SD - Earnings call transcript Q2 2019 | SandRidge Energy, Inc.

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Operator

Good morning. My name is Denise, and I will be your conference operator today. At this time, I would like to welcome everyone to the SandRidge Energy’s Second Quarter Earnings 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 me today you, Officer; Johnson, and welcome and everyone With call. Mike John Officer; Financial conference the Chief Operating are Executive Officer. to Chief Thank Chief Paul President McKinney,

you to like posted with and have our Keep in would that those call. referencing call mind our and on website and We assumptions, Investor that call, results we Relations which be release actual tab in conference subject forward-looking projected conjunction statements. from remind to we Statements slides earnings this under the during contains may are today's risks these materially and uncertainties, Forward-Looking differ in will

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

let Now, to the over me turn Paul. call

Paul McKinney

morning, time in today you quarter Johna, Thank for and provide you, everyone. results We and plan the SandRidge. for and and you to our review to taking our Thank guidance. operations on with us second good your join updates to interest

We will just website we mentioned this presentations be investor our on representing morning. Johna earlier posted now, the

use to So I along. and encourage you it follow

recurrent oil high is resources with headquartered in in principal exploration States. SandRidge Oklahoma independent and of and United an City, and exploration focus gas natural production development Company on acquisition,

find overview of location our that and market useful. of updated consolidation you On page production of information, that if Company three and highlights hope statistics. corporate financial We and of operations information table the our and an a provide you assets reserves our the map we includes this presentation, that Company the summarize

key remind our X. long-term we summary Moving for components success sustainable strategy This our believe shareholders. the and is to a on of about lead and our to near-term business investors include we Page

with provide is of discuss guide change the Later continues the observed SandRidge We will this we the responding past it conditions changes and industry our change. and in discussed them. in us to some of have industry the you us to in flexibility we happen how and strategy with call, to

Moving a Page on X.

You will of our doing highlights. with to you, one leave review but results so, with Johnson quarter a Mike will summary I before second important our want find you point.

our success. we to Our to year. commitment made commitments quarter We results other to our it important believe this our and demonstrated we control cost is deliver to discipline, earlier and to strategy ability this aspects lead promises quarter-over-quarter believe demonstrate on our financial of

no with they our Mike some afterwards with financial I this turn launching And operational are will quarter ado, up XXXX back I Suter done, results. to to Once will second finish be So review comments. further over Johnson second to review John our closing results. to quarter

Mike Johnson

morning and challenged low Paul the our Despite prices. They areas. that commodity quarter key everyone. progress you, our by reflect in Thank two fact second and good results were also

product our demonstrate in operational more mix. our they oil to First, adding success

Second, our to reduce reflect pressures. they efforts ongoing cost our

expectations and in million our in a million the accomplishments $XX loss loss us guidance net the last exceed quarter, to current of to year. of same these the meet We believe We XXXX. quarter enable $XX compared or net will posted in

XX% commodity during for down increase Board, were prices the we gas. in million million slight Adjusted NGOs EBITDA EBITDA and saw The compared adjusted year. where was for prices oil, in a $XX the XX% across period natural decrease order, to accomplished $XX last for current XX% was wellhead

year-over-year. we In increased the in reduction had still XX% aggregate, yet EBITDA the blended price of a we commodities, our adjusted

and XX% the of asset. margin result the XXX% this in production increase that oil sales, evidenced year-over-year achieved for our our This operating in margin North year-over-year important development basin in as our a higher increase by increase roughly efforts Park drove a in was primarily oil as the

We also this adjusted quarter decrease is our our expected reduce revised XXXX reflected to G&A. guidance million rate on quarter’s the annual reflect to and reduction. this which cash full-year least is workforce, our staff by The difficult of this for results million X.X the at decision related current to $X made charge G&A run

above Although of sent expected barrel our the $XX no we swaps in we XXXX intend to and derivatives price the the second layer have at opportunities during additional it XX% derivatives arise. we have a in production right XXXX remainder of quarter, during place oil strike that on just during as per

front-end of the is in with expenditure our million the the our plan we second exited of capital XX% Because on $XX allocated unrestricted XXXX drawn to our $X million year, loaded with cash. revolver roughly half capital and first quarter

Based year basis to additional to oil extend day commitment our maturity XXXX on and XXX XXXX rate and natural primarily the we current by lower exit June interest to to our discipline. the an gas, financial credit strip to expect for on grid our points. drawn we the also modestly amended facility facility demonstrating April, current pricing In

John will results for of the remainder outlook our his it the year. to on his now for thoughts and I turn operational second quarter

John Suter

Mike. Thanks oil, barrels the and % NGLs quarter natural Total X.X production of XX% equivalent was X% oil highest gas. for Company million XX of

seven averaged quarter. two cost North nine wells to The a in Northwest BOE the sales, $X.XX and Basin Park the STACK listing Company in for per Our brought Play.

was completion rig in quarter the from million, activity. $XX and will in the half substantially reduced cost second be $XX North of year. drilling for CapEx Park primarily with utilization the Rig million

lease depending guidance in staying within preserving the capital are quarter on utilize still our We range. the option while rig various commitment requirements to fourth

asset North X. Park on look at the now Slide Let’s

side drilled drilling a limits the the pad unit on six well on to-date. XRLs As we of last Two north mentioned Ridge north to field. farthest Peterson the quarter, initiated reach were

four From the to Patriot drilled South. same the XRLs pad we

test. our are rail results initial the of previous spacing based we well evaluation from With pattern seismic two a micro technical testing four Patriots the rack section, XX per wells Peters wine on

and refrac SRL We legacy June. rig in six finished the within planned early operations anticipate all the wells as being all same initiated a released XRLs We We with in completed operations section mid-June. of stimulation six week. plus stimulation this on these of drilling a

reaming look anticipate September. After we production by to wells for early this production spacing having forward future We on into completion to these optimize and all activities, plans development. tied infrastructure finishing our information help

how continue as Additionally, producing we refracs legacy in see beneficial existing infill to are anxious can wells be we areas. on development

inline updates new production QX. results see can These these you oil wells extension from cumulative the XXX end wells in X Surprise the turned curve sections. is Slide the Aggregate above of wells type well from three were located on play near of that three undrilled XX% days. targeted after southern On

to Ranch Additionally, produced XX% above the aggregate. oil sales edge the SRLs in These east wells the have field in of central two roughly curve Ray returned second cumulatively for type XX days, quarter. on and produced the have

of areas field, leading new to be delineate or excited that we type performance returns. As curve the to continue results, about well meets higher we outperforms consistently

On Slide X.

five in Park as plot, day. May. quarter North on April in that accomplished mentioned so net these Surprise Ranch and production wells production averaging per daily net Ray was achieved This second Our as oil we wells with peak we brought from XXXX BOE our rate previously XXXX a oil record

generate northern have the initial oil type these be wells, quarter strong. XXXX pad. great This which full current oil assuming will year completing addition rate per two curve the should of will our third six barrels day new spent The well the six realize in first will months the benefit of of base quarter a performance. We to fourth gross our production stimulating and

North Park in Now, assets I the X. the would base from into move on like Slide mid-continent to our

mentioned well that average day a brought to sales XX% of wells IP per seven As Merrimack earlier, stack XXX new BOE we the XX-day oil. during quarter produced Northwest per

concluded drilling by seven X.X Agreement equivalent the drilling well gross XX within We barrels of last holding acres production of new Participation established oil successfully these XXXXX sales. brought net drilling by wells million to-date we our Agreement production. The of cumulative drilling to obligations as Participation

stack allocation high locations Additional for pricing capital and quality commodity Northwest allows. as development, exists

equivalent million and X.X Our Mississippian XX% gas. NGLs oil, oil natural of XX% barrels assets contributed XX%

In we for as record as with I mentioned. continued the I'm Most all, thank of our production North rate a we Park achieved record objectives there. oil another to well our important SandRidge team about accomplishing closing, like progress excited are haven’t would strategic toward QX that

year achieved zero incidence now personnel. have with one Company recordable We for

I back will it to now hand Paul closing for remarks.

Paul McKinney

delivered shareholders earlier solid you program laid quarter John. year. another our executing Thank and to of out SandRidge strategy key the work this elements we on

of pointed out, manner. Congratulations to our safe about so of As speaking I'm here teams at doing you John and SandRidge. in and that work a all responsible you environmentally all are

and values our make Your very hard work and much. my thank easier you commitment job to

had plans continuing do in see can team capital you deliver strategic advanced several as Again objectives important currently to to operating with back to operations we our and and Park business, operating continues underway completion there. our our according and so North

We in our results continue our developing are as multitude have we plans programs encountered drilling for and in A&D of now both STACK the North remain of first and in focused evaluate to encouraged the completed the Northwest Park our year, development a we well by that completion we we and on future opportunities half marketplace. drilling,

may due amount going we slightly end prices, they something told last to year of debt on our balance year, call. budget different this were a but to minimal spending program are, that commodity according capital in our and Earlier predicted we what with you the still I lower than the

exceptions G&A this to reaffirming million are million from reduction are two associated of our made changes reducing force. down We million to expense to our guidance reflecting of the changes, $XX with in our we the range $XX we $XX million adjusted quarter $XX with

gas our liquids anticipate of to that for XX% price We prices the WTI West realization also year. Intermediate for reflecting are XX% the the Texas rest natural of we of decreasing from

alternative market our and absorbed asset through with respect and attempts M&A, processes, we there conditions remains current to buyers gap the the ambition believe failed strategic grow sellers. us expectations have to a of unsuccessful sale to Now between leading and

and cost. we proceed strategy issues improve being our and are will guided margins to intend one as We evaluate be breakeven creative of multitude by believe hydrocarbon of and to there patient we M&A of our be gap, to our prices this, and contributing efforts In-light lower disciplined our them. this opportunities volatility

distressed believe of to focused acquisition need acquisition We returns. assets companies, the in opportunities in efforts important merger producing that of we also on to that our we regard, keep is shareholders attractive our intend mind and generate this thing about are evaluate

to all the I that, call appreciation of would joining all today. said express to Having you sincere my at like this us point on

it moderator now the up will for questions. call to turn We our and over open

Operator

Capital. [Operator Tieton from Bill with Instructions] Your Dezellem comes first question

is Your line open.

William Dezellem

you. thank Hi

your Let us acquisitions. start with last relative to point

D at would what A&D, how I for So of acquisition then transactions all, part evaluation that today? the front, think divestiture. would is first a of of you To today, you be process are ago the in looking your please. quarter referenced commentary, that one characterize on versus you multitude And many secondarily, degree

Paul McKinney

divestitures, operators associated Well, are to we with operate and with we potential have contacted different respect properties we various do by that acquisitions.

in buy for the is As I have I anything you price. sale right the I'm and And Bill right the price. for have past, to you have for anything talked going

small is meaningful that clean of quarter, other it accounting this we the was some up actually things. portion a sell to so us so for some our a amount, midcontinent nature of assets some And did earlier and small and last but

point, disposition. this we there. at minor so, much big pretty And yes, to but continue participate Nothing

Now, lot are up to number the actually rooms during of with now. give second to quarter the acquisitions, going a you respect we momentum numbers, data we to I'm in significant a right now. gained of but have

are we and specialize them, these being significant CA's, these a the companies of aid. there to we agreed companies where of with out in and number that. or We by are two that have exchange signed that actual One some are have processes marketed of contacted

very so I are And that active. the is making guess I'm we point very,

have hit of sales As few alternative we streets, seen processes. strategic seen we failed have properties, this a lot seen we the year and a have by, go

in of component remain to we going so our the like disciplined we And we process. growth are we plans to going so and I and are said, this going to future key is creative a are, remain remain are patient,

William Dezellem

more process. dropped place, normal had that evaluating. really I'm a your static lot the with taken a months if of you offers in but churn properties? ago, list have are compared come some new group spread of part understand rather three list, difference ones have which of just has or the the between I the is properties on, been you that or on wondering Paul, much Meaning to bid that analysis that off continuous if has acquisitions

Paul McKinney

quite is kind evaluated we of the no opportunity And few of that work. the has that have a list. have that nature that off kind There dropped No. just of

I the say know, is pretty well very A&D rate success low. you mean, typically rates capture As should or for I the

kick So you a works. that of find tires that lot deal before will you will

got side have to either remember of on You there that two to is people agree. negotiation

reason And representing we perceived buyers are between being we yet. gap are happened and primary is hadn't patient so that the our But disciplined. in and and expectation our thing doing the right sellers by transactions believe we shareholders

William Dezellem

it In with net the consternation perceive gap widened has narrowed in most that the or do you recent industry?

Paul McKinney

creative get sides with do of a to transactions be have you. a that bit to both become more feel those for that to done. honest deals though don't I need I believe little

a the for is have resource that and are us Bill, just desperately lot to on exists. make an completing know that world I opinion industry, drilling don’t wells frustrating think But that and developing trying that gap needs, are right. that a in the this of I this volatility living, I

William Dezellem

a questions, in back step I or continue? have prefer I queue group either I of would Understood you shall more

Paul McKinney

welcome. conversation. long afterwards Actually the back for Call you are here

know something you will welcome are and call schedule that to your here convenient. You we at

William Dezellem

Great. it I you. then. over will Thank turn

Operator

Your question [indiscernible]. comes [Operator next Instructions] from

Your open. line is

Unidentified Analyst

you? are how Hi,

Paul McKinney

well, are Hi. how I'm and good you?

Unidentified Analyst

of Thank good. and property inconsistency thinking small on value, be spending actively for more you taking much my in pretty question assets are properties my nickel that distressed room are distressed the some is you in you Obviously the than is a Good, buying big you back rather shouldn’t yourself at fraction looking a very a call. book shares here? about

Paul McKinney

company that the have you one, this if us strategy buyback clear have a the a that other is that that grow point a I a we this shares grow. to I mandate take that our the have okay. and for Company then to we the challenge size that companies is very And is pursued That liquidity make that joined and need liquidity robs of we valid Company. with

we I our had were think but I question. our once not - similar had XX-K, report, similar so And question we you, annual before a reviewing a annual with similar

committed can grow growing I hold, I as you agree you standpoint that and so position to valid Company, need the but And the a valid we the that with request from are tell a to this. to I liquidity

Unidentified Analyst

couldn’t investment you on in are I'm growth I [Exxon] Okay in I'm and let and and continue. if I'm worth doing value, lot is the I really list enormous your a share a you an value you think interested an down care should or tell me whether (Ph) I job book you does. your a this are don’t said you tell have shareholder that and I want in can can are it’s to my about about about return I care become or Directors mission, a analyst to your as you you of Board what book interested investment don’t. that my and interested growth which, stock not Company actually write I I you how be that a hell interested I give buying how you you whether big your of price. false how the

I accurately shares sheet of if reflects suggest and assets where to would you not buying a overstated, to writing comment. a down back? your are are ask start your you have they or overstated that to My questions the just the question does don’t you them balance was are I is That value why place they

Paul McKinney

appreciate really do. I of all they as your and Well, overstated do not are really feedback, I a first shareholder

difference be for allow you encourage my we And shareholder is with like do which with patient, us have that I to us we we your well. you of a growth. are only request opinion, my a steps much. I remain taking We price Thank the to I concern, everything team primary would earn to to will because and do and very everything your will that can you to believe share confidence. right respect address as And is have and to

Unidentified Analyst

we have philosophical difference. a So

are the On you hand, interested one growth. in

value. hand, creating interested On in I'm the other

So this? you how do reconcile

Paul McKinney

I will debate. continue I to you and think we really encourage for conversation direct have to a call this this don't about you productive it's and I me longer later.

So please proceed with the call.

Unidentified Analyst

Thank much. you very

Paul McKinney

welcome. are You

You are very welcome.

Operator

over remarks. There closing are no up to questions time. queue management further the call will back turn this for at I

Paul McKinney

this in everyone for you participating Thank call.

excited call. is holds of This by are what and about the We end for investors to encouraged support. our and the future SandRidge your are our

or call to team. the to and here welcome to members other us also talk of directly management are You me

you And thank again. so

Operator

This concludes conference today's call.

You disconnect. may now

SandRidge Energy (SD) 8 Aug 192019 Q2 Earnings call transcript