SandRidge Energy (SD) 8-K Results of Operations and Financial Condition

Exhibit 99.1

SandRidge Energy, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
(Unaudited)
(in thousands)

	June 30,			December 31,
	2007			2006
ASSETS
Current assets:
Cash and cash equivalents	$	2,199		$	38,948
Accounts receivable, net:
Trade		69,629			89,774
Related parties		16,002			5,731
Derivative contracts		12,583			—
Inventories		3,452			2,544
Deferred income taxes		—			6,315
Other current assets		16,547			31,494
Total current assets		120,412			174,806
Oil and natural gas properties, using full cost method of accounting
Proved		2,035,735			1,636,832
Unproved		271,239			282,374
Less: accumulated depreciation and depletion		(130,343	)		(60,752	)
		2,176,631			1,858,454
Other property, plant and equipment, net		365,829			276,264
Derivative contracts		181			—
Goodwill		29,199			26,198
Investments		5,747			3,584
Restricted deposits		37,823			33,189
Other assets		29,526			15,889
Total assets	$	2,765,348		$	2,388,384
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Current maturities of long-term debt	$	25,686		$	26,201
Accounts payable and accrued expenses:
Trade		186,033			129,799
Related parties		1,363			1,834
Deferred income taxes		170			—
Derivative contracts		—			958
Total current liabilities		213,252			158,792
Long-term debt		1,040,970			1,040,630
Derivative contracts		—			3,052
Other long-term obligations		21,219			21,219
Asset retirement obligation		55,838			45,216
Deferred income taxes		27,478			24,922
Total liabilities		1,358,757			1,293,831
Commitments and contingencies
Minority interest		5,772			5,092
Redeemable convertible preferred stock, $0.001 par value, 2,650 shares authorized; 2,184 and 2,137 shares issued and outstanding at June 30, 2007 and December 31, 2006, respectively		449,998			439,643
Stockholders’ equity:
Preferred stock, no par; 50,000 shares authorized; no shares issued and outstanding in 2007 and 2006		—			—
Common stock, $0.001 par value, 400,000 shares authorized; 110,311 issued and 108,859 outstanding at June 30, 2007 and 93,048 issued and 91,604 outstanding at December 31, 2006		109			92
Additional paid-in capital		886,508			574,868
Treasury stock, at cost		(18,490	)		(17,835	)
Retained earnings		82,694			92,693
Total stockholders’ equity		950,821			649,818
Total liabilities and stockholders’ equity	$	2,765,348		$	2,388,384

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SandRidge Energy, Inc. and Subsidiaries
Condensed Consolidated Statements of Operations
(Unaudited)
(in thousands except per share amounts)

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2007			2006			2007			2006
Revenues:
Natural gas and crude oil	$	116,274		$	14,169		$	206,450		$	28,563
Drilling and services		12,349			35,585			40,244			69,971
Midstream and marketing		25,914			31,220			52,101			61,892
Other		4,526			6,941			9,332			13,404
Total revenues		159,063			87,915			308,127			173,830
Expenses:
Production		27,044			8,374			49,018			13,665
Production taxes		4,993			707			7,926			1,529
Drilling and services		5,349			26,149			24,126			47,685
Midstream and marketing		23,327			29,109			46,747			58,386
Depreciation, depletion and amortization — natural gas and crude oil		37,975			4,626			70,699			7,868
Depreciation, depletion and amortization — other		12,143			6,625			22,263			13,808
General and administrative		12,892			13,891			25,360			20,303
Gain on derivative contracts		(39,162	)		(8,333	)		(15,981	)		(10,579	)
Loss (gain) on sale of assets		(658	)		10			(659	)		—
Total expenses		83,903			81,158			229,499			152,665
Income from operations		75,160			6,757			78,628			21,165
Other income (expense):
Interest income		2,538			163			3,626			397
Interest expense		(24,679	)		(765	)		(60,108	)		(1,584	)
Minority interest		(11	)		(144	)		(157	)		(99	)
Gain (loss) from equity investments		1,139			(136	)		2,164			(697	)
Total other income (expense)		(21,013	)		(882	)		(54,475	)		(1,983	)
Income before income tax expense		54,147			5,875			24,153			19,182
Income tax expense		19,583			226			9,082			5,150
Net income		34,564			5,649			15,071			14,032
Preferred stock dividends and accretion		12,294			—			21,260			—
Income (loss) available (applicable) to common stockholders	$	22,270		$	5,649		$	(6,189	)	$	14,032
Income (loss) per share available (applicable) to common stockholders:
Basic	$	0.21		$	0.08		$	(0.06	)	$	0.20
Diluted	$	0.21		$	0.08		$	(0.06	)	$	0.19
Weighted average number of shares outstanding:
Basic		107,524			71,601			100,025			71,596
Diluted		108,602			72,547			100,025			72,540

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SandRidge Energy, Inc. and Subsidiaries
Condensed Consolidated Statements of Cash Flows
(Unaudited)
(in thousands)

	Six Months Ended
	June 30,
	2007			2006
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$	15,071		$	14,032
Adjustments to reconcile net income to net cash provided by operating activities:
Provision for doubtful accounts		—			2,119
Depreciation, depletion and amortization		92,962			21,676
Debt issuance cost amortization		13,822			—
Deferred income taxes		9,082			3,897
Unrealized gain on derivatives		(16,774	)		(10,579	)
Gain on sale of assets		(659	)		—
Interest income — restricted deposits		(660	)		—
Loss (gain) from equity investments, net of distributions		(2,163	)		708
Stock-based compensation		2,259			4,484
Minority interest		157			99
Changes in operating assets and liabilities		67,747			(6,034	)
Net cash provided by operating activities		180,844			30,402
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures for property, plant and equipment		(492,144	)		(114,500)
Acquisition of assets		—			(4,965	)
Proceeds from sale of assets		2,807			38
Contributions on equity investments		—			(2,543	)
Restricted deposits		(3,973	)		—
Restricted cash		—			2,373
Net cash used in investing activities		(493,310	)		(119,597	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from borrowings		1,152,772			58,704
Repayments of borrowings		(1,154,443	)		(13,577	)
Dividends paid — preferred		(15,409	)		—
Minority interest contributions (distributions)		522			(345	)
Proceeds from issuance of common stock		319,966			3,343
Purchase of treasury shares		(1,572	)		—
Debt issuance costs		(26,119	)		—
Net cash provided by financing activities		275,717			48,125
NET DECREASE IN CASH AND CASH EQUIVALENTS		(36,749	)		(41,070	)
CASH AND CASH EQUIVALENTS, beginning of year		38,948			45,731
CASH AND CASH EQUIVALENTS, end of period	$	2,199		$	4,661
Supplemental Disclosure of Noncash Investing and Financing Activities:
Insurance premiums financed	$	1,496		$	—
Accretion on redeemable convertible preferred stock	$	705		$	—
Common stock issued in connection with acquisitions	$	—		$	478
Redeemable convertible preferred stock dividends, net of dividends paid	$	8,956		$	—

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Industry Segment Information

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2007			2006			2007			2006
Revenues:
Exploration and production	$	116,567		$	14,784		$	209,201		$	30,065
Elimination of inter-segment revenue		(88	)		(104	)		(1,896	)		(212	)
Exploration and production, net of inter-segment revenue		116,479			14,680			207,305			29,853
Drilling and oilfield services		61,244			50,170			118,159			98,500
Elimination of inter-segment revenue		(48,911	)		(14,368	)		(77,931	)		(28,176	)
Drilling and oilfield services, net of inter-segment revenue		12,333			35,802			40,228			70,324
Midstream gas services		72,326			43,476			133,748			89,924
Elimination of inter-segment revenue		(46,413	)		(12,327	)		(81,648	)		(28,034	)
Midstream gas services, net of intersegment revenue		25,913			31,149			52,100			61,890
Other		6,818			6,370			12,571			11,926
Elimination of inter-segment revenue		(2,480	)		(86	)		(4,077	)		(163	)
Other, net of inter-segment revenue		4,338			6,284			8,494			11,763
Total revenues	$	159,063		$	87,915		$	308,127		$	173,830
Operating Income:
Exploration and production	$	76,092		$	3,026		$	76,463		$	7,962
Drilling and oilfield services		3,674			5,863			8,876			17,025
Midstream gas services		951			1,086			2,301			1,777
Other		(5,557	)		(3,218	)		(9,012	)		(5,599	)
Total operating income		75,160			6,757			78,628			21,165
Interest income		2,538			163			3,626			397
Interest expense		(24,679	)		(765	)		(60,108	)		(1,584	)
Other income (expense)		1,128			(280	)		2,007			(796	)
Income before income tax expense	$	54,147		$	5,875		$	24,153		$	19,182
Capital Expenditures:
Exploration and production	$	249,538		$	22,894		$	377,120		$	51,734
Drilling and oilfield services		42,671			29,683			83,913			49,123
Midstream gas services		13,587			4,533			23,130			8,019
Other		5,253			3,126			7,981			5,624
Total capital expenditures	$	311,049		$	60,236		$	492,144		$	114,500
Depreciation, Depletion and Amortization:
Exploration and production	$	38,475		$	4,446		$	71,686		$	8,222
Drilling and oilfield services		8,707			4,595			15,870			8,864
Midstream gas services		1,381			741			2,494			1,393
Other		1,555			1,469			2,912			3,197
Total depreciation, depletion and amortization	$	50,118		$	11,251		$	92,962		$	21,676

	June 30,		December 31,
	2007		2006
Identifiable Asset (1):
Exploration and production	$	2,380,882	$	2,091,459
Drilling and oilfield services		250,040		175,169
Midstream gas services		83,843		75,606
Other		50,583		46,150
Total	$	2,765,348	$	2,388,384

(1) Identifiable assets are those used in SandRidge’s operations in each industry segment.

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Capital Expenditures

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2007		2006		2007		2006
	(in thousands)				(in thousands)
Exploration & Production
WTO	$	117,800	$	21,285	$	188,483	$	42,582
Non-WTO (excluding Tertiary)		42,557		1,570		77,281		8,986
Tertiary		5,908		2,400		9,076		3,847
		166,265		25,255		274,840		55,415
Land & Seismic
WTO		76,283		45		82,532		99
Non-WTO (excluding Tertiary)		4,365		5		16,434		79
Tertiary		1,668		—		1,749		—
		82,316		50		100,715		178
Total Oil & Gas		248,581		25,305		375,555		55,593
Oil Service		42,672		29,671		83,913		49,111
Midstream		13,587		4,500		23,130		7,986
Other — General		6,209		760		9,546		1,810
Total SandRidge	$	311,049	$	60,236	$	492,144	$	114,500

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Operating Highlights

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2007		2006		2007			2006
Production:
Natural gas (Mmcf)		11,843		2,371		22,292			4,219
Crude oil (MBbl)		513		21		906			46
Natural gas equivalent (Mmcfe)		14,921		2,497		27,728			4,495
Daily Production (Mmcfe)		164		27		153			25
Average price per unit:
Realized natural gas price per Mcf — as reported	$	7.16	$	5.33	$	6.90		$	6.08
Realized impact of derivatives per Mcf		0.06		—		(0.04	)		—
Net realized price per Mcf	$	7.22	$	5.33	$	6.86		$	6.08
Realized crude oil price per Bbl — as reported	$	61.34	$	71.83	$	58.18		$	62.99
Realized impact of derivatives per Bbl		—		—		—			—
Net realized price per Bbl	$	61.34	$	71.83	$	58.18		$	62.99
Net price per Mcfe	$	7.84	$	5.67	$	7.42		$	6.35
Average cost per Mcfe:
Lease Operating	$	1.81	$	3.35	$	1.77		$	3.04
Production Taxes		0.33		0.28		0.29			0.34
General and administrative:
General and administrative		0.78		4.02		0.83			3.52
Stock-based compensation		0.08		1.54		0.08			1.00
DD&A — natural gas and crude oil		2.54		1.85		2.55			1.75
Lease Operating Cost by Region per Mcfe:
Offshore operations		2.75		—		3.23			—
Tertiary recovery operations		9.00		18.63		11.72			17.73
Excluding Offshore and Tertiary recovery		1.60		2.97		1.48			2.69

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