million, or $1.46 per Boe compared to $2.1 million, or $1.27 per Boe for the three months ended March 31, 2021. Adjusted general and administrative expense was $2.0 million, or $1.13 per Boe during the second quarter of 2021 compared to $1.9 million, or $1.14 per Boe during first quarter of 2021.

Production totaled 1,733 MBoe (19.0 MBoed, 13.1% oil, 35.4% NGLs and 51.5% natural gas) for the three-months ended June 30, 2021. Production totaled 3,374 MBoe (18.6 MBoed, 15.3% oil, 33.6% NGLs and 51.1% natural gas) for the six-months ended June 30, 2021.

Production in the Mid-Continent totaled 1,733 MBoe (19.0 MBoed, 13.1% oil, 35.4% NGLs and 51.5% natural gas) or the three-months ended June 30, 2021. Production in the Mid-Continent totaled 3,307 MBoe (18.3 MBoed, 13.5% oil, 34.3% NGLs and 52.2% natural gas) for the six-months ended June 30, 2021.

As of June 30, 2021, SandRidge’s total liquidity was $98.3 million, based on $88.3 million of cash, excluding restricted cash and $10.0 million available under its credit facility. As of August 6, 2021, the Company’s cash on hand, including restricted cash, was approximately $104.9 million.

 

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