SANDRIDGE ENERGY, INC. ANNOUNCES FINANCIAL AND OPERATING RESULTS FOR THE THREE AND SIX-MONTH PERIODS ENDED JUNE 30, 2023, DECLARES $0.10 PER SHARE CASH DIVIDEND, AND PROVIDES CONFERENCE CALL INFORMATION

OKLAHOMA CITY, Aug. 2, 2023 /PRNewswire/ -- SandRidge Energy, Inc. (the "Company" or "SandRidge") (NYSE: SD) today announced financial and operational results for the three and six-month periods ended June 30, 2023.

Recent Highlights

• On August 1, 2023, the Board of Directors of the Company declared a $0.10 per share cash dividend payable on August 28, 2023 to shareholders of record on August 14, 2023
• On July 11, 2023, the Company closed an acquisition which increased the Company's working interest in twenty-six wells operated by SandRidge within the Northwest Stack play for approximately $11.3 million, with an effective date of April 1, 2023. Average net production associated with the acquired interests for the first quarter of 2023 was approximately 500 barrels of oil equivalent per day (~30% oil)
• Second quarter net income was $16.6 million, or $0.45 per basic share. Adjusted net income⁽¹⁾ was $14.0 million, or $0.38 per basic share
• Adjusted EBITDA⁽¹⁾ of $20.0 million in the second quarter
• Approximately $39.5 million of free cash flow⁽¹⁾ in the six-month period ended June 30, 2023, which represents a conversion rate of approximately 77% relative to adjusted EBITDA⁽¹⁾
• Approximately $2.9 million in interest income during the second quarter bringing the total for the first six months of 2023 to approximately $5.4 million
• Second quarter G&A was $2.5 million, or $1.55 per Boe and adjusted G&A⁽¹⁾ was approximately $1.9 million, or $1.21 per Boe
• On May 12, 2023, the Company announced a one-time cash dividend of $2.00 per share that was paid on June 7, 2023. At that time, the Company also announced plans for an on-going quarterly cash dividend of $0.10 per share, first payable in August 2023, subject to quarterly approval by the Board of Directors

Financial Results & Update

Profitability & Realized Pricing

For the three months ended June 30, 2023, the Company reported net income of $16.6 million, or $0.45 per basic share, and net cash provided by operating activities of $24.0 million. After adjusting for certain items, the Company's adjusted net income⁽¹⁾ amounted to $14.0 million, or $0.38 per basic share, adjusted operating cash flow⁽¹⁾ totaled $22.6 million and adjusted EBITDA⁽¹⁾ was $20.0 million for the quarter. The Company defines and reconciles adjusted net income, adjusted operating cash flow, adjusted EBITDA, and other non-GAAP financial measures to the most directly comparable Generally Accepted Accounting Principles in the United States ("GAAP") measure in supporting tables at the conclusion of this press release.

For the six-month period ended June 30, 2023, the Company generated approximately $39.5 million of free cash flow⁽¹⁾, which represents a conversion rate of approximately 77% relative to adjusted EBITDA.

Second quarter realized oil, natural gas, and natural gas liquids prices, before the impact of derivatives⁽²⁾, were $68.02 per Bbl, $1.31 per Mcf and $15.97 per Bbl, respectively. Realized oil, natural gas, and natural gas liquids prices, before the impact of derivatives⁽²⁾, for the six months ended June 30, 2023 were $70.99 per Bbl, $2.00 per Mcf and $20.19 per Bbl, respectively.

Operating Costs

During the second quarter of 2023, lease operating expense ("LOE") was $8.8 million or $5.53 per Boe, a decrease versus the prior quarter primarily due to a reduction in utility costs and lower workover expenses. Despite market driven inflationary pressures and higher production costs associated with more producing wells from the Company's well reactivation and development programs, LOE for the six-month period ended June 30, 2023 was kept relatively consistent, compared to the same period in 2022.

For the three months ended June 30, 2023, general and administrative expense ("G&A") was $2.5 million, or $1.55 per Boe. Adjusted G&A⁽¹⁾ was $1.9 million, or $1.21 per Boe.

Liquidity and Capital Structure

As of June 30, 2023, the Company had $224.0 million of cash and cash equivalents, including restricted cash, diversified across multiple financial institutions. The Company has no outstanding term or revolving debt obligations.

Dividend Program

On May 12, 2023, SandRidge announced a one-time cash dividend of $2.00 per share that was paid on June 7, 2023. At that time, the Company also announced plans for an on-going quarterly cash dividend of $0.10 per share, first payable in August 2023, subject to quarterly approval by the Board of Directors. On August 1, 2023, the Board of Directors of the Company declared a $0.10 per share cash dividend payable on August 28, 2023 to shareholders of record on August 14, 2023.

Working Interest Acquisition

On July 11, 2023, closed an acquisition which increased the Company's working interest in twenty-six wells operated by SandRidge within the Northwest Stack play for approximately $11.3 million, with an effective date of April 1, 2023. Average net production associated with the acquired interests for the first quarter of 2023 was approximately 500 barrels of oil equivalent per day (~30% oil). The low decline profile and oilier content associated with these properties and interests will further strengthen the Company's commodity price realizations, operating margins and cash flow.

Operational Results & Update

Production

Production totaled 1,593 MBoe (17.5 MBoed, 18% oil, 54% natural gas and 28% NGLs) for the three months ended June 30, 2023 compared to 1,620 MBoe (17.8 MBoed, 13% oil, 54% natural gas and 33% NGLs) for the three months ended June 30, 2022. SandRidge's recent capital development program has helped to sustain production levels, while increasing oil content as a percentage of total production.

Development Program

During the second quarter, SandRidge completed two wells targeting the Meramec formation in the core of the Northwest Stack play as part of its previously announced capital development program, concluding the program for the year. SandRidge will continue to monitor opportunities for future development, with its primary focus being to generate high rates of return. The higher oil content of its new Northwest Stack wells versus the Company's base production was the primary driver of SandRidge's oil production increasing by approximately 39% in the second quarter of 2023 versus the second quarter of 2022. This increases the Company's oil as a percentage of total production and enhances its commodity realizations.

Base Production Declines

During the first half of 2023, SandRidge completed ten artificial lift conversions as the Company continues to focus on high return and value-adding projects that provide benefits such as lowering forward-looking costs, enhancing or reactivating production on existing wells, and further supporting its modest decline profile. These focused efforts over recent quarters have helped lower SandRidge's expected annual base PDP decline to an average of ~8% over the next ten years. The Company continues to ensure that all projects meet high rate of return thresholds and remains capital disciplined as the commodity price landscape changes.

Outlook

SandRidge will continue to focus on growing the cash value and generation capability of its asset base in a safe, responsible and efficient manner, while exercising prudent capital allocations to projects it believes provide high rates of returns in the current commodity price outlook. These near-term projects will be focused on artificial lift conversions to more efficient and cost-effective systems, other capital-efficient workovers, and limited well reactivations, while preserving future development, and expanded well reactivations, benefited by our 99% held by production acreage position that extends the option value to initiate projects in favorable commodity price environments, to achieve high rates of return. The Company will continue to monitor forward-looking commodity prices, results, costs and other factors that could influence returns on investments, which will continue to shape its disciplined development decisions in 2023 and beyond.

SandRidge will also continue to maintain the optionality to execute on value accretive merger and acquisition opportunities that could bring synergies, leverage the Company's core competencies, complement its portfolio of assets, further utilize its approximately $1.6 billion of net operating losses ("NOLs"), or otherwise yield attractive returns for its shareholders.

Environmental, Social, and Governance ("ESG")

SandRidge maintains its Environmental, Social, and Governance ("ESG") commitment, to include no routine flaring of produced natural gas and transporting approximately 97% of its produced water via pipeline instead of truck. Additionally, SandRidge maintains an emphasis on the safety and training of our workforce. We have personnel dedicated to the close monitoring of our safety standards and daily operations.

Conference Call Information

The Company will host a conference call to discuss these results on Thursday, August 3, 2023 at 10:00 am CT. The conference call can be accessed by registering online in advance at https://conferencingportals.com/event/mIkSnMey at which time registrants will receive dial-in information as well as a conference ID. At the time of the call, participants will dial in using the participant number and conference ID provided upon registration. The Company's latest presentation is available on the Company's website at investors.sandridgeenergy.com/Investor-Relations/events.

A live audio webcast of the conference call will also be available via SandRidge's website, investors.sandridgeenergy.com, under Presentation & Events. The webcast will be archived for replay on the Company's website for at least 30 days.

Contact Information

Investor Relations
SandRidge Energy, Inc.
1 E. Sheridan Ave. Suite 500
Oklahoma City, OK 73104
[email protected]

About SandRidge Energy, Inc.

SandRidge Energy, Inc. (NYSE: SD) is an independent oil and gas company engaged in the development and acquisition of oil and gas properties. Its primary area of operations is the Mid-Continent region in Oklahoma and Kansas. Further information can be found at www.sandridgeenergy.com.

-Tables to Follow-

Operational and Financial Statistics

Information regarding the Company's production, pricing, costs and earnings is presented below (unaudited):

Capital Expenditures

The table below presents actual results of the Company's capital expenditures for the three-months ended June 30, 2023 (unaudited):

Capitalization

The Company's capital structure as of June 30, 2023 and December 31, 2022 is presented below: