EX-99.1 2 h52099exv99w1.htm FINANCIAL AND OPERATIONAL INFORMATION exv99w1
 

Exhibit 99.1
SandRidge Energy, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
(Unaudited)
(in thousands)
                 
    June 30,     December 31,  
    2007     2006  
ASSETS
                
Current assets:
                
Cash and cash equivalents
   $ 2,199     $ 38,948  
Accounts receivable, net:
                
Trade
     69,629       89,774  
Related parties
     16,002       5,731  
Derivative contracts
     12,583       —  
Inventories
     3,452       2,544  
Deferred income taxes
     —       6,315  
Other current assets
     16,547       31,494  
 
            
Total current assets
     120,412       174,806  
Oil and natural gas properties, using full cost method of accounting
                
Proved
     2,035,735       1,636,832  
Unproved
     271,239       282,374  
Less: accumulated depreciation and depletion
     (130,343 )     (60,752 )
 
            
 
     2,176,631       1,858,454  
 
            
Other property, plant and equipment, net
     365,829       276,264  
Derivative contracts
     181       —  
Goodwill
     29,199       26,198  
Investments
     5,747       3,584  
Restricted deposits
     37,823       33,189  
Other assets
     29,526       15,889  
 
            
Total assets
   $ 2,765,348     $ 2,388,384  
 
            
 
                
LIABILITIES AND STOCKHOLDERS’ EQUITY
                
Current liabilities:
                
Current maturities of long-term debt
   $ 25,686     $ 26,201  
Accounts payable and accrued expenses:
                
Trade
     186,033       129,799  
Related parties
     1,363       1,834  
Deferred income taxes
     170       —  
Derivative contracts
     —       958  
 
            
Total current liabilities
     213,252       158,792  
Long-term debt
     1,040,970       1,040,630  
Derivative contracts
     —       3,052  
Other long-term obligations
     21,219       21,219  
Asset retirement obligation
     55,838       45,216  
Deferred income taxes
     27,478       24,922  
Total liabilities
     1,358,757       1,293,831  
 
            
Commitments and contingencies
                
Minority interest
     5,772       5,092  
Redeemable convertible preferred stock, $0.001 par value, 2,650 shares authorized; 2,184 and 2,137 shares issued and outstanding at June 30, 2007 and December 31, 2006, respectively
     449,998       439,643  
 
                
Stockholders’ equity:
                
Preferred stock, no par; 50,000 shares authorized; no shares issued and outstanding in 2007 and 2006
     —       —  
Common stock, $0.001 par value, 400,000 shares authorized; 110,311 issued and 108,859 outstanding at June 30, 2007 and 93,048 issued and 91,604 outstanding at December 31, 2006
     109       92  
Additional paid-in capital
     886,508       574,868  
Treasury stock, at cost
     (18,490 )     (17,835 )
Retained earnings
     82,694       92,693  
Total stockholders’ equity
     950,821       649,818  
 
            
Total liabilities and stockholders’ equity
   $ 2,765,348     $ 2,388,384  
 
            

1

 

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

2

 

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

3

 

Industry Segment Information
                                 
    Three Months Ended     Six Months Ended  
    June 30,     June 30,  
    2007     2006     2007     2006  
Revenues:
                                
Exploration and production
   $ 116,567     $ 14,784     $ 209,201     $ 30,065  
Elimination of inter-segment revenue
     (88 )     (104 )     (1,896 )     (212 )
 
                        
Exploration and production, net of inter-segment revenue
     116,479       14,680       207,305       29,853  
 
                        
Drilling and oilfield services
     61,244       50,170       118,159       98,500  
Elimination of inter-segment revenue
     (48,911 )     (14,368 )     (77,931 )     (28,176 )
 
                        
Drilling and oilfield services, net of inter-segment revenue
     12,333       35,802       40,228       70,324  
 
                        
Midstream gas services
     72,326       43,476       133,748       89,924  
Elimination of inter-segment revenue
     (46,413 )     (12,327 )     (81,648 )     (28,034 )
 
                        
Midstream gas services, net of intersegment revenue
     25,913       31,149       52,100       61,890  
 
                        
Other
     6,818       6,370       12,571       11,926  
Elimination of inter-segment revenue
     (2,480 )     (86 )     (4,077 )     (163 )
 
                        
Other, net of inter-segment revenue
     4,338       6,284       8,494       11,763  
 
                        
Total revenues
   $ 159,063     $ 87,915     $ 308,127     $ 173,830  
 
                        
Operating Income:
                                
Exploration and production
   $ 76,092     $ 3,026     $ 76,463     $ 7,962  
Drilling and oilfield services
     3,674       5,863       8,876       17,025  
Midstream gas services
     951       1,086       2,301       1,777  
Other
     (5,557 )     (3,218 )     (9,012 )     (5,599 )
 
                            
Total operating income
     75,160       6,757       78,628       21,165  
Interest income
     2,538       163       3,626       397  
Interest expense
     (24,679 )     (765 )     (60,108 )     (1,584 )
Other income (expense)
     1,128       (280 )     2,007       (796 )
 
                        
Income before income tax expense
   $ 54,147     $ 5,875     $ 24,153     $ 19,182  
 
                        
Capital Expenditures:
                                
Exploration and production
   $ 249,538     $ 22,894     $ 377,120     $ 51,734  
Drilling and oilfield services
     42,671       29,683       83,913       49,123  
Midstream gas services
     13,587       4,533       23,130       8,019  
Other
     5,253       3,126       7,981       5,624  
 
                        
Total capital expenditures
   $ 311,049     $ 60,236     $ 492,144     $ 114,500  
 
                        
Depreciation, Depletion and Amortization:
                                
Exploration and production
   $ 38,475     $ 4,446     $ 71,686     $ 8,222  
Drilling and oilfield services
     8,707       4,595       15,870       8,864  
Midstream gas services
     1,381       741       2,494       1,393  
Other
     1,555       1,469       2,912       3,197  
 
                        
Total depreciation, depletion and amortization
   $ 50,118     $ 11,251     $ 92,962     $ 21,676  
 
                        
                 
    June 30,     December 31,  
    2007     2006  
Identifiable Asset (1):
                
Exploration and production
   $ 2,380,882     $ 2,091,459  
Drilling and oilfield services
     250,040       175,169  
Midstream gas services
     83,843       75,606  
Other
     50,583       46,150  
 
            
Total
   $ 2,765,348     $ 2,388,384  
 
            
 
(1)   Identifiable assets are those used in SandRidge’s operations in each industry segment.

4

 

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

5

 

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

6