SD - Earnings call transcript Q1 2019 | SandRidge Energy, Inc.

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Operator

Good morning. My name is Heidi and I will be your conference operator today. At this time, I would like to welcome everyone to the SandRidge First Quarter 2019 Conference call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session [Operator Instructions]. you. Thank may you your begin Robinson, conference. Johna

Johna Robinson

Suter, and today's me website we we call. uncertainties, today you, our differ Officer; remind Johnson, and on you to welcome like conjunction under contains We and release everyone With call. Mike and mind John will Officer; Financial Keep in projected referencing slides Relations subject our that from conference that forward-looking the materially the Chief and Operating posted tab and are to statements statements. have this be during Executive Officer. in are may would to assumptions, Chief Thank call forward-looking Investor those Chief these with actual Paul which earnings results and in President McKinney, risks call, conference

We reference will later can Also, other our us adjusted non-GAAP these G&A found file measures. EBITDA, you on and adjusted measures Reconciliations our afternoon. website. of see be also financial to will this make XX-Q

Now, Paul. let over to call turn the me

Paul McKinney

you We'll Johna use updates it and just encourage good investor join you for mentioned, to morning, our with time for it provide on this be to we results to along. our and you, today our to on presentation quarter operations to we guidance. and posted plan Thank and everybody. first the and We the interest follow referencing us taking your today you review in that morning SandRidge. Johna website Thank early

of reserves information. consolidation our and and of table the our information location information slide our market where our included that find location overview highlights a We on financial company with map X Page We you the a current that asset this production that operations all and today useful. and hope we've will begin summarizes -- an

components efforts for our aspects company we last shareholders. new believe This is we call strategy, and strategy share of our and of a adjusted you that will X, key defining that lead to debt shared is long-term will the business one to both and culture returns. success we our to summary on near-term as Moving a our highlights focus to Page competitive sustainable with believe this per lead continue in our the

Now in which provide summary just moving Page to on with a review our X, you of moment. quarter Johnson we a first will Mike highlights

Before over this to with Mike, several turning to want points. I share you

demonstrate early strategy. First our progress our quarter results this business in

LOE costs the close previous plan and is up flow. spending in year is reductions we're and believe quarters cost, we both We the and reducing within remaining limit our intend quarters, to it or of our our continue cash environment with our within have commodity Our and to throughout X% light cash of prices year-over-year capital this to production our we stay in, over to G&A. on cash prudent substantially to reduced preserve our sheet. very In annual focus balance

like to and areas, advantage the understanding to the I'd and is the pleased best progress with Park North both the The We develop preserve make by believe the play. doing Park results North to we we making the also of next drilling so are opportunities programs way from in flexibilities how are Midcontinent we in marketplace. our take in point that the

year currently XX patterns with began help well of the and other uncertainty well wells to configuration test reduce objectives capital the last our and was equivalent Park in the is XX respect development in in in recall, year and you If the the one We this test ongoing. year. spacing included to to this two test to quarter place well to the that section resource to wells an spacing program our program optimum of of plan. that equivalent tests define per different per North fourth of the section, One

from necessary are We that and spacing various resources. Colorado, we to this ongoing, this With and We regulatory early and these important spacing we investments to as year six other more into change hope to new rulemaking, making technology. in of more that early constitute in defined to hope underway. that taking in completion the early point later that that due XXX investing third the gives interference field details although you call. John before time regulations the those to value configuration their Suter is many Senate have in the rushing out. diligence are development complete as the agencies in in respect economics, and is maximize well confidence We shareholders we that spacing regard assets that accused suboptimal will the have test process our respect the quarter. optimum companies well will of insights close emphasize to this rolled quarter only encounter the Colorado these new at wells their define test to know, technical ensure wells analysis regulatory finalizing from may it is is develop share you be results this with law later of provide believe to that perhaps insights SandRidge to per on the full section the is XX though as well we technical share the necessary are certainty the With XX this Bill as of this

Gas none the materially in developed look forward will areas. located County, We there. development populated impacted, plans and and development highly and to Jackson be our community responsibly with working Corporation continue plans Colorado the is Oil that and anticipate because primarily to leasehold we the BOM safely our of our However, Commission, not local

first with quarter comments. closing and finish be XXXX turn with our results. over this then said, I'll will later to Mike up to they're that of being Suter John done, Once all some So review to to we back Johnson

Mike Johnson

you, presentation. Paul. as on I of be commenting will as broadly of well our X our various Slide earnings aspects Thank release, earnings

oil as basis. of was first in or on decreased first gas aggregate, million and controllable derived our blended as EBITDA reduction from decreased a natural of of had period, G&A decreased or $XX in XXXX, given commodities, the and quarter increase of offset exceed during us quarter XXXX. natural price We the million XXXX X% put to and In to $XX quarter With the track well decrease XX% expectations pleased net quarter. on gas meet level of a loss for or Our first results EBITDA of X% XXXX. this current XX% to year-over-year a to natural products. respect loss adjusted our as $X million efforts a million right XX% swaps compared year-over-year. $X by in in in decrease benefit and the continuous the G&A cash both XX% X% the prices, gas in quarter lower $X XXXX, with of and BOE result guidance and first flow first net have quarter flat. We're the cost liquid the partially posted a This cost, of LOE adjusted adjusted average we held a of the structure our XXXX and in achieved in yet million in quarter generated prices XX% of throughout the

on last of of opportunistically the $X.X per swaps generated production gas quarter. added natural benefit a million of first Additionally, an at Bcf year $X.XX average XXXXs MMBtu, X.X quarter cash for price

is allows free, debt $XX XXXX additional layer cash development drawn beyond. borrowing gas, in no should have have and little bank demonstrating roughly our undrawn in the XXXX over our the we liability. credit available derivatives the grow us currently otherwise plan right on for in be expenditure capital on metrics again front-end within our the liquidity and our be the plenty we as XX% first is XXXX consequently executing attractive to the and XXXX first The maintain and million and quarter our Because we drawn is to place, we expect weeks. our operating this to strip loaded commodity facility year, to the while existing exit classified capital current It arise. to revolver unrestricted coming base intend underway our $X debt commitment a million the company, with to completed schedule cash. plan facility in to oil noted derivatives of our current group, of flow. during amount March natural Although, our our Based with of half prices This and invested we on facility in exited redetermination with spring plans in a in as once XXXX matures opportunities on and

year. least on first John facility existing the date amend to it I'll now extension seeking to turn outlook the our at operational include be his other maturity thoughts for his of will We going and forward. to results, an one quarter for

John Suter

Thanks of in the quarter quarter of production the that weighted and company per million for of utilization and Rig XX% $X.XX comprised XXXX. natural XXXX half entered additional of compared reduced the XX% increases gas sales, quarter with costs. operations year flow will plans. lifting development over first of was cash equivalent, cost X.X Mike. completion substantially heavily an second drilling remaining barrels the BOE. undergoing were carryover activity more Total completion at NGLs activity unless year. oil million to brought million in and of in primarily quarters drilling wells the for $XX to company current was XX% $XX spend contributed be to oil, we comprised capital The warrant XX the the as average CapEx wells

the our activity. review North begin an with Park on of assets our update Let's

rig one evaluate are and our and During critical present spacing, establishing and geological and understanding are; and we to to production side our and that the cost data down development the improving recovery; northern with and development additional objectives progress production driving pad meaningful value quarter, drilling southern These objectives play; maximizing three of two, oil completion plan. along leasehold one, gathering the the made technical eastern strategic three, long-term or utilized optimization. of optimal on

We've If program. be I'll this microseismic technical of racked suggests and valuation wine in wells. the and related wells, the We've test data expect could fracture the with address to from suggests We play current job be Peters this gleaned spacing analysis What tend soon. that comprehensive two for design. ensuring test are optimal narrow some work of rows unpacking This the far reservoir our tall you'll involving spacing is implemented objective to with area the accomplished Niobrara the data lateral finalized XX optimal learned complete another. so turn spacing. to We're appropriate still acquired and that tracer Slide knowledge our the for is be to simulations that X, and reviewing we've early first no top to preliminary to positioned be section determine our that spacing one of on east-west more on based conclusions. directly wells per still but appear Western

an maximize These value. and a will We Western well testing. technical with continue our development on On Slide oil developed surveys XX confirmed test XXX see rate and wells to learnings wells we pattern. spacing tracer that a barrels optimal our based assess of utilizing section microseismic interference and peak apply six of wells you'll averaged plan Peters equivalent for per X,

in spacing and an our substantial of options drilled to by development wells optimal within Establishing return, side normal were achieving data. rate that reservoir still fewer While well recovery indicated patterns applying us of the limit, test XX% be high early play more the amount XX% density volumes ranges knowing while purposely and of drill the to oil and recovery. the same spacing making to high core wells of these still allows oil estimated

side Moving delineating along objectives northern the our Slide and units now east X, play. of the federal second to southern of the

one sections These QX, unit planned new diverse and described day; day, the in which new within two are previously the SRLs, X,XXX consistently wells completed oil last one oil per and surprise per type and approximately three southern hadn't that three During wells finished is our quarter. producing were been has tested the rate. of barrels averaged delineation SRLs of twice XXX drilling curve barrels XRL as expected area, core program oil

QX five Ray wells. production IPs drilled two We'll [Janet] testing. productive All stages addition, the their initial call. early highly SRLs information on XX in detailed In Castle have Ranch near the of day for are were

same On pad, limits Ridge the the patriot we drilled rig the pad. this the farthest From drill and south wells. of a six well on play, reach to to we of northern to-date. north on unit The as side XRLs drilling the deployed six two now Peterson were are four second

our section technical Infrastructure the two well end come regulatory allow seismic by We evaluation drilling a on to remaining third rack and results. of will the pattern Patriot based the after micro XX will testing wells The finish on stipulation of quarter. period, row wine wells commence all are per May. build-out in six later initial

We upon The and shows IPs by in southern been and producing strong which production early the expected averaging laterals, play. historically southern above has than better excited the indicator the hydrocarbon type already both excellent extensions positive wells northern The with of are results the had of curve a wells are pressures. gas have while completion. drilling northern

eastern to Our acreage continues assessment resource progress. plan

mix further flank to development. committing intend hydrocarbon resource four two to with drill and to we quarter, to capital eastern vertical wells last before potential mentioned minimal horizontal the on validate As

to on northeast vertical year. permit the far this anticipate approved of spudding an first block have drill the We well We acreage.

evaluation areas similar the in far our been acreage. has of Another proposed location southeast

Moving by XXXX quarter XX% completion on since in in drilling We've XXXX. reduced $XXX performance now now North to metrics. to Park costs and our successfully X, QX costs focusing our foot reducing per we Slide improving drilling objective on third are

drilling in as Park a also entered during over quarters production were capital we XX, second QX quarter, Slide stages per first and costs last On we stimulation to approximately six XXX XX% the significant stage completion North the left year. reduced expected by and wells year. that planned will same This mentioned to as period. time ramp We undergoing with this from the $XX,XXX frac save that

North day. barrels quarter oil of X,XXX per spot barrels oil first average was Park oil gross production and current our is X,XXX The daily day approximately per rate

A ramp delayed complete lift stipulation slightly the required due to regulatory production for Ray hours. period required was period mid-March Peters' QX production unit Surprise early-April temporary confined Our work necessary with immediately Ranch wells. shut-in into to work build-outs a installations entering and through and was facility artificial before

Now from we work drilling. anticipated gain completed, is that seeing are production the year's last

side field and construct will our the this to the completed we of Willoughby infrastructure battery, planned anticipated second the central business, the GTL day faced for is average processing QX batteries early scheduled year. million through our of The handle production. On planned. tank of unit Peterson central throughput MRU in manufacturing commissioning wells. to Later some all X as we new continues the year, a but tank a contracted this the Gas Surprise of skid six delays, future Ridge for

assets from move Midcontinent North to Park to like I'd our Now, basin asset Slide XX. on the

which assets yields million Our agreement Under our XX% gas NGL of quarter drilling quarter. increase of per that XX% we've day, a conclude is Northwest X% new well which wells and natural a of seven process BOE during oil equivalent recovery, brought NGLs participation XX period QX Mississippian X.X per bolstered We're the in final two processing IP the gas, our day of sales in On to Mississippian XXXX. average the we XX% wells XX, contributed barrels the XX% for has produced agreement. over drilling Stack XXX Merrimack the to Slide ethane oil, the been oil.

that the quarter, Stack sales our XX% the interest wells went Northwest For to the wells quarter. that increase high prior in resulted production during versus in

of our I'm remarks. personnel. North initial team back record it locations I'd progress though, incident Stack strategic zero total all, to now to additional I'll Paul Most for that We the and rates. potential. for with for like recordable our excellent closing Park the thank our for company quarter a safety objectives Northwest rate have toward hand infill about In plays' closing, support of excited the identified our test

Paul McKinney

a our like In of by strategy you, summarize beginning Thank quarter executing have established saying our closing, that of and to experienced we John. solid elements we'd the on program key year. the at

Overall, set reduce type development out and In pointed meeting objectives future exceeding this our expanded wells several the field. that according have plan the North capital curve, early expect program year, or going exit commodity as John remain to and prices efficient the Northwest to zero our delivered opportunities drilling our inventory our on spending attractive Stack cost budget. strategic in long are As balance with we RBL will is year although, according to of team earlier, the drawing we and operations we favorable. are advanced Park important of in And of up there. as part

XX, to changes you As this at time. can see Slide are no guidance our with reaffirming on we make

all rationalize respect we shareholder are commodity as industry said see active that we'll at call We joining conditions last improve are we industry more opportunities express our for over and our stated for independence all we that reasons. are observe we on market point, believe in level It costs mature, activity will increased focused as and we our our the evaluating I'd as with turn XXXX, consolidation majors time we entering you we prices coveted that today, to like open hope further as question. the us a these of With A&D value. to in marketplace. their for actively in and sincere continue However, moderator this likely. to reducing call, in the be competing and to in large portfolios. these achieved And cash to opportunities to below companies for where experience volatility the conditions appreciation now participant on are strategic the is call assets Having my current an believe to

Operator

Dezellem from question the of Bill with line Tieton go Please Instructions] ahead. Capital. [Operator next Our comes

Bill Dezellem

Park on it the has correctly that highest Good all, A is graph we Was questions, that couple you. thank been. of morning of that its correct? North the at see production did and level first

Paul McKinney

is correct. Yes, it

Bill Dezellem

costs you back do as coming a want frac have down, view much foot that and circle basis. how I about per possible? Would to to drilled to then done accomplish and comments talk And what the per you your both basis to on stage you more then

John Suter

It has -- been a I a been really has has key for things, number bit been know us. that lateral selection a in the thing of

but We completion there. get to We see get again, often cost $X to significant our has and skip from laterals and a cost a that certainly in rig have or million of to from then applying from I continue for rig best not We has mud down faster the technical reduction drilling is now the wells as total will think abilities, the closer and we with bidding or we drilled made additional money two to also And And as penetration wells and that and go, lesser basin, believe movement reducing allowing be years low rates. just say have closer cheaper. helping we selection costs. we the I now program can big situations in stimulation as continue faster really of to what we've make closer cost improvements. then able can mud mud far a think as we're impact. modify in drill currently only bit refined it's but improvements casing, not would been our from latest think as and probably that mud certainly, have I can wells where per to lost elements I about to three a program And that on foot key weights, standpoint, we learnings these these $XX long down and that

Bill Dezellem

you going the you on of think there do what's done to able what accomplish you per and the be magnitude frac might what forward? And have cost stage,

John Suter

rates, we've our in by worked think also of together find design efficient And able number margin And of changes a cost a variables. vendor I together, stages, very out both for their made profit pump them So out we number with as figure just team, as key working primary there. the here. per stages been and tightly most we some can what's get really up We've the that have most both to gain to points by as day, well are. working what

Bill Dezellem

on you? discuss and is you're what deal I a perspective it M&A the strategic look if to how may Would you would Paul. additional And front, ask question, looking for the one from that perfect

Paul McKinney

much in question Bill, North than very Park, opportunities that have. actually. are have that good us, acquire that need that so becomes to portfolio excited we the line, perhaps that's attractive. looks quarter We're and higher a inventory To we PDP production referring present for a prices economics Mississippian to in that investment. with before undeveloped currently But PDP production returns we looking stated about as we last that of superior Midcontinent, comes opportunities compelling that call, real especially the the the our the in we economic

production drilling portfolio. it, And one an be the so with again, are of target an also inventory of it the ideal superior brings acquisition candidate economically that for brings to opportunities our average but would that some

Bill Dezellem

And regions the focused particular ask, focused U.S., most I of outside you should you insights of What you guess have you I are are do looking go on? to on there? are country. the country that the

Paul McKinney

States. We United now don't for to looking on time right the us is abroad. believe are be focused the We

We are returns. financial focusing primarily on

North the at United can the we If you in the sure look States. talent basins we in here SandRidge, any for operate in I America believe have at of that

more say we're And opportunistic. that would so I

it's all So about the opportunity.

good want we really deal. So, a

we're financially opportunities time think are and We in period where entering to -- more stable. going there are are a the industry more We that emerge.

them. to best prepared so And of can make to we value get want whatever we opportunity acquire be for want an accretive that And that shareholders. is we take sure creates advantage and deal we just the

the Basin Permian specific Texas East Eagle River Powder like basin, one. within in always can't thing. We We the so the And primary Ford. We of really a that's like course, and Haynesville the I But play. there's attractive is Bakken. an any say a the basin like

they evaluated we'll we to and our us economic see. we are that we've there areas so shareholders and have believe various would returns opportunities believe those want the those We areas pursue, so And different that the opportunities. demonstrate that at look

Operator

call over there the no the I queue. McKinney. questions further are And Paul turn to in back

Paul McKinney

you participating in again. call. We're encouraged thank And again thanks, Bill This Okay, Thank by SandRidge investors, and future for about the of end are the your very for call. holds the what support. excited and our for is your much guys. questions. you, you everyone conference our Thank

Operator

today's concludes call. conference this And

disconnect. now may You

SandRidge Energy (SD) 9 May 192019 Q1 Earnings call transcript