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Form 10-K
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þ
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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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¨
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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SANDRIDGE ENERGY, INC.
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(Exact name of registrant as specified in its charter)
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Delaware
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20-8084793
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(State or other jurisdiction of
incorporation or organization)
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(I.R.S. Employer
Identification No.)
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123 Robert S. Kerr Avenue
Oklahoma City, Oklahoma
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73102
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(Address of principal executive offices)
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(Zip Code)
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(405) 429-5500
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(Registrant’s telephone number, including area code)
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Securities registered pursuant to Section 12(b) of the Act:
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Title of Each Class
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Name of Each Exchange on Which Registered
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Common Stock, $0.001 par value
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New York Stock Exchange
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Securities registered pursuant to Section 12(g) of the Act:
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None
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Large accelerated filer
þ
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Accelerated filer
o
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Non-accelerated filer
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(Do not check if smaller reporting company)
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Smaller reporting company
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Item
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Page
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PART I
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1.
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1A.
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1B.
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2.
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3.
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4.
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PART II
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5.
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6.
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7.
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7A.
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8.
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9.
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9A.
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9B.
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PART III
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10.
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11.
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12.
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13.
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14.
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PART IV
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15.
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•
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risks associated with drilling oil and natural gas wells;
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•
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the volatility of oil, natural gas and NGL prices;
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•
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uncertainties in estimating oil, natural gas and NGL reserves;
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•
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the need to replace the oil, natural gas and NGLs the Company produces;
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the Company’s ability to execute its growth strategy by drilling wells as planned;
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the amount, nature and timing of capital expenditures, including future development costs, required to develop the Company’s undeveloped areas;
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concentration of operations in the Mid-Continent region of the United States;
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economic viability of certain natural gas production in west Texas due to high CO
2
content;
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•
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risks associated with obligations to deliver minimum volumes of natural gas and/or CO
2
under long-term contracts, including the risk that the Company will incur significant monetary penalties for under-delivery;
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•
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limitations of seismic data;
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•
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the potential adverse effect of commodity price declines on the carrying value of the Company’s oil and natural properties;
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severe or unseasonable weather that may adversely affect production;
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availability of satisfactory oil, natural gas and NGL marketing and transportation;
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availability and terms of capital to fund capital expenditures;
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amount and timing of proceeds of asset monetizations;
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substantial existing indebtedness and limitations on operations resulting from debt restrictions and financial covenants;
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potential financial losses or earnings reductions from commodity derivatives;
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potential elimination or limitation of tax incentives;
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competition in the oil and natural gas industry;
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general economic conditions, either internationally or domestically or in the areas where the Company operates;
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costs to comply with current and future governmental regulation of the oil and natural gas industry, including environmental, health and safety laws and regulations, and regulations with respect to hydraulic fracturing and the disposal of produced water; and
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the need to maintain adequate internal control over financial reporting.
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Concentrate in Core Operating Area.
The Company’s primary area of operation is the Mid-Continent area of Oklahoma and Kansas. By concentrating in this core area, the Company is able to (i) further build and utilize its technical expertise in order to interpret geological and operational opportunities, (ii) achieve economies of scale and breadth of operations, both of which help to control costs, (iii) take advantage of investments in infrastructure including electrical delivery and saltwater gathering and disposal systems and (iv) opportunistically grow its holdings through acquisitions, farmouts and operations in this area to achieve production and reserve growth. Additionally, as operator of a majority of its wells, the Company has flexibility to utilize these competitive advantages to deliver strong, sustainable returns.
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Preservation of Capital in Depressed Commodity Pricing Environment.
Volatility of pricing can significantly impact the amount of revenue received for oil and natural gas production and the level of economic returns the Company receives for amounts invested in its exploration and development activities. Over time, costs to drill, complete and operate wells typically adjust to prevailing commodity price levels, resulting in improved and more certain returns; however, during periods of depressed oil and natural gas pricing, such as was experienced during the second half of 2014 and is currently being experienced, the Company preserves capital and liquidity by contracting its capital expenditures budget and high-grading locations for development. During such times, the Company uses its decreased budgeted funds to capitalize on in place infrastructure, such as the Company’s saltwater gathering and disposal and electrical systems, by focusing drilling efforts on locations that can most effectively make use of this existing infrastructure. Additionally, exploration programs are conducted within a high-graded inventory of locations that have a greater certainty of economic returns. The Company’s 2015 capital expenditures budget is approximately $660 million, with approximately $610 million designated for exploration and production activities. This compares to 2014 total capital expenditures of approximately $1.6 billion and exploration and development capital expenditures of approximately $1.5 billion.
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Focus on Cost Efficiency and Capital Allocation
. By leveraging its experienced workforce, scalable operational structure and infrastructure systems, the Company is able to achieve cost efficiencies and sustainable returns in the Mid-Continent area. With a focus on lower-risk, high rate of return and repeatable drilling opportunities with long economic lives, the Company has made improvements in its completion designs, well site production facilities, utilization of pad drilling and spud-to-spud cycle time to further reduce its cost structure in the Mid-Continent. Further, due to the low pressure and shallow characteristics of the reservoirs the Company develops, the Company is able to maintain a low-cost operating structure and manage service costs.
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Mitigate Commodity Price Risk
. The Company enters into derivative contracts to mitigate a portion of the commodity price volatility inherent in the oil and natural gas industry. By increasing the predictability of cash inflows for a portion of its future production, as it has for 2015, the Company is better able to mitigate funding risks for its longer term development plans and lock-in rates of return on its capital projects.
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Asset Monetization.
The Company periodically evaluates its properties to identify opportunities to monetize assets and may use proceeds realized from such transactions to fund the drilling and development of its core area, for general corporate purposes or to retire corporate debt.
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Develop Key Infrastructure Systems.
By constructing a saltwater gathering and disposal system and electrical delivery system to service its Mid-Continent properties, the Company is able to produce oil and natural gas more efficiently and, therefore, more economically, giving it a competitive advantage over other operators in this rural area.
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Focus on Reservoirs with Known Hydrocarbon Production
. The Company focuses its development efforts primarily in conventional, shallow, low-cost, permeable carbonate reservoirs with decades of production history. The nature of these reservoirs allows the Company to execute low-risk, repeatable drilling programs.
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Maintain Flexibility.
The Company has multi-year inventories of both oil and natural gas drilling locations within its core operating area. Additionally, the Company maintains its own fleet of drilling rigs through its wholly owned drilling rig business. Maintaining inventories of both oil and natural gas drilling locations as well as its own drilling rigs allows the Company to efficiently direct capital toward projects with the most attractive returns.
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Pursue Opportunistic Acquisitions
. The Company periodically reviews acquisition targets to complement its existing asset base. The Company selectively identifies such targets based on several factors including relative value, hydrocarbon mix and location and, when appropriate, seeks to acquire them at a discount to other opportunities.
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Estimated Net
Proved
Reserves
(MMBoe)
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PV-10
(In millions)(1)
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Daily
Production
(MBoe/d)(2)
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Reserves/
Production
(Years)(3)
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Gross
Acreage
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Net
Acreage
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Capital Expenditures (In millions) (4)
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Area
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Mid-Continent
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454.4
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$
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5,071.0
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79.3
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15.7
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2,077,875
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1,486,504
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$
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1,292.4
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West Texas
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61.5
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445.4
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10.5
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16.0
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98,286
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71,490
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191.2
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Total
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515.9
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$
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5,516.4
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89.8
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15.7
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2,176,161
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1,557,994
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$
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1,483.6
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(1)
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For a reconciliation of PV-10 to Standardized Measure, see “—Proved Reserves.” The Company’s total Standardized Measure was
$4.1 billion
at
December 31, 2014
.
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(2)
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Average daily net production for the month of December 2014.
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(3)
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Estimated net proved reserves as of
December 31, 2014
divided by production for the month of December 2014 annualized.
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(4)
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Capital expenditures for the year ended
December 31, 2014
on an accrual basis.
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•
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the quality and quantity of available data and the engineering and geological interpretation of that data;
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estimates regarding the amount and timing of future costs, which could vary considerably from actual costs;
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the accuracy of economic assumptions such as the future price of oil and natural gas; and
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the judgment of the personnel preparing the estimates.
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no employee’s compensation is tied to the amount of reserves recorded.
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reserves estimates are prepared by experienced reservoir engineers or under their direct supervision.
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the Senior Vice President—Corporate Reservoir Engineering reports directly to the Company’s Chief Executive Officer.
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the Reservoir Engineering Department follows comprehensive SEC-compliant internal policies to determine and report proved reserves including:
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confirming that reserves estimates include all properties owned and are based upon proper working and net revenue interests;
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reviewing and using in the estimation process data provided by other departments within the Company such as Accounting; and
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comparing and reconciling internally generated reserves estimates to those prepared by third parties.
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Geographic Locations—by Area by State
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Cawley, Gillespie & Associates, Inc.
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Mid-Continent - KS, OK
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Netherland, Sewell & Associates, Inc.
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Permian Basin—TX
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more than 27 years of practical experience in petroleum engineering and more than 25 years of experience estimating and evaluating reserve information;
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a registered professional engineer in the state of Texas; and
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a Bachelor of Science Degree in Petroleum Engineering.
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practicing consulting petroleum engineering since 2013 and over 14 years of prior industry experience;
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licensed professional engineers in the state of Texas; and
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Bachelor of Science Degree in Chemical Engineering
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more than 58 years of practical experience in petroleum engineering and more than 54 years estimating and evaluating reserve information;
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•
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a registered professional engineer in the state of Oklahoma; and
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•
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a Bachelor of Science Degree in Petroleum Engineering.
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December 31,
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2014
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2013
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2012
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Estimated Proved Reserves(1)
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Developed
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Oil (MMBbls)
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79.0
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83.9
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136.6
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NGL (MMBbls)
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56.8
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35.8
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33.8
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Natural gas (Bcf)
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1,203.4
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951.6
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896.7
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Total proved developed (MMBoe)
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336.4
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278.3
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319.9
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Undeveloped
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Oil (MMBbls)
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47.0
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58.7
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125.4
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NGL (MMBbls)
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35.0
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23.3
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34.2
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Natural gas (Bcf)
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584.8
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438.8
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518.3
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Total proved undeveloped (MMBoe)
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179.5
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155.1
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246.0
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Total Proved
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Oil (MMBbls)
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126.0
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142.6
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262.0
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NGL (MMBbls)
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91.8
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59.1
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68.0
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Natural gas (Bcf)
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1,788.2
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1,390.4
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1,415.0
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Total proved (MMBoe)(2)
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515.9
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433.4
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565.9
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PV-10 (in millions)(3)
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$
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5,516.4
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$
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5,191.6
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$
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7,488.4
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Standardized Measure of Discounted Net Cash Flows (in millions)(2)(4)
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$
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4,087.8
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$
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4,017.6
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$
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5,840.4
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(1)
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The Company’s estimated proved reserves and the future net revenues, PV-10 and Standardized Measure were determined using prices calculated as a 12-month unweighted average of the first-day-of-the-month index price for each month of each year. All prices are held constant throughout the lives of the properties. The index prices and the equivalent weighted average wellhead prices used in the Company’s reserve reports are shown in the table below.
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Index prices (a)
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Weighted average
wellhead prices (b)
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Oil
(per Bbl) |
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Natural gas
(per Mcf) |
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Oil
(per Bbl)(c)
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NGL (per Bbl)
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Natural gas
(per Mcf)
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||||||||||
December 31, 2014
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$
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91.48
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$
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4.35
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$
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91.65
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$
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32.79
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$
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3.61
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December 31, 2013
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$
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93.42
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$
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3.67
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$
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95.67
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$
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31.40
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$
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3.65
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December 31, 2012
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$
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91.21
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$
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2.76
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$
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91.65
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$
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32.64
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$
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2.29
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(a)
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Index prices are based on average West Texas Intermediate posted prices for oil and average Henry Hub spot market prices for natural gas.
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(b)
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Average adjusted volume-weighted wellhead product prices reflect adjustments for transportation, quality, gravity, and regional price differentials.
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(c)
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At December 31, 2013 and 2012, the weighted average wellhead oil price is significantly higher than the index price as a result of favorable location differentials for production in the Gulf of Mexico.
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(2)
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Estimated total proved reserves and Standardized Measure include amounts attributable to noncontrolling interests, as shown in the following table:
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(3)
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PV-10 is a non-GAAP financial measure and represents the present value of estimated future cash inflows from proved oil, natural gas and NGL reserves, less future development and production costs, discounted at 10% per annum to reflect timing of future cash flows and using 12-month average prices for the years ended
December 31, 2014
,
2013
and
2012
. PV-10 differs from Standardized Measure because it does not include the effects of income taxes on future net revenues. Neither PV-10 nor Standardized Measure represents an estimate of fair market value of the Company’s oil and natural gas properties. PV-10 is used by the industry and by the Company’s management as an arbitrary reserve asset value measure to compare against past reserve bases and the reserve bases of other business entities. It is useful because its calculation is not dependent on the taxpaying status of the entity. The following table provides a reconciliation of the Company’s Standardized Measure to PV-10:
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December 31,
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2014
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2013
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2012
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(In millions)
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Standardized Measure of Discounted Net Cash Flows
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$
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4,087.8
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$
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4,017.6
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$
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5,840.4
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Present value of future income tax discounted at 10%
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1,428.6
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1,174.0
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1,648.0
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PV-10
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$
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5,516.4
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$
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5,191.6
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$
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7,488.4
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(4)
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Standardized Measure represents the present value of estimated future cash inflows from proved oil, natural gas and NGL reserves, less future development and production costs, and income tax expenses, discounted at 10% per annum to reflect timing of future cash flows and using the same pricing assumptions used to calculate PV-10. Standardized Measure differs from PV-10 as Standardized Measure includes the effect of future income taxes.
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Year Ended December 31,
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2014
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2013
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2012
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Reserves converted from proved undeveloped to proved developed (MMBoe)
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31.4
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44.6
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42.6
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Drilling capital expended to convert proved undeveloped reserves to proved developed reserves (in millions)
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$
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343.6
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$
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437.6
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$
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718.2
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Oil
(MBbls)
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NGL (MBbls)
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Natural Gas
(MMcf)
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Total
(MBoe)
|
||||
Year Ended December 31, 2014
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||||
Mississippi Lime Horizontal
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8,234
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|
|
3,470
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|
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65,839
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22,677
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Year Ended December 31, 2013
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Mississippi Lime Horizontal
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6,901
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1,311
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|
|
52,618
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|
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16,982
|
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Year Ended December 31, 2012
|
|
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Mississippi Lime Horizontal
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4,536
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|
100
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|
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33,034
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|
|
10,142
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Fuhrman-Mascho
|
4,104
|
|
|
561
|
|
|
1,768
|
|
|
4,960
|
|
|
Year Ended December 31,
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||||||||||
|
2014
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|
2013
|
|
2012
|
||||||
Production Data
|
|
|
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|
||||||
Oil (MBbls)
|
10,876
|
|
|
14,279
|
|
|
15,868
|
|
|||
NGL (MBbls)
|
3,794
|
|
|
2,291
|
|
|
2,094
|
|
|||
Natural gas (MMcf)
|
85,697
|
|
|
103,233
|
|
|
93,549
|
|
|||
Total volumes (MBoe)
|
28,953
|
|
|
33,776
|
|
|
33,553
|
|
|||
Average daily total volumes (MBoe/d)
|
79.3
|
|
|
92.5
|
|
|
91.7
|
|
|||
Average Prices(1)
|
|
|
|
|
|
||||||
Oil (per Bbl)
|
$
|
89.86
|
|
|
$
|
97.58
|
|
|
$
|
91.79
|
|
NGL (per Bbl)
|
$
|
33.41
|
|
|
$
|
35.16
|
|
|
$
|
33.10
|
|
Natural gas (per Mcf)
|
$
|
3.70
|
|
|
$
|
3.36
|
|
|
$
|
2.49
|
|
Total (per Boe)
|
$
|
49.08
|
|
|
$
|
53.89
|
|
|
$
|
52.43
|
|
(1)
|
Prices represent actual average prices for the periods presented and do not include effects of derivative transactions.
|
|
Year Ended December 31,
|
||||||||||
|
2014
|
|
2013
|
|
2012
|
||||||
Expenses per Boe
|
|
|
|
|
|
||||||
Lease operating expenses
|
|
|
|
|
|
||||||
Transportation
|
$
|
1.23
|
|
|
$
|
1.29
|
|
|
$
|
0.89
|
|
Processing, treating and gathering(1)
|
1.16
|
|
|
1.05
|
|
|
1.18
|
|
|||
Other lease operating expenses(2)
|
9.27
|
|
|
12.60
|
|
|
11.56
|
|
|||
Total lease operating expenses
|
$
|
11.66
|
|
|
$
|
14.94
|
|
|
$
|
13.63
|
|
Production taxes(3)
|
$
|
1.10
|
|
|
$
|
0.96
|
|
|
$
|
1.41
|
|
Ad valorem taxes
|
$
|
0.29
|
|
|
$
|
0.35
|
|
|
$
|
0.59
|
|
(1)
|
Includes costs attributable to gas treatment to remove CO
2
and other impurities from natural gas.
|
(2)
|
The years ended
December 31, 2014
,
2013
and 2012 include
$33.9 million
,
$32.7 million
and $8.5 million, respectively, for amounts related to the Company’s shortfall in meeting its annual CO
2
delivery obligations under a CO
2
treating agreement as described under “—Properties—West Texas” above.
|
(3)
|
Net of severance tax refunds.
|
|
Oil
|
|
Natural Gas
|
|
Total
|
||||||||||||
|
Gross
|
|
Net
|
|
Gross
|
|
Net
|
|
Gross
|
|
Net
|
||||||
Area
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Mid-Continent
|
1,922
|
|
|
1,158.3
|
|
|
515
|
|
|
226.2
|
|
|
2,437
|
|
|
1,384.5
|
|
West Texas
|
1,268
|
|
|
1,246.4
|
|
|
781
|
|
|
750.3
|
|
|
2,049
|
|
|
1,996.7
|
|
Total
|
3,190
|
|
|
2,404.7
|
|
|
1,296
|
|
|
976.5
|
|
|
4,486
|
|
|
3,381.2
|
|
|
Developed Acreage
|
|
Undeveloped Acreage
|
||||||||
|
Gross
|
|
Net
|
|
Gross
|
|
Net
|
||||
Area
|
|
|
|
|
|
|
|
||||
Mid-Continent
|
634,701
|
|
|
416,010
|
|
|
1,443,174
|
|
|
1,070,494
|
|
West Texas
|
56,120
|
|
|
49,871
|
|
|
42,166
|
|
|
21,619
|
|
Total
|
690,821
|
|
|
465,881
|
|
|
1,485,340
|
|
|
1,092,113
|
|
|
Acres Expiring
|
||||
|
Gross
|
|
Net
|
||
Twelve Months Ending
|
|
|
|
||
December 31, 2015
|
390,675
|
|
|
280,021
|
|
December 31, 2016
|
576,271
|
|
|
423,579
|
|
December 31, 2017
|
341,661
|
|
|
264,902
|
|
December 31, 2018 and later
|
13,735
|
|
|
11,528
|
|
Other(1)
|
162,998
|
|
|
112,083
|
|
Total
|
1,485,340
|
|
|
1,092,113
|
|
(1)
|
Leases remaining in effect until development efforts or production on the developed portion of the particular lease has ceased.
|
|
2014
|
|
2013
|
|
2012
|
||||||||||||||||||||||||||||||
|
Gross
|
|
Percent
|
|
Net
|
|
Percent
|
|
Gross
|
|
Percent
|
|
Net
|
|
Percent
|
|
Gross
|
|
Percent
|
|
Net
|
|
Percent
|
||||||||||||
Completed Wells
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Development
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Productive
|
626
|
|
|
97.5
|
%
|
|
482.3
|
|
|
97.4
|
%
|
|
607
|
|
|
98.1
|
%
|
|
482.3
|
|
|
98.1
|
%
|
|
1,054
|
|
|
99.8
|
%
|
|
930.9
|
|
|
99.8
|
%
|
Dry
|
16
|
|
|
2.5
|
%
|
|
13.0
|
|
|
2.6
|
%
|
|
12
|
|
|
1.9
|
%
|
|
9.5
|
|
|
1.9
|
%
|
|
2
|
|
|
0.2
|
%
|
|
1.7
|
|
|
0.2
|
%
|
Total
|
642
|
|
|
100.0
|
%
|
|
495.3
|
|
|
100.0
|
%
|
|
619
|
|
|
100.0
|
%
|
|
491.8
|
|
|
100.0
|
%
|
|
1,056
|
|
|
100.0
|
%
|
|
932.6
|
|
|
100.0
|
%
|
Exploratory
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Productive
|
6
|
|
|
60.0
|
%
|
|
4.6
|
|
|
60.5
|
%
|
|
44
|
|
|
80.0
|
%
|
|
31.0
|
|
|
79.3
|
%
|
|
32
|
|
|
97.0
|
%
|
|
24.3
|
|
|
96.0
|
%
|
Dry
|
4
|
|
|
40.0
|
%
|
|
3.0
|
|
|
39.5
|
%
|
|
11
|
|
|
20.0
|
%
|
|
8.1
|
|
|
20.7
|
%
|
|
1
|
|
|
3.0
|
%
|
|
1.0
|
|
|
4.0
|
%
|
Total
|
10
|
|
|
100.0
|
%
|
|
7.6
|
|
|
100.0
|
%
|
|
55
|
|
|
100.0
|
%
|
|
39.1
|
|
|
100.0
|
%
|
|
33
|
|
|
100.0
|
%
|
|
25.3
|
|
|
100.0
|
%
|
Total
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Productive
|
632
|
|
|
96.9
|
%
|
|
486.9
|
|
|
96.8
|
%
|
|
651
|
|
|
96.6
|
%
|
|
513.3
|
|
|
96.7
|
%
|
|
1,086
|
|
|
99.7
|
%
|
|
955.2
|
|
|
99.7
|
%
|
Dry
|
20
|
|
|
3.1
|
%
|
|
16.0
|
|
|
3.2
|
%
|
|
23
|
|
|
3.4
|
%
|
|
17.6
|
|
|
3.3
|
%
|
|
3
|
|
|
0.3
|
%
|
|
2.7
|
|
|
0.3
|
%
|
Total
|
652
|
|
|
100.0
|
%
|
|
502.9
|
|
|
100.0
|
%
|
|
674
|
|
|
100.0
|
%
|
|
530.9
|
|
|
100.0
|
%
|
|
1,089
|
|
|
100.0
|
%
|
|
957.9
|
|
|
100.0
|
%
|
|
Owned
|
|
Third-Party
|
|
Total
|
|||
Mid-Continent
|
10
|
|
|
25
|
|
|
35
|
|
•
|
the location of wells;
|
•
|
the method of drilling and casing wells;
|
•
|
the timing of construction or drilling activities;
|
•
|
the rates of production, or “allowables”;
|
•
|
the use of surface or subsurface waters;
|
•
|
the surface use and restoration of properties upon which wells are drilled;
|
•
|
the plugging and abandoning of wells; and
|
•
|
the notice to surface owners and other third parties.
|
(i)
|
Costs incurred to operate and maintain wells and related equipment and facilities, including depreciation and applicable operating costs of support equipment and facilities and other costs of operating and maintaining those wells and related equipment and facilities. They become part of the cost of oil and gas produced. Examples of production costs (sometimes called lifting costs) are:
|
(A)
|
Costs of labor to operate the wells and related equipment and facilities.
|
(B)
|
Repairs and maintenance.
|
(C)
|
Materials, supplies, and fuel consumed and supplies utilized in operating the wells and related equipment and facilities.
|
(D)
|
Property taxes and insurance applicable to proved properties and wells and related equipment and facilities.
|
(E)
|
Severance taxes.
|
(ii)
|
Some support equipment or facilities may serve two or more oil and gas producing activities and may also serve transportation, refining and marketing activities. To the extent that the support equipment and facilities are used in oil and gas producing activities, their depreciation and applicable operating costs become exploration, development or production costs, as appropriate. Depreciation, depletion and amortization of capitalized acquisition, exploration, and development costs are not production costs but also become part of the cost of oil and gas produced along with production (lifting) costs identified above.
|
(i)
|
Reserves on undrilled acreage are limited to those directly offsetting development spacing areas that are reasonably certain of production when drilled, unless evidence using reliable technology exists that establishes reasonable certainty of economic producibility at greater distances.
|
(ii)
|
Undrilled locations are classified as having undeveloped reserves only if a development plan has been adopted indicating that they are scheduled to be drilled within five years, unless the specific circumstances justify a longer time.
|
(iii)
|
Under no circumstances shall estimates for undeveloped reserves be attributable to any acreage for which an application of fluid injection or other improved recovery technique is contemplated, unless such techniques have been proved effective by actual projects in the same reservoir or an analogous reservoir or by other evidence using reliable technology establishing reasonable certainty.
|
•
|
reductions in oil, natural gas and NGL prices;
|
•
|
delays imposed by or resulting from compliance with regulatory requirements including permitting;
|
•
|
unusual or unexpected geological formations and miscalculations;
|
•
|
shortages of or delays in obtaining equipment and qualified personnel;
|
•
|
shortages of or delays in obtaining water for hydraulic fracturing operations;
|
•
|
equipment malfunctions, failures or accidents;
|
•
|
lack of available gathering facilities or delays in construction of gathering facilities;
|
•
|
lack of available capacity on interconnecting transmission pipelines;
|
•
|
lack of adequate electrical infrastructure and water disposal capacity;
|
•
|
unexpected operational events and drilling conditions;
|
•
|
pipe or cement failures and casing collapses;
|
•
|
pressures, fires, blowouts and explosions;
|
•
|
lost or damaged drilling and service tools;
|
•
|
loss of drilling fluid circulation;
|
•
|
uncontrollable flows of oil, natural gas, brine, water or drilling fluids;
|
•
|
natural disasters;
|
•
|
environmental hazards, such as oil and natural gas leaks, pipeline ruptures and discharges of toxic gases or well fluids;
|
•
|
adverse weather conditions such as extreme cold, fires caused by extreme heat or lack of rain, and severe storms, tornadoes or hurricanes;
|
•
|
oil and natural gas property title problems; and
|
•
|
market limitations for oil, natural gas and NGLs.
|
•
|
changes in regional, domestic and foreign supply of, and demand for, oil, natural gas and NGLs, as well as perceptions of supply of, and demand for, oil, natural gas and NGLs generally;
|
•
|
the price and quantity of foreign imports;
|
•
|
the ability of other companies to complete and commission liquefied natural gas export facilities in the U.S.;
|
•
|
U.S. and worldwide political and economic conditions;
|
•
|
weather conditions and seasonal trends;
|
•
|
anticipated future prices of oil, natural gas and NGLs, alternative fuels and other commodities;
|
•
|
technological advances affecting energy consumption and energy supply;
|
•
|
the proximity, capacity, cost and availability of pipeline infrastructure, treating, transportation and refining capacity;
|
•
|
natural disasters and other extraordinary events;
|
•
|
domestic and foreign governmental regulations and taxation;
|
•
|
energy conservation and environmental measures; and
|
•
|
the price and availability of alternative fuels.
|
•
|
make the Company more vulnerable to adverse changes in general economic, industry and competitive conditions and adverse changes in government regulation;
|
•
|
require the Company to dedicate an even greater portion of its cash flow from operations to payments on its indebtedness, thereby reducing the availability of the Company’s cash flows to fund working capital, capital expenditures, acquisitions and other general corporate purposes;
|
•
|
require the Company to finance an increasing portion of its working capital and capital expenditures with cash on hand and borrowing under its senior credit facility;
|
•
|
limit the Company’s flexibility in planning for, or reacting to, changes in its business and the industry in which it operates;
|
•
|
place the Company at a disadvantage compared to its competitors that are less leveraged and, therefore, may be able to take advantage of opportunities that the Company’s indebtedness prevents it from pursuing; and
|
•
|
limit the Company’s ability to borrow additional amounts for working capital, capital expenditures, acquisitions, debt service requirements, execution of its business strategy or other purposes.
|
•
|
the accuracy of the Company’s reserve estimates;
|
•
|
the actual cost of development and production expenditures;
|
•
|
the amount and timing of actual production;
|
•
|
supply of and demand for oil, natural gas and NGLs; and
|
•
|
changes in governmental regulation or taxation.
|
•
|
evacuation of personnel and curtailment of operations;
|
•
|
damage to drilling rigs or other facilities, resulting in suspension of operations;
|
•
|
inability to deliver materials to worksites; and
|
•
|
damage to, or shutting in of, pipelines and other transportation facilities.
|
•
|
the prices at which oil, natural gas and NGLs are sold;
|
•
|
the Company’s proved reserves;
|
•
|
the level of oil, natural gas and NGLs it is able to produce from existing wells;
|
•
|
the Company’s ability to acquire, locate and produce new reserves; and
|
•
|
the Company’s capital and operating costs.
|
•
|
production is less than expected;
|
•
|
the counterparty to the derivative contract defaults on its contract obligations; or
|
•
|
the actual differential between the underlying price in the derivative contract and actual prices received is materially different from that expected.
|
•
|
revenues, cash flow and profitability;
|
•
|
the Company’s ability to retain skilled rig personnel whom it would need in the event of an upturn in the demand for drilling and related services; and
|
•
|
the fair value of the Company’s rig fleet.
|
•
|
Arthur I. Levine v. Tom L. Ward, et al., and SandRidge Energy, Inc., Nominal Defendant - filed on December 19, 2012 in the U.S. District Court for the Western District of Oklahoma
|
•
|
Deborah Depuy v. Tom L. Ward, et al., and SandRidge Energy, Inc., Nominal Defendant - filed on January 22, 2013 in the U.S. District Court for the Western District of Oklahoma
|
•
|
Paul Elliot, on Behalf of the Paul Elliot IRA R/O, v. Tom L. Ward, et al., and SandRidge Energy, Inc., Nominal Defendant - filed on January 29, 2013 in the U.S. District Court for the Western District of Oklahoma
|
•
|
Dale Hefner v. Tom L. Ward, et al., and SandRidge Energy, Inc., Nominal Defendant - filed on January 4, 2013 in the District Court of Oklahoma County, Oklahoma
|
•
|
Rocky Romano v. Tom L. Ward, et al., and SandRidge Energy, Inc., Nominal Defendant - filed on January 22, 2013 in the District Court of Oklahoma County, Oklahoma
|
•
|
Joan Brothers v. Tom L. Ward, et al., and SandRidge Energy, Inc., Nominal Defendant - filed on February 15, 2013 in the U.S. District Court for the Western District of Oklahoma
|
•
|
Lisa Ezell, Jefferson L. Mangus, and Tyler D. Mangus v. Tom L. Ward, et al., and SandRidge Energy, Inc., Nominal Defendant - filed on March 22, 2013 in the U.S. District Court for the Western District of Oklahoma
|
Item 5.
|
Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
|
|
High
|
|
Low
|
||||
2014
|
|
|
|
||||
Fourth Quarter
|
$
|
4.80
|
|
|
$
|
1.50
|
|
Third Quarter
|
$
|
7.20
|
|
|
$
|
4.10
|
|
Second Quarter
|
$
|
7.43
|
|
|
$
|
6.07
|
|
First Quarter
|
$
|
6.75
|
|
|
$
|
5.59
|
|
2013
|
|
|
|
||||
Fourth Quarter
|
$
|
6.96
|
|
|
$
|
5.21
|
|
Third Quarter
|
$
|
5.99
|
|
|
$
|
4.72
|
|
Second Quarter
|
$
|
5.60
|
|
|
$
|
4.52
|
|
First Quarter
|
$
|
7.47
|
|
|
$
|
5.05
|
|
|
Total Number of Shares Purchased(1)(2)
|
|
Average Price
Paid per Share
|
|
Total Number of Shares Purchased as Part of Publicly Announced Program(2)
|
|
Maximum Approximate Dollar Value of Shares that May Yet Be Purchased Under the Program (In millions)
|
||||||
Period
|
|
|
|
|
|
|
|
||||||
October 1, 2014 — October 31, 2014
|
23,919,390
|
|
|
$
|
3.92
|
|
|
23,911,000
|
|
|
$
|
88.7
|
|
November 1, 2014 — November 30, 2014
|
7,488
|
|
|
$
|
3.90
|
|
|
N/A
|
|
|
N/A
|
|
|
December 1, 2014 — December 31, 2014
|
14,642
|
|
|
$
|
1.93
|
|
|
N/A
|
|
|
N/A
|
|
|
Total
|
23,941,520
|
|
|
|
|
23,911,000
|
|
|
|
(1)
|
Includes shares of common stock tendered by employees in order to satisfy tax withholding requirements upon vesting of their stock awards. Shares withheld are initially recorded as treasury shares, then immediately retired. For the three-month period ended
December 31, 2014
,
30,520
shares were reacquired at a weighted average price per share of
$3.02
to satisfy tax obligations for vested employee stock awards.
|
(2)
|
Includes shares of common stock repurchased pursuant to a program approved by the Company’s Board of Directors and announced on September 4, 2014. Under the terms of the program, the Company may repurchase up to $200.0 million of the Company’s common stock. There is no fixed termination date for this repurchase program, which may be suspended or discontinued at any time.
|
|
Year Ended December 31,
|
||||||||||||||||||
|
2014
|
|
2013
|
|
2012
|
|
2011
|
|
2010
|
||||||||||
|
(In thousands, except per share data)
|
||||||||||||||||||
Statement of Operations Data
|
|
|
|
|
|
|
|
|
|
||||||||||
Revenues
|
$
|
1,558,758
|
|
|
$
|
1,983,388
|
|
|
$
|
1,934,642
|
|
|
$
|
1,415,213
|
|
|
$
|
931,736
|
|
Expenses
|
|
|
|
|
|
|
|
|
|
||||||||||
Production
|
346,088
|
|
|
516,427
|
|
|
477,154
|
|
|
322,877
|
|
|
237,863
|
|
|||||
Production taxes
|
31,731
|
|
|
32,292
|
|
|
47,210
|
|
|
46,069
|
|
|
29,170
|
|
|||||
Cost of sales
|
56,155
|
|
|
57,118
|
|
|
68,227
|
|
|
65,654
|
|
|
22,368
|
|
|||||
Midstream and marketing
|
49,905
|
|
|
53,644
|
|
|
39,669
|
|
|
66,007
|
|
|
90,149
|
|
|||||
Construction contract
|
—
|
|
|
23,349
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Depreciation and depletion—oil and natural gas
|
434,295
|
|
|
567,732
|
|
|
568,029
|
|
|
317,246
|
|
|
265,914
|
|
|||||
Depreciation and amortization—other
|
59,636
|
|
|
62,136
|
|
|
60,805
|
|
|
53,630
|
|
|
50,776
|
|
|||||
Accretion of asset retirement obligations
|
9,092
|
|
|
36,777
|
|
|
28,996
|
|
|
9,368
|
|
|
9,421
|
|
|||||
Impairment
|
192,768
|
|
|
26,280
|
|
|
316,004
|
|
|
2,825
|
|
|
—
|
|
|||||
General and administrative(1)
|
122,865
|
|
|
330,425
|
|
|
241,682
|
|
|
148,643
|
|
|
179,565
|
|
|||||
(Gain) loss on derivative contracts
|
(334,011
|
)
|
|
47,123
|
|
|
(241,419
|
)
|
|
(44,075
|
)
|
|
50,872
|
|
|||||
Loss (gain) on sale of assets
|
10
|
|
|
399,086
|
|
|
3,089
|
|
|
(2,044
|
)
|
|
2,424
|
|
|||||
Total expenses
|
968,534
|
|
|
2,152,389
|
|
|
1,609,446
|
|
|
986,200
|
|
|
938,522
|
|
|||||
Income (loss) from operations
|
590,224
|
|
|
(169,001
|
)
|
|
325,196
|
|
|
429,013
|
|
|
(6,786
|
)
|
|||||
Other income (expense)
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest expense
|
(244,109
|
)
|
|
(270,234
|
)
|
|
(303,349
|
)
|
|
(237,332
|
)
|
|
(247,442
|
)
|
|||||
Bargain purchase gain
|
—
|
|
|
—
|
|
|
122,696
|
|
|
—
|
|
|
—
|
|
|||||
Loss on extinguishment of debt
|
—
|
|
|
(82,005
|
)
|
|
(3,075
|
)
|
|
(38,232
|
)
|
|
—
|
|
|||||
Other income, net
|
3,490
|
|
|
12,445
|
|
|
4,741
|
|
|
3,122
|
|
|
2,558
|
|
|||||
Total other expense
|
(240,619
|
)
|
|
(339,794
|
)
|
|
(178,987
|
)
|
|
(272,442
|
)
|
|
(244,884
|
)
|
|||||
Income (loss) before income taxes
|
349,605
|
|
|
(508,795
|
)
|
|
146,209
|
|
|
156,571
|
|
|
(251,670
|
)
|
|||||
Income tax (benefit) expense
|
(2,293
|
)
|
|
5,684
|
|
|
(100,362
|
)
|
|
(5,817
|
)
|
|
(446,680
|
)
|
|||||
Net income (loss)
|
351,898
|
|
|
(514,479
|
)
|
|
246,571
|
|
|
162,388
|
|
|
195,010
|
|
|||||
Less: net income attributable to noncontrolling interest
|
98,613
|
|
|
39,410
|
|
|
105,000
|
|
|
54,323
|
|
|
4,445
|
|
|||||
Net income (loss) attributable to SandRidge Energy, Inc.
|
253,285
|
|
|
(553,889
|
)
|
|
141,571
|
|
|
108,065
|
|
|
190,565
|
|
|||||
Preferred stock dividends
|
50,025
|
|
|
55,525
|
|
|
55,525
|
|
|
55,583
|
|
|
37,442
|
|
|||||
Income available (loss applicable) to SandRidge Energy, Inc. common stockholders
|
$
|
203,260
|
|
|
$
|
(609,414
|
)
|
|
$
|
86,046
|
|
|
$
|
52,482
|
|
|
$
|
153,123
|
|
Earnings (loss) per share
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic
|
$
|
0.42
|
|
|
$
|
(1.27
|
)
|
|
$
|
0.19
|
|
|
$
|
0.13
|
|
|
$
|
0.52
|
|
Diluted
|
$
|
0.42
|
|
|
$
|
(1.27
|
)
|
|
$
|
0.19
|
|
|
$
|
0.13
|
|
|
$
|
0.52
|
|
Weighted average number of common shares outstanding
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic
|
479,644
|
|
|
481,148
|
|
|
453,595
|
|
|
398,851
|
|
|
291,869
|
|
|||||
Diluted
|
499,743
|
|
|
481,148
|
|
|
456,015
|
|
|
406,645
|
|
|
315,349
|
|
(1)
|
Includes employee termination benefits.
|
|
As of December 31,
|
||||||||||||||||||
|
2014
|
|
2013
|
|
2012
|
|
2011
|
|
2010
|
||||||||||
|
(In thousands)
|
||||||||||||||||||
Balance Sheet Data
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents
|
$
|
181,253
|
|
|
$
|
814,663
|
|
|
$
|
309,766
|
|
|
$
|
207,681
|
|
|
$
|
5,863
|
|
Property, plant and equipment, net
|
$
|
6,215,057
|
|
|
$
|
6,307,675
|
|
|
$
|
8,479,977
|
|
|
$
|
5,389,424
|
|
|
$
|
4,733,865
|
|
Total assets
|
$
|
7,259,225
|
|
|
$
|
7,684,795
|
|
|
$
|
9,790,731
|
|
|
$
|
6,219,609
|
|
|
$
|
5,231,448
|
|
Total debt
|
$
|
3,195,436
|
|
|
$
|
3,194,907
|
|
|
$
|
4,301,083
|
|
|
$
|
2,814,176
|
|
|
$
|
2,909,086
|
|
Total equity
|
$
|
3,209,820
|
|
|
$
|
3,175,627
|
|
|
$
|
3,862,455
|
|
|
$
|
2,548,950
|
|
|
$
|
1,547,483
|
|
Total liabilities and equity
|
$
|
7,259,225
|
|
|
$
|
7,684,795
|
|
|
$
|
9,790,731
|
|
|
$
|
6,219,609
|
|
|
$
|
5,231,448
|
|
•
|
Overview;
|
•
|
Results by Segment;
|
•
|
Consolidated Results of Operations;
|
•
|
Liquidity and Capital Resources;
|
•
|
Valuation Allowance; and
|
•
|
Critical Accounting Policies and Estimates.
|
|
Year Ended December 31,
|
||||||
|
2013(1)
|
|
2012
|
||||
Production (MBoe)
|
1,148
|
|
|
8,667
|
|
||
Revenues (in thousands)
|
$
|
68,027
|
|
|
$
|
566,075
|
|
Direct operating expenses (in thousands)
|
$
|
17,453
|
|
|
$
|
130,337
|
|
|
Year Ended December 31,
|
||||||||||
|
2014(1)
|
|
2013
|
|
2012
|
||||||
Production (MBoe)
|
1,321
|
|
|
10,082
|
|
|
8,110
|
|
|||
Revenues (in thousands)
|
$
|
90,920
|
|
|
$
|
627,236
|
|
|
$
|
449,420
|
|
Expenses (in thousands)
|
$
|
63,674
|
|
|
$
|
491,991
|
|
|
$
|
360,209
|
|
•
|
Drilled 442 wells, excluding salt water disposal wells, in the Mid-Continent area. Mid-Continent properties contributed approximately
23.4
MMBoe, or
80.9%
, of the Company’s total production in 2014 compared to approximately
17.8
MMBoe, or
52.7%
, in 2013.
|
•
|
Gulf Properties divested in February 2014, as discussed below, contributed production of approximately
1.3
MMBoe, or
4.6%
of the Company’s total production in 2014 compared to approximately
10.1
MMBoe, or
29.8%
of total production in 2013.
|
•
|
Total production for 2014 was comprised of approximately
37.6%
oil,
49.3%
natural gas and
13.1%
NGLs compared to
42.3%
oil,
50.9%
natural gas and
6.8%
NGLs in 2013.
|
|
Year Ended December 31,
|
||||||||||||||||||
|
2014
|
|
2013
|
|
2012
|
|
2011
|
|
2010
|
||||||||||
Oil (per Bbl)
|
$
|
92.91
|
|
|
$
|
98.05
|
|
|
$
|
94.15
|
|
|
$
|
95.11
|
|
|
$
|
79.61
|
|
Natural gas (per Mcf)
|
$
|
4.26
|
|
|
$
|
3.73
|
|
|
$
|
2.83
|
|
|
$
|
4.03
|
|
|
$
|
4.38
|
|
|
Year Ended December 31,
|
||||||||||
|
2014
|
|
2013
|
|
2012
|
||||||
Results (in thousands)
|
|
|
|
|
|
||||||
Revenues
|
|
|
|
|
|
||||||
Oil
|
$
|
977,269
|
|
|
$
|
1,393,360
|
|
|
$
|
1,456,590
|
|
NGL
|
126,759
|
|
|
80,555
|
|
|
69,306
|
|
|||
Natural gas
|
316,851
|
|
|
346,363
|
|
|
233,386
|
|
|||
Other
|
2,194
|
|
|
14,202
|
|
|
15,939
|
|
|||
Inter-segment revenue
|
(173
|
)
|
|
(320
|
)
|
|
(403
|
)
|
|||
Total revenues
|
1,422,900
|
|
|
1,834,160
|
|
|
1,774,818
|
|
|||
Operating expenses
|
|
|
|
|
|
||||||
Production
|
348,387
|
|
|
519,546
|
|
|
480,001
|
|
|||
Production taxes
|
31,731
|
|
|
32,292
|
|
|
47,210
|
|
|||
Depreciation and depletion—oil and natural gas
|
434,295
|
|
|
567,732
|
|
|
568,029
|
|
|||
Accretion of asset retirement obligations
|
9,092
|
|
|
36,777
|
|
|
28,996
|
|
|||
Impairment
|
164,779
|
|
|
—
|
|
|
235,396
|
|
|||
(Gain) loss on derivative contracts
|
(334,011
|
)
|
|
47,123
|
|
|
(241,419
|
)
|
|||
(Gain) loss on sale of assets
|
(39
|
)
|
|
398,543
|
|
|
3,499
|
|
|||
Other operating expenses
|
54,950
|
|
|
169,638
|
|
|
134,962
|
|
|||
Total operating expenses
|
709,184
|
|
|
1,771,651
|
|
|
1,256,674
|
|
|||
Income from operations
|
$
|
713,716
|
|
|
$
|
62,509
|
|
|
$
|
518,144
|
|
|
|
|
|
|
|
||||||
Production data
|
|
|
|
|
|
||||||
Oil (MBbls)
|
10,876
|
|
|
14,279
|
|
|
15,868
|
|
|||
NGL (MBbls)
|
3,794
|
|
|
2,291
|
|
|
2,094
|
|
|||
Natural gas (MMcf)
|
85,697
|
|
|
103,233
|
|
|
93,549
|
|
|||
Total volumes (MBoe)
|
28,953
|
|
|
33,776
|
|
|
33,553
|
|
|||
Average daily total volumes (MBoe/d)
|
79.3
|
|
|
92.5
|
|
|
91.7
|
|
|||
Average prices—as reported(1)
|
|
|
|
|
|
||||||
Oil (per Bbl)
|
$
|
89.86
|
|
|
$
|
97.58
|
|
|
$
|
91.79
|
|
NGL (per Bbl)
|
$
|
33.41
|
|
|
$
|
35.16
|
|
|
$
|
33.10
|
|
Natural gas (per Mcf)
|
$
|
3.70
|
|
|
$
|
3.36
|
|
|
$
|
2.49
|
|
Total (per Boe)
|
$
|
49.08
|
|
|
$
|
53.89
|
|
|
$
|
52.43
|
|
Average prices—including impact of derivative contract settlements(2)
|
|
|
|
|
|
||||||
Oil (per Bbl)
|
$
|
94.18
|
|
|
$
|
98.90
|
|
|
$
|
97.53
|
|
NGL (per Bbl)
|
$
|
33.41
|
|
|
$
|
35.16
|
|
|
$
|
33.10
|
|
Natural gas (per Mcf)
|
$
|
3.58
|
|
|
$
|
3.46
|
|
|
$
|
2.46
|
|
Total (per Boe)
|
$
|
50.36
|
|
|
$
|
54.79
|
|
|
$
|
55.04
|
|
(1)
|
Prices represent actual average prices for the periods presented and do not include the impact of derivative transactions.
|
(2)
|
Excludes settlements of commodity derivative contracts prior to their contractual maturity.
|
|
Year Ended December 31,
|
||||||||||||||||
|
2014
|
|
2013
|
|
2012
|
||||||||||||
|
Production (MBoe)
|
|
% of Total Production
|
|
Production (MBoe)
|
|
% of Total Production
|
|
Production (MBoe)
|
|
% of Total Production
|
||||||
Mid-Continent
|
23,423
|
|
|
80.9
|
%
|
|
17,783
|
|
|
52.7
|
%
|
|
11,039
|
|
|
32.9
|
%
|
Gulf of Mexico / Gulf Coast
|
1,321
|
|
|
4.6
|
%
|
|
10,082
|
|
|
29.8
|
%
|
|
8,110
|
|
|
24.2
|
%
|
Permian Basin
|
2,076
|
|
|
7.2
|
%
|
|
3,366
|
|
|
10.0
|
%
|
|
10,963
|
|
|
32.6
|
%
|
Other - west Texas
|
2,133
|
|
|
7.3
|
%
|
|
2,545
|
|
|
7.5
|
%
|
|
3,441
|
|
|
10.3
|
%
|
Total
|
28,953
|
|
|
100.0
|
%
|
|
33,776
|
|
|
100.0
|
%
|
|
33,553
|
|
|
100.0
|
%
|
|
Year Ended December 31,
|
||||||||||
|
2014
|
|
2013
|
|
2012
|
||||||
Results (in thousands)
|
|
|
|
|
|
||||||
Revenues
|
$
|
192,944
|
|
|
$
|
187,456
|
|
|
$
|
379,345
|
|
Inter-segment revenue
|
(116,856
|
)
|
|
(120,815
|
)
|
|
(262,712
|
)
|
|||
Total revenues
|
76,088
|
|
|
66,641
|
|
|
116,633
|
|
|||
Operating expenses
|
86,225
|
|
|
95,692
|
|
|
104,722
|
|
|||
Impairment
|
27,427
|
|
|
11,104
|
|
|
—
|
|
|||
(Loss) income from operations
|
$
|
(37,564
|
)
|
|
$
|
(40,155
|
)
|
|
$
|
11,911
|
|
|
|
|
|
|
|
|
|||||
Drilling rig statistics
|
|
|
|
|
|
||||||
Average number of operational rigs owned during the period
|
27.0
|
|
|
29.0
|
|
|
30.0
|
|
|||
Average number of rigs working for third parties
|
4.8
|
|
|
4.4
|
|
|
9.4
|
|
|||
Number of days drilling for third parties
|
1,749
|
|
|
1,603
|
|
|
2,613
|
|
|||
Average drilling revenue per day per rig drilling for third parties(1)
|
$
|
14,985
|
|
|
$
|
14,610
|
|
|
$
|
16,919
|
|
|
|
|
|
|
|
||||||
Rig status as of December 31
|
|
|
|
|
|
||||||
Working for SandRidge
|
10
|
|
|
11
|
|
|
14
|
|
|||
Working for third parties(2)
|
—
|
|
|
6
|
|
|
10
|
|
|||
Idle (3)
|
15
|
|
|
10
|
|
|
6
|
|
|||
Total operational
|
25
|
|
|
27
|
|
|
30
|
|
|||
Non-operational(4)
|
2
|
|
|
3
|
|
|
1
|
|
|||
Total rigs
|
27
|
|
|
30
|
|
|
31
|
|
(1)
|
Represents revenues from rigs working for third parties, excluding stand-by revenue, divided by the total number of days such drilling rigs were used by third parties during the period, excluding revenues for related rental equipment.
|
(2)
|
Includes five rigs receiving stand-by rates from third parties at December 31, 2012.
|
(3)
|
The company’s rigs are primarily intended to drill for its own account; as such, the number of idle rigs does not significantly impact the consolidated results of operations.
|
(4)
|
Non-operational rigs at December 31, 2014 and 2012 were stacked. Non-operational rigs at December 31, 2013 were held for sale.
|
|
Year Ended December 31,
|
||||||||||
|
2014
|
|
2013
|
|
2012
|
||||||
Results (in thousands)
|
|
|
|
|
|
||||||
Operating revenues
|
$
|
142,987
|
|
|
$
|
156,640
|
|
|
$
|
116,659
|
|
Construction contract
|
—
|
|
|
23,349
|
|
|
—
|
|
|||
Inter-segment revenue
|
(87,593
|
)
|
|
(100,529
|
)
|
|
(77,824
|
)
|
|||
Total revenues
|
55,394
|
|
|
79,460
|
|
|
38,835
|
|
|||
Operating expenses
|
63,927
|
|
|
73,744
|
|
|
52,179
|
|
|||
Construction contract
|
—
|
|
|
23,349
|
|
|
—
|
|
|||
Impairment
|
561
|
|
|
3,934
|
|
|
59,683
|
|
|||
Loss from operations
|
$
|
(9,094
|
)
|
|
$
|
(21,567
|
)
|
|
$
|
(73,027
|
)
|
|
|
|
|
|
|
||||||
Gas Marketed
|
|
|
|
|
|
||||||
Volumes (MMcf)
|
7,343
|
|
|
8,006
|
|
|
9,367
|
|
|||
Price
|
$
|
4.18
|
|
|
$
|
3.56
|
|
|
$
|
2.63
|
|
|
Year Ended December 31,
|
||||||||||
|
2014
|
|
2013
|
|
2012
|
||||||
|
(In thousands)
|
||||||||||
Revenues
|
|
|
|
|
|
||||||
Oil, natural gas and NGL
|
$
|
1,420,879
|
|
|
$
|
1,820,278
|
|
|
$
|
1,759,282
|
|
Drilling and services
|
76,088
|
|
|
66,586
|
|
|
116,633
|
|
|||
Midstream and marketing
|
55,658
|
|
|
58,304
|
|
|
40,486
|
|
|||
Construction contract
|
—
|
|
|
23,349
|
|
|
—
|
|
|||
Other
|
6,133
|
|
|
14,871
|
|
|
18,241
|
|
|||
Total revenues(1)
|
$
|
1,558,758
|
|
|
$
|
1,983,388
|
|
|
$
|
1,934,642
|
|
(1)
|
Includes
$150.4 million
,
$199.3 million
and
$181.2 million
of revenues attributable to noncontrolling interests in consolidated variable interest entities (“VIEs”), after considering the effects of intercompany eliminations, for the years ended
December 31, 2014
,
2013
and
2012
, respectively.
|
|
Year Ended December 31,
|
||||||||||
|
2014
|
|
2013
|
|
2012
|
||||||
|
(In thousands)
|
||||||||||
Expenses
|
|
|
|
|
|
||||||
Production
|
$
|
346,088
|
|
|
$
|
516,427
|
|
|
$
|
477,154
|
|
Production taxes
|
31,731
|
|
|
32,292
|
|
|
47,210
|
|
|||
Cost of sales
|
56,155
|
|
|
57,118
|
|
|
68,227
|
|
|||
Midstream and marketing
|
49,905
|
|
|
53,644
|
|
|
39,669
|
|
|||
Construction contract
|
—
|
|
|
23,349
|
|
|
—
|
|
|||
Depreciation and depletion—oil and natural gas
|
434,295
|
|
|
567,732
|
|
|
568,029
|
|
|||
Depreciation and amortization—other
|
59,636
|
|
|
62,136
|
|
|
60,805
|
|
|||
Accretion of asset retirement obligations
|
9,092
|
|
|
36,777
|
|
|
28,996
|
|
|||
Impairment
|
192,768
|
|
|
26,280
|
|
|
316,004
|
|
|||
General and administrative
|
113,991
|
|
|
207,920
|
|
|
241,682
|
|
|||
Employee termination benefits
|
8,874
|
|
|
122,505
|
|
|
—
|
|
|||
(Gain) loss on derivative contracts
|
(334,011
|
)
|
|
47,123
|
|
|
(241,419
|
)
|
|||
Loss on sale of assets
|
10
|
|
|
399,086
|
|
|
3,089
|
|
|||
Total expenses(1)
|
$
|
968,534
|
|
|
$
|
2,152,389
|
|
|
$
|
1,609,446
|
|
(1)
|
Includes
$51.0 million
,
$157.0 million
and
$75.4 million
of expenses attributable to noncontrolling interests in consolidated VIEs, after considering the effects of intercompany eliminations, for the years ended
December 31, 2014
,
2013
and
2012
, respectively. The expenses attributable to noncontrolling interest in consolidated VIEs include
$29.9
|
|
Year Ended December 31,
|
||||||||||
|
2014
|
|
2013
|
|
2012
|
||||||
|
(In thousands)
|
||||||||||
Other income (expense)
|
|
|
|
|
|
||||||
Interest expense
|
$
|
(244,109
|
)
|
|
$
|
(270,234
|
)
|
|
$
|
(303,349
|
)
|
Bargain purchase gain
|
—
|
|
|
—
|
|
|
122,696
|
|
|||
Loss on extinguishment of debt
|
—
|
|
|
(82,005
|
)
|
|
(3,075
|
)
|
|||
Other income, net
|
3,490
|
|
|
12,445
|
|
|
4,741
|
|
|||
Total other expense
|
(240,619
|
)
|
|
(339,794
|
)
|
|
(178,987
|
)
|
|||
Income (loss) before income taxes
|
349,605
|
|
|
(508,795
|
)
|
|
146,209
|
|
|||
Income tax (benefit) expense
|
(2,293
|
)
|
|
5,684
|
|
|
(100,362
|
)
|
|||
Net income (loss)
|
351,898
|
|
|
(514,479
|
)
|
|
246,571
|
|
|||
Less: net income attributable to noncontrolling interest
|
98,613
|
|
|
39,410
|
|
|
105,000
|
|
|||
Net income
(loss) attributable to SandRidge Energy, Inc.
|
$
|
253,285
|
|
|
$
|
(553,889
|
)
|
|
$
|
141,571
|
|
|
Year Ended December 31,
|
||||||||||
|
2014
|
|
2013
|
|
2012
|
||||||
|
(In thousands)
|
||||||||||
Interest expense
|
|
|
|
|
|
||||||
Interest expense on debt
|
$
|
254,475
|
|
|
$
|
277,746
|
|
|
$
|
290,560
|
|
Amortization of debt issuance costs, discounts and premium
|
9,954
|
|
|
11,127
|
|
|
16,980
|
|
|||
Dynamic Acquisition committed financing fee
|
—
|
|
|
—
|
|
|
10,875
|
|
|||
Loss on interest rate swaps
|
—
|
|
|
14
|
|
|
1,189
|
|
|||
Capitalized interest
|
(19,718
|
)
|
|
(16,691
|
)
|
|
(14,789
|
)
|
|||
Total
|
244,711
|
|
|
272,196
|
|
|
304,815
|
|
|||
Less: interest income
|
(602
|
)
|
|
(1,962
|
)
|
|
(1,466
|
)
|
|||
Total interest expense
|
$
|
244,109
|
|
|
$
|
270,234
|
|
|
$
|
303,349
|
|
|
Year Ended December 31,
|
||||||||||
|
2014
|
|
2013
|
|
2012
|
||||||
|
(In thousands)
|
||||||||||
Cash flows provided by operating activities
|
$
|
621,114
|
|
|
$
|
868,630
|
|
|
$
|
783,160
|
|
Cash flows (used in) provided by investing activities
|
(857,241
|
)
|
|
1,070,356
|
|
|
(2,555,945
|
)
|
|||
Cash flows (used in) provided by financing activities
|
(397,283
|
)
|
|
(1,434,089
|
)
|
|
1,874,870
|
|
|||
Net (decrease) increase in cash and cash equivalents
|
$
|
(633,410
|
)
|
|
$
|
504,897
|
|
|
$
|
102,085
|
|
|
Year Ended December 31,
|
||||||||||
|
2014
|
|
2013
|
|
2012
|
||||||
|
(In thousands)
|
||||||||||
Capital expenditures
|
|
|
|
|
|
||||||
Exploration and production
|
$
|
1,508,100
|
|
|
$
|
1,319,012
|
|
|
$
|
2,001,490
|
|
Drilling and oil field services
|
18,385
|
|
|
7,125
|
|
|
27,527
|
|
|||
Midstream services
|
44,606
|
|
|
55,706
|
|
|
80,413
|
|
|||
Other
|
37,798
|
|
|
42,040
|
|
|
114,552
|
|
|||
Capital expenditures, excluding acquisitions
|
1,608,889
|
|
|
1,423,883
|
|
|
2,223,982
|
|
|||
Acquisitions
|
18,384
|
|
|
17,028
|
|
|
840,740
|
|
|||
Total
|
$
|
1,627,273
|
|
|
$
|
1,440,911
|
|
|
$
|
3,064,722
|
|
8.75% Senior Notes due 2020, net of $4,598 discount
|
$
|
445,402
|
|
7.5% Senior Notes due 2021, including premium of $3,486
|
1,178,486
|
|
|
8.125% Senior Notes due 2022
|
750,000
|
|
|
7.5% Senior Notes due 2023, net of $3,452 discount
|
821,548
|
|
|
Total debt
|
$
|
3,195,436
|
|
|
Payments Due by Period
|
||||||||||||||||||
|
Total
|
|
Less than
1 year
|
|
1-3 years
|
|
3-5 years
|
|
More than
5 years
|
||||||||||
|
(In thousands)
|
||||||||||||||||||
Long-term debt obligations(1)
|
$
|
4,923,076
|
|
|
$
|
250,313
|
|
|
$
|
500,625
|
|
|
$
|
500,625
|
|
|
$
|
3,671,513
|
|
Gas gathering agreement(2)
|
292,719
|
|
|
42,334
|
|
|
84,263
|
|
|
83,528
|
|
|
82,594
|
|
|||||
Transportation and throughput agreements
|
71,159
|
|
|
12,467
|
|
|
24,965
|
|
|
21,055
|
|
|
12,672
|
|
|||||
Third-party drilling rig agreements(3)
|
31,683
|
|
|
30,009
|
|
|
1,674
|
|
|
—
|
|
|
—
|
|
|||||
Asset retirement obligations
|
54,402
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
54,402
|
|
|||||
Operating leases and other(4)
|
35,264
|
|
|
5,691
|
|
|
4,740
|
|
|
1,884
|
|
|
22,949
|
|
|||||
Total
|
$
|
5,408,303
|
|
|
$
|
340,814
|
|
|
$
|
616,267
|
|
|
$
|
607,092
|
|
|
$
|
3,844,130
|
|
(1)
|
Includes interest on long-term debt.
|
(2)
|
Consists of a gas gathering agreement to deliver certain minimum volumes of natural gas to PGC, an unconsolidated variable interest entity. Pursuant to the agreement, the base fee for gathering services can be reduced if certain criteria are met. The amounts above are based on the base fee per the agreement.
|
(3)
|
Includes drilling contracts with third-party drilling rig operators at specified day or footage rates and termination fees associated with the Company’s hydraulic fracturing services agreements. All of the Company’s drilling rig contracts contain operator performance conditions that allow for pricing adjustments or early termination for operator nonperformance.
|
(4)
|
Includes the Company’s obligation for the employee and employer match contributions to the participants of its non-qualified deferred compensation plan for eligible highly compensated employees who elect to defer income exceeding the IRS annual limitations on qualified 401(k) retirement plans.
|
|
Notional (MBbls)
|
|
Weighted Average
Fixed Price
|
|||
January 2015 - December 2015
|
5,588
|
|
|
$
|
92.44
|
|
January 2016 - December 2016
|
1,464
|
|
|
$
|
88.36
|
|
|
Notional (MMcf)
|
|
Weighted Average
Fixed Price
|
|||
January 2015 - December 2015
|
19,900
|
|
|
$
|
4.51
|
|
|
Notional (MMcf)
|
|
Weighted Average
Fixed Price
|
|||
January 2015 - December 2015
|
21,900
|
|
|
$
|
(0.27
|
)
|
|
Notional (MBbls)
|
|
Sold Put
|
|
Purchased Put
|
|
Sold Call
|
|||||||
January 2015 - December 2015
|
4,576
|
|
|
$
|
76.56
|
|
|
$
|
90.28
|
|
|
$
|
103.48
|
|
January 2016 - December 2016
|
2,556
|
|
|
$
|
83.14
|
|
|
$
|
90.00
|
|
|
$
|
100.85
|
|
|
Notional (MMcf)
|
|
Collar Range
|
|||
January 2015 - December 2015
|
1,010
|
|
|
$4.00
|
—
|
$8.55
|
•
|
temporarily suspends until June 30, 2016 the financial covenant requiring maintenance of certain levels for the ratio of total net debt to EBITDA, following which the ratio may not exceed 6.25:1.00 at June 30, 2016, 6.00:1.00 at September 30, 2016 and December 31, 2016, 5.50:1.00 at March 31, 2017 and June 30, 2017, 5.00:1.00 at September 30, 2017 and December 31, 2017 and 4.50:1.00 at March 31, 2018 and thereafter, calculated using annualized EBITDA for the fiscal quarter ended June 30, 2016 and the two subsequent fiscal quarters and otherwise calculated using the last four completed fiscal quarters;
|
•
|
adopts additional financial covenants requiring the maintenance of agreed upon levels for the (a) ratio of total debt secured by assets of the Company and certain of its subsidiaries to EBITDA, which may not exceed 2.25:1.00 at each quarter end, calculated using the last four completed fiscal quarters, and (b) ratio of EBITDA to interest expense, which must be at least 2.00:1.00 at March 31, 2015 and June 30, 2015, 1.75:1.00 at September 30, 2015, 1.50:1.00 at each quarter end from December 31, 2015 to September 30, 2016, and 2.00:1.00 at December 31, 2016 and thereafter, calculated using the last four completed fiscal quarters;
|
•
|
increases the applicable margin used in the calculation of interest under the senior credit facility to (a) between 1.750% and 2.750% for interest determined by reference to LIBOR, and (b) between 0.750% and 1.750% for interest determined by reference to the base rate;
|
•
|
permits the Company and certain of its subsidiaries to incur additional indebtedness in an aggregate principal amount not to exceed $500.0 million, which may be secured solely by collateral securing the senior credit facility on a junior lien basis, provided that such junior debt shall (a) if secured, be subject to the terms and conditions set forth in an intercreditor agreement, (b) mature no earlier than January 21, 2020 and (c) reduce the borrowing base under the senior credit facility by $0.25 for every $1.00 of junior debt incurred; and
|
•
|
limits the Company’s ability to make certain restricted payments by (a) reducing the amount of the basket exception to $200.0 million from $400.0 million and (b) requiring that the ratio of total net debt to EBITDA not exceed 4.5:1.0.
|
|
Page(s)
|
|
|
|
/s/ J
AMES
D. B
ENNETT
|
|
/s/ E
DDIE
M. L
E
B
LANC
|
James D. Bennett
President and Chief Executive Officer
|
|
Eddie M. LeBlanc
Executive Vice President and Chief Financial Officer
|
|
/s/ PricewaterhouseCoopers LLP
|
|
PricewaterhouseCoopers LLP
|
Oklahoma City, Oklahoma
|
|
February 27, 2015
|
|
|
December 31,
|
||||||
|
2014
|
|
2013
|
||||
|
(In thousands, except per share data)
|
||||||
ASSETS
|
|
|
|
||||
Current assets
|
|
|
|
||||
Cash and cash equivalents
|
$
|
181,253
|
|
|
$
|
814,663
|
|
Accounts receivable, net
|
330,077
|
|
|
349,218
|
|
||
Derivative contracts
|
291,414
|
|
|
12,779
|
|
||
Prepaid expenses
|
7,981
|
|
|
39,253
|
|
||
Other current assets
|
21,193
|
|
|
25,910
|
|
||
Total current assets
|
831,918
|
|
|
1,241,823
|
|
||
Oil and natural gas properties, using full cost method of accounting
|
|
|
|
||||
Proved (includes development and project costs excluded from amortization of
$53.6
million and $45.6 million at December 31, 2014 and 2013, respectively)
|
11,707,147
|
|
|
10,972,816
|
|
||
Unproved
|
290,596
|
|
|
531,606
|
|
||
Less: accumulated depreciation, depletion and impairment
|
(6,359,149
|
)
|
|
(5,762,969
|
)
|
||
|
5,638,594
|
|
|
5,741,453
|
|
||
Other property, plant and equipment, net
|
576,463
|
|
|
566,222
|
|
||
Derivative contracts
|
47,003
|
|
|
14,126
|
|
||
Other assets
|
165,247
|
|
|
121,171
|
|
||
Total assets
|
$
|
7,259,225
|
|
|
$
|
7,684,795
|
|
|
|
|
|
|
December 31,
|
||||||
|
2014
|
|
2013
|
||||
|
(In thousands, except per share data)
|
||||||
LIABILITIES AND EQUITY
|
|
|
|
||||
Current liabilities
|
|
|
|
||||
Accounts payable and accrued expenses
|
$
|
683,392
|
|
|
$
|
812,488
|
|
Derivative contracts
|
—
|
|
|
34,267
|
|
||
Asset retirement obligations
|
—
|
|
|
87,063
|
|
||
Deferred tax liability
|
95,843
|
|
|
—
|
|
||
Other current liabilities
|
5,216
|
|
|
—
|
|
||
Total current liabilities
|
784,451
|
|
|
933,818
|
|
||
Long-term debt
|
3,195,436
|
|
|
3,194,907
|
|
||
Derivative contracts
|
—
|
|
|
20,564
|
|
||
Asset retirement obligations
|
54,402
|
|
|
337,054
|
|
||
Other long-term obligations
|
15,116
|
|
|
22,825
|
|
||
Total liabilities
|
4,049,405
|
|
|
4,509,168
|
|
||
Commitments and contingencies (Note 15)
|
|
|
|
||||
Equity
|
|
|
|
||||
SandRidge Energy, Inc. stockholders’ equity
|
|
|
|
||||
Preferred stock, $0.001 par value, 50,000 shares authorized
|
|
|
|
||||
8.5% Convertible perpetual preferred stock; 2,650 shares issued and outstanding at December 31, 2014 and 2013; aggregate liquidation preference of $265,000
|
3
|
|
|
3
|
|
||
6.0% Convertible perpetual preferred stock; 2,000 shares issued and outstanding with aggregate liquidation preference of $200,000 at December 31, 2013
|
—
|
|
|
2
|
|
||
7.0% Convertible perpetual preferred stock; 3,000 shares issued and outstanding at December 31, 2014 and 2013; aggregate liquidation preference of $300,000
|
3
|
|
|
3
|
|
||
Common stock, $0.001 par value, 800,000 shares authorized; 485,932 issued and 484,819 outstanding at December 31, 2014 and 491,609 issued and 490,290 outstanding at December 31, 2013
|
477
|
|
|
483
|
|
||
Additional paid-in capital
|
5,204,024
|
|
|
5,298,301
|
|
||
Additional paid-in capital—stockholder receivable
|
(2,500
|
)
|
|
(3,750
|
)
|
||
Treasury stock, at cost
|
(6,980
|
)
|
|
(8,770
|
)
|
||
Accumulated deficit
|
(3,257,202
|
)
|
|
(3,460,462
|
)
|
||
Total SandRidge Energy, Inc. stockholders’ equity
|
1,937,825
|
|
|
1,825,810
|
|
||
Noncontrolling interest
|
1,271,995
|
|
|
1,349,817
|
|
||
Total equity
|
3,209,820
|
|
|
3,175,627
|
|
||
Total liabilities and equity
|
$
|
7,259,225
|
|
|
$
|
7,684,795
|
|
|
|
|
|
|
Years Ended December 31,
|
||||||||||
|
2014
|
|
2013
|
|
2012
|
||||||
|
(In thousands, except per share amounts)
|
||||||||||
Revenues
|
|
|
|
|
|
||||||
Oil, natural gas and NGL
|
$
|
1,420,879
|
|
|
$
|
1,820,278
|
|
|
$
|
1,759,282
|
|
Drilling and services
|
76,088
|
|
|
66,586
|
|
|
116,633
|
|
|||
Midstream and marketing
|
55,658
|
|
|
58,304
|
|
|
40,486
|
|
|||
Construction contract
|
—
|
|
|
23,349
|
|
|
—
|
|
|||
Other
|
6,133
|
|
|
14,871
|
|
|
18,241
|
|
|||
Total revenues
|
1,558,758
|
|
|
1,983,388
|
|
|
1,934,642
|
|
|||
Expenses
|
|
|
|
|
|
||||||
Production
|
346,088
|
|
|
516,427
|
|
|
477,154
|
|
|||
Production taxes
|
31,731
|
|
|
32,292
|
|
|
47,210
|
|
|||
Cost of sales
|
56,155
|
|
|
57,118
|
|
|
68,227
|
|
|||
Midstream and marketing
|
49,905
|
|
|
53,644
|
|
|
39,669
|
|
|||
Construction contract
|
—
|
|
|
23,349
|
|
|
—
|
|
|||
Depreciation and depletion—oil and natural gas
|
434,295
|
|
|
567,732
|
|
|
568,029
|
|
|||
Depreciation and amortization—other
|
59,636
|
|
|
62,136
|
|
|
60,805
|
|
|||
Accretion of asset retirement obligations
|
9,092
|
|
|
36,777
|
|
|
28,996
|
|
|||
Impairment
|
192,768
|
|
|
26,280
|
|
|
316,004
|
|
|||
General and administrative
|
113,991
|
|
|
207,920
|
|
|
241,682
|
|
|||
Employee termination benefits
|
8,874
|
|
|
122,505
|
|
|
—
|
|
|||
(Gain) loss on derivative contracts
|
(334,011
|
)
|
|
47,123
|
|
|
(241,419
|
)
|
|||
Loss on sale of assets
|
10
|
|
|
399,086
|
|
|
3,089
|
|
|||
Total expenses
|
968,534
|
|
|
2,152,389
|
|
|
1,609,446
|
|
|||
Income (loss) from operations
|
590,224
|
|
|
(169,001
|
)
|
|
325,196
|
|
|||
Other income (expense)
|
|
|
|
|
|
||||||
Interest expense
|
(244,109
|
)
|
|
(270,234
|
)
|
|
(303,349
|
)
|
|||
Bargain purchase gain
|
—
|
|
|
—
|
|
|
122,696
|
|
|||
Loss on extinguishment of debt
|
—
|
|
|
(82,005
|
)
|
|
(3,075
|
)
|
|||
Other income, net
|
3,490
|
|
|
12,445
|
|
|
4,741
|
|
|||
Total other expense
|
(240,619
|
)
|
|
(339,794
|
)
|
|
(178,987
|
)
|
|||
Income (loss) before income taxes
|
349,605
|
|
|
(508,795
|
)
|
|
146,209
|
|
|||
Income tax (benefit) expense
|
(2,293
|
)
|
|
5,684
|
|
|
(100,362
|
)
|
|||
Net income (loss)
|
351,898
|
|
|
(514,479
|
)
|
|
246,571
|
|
|||
Less: net income attributable to noncontrolling interest
|
98,613
|
|
|
39,410
|
|
|
105,000
|
|
|||
Net income (loss) attributable to SandRidge Energy, Inc.
|
253,285
|
|
|
(553,889
|
)
|
|
141,571
|
|
|||
Preferred stock dividends
|
50,025
|
|
|
55,525
|
|
|
55,525
|
|
|||
Income available (loss applicable) to SandRidge Energy, Inc. common stockholders
|
$
|
203,260
|
|
|
$
|
(609,414
|
)
|
|
$
|
86,046
|
|
Earnings (loss) per share
|
|
|
|
|
|
||||||
Basic
|
$
|
0.42
|
|
|
$
|
(1.27
|
)
|
|
$
|
0.19
|
|
Diluted
|
$
|
0.42
|
|
|
$
|
(1.27
|
)
|
|
$
|
0.19
|
|
Weighted average number of common shares outstanding
|
|
|
|
|
|
||||||
Basic
|
479,644
|
|
|
481,148
|
|
|
453,595
|
|
|||
Diluted
|
499,743
|
|
|
481,148
|
|
|
456,015
|
|
|
Convertible
Perpetual
Preferred Stock
|
|
Common Stock
|
|
Additional
Paid-In
Capital
|
|
Treasury
Stock
|
|
Accumulated
Deficit
|
|
Non-controlling
Interest
|
|
Total
|
||||||||||||||||||||
|
Shares
|
|
Amount
|
|
Shares
|
|
Amount
|
|
|||||||||||||||||||||||||
|
(In thousands)
|
||||||||||||||||||||||||||||||||
Balance at December 31, 2011
|
7,650
|
|
|
$
|
8
|
|
|
411,953
|
|
|
$
|
399
|
|
|
$
|
4,568,856
|
|
|
$
|
(6,158
|
)
|
|
$
|
(2,937,094
|
)
|
|
$
|
922,939
|
|
|
$
|
2,548,950
|
|
Issuance of units by royalty trusts
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
587,086
|
|
|
587,086
|
|
|||||||
Sale of royalty trust units
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
79,056
|
|
|
—
|
|
|
—
|
|
|
60,304
|
|
|
139,360
|
|
|||||||
Distributions to noncontrolling interest owners
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(181,727
|
)
|
|
(181,727
|
)
|
|||||||
Issuance of common stock in acquisition
|
—
|
|
|
—
|
|
|
73,962
|
|
|
74
|
|
|
542,064
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
542,138
|
|
|||||||
Purchase of treasury stock
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(11,312
|
)
|
|
—
|
|
|
—
|
|
|
(11,312
|
)
|
|||||||
Retirement of treasury stock
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(11,312
|
)
|
|
11,312
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Stock distributions, net of purchases, - retirement plans
|
—
|
|
|
—
|
|
|
(345
|
)
|
|
—
|
|
|
2,146
|
|
|
(2,444
|
)
|
|
—
|
|
|
—
|
|
|
(298
|
)
|
|||||||
Stock-based compensation
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
47,228
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
47,228
|
|
|||||||
Stock-based compensation excess tax benefit
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(16
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(16
|
)
|
|||||||
Issuance of restricted stock awards, net of cancellations
|
—
|
|
|
—
|
|
|
4,789
|
|
|
3
|
|
|
(3
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
141,571
|
|
|
105,000
|
|
|
246,571
|
|
|||||||
Convertible perpetual preferred stock dividends
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(55,525
|
)
|
|
—
|
|
|
(55,525
|
)
|
|||||||
Balance at December 31, 2012
|
7,650
|
|
|
8
|
|
|
490,359
|
|
|
476
|
|
|
5,228,019
|
|
|
(8,602
|
)
|
|
(2,851,048
|
)
|
|
1,493,602
|
|
|
3,862,455
|
|
|||||||
Sale of royalty trust units
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
7,289
|
|
|
—
|
|
|
—
|
|
|
21,696
|
|
|
28,985
|
|
|||||||
Distributions to noncontrolling interest owners
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(206,470
|
)
|
|
(206,470
|
)
|
|||||||
Contributions from noncontrolling interest owners
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,579
|
|
|
1,579
|
|
|||||||
Purchase of treasury stock
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(30,126
|
)
|
|
—
|
|
|
—
|
|
|
(30,126
|
)
|
|||||||
Retirement of treasury stock
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(30,126
|
)
|
|
30,126
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Stock distributions, net of purchases, - retirement plans
|
—
|
|
|
—
|
|
|
(99
|
)
|
|
—
|
|
|
(267
|
)
|
|
(168
|
)
|
|
—
|
|
|
—
|
|
|
(435
|
)
|
|||||||
Stock-based compensation
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
88,397
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
88,397
|
|
|||||||
Stock-based compensation excess tax benefit
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(4
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(4
|
)
|
|||||||
Payment received on shareholder receivable
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,250
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,250
|
|
|||||||
Issuance of restricted stock awards, net of cancellations
|
—
|
|
|
—
|
|
|
30
|
|
|
7
|
|
|
(7
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Net (loss) income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(553,889
|
)
|
|
39,410
|
|
|
(514,479
|
)
|
|||||||
Convertible perpetual preferred stock dividends
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(55,525
|
)
|
|
—
|
|
|
(55,525
|
)
|
|||||||
Balance at December 31, 2013
|
7,650
|
|
|
8
|
|
|
490,290
|
|
|
483
|
|
|
5,294,551
|
|
|
(8,770
|
)
|
|
(3,460,462
|
)
|
|
1,349,817
|
|
|
3,175,627
|
|
|||||||
Sale of royalty trust units
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4,091
|
|
|
—
|
|
|
—
|
|
|
18,028
|
|
|
22,119
|
|
|||||||
Distributions to noncontrolling interest owners
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(193,807
|
)
|
|
(193,807
|
)
|
|||||||
Purchase of treasury stock
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(6,373
|
)
|
|
—
|
|
|
—
|
|
|
(6,373
|
)
|
|||||||
Retirement of treasury stock
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(6,373
|
)
|
|
6,373
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Stock purchases, net of distributions - retirement plans
|
—
|
|
|
—
|
|
|
206
|
|
|
—
|
|
|
(1,781
|
)
|
|
1,790
|
|
|
—
|
|
|
—
|
|
|
9
|
|
|||||||
Stock-based compensation
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
23,665
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
23,665
|
|
|||||||
Stock-based compensation excess tax benefit
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
14
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
14
|
|
|||||||
Payment received on shareholder receivable
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,250
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,250
|
|
|||||||
Issuance of restricted stock awards, net of cancellations
|
—
|
|
|
—
|
|
|
3,311
|
|
|
3
|
|
|
(3
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Acquisition of ownership interest
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2,074
|
)
|
|
—
|
|
|
—
|
|
|
(656
|
)
|
|
(2,730
|
)
|
|||||||
Repurchase of common stock
|
—
|
|
|
—
|
|
|
(27,411
|
)
|
|
(27
|
)
|
|
(111,800
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(111,827
|
)
|
|||||||
Conversion of 6% preferred stock
|
(2,000
|
)
|
|
(2
|
)
|
|
18,423
|
|
|
18
|
|
|
(16
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
253,285
|
|
|
98,613
|
|
|
351,898
|
|
|||||||
Convertible perpetual preferred stock dividends
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(50,025
|
)
|
|
—
|
|
|
(50,025
|
)
|
|||||||
Balance at December 31, 2014
|
5,650
|
|
|
$
|
6
|
|
|
484,819
|
|
|
$
|
477
|
|
|
$
|
5,201,524
|
|
|
$
|
(6,980
|
)
|
|
$
|
(3,257,202
|
)
|
|
$
|
1,271,995
|
|
|
$
|
3,209,820
|
|
|
Years Ended December 31,
|
||||||||||
|
2014
|
|
2013
|
|
2012
|
||||||
|
(In thousands)
|
||||||||||
CASH FLOWS FROM OPERATING ACTIVITIES
|
|
|
|
|
|
||||||
Net income (loss)
|
$
|
351,898
|
|
|
$
|
(514,479
|
)
|
|
$
|
246,571
|
|
Adjustments to reconcile net income (loss) to net cash provided by operating activities
|
|
|
|
|
|
||||||
Depreciation, depletion and amortization
|
493,931
|
|
|
629,868
|
|
|
628,834
|
|
|||
Accretion of asset retirement obligations
|
9,092
|
|
|
36,777
|
|
|
28,996
|
|
|||
Impairment
|
192,768
|
|
|
26,280
|
|
|
316,004
|
|
|||
Debt issuance costs amortization
|
9,425
|
|
|
10,091
|
|
|
14,388
|
|
|||
Amortization of discount, net of premium, on long-term debt
|
529
|
|
|
1,036
|
|
|
2,592
|
|
|||
Bargain purchase gain
|
—
|
|
|
—
|
|
|
(122,696
|
)
|
|||
Loss on extinguishment of debt
|
—
|
|
|
82,005
|
|
|
3,075
|
|
|||
Deferred income tax provision (benefit)
|
—
|
|
|
3,842
|
|
|
(100,288
|
)
|
|||
(Gain) loss on derivative contracts
|
(334,011
|
)
|
|
47,123
|
|
|
(241,419
|
)
|
|||
Cash received (paid) on settlement of derivative contracts
|
11,796
|
|
|
(5,879
|
)
|
|
125,932
|
|
|||
Loss on sale of assets
|
10
|
|
|
399,086
|
|
|
3,089
|
|
|||
Stock-based compensation
|
19,994
|
|
|
85,270
|
|
|
42,795
|
|
|||
Other
|
407
|
|
|
3,929
|
|
|
1,387
|
|
|||
Changes in operating assets and liabilities (decreasing) increasing cash
|
|
|
|
|
|
||||||
Receivables
|
(63,492
|
)
|
|
90,048
|
|
|
(141,534
|
)
|
|||
Costs in excess of billings
|
—
|
|
|
11,229
|
|
|
(11,229
|
)
|
|||
Prepaid expenses
|
9,549
|
|
|
(7,934
|
)
|
|
(5,952
|
)
|
|||
Other current assets
|
3,164
|
|
|
(3,269
|
)
|
|
(1,586
|
)
|
|||
Other assets and liabilities, net
|
(1,132
|
)
|
|
5,777
|
|
|
34,447
|
|
|||
Accounts payable and accrued expenses
|
(66,492
|
)
|
|
101,453
|
|
|
44,115
|
|
|||
Asset retirement obligations
|
(16,322
|
)
|
|
(133,623
|
)
|
|
(84,361
|
)
|
|||
Net cash provided by operating activities
|
621,114
|
|
|
868,630
|
|
|
783,160
|
|
|||
CASH FLOWS FROM INVESTING ACTIVITIES
|
|
|
|
|
|
||||||
Capital expenditures for property, plant and equipment
|
(1,553,332
|
)
|
|
(1,496,731
|
)
|
|
(2,146,372
|
)
|
|||
Acquisitions of assets
|
(18,384
|
)
|
|
(17,028
|
)
|
|
(840,740
|
)
|
|||
Proceeds from sale of assets
|
714,475
|
|
|
2,584,115
|
|
|
431,167
|
|
|||
Net cash (used in) provided by investing activities
|
(857,241
|
)
|
|
1,070,356
|
|
|
(2,555,945
|
)
|
|||
CASH FLOWS FROM FINANCING ACTIVITIES
|
|
|
|
|
|
||||||
Proceeds from borrowings
|
—
|
|
|
—
|
|
|
1,850,344
|
|
|||
Repayments of borrowings
|
—
|
|
|
(1,115,500
|
)
|
|
(366,029
|
)
|
|||
Premium on debt redemption
|
—
|
|
|
(61,997
|
)
|
|
(844
|
)
|
|||
Debt issuance costs
|
(3,947
|
)
|
|
(91
|
)
|
|
(48,538
|
)
|
|||
Proceeds from issuance of royalty trust units
|
—
|
|
|
—
|
|
|
587,086
|
|
|||
Proceeds from the sale of royalty trust units
|
22,119
|
|
|
28,985
|
|
|
139,360
|
|
|||
Noncontrolling interest distributions
|
(193,807
|
)
|
|
(206,470
|
)
|
|
(181,727
|
)
|
|||
Noncontrolling interest contributions
|
—
|
|
|
1,579
|
|
|
—
|
|
|||
Acquisition of ownership interest
|
(2,730
|
)
|
|
—
|
|
|
—
|
|
|||
Stock-based compensation excess tax benefit
|
14
|
|
|
(4
|
)
|
|
(16
|
)
|
|||
Purchase of treasury stock
|
(8,702
|
)
|
|
(32,976
|
)
|
|
(14,723
|
)
|
|||
Repurchase of common stock
|
(111,827
|
)
|
|
—
|
|
|
—
|
|
|||
Dividends paid—preferred
|
(55,525
|
)
|
|
(55,525
|
)
|
|
(55,525
|
)
|
|||
Payment received on shareholder receivable
|
1,250
|
|
|
1,250
|
|
|
—
|
|
|||
Cash (paid) received on settlement of financing derivative contracts
|
(44,128
|
)
|
|
6,660
|
|
|
(34,518
|
)
|
|||
Net cash (used in) provided by financing activities
|
(397,283
|
)
|
|
(1,434,089
|
)
|
|
1,874,870
|
|
|||
NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS
|
(633,410
|
)
|
|
504,897
|
|
|
102,085
|
|
|||
CASH AND CASH EQUIVALENTS, beginning of year
|
814,663
|
|
|
309,766
|
|
|
207,681
|
|
|||
CASH AND CASH EQUIVALENTS, end of year
|
$
|
181,253
|
|
|
$
|
814,663
|
|
|
$
|
309,766
|
|
|
Years Ended December 31,
|
||||||||||
|
2014
|
|
2013
|
|
2012
|
||||||
|
(In thousands)
|
||||||||||
Supplemental Disclosure of Cash Flow Information
|
|
|
|
|
|
||||||
Cash paid for interest, net of amounts capitalized
|
$
|
(235,793
|
)
|
|
$
|
(274,850
|
)
|
|
$
|
(257,152
|
)
|
Cash received (paid) for income taxes
|
$
|
1,928
|
|
|
$
|
(4,610
|
)
|
|
$
|
(1,324
|
)
|
|
|
|
|
|
|
||||||
Supplemental Disclosure of Noncash Investing and Financing Activities
|
|
|
|
|
|
||||||
Deposit on pending sale
|
$
|
—
|
|
|
$
|
(255,000
|
)
|
|
$
|
255,000
|
|
Change in accrued capital expenditures
|
$
|
(55,557
|
)
|
|
$
|
72,848
|
|
|
$
|
(77,610
|
)
|
Asset retirement costs capitalized
|
$
|
4,968
|
|
|
$
|
5,078
|
|
|
$
|
7,479
|
|
Common stock issued in connection with acquisition
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
542,138
|
|
Consideration(1)
|
|
||
Shares of SandRidge common stock issued
|
73,962
|
|
|
SandRidge common stock price
|
$
|
7.33
|
|
Fair value of common stock issued
|
542,138
|
|
|
Cash consideration(2)
|
680,000
|
|
|
Cash balance adjustment(3)
|
13,091
|
|
|
Total purchase price
|
$
|
1,235,229
|
|
|
|
||
Fair Value of Liabilities Assumed
|
|
||
Current liabilities
|
$
|
129,363
|
|
Asset retirement obligations(4)
|
315,922
|
|
|
Long-term deferred tax liability(5)
|
100,288
|
|
|
Other long-term liabilities
|
4,469
|
|
|
Amount attributable to liabilities assumed
|
550,042
|
|
|
Total purchase price plus liabilities assumed
|
1,785,271
|
|
|
|
|
||
Fair Value of Assets Acquired
|
|
||
Current assets
|
142,027
|
|
|
Oil and natural gas properties(6)
|
1,746,753
|
|
|
Other property, plant and equipment
|
1,296
|
|
|
Other non-current assets
|
17,891
|
|
|
Amount attributable to assets acquired
|
1,907,967
|
|
|
Bargain purchase gain(7)
|
$
|
(122,696
|
)
|
(1)
|
Consideration paid by the Company consisted of
74 million
shares of SandRidge common stock and cash of approximately
$680.0 million
. The value of the stock consideration is based upon the closing price of
$7.33
per share of SandRidge common stock on April 17, 2012, which was the closing date of the Dynamic Acquisition. Under the acquisition method of accounting, the purchase price is determined based on the total cash paid and the fair value of SandRidge common stock issued on the acquisition date.
|
(2)
|
Cash consideration paid, including amounts paid to retire Dynamic’s long-term debt, was funded through a portion of the net proceeds from the Company’s issuance of
$750.0 million
of unsecured
8.125%
Senior Notes due 2022.
|
(3)
|
In accordance with the acquisition agreement, the Company remitted to the seller a cash payment equal to Dynamic’s average daily cash balance for the 30-day period ending on the second day prior to closing. This resulted in an additional cash payment by the Company of
$13.1 million
at closing.
|
(4)
|
The estimated fair value of the acquired asset retirement obligations was determined using the Company’s credit adjusted risk-free rate.
|
(5)
|
The net deferred tax liability is primarily a result of the difference between the estimated fair value and the Company’s expected tax basis in the assets acquired and liabilities assumed. The net deferred tax liability also includes the effects of deferred tax assets associated with net operating losses and other tax attributes acquired as a result of the Dynamic Acquisition.
|
(6)
|
The fair value of oil and natural gas properties acquired was estimated using a discounted cash flow model, with future cash flows estimated based upon projections of oil and natural gas reserve quantities and weighted average oil and natural gas prices of
$113.62
per barrel of oil and
$3.83
per Mcf of natural gas, after adjustment for transportation fees and regional price differentials. The commodity prices utilized were based upon commodity strip prices as of April 17, 2012 for the first
four
years and escalated for inflation at a rate of
2.0%
annually beginning with the fifth year through the end of production. Future cash flows were discounted using an industry weighted average cost of capital rate.
|
(7)
|
The bargain purchase gain resulted from the excess of the fair value of net assets acquired over consideration paid. To validate the bargain purchase gain on this acquisition, the Company reviewed its initial identification and valuation of assets acquired and liabilities assumed. The Company believes it was able to acquire Dynamic for less than the estimated fair value of its net assets due to their offshore location resulting in less bidding competition.
|
|
Year Ended December 31, 2012(1)
|
||
|
(In thousands, except per share data)
|
||
|
(Unaudited)
|
||
Revenues
|
$
|
2,112,576
|
|
Net income
|
$
|
39,563
|
|
Loss applicable to SandRidge Energy, Inc. common stockholders
|
$
|
(120,962
|
)
|
Loss per common share
|
|
||
Basic
|
$
|
(0.25
|
)
|
Diluted
|
$
|
(0.25
|
)
|
(1)
|
Pro forma net income, loss applicable to SandRidge Energy, Inc. common stockholders and loss per common share exclude a
$122.7 million
bargain purchase gain, a
$100.3 million
partial valuation allowance release included in income tax benefit,
$10.9 million
of fees incurred to secure financing for the Dynamic Acquisition included in interest expense and
$13.0 million
of transaction costs incurred and included in general and administrative expense in the accompanying consolidated statement of operations for the year ended December 31, 2012.
|
Consideration paid
|
|
||
Cash, net of purchase price adjustments
|
$
|
43,282
|
|
Fair value of identifiable assets acquired and liabilities assumed
|
|
||
Proved developed and undeveloped properties
|
$
|
98,725
|
|
Asset retirement obligations
|
(55,443
|
)
|
|
Total identifiable net assets
|
$
|
43,282
|
|
|
Year Ended December 31, 2012
|
||
|
(In thousands, except per share data)
|
||
|
(Unaudited)
|
||
Revenues
|
$
|
1,963,058
|
|
Net income
|
$
|
247,035
|
|
Income available to SandRidge Energy, Inc. common stockholders
|
$
|
86,510
|
|
Earnings per common share
|
|
||
Basic
|
$
|
0.19
|
|
Diluted
|
$
|
0.19
|
|
|
|
Year Ended December 31,
|
||||||
|
|
2013(1)
|
|
2012
|
||||
Revenues
|
|
$
|
68,027
|
|
|
$
|
566,075
|
|
Direct operating expenses
|
|
$
|
17,453
|
|
|
$
|
130,337
|
|
(1)
|
Includes revenues and direct operating expenses through February 26, 2013, the date of sale.
|
(1)
|
Includes revenues and expenses through
February 25, 2014
, the date of the sale.
|
|
|
Mississippian Trust I (1)
|
|
Permian Trust
|
|
Mississippian Trust II
|
|||
Total outstanding common units(1)
|
|
28,000,000
|
|
|
39,375,000
|
|
|
37,293,750
|
|
Total outstanding subordinated units(2)
|
|
—
|
|
|
13,125,000
|
|
|
12,431,250
|
|
(1)
|
The Mississippian Trust I’s previously outstanding subordinated units, all of which were held by SandRidge, converted to common units on July 1, 2014.
|
(2)
|
All outstanding subordinated units are owned by SandRidge.
|
|
December 31,
|
||||
|
2014
|
|
2013
|
||
Mississippian Trust I
|
26.9
|
%
|
|
26.9
|
%
|
Permian Trust
|
25.0
|
%
|
|
28.5
|
%
|
Mississippian Trust II
|
37.6
|
%
|
|
37.6
|
%
|
|
|
Year Ended December 31,
|
||||||||||
|
|
2014(1)
|
|
2013(2)
|
|
2012(3)
|
||||||
Total distributions
|
|
$
|
234,326
|
|
|
$
|
299,674
|
|
|
$
|
274,979
|
|
Distributions to third-party unitholders
|
|
$
|
193,807
|
|
|
$
|
206,470
|
|
|
$
|
181,727
|
|
(1)
|
Subordination thresholds were not met for the Mississippian Trust I’s first or second quarter 2014 distributions, the Permian Trust’s second, third or fourth quarter 2014 distributions or for the Mississippian Trust II’s distributions for the year ended December 31, 2014, resulting in reduced distributions to the Company on its subordinated units for these periods.
|
(2)
|
Subordination thresholds were not met for the Mississippian Trust I’s second, third or fourth quarter 2013 distributions, the Permian Trust’s second quarter 2013 distribution or for the Mississippian Trust II’s fourth quarter 2013 distribution, resulting in reduced distributions to the Company on its subordinated units for this period.
|
(3)
|
The Company received incentive distributions from the Mississippian Trust I during the first and second quarters of 2012.
|
|
Notional (MBbls)
|
|
Weighted Average
Fixed Price
|
|||
January 2015 — December 2015
|
904
|
|
|
$
|
97.78
|
|
|
Notional (MMcf)
|
|
Collar Range
|
|||||||
January 2015 — December 2015
|
1,010
|
|
|
$
|
4.00
|
|
—
|
$
|
8.55
|
|
|
Notional (MBbls)
|
|
Weighted Average
Fixed Price
|
|||
January 2015 — March 2015
|
141
|
|
|
$
|
100.90
|
|
|
December 31,
|
||||||
|
2014
|
|
2013
|
||||
Cash and cash equivalents(1)
|
$
|
9,387
|
|
|
$
|
7,912
|
|
Accounts receivable
|
17,660
|
|
|
22,540
|
|
||
Derivative contracts
|
6,589
|
|
|
4,983
|
|
||
Total current assets
|
33,636
|
|
|
35,435
|
|
||
Investment in royalty interests(2)
|
1,325,942
|
|
|
1,325,942
|
|
||
Less: accumulated depletion
|
(284,094
|
)
|
|
(186,095
|
)
|
||
|
1,041,848
|
|
|
1,139,847
|
|
||
Derivative contracts
|
—
|
|
|
1,476
|
|
||
Total assets
|
$
|
1,075,484
|
|
|
$
|
1,176,758
|
|
Accounts payable and accrued expenses
|
$
|
2,852
|
|
|
$
|
3,393
|
|
Total liabilities
|
$
|
2,852
|
|
|
$
|
3,393
|
|
(1)
|
Includes
$3.0 million
held by the trustee at
December 31, 2014
and
2013
as reserves for future general and administrative expenses.
|
(2)
|
Investment in royalty interests is included in oil and natural gas properties in the accompanying consolidated balance sheets.
|
|
December 31, 2013
|
||
Cash and cash equivalents
|
$
|
132
|
|
Accounts receivable, net
|
16
|
|
|
Prepaid expenses
|
32
|
|
|
Other current assets
|
109
|
|
|
Total current assets
|
289
|
|
|
Other property, plant and equipment, net
|
1,163
|
|
|
Total assets
|
$
|
1,452
|
|
Accounts payable and accrued expenses
|
$
|
129
|
|
Total liabilities
|
$
|
129
|
|
|
December 31,
|
||||||
|
2014
|
|
2013
|
||||
Accounts receivable due from PGC
|
$
|
1,141
|
|
|
$
|
741
|
|
Accounts payable due to PGC
|
$
|
4,163
|
|
|
$
|
3,634
|
|
Level 1
|
|
Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities.
|
|
|
|
Level 2
|
|
Quoted prices in markets that are not active, or inputs which are observable, either directly or indirectly, for substantially the full term of the asset or liability.
|
|
|
|
Level 3
|
|
Measurement based on prices or valuation models that require inputs that are both significant to the fair value measurement and less observable for objective sources (
i.e.,
supported by little or no market activity).
|
Unobservable Input
|
|
|
||
Estimated future payments for plugging and abandonment
|
|
$
|
372,034
|
|
Unobservable Input
|
|
Range
|
|
Weighted Average
|
|
Fair Value
|
||||||||||
|
|
(Price per Mcf)
|
|
(In thousands)
|
||||||||||||
December 31, 2014
|
|
|
|
|
|
|
|
|
||||||||
Natural gas basis differential forward curve
|
|
$
|
(0.03
|
)
|
–
|
$
|
(0.38
|
)
|
|
$
|
(0.29
|
)
|
|
$
|
350
|
|
|
Fair Value Measurements
|
|
Netting(1)
|
|
Assets/Liabilities at Fair Value
|
||||||||||||||
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
|
||||||||||||
Assets
|
|
|
|
|
|
|
|
|
|
||||||||||
Commodity derivative contracts
|
$
|
—
|
|
|
$
|
338,067
|
|
|
$
|
350
|
|
|
$
|
—
|
|
|
$
|
338,417
|
|
Investments
|
11,106
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
11,106
|
|
|||||
|
$
|
11,106
|
|
|
$
|
338,067
|
|
|
$
|
350
|
|
|
$
|
—
|
|
|
$
|
349,523
|
|
Liabilities
|
|
|
|
|
|
|
|
|
|
||||||||||
Guarantees
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
5,104
|
|
|
$
|
—
|
|
|
$
|
5,104
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
5,104
|
|
|
$
|
—
|
|
|
$
|
5,104
|
|
|
Fair Value Measurements
|
|
Netting(1)
|
|
Assets/Liabilities at Fair Value
|
||||||||||||||
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
|
||||||||||||
Assets
|
|
|
|
|
|
|
|
|
|
||||||||||
Restricted deposits
|
$
|
27,955
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
27,955
|
|
Commodity derivative contracts
|
—
|
|
|
50,274
|
|
|
—
|
|
|
(23,369
|
)
|
|
26,905
|
|
|||||
Investments
|
13,708
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
13,708
|
|
|||||
|
$
|
41,663
|
|
|
$
|
50,274
|
|
|
$
|
—
|
|
|
$
|
(23,369
|
)
|
|
$
|
68,568
|
|
Liabilities
|
|
|
|
|
|
|
|
|
|
||||||||||
Commodity derivative contracts
|
$
|
—
|
|
|
$
|
78,200
|
|
|
$
|
—
|
|
|
$
|
(23,369
|
)
|
|
$
|
54,831
|
|
|
$
|
—
|
|
|
$
|
78,200
|
|
|
$
|
—
|
|
|
$
|
(23,369
|
)
|
|
$
|
54,831
|
|
Level 3 Fair Value Measurements - Guarantees
|
Year Ended December 31, 2014
|
||
Beginning balance
|
$
|
—
|
|
Issuances(1)
|
9,446
|
|
|
Gain on guarantees
|
(4,342
|
)
|
|
Ending balance
|
$
|
5,104
|
|
(1)
|
Represents the fair value of the guarantees of certain plugging and abandonment obligations on behalf of Fieldwood as of February 25, 2014, the closing date for the sale of the Gulf Properties.
|
|
2014
|
|
2013
|
|
2012
|
||||||
Level 3 commodity derivative contracts at January 1
|
$
|
—
|
|
|
$
|
(512
|
)
|
|
$
|
(4,252
|
)
|
Loss on derivative contracts
|
—
|
|
|
(133
|
)
|
|
(5,460
|
)
|
|||
Purchases
|
350
|
|
|
—
|
|
|
5,697
|
|
|||
Settlements paid
|
—
|
|
|
645
|
|
|
3,503
|
|
|||
Level 3 commodity derivative contracts at December 31
|
$
|
350
|
|
|
$
|
—
|
|
|
$
|
(512
|
)
|
|
December 31, 2014
|
|
December 31, 2013
|
||||||||||||
|
Fair Value
|
|
Carrying Value
|
|
Fair Value
|
|
Carrying Value
|
||||||||
8.75% Senior Notes due 2020(1)
|
$
|
303,750
|
|
|
$
|
445,402
|
|
|
$
|
486,000
|
|
|
$
|
444,736
|
|
7.5% Senior Notes due 2021(2)
|
$
|
752,000
|
|
|
$
|
1,178,486
|
|
|
$
|
1,230,813
|
|
|
$
|
1,178,922
|
|
8.125% Senior Notes due 2022
|
$
|
472,500
|
|
|
$
|
750,000
|
|
|
$
|
795,000
|
|
|
$
|
750,000
|
|
7.5% Senior Notes due 2023(3)
|
$
|
519,750
|
|
|
$
|
821,548
|
|
|
$
|
837,375
|
|
|
$
|
821,249
|
|
(1)
|
Carrying value is net of
$4,598
and
$5,264
discount at
December 31, 2014
and
2013
, respectively.
|
(2)
|
Carrying value includes a premium, applicable to notes issued in August 2012, of
$3,486
and
$3,922
at
December 31, 2014
and
2013
, respectively.
|
(3)
|
Carrying value is net of
$3,452
and
$3,751
discount at
December 31, 2014
and
2013
, respectively.
|
|
December 31,
|
||||||
|
2014
|
|
2013
|
||||
Oil, natural gas and NGL sales
|
$
|
139,848
|
|
|
$
|
166,157
|
|
Joint interest billing
|
170,937
|
|
|
168,596
|
|
||
Oil and natural gas services
|
21,436
|
|
|
17,904
|
|
||
Insurance receivable
|
—
|
|
|
2,500
|
|
||
Other
|
4,939
|
|
|
5,122
|
|
||
|
337,160
|
|
|
360,279
|
|
||
Less: allowance for doubtful accounts
|
(7,083
|
)
|
|
(11,061
|
)
|
||
Total accounts receivable, net
|
$
|
330,077
|
|
|
$
|
349,218
|
|
|
Year Ended December 31,
|
||||||||||
|
2014
|
|
2013
|
|
2012
|
||||||
Allowance for doubtful accounts at January 1
|
$
|
11,061
|
|
|
$
|
5,635
|
|
|
$
|
3,906
|
|
Additions charged to costs and expenses(1)
|
818
|
|
|
5,497
|
|
|
1,735
|
|
|||
Deductions(2)
|
(4,796
|
)
|
|
(71
|
)
|
|
(6
|
)
|
|||
Allowance for doubtful accounts at December 31
|
$
|
7,083
|
|
|
$
|
11,061
|
|
|
$
|
5,635
|
|
(1)
|
Includes
$2.7 million
of allowance for receivables deemed uncollectible at
December 31, 2013
primarily due to bankruptcy status of customers.
|
(2)
|
Deductions represent write-off of receivables and collections of amounts for which an allowance had previously been established. Year ended
December 31, 2014
represents write-off of allowance related to the sale of the Gulf Properties.
|
|
December 31,
|
||||||
|
2014
|
|
2013
|
||||
Oil and natural gas properties
|
|
|
|
||||
Proved(1)
|
$
|
11,707,147
|
|
|
$
|
10,972,816
|
|
Unproved
|
290,596
|
|
|
531,606
|
|
||
Total oil and natural gas properties
|
11,997,743
|
|
|
11,504,422
|
|
||
Less accumulated depreciation, depletion and impairment
|
(6,359,149
|
)
|
|
(5,762,969
|
)
|
||
Net oil and natural gas properties capitalized costs
|
5,638,594
|
|
|
5,741,453
|
|
||
Land
|
16,300
|
|
|
18,423
|
|
||
Non-oil and natural gas equipment(2)
|
602,392
|
|
|
600,603
|
|
||
Buildings and structures(3)
|
263,191
|
|
|
233,405
|
|
||
Total
|
881,883
|
|
|
852,431
|
|
||
Less accumulated depreciation and amortization
|
(305,420
|
)
|
|
(286,209
|
)
|
||
Other property, plant and equipment, net
|
576,463
|
|
|
566,222
|
|
||
Total property, plant and equipment, net
|
$
|
6,215,057
|
|
|
$
|
6,307,675
|
|
(1)
|
Includes cumulative capitalized interest of approximately
$38.1 million
and
$23.4 million
at
December 31, 2014
and
2013
, respectively.
|
(2)
|
Includes cumulative capitalized interest of approximately
$4.3 million
at both
December 31, 2014
and
2013
.
|
(3)
|
Includes cumulative capitalized interest of approximately
$17.1 million
and
$12.0 million
at
December 31, 2014
and
2013
, respectively.
|
|
|
|
Year Cost Incurred
|
||||||||||||||||
|
Total
|
|
2014
|
|
2013
|
|
2012
|
|
2011 and Prior
|
||||||||||
Property acquisition
|
$
|
247,485
|
|
|
$
|
64,776
|
|
|
$
|
21,723
|
|
|
$
|
98,530
|
|
|
$
|
62,456
|
|
Exploration(1)
|
96,752
|
|
|
48,614
|
|
|
36,938
|
|
|
4,302
|
|
|
6,898
|
|
|||||
Total costs incurred
|
$
|
344,237
|
|
|
$
|
113,390
|
|
|
$
|
58,661
|
|
|
$
|
102,832
|
|
|
$
|
69,354
|
|
(1)
|
Includes
$53.6 million
of pipe inventory costs incurred (
$21.3 million
in
2014
,
$30.7 million
in
2013
and
$1.6 million
in
2012
and prior years).
|
|
December 31,
|
||||||
|
2014
|
|
2013
|
||||
Debt issuance costs, net of amortization(1)
|
$
|
56,445
|
|
|
$
|
61,923
|
|
Deferred tax asset
|
95,843
|
|
|
—
|
|
||
Restricted deposits(2)
|
—
|
|
|
27,955
|
|
||
Notes receivable on asset retirement obligations(2)
|
—
|
|
|
11,640
|
|
||
Investments
|
11,106
|
|
|
13,708
|
|
||
Other
|
1,853
|
|
|
5,945
|
|
||
Total other assets
|
$
|
165,247
|
|
|
$
|
121,171
|
|
(1)
|
Unamortized debt issuance costs associated with the 9.875% Senior Notes due 2016 and 8.0% Senior Notes due 2018 were written off in March 2013 when the Company redeemed these notes. See Note 12 for discussion of the senior note redemptions.
|
(2)
|
Assets at
December 31, 2013
were included in the sale of the Gulf Properties in February 2014, as discussed in Note
3
.
|
|
December 31,
|
||||||
|
2014
|
|
2013
|
||||
Accounts payable and other accrued expenses
|
$
|
392,500
|
|
|
$
|
341,008
|
|
Accrued interest
|
79,704
|
|
|
80,740
|
|
||
Production payable
|
120,573
|
|
|
127,647
|
|
||
Drilling advances
|
33,195
|
|
|
184,203
|
|
||
Payroll and benefits
|
44,496
|
|
|
59,785
|
|
||
Convertible perpetual preferred stock dividends
|
11,072
|
|
|
16,572
|
|
||
Related party
|
1,852
|
|
|
2,533
|
|
||
Total accounts payable and accrued expenses
|
$
|
683,392
|
|
|
$
|
812,488
|
|
|
December 31,
|
||||||
|
2014
|
|
2013
|
||||
Senior credit facility
|
$
|
—
|
|
|
$
|
—
|
|
Senior notes
|
|
|
|
||||
8.75% Senior Notes due 2020, net of $4,598 and
$5,264 discount, respectively
|
445,402
|
|
|
444,736
|
|
||
7.5% Senior Notes due 2021, including a premium of $3,486 and $3,922, respectively
|
1,178,486
|
|
|
1,178,922
|
|
||
8.125% Senior Notes due 2022
|
750,000
|
|
|
750,000
|
|
||
7.5% Senior Notes due 2023, net of $3,452 and $3,751 discount, respectively
|
821,548
|
|
|
821,249
|
|
||
Total debt
|
3,195,436
|
|
|
3,194,907
|
|
||
Less: current maturities of long-term debt
|
—
|
|
|
—
|
|
||
Long-term debt
|
$
|
3,195,436
|
|
|
$
|
3,194,907
|
|
|
|
Gross Amounts
|
|
Gross Amounts Offset
|
|
Amounts Net of Offset
|
|
Financial Collateral
|
|
Net Amount
|
||||||||||
Assets
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Derivative contracts - current
|
|
$
|
291,414
|
|
|
$
|
—
|
|
|
$
|
291,414
|
|
|
$
|
—
|
|
|
$
|
291,414
|
|
Derivative contracts - noncurrent
|
|
47,003
|
|
|
—
|
|
|
47,003
|
|
|
—
|
|
|
47,003
|
|
|||||
Total
|
|
$
|
338,417
|
|
|
$
|
—
|
|
|
$
|
338,417
|
|
|
$
|
—
|
|
|
$
|
338,417
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Liabilities
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Derivative contracts - current
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Derivative contracts - noncurrent
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Total
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
Gross Amounts
|
|
Gross Amounts Offset
|
|
Amounts Net of Offset
|
|
Financial Collateral
|
|
Net Amount
|
||||||||||
Assets
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Derivative contracts - current
|
|
$
|
18,368
|
|
|
$
|
(5,589
|
)
|
|
$
|
12,779
|
|
|
$
|
—
|
|
|
$
|
12,779
|
|
Derivative contracts - noncurrent
|
|
31,906
|
|
|
(17,780
|
)
|
|
14,126
|
|
|
—
|
|
|
14,126
|
|
|||||
Total
|
|
$
|
50,274
|
|
|
$
|
(23,369
|
)
|
|
$
|
26,905
|
|
|
$
|
—
|
|
|
$
|
26,905
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Liabilities
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Derivative contracts - current
|
|
$
|
39,856
|
|
|
$
|
(5,589
|
)
|
|
$
|
34,267
|
|
|
$
|
(34,267
|
)
|
|
$
|
—
|
|
Derivative contracts - noncurrent
|
|
38,344
|
|
|
(17,780
|
)
|
|
20,564
|
|
|
(20,564
|
)
|
|
—
|
|
|||||
Total
|
|
$
|
78,200
|
|
|
$
|
(23,369
|
)
|
|
$
|
54,831
|
|
|
$
|
(54,831
|
)
|
|
$
|
—
|
|
|
Notional (MBbls)
|
|
Weighted Average
Fixed Price
|
|||
January 2015 - December 2015
|
5,588
|
|
|
$
|
92.44
|
|
January 2016 - December 2016
|
1,464
|
|
|
$
|
88.36
|
|
|
Notional (MMcf)
|
|
Weighted Average
Fixed Price
|
|||
January 2015 - December 2015
|
19,900
|
|
|
$
|
4.51
|
|
|
Notional (MMcf)
|
|
Weighted Average
Fixed Price
|
|||
January 2015 - December 2015
|
21,900
|
|
|
$
|
(0.27
|
)
|
|
Notional (MBbls)
|
|
Sold Put
|
|
Purchased Put
|
|
Sold Call
|
|||||||
January 2015 - December 2015
|
4,576
|
|
|
$
|
76.56
|
|
|
$
|
90.28
|
|
|
$
|
103.48
|
|
January 2016 - December 2016
|
2,556
|
|
|
$
|
83.14
|
|
|
$
|
90.00
|
|
|
$
|
100.85
|
|
|
Notional (MMcf)
|
|
Collar Range
|
|||
January 2015 - December 2015
|
1,010
|
|
|
$4.00
|
—
|
$8.55
|
|
2014(1)
|
|
2013
|
|
2012(2)
|
||||||
Asset retirement obligations at January 1
|
$
|
424,117
|
|
|
$
|
498,410
|
|
|
$
|
128,116
|
|
Liability incurred upon acquiring and drilling wells
|
4,968
|
|
|
5,078
|
|
|
7,479
|
|
|||
Liability assumed in acquisition
|
—
|
|
|
—
|
|
|
371,365
|
|
|||
Revisions in estimated cash flows
|
(5,848
|
)
|
|
(3,077
|
)
|
|
34,654
|
|
|||
Liability settled or disposed in current period
|
(377,927
|
)
|
|
(113,071
|
)
|
|
(72,200
|
)
|
|||
Accretion
|
9,092
|
|
|
36,777
|
|
|
28,996
|
|
|||
Asset retirement obligations at December 31
|
54,402
|
|
|
424,117
|
|
|
498,410
|
|
|||
Less: current portion
|
—
|
|
|
87,063
|
|
|
118,504
|
|
|||
Asset retirement obligations, net of current
|
$
|
54,402
|
|
|
$
|
337,054
|
|
|
$
|
379,906
|
|
(1)
|
Liability settled or disposed in the current period includes
$366.0 million
associated with the Gulf Properties sold in February 2014, as discussed in Note
3
.
|
(2)
|
Liability assumed in acquisition represents asset retirement obligations assumed in the acquisition of oil and natural gas properties in the Gulf of Mexico during the second quarter of 2012.
|
•
|
Arthur I. Levine v. Tom L. Ward, et al., and SandRidge Energy, Inc., Nominal Defendant - filed on December 19, 2012 in the U.S. District Court for the Western District of Oklahoma
|
•
|
Deborah Depuy v. Tom L. Ward, et al., and SandRidge Energy, Inc., Nominal Defendant - filed on January 22, 2013 in the U.S. District Court for the Western District of Oklahoma
|
•
|
Paul Elliot, on Behalf of the Paul Elliot IRA R/O, v. Tom L. Ward, et al., and SandRidge Energy, Inc., Nominal Defendant - filed on January 29, 2013 in the U.S. District Court for the Western District of Oklahoma
|
•
|
Dale Hefner v. Tom L. Ward, et al., and SandRidge Energy, Inc., Nominal Defendant - filed on January 4, 2013 in the District Court of Oklahoma County, Oklahoma
|
•
|
Rocky Romano v. Tom L. Ward, et al., and SandRidge Energy, Inc., Nominal Defendant - filed on January 22, 2013 in the District Court of Oklahoma County, Oklahoma
|
•
|
Joan Brothers v. Tom L. Ward, et al., and SandRidge Energy, Inc., Nominal Defendant - filed on February 15, 2013 in the U.S. District Court for the Western District of Oklahoma
|
•
|
Lisa Ezell, Jefferson L. Mangus, and Tyler D. Mangus v. Tom L. Ward, et al., and SandRidge Energy, Inc., Nominal Defendant - filed on March 22, 2013 in the U.S. District Court for the Western District of Oklahoma
|
|
December 31,
|
||||
|
2014
|
|
2013
|
||
Shares authorized
|
50,000
|
|
|
50,000
|
|
Shares outstanding at end of period
|
|
|
|
||
8.5% Convertible perpetual preferred stock
|
2,650
|
|
|
2,650
|
|
6.0% Convertible perpetual preferred stock
|
—
|
|
|
2,000
|
|
7.0% Convertible perpetual preferred stock
|
3,000
|
|
|
3,000
|
|
|
|
Convertible Perpetual Preferred Stock
|
||||||
|
|
8.5%
|
|
7.0%
|
||||
Liquidation preference per share
|
|
$
|
100.00
|
|
|
$
|
100.00
|
|
Annual dividend per share
|
|
$
|
8.50
|
|
|
$
|
7.00
|
|
Conversion rate per share to common stock
|
|
12.4805
|
|
|
12.8791
|
|
||
Conversion date to common stock at Company's option(1)
|
|
February 20, 2014
|
|
|
November 20, 2015
|
|
(1)
|
Conversion is dependent on certain factors, including the Company’s stock trading above specified prices for a set period.
|
|
Dividends Paid
|
|
Dividends Unpaid
|
|
Total
|
||||||
Year Ended December 31, 2014
|
|
|
|
|
|
||||||
8.5% Convertible perpetual preferred stock
|
$
|
14,078
|
|
|
$
|
8,447
|
|
|
$
|
22,525
|
|
6.0% Convertible perpetual preferred stock
|
6,500
|
|
|
—
|
|
|
6,500
|
|
|||
7.0% Convertible perpetual preferred stock
|
18,375
|
|
|
2,625
|
|
|
21,000
|
|
|||
Total
|
$
|
38,953
|
|
|
$
|
11,072
|
|
|
$
|
50,025
|
|
Year Ended December 31, 2013
|
|
|
|
|
|
||||||
8.5% Convertible perpetual preferred stock
|
$
|
14,078
|
|
|
$
|
8,447
|
|
|
$
|
22,525
|
|
6.0% Convertible perpetual preferred stock
|
6,500
|
|
|
5,500
|
|
|
12,000
|
|
|||
7.0% Convertible perpetual preferred stock
|
18,375
|
|
|
2,625
|
|
|
21,000
|
|
|||
Total
|
$
|
38,953
|
|
|
$
|
16,572
|
|
|
$
|
55,525
|
|
Year Ended December 31, 2012
|
|
|
|
|
|
||||||
8.5% Convertible perpetual preferred stock
|
$
|
14,078
|
|
|
$
|
8,447
|
|
|
$
|
22,525
|
|
6.0% Convertible perpetual preferred stock
|
6,500
|
|
|
5,500
|
|
|
12,000
|
|
|||
7.0% Convertible perpetual preferred stock
|
18,375
|
|
|
2,625
|
|
|
21,000
|
|
|||
Total
|
$
|
38,953
|
|
|
$
|
16,572
|
|
|
$
|
55,525
|
|
|
December 31,
|
||||
|
2014
|
|
2013
|
||
Shares authorized
|
800,000
|
|
|
800,000
|
|
Shares outstanding at end of period
|
484,819
|
|
|
490,290
|
|
Shares held in treasury
|
1,113
|
|
|
1,319
|
|
|
Year Ended December 31,
|
||||||||||
|
2014
|
|
2013
|
|
2012
|
||||||
|
(In thousands)
|
||||||||||
Number of shares withheld for taxes
|
1,034
|
|
|
5,679
|
|
|
1,547
|
|
|||
Value of shares withheld for taxes
|
$
|
6,373
|
|
|
$
|
30,126
|
|
|
$
|
11,312
|
|
|
Number of
Shares
|
|
Weighted-
Average Grant
Date Fair Value
|
|||
Unvested restricted shares outstanding at December 31, 2011
|
13,386
|
|
|
$
|
9.34
|
|
Granted
|
7,604
|
|
|
$
|
7.46
|
|
Vested
|
(4,394
|
)
|
|
$
|
10.73
|
|
Forfeited / Canceled
|
(1,268
|
)
|
|
$
|
8.54
|
|
Unvested restricted shares outstanding at December 31, 2012
|
15,328
|
|
|
$
|
8.07
|
|
Granted
|
7,462
|
|
|
$
|
6.32
|
|
Vested
|
(13,395
|
)
|
|
$
|
7.85
|
|
Forfeited / Canceled
|
(1,752
|
)
|
|
$
|
7.33
|
|
Unvested restricted shares outstanding at December 31, 2013
|
7,643
|
|
|
$
|
6.92
|
|
Granted
|
6,367
|
|
|
$
|
6.17
|
|
Vested
|
(3,432
|
)
|
|
$
|
7.04
|
|
Forfeited / Canceled
|
(2,022
|
)
|
|
$
|
6.60
|
|
Unvested restricted shares outstanding at December 31, 2014
|
8,556
|
|
|
$
|
6.39
|
|
|
December 31,
|
||||
|
2014
|
|
2013
|
||
Outstanding at January 1
|
31,142
|
|
|
—
|
|
Granted
|
47,015
|
|
|
31,142
|
|
Forfeited /canceled
|
(12,060
|
)
|
|
—
|
|
Outstanding at December 31
|
66,097
|
|
|
31,142
|
|
|
|
|
|
||
Performance period ending December 31, 2015
|
|
|
|
||
Vested
|
9,208
|
|
|
12,178
|
|
Unvested
|
18,874
|
|
|
18,964
|
|
Performance period ending December 31, 2016
|
|
|
|
||
Vested
|
12,671
|
|
|
—
|
|
Unvested
|
25,344
|
|
|
—
|
|
|
Year Ended December 31,
|
||||||||||
|
2014
|
|
2013
|
|
2012
|
||||||
Current
|
|
|
|
|
|
||||||
Federal
|
$
|
(1,160
|
)
|
|
$
|
3,842
|
|
|
$
|
(72
|
)
|
State
|
(1,133
|
)
|
|
1,842
|
|
|
(2
|
)
|
|||
|
(2,293
|
)
|
|
5,684
|
|
|
(74
|
)
|
|||
Deferred
|
|
|
|
|
|
||||||
Federal
|
—
|
|
|
—
|
|
|
(97,410
|
)
|
|||
State
|
—
|
|
|
—
|
|
|
(2,878
|
)
|
|||
|
—
|
|
|
—
|
|
|
(100,288
|
)
|
|||
Total (benefit) provision
|
(2,293
|
)
|
|
5,684
|
|
|
(100,362
|
)
|
|||
Less: income tax provision attributable to noncontrolling interest
|
283
|
|
|
308
|
|
|
304
|
|
|||
Total (benefit) provision attributable to SandRidge Energy, Inc.
|
$
|
(2,576
|
)
|
|
$
|
5,376
|
|
|
$
|
(100,666
|
)
|
|
2014
|
|
2013
|
|
2012
|
||||||
Computed at federal statutory rate
|
$
|
122,362
|
|
|
$
|
(178,078
|
)
|
|
$
|
51,173
|
|
State taxes, net of federal benefit
|
4,145
|
|
|
(886
|
)
|
|
8,913
|
|
|||
Non-deductible expenses
|
1,895
|
|
|
2,589
|
|
|
7,247
|
|
|||
Stock-based compensation
|
1,467
|
|
|
7,611
|
|
|
7,172
|
|
|||
Net effects of consolidating the non-controlling interests’ tax provisions
|
(34,614
|
)
|
|
(13,901
|
)
|
|
(37,047
|
)
|
|||
Bargain purchase gain
|
—
|
|
|
—
|
|
|
(42,944
|
)
|
|||
Impairment of non-deductible goodwill
|
—
|
|
|
—
|
|
|
71,885
|
|
|||
Change in valuation allowance
|
(96,769
|
)
|
|
188,599
|
|
|
(66,429
|
)
|
|||
Valuation allowance release
|
—
|
|
|
—
|
|
|
(100,288
|
)
|
|||
Other
|
(1,062
|
)
|
|
(558
|
)
|
|
(348
|
)
|
|||
Total (benefit) provision attributable to SandRidge Energy, Inc.
|
$
|
(2,576
|
)
|
|
$
|
5,376
|
|
|
$
|
(100,666
|
)
|
|
December 31,
|
||||||
|
2014
|
|
2013
|
||||
Deferred tax liabilities
|
|
|
|
||||
Investments(1)
|
$
|
272,902
|
|
|
$
|
301,447
|
|
Property, plant and equipment
|
364,576
|
|
|
180,140
|
|
||
Derivative contracts
|
113,735
|
|
|
—
|
|
||
Total deferred tax liabilities
|
751,213
|
|
|
481,587
|
|
||
Deferred tax assets
|
|
|
|
||||
Derivative contracts
|
—
|
|
|
3,692
|
|
||
Allowance for doubtful accounts
|
19,086
|
|
|
20,358
|
|
||
Net operating loss carryforwards
|
1,265,458
|
|
|
973,675
|
|
||
Compensation and benefits
|
19,867
|
|
|
24,895
|
|
||
Alternative minimum tax credits and other carryforwards
|
43,840
|
|
|
46,624
|
|
||
Asset retirement obligations
|
21,946
|
|
|
147,626
|
|
||
CO
2
under-delivery shortfall penalty
|
27,674
|
|
|
15,012
|
|
||
Other
|
2,934
|
|
|
3,156
|
|
||
Total deferred tax assets
|
1,400,805
|
|
|
1,235,038
|
|
||
Valuation allowance
|
(649,592
|
)
|
|
(753,451
|
)
|
||
Net deferred tax liability
|
$
|
—
|
|
|
$
|
—
|
|
(1)
|
Includes the Company’s deferred tax liability resulting from its investment in the Royalty Trusts. See Note
4
for further discussion of the Royalty Trusts.
|
|
December 31,
|
||||||
|
2014
|
|
2013
|
||||
Unrecognized tax benefit at January 1
|
$
|
1,382
|
|
|
$
|
1,330
|
|
Changes to unrecognized tax benefits related to the current year
|
—
|
|
|
262
|
|
||
Changes to unrecognized tax benefits related to a prior year
|
(17
|
)
|
|
(210
|
)
|
||
Decreases to unrecognized tax benefits for settlements with tax authorities
|
(1,288
|
)
|
|
—
|
|
||
Unrecognized tax benefit at December 31
|
$
|
77
|
|
|
$
|
1,382
|
|
|
Income (Loss)
|
|
Weighted Average Shares
|
|
Earnings (Loss) Per Share
|
|||||
|
(In thousands, except per share amounts)
|
|||||||||
Year Ended December 31, 2014
|
|
|
|
|
|
|||||
Basic earnings per share
|
$
|
203,260
|
|
|
479,644
|
|
|
$
|
0.42
|
|
Effect of dilutive securities
|
|
|
|
|
|
|||||
Restricted stock
|
—
|
|
|
2,181
|
|
|
|
|||
Convertible preferred stock(1)
|
6,500
|
|
|
17,918
|
|
|
|
|||
Diluted earnings per share
|
$
|
209,760
|
|
|
499,743
|
|
|
$
|
0.42
|
|
Year Ended December 31, 2013
|
|
|
|
|
|
|||||
Basic loss per share
|
$
|
(609,414
|
)
|
|
481,148
|
|
|
$
|
(1.27
|
)
|
Effect of dilutive securities
|
|
|
|
|
|
|||||
Restricted stock(2)
|
—
|
|
|
—
|
|
|
|
|||
Convertible preferred stock(3)
|
—
|
|
|
—
|
|
|
|
|||
Diluted loss per share
|
$
|
(609,414
|
)
|
|
481,148
|
|
|
$
|
(1.27
|
)
|
Year Ended December 31, 2012
|
|
|
|
|
|
|||||
Basic earnings per share
|
$
|
86,046
|
|
|
453,595
|
|
|
$
|
0.19
|
|
Effect of dilutive securities
|
|
|
|
|
|
|||||
Restricted stock
|
—
|
|
|
2,420
|
|
|
|
|||
Convertible preferred stock(3)
|
—
|
|
|
—
|
|
|
|
|||
Diluted earnings per share
|
$
|
86,046
|
|
|
456,015
|
|
|
$
|
0.19
|
|
(1)
|
Potential common shares related to the Company’s outstanding 8.5% and 7.0% convertible perpetual preferred stock covering
71.7 million
shares for the year ended
December 31, 2014
were excluded from the computation of earnings per share because their effect would have been antidilutive under the if-converted method.
|
(2)
|
Restricted stock awards covering
0.5 million
shares were excluded from the computation of loss per share because their effect would have been antidilutive.
|
(3)
|
Potential common shares related to the Company’s outstanding
8.5%
,
6.0%
and
7.0%
convertible perpetual preferred stock covering
90.1 million
shares for the years ended
December 31, 2013
and
2012
, were excluded from the computation of earnings (loss) per share because their effect would have been antidilutive under the if-converted method.
|
Royalty Trust
|
|
Total Distribution
|
|
Amount to be Distributed to Third-Party Unitholders
|
||||
Mississippian Trust I
|
|
$
|
8,538
|
|
|
$
|
6,242
|
|
Permian Trust
|
|
27,681
|
|
|
25,830
|
|
||
Mississippian Trust II
|
|
13,985
|
|
|
11,644
|
|
||
Total
|
|
$
|
50,204
|
|
|
$
|
43,716
|
|
|
Exploration and
Production(1)
|
|
Drilling and Oil
Field Services(2)
|
|
Midstream
Services(3)
|
|
All Other(4)
|
|
Consolidated
Total
|
||||||||||
Year Ended December 31, 2014
|
|
|
|
|
|
|
|
|
|
||||||||||
Revenues
|
$
|
1,423,073
|
|
|
$
|
192,944
|
|
|
$
|
142,987
|
|
|
$
|
4,376
|
|
|
$
|
1,763,380
|
|
Inter-segment revenue
|
(173
|
)
|
|
(116,856
|
)
|
|
(87,593
|
)
|
|
—
|
|
|
(204,622
|
)
|
|||||
Total revenues
|
$
|
1,422,900
|
|
|
$
|
76,088
|
|
|
$
|
55,394
|
|
|
$
|
4,376
|
|
|
$
|
1,558,758
|
|
Income (loss) from operations
|
$
|
713,716
|
|
|
$
|
(37,564
|
)
|
|
$
|
(9,094
|
)
|
|
$
|
(76,834
|
)
|
|
$
|
590,224
|
|
Interest income (expense), net
|
100
|
|
|
—
|
|
|
—
|
|
|
(244,209
|
)
|
|
(244,109
|
)
|
|||||
Other (expense) income, net
|
(423
|
)
|
|
(541
|
)
|
|
9
|
|
|
4,445
|
|
|
3,490
|
|
|||||
Income (loss) before income taxes
|
$
|
713,393
|
|
|
$
|
(38,105
|
)
|
|
$
|
(9,085
|
)
|
|
$
|
(316,598
|
)
|
|
$
|
349,605
|
|
Capital expenditures(5)
|
$
|
1,508,100
|
|
|
$
|
18,385
|
|
|
$
|
44,606
|
|
|
$
|
37,798
|
|
|
$
|
1,608,889
|
|
Depreciation, depletion, amortization and accretion
|
$
|
443,573
|
|
|
$
|
29,105
|
|
|
$
|
10,085
|
|
|
$
|
20,260
|
|
|
$
|
503,023
|
|
At December 31, 2014
|
|
|
|
|
|
|
|
|
|
||||||||||
Total assets
|
$
|
6,273,802
|
|
|
$
|
115,083
|
|
|
$
|
219,691
|
|
|
$
|
650,649
|
|
|
$
|
7,259,225
|
|
Year Ended December 31, 2013
|
|
|
|
|
|
|
|
|
|
||||||||||
Revenues
|
$
|
1,834,480
|
|
|
$
|
187,456
|
|
|
$
|
179,989
|
|
|
$
|
3,127
|
|
|
$
|
2,205,052
|
|
Inter-segment revenue
|
(320
|
)
|
|
(120,815
|
)
|
|
(100,529
|
)
|
|
—
|
|
|
(221,664
|
)
|
|||||
Total revenues
|
$
|
1,834,160
|
|
|
$
|
66,641
|
|
|
$
|
79,460
|
|
|
$
|
3,127
|
|
|
$
|
1,983,388
|
|
Income (loss) from operations
|
$
|
62,509
|
|
|
$
|
(40,155
|
)
|
|
$
|
(21,567
|
)
|
|
$
|
(169,788
|
)
|
|
$
|
(169,001
|
)
|
Interest income (expense), net
|
1,168
|
|
|
—
|
|
|
(209
|
)
|
|
(271,193
|
)
|
|
(270,234
|
)
|
|||||
Loss on extinguishment of debt
|
—
|
|
|
—
|
|
|
—
|
|
|
(82,005
|
)
|
|
(82,005
|
)
|
|||||
Other income (expense), net
|
5,487
|
|
|
—
|
|
|
(3,222
|
)
|
|
10,180
|
|
|
12,445
|
|
|||||
Income (loss) before income taxes
|
$
|
69,164
|
|
|
$
|
(40,155
|
)
|
|
$
|
(24,998
|
)
|
|
$
|
(512,806
|
)
|
|
$
|
(508,795
|
)
|
Capital expenditures(5)
|
$
|
1,319,012
|
|
|
$
|
7,125
|
|
|
$
|
55,706
|
|
|
$
|
42,040
|
|
|
$
|
1,423,883
|
|
Depreciation, depletion, amortization and accretion
|
$
|
605,242
|
|
|
$
|
33,291
|
|
|
$
|
7,972
|
|
|
$
|
20,140
|
|
|
$
|
666,645
|
|
At December 31, 2013
|
|
|
|
|
|
|
|
|
|
||||||||||
Total assets
|
$
|
6,157,225
|
|
|
$
|
158,737
|
|
|
$
|
188,165
|
|
|
$
|
1,180,668
|
|
|
$
|
7,684,795
|
|
Year Ended December 31, 2012
|
|
|
|
|
|
|
|
|
|
||||||||||
Revenues
|
$
|
1,775,221
|
|
|
$
|
379,345
|
|
|
$
|
116,659
|
|
|
$
|
4,356
|
|
|
$
|
2,275,581
|
|
Inter-segment revenue
|
(403
|
)
|
|
(262,712
|
)
|
|
(77,824
|
)
|
|
—
|
|
|
(340,939
|
)
|
|||||
Total revenues
|
$
|
1,774,818
|
|
|
$
|
116,633
|
|
|
$
|
38,835
|
|
|
$
|
4,356
|
|
|
$
|
1,934,642
|
|
Income (loss) from operations
|
$
|
518,144
|
|
|
$
|
11,911
|
|
|
$
|
(73,027
|
)
|
|
$
|
(131,832
|
)
|
|
$
|
325,196
|
|
Interest income (expense), net
|
1,286
|
|
|
—
|
|
|
(559
|
)
|
|
(304,076
|
)
|
|
(303,349
|
)
|
|||||
Bargain purchase gain
|
122,696
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
122,696
|
|
|||||
Loss on extinguishment of debt
|
—
|
|
|
—
|
|
|
—
|
|
|
(3,075
|
)
|
|
(3,075
|
)
|
|||||
Other income, net
|
1,868
|
|
|
—
|
|
|
—
|
|
|
2,873
|
|
|
4,741
|
|
|||||
Income (loss) before income taxes
|
$
|
643,994
|
|
|
$
|
11,911
|
|
|
$
|
(73,586
|
)
|
|
$
|
(436,110
|
)
|
|
$
|
146,209
|
|
Capital expenditures(5)
|
$
|
2,001,490
|
|
|
$
|
27,527
|
|
|
$
|
80,413
|
|
|
$
|
114,552
|
|
|
$
|
2,223,982
|
|
Depreciation, depletion, amortization and accretion
|
$
|
598,101
|
|
|
$
|
34,677
|
|
|
$
|
7,188
|
|
|
$
|
17,864
|
|
|
$
|
657,830
|
|
(1)
|
Income (loss) from operations includes a full cost ceiling impairment of
$164.8 million
for the year ended December 31, 2014, a loss on the sale of the Permian Properties of
$398.9 million
for the year ended
December 31, 2013
, an impairment of the Company’s goodwill of
$235.4 million
for the year ended
December 31, 2012
and the Company’s (gain) loss on derivative contracts, including net cash payments upon settlement, for the years ended
December 31, 2014
,
2013
and 2012. See Note
13
for discussion of derivative contracts.
|
(2)
|
For the years ended
December 31, 2014
and 2013, income (loss) from operations includes impairments of
$27.4 million
and
$11.1 million
, respectively, on certain drilling assets.
|
(3)
|
For the years ended
December 31, 2014
,
2013
and 2012, loss from operations includes impairments of the Company’s gas treating plants in west Texas and other midstream assets of
$0.6 million
,
$3.9 million
and
$59.7 million
, respectively.
|
(4)
|
For the year ended
December 31, 2013
, loss from operations includes a
$2.9 million
impairment of a corporate asset and an
$8.3 million
impairment of the Company’s CO
2
compression facilities. For the year ended
December 31, 2012
, loss from operations includes a
$19.6 million
impairment of the Company’s CO
2
compression facilities.
|
(5)
|
On an accrual basis and exclusive of acquisitions.
|
|
2014
|
|||||
|
Sales
|
|
% of Revenue
|
|||
Plains Marketing, L.P.
|
$
|
597,117
|
|
|
38.3
|
%
|
Atlas Pipeline Mid-Continent West OK LLC
|
$
|
333,027
|
|
|
21.4
|
%
|
|
2013
|
|||||
|
Sales
|
|
% of Revenue
|
|||
Plains Marketing, L.P.
|
$
|
491,258
|
|
|
24.8
|
%
|
Shell Trading (US) Company
|
$
|
347,422
|
|
|
17.5
|
%
|
Atlas Pipeline Mid-Continent West OK LLC
|
$
|
211,838
|
|
|
10.7
|
%
|
|
2012
|
|||||
|
Sales
|
|
% of Revenue
|
|||
Plains Marketing, L.P.
|
$
|
426,339
|
|
|
15.6
|
%
|
Enterprise Crude Oil, LLC
|
$
|
394,162
|
|
|
14.4
|
%
|
|
December 31, 2014
|
||||||||||||||||||
|
Parent
|
|
Guarantors
|
|
Non-Guarantors
|
|
Eliminations
|
|
Consolidated
|
||||||||||
|
(In thousands)
|
||||||||||||||||||
ASSETS
|
|
|
|
|
|
|
|
|
|
||||||||||
Current assets
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents
|
$
|
170,468
|
|
|
$
|
1,398
|
|
|
$
|
9,387
|
|
|
$
|
—
|
|
|
$
|
181,253
|
|
Accounts receivable, net
|
7
|
|
|
299,764
|
|
|
30,313
|
|
|
(7
|
)
|
|
330,077
|
|
|||||
Intercompany accounts receivable
|
751,376
|
|
|
1,339,152
|
|
|
41,679
|
|
|
(2,132,207
|
)
|
|
—
|
|
|||||
Derivative contracts
|
—
|
|
|
284,825
|
|
|
45,043
|
|
|
(38,454
|
)
|
|
291,414
|
|
|||||
Prepaid expenses
|
—
|
|
|
7,971
|
|
|
10
|
|
|
—
|
|
|
7,981
|
|
|||||
Other current assets
|
—
|
|
|
21,193
|
|
|
—
|
|
|
—
|
|
|
21,193
|
|
|||||
Total current assets
|
921,851
|
|
|
1,954,303
|
|
|
126,432
|
|
|
(2,170,668
|
)
|
|
831,918
|
|
|||||
Property, plant and equipment, net
|
—
|
|
|
4,987,281
|
|
|
1,227,776
|
|
|
—
|
|
|
6,215,057
|
|
|||||
Investment in subsidiaries
|
6,606,198
|
|
|
176,365
|
|
|
—
|
|
|
(6,782,563
|
)
|
|
—
|
|
|||||
Derivative contracts
|
—
|
|
|
47,003
|
|
|
—
|
|
|
—
|
|
|
47,003
|
|
|||||
Other assets
|
152,286
|
|
|
18,197
|
|
|
666
|
|
|
(5,902
|
)
|
|
165,247
|
|
|||||
Total assets
|
$
|
7,680,335
|
|
|
$
|
7,183,149
|
|
|
$
|
1,354,874
|
|
|
$
|
(8,959,133
|
)
|
|
$
|
7,259,225
|
|
LIABILITIES AND EQUITY
|
|
|
|
|
|
|
|
|
|
||||||||||
Current liabilities
|
|
|
|
|
|
|
|
|
|
||||||||||
Accounts payable and accrued expenses
|
$
|
201,368
|
|
|
$
|
477,399
|
|
|
$
|
4,632
|
|
|
$
|
(7
|
)
|
|
$
|
683,392
|
|
Intercompany accounts payable
|
1,315,667
|
|
|
780,645
|
|
|
35,895
|
|
|
(2,132,207
|
)
|
|
—
|
|
|||||
Derivative contracts
|
—
|
|
|
38,454
|
|
|
—
|
|
|
(38,454
|
)
|
|
—
|
|
|||||
Deferred tax liability
|
95,843
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
95,843
|
|
|||||
Other current liabilities
|
—
|
|
|
5,216
|
|
|
—
|
|
|
—
|
|
|
5,216
|
|
|||||
Total current liabilities
|
1,612,878
|
|
|
1,301,714
|
|
|
40,527
|
|
|
(2,170,668
|
)
|
|
784,451
|
|
|||||
Investment in subsidiaries
|
928,217
|
|
|
134,013
|
|
|
—
|
|
|
(1,062,230
|
)
|
|
—
|
|
|||||
Long-term debt
|
3,201,338
|
|
|
—
|
|
|
—
|
|
|
(5,902
|
)
|
|
3,195,436
|
|
|||||
Asset retirement obligations
|
—
|
|
|
54,402
|
|
|
—
|
|
|
—
|
|
|
54,402
|
|
|||||
Other long-term obligations
|
77
|
|
|
15,039
|
|
|
—
|
|
|
—
|
|
|
15,116
|
|
|||||
Total liabilities
|
5,742,510
|
|
|
1,505,168
|
|
|
40,527
|
|
|
(3,238,800
|
)
|
|
4,049,405
|
|
|||||
Equity
|
|
|
|
|
|
|
|
|
|
||||||||||
SandRidge Energy, Inc. stockholders’ equity
|
1,937,825
|
|
|
5,677,981
|
|
|
1,314,347
|
|
|
(6,992,328
|
)
|
|
1,937,825
|
|
|||||
Noncontrolling interest
|
—
|
|
|
—
|
|
|
—
|
|
|
1,271,995
|
|
|
1,271,995
|
|
|||||
Total equity
|
1,937,825
|
|
|
5,677,981
|
|
|
1,314,347
|
|
|
(5,720,333
|
)
|
|
3,209,820
|
|
|||||
Total liabilities and equity
|
$
|
7,680,335
|
|
|
$
|
7,183,149
|
|
|
$
|
1,354,874
|
|
|
$
|
(8,959,133
|
)
|
|
$
|
7,259,225
|
|
|
December 31, 2013
|
||||||||||||||||||
|
Parent
|
|
Guarantors
|
|
Non-Guarantors
|
|
Eliminations
|
|
Consolidated
|
||||||||||
|
(In thousands)
|
||||||||||||||||||
ASSETS
|
|
|
|
|
|
|
|
|
|
||||||||||
Current assets
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents
|
$
|
805,505
|
|
|
$
|
1,013
|
|
|
$
|
8,145
|
|
|
$
|
—
|
|
|
$
|
814,663
|
|
Accounts receivable, net
|
—
|
|
|
326,345
|
|
|
22,873
|
|
|
—
|
|
|
349,218
|
|
|||||
Intercompany accounts receivable
|
153,325
|
|
|
982,524
|
|
|
70,107
|
|
|
(1,205,956
|
)
|
|
—
|
|
|||||
Derivative contracts
|
—
|
|
|
7,796
|
|
|
14,748
|
|
|
(9,765
|
)
|
|
12,779
|
|
|||||
Prepaid expenses
|
—
|
|
|
39,165
|
|
|
88
|
|
|
—
|
|
|
39,253
|
|
|||||
Other current assets
|
1,376
|
|
|
24,410
|
|
|
124
|
|
|
—
|
|
|
25,910
|
|
|||||
Total current assets
|
960,206
|
|
|
1,381,253
|
|
|
116,085
|
|
|
(1,215,721
|
)
|
|
1,241,823
|
|
|||||
Property, plant and equipment, net
|
—
|
|
|
5,125,543
|
|
|
1,182,132
|
|
|
—
|
|
|
6,307,675
|
|
|||||
Investment in subsidiaries
|
6,009,603
|
|
|
49,418
|
|
|
—
|
|
|
(6,059,021
|
)
|
|
—
|
|
|||||
Derivative contracts
|
—
|
|
|
12,650
|
|
|
9,585
|
|
|
(8,109
|
)
|
|
14,126
|
|
|||||
Other assets
|
61,923
|
|
|
65,123
|
|
|
27
|
|
|
(5,902
|
)
|
|
121,171
|
|
|||||
Total assets
|
$
|
7,031,732
|
|
|
$
|
6,633,987
|
|
|
$
|
1,307,829
|
|
|
$
|
(7,288,753
|
)
|
|
$
|
7,684,795
|
|
LIABILITIES AND EQUITY
|
|
|
|
|
|
|
|
|
|
||||||||||
Current liabilities
|
|
|
|
|
|
|
|
|
|
||||||||||
Accounts payable and accrued expenses
|
$
|
207,572
|
|
|
$
|
601,074
|
|
|
$
|
3,842
|
|
|
$
|
—
|
|
|
$
|
812,488
|
|
Intercompany accounts payable
|
967,365
|
|
|
181,573
|
|
|
57,018
|
|
|
(1,205,956
|
)
|
|
—
|
|
|||||
Derivative contracts
|
—
|
|
|
44,032
|
|
|
—
|
|
|
(9,765
|
)
|
|
34,267
|
|
|||||
Asset retirement obligations
|
—
|
|
|
87,063
|
|
|
—
|
|
|
—
|
|
|
87,063
|
|
|||||
Total current liabilities
|
1,174,937
|
|
|
913,742
|
|
|
60,860
|
|
|
(1,215,721
|
)
|
|
933,818
|
|
|||||
Investment in subsidiaries
|
828,794
|
|
|
152,266
|
|
|
—
|
|
|
(981,060
|
)
|
|
—
|
|
|||||
Long-term debt
|
3,200,809
|
|
|
—
|
|
|
—
|
|
|
(5,902
|
)
|
|
3,194,907
|
|
|||||
Derivative contracts
|
—
|
|
|
28,673
|
|
|
—
|
|
|
(8,109
|
)
|
|
20,564
|
|
|||||
Asset retirement obligations
|
—
|
|
|
337,054
|
|
|
—
|
|
|
—
|
|
|
337,054
|
|
|||||
Other long-term obligations
|
1,382
|
|
|
21,443
|
|
|
—
|
|
|
—
|
|
|
22,825
|
|
|||||
Total liabilities
|
5,205,922
|
|
|
1,453,178
|
|
|
60,860
|
|
|
(2,210,792
|
)
|
|
4,509,168
|
|
|||||
Equity
|
|
|
|
|
|
|
|
|
|
||||||||||
SandRidge Energy, Inc. stockholders’ equity
|
1,825,810
|
|
|
5,180,809
|
|
|
1,246,969
|
|
|
(6,427,778
|
)
|
|
1,825,810
|
|
|||||
Noncontrolling interest
|
—
|
|
|
—
|
|
|
—
|
|
|
1,349,817
|
|
|
1,349,817
|
|
|||||
Total equity
|
1,825,810
|
|
|
5,180,809
|
|
|
1,246,969
|
|
|
(5,077,961
|
)
|
|
3,175,627
|
|
|||||
Total liabilities and equity
|
$
|
7,031,732
|
|
|
$
|
6,633,987
|
|
|
$
|
1,307,829
|
|
|
$
|
(7,288,753
|
)
|
|
$
|
7,684,795
|
|
|
Parent
|
|
Guarantors
|
|
Non-Guarantors
|
|
Eliminations
|
|
Consolidated
|
||||||||||
|
(In thousands)
|
||||||||||||||||||
Year Ended December 31, 2014
|
|
|
|
|
|
|
|
|
|
||||||||||
Total revenues
|
$
|
—
|
|
|
$
|
1,341,531
|
|
|
$
|
217,367
|
|
|
$
|
(140
|
)
|
|
$
|
1,558,758
|
|
Expenses
|
|
|
|
|
|
|
|
|
|
||||||||||
Direct operating expenses
|
—
|
|
|
467,175
|
|
|
16,854
|
|
|
(140
|
)
|
|
483,889
|
|
|||||
General and administrative
|
331
|
|
|
118,249
|
|
|
4,285
|
|
|
—
|
|
|
122,865
|
|
|||||
Depreciation, depletion, amortization and accretion
|
—
|
|
|
446,149
|
|
|
56,874
|
|
|
—
|
|
|
503,023
|
|
|||||
Impairment
|
—
|
|
|
150,125
|
|
|
42,643
|
|
|
—
|
|
|
192,768
|
|
|||||
Gain on derivative contracts
|
—
|
|
|
(292,733
|
)
|
|
(41,278
|
)
|
|
—
|
|
|
(334,011
|
)
|
|||||
Total expenses
|
331
|
|
|
888,965
|
|
|
79,378
|
|
|
(140
|
)
|
|
968,534
|
|
|||||
(Loss) income from operations
|
(331
|
)
|
|
452,566
|
|
|
137,989
|
|
|
—
|
|
|
590,224
|
|
|||||
Equity earnings from subsidiaries
|
495,154
|
|
|
38,967
|
|
|
—
|
|
|
(534,121
|
)
|
|
—
|
|
|||||
Interest (expense) income, net
|
(244,209
|
)
|
|
100
|
|
|
—
|
|
|
—
|
|
|
(244,109
|
)
|
|||||
Other income (expense), net
|
—
|
|
|
3,521
|
|
|
(31
|
)
|
|
—
|
|
|
3,490
|
|
|||||
Income before income taxes
|
250,614
|
|
|
495,154
|
|
|
137,958
|
|
|
(534,121
|
)
|
|
349,605
|
|
|||||
Income tax (benefit) expense
|
(2,671
|
)
|
|
—
|
|
|
378
|
|
|
—
|
|
|
(2,293
|
)
|
|||||
Net income
|
253,285
|
|
|
495,154
|
|
|
137,580
|
|
|
(534,121
|
)
|
|
351,898
|
|
|||||
Less: net income attributable to noncontrolling interest
|
—
|
|
|
—
|
|
|
—
|
|
|
98,613
|
|
|
98,613
|
|
|||||
Net income attributable to SandRidge Energy, Inc.
|
$
|
253,285
|
|
|
$
|
495,154
|
|
|
$
|
137,580
|
|
|
$
|
(632,734
|
)
|
|
$
|
253,285
|
|
|
Parent
|
|
Guarantors
|
|
Non-Guarantors
|
|
Eliminations
|
|
Consolidated
|
||||||||||
|
(In thousands)
|
||||||||||||||||||
Year Ended December 31, 2013
|
|
|
|
|
|
|
|
|
|
||||||||||
Total revenues
|
$
|
—
|
|
|
$
|
1,675,481
|
|
|
$
|
308,300
|
|
|
$
|
(393
|
)
|
|
$
|
1,983,388
|
|
Expenses
|
|
|
|
|
|
|
|
|
|
||||||||||
Direct operating expenses
|
—
|
|
|
654,080
|
|
|
29,143
|
|
|
(393
|
)
|
|
682,830
|
|
|||||
General and administrative
|
329
|
|
|
323,808
|
|
|
6,288
|
|
|
—
|
|
|
330,425
|
|
|||||
Depreciation, depletion, amortization and accretion
|
—
|
|
|
581,435
|
|
|
85,210
|
|
|
—
|
|
|
666,645
|
|
|||||
Impairment
|
—
|
|
|
15,038
|
|
|
11,242
|
|
|
—
|
|
|
26,280
|
|
|||||
Loss on derivative contracts
|
—
|
|
|
24,702
|
|
|
22,421
|
|
|
—
|
|
|
47,123
|
|
|||||
Loss on sale of assets
|
—
|
|
|
291,743
|
|
|
107,343
|
|
|
—
|
|
|
399,086
|
|
|||||
Total expenses
|
329
|
|
|
1,890,806
|
|
|
261,647
|
|
|
(393
|
)
|
|
2,152,389
|
|
|||||
(Loss) income from operations
|
(329
|
)
|
|
(215,325
|
)
|
|
46,653
|
|
|
—
|
|
|
(169,001
|
)
|
|||||
Equity earnings from subsidiaries
|
(195,118
|
)
|
|
3,075
|
|
|
—
|
|
|
192,043
|
|
|
—
|
|
|||||
Interest (expense) income, net
|
(271,193
|
)
|
|
959
|
|
|
—
|
|
|
—
|
|
|
(270,234
|
)
|
|||||
Loss on extinguishment of debt
|
(82,005
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(82,005
|
)
|
|||||
Other income (expense), net
|
—
|
|
|
16,173
|
|
|
(3,728
|
)
|
|
—
|
|
|
12,445
|
|
|||||
(Loss) income before income taxes
|
(548,645
|
)
|
|
(195,118
|
)
|
|
42,925
|
|
|
192,043
|
|
|
(508,795
|
)
|
|||||
Income tax expense
|
5,244
|
|
|
—
|
|
|
440
|
|
|
—
|
|
|
5,684
|
|
|||||
Net (loss) income
|
(553,889
|
)
|
|
(195,118
|
)
|
|
42,485
|
|
|
192,043
|
|
|
(514,479
|
)
|
|||||
Less: net income attributable to noncontrolling interest
|
—
|
|
|
—
|
|
|
—
|
|
|
39,410
|
|
|
39,410
|
|
|||||
Net (loss) income attributable to SandRidge Energy, Inc.
|
$
|
(553,889
|
)
|
|
$
|
(195,118
|
)
|
|
$
|
42,485
|
|
|
$
|
152,633
|
|
|
$
|
(553,889
|
)
|
|
Parent
|
|
Guarantors
|
|
Non-Guarantors
|
|
Eliminations
|
|
Consolidated
|
||||||||||
|
(In thousands)
|
||||||||||||||||||
Year Ended December 31, 2012
|
|
|
|
|
|
|
|
|
|
||||||||||
Total revenues
|
$
|
—
|
|
|
$
|
1,638,741
|
|
|
$
|
404,418
|
|
|
$
|
(108,517
|
)
|
|
$
|
1,934,642
|
|
Expenses
|
|
|
|
|
|
|
|
|
|
||||||||||
Direct operating expenses
|
—
|
|
|
596,028
|
|
|
146,416
|
|
|
(107,095
|
)
|
|
635,349
|
|
|||||
General and administrative
|
367
|
|
|
235,102
|
|
|
7,635
|
|
|
(1,422
|
)
|
|
241,682
|
|
|||||
Depreciation, depletion, amortization and accretion
|
—
|
|
|
570,786
|
|
|
87,044
|
|
|
—
|
|
|
657,830
|
|
|||||
Impairment
|
—
|
|
|
236,671
|
|
|
79,333
|
|
|
—
|
|
|
316,004
|
|
|||||
Gain on derivative contracts
|
—
|
|
|
(198,732
|
)
|
|
(42,687
|
)
|
|
—
|
|
|
(241,419
|
)
|
|||||
Total expenses
|
367
|
|
|
1,439,855
|
|
|
277,741
|
|
|
(108,517
|
)
|
|
1,609,446
|
|
|||||
(Loss) income from operations
|
(367
|
)
|
|
198,886
|
|
|
126,677
|
|
|
—
|
|
|
325,196
|
|
|||||
Equity earnings from subsidiaries
|
347,715
|
|
|
20,667
|
|
|
—
|
|
|
(368,382
|
)
|
|
—
|
|
|||||
Interest (expense) income, net
|
(303,510
|
)
|
|
725
|
|
|
(564
|
)
|
|
—
|
|
|
(303,349
|
)
|
|||||
Bargain purchase gain
|
—
|
|
|
122,696
|
|
|
—
|
|
|
—
|
|
|
122,696
|
|
|||||
Loss on extinguishment of debt
|
(3,075
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(3,075
|
)
|
|||||
Other income, net
|
—
|
|
|
4,741
|
|
|
—
|
|
|
—
|
|
|
4,741
|
|
|||||
Income before income taxes
|
40,763
|
|
|
347,715
|
|
|
126,113
|
|
|
(368,382
|
)
|
|
146,209
|
|
|||||
Income tax (benefit) expense
|
(100,808
|
)
|
|
—
|
|
|
446
|
|
|
—
|
|
|
(100,362
|
)
|
|||||
Net income
|
141,571
|
|
|
347,715
|
|
|
125,667
|
|
|
(368,382
|
)
|
|
246,571
|
|
|||||
Less: net income attributable to noncontrolling interest
|
—
|
|
|
—
|
|
|
—
|
|
|
105,000
|
|
|
105,000
|
|
|||||
Net income attributable to SandRidge Energy, Inc.
|
$
|
141,571
|
|
|
$
|
347,715
|
|
|
$
|
125,667
|
|
|
$
|
(473,382
|
)
|
|
$
|
141,571
|
|
|
Parent
|
|
Guarantors
|
|
Non-Guarantors
|
|
Eliminations
|
|
Consolidated
|
||||||||||
|
(In thousands)
|
||||||||||||||||||
Year Ended December 31, 2014
|
|
|
|
|
|
|
|
|
|
||||||||||
Net cash provided by operating activities
|
$
|
141,751
|
|
|
$
|
258,498
|
|
|
$
|
212,427
|
|
|
$
|
8,438
|
|
|
$
|
621,114
|
|
Cash flows from investing activities
|
|
|
|
|
|
|
|
|
|
||||||||||
Capital expenditures for property, plant and equipment
|
—
|
|
|
(1,553,332
|
)
|
|
—
|
|
|
—
|
|
|
(1,553,332
|
)
|
|||||
Proceeds from sale of assets
|
—
|
|
|
711,728
|
|
|
2,747
|
|
|
—
|
|
|
714,475
|
|
|||||
Other
|
—
|
|
|
(165,551
|
)
|
|
1,140
|
|
|
146,027
|
|
|
(18,384
|
)
|
|||||
Net cash (used in) provided by investing activities
|
—
|
|
|
(1,007,155
|
)
|
|
3,887
|
|
|
146,027
|
|
|
(857,241
|
)
|
|||||
Cash flows from financing activities
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Distributions to unitholders
|
—
|
|
|
—
|
|
|
(234,327
|
)
|
|
40,520
|
|
|
(193,807
|
)
|
|||||
Repurchase of common stock
|
(111,827
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(111,827
|
)
|
|||||
Intercompany (advances) borrowings, net
|
(598,051
|
)
|
|
598,056
|
|
|
(5
|
)
|
|
—
|
|
|
—
|
|
|||||
Other
|
(66,910
|
)
|
|
150,986
|
|
|
19,260
|
|
|
(194,985
|
)
|
|
(91,649
|
)
|
|||||
Net cash (used in) provided by financing activities
|
(776,788
|
)
|
|
749,042
|
|
|
(215,072
|
)
|
|
(154,465
|
)
|
|
(397,283
|
)
|
|||||
Net (decrease) increase in cash and cash equivalents
|
(635,037
|
)
|
|
385
|
|
|
1,242
|
|
|
—
|
|
|
(633,410
|
)
|
|||||
Cash and cash equivalents at beginning of year
|
805,505
|
|
|
1,013
|
|
|
8,145
|
|
|
—
|
|
|
814,663
|
|
|||||
Cash and cash equivalents at end of year
|
$
|
170,468
|
|
|
$
|
1,398
|
|
|
$
|
9,387
|
|
|
$
|
—
|
|
|
$
|
181,253
|
|
|
Parent
|
|
Guarantors
|
|
Non-Guarantors
|
|
Eliminations
|
|
Consolidated
|
||||||||||
|
(In thousands)
|
||||||||||||||||||
Year Ended December 31, 2013
|
|
|
|
|
|
|
|
|
|
||||||||||
Net cash (used in) provided by operating activities
|
$
|
(239,026
|
)
|
|
$
|
852,026
|
|
|
$
|
254,723
|
|
|
$
|
907
|
|
|
$
|
868,630
|
|
Cash flows from investing activities
|
|
|
|
|
|
|
|
|
|
||||||||||
Capital expenditures for property, plant and equipment
|
—
|
|
|
(1,496,731
|
)
|
|
—
|
|
|
—
|
|
|
(1,496,731
|
)
|
|||||
Proceeds from sale of assets
|
—
|
|
|
2,566,742
|
|
|
17,373
|
|
|
—
|
|
|
2,584,115
|
|
|||||
Other
|
—
|
|
|
89,606
|
|
|
3,197
|
|
|
(109,831
|
)
|
|
(17,028
|
)
|
|||||
Net cash provided by investing activities
|
—
|
|
|
1,159,617
|
|
|
20,570
|
|
|
(109,831
|
)
|
|
1,070,356
|
|
|||||
Cash flows from financing activities
|
|
|
|
|
|
|
|
|
|
||||||||||
Repayments of borrowings
|
(1,115,500
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,115,500
|
)
|
|||||
Premium on debt redemption
|
(61,997
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(61,997
|
)
|
|||||
Distributions to unitholders
|
—
|
|
|
—
|
|
|
(299,675
|
)
|
|
93,205
|
|
|
(206,470
|
)
|
|||||
Dividends paid—preferred
|
(55,525
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(55,525
|
)
|
|||||
Intercompany borrowings (advances), net
|
2,009,146
|
|
|
(2,018,212
|
)
|
|
9,066
|
|
|
—
|
|
|
—
|
|
|||||
Other
|
(31,821
|
)
|
|
6,660
|
|
|
14,845
|
|
|
15,719
|
|
|
5,403
|
|
|||||
Net cash provided by (used in) financing activities
|
744,303
|
|
|
(2,011,552
|
)
|
|
(275,764
|
)
|
|
108,924
|
|
|
(1,434,089
|
)
|
|||||
Net increase (decrease) in cash and cash equivalents
|
505,277
|
|
|
91
|
|
|
(471
|
)
|
|
—
|
|
|
504,897
|
|
|||||
Cash and cash equivalents at beginning of year
|
300,228
|
|
|
922
|
|
|
8,616
|
|
|
—
|
|
|
309,766
|
|
|||||
Cash and cash equivalents at end of year
|
$
|
805,505
|
|
|
$
|
1,013
|
|
|
$
|
8,145
|
|
|
$
|
—
|
|
|
$
|
814,663
|
|
|
Parent
|
|
Guarantors
|
|
Non-Guarantors
|
|
Eliminations
|
|
Consolidated
|
||||||||||
|
(In thousands)
|
||||||||||||||||||
Year Ended December 31, 2012
|
|
|
|
|
|
|
|
|
|
||||||||||
Net cash provided by operating activities
|
$
|
285,567
|
|
|
$
|
264,717
|
|
|
$
|
162,281
|
|
|
$
|
70,595
|
|
|
$
|
783,160
|
|
Cash flows from investing activities
|
|
|
|
|
|
|
|
|
|
||||||||||
Capital expenditures for property, plant and equipment
|
—
|
|
|
(2,112,547
|
)
|
|
(33,825
|
)
|
|
—
|
|
|
(2,146,372
|
)
|
|||||
Acquisitions, net of cash received
|
(693,091
|
)
|
|
(147,649
|
)
|
|
(587,086
|
)
|
|
587,086
|
|
|
(840,740
|
)
|
|||||
Proceeds from sale of assets
|
129,830
|
|
|
942,675
|
|
|
1,333
|
|
|
(642,671
|
)
|
|
431,167
|
|
|||||
Other
|
(61,343
|
)
|
|
278,708
|
|
|
—
|
|
|
(217,365
|
)
|
|
—
|
|
|||||
Net cash used in investing activities
|
(624,604
|
)
|
|
(1,038,813
|
)
|
|
(619,578
|
)
|
|
(272,950
|
)
|
|
(2,555,945
|
)
|
|||||
Cash flows from financing activities
|
|
|
|
|
|
|
|
|
|
||||||||||
Proceeds from borrowings
|
1,850,344
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,850,344
|
|
|||||
Repayments of borrowings
|
(350,000
|
)
|
|
—
|
|
|
(16,029
|
)
|
|
—
|
|
|
(366,029
|
)
|
|||||
Proceeds from issuance royalty trust units
|
—
|
|
|
—
|
|
|
587,086
|
|
|
—
|
|
|
587,086
|
|
|||||
Proceeds from sale of royalty trust units
|
—
|
|
|
—
|
|
|
—
|
|
|
139,360
|
|
|
139,360
|
|
|||||
Distributions to unitholders
|
—
|
|
|
—
|
|
|
(274,980
|
)
|
|
93,253
|
|
|
(181,727
|
)
|
|||||
Dividends paid—preferred
|
(55,525
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(55,525
|
)
|
|||||
Intercompany (advances) borrowings, net
|
(945,448
|
)
|
|
809,099
|
|
|
136,349
|
|
|
—
|
|
|
—
|
|
|||||
Other
|
(64,121
|
)
|
|
(34,518
|
)
|
|
30,258
|
|
|
(30,258
|
)
|
|
(98,639
|
)
|
|||||
Net cash provided by financing activities
|
435,250
|
|
|
774,581
|
|
|
462,684
|
|
|
202,355
|
|
|
1,874,870
|
|
|||||
Net increase in cash and cash equivalents
|
96,213
|
|
|
485
|
|
|
5,387
|
|
|
—
|
|
|
102,085
|
|
|||||
Cash and cash equivalents at beginning of year
|
204,015
|
|
|
437
|
|
|
3,229
|
|
|
—
|
|
|
207,681
|
|
|||||
Cash and cash equivalents at end of year
|
$
|
300,228
|
|
|
$
|
922
|
|
|
$
|
8,616
|
|
|
$
|
—
|
|
|
$
|
309,766
|
|
|
December 31,
|
||||||||||
|
2014
|
|
2013
|
|
2012
|
||||||
Oil and natural gas properties
|
|
|
|
|
|
||||||
Proved
|
$
|
11,707,147
|
|
|
$
|
10,972,816
|
|
|
$
|
12,262,921
|
|
Unproved
|
290,596
|
|
|
531,606
|
|
|
865,863
|
|
|||
Total oil and natural gas properties
|
11,997,743
|
|
|
11,504,422
|
|
|
13,128,784
|
|
|||
Less accumulated depreciation, depletion and impairment
|
(6,359,149
|
)
|
|
(5,762,969
|
)
|
|
(5,231,182
|
)
|
|||
Net oil and natural gas properties capitalized costs
|
$
|
5,638,594
|
|
|
$
|
5,741,453
|
|
|
$
|
7,897,602
|
|
|
Year Ended December 31,
|
||||||||||
|
2014
|
|
2013
|
|
2012
|
||||||
Acquisitions of properties
|
|
|
|
|
|
||||||
Proved
|
$
|
73,370
|
|
|
$
|
21,130
|
|
|
$
|
1,761,556
|
|
Unproved
|
123,649
|
|
|
100,242
|
|
|
377,185
|
|
|||
Exploration(1)
|
41,070
|
|
|
82,775
|
|
|
120,438
|
|
|||
Development(2)
|
1,288,395
|
|
|
1,131,269
|
|
|
1,704,991
|
|
|||
Total cost incurred
|
$
|
1,526,484
|
|
|
$
|
1,335,416
|
|
|
$
|
3,964,170
|
|
(1)
|
Includes seismic costs of
$10.8 million
,
$6.7 million
and
$15.3 million
for
2014
,
2013
and
2012
, respectively.
|
(2)
|
Includes the Company’s share of Century Plant construction costs of
$50.0 million
for
2012
. See Note
7
.
|
|
Year Ended December 31,
|
||||||||||
|
2014
|
|
2013
|
|
2012
|
||||||
Revenues
|
$
|
1,420,879
|
|
|
$
|
1,820,278
|
|
|
$
|
1,759,282
|
|
Expenses
|
|
|
|
|
|
||||||
Production costs
|
377,819
|
|
|
548,719
|
|
|
524,364
|
|
|||
Depreciation and depletion
|
434,295
|
|
|
567,732
|
|
|
568,029
|
|
|||
Accretion of asset retirement obligations
|
9,092
|
|
|
36,777
|
|
|
28,996
|
|
|||
Total expenses
|
821,206
|
|
|
1,153,228
|
|
|
1,121,389
|
|
|||
Income before income taxes
|
599,673
|
|
|
667,050
|
|
|
637,893
|
|
|||
Benefit of income taxes(1)
|
(3,933
|
)
|
|
(7,471
|
)
|
|
(437,595
|
)
|
|||
Results of operations for oil and natural gas producing activities (excluding corporate overhead and interest costs)
|
$
|
603,606
|
|
|
$
|
674,521
|
|
|
$
|
1,075,488
|
|
(1)
|
Reflects the Company’s effective tax rate, including the partial valuation allowance releases.
|
•
|
the quality and quantity of available data and the engineering and geological interpretation of that data;
|
•
|
estimates regarding the amount and timing of future costs, which could vary considerably from actual costs;
|
•
|
the accuracy of mandated economic assumptions such as the future prices of oil, natural gas and NGLs; and
|
•
|
the judgment of the personnel preparing the estimates.
|
|
Oil
|
|
NGL
|
|
Natural Gas
|
|||
|
(MBbls)
|
|
(MBbls)
|
|
(MMcf)(1)
|
|||
Proved developed and undeveloped reserves
|
|
|
|
|
|
|||
As of December 31, 2011
|
214,450
|
|
|
30,335
|
|
|
1,355,056
|
|
Revisions of previous estimates
|
(37,394
|
)
|
|
15,098
|
|
|
(538,214
|
)
|
Acquisitions of new reserves
|
31,470
|
|
|
683
|
|
|
202,995
|
|
Extensions and discoveries
|
89,656
|
|
|
27,259
|
|
|
489,302
|
|
Sales of reserves in place
|
(20,269
|
)
|
|
(3,287
|
)
|
|
(548
|
)
|
Production
|
(15,868
|
)
|
|
(2,094
|
)
|
|
(93,549
|
)
|
As of December 31, 2012(2)
|
262,045
|
|
|
67,994
|
|
|
1,415,042
|
|
Revisions of previous estimates
|
(13,969
|
)
|
|
3,717
|
|
|
(53,432
|
)
|
Acquisitions of new reserves
|
43
|
|
|
13
|
|
|
363
|
|
Extensions and discoveries
|
40,570
|
|
|
18,686
|
|
|
359,918
|
|
Sales of reserves in place
|
(131,769
|
)
|
|
(29,067
|
)
|
|
(228,229
|
)
|
Production
|
(14,279
|
)
|
|
(2,291
|
)
|
|
(103,233
|
)
|
As of December 31, 2013(2)
|
142,641
|
|
|
59,052
|
|
|
1,390,429
|
|
Revisions of previous estimates
|
(18,687
|
)
|
|
11,103
|
|
|
167,589
|
|
Acquisitions of new reserves
|
1,009
|
|
|
441
|
|
|
12,527
|
|
Extensions and discoveries
|
37,603
|
|
|
27,500
|
|
|
467,185
|
|
Sales of reserves in place
|
(25,659
|
)
|
|
(2,516
|
)
|
|
(163,800
|
)
|
Production
|
(10,876
|
)
|
|
(3,794
|
)
|
|
(85,697
|
)
|
As of December 31, 2014(2)
|
126,031
|
|
|
91,786
|
|
|
1,788,233
|
|
Proved developed reserves
|
|
|
|
|
|
|||
As of December 31, 2011
|
101,578
|
|
|
17,150
|
|
|
670,382
|
|
As of December 31, 2012
|
136,605
|
|
|
33,785
|
|
|
896,701
|
|
As of December 31, 2013
|
83,893
|
|
|
35,807
|
|
|
951,609
|
|
As of December 31, 2014
|
79,022
|
|
|
56,823
|
|
|
1,203,447
|
|
Proved undeveloped reserves
|
|
|
|
|
|
|||
As of December 31, 2011
|
112,872
|
|
|
13,185
|
|
|
684,674
|
|
As of December 31, 2012
|
125,440
|
|
|
34,209
|
|
|
518,341
|
|
As of December 31, 2013
|
58,748
|
|
|
23,245
|
|
|
438,820
|
|
As of December 31, 2014
|
47,009
|
|
|
34,963
|
|
|
584,786
|
|
(1)
|
Natural gas reserves are computed at
14.65
pounds per square inch absolute and
60
degrees Fahrenheit.
|
(2)
|
Includes proved reserves attributable to noncontrolling interests at
December 31, 2014
,
2013
and
2012
as shown in the table below:
|
•
|
the standardized measure includes the Company’s estimate of proved oil, natural gas and NGL reserves and projected future production volumes based upon economic conditions;
|
•
|
pricing is applied based upon 12-month average market prices at
December 31, 2014
,
2013
and
2012
adjusted for fixed or determinable contracts that are in existence at year-end. The calculated weighted average per unit prices for the Company’s proved reserves and future net revenues were as follows:
|
|
At December 31,
|
||||||||||
|
2014
|
|
2013
|
|
2012
|
||||||
Oil (per barrel)
|
$
|
91.65
|
|
|
$
|
95.67
|
|
|
$
|
91.65
|
|
NGL (per barrel)
|
$
|
32.79
|
|
|
$
|
31.40
|
|
|
$
|
32.64
|
|
Natural gas (per Mcf)
|
$
|
3.61
|
|
|
$
|
3.65
|
|
|
$
|
2.29
|
|
•
|
future development and production costs are determined based upon actual cost at year-end;
|
•
|
the standardized measure includes projections of future abandonment costs based upon actual costs at year-end; and
|
•
|
a discount factor of 10% per year is applied annually to the future net cash flows.
|
|
At December 31,
|
||||||||||
|
2014
|
|
2013
|
|
2012
|
||||||
Future cash inflows from production
|
$
|
21,022,320
|
|
|
$
|
19,937,484
|
|
|
$
|
29,482,544
|
|
Future production costs
|
(6,499,366
|
)
|
|
(6,843,713
|
)
|
|
(8,899,465
|
)
|
|||
Future development costs(1)
|
(1,810,201
|
)
|
|
(2,546,680
|
)
|
|
(4,021,051
|
)
|
|||
Future income tax expenses
|
(3,223,740
|
)
|
|
(2,283,541
|
)
|
|
(3,721,509
|
)
|
|||
Undiscounted future net cash flows
|
9,489,013
|
|
|
8,263,550
|
|
|
12,840,519
|
|
|||
10% annual discount
|
(5,401,261
|
)
|
|
(4,245,939
|
)
|
|
(7,000,151
|
)
|
|||
Standardized measure of discounted future net cash flows(2)
|
$
|
4,087,752
|
|
|
$
|
4,017,611
|
|
|
$
|
5,840,368
|
|
(1)
|
Includes abandonment costs.
|
(2)
|
Includes approximately
$643.3 million
,
$781.6 million
and
$952.7 million
attributable to noncontrolling interests at
December 31, 2014
,
2013
and
2012
respectively.
|
Present value as of December 31, 2011
|
$
|
5,216,337
|
|
Changes during the year
|
|
||
Revenues less production and other costs
|
(1,234,918
|
)
|
|
Net changes in prices, production and other costs
|
(2,555,391
|
)
|
|
Development costs incurred
|
766,943
|
|
|
Net changes in future development costs
|
(45,397
|
)
|
|
Extensions and discoveries
|
2,092,423
|
|
|
Revisions of previous quantity estimates
|
(530,755
|
)
|
|
Accretion of discount
|
678,200
|
|
|
Net change in income taxes
|
11,433
|
|
|
Purchases of reserves in-place
|
1,708,301
|
|
|
Sales of reserves in-place
|
(410,415
|
)
|
|
Timing differences and other(1)
|
143,607
|
|
|
Net change for the year
|
624,031
|
|
|
Present value as of December 31, 2012(2)
|
5,840,368
|
|
|
Changes during the year
|
|
||
Revenues less production and other costs
|
(1,271,559
|
)
|
|
Net changes in prices, production and other costs
|
271,566
|
|
|
Development costs incurred
|
474,275
|
|
|
Net changes in future development costs
|
(207,729
|
)
|
|
Extensions and discoveries
|
1,406,102
|
|
|
Revisions of previous quantity estimates
|
(296,418
|
)
|
|
Accretion of discount
|
711,385
|
|
|
Net change in income taxes
|
477,328
|
|
|
Purchases of reserves in-place
|
1,628
|
|
|
Sales of reserves in-place
|
(3,172,187
|
)
|
|
Timing differences and other(1)
|
(217,148
|
)
|
|
Net change for the year
|
(1,822,757
|
)
|
|
Present value as of December 31, 2013(2)
|
4,017,611
|
|
|
Changes during the year
|
|
||
Revenues less production and other costs
|
(1,043,060
|
)
|
|
Net changes in prices, production and other costs
|
331,694
|
|
|
Development costs incurred
|
364,262
|
|
|
Net changes in future development costs
|
(341,183
|
)
|
|
Extensions and discoveries
|
1,785,963
|
|
|
Revisions of previous quantity estimates
|
(77,688
|
)
|
|
Accretion of discount
|
477,458
|
|
|
Net change in income taxes
|
(256,371
|
)
|
|
Purchases of reserves in-place
|
50,958
|
|
|
Sales of reserves in-place
|
(1,058,330
|
)
|
|
Timing differences and other(1)
|
(163,562
|
)
|
|
Net change for the year
|
70,141
|
|
|
Present value as of December 31, 2014(2)
|
$
|
4,087,752
|
|
(1)
|
The change in timing differences and other are related to revisions in the Company’s estimated time of production and development.
|
(2)
|
Includes approximately
$643.3 million
,
$781.6 million
and
$952.7 million
attributable to noncontrolling interests at
December 31, 2014
,
2013
, and 2012 respectively.
|
|
First
Quarter
|
|
Second
Quarter
|
|
Third
Quarter
|
|
Fourth
Quarter
|
||||||||
2014
|
|
|
|
|
|
|
|
||||||||
Total revenues
|
$
|
443,056
|
|
|
$
|
374,714
|
|
|
$
|
394,107
|
|
|
$
|
346,881
|
|
(Loss) income from operations(1)(2)
|
$
|
(82,330
|
)
|
|
$
|
42,079
|
|
|
$
|
256,491
|
|
|
$
|
373,984
|
|
Net (loss) income(1)(2)
|
$
|
(142,406
|
)
|
|
$
|
(17,252
|
)
|
|
$
|
197,499
|
|
|
$
|
314,057
|
|
(Loss applicable) income available to SandRidge Energy, Inc. common stockholders(1)(2)
|
$
|
(150,217
|
)
|
|
$
|
(46,775
|
)
|
|
$
|
145,957
|
|
|
$
|
254,295
|
|
(Loss applicable) income available per share to SandRidge Energy, Inc. common stockholders(3)
|
|
|
|
|
|
|
|
||||||||
Basic
|
$
|
(0.31
|
)
|
|
$
|
(0.10
|
)
|
|
$
|
0.30
|
|
|
$
|
0.55
|
|
Diluted
|
$
|
(0.31
|
)
|
|
$
|
(0.10
|
)
|
|
$
|
0.27
|
|
|
$
|
0.48
|
|
2013
|
|
|
|
|
|
|
|
||||||||
Total revenues
|
$
|
511,690
|
|
|
$
|
512,987
|
|
|
$
|
493,603
|
|
|
$
|
465,108
|
|
(Loss) income from operations(4)(5)(6)
|
$
|
(367,482
|
)
|
|
$
|
78,386
|
|
|
$
|
(2,166
|
)
|
|
$
|
122,261
|
|
Net (loss) income(4)(5)(6)
|
$
|
(539,215
|
)
|
|
$
|
16,613
|
|
|
$
|
(65,256
|
)
|
|
$
|
73,379
|
|
(Loss applicable) income available to SandRidge Energy, Inc. common stockholders(4)(5)(6)
|
$
|
(501,177
|
)
|
|
$
|
(42,389
|
)
|
|
$
|
(95,328
|
)
|
|
$
|
29,480
|
|
(Loss applicable) income available per share to SandRidge Energy, Inc. common stockholders(3)
|
|
|
|
|
|
|
|
||||||||
Basic
|
$
|
(1.05
|
)
|
|
$
|
(0.09
|
)
|
|
$
|
(0.20
|
)
|
|
$
|
0.06
|
|
Diluted
|
$
|
(1.05
|
)
|
|
$
|
(0.09
|
)
|
|
$
|
(0.20
|
)
|
|
$
|
0.06
|
|
(1)
|
Includes a full cost ceiling limitation impairment of
$164.8 million
in the first quarter and impairments of drilling assets of
$3.1 million
and
$24.3 million
in the second and fourth quarters, respectively.
|
(2)
|
Includes loss (gain) on derivative contracts of
$42.5 million
,
$85.3 million
,
$(132.6) million
and
$(329.2) million
for the first, second, third and fourth quarters, respectively.
|
(3)
|
(Loss applicable) income available per share to common stockholders for each quarter is computed using the weighted-average number of shares outstanding during the quarter, while earnings per share for the fiscal year is computed using the weighted-average number of shares outstanding during the year. Thus, the sum of (loss applicable) income available per share to common stockholders for each of the four quarters may not equal the fiscal year amount.
|
(4)
|
Includes a
$10.6 million
impairment of various drilling assets and a
$2.9 million
impairment of a corporate asset in the second quarter of 2013 and a
$2.1 million
and
$10.0 million
impairment of certain midstream inventory, natural gas compressors, gas treating plants and a CO
2
compression station in the second and fourth quarters of 2013, respectively.
|
(5)
|
Includes loss (gain) on derivative contracts of
$40.9 million
,
$(103.7) million
,
$132.8 million
and
$(22.9) million
for the first, second, third and fourth quarters, respectively.
|
(6)
|
Includes loss on sale of Permian Properties of
$398.9 million
in the first quarter of 2013.
|
|
SANDRIDGE ENERGY, INC.
|
|
|
|
|
|
By
|
/s/ J
AMES
D. B
ENNETT
|
|
|
James D. Bennett,
|
|
|
President and Chief Executive Officer
|
February 27, 2015
|
|
|
Signature
|
|
Title
|
Date
|
|
|
|
|
/s/ JAMES D. BENNETT
|
|
President, Chief Executive Officer and Director (Principal Executive Officer)
|
February 27, 2015
|
James D. Bennett
|
|
|
|
|
|
|
|
/s/ EDDIE M. LEBLANC
|
|
Chief Financial Officer and Executive Vice President (Principal Financial Officer)
|
February 27, 2015
|
Eddie M. LeBlanc
|
|
|
|
|
|
|
|
/s/ RANDALL D. COOLEY
|
|
Senior Vice President—Accounting (Principal Accounting Officer)
|
February 27, 2015
|
Randall D. Cooley
|
|
|
|
|
|
|
|
/s/ J. MIKE STICE
|
|
Director
|
February 27, 2015
|
J. Mike Stice
|
|
|
|
|
|
|
|
/s/ EVERETT R. DOBSON
|
|
Director
|
February 27, 2015
|
Everett R. Dobson
|
|
|
|
|
|
|
|
/s/ JIM J. BREWER
|
|
Director
|
February 27, 2015
|
Jim J. Brewer
|
|
|
|
|
|
|
|
/s/ JEFFERY S. SEROTA
|
|
Director
|
February 27, 2015
|
Jeffery S. Serota
|
|
|
|
|
|
|
|
/s/ EDWARD W. MONEYPENNY
|
|
Director
|
February 27, 2015
|
Edward W. Moneypenny
|
|
|
|
|
|
|
|
/s/ STEPHEN C. BEASLEY
|
|
Director
|
February 27, 2015
|
Stephen C. Beasley
|
|
|
|
|
|
|
|
/s/ ALAN J. WEBER
|
|
Director
|
February 27, 2015
|
Alan J. Weber
|
|
|
|
|
|
|
|
/s/ DAN A. WESTBROOK
|
|
Director
|
February 27, 2015
|
Dan A. Westbrook
|
|
|
|
|
|
Incorporated by Reference
|
|
||||
Exhibit
No.
|
Exhibit Description
|
Form
|
SEC
File No.
|
Exhibit
|
Filing Date
|
Filed
Herewith
|
|
2.1
|
Equity Purchase Agreement dated as of January 6, 2014, between SandRidge Energy, Inc., SandRidge Holdings, Inc. and Fieldwood Energy LLC
|
8-K
|
001-33784
|
2.1
|
|
1/9/2014
|
|
3.1
|
Certificate of Incorporation of SandRidge Energy, Inc.
|
S-1
|
333-148956
|
3.1
|
|
1/30/2008
|
|
3.2
|
Certificate of Amendment to the Certificate of Incorporation of SandRidge Energy, Inc., dated July 16, 2010
|
10-Q
|
001-33784
|
3.2
|
|
8/9/2010
|
|
3.3
|
Certificate of Designation of 8.5% Convertible Perpetual Preferred Stock of SandRidge Energy, Inc.
|
8-K
|
001-33784
|
3.1
|
|
1/21/2009
|
|
3.4
|
Certificate of Designation of 6.0% Convertible Perpetual Preferred Stock of SandRidge Energy, Inc.
|
8-K
|
001-33784
|
3.1
|
|
12/22/2009
|
|
3.5
|
Certificate of Designation of 7.0% Convertible Perpetual Preferred Stock of SandRidge Energy, Inc.
|
8-K
|
001-33784
|
3.1
|
|
11/10/2010
|
|
3.6
|
Certificate of Designations of Series A Junior Participating Preferred Stock of SandRidge Energy, Inc.
|
8-K
|
001-33784
|
3.1
|
|
11/20/2012
|
|
3.7
|
Certificate of Elimination of Series A Junior Participating Preferred Stock of SandRidge Energy, Inc.
|
8-K
|
001-33784
|
3.1
|
|
4/30/2013
|
|
3.8
|
Amended and Restated Bylaws of SandRidge Energy, Inc.
|
8-K
|
001-33784
|
3.1
|
|
3/9/2009
|
|
3.9
|
Amendments to the March 3, 2009 Amended and Restated Bylaws of SandRidge Energy, Inc. effective November 19, 2012
|
8-K
|
001-33784
|
3.2
|
|
11/20/2012
|
|
4.1
|
Specimen Stock Certificate representing common stock of SandRidge Energy, Inc.
|
S-1
|
333-148956
|
4.1
|
|
1/30/2008
|
|
4.2
|
Indenture, dated December 16, 2009, by and among SandRidge Energy, Inc., certain subsidiary guarantors named therein and Wells Fargo Bank, National Association, as trustee
|
8-K
|
001-33784
|
4.1
|
|
12/22/2009
|
|
4.3
|
Indenture, dated March 15, 2011, by and among the SandRidge Energy, Inc., certain subsidiary guarantors named therein, and Wells Fargo Bank, National Association, as trustee
|
8-K
|
001-33784
|
4.1
|
|
3/18/2011
|
|
4.4
|
Indenture, dated as of April 17, 2012, among SandRidge Energy, Inc., certain subsidiary guarantors named therein, and Wells Fargo Bank, National Association
|
8-K
|
001-33784
|
4.1
|
|
4/17/2012
|
|
4.5
|
Supplemental Indenture, dated April 17, 2012, among SandRidge Energy, Inc., certain subsidiary guarantors named therein, and Wells Fargo Bank, National Association, as trustee
|
8-K
|
001-33784
|
4.3
|
|
4/17/2012
|
|
4.6
|
Supplemental Indenture, dated June 1, 2012, among SandRidge Energy, Inc., certain subsidiary guarantors named therein, and Wells Fargo Bank, National Association, as trustee
|
10-Q
|
001-33784
|
4.3
|
|
8/6/2012
|
|
4.7
|
Indenture, dated as of August 20, 2012, among SandRidge Energy, Inc., certain subsidiary guarantors named therein, and Wells Fargo Bank, National Association, as trustee
|
8-K
|
001-33784
|
4.4
|
|
8/21/2012
|
|
10.1†
|
Executive Nonqualified Excess Plan
|
8-K
|
001-33784
|
10.1
|
|
7/15/2008
|
|
10.2.1†
|
SandRidge Energy, Inc. 2009 Incentive Plan (as amended on July 1, 2013)
|
10-K
|
001-33784
|
10.2
|
|
2/28/2014
|
|
|
|
Incorporated by Reference
|
|
||||
Exhibit
No.
|
Exhibit Description
|
Form
|
SEC
File No.
|
Exhibit
|
Filing Date
|
Filed
Herewith
|
|
10.2.2†
|
Amendment to the SandRidge Energy, Inc. 2009 Incentive Plan
|
10-Q
|
001-33784
|
10.3
|
|
8/8/2013
|
|
10.2.3†
|
Form of Restricted Stock Certificate for SandRidge Energy, Inc. 2009 Incentive Plan
|
|
|
|
|
*
|
|
10.2.4†
|
Form of Performance Unit Certificate for SandRidge Energy, Inc. 2009 Incentive Plan
|
|
|
|
|
*
|
|
10.2.5†
|
Form of Restricted Stock Unit Certificate for SandRidge Energy, Inc. 2009 Incentive Plan
|
|
|
|
|
*
|
|
10.2.6†
|
Form of Performance Share Unit Certificate for SandRidge Energy, Inc. 2009 Incentive Plan
|
|
|
|
|
*
|
|
10.3.1
|
Employment Agreement, effective as of August 12, 2014, between SandRidge Energy, Inc. and James D. Bennett
|
|
|
|
|
*
|
|
10.3.2
|
Employment Agreement, effective as of December 30, 2013, between SandRidge Energy, Inc. and Duane Grubert
|
|
|
|
|
*
|
|
10.3.3
|
Form of Employment Agreement for Executive Vice Presidents and Senior Vice Presidents of SandRidge Energy, Inc.
|
|
|
|
|
*
|
|
10.4†
|
Form of Indemnification Agreement for directors and officers
|
S-1
|
333-148956
|
10.5
|
|
1/30/2008
|
|
10.5
|
Third Amended and Restated Credit Agreement, dated as of October 22, 2014, among SandRidge Energy, Inc., Bank of America, N.A., as Administrative Agent, Swing Line Lender and L/C Issuer, and the other lenders party thereto
|
8-K
|
001-33784
|
10.1
|
|
10/24/2014
|
|
10.5.2
|
Amendment No. 1 to the Third Amended and Restated Credit Agreement and Waiver, dated as of November 14, 2014, among SandRidge Energy, Inc., Bank of America, N.A., as Administrative Agent, Swing Line Lender and L/C Issuer, and the other lenders party thereto
|
8-K
|
001-33784
|
10.1
|
|
11/19/2014
|
|
10.5.3
|
Amendment No. 2 and Scheduled Determination of the Borrowing Base, dated as of February 23, 2015, to the Third Amended and Restated Credit Agreement among SandRidge Energy, Inc., Bank of America, N.A., as Administrative Agent, Swing Line Lender and L/C Issuer, and the other lenders party thereto
|
|
|
|
|
*
|
|
10.6
|
Gas Treating and CO
2
Delivery Agreement, dated June 29, 2008, by and between Oxy USA Inc. and SandRidge Energy Exploration and Production, LLC
|
10-Q
|
001-33784
|
10.2
|
|
8/7/2008
|
|
10.7
|
Gas Gathering Agreement, dated June 30, 2009, by and between Piñon Gathering Company, LLC and SandRidge Exploration and Production, LLC
|
10-Q
|
001-33784
|
10.5
|
|
8/6/2009
|
|
10.8
|
Operations and Maintenance Agreement, dated June 30, 2009, by and between Piñon Gathering Company, LLC and SandRidge Midstream, Inc.
|
10-Q
|
001-33784
|
10.6
|
|
8/6/2009
|
|
10.9
|
Development Agreement, by and between SandRidge Energy, Inc., SandRidge Exploration and Production, LLC and SandRidge Permian Trust
|
8-K
|
001-33784
|
10.1
|
|
8/19/2011
|
|
10.10
|
Development Agreement, by and between SandRidge Energy, Inc., SandRidge Exploration and Production, LLC and SandRidge Mississippian Trust II
|
8-K
|
001-33784
|
10.1
|
|
4/24/2012
|
|
|
|
SandRidge Energy, Inc.
|
|
|
ID: 20-8084793
|
|
|
123 Robert S. Kerr Avenue
|
|
|
Oklahoma City, Oklahoma 73102
|
Shares
[
number
]
[
number
]
[
number
]
[
number
]
|
Vest Dates
[
mm/dd/yyyy
]
[
mm/dd/yyyy
]
[
mm/dd/yyyy
]
[
mm/dd/yyyy
]
|
Number of Shares
|
Date
|
25% of Award Shares
|
1
st
Anniversary of Grant Date
|
25% of Award Shares
|
2
nd
Anniversary of Grant Date
|
25% of Award Shares
|
3
rd
Anniversary of Grant Date
|
25% of Award Shares
|
4
th
Anniversary of Grant Date
|
By: By:
|
|
Title:
|
|
|
|
|
|
SandRidge Energy, Inc.
|
|
|
ID: 20-8084793
|
|
|
123 Robert S. Kerr Avenue
|
|
|
Oklahoma City, Oklahoma 73102
|
|
|
|
|
|
|
[
name
]
|
|
Award Number:
|
[number]
|
|
[
address
]
|
|
Plan:
|
2009 Incentive Plan
|
|
[
address
]
|
|
ID:
|
[ID]
|
|
Percentage of Units
|
Vesting Dates
|
33%
|
December 31, 2013
|
33%
|
December 31, 2014
|
Remainder
|
December 31, 2015
|
Relative TSR
*
Position Compared to Energy Peer Companies
|
Value of Performance Unit
**
|
Below 25th Percentile
|
$0
|
25th Percentile
|
$50
|
50th Percentile
|
$100
|
75th Percentile or Higher
|
$200
|
By:
|
|
Title:
|
|
|
|
SandRidge Energy, Inc.
|
|
|
ID: 20-8084793
|
||
|
123 Robert S. Kerr Avenue
|
||
|
Oklahoma City, Oklahoma 73102
|
||
|
|
[
name
]
|
|
Award Number:
|
[
number
]
|
|
[
address
]
|
|
Plan:
|
2009 Incentive Plan
|
|
[
address
]
|
|
ID:
|
[
ID
]
|
|
Restricted Stock Units
[
number
]
[
number
]
[
number
]
[
number
]
|
Vesting Dates
[
mm/dd/yyyy
]
[
mm/dd/yyyy
]
[
mm/dd/yyyy
]
[
mm/dd/yyyy
]
|
By: By:
|
|
Title:
|
|
|
|
|
|
SandRidge Energy, Inc.
|
|
|
ID: 20-8084793
|
|
|
123 Robert S. Kerr Avenue
|
|
|
Oklahoma City, Oklahoma 73102
|
|
|
|
Participant:
|
|
|
|
[
Name
]
|
|
Award Number:
|
[
number
]
|
[
Address
]
|
|
Plan:
|
2009 Incentive Plan
|
[
Address
]
|
|
ID:
|
[
ID
]
|
Percentage of Units
|
Vesting Dates
|
33%
|
December 31, 2015
|
33%
|
December 31, 2016
|
Remainder
|
December 31, 2017
|
Relative TSR
*
Position Compared to Peer Companies
|
Applicable Multiple
|
|
Relative TSR
*
Position Compared to Peer Companies
|
Applicable Multiple
|
20th
|
0.0%
|
|
10th
|
100.0%
|
19th
|
20.0%
|
|
9th
|
111.1%
|
18th
|
28.8%
|
|
8th
|
122.2%
|
17th
|
37.7%
|
|
7th
|
133.3%
|
16th
|
46.6%
|
|
6th
|
144.4%
|
15th
|
55.5%
|
|
5th
|
155.5%
|
14th
|
64.4%
|
|
4th
|
166.6%
|
13th
|
73.3%
|
|
3rd
|
177.7%
|
12th
|
82.2%
|
|
2nd
|
188.8%
|
11th
|
91.1%
|
|
1st
|
200.0%
|
To the Executive:
|
to the Executive at the address set forth below such Executive’s signature hereto.
|
1.
|
Termination of Employment
.
SandRidge has made the decision to terminate your employment effective [Separation Date].
|
2.
|
Final Payment
.
You have been paid or will be paid your earned salary through the effective date of the termination of your employment. Your final paycheck will include payment for [number (#)] days of accrued and unused paid time off (“PTO”). If you believe the amount of your final paycheck is incorrect, you agree to contact SandRidge immediately.
|
3.
|
Severance Payment
.
Consistent with the terms of your Employment Agreement, and in consideration of your service to SandRidge and your execution of this Separation Agreement and the General Release contained hereafter, SandRidge will provide you with a severance payment equal to [number (#)] months’ base salary. This severance payment will not otherwise be “benefit bearing” and will not be considered as compensation for purposes of the Company's 401(k) plan, the non-qualified deferred compensation plan or for accrual of PTO or other leave. The severance payment will be paid within 60 days of your Separation Date. You will only receive the severance payment if you have returned an executed copy of this Separation Agreement and the accompanying General Release during the [21/45] day period immediately following
|
4.
|
Return of SandRidge Property
.
If you have any Company property in your possession, you agree to immediately return it to your supervisor or the Human Resources Department within 14 days of your Separation Date. SandRidge property includes work product, electronic devices and other physical property of the Company. This includes equipment, supplies, keys, security items, credit cards, passwords, electronic devices, laptop computers, cellular phones and Blackberry devices. You must also return all originals and any copies of Company records. This includes any disks, files, notebooks, etc. that you have personally generated or maintained with respect to the Company’s business, as well as any Company records in your possession.
|
5.
|
Release of Claims
.
You waive and release and promise never to assert any and all claims, known and unknown, that you have or might have against SandRidge and any related entities, directors, officers, members of leadership, agents, attorneys, employees, predecessors, successors, or assigns, arising from or related to your employment with SandRidge and/or the termination of your employment with SandRidge. These claims include, but are not limited to, personal injury claims, contract claims, employment claims, wage and hour claims, claims arising under federal, state and local statutory or common law, such as (without limitation) Title VII of the Civil Rights Act of 1964, The Age Discrimination in Employment Act, the Americans
with
Disabilities Act and the law of contract and tort.
|
6.
|
General Release
.
To accept this Separation Agreement and your severance payment, you will execute a copy of this Separation Agreement and the attached General Release and return it to SandRidge during the [21/45] day period immediately following from the date you receive this Separation Agreement. By signing this Agreement, you are agreeing that once seven days have passed from the date you sign the General Release, you will not attempt to revoke or rescind the General Release at any time in the future, and you are agreeing not to commence any action released in paragraph 5, above, in regard to your prior employment relationship. By signing this Agreement, you are representing to SandRidge that you fully understand the General Release and will have had an opportunity to seek legal advice regarding the General Release and the proposed Separation Agreement, if you desire to do so, before signing either document. You are also representing to SandRidge that between the date of this notice and the date you sign the General Release you have not commenced, and will not commence, any charge, action or complaint with any court or with the Equal Employment Opportunity Commission, the United States Department of Labor or with any other federal or state judicial or administrative agency in regard to your employment relationship or any matters arising out of that relationship. These claims include, but are not limited to, claims arising under federal, state and local statutory or common law, such as Title VII of the Civil Rights Act of 1964, The Age Discrimination in
|
7.
|
Continued Assistance
.
You will continue to cooperate with and assist SandRidge and its representatives and attorneys as requested with respect to any investigations, litigation, arbitration or other dispute resolutions by being available for interviews, depositions and/or testimony in regard to any matters in which you are or have been involved or with respect to which you have relevant information. SandRidge will reimburse you for reasonable expenses you may incur for travel in connection with this obligation to assist SandRidge. In addition, SandRidge will compensate you at a reasonable hourly rate for all time spent providing such assistance.
|
8.
|
Future Activities
.
You will not at any time in the future voluntarily contact or participate with any governmental agency in connection with any complaint or investigation pertaining to the Company, except to the extent required by applicable law, and you will not be employed or otherwise act as an expert witness or consultant or in any similar paid capacity in any litigation, arbitration, regulatory or agency hearing or other adversarial or investigatory proceeding involving the Company. In addition, at no time in the future will you voluntarily have any contact with any of the Company’s current or former employees for purposes of soliciting, advising about or discussing their participation or potential participation in any litigation, arbitration, regulatory or agency hearing or other adversarial or investigatory proceeding involving the Company.
|
9.
|
Preserving Name and Reputation
.
You will not at any time in the future defame, disparage or make statements or disparaging remarks which could embarrass or cause harm to SandRidge’s name and reputation or the names and reputation of any of its officers, directors, representatives, agents, employees or SandRidge’s current, former or prospective vendors, professional colleagues, professional organizations, associates or contractors, to any governmental or regulatory agency or to the press or media. “Disparagement” as used herein means the form and substance of any communication, regardless of whether or not you believe it to be true, that tends to degrade or belittle SandRidge or subject it to ridicule or embarrassment. You agree this paragraph is a material provision of this Separation Agreement and that in the event of breach, you will be liable for the return of the value of all consideration received as well as any other damages sustained by SandRidge.
|
10.
|
Forfeiture
.
In the event that you breach any of your obligations under this Separation Agreement or as otherwise imposed by law, SandRidge shall be entitled to stop payment of any benefit due under this Agreement and shall be entitled to recover any benefit paid under the Agreement and to obtain all other relief provided by law or equity, including, but not limited to, injunctive relief.
|
11.
|
Additional Warranties
.
You represent and warrant that as of this date you have suffered no work related injury during your employment with SandRidge and that you have no intention of filing a claim for worker’s compensation benefits arising from any incident occurring during your employment with the Company. You further represent that you have accounted to the Company for any and all hours worked through [Separation Date] including overtime, and that you have been paid for such hours worked at the appropriate rate. You also represent and warrant that you are not due any unpaid vacation or sick pay.
|
12.
|
No Admission/Offer of Compromise
.
By making this severance offer, SandRidge is not admitting liability or responsibility for any past due wages or other consideration. Any alleged responsibility or liability on the part of the Company has been and continues to be denied. In addition, this severance offer constitutes an offer of compromise pursuant to the applicable rules of evidence.
|
13.
|
Governing Law and Venue.
To the extent not preempted by federal law, the provisions of this Separation Agreement shall be construed and enforced in accordance with the laws of the State of Oklahoma, excluding any conflicts or choice of law rule or principle that might otherwise refer construction or interpretation of this provision to the substantive law of another jurisdiction. Each party hereby agrees that Oklahoma City, Oklahoma is the proper venue for any litigation seeking to enforce any provision of this Separation Agreement, and each party hereby waives any right it otherwise might have to defend, oppose, or object to, on the basis of jurisdiction, venue, or forum nonconveniens, a suit filed by the other party in any federal or state court in Oklahoma City, Oklahoma to enforce any provision of this Separation Agreement.
|
14.
|
Severability
.
If any portion, provision or part of this Separation Agreement is held, determined or adjudicated to be invalid, unenforceable or void for any reason whatsoever, each such portion, provision or part shall be severed from the remaining portions, provisions or parts of this Separation Agreement and shall not affect the validity or enforceability of such remaining portions, provisions or parts.
|
15.
|
Entire Agreement
.
This Separation Agreement between you and SandRidge, in the event you execute this Agreement, will be in consideration of the mutual promises described above. Also, this Agreement and the General Release will constitute the entire agreement between you and SandRidge with respect to your separation from employment. There are no agreements, written or oral, expressed or implied, between the parties hereto, concerning the subject matter hereof, except the agreements set forth in this Separation Agreement and the Employment Agreement to which it relates. It is understood that the requirements of paragraph 14 of the Employment Agreement survive the termination of employment.
|
TITLE
|
AGE(S)
|
|
|
|
|
|
|
TITLE
|
AGE(S)
|
|
|
|
|
|
|
1.
|
Termination of Employment
.
SandRidge has made the decision to terminate your employment effective [Separation Date].
|
2.
|
Final Payment
.
You have been paid or will be paid your earned salary through the effective date of the termination of your employment. Your final paycheck will include payment for [number (#)] days of accrued and unused paid time off (“PTO”). If you believe the amount of your final paycheck is incorrect, you agree to contact SandRidge immediately.
|
3.
|
Severance Payment
.
Consistent with the terms of your Employment Agreement, and in consideration of your service to SandRidge and your execution of this Separation Agreement and the General Release contained hereafter, SandRidge will provide you with a severance payment equal to [number (#)] months’ base salary. This severance payment will not otherwise be “benefit bearing” and will not be considered as compensation for purposes of the Company's 401(k) plan, the non-qualified deferred compensation plan or for accrual of PTO or other leave. The severance payment will be paid within 60 days of your Separation Date. You will only receive the severance payment if you have returned an executed copy of this Separation Agreement and the accompanying General Release during the [21/45] day period immediately following
|
4.
|
Return of SandRidge Property
.
If you have any Company property in your possession, you agree to immediately return it to your supervisor or the Human Resources Department within 14 days of your Separation Date. SandRidge property includes work product, electronic devices and other physical property of the Company. This includes equipment, supplies, keys, security items, credit cards, passwords, electronic devices, laptop computers, cellular phones and Blackberry devices. You must also return all originals and any copies of Company records. This includes any disks, files, notebooks, etc. that you have personally generated or maintained with respect to the Company’s business, as well as any Company records in your possession.
|
5.
|
Release of Claims
.
You waive and release and promise never to assert any and all claims, known and unknown, that you have or might have against SandRidge and any related entities, directors, officers, members of leadership, agents, attorneys, employees, predecessors, successors, or assigns, arising from or related to your employment with SandRidge and/or the termination of your employment with SandRidge. These claims include, but are not limited to, personal injury claims, contract claims, employment claims, wage and hour claims, claims arising under federal, state and local statutory or common law, such as (without limitation) Title VII of the Civil Rights Act of 1964, The Age Discrimination in Employment Act, the Americans
with
Disabilities Act and the law of contract and tort.
|
6.
|
General Release
.
To accept this Separation Agreement and your severance payment, you will execute a copy of this Separation Agreement and the attached General Release and return it to SandRidge during the [21/45] day period immediately following from the date you receive this Separation Agreement. By signing this Agreement, you are agreeing that once seven days have passed from the date you sign the General Release, you will not attempt to revoke or rescind the General Release at any time in the future, and you are agreeing not to commence any action released in paragraph 5, above, in regard to your prior employment relationship. By signing this Agreement, you are representing to SandRidge that you fully understand the General Release and will have had an opportunity to seek legal advice regarding the General Release and the proposed Separation Agreement, if you desire to do so, before signing either document. You are also representing to SandRidge that between the date of this notice and the date you sign the General Release you have not commenced, and will not commence, any charge, action or complaint with any court or with the Equal Employment Opportunity Commission, the United States Department of Labor or with any other federal or state judicial or administrative agency in regard to your employment relationship or any matters arising out of that relationship. These claims include, but are not limited to, claims arising under federal, state and local statutory or common law, such as Title VII of the Civil Rights Act of 1964, The Age Discrimination in
|
7.
|
Continued Assistance
.
You will continue to cooperate with and assist SandRidge
and its representatives and attorneys as requested with respect to any investigations, litigation, arbitration or other dispute resolutions by being available for interviews, depositions and/or testimony in regard to any matters in which you are or have been involved or with respect to which you have relevant information. SandRidge will reimburse you for reasonable expenses you may incur for travel in connection with this obligation to assist SandRidge. In addition, SandRidge will compensate you at a reasonable hourly rate for all time spent providing such assistance.
|
8.
|
Future Activities
.
You
will not at any time in the future voluntarily contact or participate with any governmental agency in connection with any complaint or investigation pertaining to the Company, and you will not be employed or otherwise act as an expert witness or consultant or in any similar paid capacity in any litigation, arbitration, regulatory or agency hearing or other adversarial or investigatory proceeding involving the Company. In addition, a
t no time in the future will you voluntarily have any contact with any of the Company’s current or former employees for purposes of soliciting, advising about or discussing their participation or potential participation in any litigation, arbitration, regulatory or agency hearing or other adversarial or investigatory proceeding involving the Company.
|
9.
|
Preserving Name and Reputation
.
You will not at any time in the future defame, disparage or make statements or disparaging remarks which could embarrass or cause harm to SandRidge’s name and reputation or the names and reputation of any of its officers, directors, representatives, agents, employees or SandRidge’s current, former or prospective vendors, professional colleagues, professional organizations, associates or contractors, to any governmental or regulatory agency or to the press or media. Similarly, SandRidge will not at any time in the future defame, disparage or make statements or disparaging remarks which could embarrass or cause harm to you or your name and reputation. “Disparagement” as used herein means the form and substance of any communication, regardless of whether or not believed to be true, that tends to degrade or belittle SandRidge or you or subject it or you to ridicule or embarrassment.
|
10.
|
Remedies.
In the event that you breach any of your obligations under this Separation Agreement or as otherwise imposed by law, SandRidge shall be entitled to any and all relief provided by law or equity, including, but not limited to, injunctive relief.
|
11.
|
Additional Warranties
.
You represent and warrant that as of this date you have suffered no work related injury during your employment with SandRidge and that you
|
12.
|
No Admission/Offer of Compromise
.
By making this severance offer, SandRidge is not admitting liability or responsibility for any past due wages or other consideration. Any alleged responsibility or liability on the part of the Company has been and continues to be denied. In addition, this severance offer constitutes an offer of compromise pursuant to the applicable rules of evidence.
|
13.
|
Governing Law and Venue.
To the extent not preempted by federal law, the provisions of this Separation Agreement shall be construed and enforced in accordance with the laws of the State of Oklahoma, excluding any conflicts or choice of law rule or principle that might otherwise refer construction or interpretation of this provision to the substantive law of another jurisdiction. Each party hereby agrees that Oklahoma City, Oklahoma is the proper venue for any litigation seeking to enforce any provision of this Separation Agreement, and each party hereby waives any right it otherwise might have to defend, oppose, or object to, on the basis of jurisdiction, venue, or forum nonconveniens, a suit filed by the other party in any federal or state court in Oklahoma City, Oklahoma to enforce any provision of this Separation Agreement.
|
14.
|
Severability
.
If any portion, provision or part of this Separation Agreement is held, determined or adjudicated to be invalid, unenforceable or void for any reason whatsoever, each such portion, provision or part shall be severed from the remaining portions, provisions or parts of this Separation Agreement and shall not affect the validity or enforceability of such remaining portions, provisions or parts.
|
15.
|
Entire Agreement
.
This Separation Agreement between you and SandRidge, in the event you execute this Agreement, will be in consideration of the mutual promises described above. Also, this Agreement and the General Release will constitute the entire agreement between you and SandRidge with respect to your separation from employment. There are no agreements, written or oral, expressed or implied, between the parties hereto, concerning the subject matter hereof, except the agreements set forth in this Separation Agreement and the Employment Agreement to which it relates. It is understood that the requirements of paragraph 14 of the Employment Agreement survive the termination of employment.
|
TITLE
|
AGE(S)
|
|
|
|
|
|
|
TITLE
|
AGE(S)
|
|
|
|
|
|
|
To the Executive:
|
to the Executive at the address set forth below such Executive’s signature hereto.
|
1.
|
Termination of Employment
.
SandRidge has made the decision to terminate your employment effective [Separation Date].
|
2.
|
Final Payment
.
You have been paid or will be paid your earned salary through the effective date of the termination of your employment. Your final paycheck will include payment for [number (#)] days of accrued and unused paid time off (“PTO”). If you believe the amount of your final paycheck is incorrect, you agree to contact SandRidge immediately.
|
3.
|
Severance Payment
.
Consistent with the terms of your Employment Agreement, and in consideration of your service to SandRidge and your execution of this Separation Agreement and the General Release contained hereafter, SandRidge will provide you with a severance payment equal to [number (#)] months’ base salary. This severance payment will not otherwise be “benefit bearing” and will not be considered as compensation for purposes of the Company's 401(k) plan, the non-qualified deferred compensation plan or for accrual of PTO or other leave. The severance payment will be paid within 60 days of your Separation Date. You will only receive the severance payment if you have returned an executed copy of this Separation Agreement and the accompanying General Release during the [21/45] day period immediately following
|
4.
|
Return of SandRidge Property
.
If you have any Company property in your possession, you agree to immediately return it to your supervisor or the Human Resources Department within 14 days of your Separation Date. SandRidge property includes work product, electronic devices and other physical property of the Company. This includes equipment, supplies, keys, security items, credit cards, passwords, electronic devices, laptop computers, cellular phones and Blackberry devices. You must also return all originals and any copies of Company records. This includes any disks, files, notebooks, etc. that you have personally generated or maintained with respect to the Company’s business, as well as any Company records in your possession.
|
5.
|
Release of Claims
.
You waive and release and promise never to assert any and all claims, known and unknown, that you have or might have against SandRidge and any related entities, directors, officers, members of leadership, agents, attorneys, employees, predecessors, successors, or assigns, arising from or related to your employment with SandRidge and/or the termination of your employment with SandRidge. These claims include, but are not limited to, personal injury claims, contract claims, employment claims, wage and hour claims, claims arising under federal, state and local statutory or common law, such as (without limitation) Title VII of the Civil Rights Act of 1964, The Age Discrimination in Employment Act, the Americans
with
Disabilities Act and the law of contract and tort.
|
6.
|
General Release
.
To accept this Separation Agreement and your severance payment, you will execute a copy of this Separation Agreement and the attached General Release and return it to SandRidge during the [21/45] day period immediately following from the date you receive this Separation Agreement. By signing this Agreement, you are agreeing that once seven days have passed from the date you sign the General Release, you will not attempt to revoke or rescind the General Release at any time in the future, and you are agreeing not to commence any action released in paragraph 5, above, in regard to your prior employment relationship. By signing this Agreement, you are representing to SandRidge that you fully understand the General Release and will have had an opportunity to seek legal advice regarding the General Release and the proposed Separation Agreement, if you desire to do so, before signing either document. You are also representing to SandRidge that between the date of this notice and the date you sign the General Release you have not commenced, and will not commence, any charge, action or complaint with any court or with the Equal Employment Opportunity Commission, the United States Department of Labor or with any other federal or state judicial or administrative agency in regard to your employment relationship or any matters arising out of that relationship. These claims include, but are not limited to, claims arising under federal, state and local statutory or common law, such as Title VII of the Civil Rights Act of 1964, The Age Discrimination in
|
7.
|
Continued Assistance
.
You will continue to cooperate with and assist SandRidge
and its representatives and attorneys as requested with respect to any investigations, litigation, arbitration or other dispute resolutions by being available for interviews, depositions and/or testimony in regard to any matters in which you are or have been involved or with respect to which you have relevant information. SandRidge will reimburse you for reasonable expenses you may incur for travel in connection with this obligation to assist SandRidge. In addition, SandRidge will compensate you at a reasonable hourly rate for all time spent providing such assistance.
|
8.
|
Future Activities
.
You will not at any time in the future voluntarily contact or participate with any governmental agency in connection with any complaint or investigation pertaining to the Company, except to the extent required by applicable law, and you will not be employed or otherwise act as an expert witness or consultant or in any similar paid capacity in any litigation, arbitration, regulatory or agency hearing or other adversarial or investigatory proceeding involving the Company. In addition, at no time in the future will you voluntarily have any contact with any of the Company’s current or former employees for purposes of soliciting, advising about or discussing their participation or potential participation in any litigation, arbitration, regulatory or agency hearing or other adversarial or investigatory proceeding involving the Company.
|
9.
|
Preserving Name and Reputation
.
You will not at any time in the future defame, disparage or make statements or disparaging remarks which could embarrass or cause harm to SandRidge’s name and reputation or the names and reputation of any of its officers, directors, representatives, agents, employees or SandRidge’s current, former or prospective vendors, professional colleagues, professional organizations, associates or contractors, to any governmental or regulatory agency or to the press or media. “Disparagement” as used herein means the form and substance of any communication, regardless of whether or not you believe it to be true, that tends to degrade or belittle SandRidge or subject it to ridicule or embarrassment. You agree this paragraph is a material provision of this Separation Agreement and that in the event of breach, you will be liable for the return of the value of all consideration received as well as any other damages sustained by SandRidge.
|
10.
|
Forfeiture
.
In the event that you breach any of your obligations under this Separation Agreement or as otherwise imposed by law, SandRidge shall be entitled to stop payment of any benefit due under this Agreement and shall be entitled to recover any benefit paid under the Agreement and to obtain all other relief provided by law or equity, including, but not limited to, injunctive relief.
|
11.
|
Additional Warranties
.
You represent and warrant that as of this date you have suffered no work related injury during your employment with SandRidge and that you have no intention of filing a claim for worker’s compensation benefits arising from any incident occurring during your employment with the Company. You further represent that you have accounted to the Company for any and all hours worked through [Separation Date] including overtime, and that you have been paid for such hours worked at the appropriate rate. You also represent and warrant that you are not due any unpaid vacation or sick pay.
|
12.
|
No Admission/Offer of Compromise
.
By making this severance offer, SandRidge is not admitting liability or responsibility for any past due wages or other consideration. Any alleged responsibility or liability on the part of the Company has been and continues to be denied. In addition, this severance offer constitutes an offer of compromise pursuant to the applicable rules of evidence.
|
13.
|
Governing Law and Venue.
To the extent not preempted by federal law, the provisions of this Separation Agreement shall be construed and enforced in accordance with the laws of the State of Oklahoma, excluding any conflicts or choice of law rule or principle that might otherwise refer construction or interpretation of this provision to the substantive law of another jurisdiction. Each party hereby agrees that Oklahoma City, Oklahoma is the proper venue for any litigation seeking to enforce any provision of this Separation Agreement, and each party hereby waives any right it otherwise might have to defend, oppose, or object to, on the basis of jurisdiction, venue, or forum nonconveniens, a suit filed by the other party in any federal or state court in Oklahoma City, Oklahoma to enforce any provision of this Separation Agreement.
|
14.
|
Severability
.
If any portion, provision or part of this Separation Agreement is held, determined or adjudicated to be invalid, unenforceable or void for any reason whatsoever, each such portion, provision or part shall be severed from the remaining portions, provisions or parts of this Separation Agreement and shall not affect the validity or enforceability of such remaining portions, provisions or parts.
|
15.
|
Entire Agreement
.
This Separation Agreement between you and SandRidge, in the event you execute this Agreement, will be in consideration of the mutual promises described above. Also, this Agreement and the General Release will constitute the entire agreement between you and SandRidge with respect to your separation from employment. There are no agreements, written or oral, expressed or implied, between the parties hereto, concerning the subject matter hereof, except the agreements set forth in this Separation Agreement and the Employment Agreement to which it relates. It is understood that the requirements of paragraph 14 of the Employment Agreement survive the termination of employment.
|
TITLE
|
AGE(S)
|
|
|
|
|
|
|
TITLE
|
AGE(S)
|
|
|
|
|
|
|
|
|
Applicable Margin
|
|
|
Level
|
Borrowing Base Utilization Ratio
|
Base Rate
|
Eurodollar Rate + Letters of Credit
|
Commitment Fee
|
1
|
≥ 90%
|
1.750%
|
2.750%
|
0.500%
|
2
|
≥ 75% and < 90%
|
1.500%
|
2.500%
|
0.500%
|
3
|
≥ 50% and < 75%
|
1.250%
|
2.250%
|
0.500%
|
4
|
≥ 25% and < 50%
|
1.000%
|
2.000%
|
0.375%
|
5
|
< 25%
|
0.750%
|
1.750%
|
0.375%
|
Fiscal Quarter End
|
Consolidated Leverage Ratio
|
June 30, 2016
|
6.25:1.00
|
September 30, 2016
|
6.00:1.00
|
December 31, 2016
|
6.00:1.00
|
March 31, 2017
|
5.50:1.00
|
June 30, 2017
|
5.50:1.00
|
September 30, 2017
|
5.00:1.00
|
December 31, 2017
|
5.00:1.00
|
March 31, 2018 and thereafter
|
4.50:1.00
|
Fiscal Quarter Ending
|
Interest Coverage Ratio
|
March 31, 2015
|
2.00:1.00
|
June 30, 2015
|
2.00:1.00
|
September 30, 2015
|
1.75:1.00
|
December 31, 2015
|
1.50:1.00
|
March 31, 2016
|
1.50:1.00
|
June 30, 2016
|
1.50:1.00
|
September 30, 2016
|
1.50:1.00
|
December 31, 2016 and thereafter
|
2.00:1.00
|
SANDRIDGE ENERGY, INC.
|
||
By:
|
/s/ Eddie M. LeBlanc
|
|
|
Name:
|
Eddie M. LeBlanc
|
|
Title:
|
Executive Vice President and Chief Financial Officer
|
BANK OF AMERICA, N.A., as Administrative Agent
|
|
By:
|
/s/ DeWayne D. Rosse
|
Name: DeWayne D. Rosse
|
|
Title: Assistant Vice President
|
BANK OF AMERICA, N.A., as a Lender, Swing Line Lender and L/C Issuer
|
|
By:
|
/s/ Michael Clayborne
|
Name: Michael Clayborne
|
|
Title: Vice President
|
BARCLAYS BANK PLC, as a Lender
|
||
By:
|
/s/ Christopher Lee
|
|
|
Name:
|
Christopher Lee
|
|
Title:
|
Assistant Vice President
|
BOKF, N.A. dba Bank of Oklahoma, as a Lender
|
||
By:
|
/s/ Mike Weatherholt
|
|
|
Name:
|
Mike Weatherholt
|
|
Title:
|
Senior Vice President
|
CANADIAN IMPERIAL BANK OF COMMERCE, NEW YORK BRANCH, as a Lender
|
||
By:
|
/s/ Daria Mahoney
|
|
|
Name:
|
Daria Mahoney
|
|
Title:
|
Authorized Signatory
|
|
||
By:
|
/s/ Trudy Nelson
|
|
|
Name:
|
Trudy Nelson
|
|
Title:
|
Authorized Signatory
|
CAPITAL ONE, NATIONAL ASSOCIATION, as a Lender
|
||
By:
|
/s/ Michael Higgins
|
|
|
Name:
|
Michael Higgins
|
|
Title:
|
Director
|
CITIBANK, N.A., as a Lender
|
||
By:
|
/s/ Peter Kardos
|
|
|
Name:
|
Peter Kardos
|
|
Title:
|
Vice President
|
CITIZENS BANK, N.A., as a Lender
|
||
By:
|
/s/ Scott Donaldson
|
|
|
Name:
|
Scott Donaldson
|
|
Title:
|
Senior Vice President
|
COMERICA BANK, as a Lender
|
||
By:
|
/s/ John S. Lesikar
|
|
|
Name:
|
John S. Lesikar
|
|
Title:
|
Vice President
|
COMPASS BANK, as a Lender
|
||
By:
|
/s/ Kathleen J. Bowen
|
|
|
Name:
|
Kathleen J. Bowen
|
|
Title:
|
Senior Vice President
|
DEUTSCHE BANK AG NEW YORK BRANCH, as a Lender
|
||
By:
|
/s/ Peter Cucchiara
|
|
|
Name:
|
Peter Cucchiara
|
|
Title:
|
Vice President
|
|
||
By:
|
/s/ Dusan Lazarov
|
|
|
Name:
|
Dusan Lazarov
|
|
Title:
|
Director
|
GOLDMAN SACHS LENDING PARTNERS, LLC, as a Lender
|
||
By:
|
/s/ Michelle Latzoni
|
|
|
Name:
|
Michelle Latzoni
|
|
Title:
|
Authorized Signatory
|
JPMORGAN CHASE BANK, N.A., as a Lender
|
||
By:
|
/s/ Anson D. Williams
|
|
|
Name:
|
Anson D. Williams
|
|
Title:
|
Authorized Officer
|
KEYBANK NATIONAL ASSOCIATION, as a Lender
|
||
By:
|
/s/ John Dravenstott
|
|
|
Name:
|
John Dravenstott
|
|
Title:
|
Vice President
|
MACQUARIE BANK LIMITED, as a Lender
|
||
By:
|
/s/ Robert Trevena
|
|
|
Name:
|
Robert Trevena
|
|
Title:
|
Division Director
|
|
||
By:
|
/s/ Fiona Smith
|
|
|
Name:
|
Fiona Smith
|
|
Title:
|
Division Director
|
MIDFIRST BANK, as a Lender
|
||
By:
|
/s/ Steve A. Griffin
|
|
|
Name:
|
Steve A. Griffin
|
|
Title:
|
Senior Vice President
|
MORGAN STANLEY BANK, N.A., as a Lender
|
||
By:
|
/s/ Matthew Meyers
|
|
|
Name:
|
Matthew Meyers
|
|
Title:
|
Authorized Signatory
|
MUFG UNION BANK, N.A., as a Lender
|
||
By:
|
/s/ Rachel Bowman
|
|
|
Name:
|
Rachel Bowman
|
|
Title:
|
Vice President
|
NATIXIS, NEW YORK BRANCH, as a Lender
|
||
By:
|
/s/ Justin Bellamy
|
|
|
Name:
|
Justin Bellamy
|
|
Title:
|
Director
|
|
||
By:
|
/s/ Stuart Murray
|
|
|
Name:
|
Stuart Murray
|
|
Title:
|
Managing Director
|
NEXTERA ENERGY POWER MARKETING, LLC, as a Lender
|
||
By:
|
/s/ Mark Palanchinn
|
|
|
Name:
|
Mark Palanchinn
|
|
Title:
|
Vice President and Managing Director
|
PNC BANK, NATIONAL ASSOCIATION, as a Lender
|
||
By:
|
/s/ Sandra Aultman
|
|
|
Name:
|
Sandra Aultman
|
|
Title:
|
Managing Director
|
ROYAL BANK OF CANADA, as a Lender
|
||
By:
|
/s/ Don J. McKinnerney
|
|
|
Name:
|
Don J. McKinnerney
|
|
Title:
|
Authorized Signatory
|
SANTANDER BANK, N.A., as a Lender
|
||
By:
|
/s/ Vaughn Buck
|
|
|
Name:
|
Vaughn Buck
|
|
Title:
|
Executive Vice President
|
|
||
By:
|
/s/ Puiki Lok
|
|
|
Name:
|
Puiki Lok
|
|
Title:
|
Vice President
|
SUNTRUST, as a Lender
|
||
By:
|
/s/ Shannon Juhan
|
|
|
Name:
|
Shannon Juhan
|
|
Title:
|
Vice President
|
THE BANK OF NOVA SCOTIA, as a Lender
|
||
By:
|
/s/ Alan Dawson
|
|
|
Name:
|
Alan Dawson
|
|
Title:
|
Director
|
UBS AG, STAMFORD BRANCH, as a Lender
|
||
By:
|
/s/ Darlene Arias
|
|
|
Name:
|
Darlene Arias
|
|
Title:
|
Director
|
|
||
By:
|
/s/ Craig Pearson
|
|
|
Name:
|
Craig Pearson
|
|
Title:
|
Associate Director
|
WELLS FARGO BANK, N.A., as a Lender
|
||
By:
|
/s/ Muhammad A. Dhamani
|
|
|
Name:
|
Muhammad A. Dhamani
|
|
Title:
|
Vice President
|
Entity Name
|
|
State of Organization
|
Cholla Pipeline, L.P.
|
|
Texas
|
Integra Energy, L.L.C.
|
|
Texas
|
Lariat Services, Inc.
|
|
Texas
|
d/b/a LARCO
|
|
|
d/b/a Chaparral Drilling Fluids
|
|
|
d/b/a Hondo Heavy Haul
|
|
|
SandRidge CO2, LLC
|
|
Texas
|
SandRidge Exploration and Production, LLC
|
|
Delaware
|
SandRidge Gathering, LLC
|
|
Delaware
|
SandRidge Holdings, Inc.
|
|
Delaware
|
SandRidge Midstream, Inc.
|
|
Texas
|
SandRidge Operating Company
|
|
Texas
|
SandRidge Realty, LLC
|
|
Oklahoma
|
WTO Gas Gathering Company, LLC
|
|
Texas
|
|
|
|
Please be advised that the digital document you are viewing is provided by Netherland, Sewell & Associates, Inc. (NSAI) as a convenience to our clients. The digital document is intended to be substantively the same as the original signed document maintained by NSAI. The digital document is subject to the parameters, limitations, and conditions stated in the original document. In the event of any differences between the digital document and the original document, the original document shall control and supersede the digital document.
|
|
LEE KEELING AND ASSOCIATES, INC.
|
|
|
By:
|
|
1.
|
I have reviewed this annual report on Form 10-K of SandRidge Energy, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
/s/ James D. Bennett
|
James D. Bennett
|
President and Chief Executive Officer
|
1.
|
I have reviewed this annual report on Form 10-K of SandRidge Energy, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
/s/ Eddie M. LeBlanc
|
Eddie M. LeBlanc
|
Executive Vice President and Chief Financial Officer
|
/s/ James D. Bennett
|
James D. Bennett
|
President and Chief Executive Officer
|
/s/ Eddie M. LeBlanc
|
Eddie M. LeBlanc
|
Executive Vice President and Chief Financial Officer
|
|
|
Net Reserves
|
|
Future Net Revenue (M$)
|
||||||
|
|
Oil
|
|
NGL
|
|
Gas
|
|
|
|
Present Worth
|
Category
|
|
(MBBL)
|
|
(MBBL)
|
|
(MMCF)
|
|
Total
|
|
at 10%
|
|
|
|
|
|
|
|
|
|
|
|
Proved Developed Producing
|
|
15,473.3
|
|
1,632.3
|
|
5,265.0
|
|
909,930.9
|
|
441,154.2
|
Proved Developed Non-Producing
|
|
1,020.6
|
|
115.3
|
|
374.3
|
|
42,381.8
|
|
17,128.1
|
|
|
|
|
|
|
|
|
|
|
|
Total Proved Developed
|
|
16,494.0
|
|
1,747.6
|
|
5,639.2
|
|
952,312.7
|
|
458,282.3
|
Sincerely,
|
|
|
|
|
|
NETHERLAND, SEWELL & ASSOCIATES, INC.
|
||
TexasRegistered Engineering Firm F-2699
|
||
|
|
|
|
/s/ C.H. (Scott) Rees III
|
|
By:
|
|
|
|
C.H. (Scott) Rees III, P.E
|
|
|
Chairman and Chief Executive Officer
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
/s/ Gregory S. Cohen
|
|
By:
|
|
|
|
Gregory S. Cohen, P.E. 117412
|
|
|
Petroleum Engineer
|
|
|
|
|
|
|
|
Date Signed: January 29, 2015
|
(i)
|
Same geological formation (but not necessarily in pressure communication with the reservoir of interest);
|
(ii)
|
Same environment of deposition;
|
(iii)
|
Similar geological structure; and
|
(iv)
|
Same drive mechanism.
|
(i)
|
Through existing wells with existing equipment and operating methods or in which the cost of the required equipment is relatively minor compared to the cost of a new well; and
|
(ii)
|
Through installed extraction equipment and infrastructure operational at the time of the reserves estimate if the extraction is by means not involving a well.
|
(i)
|
Gain access to and prepare well locations for drilling, including surveying well locations for the purpose of determining specific development drilling sites, clearing ground, draining, road building, and relocating public roads, gas lines, and power lines, to the extent necessary in developing the proved reserves.
|
(ii)
|
Drill and equip development wells, development-type stratigraphic test wells, and service wells, including the costs of platforms and of well equipment such as casing, tubing, pumping equipment, and the wellhead assembly.
|
(iii)
|
Acquire, construct, and install production facilities such as lease flow lines, separators, treaters, heaters, manifolds, measuring devices, and production storage tanks, natural gas cycling and processing plants, and central utility and waste disposal systems.
|
(iv)
|
Provide improved recovery systems.
|
(i)
|
Costs of topographical, geographical and geophysical studies, rights of access to properties to conduct those studies, and salaries and other expenses of geologists, geophysical crews, and others conducting those studies. Collectively, these are sometimes referred to as geological and geophysical or "G&G" costs.
|
(ii)
|
Costs of carrying and retaining undeveloped properties, such as delay rentals, ad valorem taxes on properties, legal costs for title defense, and the maintenance of land and lease records.
|
(iii)
|
Dry hole contributions and bottom hole contributions.
|
(iv)
|
Costs of drilling and equipping exploratory wells.
|
(v)
|
Costs of drilling exploratory-type stratigraphic test wells.
|
(i)
|
Oil and gas producing activities include:
|
(A)
|
The search for crude oil, including condensate and natural gas liquids, or natural gas ("oil and gas") in their natural states and original locations;
|
(B)
|
The acquisition of property rights or properties for the purpose of further exploration or for the purpose of removing the oil or gas from such properties;
|
(C)
|
The construction, drilling, and production activities necessary to retrieve oil and gas from their natural reservoirs, including the acquisition, construction, installation, and maintenance of field gathering and storage systems, such as:
|
(1)
|
Lifting the oil and gas to the surface; and
|
(2)
|
Gathering, treating, and field processing (as in the case of processing gas to extract liquid hydrocarbons); and
|
(D)
|
Extraction of saleable hydrocarbons, in the solid, liquid, or gaseous state, from oil sands, shale, coalbeds, or other nonrenewable natural resources which are intended to be upgraded into synthetic oil or gas, and activities undertaken with a view to such extraction.
|
a.
|
The first point at which oil, gas, or gas liquids, natural or synthetic, are delivered to a main pipeline, a common carrier, a refinery, or a marine terminal; and
|
b.
|
In the case of natural resources that are intended to be upgraded into synthetic oil or gas, if those natural resources are delivered to a purchaser prior to upgrading, the first point at which the natural resources are delivered to a main pipeline, a common carrier, a refinery, a marine terminal, or a facility which upgrades such natural resources into synthetic oil or gas.
|
(ii)
|
Oil and gas producing activities do not include:
|
(A)
|
Transporting, refining, or marketing oil and gas;
|
(B)
|
Processing of produced oil, gas, or natural resources that can be upgraded into synthetic oil or gas by a registrant that does not have the legal right to produce or a revenue interest in such production;
|
(C)
|
Activities relating to the production of natural resources other than oil, gas, or natural resources from which synthetic oil and gas can be extracted; or
|
(D)
|
Production of geothermal steam.
|
(i)
|
When deterministic methods are used, the total quantities ultimately recovered from a project have a low probability of exceeding proved plus probable plus possible reserves. When probabilistic methods are used, there should be at least a 10% probability that the total quantities ultimately recovered will equal or exceed the proved plus probable plus possible reserves estimates.
|
(ii)
|
Possible reserves may be assigned to areas of a reservoir adjacent to probable reserves where data control and interpretations of available data are progressively less certain. Frequently, this will be in areas where geoscience and engineering data are unable to define clearly the area and vertical limits of commercial production from the reservoir by a defined project.
|
(iii)
|
Possible reserves also include incremental quantities associated with a greater percentage recovery of the hydrocarbons in place than the recovery quantities assumed for probable reserves.
|
(iv)
|
The proved plus probable and proved plus probable plus possible reserves estimates must be based on reasonable alternative technical and commercial interpretations within the reservoir or subject project that are clearly documented, including comparisons to results in successful similar projects.
|
(v)
|
Possible reserves may be assigned where geoscience and engineering data identify directly adjacent portions of a reservoir within the same accumulation that may be separated from proved areas by faults with displacement less than formation thickness or other geological discontinuities and that have not been penetrated by a wellbore, and the registrant believes that such adjacent portions are in communication with the known (proved) reservoir. Possible reserves may be assigned to areas that are structurally higher or lower than the proved area if these areas are in communication with the proved reservoir.
|
(vi)
|
Pursuant to paragraph (a)(22)(iii) of this section, where direct observation has defined a highest known oil (HKO) elevation and the potential exists for an associated gas cap, proved oil reserves should be assigned in the structurally higher portions of the reservoir above the HKO only if the higher contact can be established with reasonable certainty through reliable technology. Portions of the reservoir that do not meet this reasonable certainty criterion may be assigned as probable and possible oil or gas based on reservoir fluid properties and pressure gradient interpretations.
|
(i)
|
When deterministic methods are used, it is as likely as not that actual remaining quantities recovered will exceed the sum of estimated proved plus probable reserves. When probabilistic methods are used, there should be at least a 50% probability that the actual quantities recovered will equal or exceed the proved plus probable reserves estimates.
|
(ii)
|
Probable reserves may be assigned to areas of a reservoir adjacent to proved reserves where data control or interpretations of available data are less certain, even if the interpreted reservoir continuity of structure or productivity does not meet the reasonable certainty criterion. Probable reserves may be assigned to areas that are structurally higher than the proved area if these areas are in communication with the proved reservoir.
|
(iii)
|
Probable reserves estimates also include potential incremental quantities associated with a greater percentage recovery of the hydrocarbons in place than assumed for proved reserves.
|
(iv)
|
See also guidelines in paragraphs (a)(17)(iv) and (a)(17)(vi) of this section.
|
(i)
|
Costs incurred to operate and maintain wells and related equipment and facilities, including depreciation and applicable operating costs of support equipment and facilities and other costs of operating and maintaining those wells and related equipment and facilities. They become part of the cost of oil and gas produced. Examples of production costs (sometimes called lifting costs) are:
|
(A)
|
Costs of labor to operate the wells and related equipment and facilities.
|
(B)
|
Repairs and maintenance.
|
(C)
|
Materials, supplies, and fuel consumed and supplies utilized in operating the wells and related equipment and facilities.
|
(D)
|
Property taxes and insurance applicable to proved properties and wells and related equipment and facilities.
|
(E)
|
Severance taxes.
|
(ii)
|
Some support equipment or facilities may serve two or more oil and gas producing activities and may also serve transportation, refining, and marketing activities. To the extent that the support equipment and facilities are used in oil and gas producing activities, their depreciation and applicable operating costs become exploration, development or production costs, as appropriate. Depreciation, depletion, and amortization of capitalized acquisition, exploration, and development costs are not production costs but also become part of the cost of oil and gas produced along with production (lifting) costs identified above.
|
(i)
|
The area of the reservoir considered as proved includes:
|
(A)
|
The area identified by drilling and limited by fluid contacts, if any, and
|
(B)
|
Adjacent undrilled portions of the reservoir that can, with reasonable certainty, be judged to be continuous with it and to contain economically producible oil or gas on the basis of available geoscience and engineering data.
|
(ii)
|
In the absence of data on fluid contacts, proved quantities in a reservoir are limited by the lowest known hydrocarbons (LKH) as seen in a well penetration unless geoscience, engineering, or performance data and reliable technology establishes a lower contact with reasonable certainty.
|
(iii)
|
Where direct observation from well penetrations has defined a highest known oil (HKO) elevation and the potential exists for an associated gas cap, proved oil reserves may be assigned in the structurally higher portions of the reservoir only if geoscience, engineering, or performance data and reliable technology establish the higher contact with reasonable certainty.
|
(iv)
|
Reserves which can be produced economically through application of improved recovery techniques (including, but not limited to, fluid injection) are included in the proved classification when:
|
(A)
|
Successful testing by a pilot project in an area of the reservoir with properties no more favorable than in the reservoir as a whole, the operation of an installed program in the reservoir or an analogous reservoir, or other evidence using reliable technology establishes the reasonable certainty of the engineering analysis on which the project or program was based; and
|
(B)
|
The project has been approved for development by all necessary parties and entities, including governmental entities.
|
(v)
|
Existing economic conditions include prices and costs at which economic producibility from a reservoir is to be determined. The price shall be the average price during the 12-month period prior to the ending date of the period covered by the report, determined as an unweighted arithmetic average of the first-day-of-the-month price for each month within such period, unless prices are defined by contractual arrangements, excluding escalations based upon future conditions.
|
(i)
|
Reserves on undrilled acreage shall be limited to those directly offsetting development spacing areas that are reasonably certain of production when drilled, unless evidence using reliable technology exists that establishes reasonable certainty of economic producibility at greater distances.
|
(ii)
|
Undrilled locations can be classified as having undeveloped reserves only if a development plan has been adopted indicating that they are scheduled to be drilled within five years, unless the specific circumstances, justify a longer time.
|
(iii)
|
Under no circumstances shall estimates for undeveloped reserves be attributable to any acreage for which an application of fluid injection or other improved recovery technique is contemplated, unless such techniques have been proved effective by actual projects in the same reservoir or an analogous reservoir, as defined in paragraph (a)(2) of this section, or by other evidence using reliable technology establishing reasonable certainty.
|