Sandridge Energy, Inc. · NYSE:SD
Sandridge Energy — Investor Presentation (May 2017)
28 slides from Sandridge Energy's investor presentation, May 2017
Slide 1: Investor Presentation May 2017
MAY 2017 INVESTOR PRESENTATION
Slide 2: Cautionary Statements
Cautionary Statements 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 i
Slide 3: SandRidge Energy
SandRidge Energy With a strong balance sheet, we have built a portfolio of three project areas with competitive project IRRs and significant location inventories. Investment will continue with the development of both our NW STACK and North Park Niobrara oil projects and high- graded harvest of our M
Slide 4: SandRidge Energy Overview
SandRidge Energy Overview Unlevered oil producer focused on resource value creation KEY INFORMATION Market Equity Value as of May 9, 2017 35.9 MM common shares $656 Million Primary Assets 2P Locations1 Net Acres Mississippian ~300 400k Anadarko Basin, OK NW STACK Under 70k Anadarko Basin, OK Evaluat
Slide 5: Q1'17 Operational and Financial Results
Q1’17 Operational and Financial Results Continued NW STACK drilling, Niobrara production outperformance and Miss Lime success STRONG • 4.0 MMBoe (44.2 MBoepd) production (28% oil) PERFORMANCE • $56 million of adjusted EBITDA with $41 million of capex1 Generated $15 million free • $6.28/boe LOE, $10.
Slide 6: NW STACK Industry Activity
NW STACK Industry Activity SD currently running 2 rigs across 70k acres in NW STACK (Major, Woodward and Garfield Co.) INDUSTRY ACTIVITY ADJACENT TO SD ACREAGE Industry activity has been converging on existing SD acreage with prominent operators seeing encouraging results: • Multiple operators with
Slide 7: NW STACK Primary Targets
NW STACK Primary Targets NW STACK Meramec and Osage same productive formation as in STACK Structurally deepens from northeast to southwest Meramec 5,800’-12,400’ TVD • Below the Chester (where present) • Interbedded shales, sands, and carbonates • Thickness from 50’-160’ • Matrix porosity developmen
Slide 8: SandRidge NW STACK Delineation
SandRidge NW STACK Delineation 2 Rigs currently running across three counties 2017 D&C capex of $65-70MM 70K NET ACRES IN NW STACK • 22 gross laterals (17 net laterals) • Major, Woodward, and Garfield Co. • Targeting the Meramec • Drilling mostly XRLs Currently flowing back • Adams 2122 1-16H 9H (Wo
Slide 9: Industry Meramec Results
Industry Meramec Results Meramec initial production has averaged 700-800 Boepd and ~60% oil on wells surrounding SD’s NW STACK acreage position 8
Slide 10: Industry Osage Results
Industry Osage Results Osage initial production has averaged 700-800 Boepd and ~40% oil on wells surrounding SD’s NW STACK acreage position 9
Slide 11: North Park Niobrara Asset Overview
North Park Niobrara Asset Overview Drilling in 2017 focuses on XRLs, multiple benches and establishes new federal unit 2017 activity will help optimize full development planning • Ten wells drilled in 2016 including one XRL and one “C” bench producer with production outperforming type curve • Target
Slide 12: Targeting Multiple Niobrara Benches
Targeting Multiple Niobrara Benches Similar geologic characteristics to the DJ Basin Niobrara but higher oil cut NORTH PARK DJ BASIN BASIN Oil EUR % >80% ~35% Depth 5,500 – 9,000 ft. 6,000 – 8,000 ft. Reservoir Storage Capacity Gross Thickness 450 – 480 ft. 150 – 300 ft. Porosity 6 – 9% 6 – 10% OOIP
Slide 13: 2016 Niobrara Program Success
2016 Niobrara Program Success 11 laterals drilled in 2016, outperforming type curve Lowered costs, optimized completions, drilled first XRL and “C” bench wells 2016 DRILLING RESULTS First XRL in the basin • 2-mile lateral (Castle 1-17H 20) drilled and completed for $3.4MM per lateral with a 30-Day I
Slide 14: First SandRidge Niobrara C Bench Lateral
First SandRidge Niobrara C Bench Lateral Hebron 4-18H cumulative oil production exceeds type curve by 32% 539 Boepd (92% oil) 30-Day IP DAILY OIL RATE CUMULATIVE OIL Jet Pump Installed 13
Slide 15: First SandRidge Niobrara XRL
First SandRidge Niobrara XRL Castle 1-17H exceeding type curve, drilled and completed for $3.4MM per lateral 901 Boepd (91% oil) 30-Day IP DAILY OIL RATE CUMULATIVE OIL Jet Pump Installed Jet Pump Installed 14
Slide 16: 2016 Niobrara Oil Production Above Type Curve
2016 Niobrara Oil Production Above Type Curve Current year program to feature XRLs with crosslinked completions 2016 DRILLING PROGRAM 2016 CROSSLINKED COMPLETIONS ONLY 15
Slide 17: Large Contiguous North Park Acreage Position
Large Contiguous North Park Acreage Position 2017 drilling increases acreage held by production or by unit to ~75% of existing 127k net acre position BEAVER CREEK UNIT 11k Net Acres (Proposed) 71k net acres currently held by production or PETERSON RIDGE UNIT unit (56% of 127k net acre position). 22k
Slide 18: North Park Basin Oil and Gas Takeaway
North Park Basin Oil and Gas Takeaway Favorable oil marketing and gas processing will create additional revenue Current Marketing and Takeaway Short term in-field gas processing may include: Oil trucked to market (up to 40 MBopd) Mechanical Refrigeration Units (MRU) for NGL extraction Low ~$3.
Slide 19: Appendix
FF SANDRIDGE energy
Slide 20: 2017 Project EURs, Economics, & Inventory
2017 Project EURs, Economics, & Inventory Diverse and material location inventory in three areas MERAMEC NIOBRARA MISSISSIPPIAN EURs & ECONOMICS XRL* SINGLE XRL FSD* SINGLE EUR, MBoe 800 – 1,000 500 – 600 600 1,350 550 % Oil 40%+ 40%+ 80%+ 20% 20% D&C per lateral ($MM) $3.1 $4.2 $3.4 $2.0 $2.4 IRR(a
Slide 21: 2016 Mississippian program: 13 laterals
2016 Mississippian program: 13 laterals $1.7MM Avg D&C per Lateral, 100% Multi and XRL • 1 dual XRL: (equivalent to 4 single laterals) • 1 full section development: (equivalent to 3 single laterals) • 1 coplanar: (equivalent to 2 single laterals) • 2 XRLs: Record low of $1.3MM Avg D&C (equivalent to
Slide 22: Durable Mississippian Economics
Durable Mississippian Economics Multis and XRLs drive lower costs with consistent results D&C CAPEX, $MM PER LATERAL 90-DAY CUMULATIVE MBOE PER LATERAL 43% Lower costs per lateral vs. 2014 Results shown by groups of 25 wells 21
Slide 23: Year End 2016 Reserves and PV-10
Year End 2016 Reserves and PV-10 OIL NGLS GAS EQUIVALENT PV-102 PROVED RESERVES MBBLS MBBLS MMCF MBOE1 $MM Proved Reserves as of Dec 31, 2015 @ SEC Pricing ($50.28 / $2.59) 77,911 61,075 1,113,840 324,626 $1,315_ Production (5,529) (4,357) (56,895) (19,369) Sale of assets (387) 0 (145,267) (24,598)
Slide 24: Four Quarters of Trailing Actuals
Four Quarters of Trailing Actuals ACTUALS PRODUCTION Q2’16 Q3’16 Q4’16 Q1’17 Oil (MMBbls) 1.4 1.3 1.2 1.1 Natural Gas Liquids (MMBbls) 1.1 1.1 1.0 0.9 Total Liquids (MMBbls) 2.5 2.4 2.2 2.0 Natural Gas (Bcf) 14.5 13.1 12.8 11.8 Total (MMBoe) 5.0 4.6 4.3 4.0 Daily Oil Equivalent (MBoepd) 54.7 49.6 47
Slide 25: 2017 Capital Expenditures Guidance
2017 Capital Expenditures Guidance CAPEX GUIDANCE $MM CAPEX GUIDANCE DETAIL $MM D&C $109 - $119 Mid-Continent D&C $65 - $70 Other E&P 99 North Park D&C 20 - 25 Other - D&C1 24 Total Exploration and Production $208 - $218 Total Drilling & Completion $109 - $119 General Corporate 2 OTHER E&P Total Cap
Slide 26: 2017 Operational Guidance
2017 Operational Guidance TOTAL COMPANY PRODUCTION PRICING REALIZATIONS Oil (MMBbls) 4.0 – 4.2 Oil (differential below WTI) $2.75 Natural Gas Liquids (MMBbls) 3.0 – 3.2 NGLs (realized % of WTI) 26% Gas (differential below Henry Hub) $1.00 Total Liquids (MMBbls) 7.0 – 7.4 Natural Gas (Bcf) 42.0 – 43.
Slide 27: Hedging Overview
Hedging Overview 80% of oil and 77% of gas volumes hedged at the midpoint of guidance in 2017 OIL Q1’17 Q2’17 Q3’17 Q4’17 FY 2017 Q1’18 Q2’18 Q3’18 Q4’18 FY 2018 SWAPS Volumes (MMBbls) 0.81 0.82 0.83 0.83 3.29 0.45 0.46 0.46 0.46 1.83 Price ($/Bbl) $52.24 $52.24 $52.24 $52.24 $52.24 $55.34 $55.34 $5
Slide 28: Reconciliation of Standardized Measure of Discounted Net Cash Flows to PV-10
Reconciliation of Standardized Measure of Discounted Net Cash Flows to PV-10 SUCCESSOR PREDECESSOR PROVED RESERVES DEC 31, 2016 DEC 31, 2015 ((in millions) Standardized measure of $ 438 $ 1,314 discounted net cash flows1 Present value of future net income - 1 tax expense discounted at 10% PV-102 $ 4