Sandridge Energy, Inc. · NYSE:SD
Sandridge Energy — Investor Day (March 2013)
129 slides from Sandridge Energy's investor day presentation, Mar 8, 2013
Slide 1: 2013 Investor/Analyst Meeting
2013 Investor/Analyst Meeting March 5, 2013
Slide 2: Disclaimer
Disclaimer 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 accompanie
Slide 3: Welcome & Introductions
Kevin White Senior Vice President, Business Development Welcome & Introductions
Slide 4: Agenda
Agenda SandRidge Overview Tom Ward Chairman, Chief Executive Officer 2012 Review & 2013 Outlook Matt Grubb President and Chief Operations Officer Corporate Finance James Bennett EVP and Chief Financial Officer Mississippian Development David Lawler EVP—Development & Production Mississippian Technica
Slide 5: SandRidge Overview
Tom L. Ward Chairman, Chief Executive Officer SandRidge Overview
Slide 6: SandRidge Operating Regions
SandRidge Operating Regions Asset Map Oil Producing Regions Mid-Continent Gas Producing Regions Mississippian Rigs Running:
Slide 7: Corporate Objectives
Corporate Objectives Continue to perform as the premier operator in the Mississippian Invest in high return, growth projects, while maintaining adequate funding visibility Further improve credit metrics
Slide 8: SandRidge Historic Progression
SandRidge Historic Progression $400 $200 a) P.F. Q4’12 Adjusted EBITDA is adjusted for the Permian and Tertiary sales and Dynamic and Hunt acquisitions. This is a non-GAAP measure; please see our website for reconciliations. b) Leverage Ratio represents Consolidated Leverage Ratio calculated pursuan
Slide 9: Permian Divestiture Overview
Permian Divestiture Overview Assets: All Permian assets, excluding SandRidge Permian Trust properties and SandRidge’s retained interest in the underlying properties Production of 22,900 Boe/d (4Q12) Net Invested Capital of approximately $1.2 Billion(a) Gross Proceeds: $2.6 Billion Intended Use of Pr
Slide 10: Today's Agenda & Key Messages
Today’s Agenda & Key Messages mississippian Asset Production growth engine through the drill-bit Continue to delineate and develop Kansas acreage Operational initiatives driving improved well performance Higher returns through cost control Infrastructure as a competitive and economic advantage Updat
Slide 11: 2012 Review & 2013 Outlook
Matt Grubb President, Chief Operating Officer Review & 2013 Outlook
Slide 12: 2012 Accomplishments
2012 Accomplishments — 131% production growth, from 4Q11 to 4Q12 — Increased reserves in the play to 227 MMBoe, annual growth of 77% Mississippian — Continued to delineate and derisk the play through ~400 wells drilled — Expanded on salt water disposal and electrical infrastructure, substantially re
Slide 13: Year-Over-Year Growth
Year-Over-Year Growth Total Company Production(a) Mississippian Production(a) 120 40 106.8 35.9 e /d 66.3 e /d o o MB 60 MB 20 15.5 0 0 2012 Analyst Day 2013 Analyst Day 2012 Analyst Day 2013 Analyst Day Reserves Adjusted EBITDA $1,200 600 566 $1,070 500 471 $1,000 $800 Boe 400 MM $654 MM $ $600 200
Slide 14: 2012 Review: Production
2012 Review: Production Total Company Production 106.8 103.0 100 90.2 66.5 Boe/d 60 M 1Q12 2Q12 3Q12 4Q12 (a) Mississippian GOM / Gulf Coast Permian 40 40 40 35.9 31.0 31.7 30.7 30.2 30.7 29.4 30 28.6 30 30 25.2 22.9 MBoe/d 19.3 MBoe/d MBoe/d 20 20 20 10 10 10 2.8 0 0 0 1Q12 2Q12 3Q12 4Q12 1Q12 2Q12
Slide 15: 2012 Review: Proved Reserves
2012 Review: Proved Reserves 20% Reserve growth 37% growth, adjusted for Sales & Production 35% Oil reserve growth 62% growth, adjusted for Sales & Production 9% PV-10 growth 43% growth, adjusted for Sales & Production 454% Proved reserve replacement $21.68/Boe Proved developed drilling F&D costs $1
Slide 16: 2012 Review: Capital Expenditures
2012 Review: Capital Expenditures Total Capital Expenditures Well Count YTD Gross Net 2012 ($MM) E&P—81% Land & Seismic—9% Drilling and Completion Oil Field Services—1% Mid-Continent 396 280 $927 Midstream & Other—9% Mid-Continent—SWD 60 44 95 Permian 717 695 497 Gulf of Mexico 151 All Other Areas 7
Slide 17: 2013 Operational Objectives: Increasing Rates of Return
2013 Operational Objectives: Increasing Rates of Return Mississippian Improve well performance Location selection process Extrapolation of realized results Well and completion design Selective use of artificial lift Continue to reduce drilling capex and LOE Reduce casing expenditures Reduce spud-to-
Slide 18: 2013 Guidance: Production
2013 Guidance: Production Total Company Production 2012 2013 • 2013 Production Guidance updated for Actuals February sale of Permian assets Guidance —Generates positive YoY growth after the Oil (MMBbls)(a) 18.0 15.9 impact of the sale Gas (Bcf) 93.5 110.4 Total (MMBoe) 33.6 34.3 • Mississippian prod
Slide 19: Mississippian: Driving Organic Production Growth
Mississippian: Driving Organic Production Growth 2012 Production Divestitures(a) Acquisitions(b) Pro Forma 2012 2013 Guidance 2013 Permian asset 2013 Guidance excluding Permian divestiture asset divestiture 19 a) Divestitures include 2012 production related to the divested Permian and Tertiary asset
Slide 20: 2013 Guidance: Capital Expenditures
2013 Guidance: Capital Expenditures Total Capital Expenditures 2013E Well Count Total Gross Net ($MM) E&P—83% Drilling and Completion Land & Seismic—6% 581 379 $1,230 Mid-Continent Oil Field Services—2% 74 54 140 Mid-Continent—SWD Midstream & Other—10% Permian 219 212 140 Gulf of Mexico / Gulf Coast
Slide 21: 2013 / 2012 Capital Expenditure Comparison
2013 / 2012 Capital Expenditure Comparison 2013 development primarily focused on Mississippian drilling activity Permian development restricted to SandRidge Permian Trust drilling Gulf of Mexico expenditures targeted to maintain production rates and generate free cash flow Non-E&P activity expenditu
Slide 22: Mississippian Overview
Mississippian Overview • Net Acres: ~1,850,000 ~11,000 potential drilling locations(a) 18 year drilling inventory • Rig Count: 32(b) Industry Leader: Over 2x nearest peer • Production: 35.9 MBoe/d (4Q12) Industry Leader • Wells Drilled: 682(b) Industry Leader: ~45% of total Miss wells • Salt Water D
Slide 23: Mississippian Production Guidance: 72% Growth in 2013
Mississippian Production Guidance: 72% Growth in 2013 Production Growth 47.7 Average Quarterly Volumes 45 Average Quarterly Rig Counts 40 60 35.9 35 30.2 30 d 40 / 25.2 MBoe 25 Rigs 20 19.3 30 30 15.5 15 12.7 20 8.5 5.4 5 3.6 0.8 1.6 0.3 0 0 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q1
Slide 24: Mississippian Strategic Plan
Mississippian Strategic Plan Mississippian development supports corporate level double digit organic production growth Continue to increase rates of return by improving the distribution of well results and control operating and capital costs, with an objective of less than $3.0MM per well Continue t
Slide 25: Mississippian Type Curve Comparison
Mississippian Type Curve Comparison YE 2012(a) vs. November Guidance Forecast November YE 2012 w/ Atlas YE 2012 Guidance Contract • Year 1 delta = +4% Boe Oil (MBbls) 152 107 107 • Year 3 delta = -1% Boe NGLs (MBbls) 60 • Year 5 delta = -5% Boe Liquids (MBbls) 152 107 167 Nat Gas (MMcf) 1,688 1,387
Slide 26: Mississippian Generates Robust Economics
Mississippian Generates Robust Economics Nov’12 Guidance YE 2012 Capex ($MM) ROR (%) ROR (%) $3.0 61% 55% $3.1 57% 50% 90% of ROR realized at 5 Years $3.2 53% 47% ~50 MBo Nov’12 Guidance: 57% ROR YE 2012: 50% ROR Nov’12 Boe Guidance YE 2012 Boe Nov’12 Oil Guidance YE 2012 Oil • Includes YE2012 comme
Slide 27: Performance Comparison of ESP Wells to YE 2012 Type
Performance Comparison of 77 ESP Wells(a) to YE 2012 Type ESP Acceleration Case with Equal Reserves YE 2012 With ESP(a) • ~70% increase in ROR Capex ($MM) ROR (%) PV-10 ($MM) ROR (%) PV-10 ($MM) $3.0 55% $2.9 95% $3.3 • ~15% increase in PV-10 $3.1 50% $2.8 86% $3.2 $3.2 47% $2.7 78% $3.1 YR 1 YR 2 Y
Slide 28: 2013: Drilling Within Infrastructure
2013: DRILLING WITHIN INFRASTRUCTURE 2013: Drilling within Infrastructure Focus SWD SWD Electrical Area Wells Pipeline (mi.) Lines (mi.) 20 Alfalfa, OK 44 215 149 Comanche, KS 7 57 58 Grant, OK 15 114 97 Harper, KS 14 56 42 SW Kansas 3 14 0 25 Woods, OK 8 44 31
Slide 29: New Percent-of-Proceeds (POP) Agreement
New Percent-of-Proceeds (POP) Agreement SandRidge entered into a new POP agreement with Atlas Pipeline Partners, L.P. Allows for capture of NGL volumes and enhances economics Greater share of processing value Lower fees Applies to a majority of SandRidge’s Mississippian wells in Oklahoma and Souther
Slide 30: Gulf of Mexico / Gulf Coast Overview
Gulf of Mexico / Gulf Coast Overview Strategic Plan • Maintain or moderately grow production through low-risk 2012 GOM/GC PV-10 Value Growth $1,467 recompletions, workovers, drilling 2012 GOM/GC Net Investment(a) 1,257 activity and/or acquisitions Investment Growth $210 2012 Growth over Net Investme
Slide 31: Gulf of Mexico / Gulf Coast Review & Outlook
Gulf of Mexico / Gulf Coast Review & Outlook 2013 Outlook: Production ~28,000 Boe/d - Includes hurricane and operational risking 2013 Outlook: Capital Spending 2013 Guidance: $200MM $150MM Drilling $30MM Recompletion $18MM Facilities $3MM Land
Slide 32: Corporate Finance
James Bennett Executive Vice President, Chief Financial Officer Corporate Finance
Slide 33: 2012 Accomplishments
2012 Accomplishments Surpassed consensus estimates(a): EPS in each of the last 4 quarters EBITDA and production in 3 of the last 4 quarters Achieved record Adjusted EBITDA of $1,070MM ($748MM Pro Forma for acquisition and divestitures) Fully funded capital plan Raised ~$1.1B in 2012 through Repsol j
Slide 34: 2012 Accomplishments (cont'd)
2012 Accomplishments (cont’d) Capitalization and credit measures in the best position since the Company’s founding Greatly improved credit profile & capital structure $1.1B year-over-year reduction in Net Debt(a) 2.3 turn reduction in Leverage ratio, year-over-year(a)(b) No near-term maturities Ende
Slide 35: 2013 Objectives
2013 Objectives Focus on high return Mississippian projects Grow production 18%(a), liquids 22%(a) and maintain our $1.75B capex budget Reduce $1.1B of long term debt and associated interest expense Maintain a leverage ratio ~3.0x Evaluate additional sources of capital and fund the business through
Slide 36: 2013 Capital Funding Plan
2013 Capital Funding Plan $3,000 $2,500 $745 $1.1B Funding Surplus $2,000 $1,750 M M $1,500 $ $1,415 $1,000 $858 ($280) ($56) ($120) $310 $500 $403 $0 Adjusted Interest Pref P&A Adj. CFFO YE2012 Cash Net Permian(a) Undrawn Capex EBITDA Dividends Balance Proceeds Credit Facility(b) Adjusted for debt
Slide 37: Credit Metrics and Liquidity
Credit Metrics and Liquidity Pro Forma LTM Adjusted EBITDA(a)(d) Net Debt & Leverage(b)(d) $1,250 $1,130 $1,183 $3,991 7.0x $4,000 $1,000 6.0x $2,903 $2,888 $3,128 $748 $3,000 $2,757 $733 $2,606 5.0x M $750 $613 $629 M $593 M $ M 4.6x 4.0x $ $2,000 4.3x $500 4.1x $1,469 3.8x 3.0x 3.4x $1,000 2.9x $2
Slide 38: Debt Reduction & Senior Notes Profile
Debt Reduction & Senior Notes Profile A portion of proceeds from the Permian sale will be used to retire the 2016 and 2018 Senior Notes $89MM of annual interest savings from debt retirement No Senior Note maturities until 2020 7.8% weighted average cost of debt
Slide 39: Current Debt Maturity Summary
Current Debt Maturity Summary Weighted Average Maturity: 7.7 yrs $1,200 Weighted Average Cost: 8.0% $1,175 $825 $750 $750 $800 $366 $450 $400 $775 Floating 8.0% 7.5% 8.125% 7.5% $0 8.75% 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 Senior Notes Credit Facility Pro Forma Debt Maturity Summa
Slide 40: Hedging Overview
Hedging Overview Strong hedge program provides downside protection in volatile commodity markets—Target 75-85% of current year production hedged Continue to use derivatives to ensure financial stability Oil 1Q13 2Q13 3Q13 4Q13 2013 2014 2015 Swaps Volumes (MMBbls) 4.53 3.44 3.36 3.34 14.67 7.51 5.08
Slide 41: Mississippian Development
David Lawler Executive Vice President, Development & Production Mississippian Development
Slide 42: Mississippian Development in 2013: Driving Higher Rates of Return
Mississippian Development in 2013: Driving Higher Rates of Return Increasing Well Performance Optimizing drilling program across the play based on 2012 results Selecting the most prolific intervals within the Mississippian Enhancing economics and flow rates with artificial lift technology Decreasing
Slide 43: 2012: Delineation and Appraisal
2012: Delineation and Appraisal Drilled 396 horizontal Mississippian wells $1,022MM 2012 capital program Delineated acreage across 230 miles and 15 counties 68% development, 32% appraisal Primary focus on Upper Mississippian member
Slide 44: 2013: Development Focused
2013: Development Focused 2013: Development Focused • >90% development, 40 appraisal wells 2013 Development Number Focus Area of Wells Alfalfa, OK 255 Comanche, KS 74 • 80% of the planned 2013 Ford, KS 25 Grant, OK 65 wells are within SandRidge Gray, KS owned infrastructure 17 Appraisal Harper, KS 4
Slide 45: Incremental Resource Potential – Stacked Horizontal Pay
Incremental Resource Potential – Stacked Horizontal Pay Monthly Average Boe/d 0 100 200 300 400 500 600 700 Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Lower Miss Middle Miss Upper Miss Woodford Potential Stacked Pay Across Mississippian Leasehold Upper, Middle, Lower Miss Targets to 3 p
Slide 46: Improving Capital Efficiency: Integrating Well Data
Improving Capital Efficiency: Integrating Well Data to Deliver Superior Results • 2 wells drilled in the same section 3,960’ apart Cutaway Schematic • Initial appraisal, Well 1, traversed two porosity intervals to test the Upper Mississippian member • Logs indicated higher hydrocarbon saturation in
Slide 47: Enhanced Economics: Electric Submersible Pumps vs. Gas Lifts
Enhanced Economics: Electric Submersible Pumps vs. Gas Lifts ESP at Inception vs. Gas Lift Example wells drilled in the same section Artificial lift employed in both wells at inception Electric Submersible Pump (ESP) was utilized on one well and Gas Lift on the other ESP delivered 100% more oil and
Slide 48: Continuous Value Enhancement: ESP Conversions Opportunities
Continuous Value Enhancement: ESP Conversions Opportunities ESP Conversion Example Gas lift employed at well inception with favorable results After 84 days, ESP is installed, resulting in significantly improved flow rates and economics: Average oil production uplift >75% Average gas production >60%
Slide 49: SandRidge: Low Cost Mississippian Developer
SandRidge: Low Cost Mississippian Developer Decreased drilling and completion costs by $500M/well (14%) from 1Q12 to 4Q12 Targeting gross well costs below $3.0MM by year-end 2013 Spud-to-spud cycle time declined 20% per well from 1Q12 to 4Q12 Best in class spud-to-first sales cycle time(a) Based on
Slide 50: Mississippian Completion Program
Mississippian Completion Program completion designs Cemented liner with plug and perf completion Open hole packers with sleeves Fracture treatments range from 8 to 15 stages based on reservoir characteristics Slick water frac with 4,500 BW and 75,000 lbs of 40/70 sand per stage Gas-lift and ESP arti
Slide 51: Performance Initiative: Rotary Steerable Drilling Technology
Performance Initiative: Rotary Steerable Drilling Technology Trial conducted in Q3 & Q4 of 2012 9 well program yielded a 32% reduction in days from surface casing to end of curve Average of 3.5 days, significantly below fleet average of 5.2 days 50% reduction in days on most recent 2 wells Rotary st
Slide 52: Performance Initiative: Multi-well Pad Drilling
Performance Initiative: Multi-well Pad Drilling 47 multi-well pads scheduled for 1st half 2013 Dual Pads Quad Pads Drilling 2 and 4 wells per pad improves efficiencies and reduces environmental footprint Anticipate an average total savings of $125M / well Savings result from: Reduced rig moves Conso
Slide 53: Performance Initiative: Region Specific Casing Design
Performance Initiative: Region Specific Casing Design Current Casing Design • Identified potential to eliminate 7” intermediate casing string in certain area of the play • Simplified well design minimizes trips and eliminates time and cost for running 7” intermediate casing and 4.5” production strin
Slide 54: Salt Water Disposal System Overview
Salt Water Disposal System Overview 116 active disposal wells ~700 miles of pipeline Disposal rate of ~700 gross MBW/d Over $450MM gross invested capital 54 • Figures are as of February 2013
Slide 55: SWD: Secures Competitive Advantages & Maximizes Value
SWD: Secures Competitive Advantages & Maximizes Value Produced water volumes increased over 100% in the Mississippian in 2012 Effectively managing produced water is key to controlling operating costs in the play LOE savings of over $2.00 per produced barrel of water relative to trucking volumes Wate
Slide 56: Electrical System Overview
Electrical System Overview Electrical System Access to over 100 MW ~500 miles of power distribution lines operated substations, 4 additional substations in 2013 Power available to support 400 ESPs - Currently operating 175 ESPs 56 • Figures are as of year-end 2012
Slide 57: Electrical System Benefits
Electrical System Benefits Sandy Corner Sub-Station Produced water transfer and artificial lift systems require high voltage Sourcing power solely from diesel generators presents economic and logistical challenges SandRidge proactively constructed infrastructure to access regional transmission netwo
Slide 58: SandRidge: Low Cost Mississippian Operator
SandRidge: Low Cost Mississippian Operator Trucked Water Progression Percent of Wells on Generator 9% 40% 8% 8.1% 35% • Proactively managing infrastructure needs 35% k ed 7% 30% and capitalizing on scale allows SandRidge c u r 6% T 25% to be a low cost operator in the play Water 5% 20% 4% 15% 13% Pr
Slide 59: Mississippian Value Equation
Mississippian Value Equation The sum of these strategic elements drives high rates of return + + + + + =
Slide 60: - BREAK -
- BREAK -
Slide 61: Mississippian Technical Overview
Rodney Johnson Executive Vice President – Corporate Reserves, A&D Mississippian Technical Overview
Slide 62: Mississippian Technical Highlights
Mississippian Technical Highlights DeRisked Resource Play Over 11.5 Million Acres > 1,500 horizontal wells to date; 82 rigs running today Expanded Play Across 230 Miles Total potential 17 million acres; SandRidge ? 1.85 million net acres Proven Reserve Potential Increased wells/section YE 2012 vs. 3
Slide 63: Mississippian – 1,535 Drilled Wells and Active Rigs
Mississippian – 1,535 Drilled Wells and 82 Active Rigs based on 4 wells per section (includes appraisal area) Drilled well counts as of 2/28/13
Slide 64: Mississippian Engineering Discussion
Mississippian Engineering Discussion 2012 Analyst Day 456 type curve (300-500 MBoe range) based on 145 PDP wells (3 wells per section) b factor could improve in one year Statistical booking of PUDs ~2 years off Continuing to extend the play Derisk play Current Outlook 369 MBoe, 107 MBo, 167 MLiquids
Slide 65: Mississippian Type Curve Comparison
Mississippian Type Curve Comparison YE 2012(a) vs. November Guidance Forecast November YE 2012 w/ Atlas YE 2012 Guidance Contract • Year 1 delta = +4% Boe Oil (MBbls) 152 107 107 • Year 3 delta = -1% Boe NGLs (MBbls) 60 • Year 5 delta = -5% Boe Liquids (MBbls) 152 107 167 Nat Gas (MMcf) 1,688 1,387
Slide 66: Mississippian Oil EUR Comparison
Mississippian Oil EUR Comparison Oil EUR Sensitivity 1,439 Wells Vertical Wells MBbls EUR • YE 2012 Oil Type Curve = 107 MBo b Factor of 2.5 Final Decline < 5% • Nov’12 Guidance = 152 MBo 3 County Area (Woods, Alfalfa, Grant) • Nov’12 Guidance with 3% final = 180 MBo
Slide 67: Type Curve Progression
Type Curve Progression General Discussion: 300-500 MBoe Statistical Understanding of the Mississippian 369 MBoe • YE 2010: 37 TC wells with history • YE 2011: 145 TC wells with history Count – 3.9x 2010 Well • YE 2012: 644 TC wells with history PDP MBoe – 4.4x 2011 – 17.4x 2010 409 MBoe 235 MBoe
Slide 68: Mississippian Generates Robust Economics
Mississippian Generates Robust Economics 90% of ROR realized at 5 Years ~50 MBo Pro Forma curve established with over 640 PDP wells ROR driven by recovery within 5 Year window Expense and capex drivers tested over 640 wells YE 2012 Capex ($MM) ROR (%) $3.0 55% $3.1 50% $3.2 47% • Includes YE 2012 co
Slide 69: Rate of Return Sensitivity
Rate of Return Sensitivity ROR Sensitivity to Capex and Commodity Pricing Type curve variance(a) = ~ 6% ROR Capex variance per $100M = ~5% ROR Commodity price per $10/Bbl oil price = ~10% ROR $80/$4.25 $90/$4.25 $100/$4.25 $110/$4.25 $120/$4.25 $80/$4.00 $90/$4.50 $100/$5.00 $110/$5.50 $120/$6.00 NY
Slide 70: Expansion of Top Performing EURs Across Miles
Expansion of Top Performing EURs Across 230 Miles
Slide 71: Mississippian Acreage Value – Evaluated & Appraisal
Mississippian Acreage Value – Evaluated & Appraisal YE 2012 EUR >P50 YE 2011 EUR >P50
Slide 72: Mississippian IP Distributions
Mississippian IP Distributions Avg. 1,547 Boepd Avg. 1,266 Boepd Avg. 614 Avg. 676 Boepd Boepd Avg. 335 Avg. 354 Boepd Boepd Avg. 166 Avg. 175 Boepd Boepd Average Avg. 44 Avg. 61 30 Day Rate Wells Rigs (Boe/d) Boepd Boepd Rate (Boe/d) Peak Oklahoma 356 472 24 Kansas 254 110 8 Average Total 336 582 3
Slide 73: Kansas Mississippian Performance Comparable to Oklahoma
Kansas Mississippian Performance Comparable to Oklahoma Kansas vs. Oklahoma Horizontal performance = accelerated vertical cum = ROR Comparable vertical cums to Oklahoma Significantly lower declines Lower IP’s
Slide 74: Mississippian Appraisal Area
Mississippian Appraisal Area
Slide 75: Regional Mississippian Sub Crop Map
Regional Mississippian Sub Crop Map
Slide 76: Hodgeman/Ness: Key Learnings
HODGEMAN /NESS: KEY LEARNINGS Tested 6 wells non-commercial with high water saturations Currently evaluating uphole potential
Slide 77: One Year Closer to Statistical PUD Booking Methodology
One Year Closer to Statistical PUD Booking Methodology
Slide 78: Wells/Sec YE 2011, Wells/Sec YE 2012, Operator Testing Wells/Sec
Wells/Sec YE 2011, 4 Wells/Sec YE 2012, Operator Testing 5 Wells/Sec • ~42 Well sets analyzed in detail - 114 wells on 3 wells per section spacing - 16 wells on 4 wells per section spacing EUR ratio comparison of 61 well pairs • No degradation to primary well performance indicates outcomes within ex
Slide 79: Mississippian: Detailed Performance Area Discussion
Mississippian: Detailed Performance Area Discussion
Slide 80: Central Finney County, Kansas – Farthest NW Expansion Area
Central Finney County, Kansas – Farthest NW Expansion Area Well Detail: Sub Crop: St. Genevieve Primary Lithology: Limestone Gross Thickness: 600’ EUR: 240 MBo 30 Day Peak IP: 58 Bo/d Mcf/d 59 Boe/d
Slide 81: Central Gray County, Kansas
Central Gray County, Kansas Well Detail: Sub Crop: St. Genevieve Primary Lithology: Limestone Gross Thickness: 800’ EUR: 189 MBo 30 Day Peak IP: 122 Bo/d 122 Boe/d
Slide 82: Southwestern Ford County, Kansas
Southwestern Ford County, Kansas Well Detail: Sub Crop: St. Louis Primary Lithology: Limestone/Dolomite Gross Thickness: 850’ EUR: 245 MBo 30 Day Peak IP: 126 Bo/d 102 Mcf/d 143 Boe/d
Slide 83: Northwestern Comanche County, Kansas
Northwestern Comanche County, Kansas Well Detail: Sub Crop: St. Louis Primary Lithology: Limestone/Dolomite Gross Thickness: 750’ EUR: 109 MBo 1,140 MMcf 299 MBoe 30 Day Peak IP: 96 Bo/d 1,164 Mcf/d 290 Boe/d
Slide 84: Southwestern Comanche County, Kansas
Southwestern Comanche County, Kansas Well Detail: Sub Crop: St. Louis Primary Lithology: Limestone/Dolomite Gross Thickness: 700’ EUR: 60 MBo 3,170 MMcf 588 MBoe 30 Day Peak IP: 74 Bo/d 787 Mcf/d 205 Boe/d
Slide 85: Eastern Comanche County, Kansas
Eastern Comanche County, Kansas Well Detail: Sub Crop: St. Louis Primary Lithology: Limestone/Dolomite Gross Thickness: 550’ EUR: 185 MBo 940 MMcf 341 MBoe 30 Day Peak IP: 219 Bo/d 678 Mcf/d 332 Boe/d
Slide 86: Eastern Woods County, Oklahoma
Eastern Woods County, Oklahoma Well Detail: Sub Crop: St. Louis Primary Lithology: Limestone/Chert Gross Thickness: 450’ EUR: 500 MBo 2,300 MMcf 883 MBoe 30 Day Peak IP: 102 Bo/d 895 Mcf/d 251 Boe/d
Slide 87: Northern Alfalfa County, Oklahoma
Northern Alfalfa County, Oklahoma Well Detail: Sub Crop: Spurgen-Warsaw Primary Lithology: Lime/Chert/Dolomite Gross Thickness: 350’ EUR: 392 MBo 3,661 MMcf 1,003 MBoe 30 Day Peak IP: 551 Bo/d 3,189 Mcf/d 1,083 Boe/d
Slide 88: Central Alfalfa County, Oklahoma
Central Alfalfa County, Oklahoma Well Detail: Sub Crop: St. Louis Primary Lithology: Lime/Dolomite/Chert Gross Thickness: 450’ EUR: 418 MBo 2,648 MMcf 859 MBoe 30 Day Peak IP: 84 Bo/d 395 Mcf/d 150 Boe/d
Slide 89: Southern Alfalfa County, Oklahoma
Southern Alfalfa County, Oklahoma Well Detail: Sub Crop: St. Louis Primary Lithology: Limestone/Chert Gross Thickness: 600’ EUR: 172 MBo 964 MMcf 332 MBoe 30 Day Peak IP: 237 Bo/d 1,414 Mcf/d 473 Boe/d
Slide 90: Southern Harper County, Kansas
Southern Harper County, Kansas Well Detail: Sub Crop: St. Louis-Spurgen Primary Lithology: Lime/Chert/Dolomite Gross Thickness: 350’ EUR: 199 MBo 904 MMcf 350 MBoe 30 Day Peak IP: 674 Bo/d 682 Mcf/d 788 Boe/d
Slide 91: Western Grant County, Oklahoma
Western Grant County, Oklahoma Well Detail: Sub Crop: St. Louis-St. Genevieve Primary Lithology: Limestone/Chert Gross Thickness: 500’ EUR: 192 MBo 1,083 MMcf 373 MBoe 30 Day Peak IP: 271 Bo/d 144 Mcf/d 295 Boe/d
Slide 92: Central Grant County, Oklahoma
Central Grant County, Oklahoma Well Detail: Sub Crop: St. Louis-St. Genevieve Primary Lithology: Limestone/Chert Gross Thickness: 600’ EUR: 325 MBo 1,151 MMcf 517 MBoe 30 Day Peak IP: 502 Bo/d 715 Mcf/d 621 Boe/d
Slide 93: Northern Garfield County, Oklahoma
Northern Garfield County, Oklahoma Well Detail: Sub Crop: St. Louis-St. Genevieve Primary Lithology: Limestone/Chert Gross Thickness: 600’ EUR: 281 MBo 2,670 MMcf 726 MBoe 30 Day Peak IP: 75 Bo/d 762 Mcf/d 202 Boe/d
Slide 94: Northwestern Noble County, Oklahoma
Northwestern Noble County, Oklahoma Well Detail: Sub Crop: Osage Primary Lithology: Chert/Limestone Gross Thickness: 600’ EUR: 154 MBo 718 MMcf 274 MBoe 30 Day Peak IP: 396 Bo/d 577 Mcf/d 492 Boe/d
Slide 95: Gulf of Mexico Gulf Coast Development
Gary Janik Senior Vice President, Offshore Operations Gulf of Mexico Gulf Coast Development
Slide 96: Gulf of Mexico / Gulf Coast Overview
Gulf of Mexico / Gulf Coast Overview Focused on low risk workover, recompletion and drilling opportunities Shallow, offshore Gulf of Mexico and Gulf Coast properties All wells on fixed structures Properties from Mustang Island across the Gulf to Pensacola Strong team with extensive experience in ope
Slide 97: GOM/GC 2012 Review
GOM/GC 2012 Review SandRidge acquired Dynamic Offshore Resources in April of 2012, adding ~25,000 Boe/d of production Additional Gulf properties were later acquired in June, adding ~3,000 Boe/d of production 4Q12 production of 31.7 MBoe/d, highlighting success of low risk drilling, recompletion and
Slide 98: GOM/GC Business Plan
GOM/GC Business Plan Find value accretive, low risk acquisition opportunities Identify low to moderate risk exploitation opportunities Utilize current infrastructure Primarily fixed operating costs Incremental production volumes add little expense Proactively conduct abandonment to save operating ex
Slide 99: Acquisition Capabilities
Acquisition Capabilities Acquisition Strategy Identify quality assets with motivated sellers Selectively acquire based on conservative valuation of proved reserves Acquire properties with low-risk upside but majority of purchase price based on known production/reserves Consolidate interests in quali
Slide 100: Acquisition Case Study
Acquisition Case Study Acquisition Metrics Production 8,000 Purchase Price ($MM) $51.0 Recompletion of Purchase Price / Production $14,153 El 77 #9,10,11 Original Production (Boe/d) 3,600 7,000 Purchase Price / Reserves $6.23 Reserves (MMBoe) 8.2 6,000 Purchase Price / Operating Income 1.7x Original
Slide 101: Ship Shoal
Ship Shoal 301 Drilling Program Case Study Ship Shoal 301 - WI – 100% - NRI – 80.98% SS 301 #A-1 Side Track Trim B Completion Net Pay – 67 ft. 1,788 BO/d 1,787 Mcf/d 0 BW/d 1,650 PSI Tubing Pressure SS 301 #A-3 Side Track - Cris S Target Net Pay - Upper Cris S 22 ft. - Lower Cris S 62 ft. - Completi
Slide 102: Eugene Island
Eugene Island 77 Recompletion Case Study Eugene Island 77 #9 Induction/GR/Sonic/Neutron/Density Log Eugene Island 63/77 1983 - WI – 100% WW Sand - NRI – 83.33% #9 • El 77 #9 – WW Sand #11 - 99 BO/d - 3,980 Mcf/d - 4 BW/d #10 - 3,775 PSI Tubing Pressure • El 77 #10 – T-1 Sand - 540 BO/d - 1,700 Mcf/d
Slide 103: GOM/GC 2013 Forecast
GOM/GC 2013 Forecast Production Guidance ~28,000 Boe/d annual rate - Adjusted for hurricane and operational risking Abandonment Spending 2013 Guidance $120MM $30MM for 170 wells $29MM for 28 platforms $23MM Bullwinkle payment $38MM EB 110/165 abandonment Normal abandonment run rate guidance: ~$65MM
Slide 104: Corporate Reserves Overview
Rodney Johnson Executive Vice President – Corporate Reserves, A&D Corporate Reserves Overview
Slide 105: SandRidge Summary – Year End 2012
SandRidge Summary – Year End 2012 Increase in SEC PV-10 Value 43%(a) to $7.5 Billion Net Reserves & Resource Value(b) $28.6 Billion Proved Reserve Replacement 454% Increase in Proved Developed Reserve Value to 67% of Total and Increase in Liquids Revenue to 89% of Total Proved Developed Drilling Fin
Slide 106: SandRidge Summary – Year End 2012
SandRidge Summary – Year End 2012 Increase in SEC PV-10 Value 43%(a) to $7.5 Billion Net Reserves & Resource Value(b) $28.6 Billion Proved Reserve Replacement 454% Increase in Proved Developed Reserve Value to 67% of Total and Increase in Liquids Revenue to 89% of Total Proved Developed Drilling Fin
Slide 107: Total Net Proved Reserves and Total Net PV-10
Total Net Proved Reserves Total Net PV-10 566 MMBoe $7,488 Million Permian Permian 236 3,981 42% 50% 107 • Includes Royalty Trust
Slide 108: Reserves and Value
Reserves and Value Year End 2012 Proved Reserves SEC Pricing— $91.21 / $2.757 Reserves by Category Liquids Gas Equivalent PV-10 MMBbls Bcf MMBoe % Millions % PDP—Producing 138 683 251 44% $ 3,999 53% PBP—Behind Pipe 13 98 29 5% 307 4% PNP—Non Producing 20 115 39 7% 742 10% PUD—Undeveloped 160 518 24
Slide 109: Increasing Proven Oil Mix
Increasing Proven Oil Mix Improved Oil Reserve Mix YE 2012 SEC 100% 90% 80% 42% 48% 70% 52% 54% 60% 86% 88% Improved Oil Revenue YE 2012 SEC 50% 40% 30% 58% 11% 52% 21% 48% 46% 20% 10% 14% 12% 0% YE ‘07 YE ‘08 YE ‘09 YE ‘10 YE ‘11 YE ‘12 89% GAS OIL 79% YE ‘11 YE ‘12 GAS OIL 109 • Includes Royalty T
Slide 110: SandRidge Predominately Proved Oil Well Value
SandRidge Predominately Proved Oil Well Value Sec pricing Includes Royalty Trusts
Slide 111: Proved F&D Costs, Reserve Life, & Replacement Ratio
Proved F&D Costs, Reserve Life, & Replacement Ratio 2011 CAPEX $ in Millions 2012 CAPEX $ in Millions E&P drilling & production capex $ 1,382 E&P drilling & production capex $ 1,764 Land & Seismic 348 Land & Seismic 191 Acquisitions 35 Acquisitions (a) 1,383 Total cost incurred — All-in F&D $ 1,765
Slide 112: Proved F&D Costs, Reserve Life, & Replacement Ratio
Proved F&D Costs, Reserve Life, & Replacement Ratio 2012 Finding & Development Metrics 2012 Proved Developed Finding Costs Excluding Including E&P CAPEX Revisions Revisions Reserves Related Metrics & Ratios Extensions, MBoe 198,466 198,466 Current Period Proved Developed Reserves (MMBoe) 319.8 Revis
Slide 113: SandRidge Corporate Reserves Adjusted for PER, SDT, & SDR Trusts
SandRidge Corporate Reserves Adjusted for PER, SDT, & SDR Trusts NET RESERVES OIL, NGL, LIQ, GAS, MMBoe PV-10 MMBbls MMBbls MMBbls Bcf ($MM) Consolidated SandRidge (10K Reporting) PDP 109 28 138 683 251 $ 3,999 PBP 9 3 13 98 29 307 PNP 18 2 20 115 39 742 PUD 125 34 160 518 246 2,763 OFFSHORE PP&A ——
Slide 114: Reserve Distribution by Value and Reserves
Reserve Distribution by Value and Reserves • SEC Pricing • Includes Royalty Trusts
Slide 115: Mid-Continent Summary
Mid-Continent Summary SEC PV-10 Value remains(a) at $2.3 Billion Net Reserves & Resource Value(b) $17 Billion Proved Reserve Replacement 918% 60% Proved Developed Reserve Value & 80%(c) Oil Revenue Miss Proved Developed Drilling F&D Costs $13.91/Boe a) Adjusted for asset sales and production b) Incl
Slide 116: Mid-Continent Summary
Mid-Continent Summary SEC PV-10 Value remains(a) at $2.3 Billion Net Reserves & Resource Value(b) $17 Billion Proved Reserve Replacement 918% 60% Proved Developed Reserve Value & 80%(c) Oil Revenue Miss Proved Developed Drilling F&D Costs $13.91/Boe a) Adjusted for asset sales and production b) Incl
Slide 117: Gulf Coast & Gulf of Mexico Waterfall
Gulf Coast & Gulf of Mexico Waterfall Primary reserve changes: Dynamic/Hunt acquisition +60.8 MMBoe Pricing revisions -2.7 MMBoe offset by performance revisions +2.4 MMBoe Offshore/Southern reserves represents ~11% of total corporate (18% Pro Forma after Permian sale)
Slide 118: Pro Forma YE Reserves SandRidge Post Permian Divestiture
Pro Forma YE Reserves SandRidge Post Permian Divestiture Year End 2012 Proved Reserves SandRidge Less Permian Divestiture Pro Forma SEC Pricing—$91.21/ $2.757 Reserves by Category Equivalent MMBoe PV-10 Millions Permian Permian YE2012 Pro Forma YE2012 Pro Forma Divest % Divest % PDP—Producing 251 84
Slide 119: Pro Forma SandRidge NAV Post Permian Divestiture
Pro Forma SandRidge NAV Post Permian Divestiture SandRidge—Reserves / Resources / NAV SandRidge YE2012 Permian Divestiture SandRidge Pro Forma Area Locations MMBoe PV10 $MM Locations MMBoe PV10 $MM Locations MMBoe PV10 $MM Resv + Resv + Resv + Resv + Resv + Resv + Resv + Resv + Resv + Resources Dril
Slide 120: Questions & Answers
SANDRIDGE Questions & Answers Se —_~
Slide 121: Appendix: Guidance and Modeling Assumptions
Appendix Guidance and Modeling Assumptions
Slide 122: 2013 Operational Guidance
2013 Operational Guidance Production Differentials Oil (MMBbls) (a) 15.9 Oil (a) $8.50 Natural Gas (Bcf) 110.4 Natural Gas $0.45 Total (MMBoe) 34.3 Capital Expenditures ($ in millions) Cost per Boe Exploration and Production $1,450 Lifting $14.50— $16.50 Land and Seismic 100 Production Taxes 1.00— 1
Slide 123: 2013 SandRidge Guidance Model – Production Revenue
2013 SandRidge Guidance Model – Production Revenue ($ in millions, except per unit amounts) Gas Oil (a) Total Production (Bcf, MMBbls, MMBoe) 110.4 15.9 34.3 Price Assumptions: NYMEX (b) $3.45 $94.02 Differential $0.45 $8.50 Projected Price (excl. effect of hedges) $3.00 $85.52 Wellhead Revenue $331
Slide 124: 2013 SandRidge Guidance Model – EBITDA
2013 SandRidge Guidance Model – EBITDA ($ in millions) E&P EBITDA: Production Revenue $1,752 Lifting, Tax, and G&A Costs 763 E&P EBITDA $989 Oilfield Services, Midstream, and Other EBITDA $30 Non-Controlling Interest EBITDA (210) Non-Cash Stock Compensation 49 SD Model EBITDA $858
Slide 125: 2013 SandRidge Guidance Model – Capital Expenditures
2013 SandRidge Guidance Model – Capital Expenditures
Slide 126: Hedging Overview
Hedging Overview Strong hedge program provides downside protection in volatile commodity markets—Target 75-85% of current year production hedged Continue to use derivatives to ensure financial stability Oil 1Q13 2Q13 3Q13 4Q13 2013 2014 2015 Swaps Volumes (MMBbls) 4.53 3.44 3.36 3.34 14.67 7.51 5.08
Slide 127: Net Asset Value – Pro Forma 2012 Year End
Net Asset Value – Pro Forma 2012 Year End (in millions) 2012A PV-10 $4,311 Resources $15,758 Projected Asset Value $20,069 Less: Net Debt (a) $1,469 Net Asset Value $18,600 Fully-Diluted Shares Outstanding 582 Net Asset Value per Share $31.98 127 a) Pro Forma for proceeds from the Permian divestitur
Slide 128: Capitalization & Credit Ratio Progression
Capitalization & Credit Ratio Progression $ in millions December 31, 2010 December 31, 2011 December 31, 2012 Pro Forma Adjustments P.F. December 31, 2012 Capitalization Cash & Cash Equivalents $6 $208 $310 $1,415 $1,725 Debt Current Maturities of LT Debt $7 $1 $0 $0 $0 Senior Credit Facility 340 0
Slide 129: Contact: Kevin R. White, SVP – Business Development
Contact: Kevin R. White, SVP – Business Development Address: 123 Robert S. Kerr Avenue, Oklahoma City, OK 73102 | Phone: 405-429-5515 Email: kwhite@SandRidgeEnergy.com | Website: www.SandRidgeEnergy.com ADDITIONAL INFORMATION AND WHERE TO FIND IT On January 18, 2013 the Company filed with the SEC a