SandRidge Energy (SD) 8-K/A Report of Independent Registered Public Accounting Firm

Exhibit 99.2

SANDRIDGE ENERGY, INC. AND SUBSIDIARIES

UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION

The following unaudited pro forma condensed combined financial information reflects the historical results of SandRidge Energy, Inc. (“SandRidge” or the “Company”) as adjusted on a pro forma basis to give effect to SandRidge’s acquisition of Arena Resources, Inc. (“Arena”). SandRidge’s historical results for the year ended December 31, 2009 have also been adjusted to give effect to a December 2009 property acquisition. These acquisitions are described further below.

Arena Acquisition. On July 16, 2010, the stockholders of each SandRidge and Arena approved SandRidge’s acquisition of all of the outstanding shares of common stock of Arena, referred to herein as the Arena Acquisition, and the transaction was completed. In connection with the acquisition, SandRidge paid $4.50 in cash and issued 4.7771 shares of SandRidge common stock for each share of Arena common stock outstanding for a total value per share of $35.79, based upon the $6.55 closing price of SandRidge common stock on July 16, 2010, the closing date of the merger. The consideration received by Arena shareholders was valued at $1.4 billion in the aggregate. SandRidge is the surviving parent company after completion of the merger. Arena was an oil and natural gas exploration, development and production company with operations in Texas, Oklahoma, Kansas and New Mexico.

2009 Permian Basin Acquisition. On December 21, 2009, SandRidge purchased oil and natural gas properties located in the Permian Basin, referred to herein as the 2009 Permian Basin Acquisition, from Forest Oil Corporation and one of its subsidiaries for $800.0 million, subject to certain purchase price and post-closing adjustments. The assets consist primarily of six operated areas in the Central Basin Platform and greater Permian Basin of western Texas and eastern New Mexico. The acquisition was financed with proceeds from the issuance of 8.75% Senior Notes due 2020, the placement of 2,000,000 new shares of 6.0% convertible perpetual preferred stock, and the public offering of 25,600,000 shares of the Company’s common stock, collectively referred to herein as the financing transactions.

The unaudited pro forma condensed combined balance sheet is based on the unaudited June 30, 2010 balance sheets of SandRidge and Arena and includes pro forma adjustments to give effect to the Arena Acquisition as if it occurred on June 30, 2010. The unaudited pro forma condensed combined statements of operations for the year ended December 31, 2009 and the six months ended June 30, 2010 are based on the audited statements of operations of SandRidge and Arena for the year ended December 31, 2009 and the unaudited statements of operations of SandRidge and Arena for the six months ended June 30, 2010, respectively, and include pro forma adjustments to give effect to SandRidge’s 2009 Permian Basin Acquisition and the Arena Acquisition as if those transactions and the financing transactions occurred on January 1, 2009.

The pro forma adjustments reflecting the Arena Acquisition under the acquisition method of accounting are preliminary and include the use of estimates and assumptions as described in the related notes. The pro forma adjustments are based on information available to management at the time these pro forma condensed consolidated financial statements were prepared. The Company believes the estimates and assumptions used are reasonable and the significant effects of the transaction are properly reflected. However, the estimates and assumptions are subject to change as additional information becomes available. The pro forma statements do not reflect any cost savings (or associated costs to achieve such savings) from operating efficiencies, synergies or other restructuring that could result from the merger.

These unaudited pro forma condensed combined financial statements are provided for illustrative purposes only and are not necessarily indicative of the results that actually would have occurred had the transactions been in effect on the dates or for the periods indicated, or of results that may occur in the future. These unaudited pro forma condensed combined financial statements should be read in conjunction with the accompanying notes, Annual Reports on Form 10-K for the year ended December 31, 2009 of both SandRidge and Arena and the Quarterly Report on Form 10-Q for the six months ended June 30, 2010 of SandRidge and Form 8-K/A filed by SandRidge on March 8, 2010 in connection with the 2009 Permian Basin Acquisition.

SANDRIDGE ENERGY, INC. AND SUBSIDIARIES

UNAUDITED PRO FORMA CONDENSED COMBINED BALANCE SHEET

June 30, 2010

	SandRidge Historical			Arena Historical		Pro Forma Adjustments				SandRidge Pro Forma Combined
	(In Thousands)
ASSETS
Current assets:
Cash and cash equivalents	$	2,083		$	55,452	$	(13,461	)	(a)	$	44,074
Accounts receivable, net		103,409			19,018		—				122,427
Derivative contracts		63,737			10,515		—				74,252
Inventories		4,295			—		—				4,295
Costs in excess of billings		46,452			—		—				46,452
Other current assets		6,150			1,082		1,934		(b)		9,166
Total current assets		226,126			86,067		(11,527	)			300,666
Oil and natural gas properties, net (full cost method of accounting)		2,283,858			638,715		947,350		(b)		3,869,923
Other property, plant and equipment, net		499,915			10,463		(4,709	)	(b)		505,669
Derivative contracts		25,792			15,989		—				41,781
Goodwill		—			—		222,478		(b)		222,478
Restricted deposits		27,860			—		—				27,860
Deferred income taxes		—			—		25,681		(b)
							(25,681	)	(d)		—
Other assets		65,112			—		—				65,112
Total assets	$	3,128,663		$	751,234	$	1,153,592			$	5,033,489
LIABILITIES AND EQUITY
Current liabilities:
Current maturities of long-term debt	$	9,610		$	—	$	—			$	9,610
Accounts payable and accrued expenses		315,893			29,733		1,129				346,755
Derivative contracts		7,480			—		—				7,480
Asset retirement obligation		2,553			—		—				2,553
Total current liabilities		335,536			29,733		1,129				366,398
Long-term debt		2,749,423			—		177,946		(b)		2,927,369
Other long-term obligations		15,348			—		861		(c)		16,209
Derivative contracts		31,419			—		—				31,419
Asset retirement obligation		115,475			8,918		(113	)	(b)		124,280
Deferred income taxes		—			135,467		342,402		(b)
							(477,869	)	(d)		—
Total liabilities		3,247,201			174,118		44,356				3,465,675
Commitments and contingencies
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; aggregate liquidation preference of $265,000		3			—		—				3
6.0% Convertible perpetual preferred stock; 2,000 shares issued and outstanding; aggregate liquidation preference of $200,000		2			—		—				2
Common stock, $0.001 par value; 400,000 shares authorized (historical); 800,000 shares authorized (pro forma); 212,836 issued and 210,600 outstanding (historical); 403,116 issued and 400,880 outstanding (pro forma)		204			39		(39	)	(b)
							190		(b)		394
Additional paid-in capital		2,978,252			335,711		(335,711	)	(b)
							1,246,144		(b)
							2,152		(b)
							2,361		(e)		4,228,909
Treasury stock, at cost		(28,726	)		—		—				(28,726	)
(Accumulated deficit) retained earnings		(3,079,210	)		224,668		210,837		(n)		(2,643,705	)
Other comprehensive income		—			16,698		(16,698	)	(b)		—
Total SandRidge Energy, Inc. stockholders’ (deficit) equity		(129,475	)		577,116		1,109,236				1,556,877
Noncontrolling interest		10,937			—		—				10,937
Total (deficit) equity		(118,538	)		577,116		1,109,236				1,567,814
Total liabilities and equity	$	3,128,663		$	751,234	$	1,153,592			$	5,033,489

The accompanying notes are an integral part of these financial statements.

SANDRIDGE ENERGY, INC. AND SUBSDIARIES

UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS

FOR THE YEAR ENDED DECEMBER 31, 2009

	SandRidge Historical			SandRidge 2009 Acquisition and Financing Adjustments					SandRidge as Adjusted for 2009 Acquisition and Financing			Arena Historical			Arena Acquisition Pro Forma Adjustments					SandRidge Pro Forma Combined
	(In Thousands, Except Per Share Amounts)
Revenues:
Oil and natural gas	$	454,705		$	91,549		(f)		$	546,254		$	126,241		$	—				$	672,495
Drilling and services		23,902			—					23,902			—			—					23,902
Midstream and marketing		86,028			—					86,028			—			—					86,028
Other		26,409			—					26,409			—			—					26,409
Total revenues		591,044			91,549					682,593			126,241			—					808,834
Expenses:
Production		169,285			23,638		(f)			192,923			15,543			—					208,466
Production taxes		4,010			3,937		(f)			7,947			6,456			—					14,403
Drilling and services		30,899			—					30,899			—			—					30,899
Midstream and marketing		78,684			—					78,684			—			—					78,684
Depreciation and depletion – oil and natural gas		176,027			54,377		(g)			230,404			39,071			38,685		(g)			308,160
Depreciation, depletion and amortization – other		50,865			—					50,865			298			—					51,163
Impairment		1,707,150			—		(h)			1,707,150			—			—		(h)			1,707,150
General and administrative		100,256			—					100,256			13,453			—					113,709
Gain on derivative contracts		(147,527	)		—					(147,527	)		(14,885	)		—					(162,412	)
Loss on sale of assets		26,419			—					26,419			—			—					26,419
Total expenses		2,196,068			81,952					2,278,020			59,936			38,685					2,376,641
(Loss) income from operations		(1,605,024	)		9,597					(1,595,427	)		66,305			(38,685	)				(1,567,807	)
Other income (expense):
Interest income		375			—					375			829			—					1,204
Interest expense		(185,691	)		(39,434	)	(i)			(225,125	)		—			(4,146	)	(m)			(229,271	)
Income from equity investments		1,020			—					1,020			—			—					1,020
Other income, net		7,272			—					7,272			—			—					7,272
Total other (expense) income		(177,024	)		(39,434	)				(216,458	)		829			(4,146	)				(219,775	)
(Loss) income before income taxes		(1,782,048	)		(29,837	)				(1,811,885	)		67,134			(42,831	)				(1,787,582	)
Income tax (benefit) expense		(8,716	)		—		(j)			(8,716	)		24,839			(24,839	)	(j)			(8,716	)
Net (loss) income		(1,773,332	)		(29,837	)				(1,803,169	)		42,295			(17,992	)				(1,778,866	)
Less: net income attributable to noncontrolling interest		2,258			—					2,258			—			—					2,258
Net (loss) income attributable to SandRidge Energy, Inc.		(1,775,590	)		(29,837	)				(1,805,427	)		42,295			(17,992	)				(1,781,124	)
Preferred stock dividends		8,813			11,633		(k)			20,446			—			—					20,446
(Loss applicable) income available to SandRidge Energy, Inc. common stockholders	$	(1,784,403	)	$	(41,470	)			$	(1,825,873	)	$	42,295		$	(17,992	)			$	(1,801,570	)
(Loss) income per share (applicable) available to SandRidge Energy, Inc. common stockholders:
Basic	$	(10.20	)																	$	(4.63	)
Diluted	$	(10.20	)																	$	(4.63	)
Weighted average number of SandRidge Energy, Inc. common shares outstanding:
Basic		175,005			24,075		(l	)								190,280		(b	)		389,360
Diluted		175,005			24,075		(l	)								190,280		(b	)		389,360

The accompanying notes are an integral part of these financial statements.

SANDRIDGE ENERGY, INC. AND SUBSIDIARIES

UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS

FOR THE SIX MONTHS ENDED JUNE 30, 2010

	SandRidge Historical			Arena Historical			Pro Forma Adjustments				SandRidge Pro Forma Combined
	(In Thousands, Except Per Share Amounts)
Revenues:
Oil and natural gas	$	319,580		$	106,110		$	—			$	425,690
Drilling and services		9,661			—			—				9,661
Midstream and marketing		50,587			—			—				50,587
Other		13,606			—			—				13,606
Total revenues		393,434			106,110			—				499,544
Expenses:
Production		106,281			11,569			—				117,850
Production taxes		10,242			5,529			—				15,771
Drilling and services		8,233			—			—				8,233
Midstream and marketing		45,285			—			—				45,285
Depreciation and depletion – oil and natural gas		106,597			26,730			22,268		(g)		155,595
Depreciation, depletion and amortization – other		24,123			149			—				24,272
General and administrative		65,539			17,045			(2,020	)	(o)		80,564
Gain on derivative contracts		(181,573	)		(784	)		—				(182,357	)
Loss on sale of assets		84			—			—				84
Total expenses		184,811			60,238			20,248				265,297
Income from operations		208,623			45,872			(20,248	)			234,247
Other income (expense):
Interest income		167			197			—				364
Interest expense		(126,348	)		—			(2,255	)	(m)		(128,603	)
Other income, net		706			—			—				706
Total other (expense) income		(125,475	)		197			(2,255	)			(127,533	)
Income before income taxes		83,148			46,069			(22,503	)			106,714
Income tax expense		162			17,038			(17,038	)	(j)		162
Net income		82,986			29,031			(5,465	)			106,552
Less: net income attributable to noncontrolling interest		2,234			—			—				2,234
Net income attributable to SandRidge Energy, Inc.		80,752			29,031			(5,465	)			104,318
Preferred stock dividends and accretion		17,263			—			—				17,263
Income available to SandRidge Energy, Inc. common stockholders	$	63,489		$	29,031		$	(5,465	)		$	87,055
Income per share available to SandRidge Energy, Inc. common stockholders:
Basic	$	0.30									$	0.22
Diluted	$	0.30									$	0.22
Weighted average number of SandRidge Energy, Inc. common shares outstanding:
Basic		209,153						190,280		(b)		399,433
Diluted		210,022						190,280		(b)		400,302

The accompanying notes are an integral part of these financial statements.

SANDRIDGE ENERGY, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS

1. Basis of Presentation

The historical financial information is derived from the historical consolidated financial statements of SandRidge, the historical statements of revenues and direct operating expenses of properties acquired in the 2009 Permian Basin Acquisition, and the historical consolidated financial statements of Arena. Revenues and direct operating expenses related to properties acquired in the 2009 Permian Basin Acquisition were derived from unaudited financial statements. The unaudited pro forma condensed combined balance sheet as of June 30, 2010 has been prepared as if the Arena Acquisition had occurred on June 30, 2010. The unaudited pro forma condensed combined statements of operations for the year ended December 31, 2009 and the six months ended June 30, 2010 assume that the 2009 Permian Basin Acquisition and Arena Acquisition occurred on January 1, 2009.

2. Pro Forma Adjustments

The following adjustments were made in the preparation of the unaudited pro forma condensed combined financial statements.

(a) Adjustment reflects additional estimated costs related to the Arena Acquisition, including professional fees and employee severance, which will be expensed. The additional expense has not been included in the accompanying pro forma condensed combined statements of operations due to its non-recurring nature. See also (n).

(b) Adjustment to reflect the elimination of the components of Arena’s historical stockholders’ equity, the consideration paid by SandRidge in the merger and the adjustments to the historical book values of Arena’s assets and liabilities as of June 30, 2010 to their estimated fair values, in accordance with acquisition accounting. The following table reflects the preliminary allocation of the total purchase price of Arena to the assets acquired and the liabilities assumed and the resulting goodwill based on the preliminary estimates of fair value (in thousands, except stock price):

Purchase Price(1):
Shares of SandRidge common stock to be issued to Arena stockholders		190,280
SandRidge common stock price	$	6.55
Fair value of common stock issued		1,246,334
Cash consideration paid to Arena stockholders(2)		177,946
Arena restricted stock awards attributable to pre-merger service(3)		2,152
Total purchase price		1,426,432
Estimated Fair Value of Liabilities Assumed:
Current liabilities		30,862
Long-term deferred tax liability(4)		477,869
Other non-current liabilities		8,805
Amount attributable to liabilities assumed		517,536
Total purchase price plus liabilities assumed		1,943,968
Estimated Fair Value of Assets Acquired:
Current assets		88,001
Oil and natural gas properties(5)		1,586,065
Other property, plant and equipment		5,754
Other non-current assets		15,989
Long-term deferred tax assets		25,681
Amount attributable to assets acquired		1,721,490
Goodwill(4)	$	222,478

⁽¹⁾ Under the terms of the amended merger agreement, consideration paid by SandRidge consisted of 4.7771 shares of SandRidge common stock plus $4.50 cash for each share of Arena common stock outstanding. The total purchase price is based upon the closing price of $6.55 per share of SandRidge common stock on July 16, 2010 (the day of the acquisition). Under the acquisition method of accounting, the actual purchase price was determined based on the total cash paid and the fair value of SandRidge common stock issued in the merger on the acquisition date. Total shares issued consisted of (i) approximately 188.9 million shares issued in exchange for 39.5 million shares of outstanding Arena common stock and (ii) 1.4 million shares issued in exchange for outstanding options to purchase Arena common stock considered in-the-money (based on the closing price of $35.98 per share of Arena common stock on July 16, 2010) that converted into shares of SandRidge common stock in accordance with the merger agreement.

⁽²⁾ Cash paid to Arena stockholders was funded through a draw on SandRidge’s senior credit facility.

⁽³⁾ The portion of unvested restricted stock awards assumed under the merger agreement attributable to service provided to Arena prior to the Arena Acquisition was included as consideration.

⁽⁴⁾ SandRidge received carryover tax basis in Arena’s assets and liabilities because the merger was not a taxable transaction under the United States Internal Revenue Code. Based upon the preliminary purchase price allocation, a step-up in basis related to the property acquired from Arena is expected to result in a SandRidge deferred tax liability of approximately $477.9 million, an increase of $342.4 million to Arena’s existing $135.5 million deferred tax liability. See also (d). The additional deferred tax liability resulted in an excess of consideration transferred to acquire Arena over the acquisition date estimated fair value of the net assets acquired, or goodwill.

⁽⁵⁾ Weighted average commodity prices utilized in the determination of the pro forma fair value of oil and natural gas properties were $105.58 per barrel of oil and $8.56 per mcf of natural gas, after adjustment for transportation fees and regional price differentials.

(c) Adjustment to recognize expense related to the vesting of certain employer contributions to SandRidge’s non-qualified deferred compensation plan due to change in control provisions that triggered upon consummation of the Arena Acquisition. The additional expense has not been included in the accompanying pro forma condensed combined statements of operations due to its non-recurring nature. See also (n).

(d) Adjustment to recognize offset of newly created net deferred tax liability with existing SandRidge deferred tax assets and the resulting release of approximately $452.2 million in the current valuation allowance against those existing deferred tax assets. The release of the valuation allowance has been reflected as a credit to accumulated deficit in the accompanying pro forma condensed combined balance sheet, but has not been included in the accompanying pro forma condensed combined statements of operations due to its non-recurring nature. See also (n).

(e) Adjustment to recognize effects on additional paid-in capital and accumulated deficit of estimated stock-based compensation of approximately $2.4 million associated with 73,300 restricted shares of Arena common stock granted immediately prior to and in conjunction with the Arena Acquisition. This additional stock-based compensation expense has not been included in the accompanying pro forma condensed combined statements of operations due to its non-recurring nature. See also (n).

(f) Adjustment to recognize revenues and direct operating expenses of the 2009 Permian Basin Acquisition properties as if the acquisition had taken place on January 1, 2009.

(g) Adjustment to recognize accretion of asset retirement obligation attributable to the 2009 Permian Basin Acquisition properties as well as depreciation and depletion attributable to the 2009 Permian Basin Acquisition properties for the year ended December 31, 2009 and to recognize additional depletion attributable to the Arena Acquisition properties for the year ended December 31, 2009 and the six months ended June 30, 2010, using the unit of production method under the full cost method of accounting, as if the acquisitions had taken place on January 1, 2009.

(h) The Company estimates it would have incurred an additional impairment from full cost ceiling limitations of approximately $121.5 million for the year ended December 31, 2009 had the 2009 Permian Basin Acquisition occurred on January 1, 2009 and a total combined additional impairment of approximately $520.5 million had both the 2009 Permian Basin Acquisition and Arena Acquisition occurred on January 1, 2009. These additional estimated pro forma impairments have not been reflected in the pro forma condensed combined statements of operations due to their non-recurring nature. In accordance with full cost accounting, full cost ceiling limitations are calculated using the 12-month average oil and natural gas prices for the most recent 12 months. Under the acquisition method of accounting, however, acquired properties are recorded at their fair market values at the date of acquisition.

(i) Adjustment to recognize discount and offering cost amortization and interest expense associated with 8.75% Senior Notes due 2020 issued in December 2009. Proceeds were used to partially fund the 2009 Permian Basin Acquisition.

(j) Adjustment to reverse Arena’s historical income tax provision. There was no pro forma income tax provision related to the 2009 Permian Basin Acquisition or the Arena Acquisition due to SandRidge’s net deferred tax asset position and the corresponding full valuation allowance. See also (d).

(k) Adjustment to recognize additional dividends associated with the Company’s 6.0% convertible perpetual preferred stock issued in December 2009. Proceeds were used to partially fund the 2009 Permian Basin Acquisition.

(l) Impact on weighted average shares outstanding for the December 2009 underwritten offering of 25,600,000 shares of Company common stock. Proceeds were used to partially fund the 2009 Permian Basin Acquisition.

(m) Adjustment to recognize additional interest expense related to the $177.9 million drawn on SandRidge’s senior credit facility to fund the cash portion of the Arena Acquisition purchase price. Additional interest expense was based upon the average annual interest rates paid on amounts outstanding under SandRidge’s senior credit facility during the year ended December 31, 2009 and the six months ended June 30, 2010 of 2.33% and 2.52%, respectively.

(n) Pro forma adjustments to (accumulated deficit) retained earnings are as follows:

Pro forma adjustment to expense additional estimated transaction costs – see (a)	$	(13,461	)
Historical Arena retained earnings – see (b)		(224,668	)
Pro forma adjustment to recognize vesting of certain employer contributions made to SandRidge’s non-qualified compensation plan – see (c)		(861	)
Pro forma adjustment for the release of valuation allowance against existing SandRidge net deferred tax asset – see (d)		452,188
Pro forma adjustment for additional stock-based compensation – see (e)		(2,361	)
	$	210,837

(o) Adjustment to remove stock compensation expense recorded by Arena during the six months ended June 30, 2010 related to stock awards that were merger related or assumed as part of the merger and included as consideration. See also (b) ⁽³⁾.

3. Supplemental Pro Forma Combined Oil and Gas Reserve and Standardized Measure Information (Unaudited)

The following unaudited supplemental pro forma oil and natural gas reserve tables present how the combined oil and gas reserve and standardized measure information of SandRidge and Arena may have appeared had the merger occurred on January 1, 2009. The Supplemental Pro Forma Combined Oil and Gas Reserve and Standardized Measure Information is for illustrative purposes only.

Estimated Pro Forma Combined Quantities of Proved Reserves

	SandRidge Historical				Arena Historical				Total Pro Forma
	Oil(1) (MBbls)		Gas (MMcf)		Oil (MBbls)		Gas (MMcf)		Oil(1) (MBbls)		Gas (MMcf)
Proved Reserves
As of December 31, 2008	43,164		1,899,636		55,845		58,805		99,009		1,958,441
Revisions of previous estimates	8,826		(1,244,873	)	(10,075	)	(15,814	)	(1,249	)	(1,260,687	)
Acquisitions of new reserves	56,342		104,046		1,589		2,792		57,931		106,838
Extensions and discoveries	8		8,890		14,360		13,605		14,368		22,495
Sales of reserves in place	(97	)	(163	)	—		—		(97	)	(163	)
Production	(2,894	)	(87,461	)	(2,004	)	(2,173	)	(4,898	)	(89,634	)
As of December 31, 2009	105,349		680,075		59,715		57,215		165,064		737,290
Proved developed reserves:
As of December 31, 2008	15,342		851,357		20,231		28,659		35,573		880,016
As of December 31, 2009	38,327		592,777		21,145		28,302		59,472		621,079
Proved undeveloped reserves:
As of December 31, 2008	27,822		1,048,279		35,614		30,146		63,436		1,078,425
As of December 31, 2009	67,022		87,298		38,570		28,913		105,592		116,211

⁽¹⁾ Includes NGLs

Pro Forma Combined Standardized Measure of Discounted Future Net Cash Flows

	Year Ended December 31, 2009
	SandRidge Historical			Arena Historical			Pro Forma Adjustments (1)			Pro Forma
	(In Thousands)
Future cash inflows from production	$	7,582,670		$	3,721,874		$	—		$	11,304,544
Future production costs		(3,028,888	)		(902,964	)		—			(3,931,852	)
Future development costs		(938,272	)		(543,023	)		—			(1,481,295	)
Future income tax expenses		—			(746,548	)		746,548			—
Undiscounted future net cash flows		3,615,510			1,529,339			746,548			5,891,397
10% annual discount		(2,054,532	)		(775,105	)		(379,424	)		(3,209,061	)
Standardized measure of discounted future net cash flows	$	1,560,978		$	754,234		$	367,124		$	2,682,336

⁽¹⁾ Pro forma adjustments represent elimination of effect of future income taxes due to SandRidge’s deferred tax asset position and the associated full valuation allowance that serves to reduce to zero a tax benefit that otherwise would result from the tax effects of PV-10 at December 31, 2009.

Changes in the Pro Forma Combined Standardized Measure of Discounted Future Net Cash Flows

	Year Ended December 31, 2009
	SandRidge Historical			Arena Historical			Pro Forma Adjustments (1)		Pro Forma
	(In Thousands)
Standardized measure at December 31, 2008	$	2,220,576		$	460,687		$	—	$	2,681,263
Revenues less production and other costs		(281,410	)		(110,697	)		—		(392,107	)
Net changes in prices, production and other costs		(1,841,292	)		619,543			—		(1,221,749	)
Net development costs incurred		201,467			107,237			—		308,704
Net changes in future development costs		1,075,246			6,551			—		1,081,797
Extensions and discoveries		8,671			253,486			—		262,157
Revisions of previous quantity estimates		(553,469	)		(447,111	)		—		(1,000,580	)
Accretion of discount		109,512			48,058			—		157,570
Net change in income taxes		37,936			(176,306	)		367,124		228,754
Purchases of reserves in place		565,457			28,329			—		593,786
Sales of reserves in place		(131	)		—			—		(131	)
Timing differences and other		18,415			(35,543	)		—		(17,128	)
Standardized measure at December 31, 2009	$	1,560,978		$	754,234		$	367,124	$	2,682,336

⁽¹⁾ Pro forma adjustments represent elimination of effect of future income taxes due to SandRidge’s deferred tax asset position and the associated full valuation allowance that serves to reduce to zero a tax benefit that otherwise would result from the tax effects of PV-10 at December 31, 2009.