Sandridge Energy, Inc. · NYSE:SD
Sandridge Energy — Investor Presentation (March 2017)
26 slides from Sandridge Energy's investor presentation, March 2017
Slide 1: Investor Presentation March 2017
MARCH 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 built a portfolio of three project areas with competitive project IRRs and significant location inventories. Investment will continue the high-graded harvest of our Mississippian position, and development of both our NW STACK and North Park Niobr
Slide 4: SandRidge Energy Overview
SandRidge Energy Overview Unlevered oil producer focused on resource value creation KEY INFORMATION Market Equity Value as of Mar 20, 2017 35.9 MM common shares $638 Million Primary Assets 2P Locations1 Net Acres Mississippian ~300 400k Anadarko Basin, OK NW STACK Under 60k Anadarko Basin, OK Evalua
Slide 5: STACK Activity Moving Northwest
STACK Activity Moving Northwest Increasing activity supports enthusiasm around Major, Woodward, and Garfield Co. NW STACK INDUSTRY ACTIVITY ADJACENT TO SD ACREAGE Industry activity has been converging on existing SD acreage with prominent operators seeing encouraging results: • Multiple operators wi
Slide 6: NW STACK Primary Targets
NW STACK Primary Targets NW STACK Meramec and Osage same productive formation as in STACK Structurally deepens from northeast to southwest Meramec 5,800’-12,400’ TVD • Below the Chester (where present) • Interbedded shales, sands, and carbonates • Thickness from 50’-160’ • Matrix porosity developmen
Slide 7: NW STACK – Meramec and Osage
NW STACK – Meramec and Osage SandRidge has operated in and around the NW Stack for many years 2016 Meramec and Osage program SANDRIDGE ACTIVITY ACROSS 3 COUNTIES • Medill 1-27H, Major Co., Meramec • Keeton 1-24H, Major Co., Osage • Charlene 1-29H, Garfield Co., Meramec Osage drilled in Garfield Co.
Slide 8: Activity Proving Out NW STACK
Activity Proving Out NW STACK 17 Rigs running, many producing wells now near SD NW STACK acreage 8
Slide 9: NW STACK Acquisition
NW STACK Acquisition Acquisition increases our NW STACK position to 60k net acres CONTIGUOUS ~13.1K NET ACRES FOR $48MM CASH • Complements surrounding SD NW STACK acreage • Stacked pay of Meramec and Osage • Adds locations with competitive IRRs at strip • ~700 Boepd of production • 88% operated w/ m
Slide 10: High-Grade + Innovation = Value Creation
High-Grade + Innovation = Value Creation 2016 Mississippian program: 13 laterals, 51% IRR1 $1.7MM Avg D&C per Lateral 100% Multi and XRL • 1 dual XRL: (equivalent to 4 single laterals) • 1 full section development: (equivalent to 3 single laterals) • 1 coplanar: (equivalent to 2 single laterals) • 2
Slide 11: Durable Improvement in Mississippian Economics
Durable Improvement in Mississippian Economics Multis and XRLs support continued harvest of remaining high-graded inventory D&C CAPEX, $MM PER LATERAL 90-DAY CUMULATIVE MBOE PER LATERAL 43% Lower costs per lateral vs. 2014 Results shown by groups of 25 wells 11
Slide 12: Mississippian Recoveries Improving
Mississippian Recoveries Improving High-graded harvest resulting in more consistent results PROJECTED EURS P10 / P90 RATIO NORMALIZED BY LATERAL 2013 2014 2015 2016 7 7 6 2 • High-grading results in improving EUR trend • Realizing tighter EUR distributions (P10 / P90) • Remaining Mississippian locat
Slide 13: North Park Niobrara Asset Overview
North Park Niobrara Asset Overview Dominant acreage position with high oil cut • XRLs currently below $7.0MM D&C (<$3.5MM per lateral) with projected 600 MBoe EUR and targeting sub-$3.5MM per lateral in 2017 • Ten wells drilled in 2016 including one XRL and one “C” bench target • 60 drilling permits
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 % >80% ~35% 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% OOIP
Slide 15: SandRidge Niobrara Shale Advancements
SandRidge Niobrara Shale Advancements Lowered costs, optimized completions, drilled an XRL, confirmed stacked pay Improved drilling and completion designs • Eliminated intermediate casing • Oil based mud utilized for improved drilling times and hole stability • Confirmed crosslinked gel fracs yield
Slide 16: North Park Laterals Outperforming Cumulative Oil Type Curve
North Park Laterals Outperforming Cumulative Oil Type Curve 11 SandRidge Laterals in 2016 outperforming type curve by 9% 16
Slide 17: North Park Laterals Outperforming Oil Type Curve
North Park Laterals Outperforming Oil Type Curve Average oil rate of all 11 laterals drilled by SandRidge in 2016 11 SD Laterals in 2016: • Average free flowing period of two to three months • Earlier installation of artificial lift in future to optimize production • All laterals currently on either
Slide 18: Niobrara Asset Midstream Status
Niobrara Asset Midstream Status Oil currently trucked at low differential to WTI NORTH PARK BASIN Current Oil and Gas Disposition POTENTIAL PIPELINE ROUTES • Building out field gathering infrastructure; centralized tank battery used for processing, storage and export • Oil trucked to market (central
Slide 19: Appendix
PAPA TS ZA VARS fa al . wz APPENDIX } www.sandridgeenergy.com
Slide 20: 2017 Project EURs, Economics, & Inventory
2017 Project EURs, Economics, & Inventory Diverse and material location inventory in three active areas Meramec Niobrara Mississippian EURs & Economics XRL* Single XRL FSD* Single EUR, MBoe 800 – 1,000 500 – 600 600 1,350 550 % Oil 40% 40% 85% 20% 20% D&C per lateral ($MM) $3.1 $4.2 $3.4 $2.0 $2.4 I
Slide 21: Year End 2016 Reserves and PV-10
Year End 2016 Reserves and PV-10 Oil NGLs Gas Equivalent PV-102 Proved Reserves MBbls MBbls MMcf MBoe1 $MM Proved Reserves as of Dec 31, 2015 @ SEC Pricing ($50.28 / $2.59) 77,911 61,075 1,113,840 324,626 $1,315_ Production (5,529) (4,357) (56,895) (19,369) Sale of assets (387) 0 (145,267) (24,598)
Slide 22: Market Capitalization and Liquidity
Market Capitalization and Liquidity $763MM OF PROVEN PV-10 AT STRIP1 $145MM PUD PV10 $618MM $638MM PDP PV10 COMMON STRONG LIQUIDITY EQUITY 35.9 MM common shares $425MM outstanding at $17.78 per share1 UNDRAWN BORROWING BASE $417MM available ($8MM LOCs) • $600MM committed • First redetermination Oct
Slide 23: 2017 Capital Expenditures Guidance
2017 Capital Expenditures Guidance CAPEX GUIDANCE $MM CAPEX GUIDANCE DETAIL $MM D&C $109 - $119 Mid-Continent D&C $65 - $70 Other E&P 99 North Park D&C 20 - 25 Other - D&C1 24 Total Exploration and Production $208 - $218 Total Drilling & Completion $109 - $119 General Corporate 2 OTHER E&P Total Cap
Slide 24: 2017 Operational Guidance
2017 Operational Guidance TOTAL COMPANY PRODUCTION PRICING REALIZATIONS Oil (MMBbls) 4.0 – 4.2 Oil (differential below WTI) $2.75 Natural Gas Liquids (MMBbls) 3.0 – 3.2 NGLs (realized % of WTI) 26% Gas (differential below Henry Hub) $1.00 Total Liquids (MMBbls) 7.0 – 7.4 Natural Gas (Bcf) 42.0 – 43.
Slide 25: Hedging Overview
Hedging Overview OIL Q1’17 Q2’17 Q3’17 Q4’17 FY 2017 Q1’18 Q2’18 Q3’18 Q4’18 FY 2018 SWAPS Volumes (MMBbls) 0.81 0.82 0.83 0.83 3.29 0.45 0.46 0.46 0.46 1.83 Price ($/Bbl) $52.24 $52.24 $52.24 $52.24 $52.24 $55.34 $55.34 $55.34 $55.34 $55.34 NATURAL GAS Q1’17 Q2’17 Q3’17 Q4’17 FY 2017 Q1’18 Q2’18 Q3
Slide 26: Reconciliation of Standardized Measure of Discounted Net Cash Flows to PV-10
Reconciliation of Standardized Measure of Discounted Net Cash Flows to PV-10 Successor Predecessor Proved Reserves Dec 31, 2016 Dec 31, 2015 ((in millions) Standardized measure of $ 438 $ 1,314 discounted net cash flows1 Present value of future net income - 1 tax expense discounted at 10% PV-102 $ 4
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