OKLAHOMA CITY, Nov. 12, 2019 /PRNewswire/ -- SandRidge Energy, Inc. (the "Company" or "SandRidge") (NYSE:SD) today announced financial and operational results for the quarter ended September 30, 2019.
Highlights during the third quarter:
- Reduced G&A by 38% and Adjusted G&A by 39%, quarter over quarter
- Reduced full year 2019 capital expenditures and adjusted G&A guidance midpoints
- Net loss of $182 million, or $5.12 per share, driven largely by a non-cash ceiling test write down, and adjusted net loss of $17 million, or $0.49 per share
Paul McKinney, President and CEO commented, "During the third quarter, we faced a challenging price environment, particularly with regard to NGLs, which significantly impacted our results. We continued to focus our efforts on further reducing our G&A costs, evaluating various M&A opportunities and reviewing our capital spending plans for the rest of the year. The planned reduction in our fourth quarter capital spending is in response to the continued volatile commodity price environment. While we are very pleased with the early results of our North Park wells completed during the quarter, we are currently assessing our capital budget for 2020 with a focus on value enhancing opportunities and financial discipline."
Financial Results
For the third quarter, the Company reported a net loss of $182 million, or $5.12 per share, and net cash provided by operating activities of $33 million. After adjusting for certain items, the Company's adjusted net loss amounted to $17 million, or $0.49 per share, operating cash flow totaled $26 million and adjusted EBITDA was $26 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 beginning on page 10.
Operational Results and Activity
Production totaled 2.9 MMBoe (29% oil, 22% NGLs and 49% natural gas) for the third quarter.
North Park Basin Asset in Jackson County, Colorado
Net production from the North Park Basin totaled 363 MBoe (3.9 MBoepd) for the quarter. During the quarter, the Company brought six wells to sales with initial production rates in line with expectations and completed a refrac on the Grizzly 3-32H (including 1,000 feet of additional perforations), which resulted in a more than tenfold increase in production from previous rates.
Mid-Continent Assets in Oklahoma and Kansas
In the third quarter, production in the Mississippian totaled 2.2 MMBoe (24.1 MBoepd, 16% oil) and Northwest STACK production totaled 274 MBoe (3.0 MBoepd, 43% oil).
Liquidity and Capital Structure
As of October 31, 2019, the Company's total liquidity was $205 million, based on $2 million of cash and $203 million available under the aggregate elected commitment amount of its credit facility, net of outstanding letters of credit. The Company currently has $61 million drawn on the facility.
Conference Call Information
The Company will host a conference call to discuss these results on Wednesday, November 13, 2019 at 10:00 am CT. The telephone number to access the conference call from within the U.S. is (866) 393-4306 and from outside the U.S. is (734) 385-2616. The passcode for the call is 5481108. An audio replay of the call will be available from November 13, 2019 until 11:59 pm CT on November 27, 2019. The number to access the conference call replay is (855) 859-2056 or (404) 537-3406. The passcode for the replay is 5481108.
A live audio webcast of the conference call will also be available via SandRidge's website, www.sandridgeenergy.com, under Investor Relations/Presentation & Events. The webcast will be archived for replay on the Company's website for 30 days.
2019 Operational and Capital Expenditure Guidance
Presented below is the Company's updated operational and capital expenditure guidance for 2019.
Updated | Previous | ||
Projection as of | Projection as of | ||
November 12, 2019 | August 7, 2019 | ||
Production | |||
Oil (MMBbls) | 3.4 - 3.5 | 3.7 - 3.9 | |
Natural Gas Liquids (MMBbls) | 2.8 - 2.9 | 2.5 - 2.6 | |
Total Liquids (MMBbls) | 6.2 - 6.4 | 6.2 - 6.5 | |
Natural Gas (Bcf) | 31.5 - 33.5 | 31.0 - 33.0 | |
Total (MMBoe) | 11.5 - 12.0 | 11.4 - 12.0 | |
Price Differentials to NYMEX | |||
Oil (per Bbl) | ($4.30) | ($4.30) | |
Natural Gas Liquids (realized % of NYMEX WTI) | 21% | 25% | |
Natural Gas (per MMBtu) | ($1.30) | ($1.30) | |
Expenses | |||
LOE | $91 - $94 million | $89 - $94 million | |
Adjusted G&A Expense (1) | $31 - $33 million | $31 - $35 million | |
% of Revenue | |||
Severance and Ad Valorem Taxes | 7.0% - 7.5% | 6.5% - 7.0% | |
Capital Expenditures ($ in millions) | |||
Drilling and Completion | $105 - $110 | $115 - $125 | |
Other Exploration and Production | $55 - $60 | $45 - $55 | |
Total Capital Expenditures | $160 - $170 | $160 - $180 | |
(excluding acquisitions and plugging and abandonment) | |||
1. | Adjusted G&A expense is a non-GAAP financial measure. The Company has defined this measure at the conclusion of this press release under "Non-GAAP Financial Measures" beginning on page 10. 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. |
Operational and Financial Statistics
Information regarding the Company's production, pricing, costs and earnings is presented below:
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||
Production - Total | |||||||||||
Oil (MBbl) | 835 | 956 | 2,668 | 2,637 | |||||||
NGL (MBbl) | 629 | 710 | 2,335 | 2,110 | |||||||
Natural Gas (MMcf) | 8,318 | 8,757 | 25,414 | 27,221 | |||||||
Oil equivalent (MBoe) | 2,850 | 3,126 | 9,239 | 9,284 | |||||||
Daily production (MBoed) | 31.0 | 34.0 | 33.8 | 34.0 | |||||||
Average price per unit | |||||||||||
Realized oil price per barrel - as reported | $ | 52.78 | $ | 66.94 | $ | 53.54 | $ | 63.16 | |||
Realized impact of derivatives per barrel | 0.75 | (12.95) | 0.23 | (12.35) | |||||||
Net realized price per barrel | $ | 53.53 | $ | 53.99 | $ | 53.77 | $ | 50.81 | |||
Realized NGL price per barrel - as reported | $ | 10.11 | $ | 26.45 | $ | 12.37 | $ | 24.70 | |||
Realized impact of derivatives per barrel | — | — | — | — | |||||||
Net realized price per barrel | $ | 10.11 | $ | 26.45 | $ | 12.37 | $ | 24.70 | |||
Realized natural gas price per Mcf - as reported | $ | 0.93 | $ | 1.68 | $ | 1.37 | $ | 1.66 | |||
Realized impact of derivatives per Mcf | — | 0.09 | 0.20 | 0.13 | |||||||
Net realized price per Mcf | $ | 0.93 | $ | 1.77 | $ | 1.57 | $ | 1.79 | |||
Realized price per Boe - as reported | $ | 20.42 | $ | 31.19 | $ | 22.34 | $ | 28.41 | |||
Net realized price per Boe - including impact of derivatives | $ | 20.64 | $ | 27.47 | $ | 22.96 | $ | 25.28 | |||
Average cost per Boe | |||||||||||
Lease operating | $ | 8.37 | $ | 7.01 | $ | 7.76 | $ | 7.02 | |||
Production, ad valorem, and other taxes | $ | 1.52 | $ | 2.35 | $ | 1.66 | $ | 2.07 | |||
Depletion (1) | $ | 13.64 | $ | 10.59 | $ | 12.42 | $ | 9.91 | |||
(Loss) earnings per share | |||||||||||
(Loss) earnings per share applicable to common stockholders | |||||||||||
Basic | $ | (5.12) | $ | 0.33 | $ | (5.66) | $ | (1.81) | |||
Diluted | $ | (5.12) | $ | 0.33 | $ | (5.66) | $ | (1.81) | |||
Adjusted net (loss) income per share available to common stockholders | |||||||||||
Basic | $ | (0.49) | $ | 0.31 | $ | (0.74) | $ | 0.42 | |||
Diluted | $ | (0.49) | $ | 0.31 | $ | (0.74) | $ | 0.42 | |||
Weighted average number of shares outstanding (in thousands) | |||||||||||
Basic | 35,491 | 35,308 | 35,390 | 34,971 | |||||||
Diluted | 35,491 | 35,330 | 35,390 | 34,971 | |||||||
(1) Includes accretion of asset retirement obligation. |
Capital Expenditures
The table below presents actual results of the Company's capital expenditures for the three months and nine months ended September 30, 2019.
Three Months Ended | Nine Months Ended | ||||
September 30, 2019 | September 30, 2019 | ||||
(In thousands) | (In thousands) | ||||
Drilling and Completion | 27,231 | 103,878 | |||
Other Exploration and Production | 15,382 | 45,401 | |||
Total Capital Expenditures | $ | 42,613 | $ | 149,279 | |
(excluding acquisitions and plugging and abandonment) | |||||
Derivative Contracts
The table below sets forth the Company's hedge position for 2019 as of November 12, 2019:
Quarter Ending | ||||||||||
3/31/2019 | 6/30/2019 | 9/30/2019 | 12/31/2019 | FY 2019 | ||||||
WTI Swaps: | ||||||||||
Total Volume (MBbls) | - | - | 163.0 | 184.0 | 347.0 | |||||
Swap Price ($/Bbl) | - | - | $60.04 | $60.04 | $60.04 | |||||
Capitalization
The Company's capital structure as of September 30, 2019 and December 31, 2018 is presented below:
September 30, 2019 | December 31, 2018 | ||||
(In thousands) | |||||
Cash, cash equivalents and restricted cash | $ | 5,728 | $ | 19,645 | |
Credit facility | $ | 62,000 | $ | — | |
Total debt | 62,000 | — | |||
Stockholders' equity | |||||
Common stock | 36 | 36 | |||
Warrants | 88,518 | 88,516 | |||
Additional paid-in capital | 1,058,905 | 1,055,164 | |||
Accumulated deficit | (496,215) | (295,995) | |||
Total SandRidge Energy, Inc. stockholders' equity | 651,244 | 847,721 | |||
Total capitalization | $ | 713,244 | $ | 847,721 | |