KEYFACT Energy
SandRidge Energy announces financial and operational results for the quarter and fiscal year ended December 31, 2019.
- Results and highlights during the fourth quarter and full year 2019:
- Fourth quarter net loss of $249 million, or $7.01 per share, driven largely by a non-cash ceiling test write down, and adjusted net loss of $4 million, or $0.11 per share
- Fourth quarter adjusted EBITDA increased 24% quarter-over-quarter to $32 million
- Met or exceeded all 2019 operational guidance metrics
- Decreased G&A and adjusted G&A year-over-year by 21% and 19%, respectively, and beat the low end of adjusted G&A guidance by 7%
- North Park oil production increased 48% year-over-year and reached 52% of total company oil production for the fourth quarter
- Proved reserves of 90 MMBoe at December 31, 2019 with Standardized Measure and PV-10 of $364 million
John Suter, Interim President and CEO commented,
"This was a challenging year for SandRidge with financial results impacted by low and volatile commodity prices, particularly with regard to Mid-Continent natural gas and NGL realizations. To adapt, we adjusted capital spending for the fourth quarter by deferring projects to minimize outspend and generate moderate free cash flow. Even with the deferral of fourth quarter projects, we delivered within or exceeded all operational guidance metrics. Entering 2020, we remain focused on our strategy to maximize value for our shareholders by relentlessly driving cost reduction and pursuing only high return opportunities. Our reduced capital spending plan is expected to generate positive free cash flow assuming $53 per Bbl and $2.15 per MMBtu. We continue to remain flexible with contingent development plans should commodity prices improve."
Financial Results
Fourth Quarter
For the fourth quarter, the Company reported a net loss of $249 million, or $7.01 per share, and net cash provided by operating activities of $26 million. After adjusting for certain items, the Company's adjusted net loss amounted to $4 million, or $0.11 per share, operating cash flow totaled $31 million and adjusted EBITDA was $32 million for the quarter. The Company defines and reconciles adjusted net income, adjusted EBITDA and other non-GAAP financial measures to the most directly comparable GAAP measure in supporting tables at the conclusion of this press release beginning on page 11.
Full Year
For the full year of 2019, the Company reported a net loss of $449 million, or $12.68 per share, and net cash provided by operating activities of $121 million. After adjusting for certain items, the Company's adjusted net loss amounted to $30 million, or $0.85 per share, operating cash flow totaled $129 million and adjusted EBITDA was $135 million for the year.
Operational Results and Activity
Production totaled 2.7 MMBoe (31% oil, 21% NGLs and 48% natural gas) for the fourth quarter and 12.0 MMBoe (30% oil, 24% NGLs and 46% natural gas) for the full year of 2019. The Company did not bring any new wells to sales during the fourth quarter.
North Park Basin Asset in Jackson County, Colorado
Net production for North Park Basin totaled 445 MBoe (4.8 MBoepd) during the fourth quarter and 1.5 MMBoe (4.2 MBoepd) for the year. During 2019, the Company drilled ten wells and brought sixteen wells to sales which progressed both well spacing and delineation of the play. Nine of these wells were involved in two different spacing pattern tests, one with a twenty-three wells-per-section pattern and the other with a fifteen wells-per-section pattern. The results help optimize full field development planning in the future.
Mid-Continent Assets in Oklahoma and Kansas
Production in the Mississippian totaled 2.1 MMBoe (22.5 MBoepd, 16% oil) during the fourth quarter and 9.4 MMBoe (25.8 MBoepd, 16% oil) for the year. Production in Northwest STACK totaled 201 MBoe (2.2 MBoepd, 38% oil) during the quarter and 1.0 MMBoe (2.8 MBoepd, 44% oil) for the year. During 2019, the Company drilled eleven wells and brought fourteen wells to sales in the Northwest STACK.
Year End 2019 Estimated Proved Reserves
Proved reserves decreased from 160 MMBoe at December 31, 2018 to 90 MMBoe at December 31, 2019, primarily due to downward revisions associated with the decrease in year-over-year SEC commodity pricing. Approximately 70% or 49 MMBoe of the total reserves decrease is due to SEC pricing and increased commodity price differentials. The remaining reserve decrease primarily resulted from a combination of downgrading PUDs due to a revised drilling schedule, production, modest performance revisions and well shut-ins during 2019. Proved developed reserves made up 69% of the Company's 2019 estimated proved reserves and 31% were classified as proved undeveloped. The Company's Standardized Measure and PV-10 at December 31, 2019 was $364 million utilizing SEC pricing of $55.69 per Bbl for oil and $2.58 per MMBtu for natural gas, before adjustments.
2020 Capital Expenditures and Operational Guidance
In 2020, the Company plans to spend $25 - $30 million in total capital expenditures allocated between the North Park Basin and Mid-Continent. With this capital plan, the Company expects to be free cash flow positive assuming $53 per Bbl and $2.15 per MMBtu. Total production for 2020 is projected to be 7.7 - 8.6 MMBoe. With this plan, the Company intends to reduce debt and maintain a clean balance sheet.
Liquidity and Capital Structure
As of February 21, 2020, the Company's total liquidity was $176 million, based on $3 million of cash and $173 million available under its credit facility, net of outstanding letters of credit. The Company currently has $49 million drawn on the facility.
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