SandRidge Energy, Inc. · NYSE:SD
SandRidge Energy — Investor Presentation (November 2014)
27 slides from SandRidge Energy's investor presentation, Nov 17, 2014
Slide 1: Monday, November 17, 2014
Monday, November 17, 2014 1
Slide 2: Disclaimer: Forward Looking Statement
DISCLAIMER 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 intention an
Slide 3: SandRidge Mission
SANDRIDGE MISSION Premier Mid-Continent Company MISSION STATEMENT Our Mission at SandRidge is to create the premier, high-return, growth- oriented, resource conversion company, focused in the Mid- Continent region of the United States. www.SandRidgeEnergy.com 3 3
Slide 4: Q3'14 – Continued Strong Well Results
Q3’14 – CONTINUED STRONG WELL RESULTS RESULTS Focus and Innovation Yield Exceptional Operating Results Operational Update • Third quarter total company production 80 Mboe/d, 14% growth quarter-over- quarter • Mid-Continent production grew 39% year-over-year and 19% quarter-over-quarter to 67 Mboe/d
Slide 5: SandRidge Company Overview
SANDRIDGE COMPANY OVERVIEW MARKET VALUE ($ in millions) SD Quick Facts Market Cap (11/10/2014) $1,720 • Fractured Carbonate Focus Net Debt(a) 2,605 • Mid-Continent, Horizontal Preferred Stock 765 Mississippian Leader Enterprise Value $5,090 • Sub-$3.0MM/well, 380 MBoe EUR ASSET OVERVIEW(b)(c) • Stac
Slide 6: Actionable Growth with Upsides
ACTIONABLE GROWTH WITH UPSIDES FOCUSED Significant Acreage Position Stacked Oily Pay Zones Improving Already Strong Returns * 11/7/2014 STRIP PRICING www.SandRidgeEnergy.com 6 6
Slide 7: Material Well Cost and LOE Reduction
MATERIAL WELL COST AND LOE REDUCTION Mississippian Leader FOCUSED • Best in class Mid-Continent drilling and completion (D&C) lateral costs $2.9MM /Lateral – $2.9MM per Mid-Continent single lateral – $1MM decrease in capital since Q1 2012 – 100% electric submersible pump (ESP) implementation rate in
Slide 8: Targeting Breakout Economics
TARGETING BREAKOUT ECONOMICS INNOVATION Ahead of Schedule, Reducing Well Costs • Hedges maintain strong well economics that are improving as costs come down • Breakout innovations on well design could both: – Enhance returns $95/$4.25 – Expand focus areas • Value enhancing projects in motion 11/7 –
Slide 9: 2014 Mississippian PUD Type Curve
2014 MISSISSIPPIAN PUD TYPE CURVE Actual Performance Consistently Above Type Curve FOCUSED 350 200 Oil: 118 MBo 30 Day IP (Bo/day) 176 180 1st Year Decline(a) 80% 300 B Factor 1.41 Cumulative Production (Mboe) 160 NGL: 64 MBbls 250 140 Yield (Bbls/MMcf) 47.5 Shrink 87.3% Avg. Boe/d 120 200 GAS: 1.2
Slide 10: Mississippian Well Performance
MISSISSIPPIAN WELL PERFORMANCE MULTI-YEAR Continued Improvement GROWTH Type Curve 849 Mcf/d AVG. MCFPD Type Curve 176 Bbl/d AVG. BOPD www.SandRidgeEnergy.com 10 10
Slide 11: Mississippian Well EURs
MISSISSIPPIAN WELL EURS MULTI-YEAR Continued Improvement GROWTH 20% COMMERCIAL 18% 16% 14% 12% % of Wells 10% 8% 6% 4% 2% 0% EUR (MBoe) 1 1 2 1 EURs are as of Year-End 2013 Wells Prior to 2013 2013 Wells 2014 Wells 2 EURs are per the Company’s estimates as of Mid-Year 2014 www.SandRidgeEnergy.com 11
Slide 12: Mid-Continent Focus Area
MID-CONTINENT FOCUS AREA Deep Understanding of the Play FOCUSED ~650,000 Acres in Focus Area • 3D Required to Define Fracture Trends • Highest 30 Day Gas IPs • Positive Multi Lateral Results • Low H2O Cut • Upside as Gas Prices Rise • Highest 30 Day Oil IPs • Highest Liquids % • Lowest H2O Cut • Che
Slide 13: Multi-Zone Drilling Locations
MULTI-ZONE DRILLING LOCATIONS Many Years of Drilling Ahead FOCUSED High-Graded Locations to Drill 4,510 wells Emerging Un-Risked Locations >8,000 wells development Marmaton Upper Miss HZ Wells to Sales 1 HZ Wells to Sales 849 Locations TBD Locations 2,668 Chester Middle Miss HZ Wells to Sales 5 HZ W
Slide 14: Applying Seismic Technology
APPLYING SEISMIC TECHNOLOGY INNOVATION Understanding the Rock 2013 - 730 square miles of 3D data acquired 2014- 1,070 square miles of new 3D data to acquire 2015 - 800 square miles of new 3d data to acquire KS OK Main fault trend Parallel fault trend 100 MILES COMPLETED PLANNED SD LEASEHOLD www.Sand
Slide 15: Multilateral Approach is Successful
MULTILATERAL APPROACH IS SUCCESSFUL Changing How Carbonates are Developed INNOVATION Achieving Breakthrough Cost Upsides with Production Uplift Dual Stacked Lateral • Multilateral success achieved on three dual stacked laterals and one co-planar well in Grant, Alfalfa, and Harper counties during Q2’
Slide 16: FSD Offers Up to 34% More Section for Less Capex
INNOVATION / UPSIDE FSD Offers Up to 34% More Section for 26% less INNOVATION capex Full Section Development • Fracture stimulates 34% more interval: 22,000’ vs typically 16,400’ with four Full Section Development single laterals • Rock integrity of our carbonates (vs shales or sandstones elsewhere)
Slide 17: Saltwater Gathering & Disposal (SWG)
SALTWATER GATHERING & DISPOSAL (SWG) UPSIDES Produced Water Gathered and Sequestered into Arbuckle Through Cost Effective Infrastructure Most Efficient SWG Operator in • Produce – ~1.2 million barrels of water gathered and disposed per day the midcontinent during Q3‘14 in the Mid-Continent and Permi
Slide 18: Appendix
APPENDIX
Slide 19: 2014 Production Guidance Update
2014 PRODUCTION GUIDANCE UPDATE APPENDIX (A) 2013: 11.3 MMBoe of non-recurring production related to divested Permian and GoM assets (B) 2014: 1.3 MMBoe of non-recurring production related to divested GoM assets (2/25/2014 closing) www.SandRidgeEnergy.com 19 19
Slide 20: Credit Profile
CREDIT PROFILE APPENDIX • ~$1.5 Bln liquidity at Q3’14 – $590MM cash – Fully undrawn credit facility of $900MM • 3.2x leverage ratio at Q2’14 • Significant oil hedges at strong prices provide cash flow stability and visibility • Contains Non-GAAP financial measures. Refer to slide 2 for additional d
Slide 21: Capital Structure Overview
CAPITAL STRUCTURE OVERVIEW APPENDIX (d) (d) (a) Convertible at holder’s option at $8.0125 per common share; convertible after Feb 20, 2014 (b) Convertible at holder’s option at $10.856 per common share; automatic conversion after Dec 21, 2014 (c) Convertible at holder’s option at $7.7645 per common
Slide 22: Valuable Hedge Position
VALUABLE HEDGE POSITION APPENDIX Majority of Liquids Hedged >$90 Through 2015 Q4 2014: 92% of Liquids Volumes Hedged 2015: 10.2 MMBBls Liquids volumeS hedged 2016: 4.0 MMBBLS Liquids volumeS hedged 1.5 MMBbls 1.1 MMBbls 5.6 MMBBLS $88.36/ BBL SWAPS 3-Way SWAPS UNHEDGED UNHEDGED $98.78/Bbl Collars $9
Slide 23: 2013 Reserve Metrics
2013 RESERVE METRICS APPENDIX Focused on the Mississippian Play Pro Forma 2013 Excluding Gulf of Mexico Proved Reserves* SEC Pricing - $93.42 / $3.67 RESERVES PV10 434% Reserve Replacement Liquids Gas Equivalent % $MM % MMBbls Bcf MMBoe 63% Proved Developed Reserves by Reservoir Status PDP - Produci
Slide 24: 2014 Mississippian PUD Type Curve
2014 MISSISSIPPIAN PUD TYPE CURVE APPENDIX 380 MBoe, 48% Liquids 350 200 Oil: 118 MBo 30 Day IP (Bo/day) 176 180 1st Year Decline(a) 80% 300 B Factor 1.41 160 Cumulative Production (Mboe) NGL: 64 MBbls 250 140 Yield (Bbls/MMcf) 47.5 Shrink 87.3% Avg. Boe/d 120 200 Type Curve EUR YE2013 GAS: 1.2 Bcf
Slide 25: 2014 Operational Guidance Update
2014 OPERATIONAL GUIDANCE UPDATE APPENDIX Updating 2014 Guidance: Production Ranges Have Been Tightened to Account for Third Quarter Performance a) EBITDA from Oilfield Services and Other is a non-GAAP financial measure as it excludes from net income interest expense, income tax expense and deprecia
Slide 26: 2014 Capex Guidance
2014 CAPEX GUIDANCE APPENDIX ($ in millions) DRILLING AND COMPLETION (D&C) Updated Previous Change Land and Seismic Budget Increased to Mid-Continent/Mississippian $1,040 1,040 Mid-Continent SWD Wells 60 60 Take Advantage of Acreage Opportunities Permian Gulf of Mexico / Gulf Coast 145 20 110 10 35
Slide 27: SandRidge Investor Relations
Our Mission at SandRidge is to create the premier, high-return, growth-oriented, resource conversion company, focused in the Midcontinent region of the United States. SANDRIDGE INVESTOR RELATIONS 123 Robert S. Kerr Avenue, Oklahoma City, OK 73102 investors@sandridgeenergy.com www.SandRidgeEnergy.com
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