SandRidge Energy, Inc. · NYSE:SD
SandRidge Energy — FY2014 Earnings Presentation
21 slides from SandRidge Energy's earnings presentation, Feb 26, 2015
Slide 1: Oe Zi gt gh
a Oe Zi gt gh _ THURSDAY, FEBRUARY 26, 20:5 se: =~ ‘iced
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: Actions to Thrive in Lower Price Environment
ACTIONS TO THRIVE IN LOWER PRICE ENVIRONMENT SUCCESS DEMONSTRATED BY HITTING GROWTH GUIDANCE AND ADDING RESERVES • Reserves up 37%, PUD type curve up 27% • 2014 production of 29 MMBoe, 1% over guidance; MidCon grew 47% YOY to Q4’14 76 MBoe/d IMPROVED CAPITAL EFFICIENCY THROUGH 2015 AND INTO 2016 • $
Slide 4: 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 comparable
Slide 5: 2015 Capex of $700MM vs. $1.6B in 2014
2015 CAPEX OF $700MM VS. $1.6B IN 2014 PLANNED SPEND AND RESULT PRINCIPLES $700MM Capex budget Drilling projects must generate hurdle returns at strip pricing 28.0-30.5 MMBoe guided production Unlock value in this market ~ 6% Year-over-Year volume growth • Efficiency gains • Service cost reductions
Slide 6: Year End Proved Reserves +37%
YEAR END PROVED RESERVES +37% • 516 MMBoe (+37% YOY) • All-in F&D $9.00/Boe RESERVES GROWTH • $5.5B SEC PV-10(a)(+34% YOY) • 42% Liquids Mix • $3.3B PV-10(b) at Strip • $10.69 Proven Value/Boe(a) • 604% All-in Reserve Replacement • 18.7 Years Reserve Life • 65% Proved Developed • 12.2 Years Proved D
Slide 7: 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 As of
Slide 8: Meaningful Well Cost Reductions
MEANINGFUL WELL COST REDUCTIONS EFFICIENCY GAINS • Rig efficiency • Location high-grading • Wellbore + completion design SERVICE COSTS • Rig rates • Directional drilling • Stimulation • Liner packer system • ESPs MULTILATERAL EXPANSION • 40% multilaterals • 85% of the cost of single laterals for 100
Slide 9: New Costs and EURs Preserve Prior Returns
NEW COSTS AND EURs PRESERVE PRIOR RETURNS 27% More EUR for 80% of the Cost • At target lateral cost of $2.4MM and 2015 type curve, wells generate ~45% IRRs at recent strip, hedges excluded • Returns for these new costs and type curve are comparable to returns from 2014 program ($3MM lateral cost, 20
Slide 10: Capitalizing on Proven Innovation
CAPITALIZING ON PROVEN INNOVATION 100% of 90-Day Type Curve Production for 85% of the Cost of a Single Lateral ACTIVITY AND SUCCESS IN 2014 • Sole multilateral operator in the Midcontinent • Multilateral program consisted of 28 projects with average completed well costs of $2.6MM per lateral • Wells
Slide 11: Multi-Zone Drilling Locations and 2015 Activity
MULTI-ZONE DRILLING LOCATIONS AND 2015 ACTIVITY Ramp Down to 6 Development Rigs + 1 Committed to Appraisal New Ventures DRILLING LOCATION INFORMATION MISS CHESTER WOODFORD* Producing Laterals 1375 35 5 ( As of February 2015) Peak 30-Day Boe 365 369 418 Future Locations (a) 3212 401 147 * Wells devel
Slide 12: Capital Structure Focus
CAPITAL STRUCTURE FOCUS FINANCIAL POSITION • Ample Liquidity – $900MM borrowing base CAPITAL DISCIPLINE – New senior secured covenant (2.25x EBITDA beginning 3/31/15) • Capex Set at $700MM – No bond maturities before 2020 • Capital Efficiency Gains – Operational Improvements – Service Cost Reduction
Slide 13: Appendix
FY SANDRIDGE APPENDIX
Slide 14: 2015 Production Guidance
2015 PRODUCTION GUIDANCE (a) 2014: 1.3 MMBoe of non-recurring production related to divested GOM assets Note: Totals may not foot due to rounding SandRidgeEnergy.com 14 14
Slide 15: Capital Structure Overview
CAPITAL STRUCTURE OVERVIEW Senior Notes ($ 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 16: Strong Hedge Position
STRONG HEDGE POSITION • As of 02.25.2015 • Positions displayed include royalty trusts, but are exclusive of basis hedges. • Liquids hedged to NYMEX WTI; Natural Gas hedged to NYMEX Henry Hub; NGL barrels hedged at 3:1 ratio to WTI. SandRidgeEnergy.com 16 1623
Slide 17: Saltwater Gathering & Disposal (SWG)
SALTWATER GATHERING & DISPOSAL (SWG) PRODUCE MOST EFFICIENT SWG OPERATOR • ~1.3 million barrels of water gathered and disposed per day IN THE MIDCONTINENT: during Q4‘14 in the Mid-Continent and Permian Basin • Average capacity of 15,000 Bw/d per well GATHER & PROCESS – Low pressure pumps at most loc
Slide 18: Largest Saltwater Gathering System in the Nation
LARGEST SALTWATER GATHERING SYSTEM IN THE NATION Hydraulic Modeling and Engineered Process Achieved >99% Pipe Efficiency • 1,260 MBw/d current volumes • 191 SWG wells • 1,049 miles of installed pipelines • Advanced hydraulic simulation • Resembles hydrocarbon gathering and processing system • Design
Slide 19: 2015 Operational Guidance
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 Liquids (MMB
Slide 20: 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 21: 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