SandRidge Energy, Inc. · NYSE:SD
SandRidge Energy — Goldman Sachs Global Energy Conference 2015
31 slides from SandRidge Energy's conference presentation, January 2015
Slide 1: Goldman Sachs Global Energy Conference
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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: Premier Mid-Continent Company
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: SandRidge Company Overview
SANDRIDGE COMPANY OVERVIEW MARKET VALUE ($ in millions) SD Quick Facts Focus Area Asset Map Market Cap (1/5/2015) $742 • Fractured Carbonate Focus Net Debt(a) 2,605 • Mid-Continent, Horizontal Preferred Stock 565 Mississippian Leader Enterprise Value $3,912 • Sub-$3.0MM/well, 380 MBoe EUR ASSET OVER
Slide 5: Lower Prices Influence 2015 Activity, Tactics, and Costs
LOWER PRICES INFLUENCE 2015 Activity, Tactics, and Costs FOCUSED Finalizing 2015 Capital Budget Plans, Will Announce in February • Strong liquidity and hedging plus reduced capital spending − $900MM credit facility fully undrawn; material 2015 liquids hedging − Reducing rig count, high-grading locat
Slide 6: SandRidge Energy Scale & Operation
SANDRIDGE ENERGY SCALE & OPERATION Scale, Focus, Discipline FOCUS Activity • Q3 2014 total company production of 80 MBoe/d, with 67 MBoe/d in Midcontinent • Mississippian position of 670,000 core acres, 55% HBP • ~30 active rigs, >400 horizontal laterals per year • ~40% production growth year-over-y
Slide 7: SandRidge Energy Strategy & Asset Overview
SANDRIDGE ENERGY STRATEGY & Midcontinent Scale, Capability and Upside ASSET OVERVIEW • Mississippian development leader: high capacity to execute on large scale stacked pay acreage footprint • Cost focus (per lateral, with facility and infrastructure efficiencies and asset value) • New Ventures: adj
Slide 8: Growth Platform with Upsides
GROWTH PLATFORM WITH UPSIDES FOCUSED Significant Acreage Position Stacked Oily Pay Zones Improving Already Strong Returns www.SandRidgeEnergy.com 8 8
Slide 9: 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 per Mid-Continent single lateral – $700M decrease in well cost since 2012 – 100% electric submersible pump (ESP) implementation rate in Q3’14 • Primary
Slide 10: Well Costs Continue to Improve
WELL COSTS CONTINUE TO IMPROVE Plan $2.8mm For 2015 and Lower In 2016 FOCUSED • Continuous improvement has reduced well costs from $3.6MM in 2012 to $2.9MM in 2014 • Multilaterals are now ~20% of the program, recently at $2.4MM per lateral • Continued cost control initiatives plus less cost pressure
Slide 11: 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 – Expand focus areas • Value enhancing projects in motion – Completion tech
Slide 12: 2014 Mississippian PUD Type Curve
2014 MISSISSIPPIAN PUD TYPE CURVE Actual Performance Consistently Above Type Curve FOCUSED Oil: 118 MBo 30 Day IP (Bo/day) 176 1st Year Decline(a) 80% B Factor 1.41 NGL: 64 MBbls Yield (Bbls/MMcf) 47.5 Shrink 87.3% GAS: 1.2 Bcf 30 Day IP(b) (Mcf/day) 848 1st Year Decline(a) 65% B Factor 1.83 a) Repr
Slide 13: Mississippian Well Performance
MISSISSIPPIAN WELL PERFORMANCE MULTI-YEAR Continued Improvement GROWTH Type Curve 849 Mcf/d Type Curve 176 Bbl/d www.SandRidgeEnergy.com 13 13
Slide 14: 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 15: 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 1,150 Chester Middle Miss HZ Wells to Sales 35 HZ Wells to Sales 161 Woodford
Slide 16: New Ventures Case Study: Chester Oil Development
NEW VENTURES CASE STUDY INNOVATION Chester Oil Development • Horizontal development of legacy vertical production • Fine grained silty sandstone, 2 distinct pay intervals • Existing infrastructure in area • Higher oil cut and less water production than Miss carbonates • Stacked lateral potential (Ch
Slide 17: Applying Seismic Technology
APPLYING SEISMIC TECHNOLOGY INNOVATION Understanding the Rock +25% of core counties with 3d coverage +45% of ok core counties with 3d coverage 2013 - 730 square miles of 3D data acquired 2014 - 1,070 square miles of new 3D data acquired KS OK Main fault trend 3d seismic reveals: • Fractures • Faulti
Slide 18: 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 19: Full Section Development Offers 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 single Full Section Development laterals • Rock integrity of our carbonates (vs shales or sandstones elsewhere)
Slide 20: Full Section Development Case Study
FULL SECTION DEVELOPMENT CASE STUDY INNOVATION $2.1 MM Per Lateral, Over 4x Type Curve From 4 Laterals Kirkpatrick Farms: First FSD Well, $8.32MM Well Cost Peak 30-Day IP: 1,086 Boe/d (60% Oil) • Development Model: – Full section development candidates are areas with geologically and economically pr
Slide 21: Saltwater Gathering & Disposal (SWG) Upsides
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
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Slide 23: Q3'14 Continued Strong Well Results
Q3’14 – CONTINUED STRONG WELL RESULTS APPENDIX 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 24: 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 24 24
Slide 25: Credit Profile
CREDIT PROFILE APPENDIX Ability to Maintain Adequate Liquidity, Reasonable Leverage • ~$1.5 Bln liquidity at Q3’14 – $590MM cash – Fully undrawn credit facility of $900MM(c) • 3.4x Q3’14 leverage ratio • Significant oil hedges at strong prices provide cash flow stability and visibility • Contains No
Slide 26: Capital Structure Overview
CAPITAL STRUCTURE OVERVIEW APPENDIX No Principle Currently Due until 2020 Senior Notes ($ in millions) Preferred Stock ($ in millions) 8.75% Sr Notes due 2020 $445 8.5% Convertible Perpetual Preferred (a) $265 7.5% Sr Notes due 2021 1,179 7.0% Convertible Perpetual Preferred (b) 300 8.125% Sr Notes
Slide 27: Hedging Overview
HEDGING OVERVIEW APPENDIX Liquids Q1 2015 Q2 2015 Q3 2015 Q4 2015 2015 2016 Swaps Volumes (MMBbls) 2.29 To be updated 1.73 1.01 0.55 5.59 1.46 Price ($/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 $
Slide 28: 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 29: 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 Cumulative Production (Mboe) 160 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 30: 2014 Operational Guidance Update
2014 OPERATIONAL GUIDANCE UPDATE APPENDIX a) EBITDA from Oilfield Services and Other is a non-GAAP financial measure as it excludes from net income interest PRODUCTION PRICE REALIZATIONS expense, income tax expense and depreciation, depletion Oil (MMBbls) 10.8 - 11.2 Oil (differential below WTI) $2.
Slide 31: 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 [email protected] www.SandRidgeEnergy.com
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