Sandridge Energy, Inc. · NYSE:SD
Sandridge Energy — Q3 2018 Earnings Presentation
28 slides from Sandridge Energy's earnings presentation, Nov 8, 2018
Slide 1: Investor Presentation
ZY SANDRIDGE energy Investor Presentation November 8, 2018 ~~ __
Slide 2: 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 and are generally accompanied by words
Slide 3: Oil production (MBopd) by quarter
• • 5 • 4 • 3 MBopd • 2 1 • 0 Q1 '17 Q2 '17 Q3 '17 Q4 '17 Q1 '18 Q2 '18 Q3 '18 •
Slide 4: Overview of Recent A&D Transactions
mN Overview of Recent A&D Transactions Generating Meaningful Incremental Asset Value, Margin and Efficiency Improvements Sold CBP assets for net proceeds of $14.5MM Acquired Mid-Continent working interests for $25.1MM * Divested remaining CBP assets and 25% equity interest in the trust + Additive to
Slide 5: Strategic Objectives
NY Strategic Objectives Driving to Create Profitable Growth & Shareholder Value * Operational execution / safety and environmental excellence * Continued cash cost and efficiency improvements * Improved corporate returns through better cash flow margins and profitable capital deployment * Enhanced c
Slide 6: EBITDA per Boe and cash costs
• 28% 29% 31% 26% • $15.4 $12.9 $12.6 $11.4 • • • 2017 Q1 '18 Q2 '18 Q3 '18 EBITDA Per Boe % Oil • $11.17 $11.17 $10.36 $10.27 $13.7 $11.1 $9.8 $8.7 $25.7 $24.7 $23.4 $20.8 Q4 '17 Q1 '18 Q2 '18 Q3 '18 LOE Adj. G&A Total Cash Costs Per Boe
Slide 7: North Park Basin
m~\ North Park Basin Q3 Capital Spend Primarily Driven by Spacing Test Drilling and Completions Q3'18 + Net production of 4.1 MBopd * Net capex of $25MM Q3'18 CAPEX PROJECTED 2018 CAPEX * Frac operations completed on eastern spacing test $25MM $113 - $118MM 19% NON D&C * Commenced drilling on wester
Slide 8: NPB Niobrara Development Plan
NY NPB Niobrara Development Plan Remaining 2018 Activity Western Spacing Test: + Potential 23 wells per section spacing with full development + Three layers of wells to capture reserves from all four benches * Test three layers within 160 acre block WESTERN 660' + “Wine rack” configuration with 660’
Slide 9: North Park Basin Achievements
NY North Park Basin Achievements Creating Value from Third Quarter Well Performance and Improved Production Production — Record oil production of 4.1 MBopd (379 MBo) — Grows to 40% of total company oil production Margin Improvement — Contributed 35% of gross operating profit and 29% of total company
Slide 10: North Park oil production (MBopd)
6.0 5.0 4.0 MBopd 3.0 2.0 1.0 0.0 Q1 '17 Q2 '17 Q3 '17 Q4 '17 Q1 '18 Q2 '18 Q3 '18 Q4 '18E Q1 '19E Q2 '19E
Slide 11: Oil Rate (Bopd)
2,000 • 1,500 Oil Rate (Bopd) 1,000 • 500 • 0 0 30 60 90 120 Producing Days
Slide 12: NPB Gas-to-Liquids Pilot
aa NPB Gas-to-Liquids Pilot Gas Midstream Alternative * Gas-to-Liquids (GTL) processing converts natural gas into diesel and naphtha * 50 year old chemical process implemented internationally on a large scale + Advantage Midstream uses a tested, proprietary catalyst to provide commercial viability o
Slide 13: Mid-Continent Program
m~\ Mid-Continent Program Two Active Rigs Targeting NW STACK and Miss Lime Q318 + Net capex of $16MM * Net production of 28.6 MBopd 1 * Per unit lease operating expenses: $5.95 per Boe x Pastece SI 2018 SUBCRO! * Two active rigs * Delineate and hold NW STACK acreage under the Drilling Participation
Slide 14: NW STACK
=~ NW STACK Continued Learning Curve Acceleration Q3'18 Net production of 2.4 MBoepd (39% oil) Net capex of ~$7MM Drilled three wells Four wells produced an average 30-Day IP of 549 Boepd (61% oil) - Kopper 1-5H produced a 30-Day IP of 863 Boepd (61% oil) 420 net acres acquired within core area in M
Slide 15: Mississippian Lime
Am \ \y Mississippian Lime Selective Drilling Focus Within Increasing Industry Activity Q3'18 CAPEX $9MM Q3'18 * Q3'18 Production of 26 MBoepd (17% oil) + Net capex of $9MM * Drilling completed on four well program subsequent to the quarter 2018 * 1 active rig 2H'18 + 2018 net capex of $34 - $37MM P
Slide 16: Investment Highlights
my Investment Highlights * Clean capital structure: RBL and common stock + Unlevered with $350 million undrawn RBL and $363 million of liquidity as of November 2, 2018 * 181 proved undeveloped locations with significant additional probable and possible opportunities A ( >) Assets Provide + Large HBP
Slide 17: Appendix
FY SANDRIDGE energy APPENDIX ~~ __
Slide 18: 2018 Outlook
mY 2018 Outlook Third Quarter Update to Full Year Guidance TOTAL COMPANY PRODUCTION UPDATED PREVIOUS Guidance Change Drivers Oil (MMBbIs) 3.4-3.6 3.4-3.6 . Natural Gas Liquids (MMBbls) 27-29 2.6-2.8 + Production (INCREASED) Total Liquids (MMBbIs) 61-65 6.0-6.4 — Higher gas and NGL production due to
Slide 19: 2018 Outlook: Capital Expenditures Guidance Detail
mY 2018 Outlook Capital Expenditures Guidance Detail (1) Primarily 2017 Carryover (2) Includes Production Gathering and Facilities CAPEX GUIDANCE ($MM) UPDATED PREVIOUS Mid-Continent D&C $22 - $27 $17-$19 North Park D&C 55-60 65-73 Other D&C! 35 34 Total Drilling & Completion $112-$122 $116-$126 Lan
Slide 20: Hedging Overview
A Hedging Overview fae eve creer ors [evnn ornate er are] nn SWAPS Total Volumes (MMBbIs) 1.05 1.00 0.92 0.83 3.80 0.45 0.46 0.46 0.46 1.83 Daily Volumes (MBblspd) 11.7 11.0 10.0 9.0 10.4 5.0 5.0 5.0 5.0 5.0 Price ($/Bbl) $55.46 $55.50 $56.04 $56.12 $55.75 $54.29 $54.29 $54.29 $54.29 $54.29 NATURALG
Slide 21: North Park Basin Well Results
mY North Park Basin Well Results Delivering Above Type Curve Results Across Multiple Benches GREGORY | PAD a B Gregory 0780 1-9H Bench 30D IP: 550 Boepd (89% oil) B_ Castle 5-17H20 Bench 30D IP: 1,169 Boepd (90% oil) C Castle 6-17H20 Bench 30D IP: 1,049 Boepd (92% oil) D Castle 7-17H20 Bench 30D IP:
Slide 22: NW STACK Industry Results
NW STACK Industry Results Almond Joy 21-1H (SRL) Carrera, 797 Boepd (56% oil) Anita 17/8-19-17 1H (XRL) Ta 199 Boepd (55% oil) Boehs 7-3 MH (SRL) Red Bluff, 1,159 Boepd Burrell 5-33 MH (SRL) Red Bluff, 1,131 Boepd (5: Campbell 1-26H23H (XRL) Charleston 2-33H (SRL) SandRidge, 951 Boep Combs 19-18-1H
Slide 23: NW STACK 2H'18 Program
Am \ NW STACK 2H'18 Program Remaining 2018 Drilling Focused on Step-Out Development to Support Future Drilling Lae WOODWARD® / Kopper 1-5H 863 d(61 Lamm 1-19H (SRL) ise 1-20H (XRL) 7% oil) DEWEY BLAINE Hl 03 Wells W Q4'18 Wells (0) SandRidge Acreage 3 Note: Rates are 30-Day IPs SandRidge Energy, Inc
Slide 24: Average Oil Rate (Bopd)
40 1,000 30 Average Oil Rate (Bopd) Well Count 20 100 10 10 0 0 60 120 180 240 300 360 Producing Days Type Curve Producing Wells Well Count
Slide 25: Average Boepd
100 1,000 90 80 70 60 Well Count Average Boepd 50 100 40 30 20 10 10 0 0 60 120 180 240 300 360 Producing Days Average Boe Type Curve Well Count
Slide 26: Reconciliation of G&A to Adjusted G&A
ay Reconciliation of G&A to Adjusted G&A The Company defines adjusted G&A as general and administrative expense adjusted for certain non-cash stock-based compensation and other non-recurring items, as shown in the following table. Three Months Ended September 30,2018 — Three Months Ended September 3
Slide 27: Reconciliation of Net Income (Loss) to EBITDA and Adjusted EBITDA
-Y Reconciliation of Net Income (Loss) to EBITDA and Adjusted EBITDA The Company defines EBITDA as net income (loss) before income tax benefit, interest expense, depreciation and amortization - other and depreciation and depletion - oil and natural gas. Adjusted EBITDA, as presented herein, is EBITD
Slide 28: NYMEX-Proved Reserves and their Present Value
m\ NYMEX-Proved Reserves and their Present Value The Company estimated NYMEX-based proved reserves estimates referenced in this communication are effective as of November 1, 2018 and are based on modifications to the Company's 2017 year-end reserve report to reflect updated management assumptions an