SandRidge Energy (SD) 8-K/A Other Events

Exhibit 99.1

SANDRIDGE ENERGY, INC. AND SUBSIDIARIES

UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION

The following unaudited pro forma condensed combined financial information reflects the historical financial statements of SandRidge Energy, Inc. (“SandRidge”) adjusted on a pro forma basis to give effect to its acquisition of oil and natural gas properties from Hunt Oil Company, Hunt Cheiftain Development, L.P., and Hunt Oil Company of Louisiana, Inc. (collectively, “Hunt”). SandRidge’s historical results have also been adjusted to give effect to (i) the acquisition of Dynamic Offshore Resources, LLC (“Dynamic”) by SandRidge and SandRidge’s issuance of approximately 74.0 million shares of SandRidge common stock and $750.0 million aggregate principal amount of 8.125% Senior Notes due 2022, herein referred to as the financing transactions, to fund the acquisition of Dynamic and (ii) the conveyance of royalty interests in certain oil and natural gas properties (the “Mississippian Trust II Royalty Interests”) to SandRidge Mississippian Trust II by SandRidge. These transactions are described further below.

• Acquisition of Properties from Hunt. On June 20, 2012, SandRidge acquired oil and natural gas properties from Hunt for approximately $38.5 million, net of purchase price adjustments and subject to post-closing adjustments. The properties comprise approximately 184,000 gross (103,000 net) acres in the Gulf of Mexico (the “Acquired Properties”).

• Dynamic Acquisition. On April 17, 2012, SandRidge completed its acquisition of Dynamic for approximately $1.2 billion, comprised of approximately $680.0 million in cash and approximately 74.0 million shares of SandRidge common stock, referred to herein as the Dynamic Acquisition. Dynamic is an oil and natural gas exploration, development and production company with operations in the Gulf of Mexico.

• 8.125% Senior Notes due 2022. On April 17, 2012, concurrent with the closing of the Dynamic Acquisition, SandRidge issued $750.0 million aggregate principal amount of 8.125% Senior Notes due 2022 (the “8.125% Senior Notes”). Net proceeds from the offering were approximately $730.1 million after deducting offering expenses, and were used primarily to finance the cash portion of the Dynamic Acquisition.

• SandRidge Mississippian Trust II. On April 23, 2012, SandRidge Mississippian Trust II (the “Mississippian Trust II”), a newly formed Delaware statutory trust, completed its initial public offering of 29,900,000 common units representing beneficial interests in the Mississippian Trust II. Net proceeds to the Mississippian Trust II, after underwriting discounts and commissions, were $590.2 million. Concurrent with the closing, SandRidge conveyed the Mississippian Trust II Royalty Interests to the Mississippian Trust II in exchange for the net proceeds of the Mississippian Trust II’s initial public offering, which were further reduced by $3.1 million for a structuring fee paid to certain of the underwriters, and 19,825,000 units (7,393,750, common units and 12,431,250, subordinated units) representing approximately 39.9% of the beneficial interest in the Mississippian Trust II. The Mississippian Trust II Royalty Interests are in certain existing wells and wells to be drilled on oil and natural gas properties leased by SandRidge in the Mississippian formation in northern Oklahoma and southern Kansas within an area of mutual interest. SandRidge intends to use the net proceeds from the offering for general corporate purposes, which may include the funding of its drilling program.

The unaudited pro forma condensed combined balance sheet is based on the unaudited March 31, 2012 SandRidge and Dynamic balance sheets and includes pro forma adjustments to give effect to the acquisition of properties from Hunt, the Dynamic Acquisition, the financing transactions and the conveyance of the Mississippian Trust II Royalty Interests as if those transactions occurred on March 31, 2012. The unaudited pro forma condensed combined statement of operations for the six months ended June 30, 2012, provided to update the unaudited pro forma condensed combined statement of operations to the period most recently reported by SandRidge, is based on the unaudited statement of operations of SandRidge for the six months ended June 30, 2012, the unaudited statement of revenues and direct operating expenses of the Acquired Properties for the period of January 1, 2012 through June 20, 2012 and the unaudited statement of operations of Dynamic for the period of January 1, 2012 through April 17, 2012 and includes pro forma adjustments to give effect to the acquisition of properties from Hunt, the Dynamic Acquisition, the financing transactions and the Mississippian Trust II Royalty Interests conveyance as if those transactions occurred on January 1, 2011. The unaudited pro forma condensed combined statement of operations for the three months ended March 31, 2012 is based on the unaudited statement of operations of SandRidge, the unaudited statement of revenues and direct operating expenses of the Acquired Properties and the unaudited statement of operations of Dynamic for the three months ended March 31, 2012 and includes pro forma adjustments to give effect to the acquisition of properties from Hunt, the Dynamic Acquisition, the financing transactions and the Mississippian Trust II Royalty Interests conveyance as if those transactions occurred on January 1, 2011. The unaudited pro forma condensed combined statement of operations for the year ended December 31, 2011 is based on the audited statement of operations of SandRidge, the audited statement of revenues and direct operating expenses of the Acquired Properties and the audited statement of operations of Dynamic for the year ended December 31, 2011 and includes pro forma adjustments to give effect to the acquisition of properties from Hunt, the Dynamic Acquisition and the financing transactions as if they occurred on January 1, 2011. Additionally, the audited statements of operations of both SandRidge and Dynamic for the year ended December 31, 2011 have been adjusted for certain acquisition or divesture transactions, as further described below.

SandRidge’s historical results for the year ended December 31, 2011 have been adjusted on a pro forma basis to give effect to (i) its conveyance of the Mississippian Trust II Royalty Interests to the Mississippian Trust II (described above), (ii) the sale of certain producing properties located in eastern Texas (the “East Texas Properties”) and (iii) its conveyance of royalty interests in certain oil and natural gas properties located in Andrews County, Texas (the “Permian Trust Royalty Interests”) to SandRidge Permian Trust. SandRidge’s historical results have also been adjusted to give effect to SandRidge’s July 2010 acquisition of Arena Resources, Inc. (“Arena”), including all related adjustments, as if they had occurred prior to 2011. The sale of the East Texas Properties, the conveyance of the Permian Trust Royalty Interests and the acquisition of Arena are described further below.

• East Texas Sale. On November 14, 2011, SandRidge sold producing properties located on over 23,000 net acres in Gregg, Harrison, Rusk and Panola counties in Texas for an agreed upon price of $231.0 million (“East Texas Sale”).

• SandRidge Permian Trust. On August 16, 2011, the SandRidge Permian Trust (the “Permian Trust”) completed its initial public offering of 34,500,000 common units representing beneficial interests in the Permian Trust. Net proceeds to the Permian Trust, after certain offering expenses, were $580.6 million. Concurrent with the closing, SandRidge conveyed the Permian Trust Royalty Interests to the Permian Trust in exchange for the net proceeds of the Permian Trust’s initial public offering and 18,000,000 units (4,875,000 common units and 13,125,000 subordinated units), representing approximately 34.3% of the beneficial interest in the Permian Trust. The Permian Trust Royalty Interests conveyed to the Permian Trust are in certain oil and natural gas properties located in the Central Basin Platform of the Permian Basin in Andrews County, Texas and entitle the Permian Trust to a percentage of the proceeds from the sale of oil, natural gas and natural gas liquids production from currently producing wells and development wells to be drilled by SandRidge within an area of mutual interest. SandRidge used a portion of the net proceeds from the offering to repay borrowings under its senior credit facility and for general corporate purposes.

• Arena Acquisition. On July 16, 2010, SandRidge completed the acquisition of all of the outstanding shares of common stock of Arena, referred to herein as the Arena Acquisition. 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 acquisition. The consideration received by Arena shareholders was valued at $1.4 billion in the aggregate. SandRidge was the surviving parent company after completion of the acquisition. Arena was an oil and natural gas exploration, development and production company with operations in Texas, Oklahoma, Kansas and New Mexico. In the second quarter of 2011, SandRidge completed its valuation of assets acquired and liabilities assumed related to the Arena Acquisition.

Dynamic’s historical consolidated statement of operations for the year ended December 31, 2011 has been adjusted on a pro forma basis to give effect to its acquisition of certain oil and natural gas interests in the Gulf of Mexico as described further below.

• XTO Acquisition. On August 31, 2011, Dynamic acquired certain oil and natural gas interests in the Gulf of Mexico from XTO Offshore Inc. and other related subsidiaries of ExxonMobil Corporation (“Exxon”) for $173.5 million (the “XTO Acquisition”). The properties acquired comprise substantially all of the Gulf of Mexico assets that Exxon acquired as part of its acquisition of XTO Energy, Inc. in 2010 (the “XTO Acquisition Properties”).

The pro forma adjustments reflecting: (i) SandRidge’s acquisition of properties from Hunt, (ii) the acquisition of Dynamic by SandRidge under the acquisition method of accounting, (iii) SandRidge’s conveyance of the Mississippian Trust II Royalty Interests to the Mississippian Trust II, (iv) SandRidge’s sale of the East Texas Properties, (v) SandRidge’s conveyance of the Permian Trust Royalty Interests to the Permian Trust, (vi) final adjustments recorded in 2011 related to SandRidge’s Arena Acquisition, and (vii) Dynamic’s acquisition of the XTO Acquisition Properties 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 unaudited pro forma condensed combined financial statements were prepared. SandRidge 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 financial 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 acquisition of properties from Hunt or the Dynamic Acquisition. Additionally, the unaudited pro forma condensed combined statements of operations exclude the impact of non-recurring expenses SandRidge and Dynamic have incurred or will incur as a result of the acquisition of properties from Hunt, the Dynamic Acquisition and related financing, primarily non-capitalizable banking and legal fees, the bargain purchase gain and an income tax benefit resulting from a partial release of the valuation allowance on SandRidge’s deferred tax asset. The unaudited pro forma condensed combined statement of operations for the year ended December 31, 2011 also excludes certain non-recurring adjustments recorded in 2011 relating to SandRidge’s July 2010 acquisition of Arena.

The unaudited pro forma condensed combined financial information is for informational purposes only and is not intended to represent or to be indicative of the results that actually would have occurred had the transactions described above been completed as of the dates set forth in this unaudited pro forma condensed combined financial information and should not be taken as indicative of SandRidge’s future combined results of operations or financial position. Actual results may differ significantly from that reflected in the unaudited pro forma condensed combined financial information for a number of reasons, including, but not limited to, differences between the assumptions used to prepare the unaudited pro forma condensed combined financial information and actual results. The unaudited pro forma financial information should be read in conjunction with the accompanying footnotes, SandRidge’s Quarterly Reports on Form 10-Q for the six months ended June 30, 2012 and three months ended March 31, 2012 and Annual Report on Form 10-K for the year ended December 31, 2011, the Permian Trust’s Annual Report on Form 10-K for the year ended December 31, 2011, the Mississippian Trust II’s Quarterly Reports on Form 10-Q for the six months ended June 30, 2012 and three months ended March 31, 2012, Dynamic’s financial statements and related notes for the year ended December 31, 2011 included in SandRidge’s current report on Form 8-K filed on April 9, 2012 and for the three months ended March 31, 2012 included in SandRidge’s current report on Form 8-K filed on May 18, 2012, the unaudited Statements of Revenues and Direct Operating Expenses for the three months ended March 31, 2012 and 2011 and the audited Statements of Revenues and Direct Operating Expenses for the year ended December 31, 2011 for the Acquired Properties, both included in an exhibit to this current report, and other information that SandRidge has filed with the Securities and Exchange Commission.

SANDRIDGE ENERGY, INC. AND SUBSIDIARIES

UNAUDITED PRO FORMA CONDENSED COMBINED BALANCE SHEET

MARCH 31, 2012

	SandRidge Historical			Dynamic Historical		Dynamic Acquisition Pro Forma Adjustments			SandRidge as  Adjusted for Dynamic Acquisition			Acquired Properties Pro Forma Adjustments			SandRidge Mississippian Trust II Pro Forma Adjustments			SandRidge Pro Forma Combined
	(In thousands, except per share amounts)
ASSETS
Current assets
Cash and cash equivalents	$	127,842		$	48,468	$	(48,468	)(a)
							23,862	(b)	$	151,704		$	(38,593	)(m)	$	587,087	(q)	$	700,198
Accounts receivable, net		240,636			81,569		—			322,205			—			—			322,205
Derivative contracts		7,526			22,967		—			30,493			—			—			30,493
Inventories		9,491			—		—			9,491			—			—			9,491
Costs in excess of billings		1,621			—		—			1,621			—			—			1,621
Notes receivable – abandonments		—			4,097		2,075	(d)
							(6,172	)(e)		—			—			—			—
Other current assets		32,324			17,431		(2,571	)(c)
							6,172	(e)		53,356			—			—			53,356
Total current assets		419,440			174,532		(25,102	)		568,870			(38,593	)		587,087			1,117,364
Oil and natural gas properties, net (full cost method)		5,034,146			—		1,180,776	(e)
							565,978	(c)		6,780,900			93,901	(n)		—			6,874,801
Other property, plant and equipment, net		576,668			—		1,342	(e)		578,010			—			—			578,010
Property and equipment, net		—			1,182,118		(1,182,118	)(e)		—			—			—			—
Restricted deposits		27,904			—		—			27,904			—			—			27,904
Derivative contracts		1,109			3,020		—			4,129			—			—			4,129
Goodwill		235,396			—		—			235,396			—			—			235,396
Notes receivable – abandonments		—			17,108		(3,775	)(d)
							(13,333	)(e)		—			—			—			—
Other assets		83,436			14,029		(3,286	)(f)
							13,333	(e)
							(9,243	)(g)
							(10	)(c)
							19,921	(h)		118,180			—			—			118,180
Total assets	$	6,378,099		$	1,390,807	$	544,483		$	8,313,389		$	55,308		$	587,087		$	8,955,784
LIABILITIES AND EQUITY
Current liabilities
Current maturities of long-term debt	$	1,070		$	—	$	—		$	1,070		$	—		$	—		$	1,070
Accounts payable and accrued expenses		601,785			64,758		51,498	(e)		718,041			—			—			718,041
Billings and estimated contract loss in excess of costs incurred		34,310			—		—			34,310			—			—			34,310
Derivative contracts		97,462			—		20,238	(e)		117,700			—			—			117,700
Asset retirement obligation		32,906			74,433		(8,228	)(d)		99,111			18,736	(o)		—			117,847
Other current liabilities		—			71,736		(71,736	)(e)		—			—			—			—
Total current liabilities		767,533			210,927		(8,228	)		970,232			18,736			—			988,968
Long-term debt		2,813,484			345,000		(345,000	)(f)
							750,000	(b)		3,563,484			—			—			3,563,484
Derivative contracts		292,110			—		3,627	(e)		295,737			—			—			295,737
Asset retirement obligation		100,126			295,637		(45,919	)(d)		349,844			36,707	(o)		—			386,551
Deferred income taxes		—			42,561		(42,561	)(i)		—			—			—			—
Other long-term obligations		13,787			9,525		(3,627	)(e)
							(5,898	)(g)		13,787			—			—			13,787
Total liabilities		3,987,040			903,650		302,394			5,193,084			55,443			—			5,248,527
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 March 31, 2012; aggregate liquidation preference of $265,000		3			—		—			3			—			—			3
6.0% Convertible perpetual preferred stock; 2,000 shares issued and outstanding at March 31, 2012; aggregate liquidation preference of $200,000		2			—		—			2			—			—			2
7.0% Convertible perpetual preferred stock; 3,000 shares issued and outstanding at March 31, 2012; aggregate liquidation preference of $300,000		3			—		—			3			—			—			3
Common stock, $0.001 par value, 800,000 shares authorized; 416,478 issued and 415,544 outstanding (historical) and 490,440 issued and 489,506 outstanding (pro forma)		401			—		74	(c)		475			—			—			475
Members’ capital		—			487,157		(487,157	)(j)		—			—			—			—
Additional paid-in capital		4,632,544			—		541,964	(k)		5,174,508			—			—			5,174,508
Treasury stock, at cost		(6,617	)		—		—			(6,617	)		—			—			(6,617	)
Accumulated deficit		(3,169,153	)		—		105,819	(c)
					—		94,415	(i)
					—		(13,026	)(l)		(2,981,945	)		(135	)(p)		—			(2,982,080	)
Total SandRidge Energy, Inc. stockholders’ equity		1,457,183			487,157		242,089			2,186,429			(135	)		—			2,186,294
Noncontrolling interest		933,876			—		—			933,876			—			587,087	(q)		1,520,963
Total equity		2,391,059			487,157		242,089			3,120,305			(135	)		587,087			3,707,257
Total liabilities and equity	$	6,378,099		$	1,390,807	$	544,483		$	8,313,389		$	55,308		$	587,087		$	8,955,784

The accompanying notes are an integral part of this unaudited pro forma financial information.

SANDRIDGE ENERGY, INC. AND SUBSIDIARIES

UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS

FOR THE SIX MONTHS ENDED JUNE 30, 2012

	SandRidge Historical			Dynamic Historical			Dynamic Acquisition Pro Forma Adjustments			SandRidge as Adjusted for Dynamic Acquisition			Acquired Properties Historical (o)		Acquired Properties Pro Forma Adjustments			SandRidge Mississippian Trust II Pro Forma Adjustments			SandRidge Pro Forma Combined
	(In thousands, except per share amounts)
Revenues
Oil and natural gas	$	771,123		$	173,588		$	1,229	(a)	$	945,940		$	28,232	$	—		$	—		$	974,172
Drilling and services		62,941			—			—			62,941			—		—			—			62,941
Midstream and marketing		17,158			—			—			17,158			—		—			—			17,158
Other		8,847			3,117			—			11,964			—		—			—			11,964
Total revenues		860,069			176,705			1,229			1,038,003			28,232		—			—			1,066,235
Expenses
Production		205,791			48,721			17,697	(b)		272,209			11,519		—			—			283,728
Production taxes		23,255			—			752	(b)		24,007			462		—			—			24,469
Drilling and services		36,802			—			—			36,802			—		—			—			36,802
Midstream and marketing		16,513			—			—			16,513			—		—			—			16,513
Exploration		—			2,864			(2,864	)(c)		—			—		—			—			—
Depreciation and depletion — oil and natural gas		226,326			55,177			(2,086	)(d)
								(177	)(e)		279,240			—		11,767	(d)		—			291,007
Depreciation, depletion and amortization — other		29,860			—			—			29,860			—		—			—			29,860
Accretion of asset retirement obligation		10,572			—			5,360	(b)
								1,853	(f)		17,785			—		1,937	(p)		—			19,722
General and administrative		112,017			9,989			(3,250	)(g)
								(12,421	)(h)		106,335			—		(105	)(h)		250	(q)		106,480
Gain on derivative contracts		(415,204	)		—			28,922	(b)		(386,282	)		—		—			—			(386,282	)
Loss on sale of assets		3,380			—			—			3,380			—		—			—			3,380
Other		—			25,116			(23,809	)(b)
								(1,307	)(i)		—			—		—			—			—
Total expenses		249,312			141,867			8,670			399,849			11,981		13,599			250			425,679
Income from operations		610,757			34,838			(7,441	)		638,154			16,251		(13,599	)		(250	)		640,556
Other income (expense)
Interest expense		(135,534	)		(6,633	)		6,633	(j)
								(18,112	)(j)
								(501	)(j)
								10,875	(k)		(143,272	)		—		—			—			(143,272	)
Bargain purchase gain		124,446			—			(124,446	)(l)		—
Loss on derivative contracts		—			(28,922	)		28,922	(b)		—			—		—			—			—
Other income (expense), net		2,387			(3,387	)		—			(1,000	)		—		—			—			(1,000	)
Total other expense		(8,701	)		(38,942	)		(96,629	)		(144,272	)		—		—			—			(144,272	)
Income (loss) before income taxes		602,056			(4,104	)		(104,070	)		493,882			16,251		(13,599	)		(250	)		496,284
Income tax benefit		(103,587	)		(923	)		104,251	(m)		(259	)		—		—			—			(259	)
Net income (loss)		705,643			(3,181	)		(208,321	)		494,141			16,251		(13,599	)		(250	)		496,543
Less: net income attributable to noncontrolling interest		100,958			—			—			100,958			—		—			11,429	(r)		112,387
Net income (loss) attributable to SandRidge Energy, Inc.		604,685			(3,181	)		(208,321	)		393,183			16,251		(13,599	)		(11,679	)		384,156
Preferred stock dividends		27,763			—			—			27,763			—		—			—			27,763
Income available (loss applicable) to SandRidge Energy, Inc. common stockholders	$	576,922		$	(3,181	)	$	(208,321	)	$	365,420		$	16,251	$	(13,599	)	$	(11,679	)	$	356,393
Earnings per share available to SandRidge Energy, Inc. common stockholders
Basic	$	1.34								$	0.77										$	0.75
Diluted	$	1.14								$	0.68										$	0.67
Weighted average number of SandRidge Energy, Inc. common shares outstanding
Basic		430,802						43,890	(n)		474,692											474,692
Diluted		530,378						43,890	(n)		574,268											574,268

The accompanying notes are an integral part of this unaudited pro forma financial information.

SANDRIDGE ENERGY, INC. AND SUBSIDIARIES

UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS

FOR THE THREE MONTHS ENDED MARCH 31, 2012

	SandRidge Historical			Dynamic Historical			Dynamic Acquisition Pro Forma Adjustments			SandRidge as Adjusted for Dynamic Acquisition			Acquired Properties Historical (o)		Acquired Properties Pro Forma Adjustments			SandRidge Mississippian Trust II Pro Forma Adjustments			SandRidge Pro Forma Combined
	(In thousands, except per share amounts)
Revenues
Oil and natural gas	$	341,365		$	143,792		$	1,504	(a)	$	486,661		$	14,433	$	—		$	—		$	501,094
Drilling and services		29,309			—			—			29,309			—		—			—			29,309
Midstream and marketing		8,306			—			—			8,306			—		—			—			8,306
Other		2,655			2,874			—			5,529			—		—			—			5,529
Total revenues		381,635			146,666			1,504			529,805			14,433		—			—			544,238
Expenses
Production		83,310			37,814			15,499	(b)		136,623			6,545		—			—			143,168
Production taxes		12,254			—			642	(b)		12,896			241		—			—			13,137
Drilling and services		17,560			—			—			17,560			—		—			—			17,560
Midstream and marketing		7,954			—			—			7,954			—		—			—			7,954
Exploration		—			2,222			(2,222	)(c)		—			—		—			—			—
Depreciation and depletion — oil and natural gas		87,066			45,109			1,389	(d)
								(149	)(e)		133,415			—		5,782	(d)		—			139,197
Depreciation, depletion and amortization — other		14,513			—			—			14,513			—		—			—			14,513
Accretion of asset retirement obligation		2,607			—			4,015	(b)
								2,038	(f)		8,660			—		969	(p)		—			9,629
General and administrative		50,301			7,511			(2,444	)(g)
								(2,474	)(h)		52,894			—		—			250	(q)		53,144
Loss on derivative contracts		254,646			—			33,838	(b)		288,484			—		—			—			288,484
Loss on sale of assets		3,080			—			—			3,080			—		—			—			3,080
Other		—			21,463			(20,156	)(b)
								(1,307	)(i)		—			—		—			—			—
Total expenses		533,291			114,119			28,669			676,079			6,786		6,751			250			689,866
(Loss) income from operations		(151,656	)		32,547			(27,165	)		(146,274	)		7,647		(6,751	)		(250	)		(145,628	)
Other income (expense)
Interest expense		(66,965	)		(2,960	)		2,960	(j)
								(15,234	)(j)
								(422	)(j)
								10,875	(k)		(71,746	)		—		—			—			(71,746	)
Loss on derivative contracts		—			(33,838	)		33,838	(b)		—			—		—			—			—
Other income (expense), net		2,468			(2,099	)		—			369			—		—			—			369
Total other expense		(64,497)			(38,897)			32,017			(71,377)			—		—			—			(71,377)
(Loss) income before income taxes		(216,153)			(6,350)			4,852			(217,651)			7,647		(6,751)			(250)			(217,005)
Income tax expense (benefit)		71			(920	)		920	(m)		71			—		—			—			71
Net (loss) income		(216,224	)		(5,430	)		3,932			(217,722	)		7,647		(6,751	)		(250	)		(217,076	)
Less: net income attributable to noncontrolling interest		1,954			—			—			1,954			—		—			9,382	(r)		11,336
Net (loss) income attributable to SandRidge Energy, Inc.		(218,178	)		(5,430	)		3,932			(219,676	)		7,647		(6,751	)		(9,632	)		(228,412	)
Preferred stock dividends		13,881			—			—			13,881			—		—			—			13,881
(Loss applicable) income available to SandRidge Energy, Inc. common stockholders	$	(232,059	)	$	(5,430	)	$	3,932		$	(233,557	)	$	7,647	$	(6,751	)	$	(9,632	)	$	(242,293	)
Loss per share available to SandRidge Energy, Inc. common stockholders
Basic	$	(0.58	)							$	(0.49	)									$	(0.51	)
Diluted	$	(0.58	)							$	(0.49	)									$	(0.51	)
Weighted average number of SandRidge Energy, Inc. common shares outstanding
Basic		400,597						73,962	(n)		474,559											474,559
Diluted		400,597						73,962	(n)		474,559											474,559

The accompanying notes are an integral part of this unaudited pro forma financial information.

SANDRIDGE ENERGY, INC. AND SUBSIDIARIES

UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS

FOR THE YEAR ENDED DECEMBER 31, 2011

		SandRidge Pro Forma Historical (Note 4)			Dynamic Pro Forma Historical (Note 5)			Dynamic Acquisition Pro Forma Adjustments			SandRidge As Adjusted for Dynamic			Acquired Properties Historical (o)		Acquired Properties Pro Forma Adjustments			SandRidge Pro Forma Combined
		(In thousands, except per share amounts)
Revenues
Oil and natural gas		$	1,187,259		$	616,420		$	(3,050	)(a)
									(16,496	)(b)	$	1,784,133		$	87,112	$	—		$	1,871,245
Drilling and services			103,298			—			—			103,298			—		—			103,298
Midstream and marketing			66,690			—			—			66,690			—		—			66,690
Other			18,431			—			16,496	(b)		34,927			—		—			34,927
Total revenues			1,375,678			616,420			(3,050	)		1,989,048			87,112		—			2,076,160
Expenses
Production			309,367			133,094			58,087	(b)		500,548			28,780		—			529,328
Production taxes			44,850			—			797	(b)		45,647			1,353		—			47,000
Drilling and services			65,654			—			—			65,654			—		—			65,654
Midstream and marketing			66,007			—			—			66,007			—		—			66,007
Exploration expense			—			15,085			(15,085	)(c)		—			—		—			—
Depreciation and depletion – oil and natural gas			311,306			203,457			(21,041	)(d)
									(10,851	)(e)		482,871			—		28,890	(d)		511,761
Depreciation and amortization – other			53,630			—			—			53,630			—		—			53,630
Accretion of asset retirement obligations			9,368			—			15,028	(b)
									7,443	(f)		31,839			—		3,876	(p)		35,715
Impairment			2,825			—			—			2,825			—		—			2,825
General and administrative			150,143			24,400			(9,279	)(g)		165,264			—		—			165,264
Gain on derivative contracts			(44,075	)		—			(43,734	)(b)		(87,809	)		—		—			(87,809	)
Gain on sale of assets			(2,044	)		—			(19	)(b)		(2,063	)		—		—			(2,063	)
Other			—			84,124			(73,893	)(b)					—		—
									(10,231	)(i)		—			—		—			—
Total expenses			967,031			460,160			(102,778	)		1,324,413			30,133		32,766			1,387,312
Income from operations			408,647			156,260			99,728			664,635			56,979		(32,766	)		688,848
Other income (expense)
Interest expense			(234,200	)		(13,007	)		13,007	(j)					—		—
									(60,938	)(j)					—		—
									(1,688	)(j)		(296,826	)		—		—			(296,826	)
Loss on extinguishment of debt			(38,232	)		—			—			(38,232	)		—		—			(38,232	)
Gain on derivative contracts			—			43,734			(43,734	)(b)		—			—		—			—
Bargain purchase gain			—			282			—			282			—		—			282
Other income (expense), net			970			(145	)		—			825			—		—			825
Total other (expense) income			(271,462	)		30,864			(93,353	)		(333,951	)		—		—			(333,951	)
Income before income taxes			137,185			187,124			6,375			330,684			56,979		(32,766	)		354,897
Income tax expense (benefit)			377			(5,359	)		5,359	(m)		377			—		—			377
Net income			136,808			192,483			1,016			330,307			56,979		(32,766	)		354,520
Less: net income attributable to noncontrolling interest			97,547			460			—			98,007			—		—			98,007
Net income attributable to SandRidge Energy, Inc.			39,261			192,023			1,016			232,300			56,979		(32,766	)		256,513
Preferred stock dividends			55,583			—			—			55,583			—		—			55,583
(Loss applicable) income available to SandRidge Energy, Inc. common stockholders		$	(16,322	)	$	192,023		$	1,016		$	176,717		$	56,979	$	(32,766	)	$	200,930
(Loss) earnings per share
Basic		$	(0.04	)							$	0.37							$	0.43
Diluted		$	(0.04	)							$	0.37							$	0.42
Weighted average number of common shares outstanding
Basic			398,851						73,759	(n)		472,610								472,610
	��
Diluted			398,851						81,553	(n)		480,404								480,404

The accompanying notes are an integral part of this unaudited pro forma financial information.

SANDRIDGE ENERGY, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS

Note 1. Basis of Presentation

On June 20, 2012, SandRidge acquired oil and natural gas properties from Hunt Oil Company, Hunt Cheiftain Development, L.P., and Hunt Oil Company of Louisiana, Inc. (collectively, “Hunt”) for $38.5 million, net of purchase price adjustments and subject to post-closing adjustments. The properties comprise approximately 184,000 gross (103,000 net) acres in the Gulf of Mexico (the “Acquired Properties”).

On April 23, 2012, SandRidge Mississippian Trust II (the “Mississippian Trust II”), a newly formed Delaware statutory trust, completed its initial public offering (“IPO”) of 29,900,000 common units representing beneficial interests in the Mississippian Trust II. Net proceeds to the Mississippian Trust II, after underwriting discounts and commissions, were $590.2 million. Concurrent with the closing, SandRidge conveyed certain royalty interests to the Mississippian Trust II in exchange for the net proceeds of the Mississippian Trust II’s IPO, which were further reduced by $3.1 million for a structuring fee paid to certain of the underwriters, and 19,825,000 units (7,393,750 common units and 12,431,250 subordinated units) representing approximately 39.9% of the beneficial interest in the Mississippian Trust II. The royalty interests conveyed to the Mississippian Trust II are in certain existing wells and wells to be drilled on oil and natural gas properties leased by SandRidge in the Mississippian formation in northern Oklahoma and southern Kansas within an area of mutual interest (the “Mississippian Trust II Royalty Interests”).

On February 1, 2012, SandRidge Energy, Inc. (“SandRidge”) and Dynamic Offshore Holding, LP (the “Seller”) entered into an Equity Purchase Agreement (the “Equity Purchase Agreement”) for SandRidge to acquire 100% of the outstanding equity interests of Dynamic Offshore Resources, LLC (“Dynamic”), a wholly-owned subsidiary of the Seller. On April 17, 2012, SandRidge completed its acquisition of Dynamic (the “Dynamic Acquisition”) for approximately $1.2 billion, comprised of approximately $680.0 million in cash and approximately 74 million shares of SandRidge’s common stock. Dynamic is an oil and natural gas exploration, development and production company with operations in the Gulf of Mexico.

In conjunction with the Equity Purchase Agreement, SandRidge secured $725.0 million in committed financing (the “Bridge Loan”) from Bank of America, N.A., SunTrust Bank and The Royal Bank of Scotland plc that was available for SandRidge’s use to fund the cash portion of the Dynamic purchase price. SandRidge incurred a $10.9 million fee in connection with securing the Bridge Loan. Rather than using the Bridge Loan, however, SandRidge issued $750.0 million of 8.125% Senior Notes due 2022 (the “8.125% Senior Notes”) on April 17, 2012 to primarily fund the cash portion of the Dynamic purchase price. The pro forma effects of the 8.125% Senior Notes and common stock issuance, herein referred to as the financing transactions, have been reflected in the pro forma adjustments.

The unaudited pro forma condensed combined balance sheet is based on the unaudited March 31, 2012 SandRidge and Dynamic balance sheets and includes pro forma adjustments to give effect to the acquisition of properties from Hunt, the Dynamic Acquisition, the financing transactions and the conveyance of the Mississippian Trust II Royalty Interests as if those transactions occurred on March 31, 2012. The unaudited pro forma condensed combined statement of operations for the six months ended June 30, 2012 is based on the unaudited statement of operations of SandRidge for the six months ended June 30, 2012, the unaudited statement of revenues and direct operating expenses of the Acquired Properties for the period of January 1, 2012 through June 20, 2012 and the unaudited statement of operations of Dynamic for the period of January 1, 2012 through April 17, 2012 and includes pro forma adjustments to give effect to the acquisition of properties from Hunt, the Dynamic Acquisition, the financing transactions and the Mississippian Trust II Royalty Interests conveyance as if those transactions occurred on January 1, 2011. The unaudited pro forma condensed combined statement of operations for the three months ended March 31, 2012 is based on the unaudited statement of operations of SandRidge, the unaudited statement of revenues and direct operating expenses of the Acquired Properties and the unaudited statement of operations of Dynamic for the three months ended March 31, 2012 and includes pro forma adjustments to give effect to the acquisition of properties from Hunt, the Dynamic Acquisition, the financing transactions and the Mississippian Trust II Royalty Interests conveyance as if those transactions occurred on January 1, 2011. The unaudited pro forma condensed combined statement of operations for the year ended December 31, 2011 is based on the audited statement of operations of SandRidge, the audited statement of revenues and direct operating expenses of the Acquired Properties and the audited statement of operations of Dynamic for the year ended December 31, 2011 and includes pro forma adjustments to give effect to the acquisition of properties from Hunt, the Dynamic Acquisition and the financing transactions as if they occurred on January 1, 2011. Additionally, the audited statements of operations for both SandRidge and Dynamic for the year ended December 31, 2011 have been adjusted for certain acquisition or divesture transactions.

The unaudited pro forma condensed combined statements of operations for the six months ended June 30, 2012, three months ended March 31, 2012 and year ended December 31, 2011 exclude the impact of non-recurring expenses SandRidge and Dynamic have incurred or will incur as a result of the acquisition of properties from Hunt, the Dynamic Acquisition and related financings, primarily banking and legal fees, the bargain purchase gain and an income tax benefit resulting from a partial release of the valuation allowance on SandRidge’s deferred tax asset. The unaudited pro forma condensed combined statement of operations for the year ended December 31, 2011 also excludes certain non-recurring adjustments recorded in 2011 relating to SandRidge’s July 2010 acquisition of Arena Resources, Inc. (“Arena”). SandRidge’s historical results for the year ended December 31, 2011 have been adjusted on a pro forma basis to give effect to (i) its conveyance of the Mississippian Trust II Royalty Interests to the Mississippian Trust II, (ii) the sale of certain producing properties located in eastern Texas (the “East Texas Properties”) and (iii) its conveyance of the royalty interests in certain oil and natural gas properties located in Andrews County, Texas (the “Permian Trust Royalty Interests”) to SandRidge Permian Trust (the “Permian Trust”). SandRidge’s historical results for the year ended December 31, 2011 have also been adjusted to give effect to final adjustments recorded in 2011 by SandRidge with respect to its July 2010 acquisition of Arena as if they had occurred prior to 2011. See Note 4 to the unaudited pro forma condensed combined financial statements for further discussion of these pro forma adjustments to the SandRidge historical statement of operations. Dynamic’s historical consolidated statement of operations for the year ended December 31, 2011 has also been adjusted on a pro forma basis to give effect to Dynamic’s 2011 acquisition of certain oil and natural gas interests in the Gulf of Mexico. See Note 5 to the unaudited pro forma condensed combined financial statements for further discussion of these pro forma adjustments to the Dynamic historical statement of operations.

SandRidge believes that the assumptions used in the preparation of these unaudited pro forma condensed combined financial statements provide a reasonable basis for presenting the effects directly attributable to the transactions described above. The unaudited pro forma financial information should be read in conjunction with the accompanying footnotes, SandRidge’s Quarterly Reports on Form 10-Q for the six months ended June 30, 2012 and three months ended March 31, 2012 and Annual Report on Form 10-K for the year ended December 31, 2011, the Permian Trust’s Annual Report on Form 10-K for the year ended December 31, 2011, the Mississippian Trust II’s Quarterly Reports on Form 10-Q for the six months ended June 30, 2012 and three months ended March 31, 2012, Dynamic’s financial statements and related notes for the year ended December 31, 2011 included in SandRidge’s current report on Form 8-K filed on April 9, 2012 and for the three months ended March 31, 2012 included in SandRidge’s current report on Form 8-K filed on May 18, 2012, the unaudited Statements of Revenues and Direct Operating Expenses for the three months ended March 31, 2012 and 2011 and the audited Statements of Revenues and Direct Operating Expenses for the year ended December 31, 2011 for the Acquired Properties, both included in an exhibit to this current report, and other information that SandRidge has filed with the Securities and Exchange Commission.

Consolidation of the Trusts by SandRidge.In accordance with Accounting Standards Codification Topic 810, including the guidance in Accounting Standards Update 2009-17, SandRidge consolidates the activities of variable interest entities of which it is the primary beneficiary. SandRidge has determined that it is the primary beneficiary of the Permian Trust and began consolidating the activities of the Permian Trust with its results beginning in August 2011. Additionally, SandRidge has determined that it is the primary beneficiary of the Mississippian Trust II and began consolidating the activities of the Mississippian Trust II with its results beginning in April 2012. In consolidation, the royalty trust net income attributable to common units of the royalty trusts owned by third parties is reflected as noncontrolling interest. Accordingly, the pro forma impact of the Permian Trust and Mississippian Trust II Royalty Interests conveyances primarily are limited to giving effect to noncontrolling interest accounting.

Note 2. Pro Forma Adjustments – Unaudited Pro Forma Condensed Combined Balance Sheet

The following adjustments were made in the preparation of the unaudited pro forma condensed combined balance sheet:

(a) Adjustment to eliminate Dynamic’s cash balance, which was excluded from the assets acquired.

(b) In connection with the closing of the Dynamic Acquisition, SandRidge received funds, net of approximately $19.9 million in costs, associated with its issuance of $750.0 million principal amount of 8.125% Senior Notes. The net proceeds from the issuance were used to fund the cash portion of the Dynamic purchase price and to pay associated transaction costs of approximately $13.1 million with the remainder of the proceeds used for general corporate purposes.

(c) Adjustment to reflect consideration paid by SandRidge in the acquisition and adjustments to historical book values of Dynamic’s assets and liabilities as of March 31, 2012 to their estimated fair values, in accordance with the acquisition method of accounting. The following table reflects the preliminary allocation of consideration to the assets acquired and the liabilities assumed and the resulting bargain purchase gain based on the preliminary estimates of fair value (in thousands, except stock price):

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
Estimated Fair Value of Liabilities Assumed
Current liabilities		136,494
Asset retirement obligation(4)		315,922
Long-term deferred tax liability(5)		94,415
Other non-current liabilities		3,627
Amount attributable to liabilities assumed		550,458
Total purchase price plus liabilities assumed		1,785,687
Estimated Fair Value of Assets Acquired
Current assets		125,568
Oil and natural gas properties(6)		1,746,753
Other property, plant and equipment		1,342
Other non-current assets		17,843
Amount attributable to assets acquired		1,891,506
Bargain purchase gain(7)	$	(105,819	)

(1) Consideration paid by SandRidge consists of 73,961,554 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 (the closing date of the 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 paid to Dynamic, including amounts paid to retire Dynamic’s long-term debt, was funded through a portion of the net proceeds from SandRidge’s issuance of $750.0 million of 8.125% Senior Notes.

(3) In accordance with the Equity Purchase Agreement, SandRidge remitted to the Seller a cash payment equal to the difference between Dynamic’s average daily cash balance for the 30-day period ending on the second day prior to closing and the actual cash balance on the second day prior to closing. This resulted in an additional cash payment by SandRidge of $13.1 million at closing.

(4) The estimated fair value of the acquired asset retirement obligation was determined using SandRidge’s credit adjusted risk-free rate.

(5) The deferred tax liability is a result of the difference between the estimated fair value and SandRidge’s expected tax basis in the assets acquired and liabilities assumed from Dynamic.

(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 estimated oil and natural gas reserve quantities and forward strip oil and natural gas prices as of April 17, 2012, discounted to present value using SandRidge’s risk weighted assessments for proved, probable and possible reserves and an industry-based weighted average cost of capital.

(7) The bargain purchase gain results from the excess of the fair value of the net assets acquired over the consideration paid, and as additional information becomes available, is subject to adjustment.

(d) Adjustment to Dynamic’s asset retirement obligation and related notes receivable balance as a result of calculating these amounts based on SandRidge’s credit adjusted risk-free rate. Based on applicable agreements, Dynamic is to be reimbursed specified amounts by sellers of oil and natural gas properties following the performance of decommissioning operations. These reimbursable amounts are presented as notes receivable – abandonments.

(e) Adjustments to align the presentation of Dynamic’s assets and liabilities based on the asset and liability line items presented by SandRidge.

(f) Adjustment to reflect repayment of Dynamic’s outstanding long-term debt at closing pursuant to the terms of the Equity Purchase Agreement, as well as to eliminate the related unamortized debt issuance costs of $3.3 million.

(g) Adjustment to reverse the assets and liabilities related to natural gas imbalances recorded by Dynamic under the entitlement method. SandRidge uses the sales method of accounting for natural gas imbalances.

(h) Adjustment to reflect estimated deferred debt costs associated with the issuance of SandRidge’s 8.125% Senior Notes. See (b) above.

(i) Adjustment to recognize offset of newly created net deferred tax liability with SandRidge’s existing net deferred tax assets and the resulting release of approximately $94.4 million in the current valuation allowance against those existing net deferred tax assets and to adjust Dynamic’s deferred tax liability to $0 as a result of SandRidge’s net deferred tax asset. The release of the valuation allowance has been reflected as a credit to accumulated deficit in the accompanying unaudited pro forma condensed combined balance sheet, but has not been included in the accompanying unaudited pro forma condensed combined statements of operations due to its non-recurring nature.

(j) Adjustment to eliminate Dynamic’s historical members’ capital.

(k) Adjustment to reflect issuance of approximately 74.0 million shares of SandRidge common stock at $7.33 per share (closing stock price on April 17, 2012), net of par value and estimated issuance costs of approximately $0.1 million.

(l) Adjustment to reflect additional estimated costs related to the acquisition, including professional fees and employee severance. The additional expense has not been included in the accompanying unaudited pro forma condensed combined statements of operations due to its non-recurring nature.

(m) Adjustment to reflect cash consideration of $38.5 million to acquire oil and natural gas properties from Hunt and $0.1 million for associated transaction costs.

(n) Adjustment to reflect the fair value of oil and natural gas properties acquired, estimated using a discounted cash flow model, with future cash flows estimated based upon estimated oil and natural gas reserve quantities and forward strip oil and natural gas prices as of June 20, 2012, discounted to present value using SandRidge’s risk weighted assessments for proved reserves and an industry-based weighted average cost of capital.

(o) Adjustment to reflect the estimated fair value of the asset retirement obligation associated with the oil and natural gas properties acquired from Hunt using SandRidge’s credit adjusted risk-free rate.

(p) Adjustment to reflect estimated acquisition costs, including professional fees. The additional expense has not been included in the accompanying unaudited pro forma condensed combined statements of operations due to its non-recurring nature.

(q) Adjustment to reflect proceeds from the Mississippian Trust II’s issuance of 29,900,000 common units to third parties through its IPO at $21 per unit net of estimated underwriting fees, offering expenses and structuring fees. Net proceeds will be used for general corporate purposes and to fund SandRidge’s drilling program, which may include funding of SandRidge’s drilling obligation to the MississippianTrust II.

Note 3. Pro Forma Adjustments – Unaudited Pro Forma Condensed Combined Statements of Operations

The following adjustments were made in the preparation of the unaudited pro forma condensed combined statements of operations:

(a) Adjustment to reverse the effect on revenues of natural gas imbalances recorded by Dynamic under the entitlement method. SandRidge uses the sales method of accounting for natural gas imbalances.

(b) Adjustments to align the presentation of Dynamic’s revenues and expenses based on the statement of operations line items and presentation utilized by SandRidge.

(c) Adjustment to eliminate expense related to unsuccessful exploration costs, geological and geophysical costs and delay rentals attributable to the development of oil and natural gas properties from Dynamic’s historical financial statements in accordance with the full cost method of accounting for oil and natural gas properties. SandRidge follows the full cost method of accounting for oil and natural gas properties while Dynamic followed the successful efforts method of accounting for oil and natural gas properties prior to its acquisition by SandRidge. Certain costs that are capitalized under the full cost method are expensed under the successful efforts method. These costs consist primarily of unsuccessful exploration drilling costs, geological and geophysical costs, delay rental on leases, abandonment costs and general and administrative expenses directly related to exploration and development activities.

(d) Adjustment to depreciation and depletion resulting from the pro forma calculation of the combined entity’s depletion expense under the full cost method of accounting for oil and natural gas properties. The pro forma depletion adjustments utilize depletion rates of $15.83, $15.73 and $15.69 per Boe for the six months ended June 30, 2012, three months ended March 31, 2012 and year ended December 31, 2011, respectively. The pro forma depletion adjustment for the six months ended June 30, 2012 reflects depletion using the combined entity’s rate through the acquisition date for the acquisition of properties from Hunt (June 20, 2012) and the Dynamic Acquisition (April 17, 2012). Under the successful efforts method of accounting, proved property acquisition costs are amortized on a unit-of-production basis over total proved reserves and costs of wells, related equipment and facilities are depreciated over the life of the proved developed reserves that will utilize those capitalized assets on a field-by-field basis. Under the full cost method of accounting, property acquisition costs, costs of wells, related equipment and facilities and future development costs are included in a single full cost pool, which is amortized on a unit-of-production basis over total proved reserves.

(e) Adjustment to eliminate the impairment of oil and natural gas properties recorded by Dynamic under the successful efforts method of accounting.

(f) Adjustment to Dynamic’s accretion expense due to changes in the asset retirement obligation as a result of calculating the obligation based upon SandRidge’s credit adjusted risk-free rate.

(g) Adjustment to capitalize a portion of Dynamic’s general and administrative expenses as allowed under the full cost method, using SandRidge’s historical capitalization rates of approximately 33%, 33% and 38% for the period of January 1 through April 17, 2012, the three months ended March 31, 2012 and the year ended December 31, 2011, respectively.

(h) Adjustment to eliminate non-recurring acquisition costs, which were included in SandRidge’s historical statements of operations for the six months ended June 30, 2012 and the three months ended March 31, 2012.

(i) Adjustment to eliminate the loss on abandonment recorded by Dynamic under the successful efforts method of accounting. Under full cost accounting, any differences between the recorded asset retirement obligation and actual plugging and abandonment costs are recorded as an adjustment to accumulated depletion.

(j) Adjustment to eliminate historical interest expense on Dynamic’s debt, which was repaid at closing, record interest expense on the $750.0 million principal amount of 8.125% Senior Notes and amortize estimated debt issuance costs of $19.9 million related to the 8.125% Senior Notes over the term of the notes. The pro forma adjustment for the six months ended June 30, 2012 reflects interest expense and amortization of debt issuance costs through April 17, 2012.

(k) Adjustment to eliminate the non-recurring fee SandRidge incurred to secure the Bridge Loan, which was included in SandRidge’s historical statements of operations for the six months ended June 30, 2012 and three months ended March 31, 2012.

(l) Adjustment to reverse the bargain purchase gain resulting from the Dynamic Acquisition. The bargain purchase gain is the excess fair value of net assets acquired over consideration paid and was included in SandRidge’s historical statement of operations for the six months ended June 30, 2012.

(m) Adjustment to reverse Dynamic’s income tax benefit. There was no pro forma income tax provision related to the acquisition of Dynamic due to SandRidge’s net deferred tax asset position and the corresponding full valuation allowance. A net deferred tax liability resulted from the difference between the estimated fair value and SandRidge’s 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 through the Dynamic Acquisition. This net deferred tax liability was offset with SandRidge’s existing net deferred tax asset, resulting in the release of $103.3 million of valuation allowance against SandRidge’s existing net deferred tax asset, which is reflected in SandRidge’s historical statement of operations for the six months ended June 30, 2012. The release of the valuation allowance is considered non-recurring and therefore reversed in the pro forma adjustments for the six months ended June 30, 2012.

(n) Adjustment to weighted average shares outstanding for the issuance of SandRidge common stock in conjunction with the Dynamic Acquisition.

(o) Adjustment to recognize revenues and direct operating expenses of the properties acquired from Hunt.

(p) Adjustment to record accretion expense on the asset retirement obligation assumed in the acquisition of oil and natural gas properties from Hunt.

(q) The Mississippian Trust II’s general and administrative expenses are estimated at $1.3 million annually and include an annual administrative services fee of $0.3 million payable by the Mississippian Trust II to SandRidge that is eliminated in consolidation. Adjustment for the Mississippian Trust II for the six months ended June 30, 2012 is net of amounts attributable to the Mississippian Trust II from April 23, 2012 to June 30, 2012 already reflected in the SandRidge historical results.

(r) Reflects net income of the Mississippian Trust II attributable to the third-party beneficial ownership of 60.1%. Such amounts were estimated based on pro forma distributable income of the Mississippian Trust II of $27.7 million less depletion of $8.7 million and $22.5 million less estimated depletion of $6.9 million for the six months ended June 30, 2012 and three months ended March 31, 2012, respectively. Adjustment for the Mississippian Trust II for the six months ended June 30, 2012 is net of amounts attributable to the Mississippian Trust II from April 23, 2012 to June 30, 2012 already reflected in the SandRidge historical results.

Note 4. SandRidge’s Unaudited Pro Forma Condensed Consolidated Statement of Operations

SandRidge’s unaudited pro forma condensed statement of operations for the year ended December 31, 2011 included in the unaudited pro forma condensed combined statement of operations for the year ended December 31, 2011 gives effect to the following transactions:

• SandRidge Mississippian Trust II. On April 23, 2012, the Mississippian Trust II completed its IPO. Concurrent with the closing, SandRidge conveyed the Mississippian Trust II Royalty Interests to the Mississippian Trust II in exchange for the net proceeds of the IPO and 19,825,000 units (7,393,750, common units and 12,431,250, subordinated units). See Note 1 for further discussion of the Mississippian Trust II’s IPO.

• East Texas Sale. On November 14, 2011, SandRidge sold producing properties located on over 23,000 net acres in Gregg, Harrison, Rusk and Panola counties in Texas for an agreed upon price of $231.0 million (“East Texas Sale”).

• SandRidge Permian Trust. On August 16, 2011, the Permian Trust completed its IPO of 34,500,000 common units representing beneficial interests in the Permian Trust. Net proceeds to the Permian Trust, after certain offering expenses, were $580.6 million. Concurrent with the closing, SandRidge conveyed the Permian Trust Royalty Interests to the Permian Trust in exchange for the net proceeds of the Permian Trust’s IPO and 18,000,000 units (4,875,000 common units and 13,125,000 subordinated units), representing approximately 34.3% of the beneficial interest in the Permian Trust.

• Arena Acquisition. On July 16, 2010, SandRidge completed the acquisition of all of the outstanding shares of common stock of Arena. 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 acquisition. The consideration received by Arena shareholders was valued at $1.4 billion in the aggregate. SandRidge was the surviving parent company after completion of the acquisition. In the second quarter of 2011, SandRidge completed its valuation of assets acquired and liabilities assumed related to the Arena Acquisition.

The unaudited pro forma condensed statement of operations for the year ended December 31, 2011 is based on the audited statement of operations of SandRidge for the year ended December 31, 2011, and includes pro forma adjustments to give effect to SandRidge’s conveyance of the Permian Trust Royalty Interests to the Permian Trust, the East Texas Sale and the conveyance of the Mississippian Trust II Royalty Interests to the Mississippian Trust II as if those transactions occurred on January 1, 2011, and to reflect the effects of final adjustments for the Arena Acquisition. SandRidge believes that the assumptions used provide a reasonable basis for presenting the effects directly attributable to these transactions. Certain reclassifications have been made to the historical statement of operations for the year ended December 31, 2011 to conform to the presentation in the historical statements of operations for the six months ended June 30, 2012 and the three months ended March 31, 2012.

SandRidge Energy, Inc.

Unaudited Pro forma Condensed Statement of Operations

Year Ended December 31, 2011

				Pro Forma Adjustments
							Dispositions
	SandRidge Historical			Arena Acquisition			SandRidge Permian  Trust			East Texas Sale			SandRidge Mississippian Trust II			SandRidge Pro Forma Historical
	(In thousands, except per share amounts)
Revenues
Oil and natural gas	$	1,226,794			—			—		$	(39,535	)(f)		—		$	1,187,259
Drilling and services		103,298			—			—			—			—			103,298
Midstream and marketing		66,690			—			—			—			—			66,690
Other		18,431			—			—			—			—			18,431
Total revenues		1,415,213			—			—			(39,535	)		—			1,375,678
Expenses
Production		322,877			—			—			(13,510	)(f)		—			309,367
Production taxes		46,069			—			—			(1,219	)(f)		—			44,850
Drilling and services		65,654			—			—			—			—			65,654
Midstream and marketing		66,007			—			—			—			—			66,007
Depreciation and depletion — oil and natural gas		317,246			—			—			(5,940	)(g)		—			311,306
Depreciation and amortization — other		53,630			—			—			—			—			53,630
Accretion of asset retirement obligation		9,368			—			—			—			—			9,368
Impairment		2,825			—			—			—			—			2,825
General and administrative		148,643			—			500	(c)		—			1,000	(c)		150,143
Gain on derivative contracts		(44,075	)		—			—			—			—			(44,075	)
Gain on sale of assets		(2,044	)		—			—			—			—			(2,044	)
Total expenses		986,200			—			500			(20,669	)		1,000			967,031
Income from operations		429,013			—			(500	)		(18,866	)		(1,000	)		408,647
Other income (expense)
Interest expense		(237,332	)		—			3,132	(d)		—			—			(234,200	)
Loss on extinguishment of debt		(38,232	)		—			—			—			—			(38,232	)
Other income, net		3,122			(2,152	)(a)		—			—			—			970
Total other expense		(272,442	)		(2,152	)		3,132			—			—			(271,462	)
Income before income taxes		156,571			(2,152	)		2,632			(18,866	)		(1,000	)		137,185
Income tax (benefit) expense		(5,817	)		6,247	(b)		—			(53	)(h)		—			377
Net income		162,388			(8,399	)		2,632			(18,813	)		(1,000	)		136,808
Less: net income attributable to noncontrolling interest		54,323			—			26,612	(e)		—			16,612	(i)		97,547
Net income attributable to SandRidge Energy, Inc.		108,065			(8,399	)		(23,980	)		(18,813	)		(17,612	)		39,261
Preferred stock dividends		55,583			—			—			—			—			55,583
Income available (loss applicable) to SandRidge Energy, Inc. common stockholders	$	52,482		$	(8,399	)	$	(23,980	)	$	(18,813	)	$	(17,612	)	$	(16,322	)
Earnings (loss) per share
Basic	$	0.13														$	(0.04	)
Diluted	$	0.13														$	(0.04	)
Weighted average number of common shares outstanding
Basic		398,851															398,851
Diluted		406,645												(7,794	)(j)		398,851

(a) Adjustment to reverse income amounts resulting from the final adjustment to liabilities established in the Arena Acquisition purchase price allocation that were reduced to zero based on final information received during the year ended December 31, 2011. Income from adjusting the liability is considered non-recurring and therefore reversed in the unaudited pro forma condensed statement of operations.

(b) Adjustment to reverse the release of a portion of SandRidge’s valuation allowance for the year ended December 31, 2011. A deferred tax liability resulted from the step-up in basis on the property acquired from Arena. This deferred tax liability was offset with SandRidge’s existing net deferred tax asset, resulting in the release of $7.0 million of valuation allowance against SandRidge’s existing net deferred tax asset for the year ended December 31, 2011. The $7.0 million valuation allowance release is presented net of $0.8 million of income tax expense related to the filing of Arena’s final tax returns. The release of the valuation allowance is considered non-recurring and therefore reversed in the unaudited pro forma condensed statement of operations for the year ended December 31, 2011.

(c) The Permian Trust and Mississippian Trust II’s general and administrative expenses are each estimated at $1.3 million annually and include an annual administrative services fee of $0.3 million payable by each of the Permian Trust and Mississippian Trust II to SandRidge that will be eliminated in consolidation. Adjustment to the Permian Trust for the year ended December 31, 2011 is net of amounts attributable to the Permian Trust from August 16, 2011 to December 31, 2011 already reflected in the SandRidge historical results.

(d) Adjustment to reflect reduction of interest expense due to repayment of amounts outstanding under SandRidge’s senior credit facility with proceeds from the Permian Trust’s IPO.

(e) Reflects net income of the Permian Trust attributable to third-party beneficial ownership of 65.7%. Such amounts were estimated based on pro forma income of the Permian Trust of $89.8 million less estimated depletion of $15.7 million for the year ended December 31, 2011. Adjustment for the year ended December 31, 2011 is net of amounts attributable to the Permian Trust from August 16, 2011 to December 31, 2011 already reflected in the SandRidge historical results.

(f) Adjustment to reduce oil and natural gas sales, production expense and production tax expense for amounts attributable to the East Texas Properties during the year ended December 31, 2011.

(g) Adjustment to reduce depletion, using the unit of production method under the full cost method of accounting, for amounts attributable to the East Texas Properties during the year ended December 31, 2011.

(h) Adjustment to income tax expense for income tax attributable to net revenues generated by the East Texas Properties during the year ended December 31, 2011. Adjustment was based upon the SandRidge consolidated effective income tax rate excluding the effects of adjustments to SandRidge’s valuation allowance caused by the Arena Acquisition discussed in (b) above.

(i) Reflects net income of the Mississippian Trust II attributable to a third-party beneficial ownership of 60.1%. Such amounts were estimated based on pro forma distributable income of the Mississippian Trust II of $37.3 million less estimated depletion of $9.7 million for the year ended December 31, 2011.

(j) Adjustment to the weighted average number of common shares outstanding – diluted based on pro forma loss applicable to SandRidge Energy, Inc. common stockholders.

Note 5. Dynamic Unaudited Pro Forma Condensed Statement of Operations

Dynamic’s unaudited pro forma condensed statement of operations for the year ended December 31, 2011 included in the unaudited pro forma condensed combined statement of operations for the year ended December 31, 2011 gives effect to its acquisition of certain oil and natural gas interests in the Gulf of Mexico from XTO Offshore Inc. and other related subsidiaries of ExxonMobil Corporation (“Exxon”) for $173.5 million on August 31, 2011 (the “XTO Acquisition”). The properties acquired comprise substantially all of the Gulf of Mexico assets that Exxon acquired as part of its acquisition of XTO Energy, Inc. in 2010.

Dynamic Offshore Resources, LLC

Unaudited Pro Forma Condensed Statement of Operations

For the Year Ended December 31, 2011

	Dynamic Historical			XTO Acquisition		Pro Forma Adjustments			Dynamic Pro Forma Historical
	(In thousands)
Revenues	$	520,782		$	95,638	$	—		$	616,420
Expenses
Production		113,487			19,607		—			133,094
Exploration expense		15,085			—		—			15,085
Depreciation, depletion and amortization		173,585			—		29,872	(a)		203,457
General and administrative expense		24,400			—		—			24,400
Other operating expense		77,505			4,125		2,494	(a)		84,124
Total expenses		404,062			23,732		32,366			460,160
Income from operations		116,720			71,906		(32,366	)		156,260
Other income (expense)
Interest expense		(9,503	)		—		(3,504	)(b)		(13,007	)
Commodity derivative income		43,734			—		—			43,734
Bargain purchase gain		282			—		—			282
Other		(145	)		—		—			(145	)
Total other income		34,368			—		(3,504	)		30,864
Income before income taxes		151,088			71,906		(35,870	)		187,124
Income tax benefit		(5,359	)		—		—			(5,359	)
Net income		156,447			71,906		(35,870	)		192,483
Less: net income attributable to noncontrolling interest		460			—		—			460
Net income attributable to Dynamic	$	155,987		$	71,906	$	(35,870	)	$	192,023

(a) Adjustment to reflect additional depreciation, depletion and amortization expense and accretion expense attributable to XTO Acquisition properties.

(b) Adjustment to reflect additional interest expense incurred on $173.7 million in borrowings to fund the XTO Acquisition from January 1, 2011 to August 31, 2011, at an estimated annual rate of approximately 3.0%.