Sandridge Energy, Inc. · NYSE:SD
Sandridge Energy — Investor Presentation (May 2015)
29 slides from Sandridge Energy's investor presentation, May 2015
Slide 1: Investor Presentation May 2015
INVESTOR PRESENTATION MAY 2015 0
Slide 2: Disclaimer
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: Mission Statement
MISSION STATEMENT 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. FY SANDRIDGE THE POWER OF US”
Slide 4: SandRidge Has a Leading U.S. Midcontinent Oil & Gas Position
SANDRIDGE HAS A LEADING U.S. MIDCONTINENT OIL & GAS POSITION WE ARE SKILLED, LARGE SCALE DEVELOPERS OF OIL AND GAS RESOURCES • 1,500 wells drilled, over $5B invested since 2010 ($1.6B in 2014) • Producing ~90 MBoepd, largest water gathering system in U.S. (over 1.2 MMBwpd) • Expert at horizontal red
Slide 5: 2015 Budget Philosophy Reflected in Q1 Results
2015 BUDGET PHILOSOPHY REFLECTED IN Q1 RESULTS EBITDA, PRODUCTION & SPEND RATE IN LINE WITH PLAN • $182MM of adjusted EBITDA; adjusted earnings of $0.00 per diluted share • Mid-Continent production of 76.2 MBoepd, up 50% vs Q1 2014 • Total Company production of 87.7 MBoepd, up 36% vs Q1 2014, pro fo
Slide 6: 27% More EUR for 80% of the Cost
27% MORE EUR FOR 80% OF THE COST returns are preserved… drilling location count grows. At lower well costs… Development inventory is preserved with lower costs and expanded with oil price recovery Type curve returns at target costs and Service cost reductions plus increased current strip exceed IRRs
Slide 7: 2015 Capex of $700MM vs. $1.6B in 2014
2015 CAPEX OF $700MM VS. $1.6B IN 2014 Reducing Capital Spending While Increasing Efficiency PRINCIPLES PLANNED SPEND AND RESULT $700MM Capex budget Drilling projects must generate hurdle returns at strip pricing 28.0-30.5 MMBoe guided production Unlock value in this market • Efficiency gains Guidin
Slide 8: Strong Hedge Position for Remainder of 2015
STRONG HEDGE POSITION FOR REMAINDER OF 2015 $251MM Mark-to-Market Hedge Book Value, $60 Oil in 2015 Realizes $82.79 per Bbl * • Positions displayed are from April forward • Positions displayed include royalty trusts, but are exclusive of basis hedges • Liquids hedged to NYMEX WTI; Natural Gas hedged
Slide 9: Liquidity and Balance Sheet Flexibility Intact
LIQUIDITY AND BALANCE SHEET FLEXIBILITY INTACT Ample Liquidity, No Near Term Maturities • $725MM liquidity; $900MM borrowing base MARKET VALUE ($ in millions) • 0.22x senior leverage ratio (senior secured debt/LTM pro forma EBITDA) vs Market Cap (5/6/2015) $857 2.25x covenant Net Debt(1)(2) 3,359 •
Slide 10: 2014 Achievements
2014 ACHIEVEMENTS Hit our Operating Stride in 2014, Now Focused on Balance Sheet 2014 FULL YEAR RESULTS • 37% Proved reserves growth • 27% Type curve growth * • 47% Midcon production growth TOTAL SD PRODUCTION • 1% over production guidance midpoint • Added Garfield county to focus area • Pioneered m
Slide 11: Year End Proved Reserves +37% to 516 MMBoe
YEAR END PROVED RESERVES +37% TO 516 MMBOE Consistent Growth of a Strong Reserves Base RESERVES MIX • $5.5B SEC PV-10(a) (+34% YOY) • 42% Liquids Mix • $10.69 Proven Value/Boe(a) • 18.7 Years Reserve Life • 604% All-in Reserve Replacement • 12.2 Years Proved Developed • 65% Proved Developed Reserve
Slide 12: Consistent Well Performance Above Type Curve
CONSISTENT WELL PERFORMANCE ABOVE TYPE CURVE Several Quarters of Stronger Gas IPs and Early Volumes *as of 5.6.15 SandRidgeEnergy.com 11 11
Slide 13: 2015 Mississippian PUD Type Curve
2015 MISSISSIPPIAN PUD TYPE CURVE 484 MBoe, 44% Liquids 2015 OIL: 118 MBo 30 Day IP (Bo/d) 190 1st Year Decline(a) 80% B Factor 1.26 2015 NGL: 97 MBbls Yield (Bbls/MMcf) 51.6 Shrink 86.1% 2015 GAS: 1.6 Bcf (b) 30 Day IP (Mcf/d) 966 1st Year Decline(a) 62% B Factor 2.00 MBoe SandRidgeEnergy.com (a) R
Slide 14: On Track to Achieve $2.4MM per Lateral Costs
ON TRACK TO ACHIEVE $2.4MM PER LATERAL COSTS $350K of $600K Targeted Savings Realized as of April 2015 $130K REALIZED - EFFICIENCY GAINS • Rig efficiency & location high-grading • Wellbore & completion design – Liner tool elimination – Stimulation revision $200K REALIZED - SERVICE COSTS • Liner pack
Slide 15: 40% Multilaterals in 2015 Drilling Plan
40% MULTILATERALS IN 2015 DRILLING PLAN 106% of 90-Day Type Curve Production for 85% of the Cost of a Single Lateral* FULL SECTION DEVELOPMENT ACTIVITY AND SUCCESS THROUGH Q1’15 • Sole multilateral operator in the Midcontinent • Multilateral program consists of 43 projects with average completed wel
Slide 16: Rig Activity Target Achieved in First Half 2015
RIG ACTIVITY TARGET ACHIEVED IN FIRST HALF 2015 Current 6 Development Rigs + 1 Committed to Appraisal New Ventures DRILLING LOCATION INFORMATION (as of April 2015) MISS CHESTER WOODFORD* Producing Laterals 1,463 41 8 1Q‘15 30-day Boe 405 452 199 (a) Future Locations 3,212 401 147 * Wells developed u
Slide 17: Large Midcontinent Fairway for Appraisal
LARGE MIDCONTINENT FAIRWAY FOR APPRAISAL Material Success in Chester and Woodford • Appraisal / New Ventures is a critical piece of SD business • Focused on redevelopment of additional legacy vertical reservoirs and technology transfer of SD expertise from existing to new areas • $46MM CAPEX budget
Slide 18: New Ventures Success Case
NEW VENTURES SUCCESS CASE Pioneering Chester Oil Development • First industry horizontal re-development of legacy Chester vertical production – Fine grained silty sandstone, distinct pay intervals separated by shale – Existing infrastructure in area – Higher oil cut and less water production than Mi
Slide 19: Geological Expertise Unlocks Woodford
GEOLOGICAL EXPERTISE UNLOCKS WOODFORD Refined Geological Model Yielding Strong Results • Woodford targets now identified based on four desirable characteristics: – Production interval above Woodford (example: Mississippian) – Siliceous Woodford member with moveable oil – Productive interval below Wo
Slide 20: Saltwater Gathering & Disposal (SWG)
SALTWATER GATHERING & DISPOSAL (SWG) Most Efficient SWG Operator in the Mid-Continent ~$600MM INVESTED THROUGH Q1’15 PRODUCE • Average capacity of 15,000 Bwpd per • ~1.3 million barrels of water gathered and disposed per well day during Q1‘15 in the Mid-Continent and Permian Basin – Low pressure pum
Slide 21: Largest Saltwater Gathering System in the Nation
LARGEST SALTWATER GATHERING SYSTEM IN THE NATION Pipeline Footprint Resembles Typical Gathering System • > 200 SWG wells • ~ 1.3 MMBwpd current volumes • 99% of Water is Piped vs. Trucked • 1,050 miles of installed pipelines • Advanced hydraulic simulation • Resembles hydrocarbon gathering and proce
Slide 22: Appendix
FY SANDRIDGE APPENDIX
Slide 23: 2015 Production Guidance
2015 PRODUCTION GUIDANCE Note: Totals may not foot due to rounding (a) 2014: 1.3 MMBoe of non-recurring production related to divested GOM assets SandRidgeEnergy.com 22 22
Slide 24: Capital Structure Overview
CAPITAL STRUCTURE OVERVIEW Senior Notes ($ in millions) Preferred Stock ($ in millions) 8.75% Sr Notes due 2020 $450 8.5% Convertible Perpetual Preferred (a) $265 7.5% Sr Notes due 2021 1,175 7.0% Convertible Perpetual Preferred (b) 300 8.125% Sr Notes due 2022 750 Total $565 7.5% Sr Notes due 2023
Slide 25: Hedging Overview
HEDGING OVERVIEW LIQUIDS Q1 2015 Q2 2015 Q3 2015 Q4 2015 2015 2016 Swaps Volumes (MMBbls) 2.29 1.73 1.01 0.55 5.59 1.46 Price ($/Bbl) $92.71 $91.55 $92.43 $94.11 $92.44 $88.36 Three-way Collars Volumes (MMBbls) 0.72 0.73 1.56 1.56 4.58 2.56 Call Price ($/Bbl) $103.13 $103.13 $103.65 $103.65 $103.48
Slide 26: 2014 Year End Reserves
2014 YEAR END RESERVES Creating Value from a Strong Reserve Base SEC Pricing $91.48 / $4.35 RESERVES PV10 PV-10 LIQUIDS GAS EQUIVALENT % $MM % MMBbls Bcf MMBoe Reserves by Reservoir Status PDP – Producing 119 1,011 287 56% $ 3,523 64% PNP – Non Producing 15 117 35 7% 462 8% PBP – Behind Pipe 2 76 14
Slide 27: Updated 2015 Operational Guidance
UPDATED 2015 OPERATIONAL GUIDANCE PRODUCTION PRICE REALIZATIONS a) EBITDA from Oilfield Services and Other is a non-GAAP Oil (MMBbls) 9.0 – 10.0 Oil (differential below WTI) $3.75 financial measure as it excludes from net income interest expense, income tax expense and depreciation, Natural Gas Liqu
Slide 28: 2015 Capex Guidance
2015 CAPEX GUIDANCE 2015 CAPEX GUIDANCE 2015 GUIDANCE LATERAL COUNTS 2015 GROSS 2015 NET Development D&C $306 Development 182 116 Appraisal & New Ventures D&C 29 Appraisal & New Ventures 11 8 Carryover 102 Total Laterals 193 124 Total D&C $437 SWG - D&C 11 Permian 0 JV Carry 0 Total D&C $448 OTHER E
Slide 29: 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