SandRidge Energy, Inc. · NYSE:SD
SandRidge Energy — Investor Presentation (January 2017)
26 slides from SandRidge Energy's investor presentation, January 2017
Slide 1: Investor Presentation January 2017
JANUARY 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 competitive project IRRs from the high-graded harvest of our Mid-Continent position, plus we’re adding portfolio diversification and long term growth from our North Park Niobrara project, with capacity to do more. - Over $500MM of Liquidity - Hig
Slide 4: SandRidge Energy Overview
SANDRIDGE ENERGY OVERVIEW UNLEVERED OIL PRODUCER FOCUSED ON RESOURCE VALUE CREATION KEY INFORMATION FULLY DILUTED MARKET EQUITY VALUE @ $24 / SHARE 20.6 MM Common shares + $494 Million + 14.8 MM Conversion shares $ 355 Million = Estimated Market Cap = $850 Million PRIMARY ASSETS 458k ~300 2P1 Mid-Co
Slide 5: Creating Resource Value in Two Basins
CREATING RESOURCE VALUE IN TWO BASINS • High-graded harvest and expansion of our Mid-Continent asset HARVEST & • Q4’16 Miss XRLs reduce 2016 average D&C from $1.9MM to $1.7MM per lateral, APPRAISE • supporting competitive IRRs at Dec 2016 strip ~1,300 producing horizontal wells, 3D seismic and impro
Slide 6: Sub-$200MM 2017 Capex Targets Attractive IRRs
SUB-$200MM 2017 CAPEX TARGETS ATTRACTIVE IRRS PLUS 2017 PUD ADDITIONS IN BOTH MID-CONTINENT AND NIOBRARA • Finish 2016’s successful high-graded Miss program – Late 2016 Miss XRLs (4 laterals total) at <$1.5MM D&C per lateral – Drilling technology and well cost reduction focus transfer to both Merame
Slide 7: 2017 Meramec/Osage Program in 3 Oklahoma Counties
2017 MERAMEC/OSAGE PROGRAM IN 3 OKLAHOMA COUNTIES POTENTIAL TO ADD MATERIAL LOCATIONS THROUGH MERAMEC/OSAGE DEVELOPMENT INDUSTRY ACTIVITY INDUSTRY ACTIVITY IS CONVERGING ADJACENT TO SD ACREAGE ON EXISTING SANDRIDGE ACREAGE SD Meramec/Osage activity in 3 counties: • Garfield Co: 1 Meramec well and 3
Slide 8: Mid-Continent Overview
MID-CONTINENT OVERVIEW 458K NET ACRES IN OKLAHOMA, WITH MISSISSIPPIAN, CHESTER, AND MERAMEC/OSAGE PRODUCTION • SandRidge is a leading producer in the Mid-Continent KS • Stacked reservoirs on large acreage base OK – Mississippian – Chester/Manning – Meramec/Osage gaining industry attention • Miss Lim
Slide 9: Durable Improvement in Economics
DURABLE IMPROVEMENT IN ECONOMICS MULTIS AND XRLS ARE A BREAKTHROUGH IN MISSISSIPPIAN D&C CAPEX, $MM PER LATERAL 90-DAY CUMULATIVE MBOE PER LATERAL Lower costs per lateral Results shown by groups of 50 wells -43% vs 2014 9
Slide 10: Mississippian Recoveries Improving
MISSISSIPPIAN RECOVERIES IMPROVING HIGH-GRADE YIELDING TIGHTER EUR DISTRIBUTIONS WITH BETTER RESERVOIR CHARACTERIZATION P10 / P90 RATIO PROJECTED EURS 2013 2014 2015 2016 NORMALIZED BY LATERAL 7 8 7 2 • High-graded harvest resulting in more consistent results • Remaining Mississippian locations form
Slide 11: 2016 Mississippian Value Creation
2016 MISSISSIPPIAN VALUE CREATION MULTIS AND XRLS REDUCE COSTS AND PRESERVE COMPETITIVE RETURNS AT LOWER COMMODITY PRICES 2016: 13 Miss laterals 51% IRR1 $1.7MM Avg D&C per Lateral 100% Multi and XRL • 2 XRLs: (equivalent to 4 single laterals) • 1 dual XRL: (equivalent to 4 single laterals) • 1 full
Slide 12: North Park Niobrara Asset Overview
NORTH PARK NIOBRARA ASSET OVERVIEW DOMINANT ACREAGE POSITION WITH HIGH OIL CUT • XRLs of $7.0MM D&C Capex ($3.5MM per lateral) with projected 600 MBoe EUR and targeting sub- $3MM per lateral in 2017 • Eleven laterals drilled in 2016 including one XRL • 60 drilling permits approved • 28 MMBoe of prov
Slide 13: Niobrara Drilling Economics
NIOBRARA DRILLING ECONOMICS REDUCING COSTS $500K PER LATERAL SUPPORTS LARGE IRR UPSIDE; CURRENT COSTS ACHIEVED AFTER JUST 11 LATERALS INCLUDING ONLY 1 XRL XRL CURRENTLY $3.5MM PER LATERAL Current $3.5MM per lateral Targeting <$3.0MM per lateral Reducing cost per lateral of XRLs will be a priority in
Slide 14: Initially Targeting Lower Niobrara
INITIALLY TARGETING LOWER NIOBRARA SIMILAR GEOLOGIC CHARACTERISTICS TO THE DJ BASIN NIOBRARA BUT HIGHER OIL CUT NORTH PARK DJ BASIN BASIN Oil EUR % 81% 35% - 40% 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% O
Slide 15: 2016 SandRidge Niobrara Results
2016 SANDRIDGE NIOBRARA RESULTS 478 BOEPD (90% OIL) AVERAGE 30-DAY IP ON FIRST FIVE SANDRIDGE LATERALS FIRST FIVE SANDRIDGE LATERALS SIX LATERALS ONLINE IN LATE 2016 DESIGNED TO TEST • Cycle time reduction • XRL • Additional bench • Spacing • Stimulation methods • Artificial lift methods Initial res
Slide 16: First SandRidge Niobrara Lateral
FIRST SANDRIDGE NIOBRARA LATERAL THE GREGORY 1-9H CONTINUES TO OUTPERFORM TYPE CURVE GREGORY 1-9H, 550 BOEPD (89% OIL) 30-DAY IP Cumulative production of 82 MBo at 250 Days 16
Slide 17: Niobrara Type Curve Support
NIOBRARA TYPE CURVE SUPPORT AVERAGE OIL RATE OF FIRST FIVE SANDRIDGE LATERALS DRILLED FIRST 5 SANDRIDGE LATERALS • Outperforming type curve • Free flowed for over three months • First three laterals currently on artificial lift • Optimizing production by accelerating artificial lift on future instal
Slide 18: 14 Laterals Supporting Type Curve Cumulative Oil
14 LATERALS SUPPORTING TYPE CURVE CUMULATIVE OIL LAST 14 LATERALS USING MODERN COMPLETION DESIGNS Average Cumulative Oil 126,298 Bbls 96,917 Bbls Cumulative Type Curve Oil 18
Slide 19: Achievable Upside in Niobrara
ACHIEVABLE UPSIDE IN NIOBRARA LOWER COSTS, OPTIMIZED COMPLETIONS, XRLS, STACKED PAY AND LOCATION COUNT UPSIDE INCLUDES • Successfully drilling XRLs; first 2-mile lateral drilled and completed in Q3’16 and brought online in Q4’16 • Proving up additional benches – First SandRidge well, the Gregory 1-9
Slide 20: Niobrara Asset Midstream Status
NIOBRARA ASSET MIDSTREAM STATUS WTI OIL DIFFERENTIAL HAS BEEN REDUCED FROM $11+/BBL TO $3.15/BBL NORTH PARK BASIN CURRENT OIL AND GAS DISPOSITION POTENTIAL PIPELINE ROUTES • Building out field gathering infrastructure; centralized Rockies Express Plains Rocky Pipeline (REX) tank battery used for pro
Slide 21: Appendix
www.sandridgeenergy.com
Slide 22: $536MM Liquidity
THE REORGANIZED SANDRIDGE ENERGY AS OF OCT. 31ST COMMON • 20.6 MM common shares outstanding EQUITY • 14.8 MM issuable upon conversion of mandatorily convertible debt • 4.9 MM warrants at $41.34 strike price net share settled • 2.1 MM warrants at $42.03 strike price MANDATORILY • $278MM1 face value C
Slide 23: New SandRidge Capital Structure
NEW SANDRIDGE CAPITAL STRUCTURE PRO FORMA CAPITAL STRUCTURE $MM AS OF PRO FORMA DEBT AT PRINCIPAL VALUE RESTRUCTURING JUN 30, 2016 OCT. 31, 2016 AS OF Secured Note1 $ - $ 35 $ 35 8.75% Second Lien Secured Notes due 2020 1,328 (1,328) - Unsecured Notes: 8.75% Senior Unsecured Notes due 2020 $ 396 $ (
Slide 24: 2016 Operational Guidance
2016 OPERATIONAL GUIDANCE TOTAL COMPANY PRODUCTION PRICING REALIZATIONS Oil (MMBbls) 5.4 - 5.5 Oil (differential below WTI) $3.75 Natural Gas Liquids (MMBbls) 4.1 - 4.3 NGLs (realized % of WTI) 30% Gas (differential below Henry Hub) $0.50 Total Liquids (MMBbls) 9.5 - 9.8 Natural Gas (Bcf) 57.0 - 57.
Slide 25: 2016 Capital Expenditures Guidance
2016 CAPITAL EXPENDITURES GUIDANCE CAPEX GUIDANCE $MM CAPEX GUIDANCE DETAIL $MM D&C $122.5 - $132.5 Mid-Continent D&C $42.5 - $47.5 Other E&P $92.5 - $102.5 North Park D&C 55 – 60 Total Exploration and Production $215 - $235 Other - D&C1 25 General Corporate $5 Total Drilling & Completing $122.5 - $
Slide 26: Hedging Overview
HEDGING OVERVIEW OIL Q4’16 Q1’17 Q2’17 Q3’17 Q4’17 FY 2017 Q1’18 Q2’18 Q3’18 Q4’18 FY 2018 SWAPS Volumes (MMBbls) 1.29 0.63 0.64 0.64 0.64 2.56 0.27 0.27 0.28 0.28 1.10 Price ($/Bbl) $56.45 $51.45 $51.45 $51.45 $51.45 $51.45 $55.10 $55.10 $55.10 $55.10 $55.10 NATURAL GAS Q4’16 Q1’17 Q2’17 Q3’17 Q4’1
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