View this Presentation - SandRidge Energy, Inc.

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DISCLAIMER
FORWARD LOOKING STATEMENT
This presentation includes "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended,
and Section 21E of the Securities Exchange Act of 1934, as amended. These statements express a belief, expectation or intention and
are generally accompanied by words that convey projected future events or outcomes. The forward-looking statements include
statements about the company’s corporate strategies, future operations, development plans and appraisal programs, and projections
and estimates of our drilling inventory and locations, production, reserves, rates of return, projected capital expenditures and other
costs, efficiency initiative outcomes, infrastructure utilization and investment, liquidity, debt maturities, capital structure, and price
realizations. We have based these forward-looking statements on our current expectations and assumptions and analyses made by us
in light of our experience and our perception of historical trends, current conditions and expected future developments, as well as
other factors we believe are appropriate under the circumstances. However, whether actual results and developments will conform
with our expectations and predictions is subject to a number of risks and uncertainties, including the volatility of oil and natural gas
prices, our success in discovering, estimating, and developing oil and natural gas reserves, the availability and terms of capital, our
timely execution of hedge transactions, credit conditions of global capital markets, changes in economic conditions, regulatory
changes and other factors, many of which are beyond our control. We refer you to the discussion of risk factors in Part I, Item 1A –
“Risk Factors” of our Annual Report on Form 10-K for the year ended December 31, 2014 and in comparable “Risk Factors” sections
of our Quarterly Reports on Form 10-Q filed after the date of this presentation. All of the forward-looking statements made in this
presentation are qualified by these cautionary statements. The actual results or developments anticipated may not be realized or,
even if substantially realized, they may not have the expected consequences to or effects on our company or our business or
operations. Such statements are not guarantees of future performance and actual results or developments may differ materially from
those projected in the forward-looking statements. We undertake no obligation to update or revise any forward-looking statements.
SandRidgeEnergy.com
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2015 BUDGET PHILOSOPHY REFLECTED IN Q1 RESULTS
EBITDA, PRODUCTION & SPEND RATE IN LINE WITH PLAN
• $182MM of adjusted EBITDA; adjusted earnings of $0.00 per diluted share
• Mid-Continent production of 76.2 MBoepd, up 50% vs Q1 2014
• Total Company production of 87.7 MBoepd, up 36% vs Q1 2014, pro forma for divestitures
• Mid-Continent Q1 laterals 30-day IP rates of 402 Boepd, 52% oil, 115% of type curve
• Front-end loaded capex of $322MM in Q1 vs $700MM full year guidance
TARGETED WELL COSTS OF $2.4MM PER LATERAL ACHIEVABLE IN 2H 2015
• Per lateral well costs preserving attractive economics of previous year’s costs and prices
• Estimated $2.7MM average drill and complete costs per Mississippian lateral in first quarter
• $350K of total $600K targeted well costs savings realized as of April 1st
• Continued expansion of multilateral program throughout remainder of 2015
DECREASED ACTIVITY IN REMAINDER OF 2015
• Currently running 7 rigs vs exit rate of 35 in 2014
• All active rigs drilling producers
• $400MM capex run rate in Q4 2015
SandRidgeEnergy.com
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27% MORE EUR FOR 80% OF THE COST
At lower well costs…
returns are preserved…
drilling location count grows.
Development inventory is preserved with lower
costs and expanded with oil price recovery
Service cost reductions plus increased
efficiencies while drilling more multilaterals
Type curve returns at target costs and
current strip exceed IRRs from higher
price and cost environment in 2014
* PUDs + Risked Probables @ Strip
* 05.01.15 Strip Pricing
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RIG ACTIVITY TARGET ACHIEVED IN FIRST HALF 2015
Current 6 Development Rigs + 1 Committed to Appraisal New Ventures
DRILLING LOCATION INFORMATION
MISS
CHESTER
WOODFORD*
Producing Laterals
1,463
41
8
1Q‘15 30-day Boe
405
452
199
3,212
401
147
( As of April 2015)
(a)
Future Locations
* Wells developed under new geological model
(a) PUDs + Risked Probables @ 05.01.15 Strip
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LIQUIDITY AND BALANCE SHEET FLEXIBILITY INTACT
Ample Liquidity, No Near Term Maturities
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$725MM liquidity
$900MM borrowing base
0.22x senior leverage ratio (senior secured debt/LTM pro forma EBITDA) vs 2.25x covenant
$251MM mark-to-market hedge book value
No bond maturities before 2020
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(a) $175 MM drawn as of March 31, 2015
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SANDRIDGE HAS A LEADING U.S. MIDCONTINENT OIL & GAS POSITION
WE ARE SKILLED, LARGE SCALE DEVELOPERS OF OIL AND GAS RESOURCES
• 1,500 wells drilled, over $5B invested since 2010 ($1.6B in 2014)
• Producing ~90 MBoepd, largest water gathering system in U.S. (over 1.2 MMBwpd)
• Expert at horizontal redevelopment of legacy vertical oil and gas plays
TRANSFERABLE SKILLSETS TO OTHER PLAYS
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Drilling: ran 30+ rigs in 2014, current $2.7MM cost per horizontal lateral
Infrastructure and logistics: optimizing extensive water and electrical systems
Production: Mid-Continent production grew 50% year over year to 76.2 MBoepd in Q1’15
Artificial Lift: optimizing gas lift, ESPs, and rod pumps
Engineering and geology: growing multi-year inventory of drilling locations
INNOVATION AND CONTINUOUS IMPROVEMENT ARE PART OF OUR CULTURE
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Premier operator of the Mississippian Limestone in Oklahoma and Kansas
Developing stacked pays such as Chester and Woodford
Sole operator drilling multilateral wells
Cost leaders: well costs, production expense
BUSINESS MINDED CULTURE
• Management background includes oil majors, independents, midstream and Wall Street
• We efficiently accelerate value creation with large scale activity levels more typical
of larger companies
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CONSISTENT WELL PERFORMANCE ABOVE TYPE CURVE
Several Quarters of Stronger Gas IPs and Early Volumes
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ON TRACK TO ACHIEVE $2.4MM PER LATERAL COSTS
$350K of $600K Targeted Savings Realized as of April 2015
$130K REALIZED - EFFICIENCY GAINS
• Rig efficiency & location high-grading
• Wellbore & completion design
– Liner tool elimination
– Stimulation revision
$200K REALIZED - SERVICE COSTS
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Liner packer system
Stimulation
Directional drilling
ESP/Artificial lift equipment
Fuel
$20K REALIZED - MULTILATERAL EXPANSION
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COST SAVINGS EVIDENT IN CYCLE TIME
Drilling Efficiencies Driving 30% Spud to Rig Release Cycle Time
Reduction Quarter Over Quarter
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UPDATED 2015 OPERATIONAL GUIDANCE – DD&A
PRODUCTION
Oil (MMBbls)
Natural Gas Liquids (MMBbls)
Total Liquids (MMBbls)
Natural Gas (Bcf)
Total (MMBoe)
CAPITAL EXPENDITURES ($ in millions)
Exploration and Production
Land and Geophysical
Total Exploration and Production
Oil Field Services
Electrical/Midstream
General Corporate
Total Capital Expenditures (excl. A&D)
EBITDA from Oilfield Services
and Other ($MM)(a)
Adjusted Net Income
Attributable to NCI ($MM)(b)
Adjusted EBITDA
Attributable to NCI ($MM)(c)
PRICE REALIZATIONS
9.0 – 10.0
4.0 – 5.0
13.0 – 15.0
89.5 – 93.5
28.0 – 30.5
$612
38
$650
5
30
15
$700
Oil (differential below WTI)
$3.75
NGLs (realized % of WTI)
30%
Gas (differential below Henry Hub)
$0.75
COSTS PER BOE
Lifting
$12.25 - $13.00
Production Taxes
0.65 – 0.85
*
DD&A – oil & gas
11.50 – 13.50
DD&A – other
2.00 – 2.20
$13.50 - $15.70
Total DD&A*
G&A – cash
3.00 – 3.50
G&A – stock
0.50 – 0.75
Total G&A
$3.50 - $4.25
Corporate Tax Rate
Deferral Rate
0%
0%
$10
$60
$90
* Updated DD&A projection in conjunction with Q1 ceiling test
write-down. Previous range was $12.00-15.00 for DD&A Oil & Gas and $14.00-17.20 for Total DD&A
a) EBITDA from Oilfield Services and Other is a non-GAAP
financial measure as it excludes from net income
interest expense, income tax expense and depreciation,
depletion and amortization. The most directly
comparable GAAP measure for EBITDA from Oilfield
Services and Other is Net Income from Oilfield Services
and Other. Information to reconcile this non-GAAP
financial measure to the most directly comparable GAAP
financial measure is not available at this time, as
management is unable to forecast the excluded items
for future periods and/or does not forecast the excluded
items on a segment basis.
b) Adjusted Net Income Attributable to Noncontrolling
Interest is a non-GAAP financial measure as it excludes
gain or loss due to changes in fair value of derivative
contracts and gain or loss on sale of assets. The most
directly comparable GAAP measure for Adjusted Net
Income Attributable to Noncontrolling Interest is Net
Income Attributable to Noncontrolling Interest.
Information to reconcile this non-GAAP financial measure
to the most directly comparable GAAP financial measure
is not available at this time, as management is unable to
forecast the excluded items for future periods.
c) Adjusted EBITDA Attributable to Noncontrolling Interest
is a non-GAAP financial measure as it excludes from net
income interest expense, income tax expense and
depreciation, depletion and amortization, gain or loss
due to changes in fair value of derivative contracts and
gain or loss on sale of assets. The most directly
comparable GAAP measure for Adjusted EBITDA
Attributable to Noncontrolling Interest is Net Income
Attributable to Noncontrolling Interest. Information to
reconcile this non-GAAP financial measure to the most
directly comparable GAAP financial measure is not
available at this time, as management is unable to
forecast the excluded items for future periods.
SandRidgeEnergy.com
www.SandRidgeEnergy.com
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