SandRidge Energy, Inc. · NYSE:SD
SandRidge Energy — Q3 2021 Earnings Presentation
19 slides from SandRidge Energy's earnings presentation, November 2021
Slide 1: Investor Presentation
Investor Presentation November 2021
Slide 2: Disclosure – Forward Looking Statements
Disclosure – Forward Looking Statements 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
Slide 3: SandRidge – Investment Highlights
SandRidge – Investment Highlights • SandRidge Energy’s Reserve PD PV-10 is ~$413MM(1) with net cash of $99MM(2) as of 3Q21 $ Millions Reserve PD PV-10(1) ~$413 Cash and cash equivalents(3) $99 Total Debt(4) $0 • SandRidge is an experienced operator with: – ~1% annual decline over the trailing twelve
Slide 4: SandRidge – Key Highlights
SandRidge – Key Highlights • Over the past few years, the Board and Management have focused SD’s assets, optimized its production profile, streamlined its organization and cost structure, strengthened its balance sheet and maintained an ESG commitment ▪ Currently, focused solely on well-understood,
Slide 5: The “Reset” SandRidge – Go-Forward Strategy
The “Reset” SandRidge – Go-Forward Strategy • The Company’s primary strategic focus is to grow the cash value and generation capability of its asset base to accelerate shareholder value realization in a safe, responsible and efficient manner ▪ Extend and flatten the Company’s production profile with
Slide 6: Midcon Asset Position
Midcon Asset Position • 371K acre position across northern OK and southern KS • Daily average production rate of 18.7 MBoed in 3Q21 ‒ Shallowing 3Q21 base declines will be lessened further from remaining well reactivations in 4Q21 • More than 10-year reserves-to-production ratio and a ~31-year weigh
Slide 7: Owned and Operated, Integrated Water and Power Infrastructure Across Acreage Footprint
Owned and Operated, Integrated Water and Power Infrastructure Across Acreage Footprint • The Company believes that: ‒ Owned and operated SWD and EDS systems provide a field cost and strategic advantage relative to abutting operators ‒ Represents significant prior investment(7) with low current capit
Slide 8: Midcon Operating Cost Structure
Midcon Operating Cost Structure • Since 2016, the Company lowered its annual absolute LOE by over 75% and its LOE per Boe by more than 30%(20) Overview LOE(21) ▪ Reduced annual absolute LOE by LOE Expense Workover LOE/Boe >75% since 2016(20) $150 $5.52 $6.0 – Per Boe LOE by >30% $5.15 $4.90 $4.58 ▪
Slide 9: Production Optimization
Production Optimization • The Company has implemented a disciplined program of high ROI workover and other projects to shallow its PDP decline profile • Work done to date has played a key role in achieving ~1% annual decline over the trailing twelve months(5) ▪ Relatively low capital investment, qui
Slide 10: Improving NGL and Gas Realizations
. Improving NGL and Gas Realizations • Realizations continue to build back up to pre-pandemic levels, further enhancing SD’s strong margins and cash flow • Price realizations are a key value driver for the Company on which the Board and management are keenly focused (24) NGL Realization (% of WTI) 4
Slide 11: SandRidge Organization Today
SandRidge Organization Today • Starting in 2018, the Board and Management initiated meaningful personnel reductions to “right size” the organization to better align with the asset base and activity levels as well as to improve the ratio between field and corporate employees ‒ Outsourced operational
Slide 12: Streamlined G&A
Streamlined G&A • The Company has lowered its absolute and per Boe G&A by more than 75% and 60%, respectively, since 2018(20) Total G&A(25) $150 $8.0 $6.50 Total G&A / Boe ($/Boe) $6.0 SD Total G&A ($MM) $5.10 $100 $3.38 $4.0 $125.9 $2.68 $50 $1.76 $76.0 $1.34 $2.0 $41.7 $32.1 $15.3 $0 $6.8 $- 2016
Slide 13: Peer Leading EBITDA-to-FCF Conversion
Peer Leading EBITDA-to-FCF Conversion • Free cash flow as a percentage of EBITDA leads peers Free Cash Flow as a % of EBITDA, SD to Peers (27) 100% 50% 0% -50% -100% -150% SD Peer 1 Peer 2 Peer 3 Peer 4 Peer 5 Peer 6 Peer 7 Peer 8 Peer 9 Peer 10 Peer 11 Peer 12 Peer 13 13 SandRidge Energy, Inc. NYSE
Slide 14: Proved Developed Reserve Value
Proved Developed Reserve Value • The Company believes its PD reserves PV-10 value is approximately $413MM using the current strip(1) • The Company believes its PD PV-10 value has the following approximate price sensitivities versus October 29, 2021 NYMEX strip(28): ‒ $5.00 per barrel change in oil r
Slide 15: 3Q21 Performance In Context of Guidance
3Q21 Performance In Context of Guidance • SD’s 3Q21 actual production, adj. G&A and gas and NGL realizations compared favorably to a quarterly average of the midpoint of the Company’s annual guidance 2021E Guidance (33) 3Q21 (Unaudited) Midpoint Quarterly(34) Actual Net Production Oil (MMBbls) 0.9 0
Slide 16: APPENDIX
May 12, 2021 APPENDIX SandRidge Energy, Inc. NYSE: SD
Slide 17: Acquisition Approach
Acquisition Approach • Since 2018, the Company has implemented a disciplined, low risk, PDP focused acquisition approach (35) (35) Acquisition Date Capital PV Payback Rationale Midcon Assets from Enduring Nov. 2018 $25.1MM ~PV-25 < 3 years • Provided SD an additional 13% interest in the Resources as
Slide 18: Hedging Summary
Hedging Summary • A modest natural gas / NGL hedge program was reinstated in 3Q21 to ensure achievement of forecasted returns on well reactivation program • Approximately 13% of 3Q21 Boed production hedged from October 2021 - February 2022 • Currently, fully exposed to upside in commodity prices in
Slide 19: Endnotes
Endnotes 1) Management's internal unaudited proved developed reserve PV-10 for third quarter 2021, utilizing forward-looking pricing and other assumptions, do not reflect audited or engineered SEC historical price-based reserves, as routinely updated from the Company's year-end 2020 reserves, consis