10-Q

UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

Form 10-Q

(Mark One)
þ	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the quarterly period ended March 31, 2008
OR
o	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the transition period from          to

Commission File Number: 001-33784

SANDRIDGE ENERGY, INC.

(Exact name of registrant as specified in its charter)

Delaware	20-8084793
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
1601 N.W. Expressway, Suite 1600, Oklahoma City, Oklahoma (Address of principal executive offices)	73118 (Zip Code)

Registrant’s telephone number, including area code:

(405) 753-5500

Former name, former address and former fiscal year, if changed since last report: Not applicable

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  Yes þ     No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer o Accelerated filer o Non-accelerated filer þ Smaller reporting company o

(Do not check if a smaller reporting company)

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).  Yes o     No þ

The number of shares outstanding of the registrant’s common stock, par value $0.001 per shares, as of the close of business on April 30, 2008, was 146,194,356.

SANDRIDGE ENERGY, INC.
FORM 10-Q
Quarter Ended March 31, 2008

INDEX

PART I. FINANCIAL INFORMATION
ITEM 1.	Financial Statements (Unaudited)	4
	Condensed Consolidated Balance Sheets	4
	Condensed Consolidated Statements of Operations	5
	Condensed Consolidated Statement of Changes in Stockholders’ Equity	6
	Condensed Consolidated Statements of Cash Flows	7
	Notes to Condensed Consolidated Financial Statements	8
ITEM 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	22
ITEM 3.	Quantitative and Qualitative Disclosures About Market Risk	34
ITEM 4.	Controls and Procedures	37
PART II. OTHER INFORMATION
ITEM 1.	Legal Proceedings	37
ITEM 1A.	Risk Factors	37
ITEM 2.	Unregistered Sales of Equity Securities and Use of Proceeds	37
ITEM 6.	Exhibits	37
Bylaws
Employment Agreement - Dirk M. Van Doren
Employment Agreement - Matthew K. Grubb
Employment Agreement - Todd N. Tipton
Employment Agreement - Larry K. Coshow
Form of Employment Agreement for Senior Vice Presidents
Employment Separation Agreement of Larry K. Coshow
Amendment No. 3 to Senior Credit Facility
Amendment No. 4 to Senior Credit Facility
Section 302 Certification - Chief Executive Officer
Section 302 Certification - Chief Financial Officer
Section 906 Certification of Chief Executive Officer and Chief Financial Officer

2

DISCLOSURES REGARDING FORWARD-LOOKING STATEMENTS

This quarterly report on Form 10-Q includes “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Various statements contained in this report, including those that express a belief, expectation, or intention, as well as those that are not statements of historical fact, are forward-looking statements. The forward-looking statements include projections and estimates concerning 2008 capital expenditures, the pending sale of assets in the Piceance Basin, the timing and success of specific projects such as our rig fleet expansion program, outcomes and effects of litigation, claims and disputes, and elements of our business strategy. Our forward-looking statements are generally accompanied by words such as “estimate,” “project,” “predict,” “believe,” “expect,” “anticipate,” “potential,” “could,” “may,” “foresee,” “plan,” “goal” or other words that convey the uncertainty of future events or outcomes. We have based these forward-looking statements on our current expectations and assumptions about future events. These statements are based on certain assumptions and analyses made by us in light of our experience and our perception of historical trends, current conditions and expected future developments as well as other factors we believe are appropriate under the circumstances. However, whether actual results and developments will conform with our expectations and predictions is subject to a number of risks and uncertainties, including the risk factors discussed in Item 1A of our annual report on Form 10-K for the year ended December 31, 2007, the opportunities that may be presented to and pursued by us, competitive actions by other companies, changes in laws or regulations and other factors, many of which are beyond our control. Consequently, all of the forward-looking statements made in this report are qualified by these cautionary statements. The actual results or developments anticipated may not be realized or, even if substantially realized, they may not have the expected consequences to or effects on our company or our business or operations. Such statements are not guarantees of future performance and actual results or developments may differ materially from those projected in the forward-looking statements. We undertake no obligation to publicly update or revise any forward-looking statements.

3

PART I. Financial Information

ITEM 1.   Financial Statements

SandRidge Energy, Inc. and Subsidiaries

Condensed Consolidated Balance Sheets

	March 31,			December 31,
	2008			2007
	(Unaudited)
	(In thousands)
ASSETS
Current assets:
Cash and cash equivalents	$	726		$	63,135
Accounts receivable, net:
Trade		112,674			94,741
Related parties		23,037			20,018
Derivative contracts		—			21,958
Inventories		4,864			3,993
Deferred income taxes		1,428			1,820
Other current assets		20,373			20,787
Total current assets		163,102			226,452
Crude oil and natural gas properties, using full cost method of accounting
Proved		3,204,557			2,848,531
Unproved		259,610			259,610
Less: accumulated depreciation and depletion		(294,729	)		(230,974	)
		3,169,438			2,877,167
Other property, plant and equipment, net		506,156			460,243
Derivative contracts		2,145			270
Investments		8,815			7,956
Restricted deposits		32,633			31,660
Other assets		25,543			26,818
Total assets	$	3,907,832		$	3,630,566
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Current maturities of long-term debt	$	15,662		$	15,350
Accounts payable and accrued expenses:
Trade		242,324			215,497
Related parties		1,747			395
Asset retirement obligation		882			864
Derivative contracts		123,284			—
Total current liabilities		383,899			232,106
Long-term debt		1,263,270			1,052,299
Other long-term obligations		16,817			16,817
Asset retirement obligation		60,748			57,716
Deferred income taxes		18,341			49,350
Total liabilities		1,743,075			1,408,288
Commitments and contingencies (Note 11)
Minority interest		4,875			4,672
Redeemable convertible preferred stock, $0.001 par value, 2,625 shares authorized; 1,844 and 2,184 shares issued and outstanding at March 31, 2008 and December 31, 2007, respectively		380,893			450,715
Stockholders’ equity:
Preferred stock, $0.001 par value; 47,375 shares authorized; no shares issued and outstanding in 2008 and 2007		—			—
Common stock, $0.001 par value, 400,000 shares authorized; 147,516 issued and 146,206 outstanding at March 31, 2008 and 141,847 issued and 140,391 outstanding at December 31, 2007		144			140
Additional paid-in capital		1,763,225			1,686,113
Treasury stock, at cost		(17,389	)		(18,578	)
Retained earnings		33,009			99,216
Total stockholders’ equity		1,778,989			1,766,891
Total liabilities and stockholders’ equity	$	3,907,832		$	3,630,566

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

4

SandRidge Energy, Inc. and Subsidiaries

Condensed Consolidated Statements of Operations

	Three Months Ended
	March 31,
	2008			2007
	(Unaudited)
	(In thousands except per share amounts)
Revenues:
Natural gas and crude oil	$	205,487		$	90,176
Drilling and services		12,334			27,895
Midstream and marketing		46,409			26,187
Other		4,856			4,806
Total revenues		269,086			149,064
Expenses:
Production		34,188			21,974
Production taxes		9,220			2,933
Drilling and services		7,169			18,777
Midstream and marketing		40,418			23,420
Depreciation, depletion and amortization — natural gas and crude oil		65,076			32,684
Depreciation, depletion and amortization — other		17,965			10,160
General and administrative		20,994			12,468
Loss on derivative contracts		136,844			23,181
Loss (gain) on sale of assets		23			(1	)
Total expenses		331,897			145,596
(Loss) income from operations		(62,811	)		3,468
Other income (expense):
Interest income		796			1,088
Interest expense		(25,172	)		(35,429	)
Minority interest		(835	)		(146	)
Income from equity investments		859			1,025
Total other (expense) income		(24,352	)		(33,462	)
Loss before income tax benefit		(87,163	)		(29,994	)
Income tax benefit		(30,538	)		(10,501	)
Net loss		(56,625	)		(19,493	)
Preferred stock dividends and accretion		9,582			8,966
Loss applicable to common stockholders	$	(66,207	)	$	(28,459	)
Basic and diluted loss per share applicable to common stockholders	$	(0.47	)	$	(0.31	)
Weighted average number of common shares outstanding:
Basic		141,044			92,442
Diluted		141,044			92,442

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

5

SandRidge Energy, Inc. and Subsidiaries

Condensed Consolidated Statement of Changes in Stockholders’ Equity

			Additional
	Common		Paid-In		Treasury			Retained
	Stock		Capital		Stock			Earnings			Total
	(Unaudited)
	(In thousands)
Three months ended March 31, 2008
Balance, December 31, 2007	$	140	$	1,686,113	$	(18,578	)	$	99,216		$	1,766,891
Purchase of treasury stock		—		—		(1,254	)		—			(1,254	)
Common stock issued under retirement plan		—		2,566		2,443			—			5,009
Conversion of redeemable convertible preferred stock to common stock		4		71,305		—			—			71,309
Accretion on redeemable convertible preferred stock		—		—		—			(1,487	)		(1,487	)
Stock-based compensation		—		3,241		—			—			3,241
Net loss		—		—		—			(56,625	)		(56,625	)
Redeemable convertible preferred stock dividend		—		—		—			(8,095	)		(8,095	)
Balance, March 31, 2008	$	144	$	1,763,225	$	(17,389	)	$	33,009		$	1,778,989

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

6

SandRidge Energy, Inc. and Subsidiaries

Condensed Consolidated Statements of Cash Flows

	Three Months Ended
	March 31,
	2008			2007
	(Unaudited)
	(In thousands)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$	(56,625	)	$	(19,493	)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation, depletion and amortization		83,041			42,844
Debt issuance cost amortization		1,097			12,752
Deferred income taxes		(30,617	)		(10,501	)
Unrealized loss on derivative contracts		143,367			21,662
Loss (gain) on sale of assets		23			(1	)
Interest income — restricted deposits		(192	)		(266	)
Income from equity investments, net of distributions		(859	)		(1,025	)
Stock-based compensation		3,241			1,071
Minority interest		835			146
Changes in operating assets and liabilities		13,378			(3,226	)
Net cash provided by operating activities		156,689			43,963
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures for property, plant and equipment		(418,650	)		(181,095	)
Proceeds from sale of assets		452			26
Fundings of restricted deposits		(781	)		(1,477	)
Net cash used in investing activities		(418,979	)		(182,546	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from borrowings		340,220			1,142,772
Repayments of borrowings		(128,937	)		(1,136,845	)
Dividends paid — preferred		(9,516	)		(6,859	)
Minority interest (distributions) contributions		(632	)		762
Proceeds from issuance of common stock		—			318,925
Purchase of treasury stock		(1,254	)		(661	)
Debt issuance costs		—			(25,000	)
Net cash provided by financing activities		199,881			293,094
NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS		(62,409	)		154,511
CASH AND CASH EQUIVALENTS, beginning of year		63,135			38,948
CASH AND CASH EQUIVALENTS, end of period	$	726		$	193,459
Supplemental Disclosure of Noncash Investing and Financing Activities:
Insurance premiums financed	$	—		$	1,496
Accretion on redeemable convertible preferred stock	$	1,487		$	350

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

7

SandRidge Energy, Inc. and Subsidiaries

Notes to Condensed Consolidated Financial Statements

(Unaudited)

1.   Basis of Presentation

Nature of Business.  SandRidge Energy, Inc., together with its subsidiaries (collectively, the “Company” or “SandRidge”), is a natural gas and crude oil company with its principal focus on exploration, development and production. SandRidge also owns and operates natural gas gathering, marketing and processing facilities and CO₂ treating and transportation facilities and conducts tertiary oil recovery operations. In addition, SandRidge owns and operates drilling rigs and a related oil field services business operating under the Lariat Services, Inc. brand name. SandRidge’s primary exploration, development and production areas are concentrated in West Texas. The Company also operates significant interests in the Cotton Valley Trend in East Texas, the Gulf Coast area, the Mid-Continent and the Gulf of Mexico.

On November 21, 2006, the Company acquired all of the outstanding membership interests of NEG Oil & Gas LLC (“NEG”).

Interim Financial Statements.  The accompanying condensed consolidated financial statements as of December 31, 2007 have been derived from the audited financial statements contained in the Company’s annual report on Form 10-K for the fiscal year ended December 31, 2007 (the “2007 Form 10-K”). The unaudited interim condensed consolidated financial statements of SandRidge have been prepared by the Company in accordance with the accounting policies stated in the audited consolidated financial statements contained in the 2007 Form 10-K. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) have been condensed or omitted, although the Company believes that the disclosures contained herein are adequate to make the information presented not misleading. In the opinion of management, all adjustments (consisting only of normal recurring adjustments) necessary to state fairly the information in the Company’s unaudited condensed consolidated financial statements have been included. These condensed financial statements should be read in conjunction with the financial statements and notes thereto included in the 2007 Form 10-K.

2.   Significant Accounting Policies

For a description of the Company’s accounting policies, refer to Note 1 of the consolidated financial statements included in the 2007 Form 10-K.

Reclassifications.  Certain reclassifications have been made in prior period financial statements to conform with current period presentation.

Recent Accounting Pronouncements.  Effective January 1, 2008, SandRidge implemented Statement of Financial Accounting Standards (“SFAS”) No. 157, “Fair Value Measurements”. SFAS No. 157 defines fair value, establishes a framework for measuring fair value and expands disclosures about fair value measurements. SFAS No. 157 does not require new fair value measurements. SFAS No. 157 did not have an effect on the Company’s financial statements other than requiring additional disclosures regarding fair value measurements. See Note 4.

In February 2008, the Financial Accounting Standards Board (“FASB”) issued FASB Staff Position FAS 157-2, “Effective Date of FASB Statement No. 157” (“FSP 157-2”). FSP 157-2 delays the effective date of SFAS No. 157 to fiscal years beginning after November 15, 2008 for all nonfinancial assets and nonfinancial liabilities, except those recognized or disclosed at fair value in the financial statements on a recurring basis, at least annually. The adoption of FSP 157-2 is not expected to have a material impact on the Company’s financial position, results of operations or cash flows.

In December 2007, the FASB issued SFAS No. 141(R), “Business Combinations”, which replaces SFAS No. 141. SFAS No. 141(R) establishes principles and requirements for how an acquirer recognizes and measures in its financial statements the identifiable assets acquired, the liabilities assumed, any noncontrolling

8

SandRidge Energy, Inc. and Subsidiaries

Notes to Condensed Consolidated Financial Statements — (Continued)

interest in the acquiree and the goodwill acquired. The Statement also establishes disclosure requirements which will enable users to evaluate the nature and financial effects of the business combination. SFAS No. 141(R) is effective for fiscal years beginning after December 15, 2008. The Company plans to implement this standard on January 1, 2009. The Company has not yet evaluated the potential impact of this standard.

In December 2007, the FASB issued SFAS No. 160, “Noncontrolling Interests in Consolidated Financial Statements — an Amendment of Accounting Research Bulletin No. 51”, which establishes accounting and reporting standards for ownership interests in subsidiaries held by parties other than the parent, the amount of consolidated net income attributable to the parent and to the noncontrolling interest, changes in a parent’s ownership interest and the valuation of retained noncontrolling equity investments when a subsidiary is deconsolidated. The Statement also establishes disclosure requirements to clearly identify and distinguish between the interests of the parent and the interests of the noncontrolling owners. SFAS No. 160 is effective for fiscal years beginning after December 15, 2008. The Company plans to implement this standard on January 1, 2009. The Company has not yet evaluated the potential impact of this standard.

In March 2008, the FASB issued SFAS No. 161, “Disclosures about Derivative Instruments and Hedging Activities”, which changes disclosure requirements for derivative instruments and hedging activities. The Statement requires enhanced disclosure, including qualitative disclosures about objectives and strategies for using derivatives, quantitative disclosures about fair value amounts of gains and losses on derivative instruments and disclosures about credit-risk-related contingent features in derivative agreements. SFAS No. 161 is effective for fiscal years beginning after November 15, 2008. The Company plans to implement this standard on January 1, 2009. The Company has not yet evaluated the potential impact of this standard.

3.   Property, Plant and Equipment

Property, plant and equipment consists of the following (in thousands):

	March 31,			December 31,
	2008			2007
Crude oil and natural gas properties:
Proved	$	3,204,557		$	2,848,531
Unproved		259,610			259,610
Total crude oil and natural gas properties		3,464,167			3,108,141
Less accumulated depreciation and depletion		(294,729	)		(230,974	)
Net crude oil and natural gas properties capitalized costs		3,169,438			2,877,167
Land		1,344			1,149
Non crude oil and natural gas equipment		602,488			539,893
Buildings and structures		39,225			38,288
Total		643,057			579,330
Less accumulated depreciation, depletion and amortization		(136,901	)		(119,087	)
Net capitalized costs		506,156			460,243
Total property, plant and equipment	$	3,675,594		$	3,337,410

The amount of capitalized interest included in the above non crude oil and natural gas equipment balance at March 31, 2008 and December 31, 2007 was approximately $3.7 million and $3.4 million, respectively.

9

SandRidge Energy, Inc. and Subsidiaries

Notes to Condensed Consolidated Financial Statements — (Continued)

4.   Fair Value Measurements

The Company implemented SFAS No. 157 effective January 1, 2008 for its financial assets and liabilities measured on a recurring basis. SFAS No. 157 applies to all financial assets and liabilities that are being measured and reported on a fair value basis. In February 2008, the FASB issued FSP 157-2, which delayed the effective date of SFAS No. 157 by one year for certain nonfinancial assets and liabilities.

As defined in SFAS No. 157, fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. SFAS No. 157 requires disclosure that establishes a framework for measuring fair value and expands disclosure about fair value measurements. The statement requires fair value measurements be classified and disclosed in one of the following categories:

Level 1:	Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities. The Company considers active markets as those in which transactions for the assets or liabilities occur in sufficient frequency and volume to provide pricing information on an ongoing basis.
Level 2:	Quoted prices in markets that are not active, or inputs which are observable, either directly or indirectly, for substantially the full term of the asset or liability.
Level 3:	Measured based on prices or valuation models that required inputs that are both significant to the fair value measurement and less observable for objective sources (i.e., supported by little or no market activity).

As required by SFAS No. 157, financial assets and liabilities are classified based on the lowest level of input that is significant to the fair value measurement. The Company’s assessment of the significance of a particular input to the fair value measurement requires judgment, and may affect the valuation of the fair value of assets and liabilities and their placement within the fair value hierarchy levels. Per SFAS No. 157, the Company has classified its derivative contracts into one of the three levels based upon the data relied upon to determine the fair value. The fair values of the Company’s natural gas and crude oil swaps, crude oil collars and interest rate swap are based upon quotes obtained from counterparties to the derivative contracts and are designated as Level 3 as the Company does not have sufficient corroborating market evidence to support classifying these assets and liabilities as Level 2. The following table summarizes the valuation of the Company’s financial assets and liabilities by SFAS No. 157 pricing levels as of March 31, 2008:

	Fair Value Measurements Using:
	Quoted Prices in		Significant
	Active Markets for		Other		Significant
	Identical Assets		Observable		Unobservable			Assets/
	or Liabilities		Inputs		Inputs			Liabilities at
Description	(Level 1)		(Level 2)		(Level 3)			FairValue
			(In thousands)
Derivative assets	$	—	$	—	$	2,145		$	2,145
Derivative liabilities		—		—		(123,284	)		(123,284	)
	$	—	$	—	$	(121,139	)	$	(121,139	)

The determination of the fair values above incorporates various factors required under SFAS No. 157. These factors include not only the impact of the Company’s nonperformance risk on its liabilities, but also the credit standing of the counterparties.

10

SandRidge Energy, Inc. and Subsidiaries

Notes to Condensed Consolidated Financial Statements — (Continued)

The table below sets forth a reconciliation for assets and liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3) during the first quarter of 2008 (in thousands):

Derivative contracts as of December 31, 2007	$	22,228
Total gains or losses (realized/unrealized)		(136,038	)
Purchases, issuances and settlements		(7,329	)
Transfers in and out of Level 3		—
Derivative contracts as of March 31, 2008	$	(121,139	)
Change in unrealized gains (losses) on derivative contracts still held as of March 31, 2008	$	(143,367	)

5.   Asset Retirement Obligation

A reconciliation of the beginning and ending aggregate carrying amounts of the asset retirement obligation for the period from December 31, 2007 to March 31, 2008 is as follows (in thousands):

Asset retirement obligation, December 31, 2007	$	58,580
Liability incurred upon acquiring and drilling wells		1,730
Revisions in estimated cash flows		—
Liability settled in current period		—
Accretion of discount expense		1,320
Asset retirement obligation, March 31, 2008		61,630
Less: Current portion		882
Asset retirement obligation, net of current	$	60,748

6.   Long-Term Debt

Long-term debt consists of the following (in thousands):

	March 31,		December 31,
	2008		2007
Senior term loans	$	1,000,000	$	1,000,000
Senior credit facility		215,000		—
Other notes payable:
Drilling rig fleet and related oil field services equipment		44,347		47,836
Mortgage		19,450		19,651
Other equipment and vehicles		135		162
Total debt		1,278,932		1,067,649
Less: Current maturities of long-term debt		15,662		15,350
Long-term debt	$	1,263,270	$	1,052,299

Senior Term Loans.  On March 22, 2007, the Company issued $1.0 billion of senior unsecured term loans (the “senior term loans”). The closing of the senior term loans was generally contingent upon closing the private placement of common equity as described in Note 13. The senior term loans include both floating rate term loans and fixed rate term loans. A portion of the proceeds from the senior term loans was used to repay the Company’s $850.0 million senior bridge facility, which was paid in full in March 2007.

11

SandRidge Energy, Inc. and Subsidiaries

Notes to Condensed Consolidated Financial Statements — (Continued)

The Company issued $350.0 million at a variable rate with interest payable quarterly and principal due on April 1, 2014 (the “variable rate term loans”). The variable rate term loans bear interest, at the Company’s option, at the LIBOR rate plus 3.625% or the higher of (i) the federal funds rate, as defined, plus 3.125% or (ii) a bank’s prime rate plus 2.625%. After April 1, 2009, the variable rate term loans may be prepaid in whole or in part with certain prepayment penalties. The average interest rate paid on amounts outstanding under the Company’s variable term loans for the three month period ended March 31, 2008 was 8.36%.

In January 2008, the Company entered into an interest rate swap to fix the variable LIBOR interest rate on the variable rate term loans at 6.26% for the period from April 1, 2008 to April 1, 2011. This swap has not been designated as a hedge.

The Company issued $650.0 million at a fixed rate of 8.625% with the principal due on April 1, 2015 (the “fixed rate term loans”). Under the terms of the fixed rate term loans, interest is payable quarterly and during the first four years interest may be paid, at the Company’s option, either entirely in cash or entirely with additional fixed rate term loans. If the Company elects to pay the interest due during any period in additional fixed rate term loans, the interest rate increases to 9.375% during such period. After April 1, 2011, the fixed rate term loans may be prepaid in whole or in part with certain prepayment penalties.

Debt covenants under the senior term loans include financial covenants similar to those of the senior credit facility and include limitations on the incurrence of indebtedness, payment of dividends, asset sales, certain asset purchases, transactions with related parties, and consolidation or merger.

The Company incurred $26.1 million of debt issuance costs in connection with the senior term loans. These costs are included in other assets and amortized over the term of the senior term loans.

On March 28, 2008, the Company commenced an offer to exchange the senior term loans for senior unsecured notes with registration rights, as required under the senior term loan credit agreement. See Note 15.

Senior Credit Facility.  On November 21, 2006, the Company entered into a $750.0 million senior secured revolving credit facility (the “senior credit facility”). The senior credit facility matures on November 21, 2011 and is available to be drawn on and repaid without restriction so long as the Company is in compliance with its terms, including certain financial covenants. The initial proceeds of the senior credit facility were used to (i) partially finance the acquisition of NEG, (ii) refinance the existing senior secured revolving credit facility and NEG’s existing credit facility, and (iii) pay fees and expenses related to the NEG acquisition and the existing credit facility.

The senior credit facility contains various covenants that limit the Company and certain of its subsidiaries’ ability to grant certain liens; make certain loans and investments; make distributions; redeem stock; redeem or prepay debt; merge or consolidate with or into a third party; or engage in certain asset dispositions, including a sale of all or substantially all of the Company’s assets. Additionally, the senior credit facility limits the ability of the Company and certain of its subsidiaries to incur additional indebtedness with certain exceptions, including under the senior term loans (as discussed above).

The senior credit facility also contains financial covenants, including maintenance of agreed upon levels for the (i) ratio of total funded debt to EBITDAX (as defined in the senior credit facility), (ii) ratio of EBITDAX to interest expense plus current maturities of long-term debt, and (iii) current ratio. The Company was in compliance with all of the covenants under the senior credit facility as of March 31, 2008.

The obligations under the senior credit facility are secured by first priority liens on all shares of capital stock of each of the Company’s present and future subsidiaries; all intercompany debt of the Company and its subsidiaries; and substantially all of the Company’s assets and the assets of its guarantor subsidiaries, including proved crude oil and natural gas reserves representing at least 80% of the present discounted value (as defined in the senior credit facility) of proved crude oil and natural gas reserves reviewed in determining the borrowing base for the senior credit facility. Additionally, the obligations under the senior credit facility are guaranteed by certain Company subsidiaries.

12

SandRidge Energy, Inc. and Subsidiaries

Notes to Condensed Consolidated Financial Statements — (Continued)

At the Company’s election, interest under the senior credit facility is determined by reference to (i) the LIBOR rate plus an applicable margin between 1.25% and 2.00% per annum or (ii) the higher of the federal funds rate plus 0.5% or the prime rate plus, in either case, an applicable margin between 0.25% and 1.00% per annum. Interest is payable quarterly for prime rate loans and at the applicable maturity date for LIBOR loans, except that if the interest period for a LIBOR loan is six months, interest is paid at the end of each three month period. The average interest rate paid on amounts outstanding under our senior credit facility for the three month period ended March 31, 2008 was 4.57%.

The borrowing base of proved reserves was initially set at $300.0 million. The borrowing base was increased to $400.0 million on May 2, 2007, to $700.0 million on September 14, 2007 and to $1.2 billion on April 4, 2008. Borrowings under the senior credit facility may not exceed the lower of the borrowing base or the committed loan amount, which was increased to $1.75 billion on April 4, 2008. At March 31, 2008, the Company had $215.0 million in outstanding indebtedness under this facility.

Senior Bridge Facility.  On November 21, 2006, the Company entered into an $850.0 million senior unsecured bridge facility (the “senior bridge facility”). Together with borrowings under the senior credit facility, the proceeds from the senior bridge facility were used to (i) partially finance the NEG acquisition, (ii) refinance the existing senior secured revolving credit facility and NEG’s existing credit facility, and (iii) pay fees and expenses related to the NEG acquisition and the existing credit facility. The senior bridge facility was repaid in March 2007. The Company expensed remaining unamortized debt issuance costs related to the senior bridge facility of approximately $12.5 million to interest expense in March 2007.

Other Indebtedness.  The Company has financed a portion of its drilling rig fleet and related oil field services equipment through notes. At March 31, 2008, the aggregate outstanding balance of these notes was $44.3 million, with an annual fixed interest rate ranging from 7.64% to 8.87%. The notes have a final maturity date of December 1, 2011, require aggregate monthly installments for principal and interest in the amount of $1.2 million and are secured by the equipment. The notes have a prepayment penalty (currently ranging from 1 to 3%) that is triggered if the Company repays the notes prior to maturity.

On November 15, 2007, the Company entered into a note payable in the amount of $20.0 million with a lending institution as a mortgage on the downtown Oklahoma City property purchased by the Company in July 2007 to serve as its corporate headquarters. This note is fully secured by one of the buildings and a parking garage located on the downtown property, bears interest at 6.08% annually and matures on November 15, 2022. Payments of principal and interest in the amount of approximately $0.5 million are due on a quarterly basis through the maturity date. During 2008, the Company expects to make payments of principal and interest on this note totaling $0.8 million and $1.2 million, respectively.

Prior to 2007, the Company financed the purchase of various vehicles, oil field services equipment and other equipment through various notes payable. The aggregate outstanding balance of these notes as of December 31, 2006 was $4.5 million. Additionally, the Company financed its insurance premium payment made in 2007. These notes were substantially repaid during 2007 with borrowings under the Company’s senior credit facility. Also, in 2007 the Company repaid a $4.0 million loan incurred in 2005 for the purpose of completing a gas processing plant and pipeline in Colorado.

For the three months ended March 31, 2008 and 2007, interest payments, net of amounts capitalized, were approximately $25.4 million and $28.5 million, respectively.

7.   Other Long-Term Obligations

The Company has recorded a long-term obligation for amounts to be paid under a settlement agreement with Conoco, Inc. entered into in January 2007. The Company agreed to pay approximately $25.0 million plus interest, payable in $5.0 million increments on April 1, 2007, July 1, 2008, July 1, 2009, July 1, 2010, and July 1, 2011. On March 30, 2007, the Company made the first $5.0 million settlement payment plus accrued interest. The $5.0 million

13

SandRidge Energy, Inc. and Subsidiaries

Notes to Condensed Consolidated Financial Statements — (Continued)

payment to be made on July 1, 2008 has been included in accounts payable-trade in the accompanying condensed consolidated balance sheets as of March 31, 2008 and December 31, 2007. The unpaid settlement amount of approximately $15.0 million has been included in other long-term obligations in the accompanying condensed consolidated balance sheets as of March 31, 2008 and December 31, 2007.

8.   Derivative Contracts

The Company has entered into various derivative contracts including collars, fixed price swaps, basis swaps and interest rate swaps with counterparties. The contracts expire on various dates through December 31, 2011.

At March 31, 2008, the Company’s open commodity derivative contracts consisted of the following:

Natural Gas

	Notional		Weighted Avg.
Period and Type of Contract	(in MMBtus)		Fixed Price
April 2008 — June 2008
Price swap contracts		17,900	$	7.69
Basis swap contracts		13,350	$	(0.59	)
July 2008 — September 2008
Price swap contracts		18,100	$	8.23
Basis swap contracts		15,640	$	(0.57	)
October 2008 — December 2008
Price swap contracts		17,480	$	8.67
Basis swap contracts		14,720	$	(0.65	)
January 2009 — March 2009
Price swap contracts		6,300	$	9.12
Basis swap contracts		2,700	$	(0.49	)
April 2009 — June 2009
Price swap contracts		910	$	8.10
Basis swap contracts		2,730	$	(0.49	)
July 2009 — September 2009
Basis swap contracts		2,760	$	(0.49	)
October 2009 — December 2009
Basis swap contracts		2,760	$	(0.49	)
January 2011 — March 2011
Basis swap contracts		1,350	$	(0.47	)
April 2011 — June 2011
Basis swap contracts		1,365	$	(0.47	)
July 2011 — September 2011
Basis swap contracts		1,380	$	(0.47	)
October 2011 — December 2011
Basis swap contracts		1,380	$	(0.47	)

14

SandRidge Energy, Inc. and Subsidiaries

Notes to Condensed Consolidated Financial Statements — (Continued)

Crude Oil

	Notional		Weighted Avg.
Period and Type of Contract	(in MBbls)		Fixed Price
April 2008 — June 2008
Price swap contracts		270	$	95.04
Collar contracts		21	$	50.00 — 83.35
July 2008 — September 2008
Price swap contracts		225	$	94.33
Collar contracts		27	$	50.00 — 82.60
October 2008 — December 2008
Price swap contracts		225	$	93.17
Collar contracts		27	$	50.00 — 82.60

In January 2008, the Company entered into an interest rate swap to fix the variable LIBOR interest rate on its variable rate term loans at 6.26% for the period April 1, 2008 to April 1, 2011.

These derivatives have not been designated as hedges. The Company records all derivatives on the balance sheet at fair value. Changes in derivative fair values are recognized in earnings. Cash settlements and valuation gains and losses for commodity derivative contracts are included in loss on derivative contracts in the condensed consolidated statements of operations. The following table summarizes the cash settlements and valuation gains and losses on commodity derivative contracts for the three month periods ended March 31, 2008 and 2007 (in thousands):

	Three Months Ended
	March 31,
	2008			2007
Realized (gain) loss	$	(7,329	)	$	1,519
Unrealized loss		144,173			21,662
Loss on derivative contracts	$	136,844		$	23,181

An unrealized gain of $0.8 million related to the interest rate swap is included in interest expense in the condensed consolidated statement of operations for the three month period ended March 31, 2008.

9.   Income Taxes

In accordance with applicable generally accepted accounting principles, the Company estimates for each interim reporting period the effective tax rate expected for the full fiscal year and uses that estimated rate in providing income taxes on a current year-to-date basis.

For the three months ended March 31, 2008 and 2007, income tax payments were approximately $0.2 million and $0.4 million, respectively.

10.   Earnings Per Share

Basic earnings per share are computed using the weighted average number of common shares outstanding during the period. Diluted earnings per share are computed using the weighted average shares outstanding during the period, but also include the dilutive effect of awards of restricted stock. The following table summarizes the

15

SandRidge Energy, Inc. and Subsidiaries

Notes to Condensed Consolidated Financial Statements — (Continued)

calculation of weighted average common shares outstanding used in the computation of diluted earnings per share, for the three month periods ended March 31, 2008 and 2007 (in thousands):

	Three Months Ended
	March 31,
	2008		2007
Weighted average basic common shares outstanding		141,044		92,442
Effect of dilutive securities:
Restricted stock		—		—
Weighted average diluted common and potential common shares outstanding		141,044		92,442

For the three month periods ended March 31, 2008 and 2007, restricted stock awards covering 2.2 million shares and 1.3 million shares, respectively, were excluded from the computation of net loss per share because their effect would have been antidilutive.

In computing diluted earnings per share, the Company evaluated the if-converted method with respect to its outstanding redeemable convertible preferred stock. Under this method, the Company assumes the conversion of the preferred stock to common stock and determines if this is more dilutive than including the preferred stock dividends (paid and unpaid) in the computation of income available to common stockholders. The Company determined the if-converted method is not more dilutive and has included preferred stock dividends in the determination of loss applicable to common stockholders.

11.   Commitments and Contingencies

The Company is a defendant in certain lawsuits from time to time in the normal course of business. In management’s opinion, the Company is not currently involved in any legal proceedings which, individually or in the aggregate, could have a material effect on the financial condition, operations and/or cash flows of the Company.

12.   Redeemable Convertible Preferred Stock

In November 2006, the Company sold 2,136,667 shares of redeemable convertible preferred stock in order to finance a portion of the NEG acquisition and received net proceeds from this sale of approximately $439.5 million after deducting offering expenses of approximately $9.3 million. Each holder of the redeemable convertible preferred stock is entitled to quarterly cash dividends at the annual rate of 7.75% of the accreted value of its redeemable convertible preferred stock. The accreted value was $210 per share as of March 31, 2008 and December 31, 2007. Each share of convertible preferred stock was initially convertible into ten (10.2 currently) shares of common stock at the option of the holder, subject to certain anti-dilution adjustments. A summary of dividends declared and paid on the redeemable convertible preferred stock is as follows (in thousands except per share data):

		Dividends
Declared	Dividend Period	per Share		Total		Payment Date
January 31, 2007	November 21, 2006 — February 1, 2007	$	3.21	$	6,859	February 15, 2007
May 8, 2007	February 2, 2007 — May 1, 2007		3.97		8,550	May 15, 2007
June 8, 2007	May 2, 2007 — August 1, 2007		4.10		8,956	August 15, 2007
September 24, 2007	August 2, 2007 — November 1, 2007		4.10		8,956	November 15, 2007
December 16, 2007	November 2, 2007 — February 1, 2008		4.10		8,956	February 15, 2008
March 7, 2008	February 2, 2008 — May 1, 2008		4.01		8,095	(1)

16

SandRidge Energy, Inc. and Subsidiaries

Notes to Condensed Consolidated Financial Statements — (Continued)

(1) Includes $0.6 million of prorated dividends paid to holders of redeemable convertible preferred shares who converted to shares of common stock in March 2008. The remaining dividends of $7.5 million were paid subsequent to March 31, 2008.

Approximately $8.1 million and $8.6 million in paid and unpaid dividends have been included in the Company’s earnings per share calculations for the three month periods ended March 31, 2008 and 2007, respectively, as presented in the accompanying condensed consolidated statements of operations.

On March 30, 2007, certain holders of the Company’s common units (consisting of shares of common stock and a warrant to purchase redeemable convertible preferred stock upon the surrender of common stock) exercised warrants to purchase redeemable convertible preferred stock. The holders converted 526,316 shares of common stock into 47,619 shares of redeemable convertible preferred stock.

During March 2008, holders of 339,823 shares of the Company’s redeemable convertible preferred stock elected to convert those shares into 3,465,593 shares of the Company’s common stock. The conversion resulted in an increase to additional paid in capital of $71.3 million, which represents the difference between the par value of the common stock issued and the carrying value of the redeemable convertible preferred shares converted. Additionally, the Company recorded a one-time charge to retained earnings for $1.1 million in accelerated accretion expense related to the converted redeemable convertible preferred shares.

Beginning in the second quarter of 2008, the Company may convert all outstanding shares of redeemable convertible preferred stock at the then conversion rate if certain conditions have been met. See Note 15.

13.   Stockholders’ Equity

The following table presents information regarding SandRidge’s common stock (in thousands):

	March 31,		December 31,
	2008		2007
Shares authorized		400,000		400,000
Shares outstanding at end of period		146,206		140,391
Shares held in treasury		1,310		1,456

The Company is authorized to issue 50,000,000 shares of preferred stock, $0.001 par value, of which 2,625,000 shares are designated as redeemable convertible preferred. As of March 31, 2008 and December 31, 2007, there were 1,844,464 and 2,184,286 shares, respectively, of redeemable convertible preferred stock outstanding. (See Note 12.) There were no undesignated preferred shares outstanding as of March 31, 2008 and December 31, 2007.

Common Stock Issuance.  In March 2007, the Company sold approximately 17.8 million shares of common stock for net proceeds of $318.7 million after deducting offering expenses of approximately $1.4 million. The stock was sold in private sales to various investors including Tom L. Ward, the Company’s Chairman and Chief Executive Officer, who invested $61.4 million in exchange for approximately 3.4 million shares of common stock.

On November 9, 2007, the Company completed the initial public offering of its common stock. The Company sold 32,379,500 shares of its common stock, including 4,710,000 shares sold directly to an entity controlled by Tom L. Ward, at a price of $26 per share. After deducting underwriting discounts of approximately $44.0 million and

17

SandRidge Energy, Inc. and Subsidiaries

Notes to Condensed Consolidated Financial Statements — (Continued)

offering expenses of approximately $3.1 million, the Company received net proceeds of approximately $794.7 million. The Company used the net proceeds from the offering as follows (in millions):

Repayment of outstanding balance and accrued interest on senior credit facility	$	515.9
Repayment of note payable and accrued interest incurred in connection with recent acquisition		49.1
Excess cash to fund future capital expenditures		229.7
Total	$	794.7

During March 2008, the Company issued 3,465,593 shares of common stock upon the conversion of 339,823 shares of its redeemable convertible preferred stock (see additional discussion at Note 12).

Treasury Stock.  The Company makes required tax payments on behalf of employees as their restricted stock awards vest and then withholds a number of vested shares of common stock having a value on the date of vesting equal to the tax obligation. As a result of such transactions, the Company withheld approximately 38,000 and 37,000 shares at a total value of $1.3 million and $0.7 million during the three month periods ended March 31, 2008 and 2007, respectively. These shares were accounted for as treasury stock.

During the first quarter 2008, the Company transferred 184,484 shares of its treasury stock into an account established for the benefit of the Company’s 401(k) Plan. The transfer was made in order to satisfy the Company’s $5.0 million accrued payable to match employee contributions made to the plan during 2007. Historical cost of the shares transferred totaled approximately $2.4 million, resulting in an increase to the Company’s additional paid-in capital of approximately $2.6 million.

Restricted Stock.  The Company issues restricted stock awards under incentive compensation plans which vest over specified periods of time. Awards issued prior to 2006 had vesting periods of one, four or seven years. All awards issued during and after 2006 have four year vesting periods. Shares of restricted common stock are subject to restriction on transfer and certain conditions to vesting.

For the three months ended March 31, 2008 and 2007, the Company recognized stock-based compensation expense related to restricted stock of $3.2 million and $1.1 million, respectively. Stock-based compensation expense is reflected in general and administrative expense in the condensed consolidated statements of operations.

14.   Related Party Transactions

In the ordinary course of business, the Company engages in transactions with certain shareholders and other related parties. These transactions primarily consist of purchases of drilling equipment and sales of oil field service supplies. Following is a summary of significant transactions with such related parties for the three month periods ended March 31, 2008 and 2007 (in thousands):

	Three Months Ended
	March 31,
	2008		2007
Sales to and reimbursements from related parties	$	25,356	$	2,319
Purchases of services from related parties	$	19,890	$	6,785

The Company leases office space in Oklahoma City from a member of its Board of Directors. The Company believes that the payments made under this lease are at fair market rates. Rent expense related to the lease totaled $0.4 million and $0.3 million for the three month periods ended March 31, 2008 and 2007, respectively. The lease expires in August 2009.

Larclay, L.P.  The Company and Clayton Williams Energy, Inc. (“CWEI”) each own a 50% interest in Larclay, L.P., a limited partnership formed in 2006 to acquire drilling rigs and provide land drilling services. Larclay

18

SandRidge Energy, Inc. and Subsidiaries

Notes to Condensed Consolidated Financial Statements — (Continued)

currently owns 12 rigs, one of which has not yet been assembled. The Company serves as the operations manager of the partnership. Under the partnership agreement, CWEI was responsible for rig financing and purchasing. The Company had sales to and cost reimbursements from Larclay for the three months ended March 31, 2008 and 2007 of $10.9 million and $2.3 million, respectively. As of March 31, 2008 and December 31, 2007, the Company had accounts receivable — related party due from Larclay of $18.3 million and $16.6 million, respectively. Additionally, the Company contracted with Larclay to utilize rigs for drilling. For the three month periods ended March 31, 2008 and 2007, the Company was billed $10.7 million and $6.8 million, respectively, for these services. As of March 31, 2008 and December 31, 2007, the Company had accounts payable — related party due to Larclay of $1.5 million and $0.3 million, respectively.

15.   Subsequent Events

Increase in Borrowing Base.  In April 2008, the Company’s borrowing base under its senior credit facility was increased to $1.2 billion from $700.0 million and the total available under the facility was increased to $1.75 billion from $750.0 million.

Exchange of Senior Term Loans.  On May 1, 2008, the Company issued $650.0 million of its Senior Notes due 2015 in exchange for an equal outstanding principal amount of its fixed rate term loans and $350.0 million of its Senior Floating Rate Notes due 2014 in exchange for an equal outstanding principal amount of its variable rate term loans. The exchange was made pursuant to a non-public exchange offer that commenced on March 28, 2008 and expired on April 28, 2008. The newly issued senior notes have terms that are substantially identical to those of the exchanged senior term loans, except that the senior notes have been issued with registration rights.

Conversion of Redeemable Convertible Preferred Stock.  In May 2008, the Company converted the remaining outstanding 1,844,464 shares of its redeemable convertible preferred stock into 18,810,260 shares of its common stock as permitted under the terms of the redeemable convertible preferred stock. This conversion resulted in a one-time charge to retained earnings of $6.1 million in accelerated accretion expense related to the remaining offering costs of the redeemable convertible preferred shares. Prorated dividends totaling $0.5 million for the period from May 2, 2008 to the date of conversion (May 7, 2008) were paid to the holders of the converted shares on May 7, 2008.

Sale of Assets.  In May 2008, the Company entered into an agreement, along with other parties, to sell substantially all of its assets located in the Piceance Basin of Colorado to a subsidiary of The Williams Companies, Inc. The total purchase price is $285 million with net proceeds to the Company estimated to be approximately $140 million, subject to closing adjustments and allocation of the sales price among multiple sellers. Assets to be sold include undeveloped acreage, working interests in wells, gathering and compression systems and other facilities related to the wells. The sale is subject to customary closing conditions and is expected to close during the second quarter of 2008.

16.   Industry Segment Information

SandRidge has four business segments: exploration and production, drilling and oil field services, midstream gas services, and other. These segments represent the Company’s four main business units, each offering different products and services. The exploration and production segment is engaged in the development, acquisition and production of crude oil and natural gas properties. The drilling and oil field services segment is engaged in the land contract drilling of crude oil and natural gas wells. The midstream gas services segment is engaged in the purchasing, gathering, processing and treating of natural gas. The other segment includes transporting CO₂ to market for use by the Company and others in tertiary oil recovery operations and other miscellaneous operations.

19

SandRidge Energy, Inc. and Subsidiaries

Notes to Condensed Consolidated Financial Statements — (Continued)

Management evaluates the performance of the Company’s business segments based on operating income, which is defined as segment operating revenues less operating expenses and depreciation, depletion and amortization. Summarized financial information concerning the Company’s segments is shown in the following table (in thousands):

	Three Months Ended
	March 31,
	2008			2007
Revenues:
Exploration and production	$	206,966		$	92,634
Elimination of inter-segment revenue		(44	)		(1,808	)
Exploration and production, net of inter-segment revenue		206,922			90,826
Drilling and oil field services		79,838			56,915
Elimination of inter-segment revenue		(67,516	)		(29,020	)
Drilling and oil field services, net of inter-segment revenue		12,322			27,895
Midstream gas services		148,235			61,422
Elimination of inter-segment revenue		(103,148	)		(35,235	)
Midstream gas services, net of inter-segment revenue		45,087			26,187
Other		5,854			5,753
Elimination of inter-segment revenue		(1,099	)		(1,597	)
Other, net of inter-segment revenue		4,755			4,156
Total revenues	$	269,086		$	149,064
Operating (Loss) Income:
Exploration and production	$	(47,389	)	$	371
Drilling and oil field services		(2,148	)		5,202
Midstream gas services		32			1,350
Other		(13,306	)		(3,455	)
Total operating (loss) income		(62,811	)		3,468
Interest income		796			1,088
Interest expense		(25,172	)		(35,429	)
Other income		24			879
Loss before income tax benefit	$	(87,163	)	$	(29,994	)
Capital Expenditures:
Exploration and production	$	354,765		$	127,582
Drilling and oil field services		17,921			41,242
Midstream gas services		38,721			9,543
Other		7,243			2,728
Total capital expenditures	$	418,650		$	181,095

20

SandRidge Energy, Inc. and Subsidiaries

Notes to Condensed Consolidated Financial Statements — (Continued)

	Three Months Ended
	March 31,
	2008		2007
Depreciation, Depletion and Amortization:
Exploration and production	$	65,590	$	33,211
Drilling and oil field services		12,348		7,163
Midstream gas services		2,774		1,113
Other		2,329		1,357
Total depreciation, depletion and amortization	$	83,041	$	42,844

	March 31,		December 31,
	2008		2007
Identifiable Assets(1):
Exploration and production	$	3,364,879	$	3,143,137
Drilling and oil field services		272,374		271,563
Midstream gas services		169,578		127,822
Other		101,001		88,044
Total	$	3,907,832	$	3,630,566

(1) Identifiable assets are those used in SandRidge’s operations in each business segment.

21

ITEM 2.   Management’s Discussion and Analysis of Financial Condition and Results of Operations

Introduction

The following discussion and analysis is intended to help the reader understand our business, financial condition, results of operations, liquidity and capital resources. This discussion and analysis should be read in conjunction with our condensed consolidated financial statements and the accompanying notes included in this report, as well as our audited consolidated financial statements and the accompanying notes included in our annual report on Form 10-K for the year ended December 31, 2007 (the “2007 Form 10-K”). The following discussion contains forward-looking statements that reflect our future plans, estimates, beliefs and expected performance. The forward-looking statements are dependent upon events, risks and uncertainties that may be outside our control. Our actual results could differ materially from those discussed in these forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, market prices for natural gas and crude oil, economic and competitive conditions, regulatory changes, estimates of proved reserves, potential failure to achieve production from development projects, capital expenditures and other uncertainties, as well as those factors discussed below and elsewhere in this report and in our 2007 Form 10-K, all of which are difficult to predict. In light of these risks, uncertainties and assumptions, the forward-looking events discussed may not occur.

The financial information with respect to the three month periods ended March 31, 2008 and March 31, 2007 that is discussed below is unaudited. In the opinion of management, this information contains all adjustments, consisting only of normal recurring accruals, necessary to state fairly the unaudited condensed consolidated financial statements. The results of operations for the interim periods are not necessarily indicative of the results of operations for the full fiscal year.

Overview of Our Company

We are a rapidly expanding independent natural gas and crude oil company concentrating on exploration, development and production activities. We are focused on continuing the exploration and exploitation of our significant holdings in the West Texas Overthrust, which we refer to as the WTO, a natural gas prone geological region where we have operated since 1986. The WTO includes the Piñon Field as well as the Allison Ranch, South Sabino, Thistle, Big Canyon, and McKay Creek exploration areas. We also own and operate drilling rigs and conduct related oil field services, and we own and operate interests in gas gathering, marketing and processing facilities and CO₂ gathering and transportation facilities.

On November 21, 2006, we acquired all of the outstanding membership interests in NEG Oil & Gas LLC (“NEG”) for total consideration of approximately $1.5 billion, excluding cash acquired. With core assets in the Val Verde and Permian Basins of West Texas, including overlapping or contiguous interests in the WTO, the NEG acquisition has dramatically increased our exploration and production segment operations. In addition to the NEG acquisition, we have completed numerous acquisitions of additional working interests in the WTO during the period from late 2005 through March 31, 2008. We also operate significant interests in the Cotton Valley Trend in East Texas, the Gulf Coast area, the Mid-Continent and the Gulf of Mexico.

During November 2007, we completed the initial public offering of our common stock. We used the proceeds from this offering to repay indebtedness outstanding under our senior credit facility as well as a note payable related to a 2007 acquisition and to fund the remainder of our 2007 capital expenditure program and a portion of our 2008 capital expenditure program. See further discussion of these transactions in Note 13 to the condensed consolidated financial statements contained in Part I, Item 1 of this report.

22

Segment Overview

We operate in four related business segments: exploration and production, drilling and oil field services, midstream gas services and other. Management evaluates the performance of our business segments based on operating income, which is defined as segment operating revenue less operating expenses and depreciation, depletion and amortization. These measurements provide important information to us about the activity and profitability of our lines of business. Set forth in the table below is financial information regarding each of our business segments.

	Three Months Ended
	March 31,
	2008			2007
Segment income and expense (in thousands):
Revenue:
Exploration and production	$	206,922		$	90,826
Drilling and oil field services		12,322			27,895
Midstream gas services		45,087			26,187
Other		4,755			4,156
Total revenues		269,086			149,064
Operating (loss) income:
Exploration and production		(47,389	)		371
Drilling and oil field services		(2,148	)		5,202
Midstream gas services		32			1,350
Other		(13,306	)		(3,455	)
Total operating (loss) income		(62,811	)		3,468
Interest income		796			1,088
Interest expense		(25,172	)		(35,429	)
Other income		24			879
Loss before income taxes	$	(87,163	)	$	(29,994	)
Production data:
Natural gas (Mmcf)		19,173			10,449
Crude oil (MBbls)		611			393
Combined equivalent volumes (Mmcfe)		22,839			12,807
Average daily combined equivalent volumes (Mmcfe/d)		251.0			142.3
Average prices — as reported(1):
Natural gas (per Mcf)	$	7.86		$	6.60
Crude oil (per Bbl)(3)	$	89.81		$	54.06
Combined equivalent (per Mcfe)	$	9.00		$	7.04
Average prices — including impact of derivative contract settlements:
Natural gas (per Mcf)	$	8.32		$	6.45
Crude oil (per Bbl)(3)	$	87.42		$	54.06
Combined equivalent (per Mcfe)	$	9.32		$	6.92
Drilling and oil field services:
Number of operational drilling rigs owned at end of period		26.0			25.0
Average number of operational drilling rigs owned during the period		26.0			25.0
Average total revenue per rig per day(2)	$	17,500		$	16,600

(1)	Prices represent actual average prices for the periods presented and do not give effect to derivative transactions.
(2)	Does not include revenues for related rental equipment.
(3)	Includes natural gas liquids.

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Exploration and Production Segment

We explore for, develop and produce natural gas and crude oil reserves, with a focus on our proved reserves and extensive undeveloped acreage positions in the WTO. We operate substantially all of our wells in our core areas and employ our drilling rigs and other drilling services in the exploration and development of our operated wells and, to a lesser extent, on our non-operated wells.

The primary factors affecting the financial results of our exploration and production segment are the prices we receive for our natural gas and crude oil production, the quantity of our natural gas and crude oil production and changes in the fair value of derivative contracts we use to reduce the volatility of the prices we receive for our natural gas and crude oil production. Because we are vertically integrated, our exploration and production activities affect the results of our drilling and oil field services and midstream gas services segments. The NEG acquisition in 2006 substantially increased our revenues and operating income in our exploration and production segment. However, because our working interest in the Piñon Field increased to approximately 93%, there are greater intercompany eliminations that affect the consolidated financial results of our drilling and oil field services and midstream gas services segments.

Exploration and production segment revenues increased to $206.9 million in the three months ended March 31, 2008 from $90.8 million in the three months ended March 31, 2007, an increase of 127.8%, as a result of a 78.1% increase in combined production volumes and a 27.8% increase in the combined average price we received for the natural gas and crude oil we produced. In the three month period ended March 31, 2008 we increased natural gas production by 8.8 Bcf to 19.2 Bcf and increased crude oil production by 218 MBbls to 611 MBbls from the comparable period in 2007. The total combined 10.0 Bcfe increase in production was due primarily to an increase in our average working interest in the WTO from 81% at March 31, 2007 to 93% at March 31, 2008 and successful drilling in the WTO throughout 2007 and the first quarter of 2008. The Company had 1,869 producing wells at March 31, 2008 as compared to 1,333 producing wells at March 31, 2007.

The average price we received for our natural gas production for the three month period ended March 31, 2008 increased 19.1%, or $1.26 per Mcf, to $7.86 per Mcf from $6.60 per Mcf in the comparable period in 2007. The average price received for our crude oil production increased 66.1%, or $35.75 per barrel, to $89.81 per barrel during the three months ended March 31, 2008 from $54.06 per barrel during the same period in 2007. Including the impact of derivative contract settlements, the effective price received for natural gas for the three month period ended March 31, 2008 was $8.32 per Mcf as compared to $6.45 per Mcf during the same period in 2007. Including the impact of derivative contract settlements, the effective price received for crude oil for the three month period ended March 31, 2008 was $87.42. Our derivative contracts had no impact on effective oil prices during the three months ended March 31, 2007. During 2007 and continuing into 2008, we entered into derivatives contracts to mitigate the impact of commodity price fluctuations on our 2007, 2008 and 2009 production. Our derivative contracts are not designated as accounting hedges and, as a result, gains or losses on commodity derivative contracts are recorded as an operating expense. Internally, management views the settlement of such derivative contracts as adjustments to the price received for natural gas and crude oil production to determine “effective prices.”

For the three months ended March 31, 2008, we had a $47.4 million operating loss in our exploration and production segment, compared to $0.4 million in operating income for the same period in 2007. Our $116.1 million increase in exploration and production revenues was offset by a $12.2 million increase in production expenses, a $32.4 million increase in depreciation, depletion and amortization, or DD&A, due to the increase in production and a $136.8 million loss on our derivative contracts. The increase in production expenses was attributable to the increase in number of operating wells we own and an increase in our average working interest in those wells. During the three month period ended March 31, 2008, the exploration and production segment reported a $136.8 million net loss on our commodity derivative positions ($7.3 million realized gain and $144.1 million unrealized loss) compared to a $23.2 million loss ($1.5 million realized loss and $21.7 million unrealized loss) in the comparable period in 2007. During 2007 and first quarter 2008, we selectively entered into natural gas and oil swaps and natural gas basis swaps in order to mitigate the effects of fluctuations in prices received for our production. Given the long term nature of our investment in the WTO development program and the relatively high level of natural gas prices compared to our budgeted prices, management believes it prudent to enter into natural gas and crude oil swaps and natural gas basis swaps for a portion of our production. Unrealized gains or losses on derivative contracts represent

24

the change in fair value of open derivative positions during the period. The change in fair value is principally measured based on period end prices as compared to the contract price. The unrealized loss on natural gas and crude oil derivative contracts recorded in the three month period ended March 31, 2008 was attributable to an increase in average natural gas and crude oil prices at March 31, 2008 as compared to the average natural gas and crude oil prices at December 31, 2007 or the contract price for contracts entered into during the period. Future volatility in natural gas and crude oil prices could have an adverse effect on the operating results of our exploration and production segment.

Drilling and Oil Field Services Segment

We drill for our own account primarily in the WTO through our drilling and oil field services subsidiary, Lariat Services, Inc. We also drill wells for other natural gas and crude oil companies, primarily located in the West Texas region. As of March 31, 2008, our drilling rig fleet consisted of 37 operational rigs, 26 we owned directly and 11 owned by Larclay, L.P., a limited partnership in which we have a 50% interest. We also own one rig that is currently being retrofitted. Our oil field services business conducts operations that complement our drilling services operations. These services include providing pulling units, trucking, rental tools, location and road construction and roustabout services to ourselves and to third parties. Additionally, we provide under-balanced drilling systems only for our own account.

In 2006, we and CWEI formed Larclay, L.P., which acquired twelve sets of rig components and other related equipment to assemble into completed land drilling rigs. The drilling rigs were to be used for drilling on CWEI’s prospects, our prospects or for contracting to third parties on daywork drilling contracts. All of these rigs have been delivered, although one rig has not been assembled. CWEI was responsible for securing financing and the purchase of the rigs. The partnership financed 100% of the acquisition cost of the rigs utilizing a guarantee by CWEI. We operate the rigs owned by the partnership. The partnership and CWEI are responsible for all costs related to the initial construction and equipping of the drilling rigs. In the event of an operating shortfall within the partnership, we, along with CWEI, are responsible to fund the shortfall through loans to the partnership. We account for Larclay as an equity investment.

The financial results of our drilling and oil field services segment depend on many factors, particularly the demand for and the price we can charge for our services. We provide drilling services for our own account and for others, generally on a daywork, and less often on a turnkey, contract basis. We generally assess the complexity and risk of operations, the on-site drilling conditions, the type of equipment to be used, the anticipated duration of the work to be performed and the prevailing market rates in determining the contract terms we offer.

Daywork Contracts.  Under a daywork drilling contract, we provide a drilling rig with required personnel to our customer who supervises the drilling of the well. We are paid based on a negotiated fixed rate per day while the rig is used. Daywork drilling contracts specify the equipment to be used, the size of the hole and the depth of the well. Under a daywork drilling contract, the customer bears a large portion of the out-of-pocket drilling costs, and we generally bear no part of the usual risks associated with drilling, such as time delays and unanticipated costs. As of March 31, 2008, 26 of our rigs were operating under daywork contracts and 24 of these were working for our account. As of March 31, 2008, the 11 operational rigs owned by Larclay were operating under daywork contracts and six of these were working for our account. Four of the remaining operational Larclay rigs were working for CWEI as of March 31, 2008.

Turnkey Contracts.  Under a typical turnkey contract, a customer will pay us to drill a well to a specified depth and under specified conditions for a fixed price, regardless of the time required or the problems encountered in drilling the well. We provide most of the equipment and drilling supplies required to drill the well. We subcontract for related services such as the provision of casing crews, cementing and well logging. Generally, we do not receive progress payments and are paid only after the well is drilled. We enter into turnkey contracts in areas where our experience and expertise permit us to drill wells more profitably than under a daywork contract. As of March 31, 2008, none of our rigs were operating under a turnkey contract.

Drilling and oil field services segment revenue decreased to $12.3 million in the three month period ended March 31, 2008 from $27.9 million in the three month period ended March 31, 2007. This resulted in an operating loss of $2.1 million in the three month period ended March 31, 2008 compared to operating income of $5.2 million

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in the same period in 2007. The decline in revenues and operating income is primarily attributable to an increase in the number of our rigs operating on our properties and an increase in our ownership interest in our natural gas and crude oil properties. Our drilling and oil field services segment records revenues and operating income only on wells drilled for or on behalf of third parties. The portion of drilling costs incurred by our drilling and oil field services segment relating to our ownership interest are capitalized as part of our full-cost pool. With the various WTO property acquisitions that occurred throughout 2007 and the first quarter of 2008, our average working interest has increased to approximately 93% (from 81% at March 31, 2007) in the wells we operate in the WTO, and the third-party interest has declined to less than 10%. Additionally, 24 of the 26 operational rigs we owned were working for our account at March 31, 2008, as compared to 14 of our 23 operational rigs working for our account at March 31, 2007. As a result, during the three month period ended March 31, 2008, approximately 84.6%, or $67.5 million, of our drilling and oil field service revenues were generated by work performed on our own account and eliminated in consolidation as compared to approximately 51.0%, or $29.0 million, for the comparable period in 2007. The average daily rate we received per rig of approximately $17,500, excluding revenues for related rental equipment and before intercompany eliminations, was slightly higher than the daily rate of $16,600 from the comparable period in 2007.

Midstream Gas Services Segment

We provide gathering, compression, processing and treating services of natural gas in West Texas and the Piceance Basin in northwestern Colorado, primarily through our wholly owned subsidiary, SandRidge Midstream, Inc. (formerly known as ROC Gas Company, Inc.). Through our gas marketing subsidiary, Integra Energy LLC, we buy and sell natural gas produced from our operated wells as well as third-party operated wells. Gas marketing revenue is one of our largest revenue components; however, it is a very low margin business. On a consolidated basis, natural gas purchases and other costs of sales include the total value we receive from third parties for the natural gas we sell and the amount we pay for natural gas, which are reported as midstream and marketing expense. The primary factors affecting our midstream gas services are the quantity of natural gas we gather, treat and market and the prices we pay and receive for natural gas.

Midstream gas services revenue for the three months ended March 31, 2008 was $45.1 million compared to $26.2 million in the comparable period of 2007. The quarterly increase in midstream gas services revenues is attributable to larger third-party volumes transported and marketed through our gathering systems during the three months ended March 31, 2008 as compared to the same period in 2007. We generally charge a flat fee per unit transported and charge a percentage of sales for marketed volumes.

Other Segment

Our other segment consists primarily of our CO₂ gathering and sales operations, corporate operations and other investments. We conduct our CO₂ gathering and sales operations through our wholly owned subsidiary, SandRidge CO₂, LLC (formerly operated through PetroSource Energy Company, LLC). SandRidge CO₂ gathers CO₂ from natural gas treatment plants located in West Texas and transports and sells this CO₂ for use in our and third parties’ tertiary oil recovery operations. The operating loss in the other segment was $13.3 million for the three months ended March 31, 2008 as compared to a loss of $3.5 million during the same period in 2007. The increase is primarily attributable to significant increases in corporate and support staff throughout 2007 and the first quarter of 2008.

Results of Operations

Three months ended March 31, 2008 compared to the three months ended March 31, 2007

Revenue.  Total revenue increased 80.5% to $269.1 million for the three months ended March 31, 2008 from $149.1 million in the same period in 2007. This increase was due to a $115.3 million increase in natural gas and crude oil sales. Lower drilling and oil field services revenues partially offset the increases noted in midstream gas services and other segments.

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	Three Months Ended
	March 31,
	2008		2007		$ Change			% Change
	(In thousands)
Revenue:
Natural gas and crude oil	$	205,487	$	90,176	$	115,311			127.9%
Drilling and services		12,334		27,895		(15,561	)		(55.8)%
Midstream and marketing		46,409		26,187		20,222			77.2%
Other		4,856		4,806		50			1.0%
Total revenues	$	269,086	$	149,064	$	120,022			80.5%

Total natural gas and crude oil revenues increased $115.3 million to $205.5 million for the three months ended March 31, 2008 compared to $90.2 million for the same period in 2007, primarily as a result of an increase in natural gas and crude oil production volumes and prices received for our production. Total natural gas production increased 83.5% to 19,173 Mmcf in 2008 compared to 10,449 Mmcf in 2007, while crude oil production increased 55.5% to 611 MBbls in 2008 from 393 MBbls in 2007. The increase was due to our successful drilling in the WTO and an increased working interest in 2008 in the WTO as compared to the same period in 2007. The average price received, excluding the impact of derivative contracts, for our natural gas and crude oil production increased 27.8% in the 2008 period to $9.00 per Mcfe compared to $7.04 per Mcfe in 2007.

Drilling and services revenue decreased 55.8% to $12.3 million for the three months ended March 31, 2008 compared to $27.9 million in the same period in 2007. The decline in revenues is due to an increase in the number of company-owned rigs operating on company-owned natural gas and crude oil properties and the increase in working interest in these properties. Additionally, the average daily revenue per rig, after considering the effect of the elimination of intercompany usage, increased to approximately $17,500 per day during the first three months of 2008 as compared to an average rate of $16,600 per day during the same period in 2007.

Midstream and marketing revenue increased $20.2 million, or 77.2%, with revenues of $46.4 million in the three month period ended March 31, 2008 as compared to $26.2 million in the three month period ended March 31, 2007. This increase is due primarily to larger production volumes transported and marketed, during the three months ended March 31, 2008 as compared to the same period in 2007, for the third parties with ownership in our wells or ownership in other wells connected to our gathering systems.

Other revenue increased to $4.9 million for the three months ended March 31, 2008 from $4.8 million for the same period in 2007. Other revenue is generated primarily by our CO₂ gathering and sales operations.

Operating Costs and Expenses.  Total operating costs and expenses increased to $331.9 million for the three months ended March 31, 2008 compared to $145.6 million for the same period in 2007 due to increases in production-related costs, general and administrative expenses as a result of an increase in corporate staff, depreciation, depletion and amortization and losses on derivative contracts. These increases were partially offset by a decrease in expenses attributable to our drilling and services.

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	Three Months Ended
	March 31,
	2008		2007			$ Change			% Change
	(In thousands)
Operating costs and expenses:
Production	$	34,188	$	21,974		$	12,214			55.6%
Production taxes		9,220		2,933			6,287			214.4%
Drilling and services		7,169		18,777			(11,608	)		(61.8)%
Midstream and marketing		40,418		23,420			16,998			72.6%
Depreciation, depletion, and amortization — natural gas and crude oil		65,076		32,684			32,392			99.1%
Depreciation, depletion and amortization — other		17,965		10,160			7,805			76.8%
General and administrative		20,994		12,468			8,526			68.4%
Loss on derivative contracts		136,844		23,181			113,663			490.3%
Loss (gain) on sale of assets		23		(1	)		24			2,400.0%
Total operating costs and expenses	$	331,897	$	145,596		$	186,301			128.0%

Production expense includes the costs associated with our production activities, including, but not limited to, lease operating expense and processing costs. Production expenses increased $12.2 million primarily due to an increase in the number of wells in which we have a working interest. We owned working interests in 1,869 producing wells at March 31, 2008 compared to 1,333 producing wells at March 31, 2007. Production taxes increased $6.3 million, or 214.4%, to $9.2 million primarily due to the increase in production and the increased prices received for production during the three months ended March 31, 2008.

Drilling and services expenses decreased 61.8% for the three months ended March 31, 2008 as compared to the same period in 2007 primarily because of the increase in the number and working interest ownership of the wells we drilled for our own account.

Midstream and marketing expenses increased $17.0 million or 72.6% to $40.4 million due to larger production volumes transported and marketed during the three months ended March 31, 2008 on behalf of third parties than during the comparable period in 2007.

Depreciation, depletion and amortization (“DD&A”) for our natural gas and crude oil properties increased to $65.1 million for the three months ended March 31, 2008 from $32.7 million in the same period in 2007. Our DD&A per Mcfe increased $0.30 to $2.85 in the first quarter of 2008 from $2.55 in the comparable period in 2007. The increase is primarily attributable to an increase in our depreciable properties, higher future development costs and increased production. Our production increased 78.1% to 22.8 Bcfe from 12.8 Bcfe in 2007.

DD&A for our other assets consists primarily of depreciation of our drilling rigs, midstream gathering and compression facilities and other equipment. The increase in DD&A for our other assets was attributable primarily to higher carrying costs of our rigs due to upgrades and retrofitting and our midstream gathering and processing assets due to upgrades made throughout 2007. We calculate depreciation of property and equipment using the straight-line method over the estimated useful lives of the assets, which range from three to 25 years. Our drilling rigs and related oil field services equipment are depreciated over an average seven-year useful life.

General and administrative expenses increased $8.5 million to $21.0 million for the three months ended March 31, 2008 from $12.5 million for the comparable period in 2007. The increase was principally attributable to an $8.8 million increase in corporate salaries and wages due to a significant increase in corporate and support staff. As of March 31, 2008, we had 2,385 employees as compared to 1,746 at March 31, 2007. General and administrative expenses include non-cash stock compensation expense of $3.2 million for the three months ended March 31, 2008 as compared to $1.1 million for the comparable period in 2007. The increases in salaries and wages as well as stock compensation were partially offset by $3.2 million in capitalized general and administrative

28

expenses for the three months ended March 31, 2008. There were no general and administrative expenses capitalized during the three months ended March 31, 2007.

For the three month period ended March 31, 2008, we recorded a loss of $136.8 million ($144.1 million unrealized loss and $7.3 million realized gain) on our derivative contracts compared to a $23.2 million loss ($21.7 million unrealized loss and $1.5 million realized loss) for the comparable period in 2007. During 2007 and the first three months of 2008, we selectively entered into natural gas and crude oil swaps and basis swaps in order to mitigate the effects of fluctuations in prices received for our production. Given the long-term nature of our investment in the WTO development program and the relatively high level of natural gas prices compared to budgeted prices, we believe it is prudent to enter into natural gas swaps and basis swaps for a portion of our production. Unrealized gains or losses on natural gas and crude oil derivative contracts represent the change in fair value of open derivative positions during the period. The change in fair value is principally measured based on period end prices as compared to the prior period end prices or contract price for contracts entered into during the period. The unrealized loss recorded in the three month period ended March 31, 2008 related to natural gas and crude oil commodities was attributable to an increase in average natural gas and crude oil prices at March 31, 2008 as compared to the average natural gas and crude oil prices at December 31, 2007 or the contract price for contracts entered into during the period.

Other Income (Expense).  Total other expense decreased to $24.4 million in the three month period ended March 31, 2008 from $33.5 million in the three month period ended March 31, 2007. The decrease is reflected in the table below.

	Three Months Ended
	March 31,
	2008			2007			$ Change			% Change
	(In thousands)
Other income (expense):
Interest income	$	796		$	1,088		$	(292	)		(26.8)%
Interest expense		(25,172	)		(35,429	)		10,257			(29.0)%
Minority interest		(835	)		(146	)		(689	)		471.9%
Income from equity investments		859			1,025			(166	)		(16.2)%
Total other expense		(24,352	)		(33,462	)		9,110			(27.2)%
Loss before income tax expense (benefit)		(87,163	)		(29,994	)		(57,169	)		190.6%
Income tax expense (benefit)		(30,538	)		(10,501	)		(20,037	)		190.8%
Net loss	$	(56,625	)	$	(19,493	)	$	(37,132	)		190.5%

Interest income decreased to $0.8 million for the three months ended March 31, 2008 from $1.1 million for the same period in 2007. This decrease was generally due to lower excess cash levels during the three months ended March 31, 2008 as compared to the same period in 2007.

Interest expense decreased to $25.2 million for the three months ended March 31, 2008 from $35.4 million for the same period in 2007. This decrease was primarily attributable to the expensing, in March 2007, of approximately $12.5 million in unamortized debt issuance costs related to our senior bridge facility at the time it was repaid. Also contributing slightly to the decrease for the three months ended March 31, 2008 was an $0.8 million unrealized gain related to our interest rate swap These decreases were partially offset by increased interest expense during the three months ended March 31, 2008 due to higher average debt balances outstanding during that period as compared to the same period in 2007.

During the three months ended March 31, 2008, we reported income from equity investments of $0.9 million as compared to $1.0 million in the comparable period in 2007.

We reported an income tax benefit of $30.5 million for the three months ended March 31, 2008, as compared to a benefit of $10.5 million for the same period in 2007. The current period income tax benefit represents an effective income tax rate of 35% which is unchanged from the same period in 2007.

29

Liquidity and Capital Resources

Summary

Our operating cash flow is influenced mainly by the prices that we receive for our natural gas and crude oil production; the quantity of natural gas we produce and, to a lesser extent, the quantity of crude oil we produce; the success of our development and exploration activities; the demand for our drilling rigs and oil field services and the rates we receive for these services; and the margins we obtain from our natural gas and CO₂ gathering and processing contracts.

On November 9, 2007, we completed the initial public offering of our common stock. We sold 32,379,500 shares of our common stock, including 4,170,000 shares sold directly to an entity controlled by our Chairman and Chief Executive Officer, Tom L. Ward. After deducting underwriting discounts of approximately $44.0 million and offering expenses of approximately $3.1 million, we received net proceeds of approximately $794.7 million. The net proceeds were utilized as follows (in millions):

Repayment of outstanding balance and accrued interest on senior credit facility	$	515.9
Repayment of note payable and accrued interest incurred in connection with recent acquisition		49.1
Excess cash to fund capital expenditures		229.7
Total	$	794.7

As of March 31, 2008, our cash and cash equivalents were $0.7 million, and we had approximately $462.3 million available under our senior credit facility. Amounts outstanding under our senior credit facility at March 31, 2008 totaled $215.0 million. As of March 31, 2008, we had $1.3 billion in total debt outstanding.

Recent Developments

Increase in Borrowing Base.  In April 2008, the Company’s senior credit facility was increased to $1.75 billion from $750 million and its borrowing base was increased to $1.2 billion from $700.0 million.

Exchange of Senior Term Loans.  On May 1, 2008, the Company issued $650.0 million in Senior Notes due 2015 in exchange for an equal outstanding principal amount of its fixed rate term loans and $350.0 million of its Senior Floating Rate Notes due 2014 in exchange for an equal outstanding principal amount of its variable rate term loans. The exchange was made pursuant to a private placement exchange offer that commenced on March 28, 2008 and expired on April 28, 2008. The newly issued senior notes have terms that are substantially identical to those of the exchanged senior term loans, except that the senior notes have been issued with registration rights.

Conversion of Redeemable Convertible Preferred Stock.  In May 2008, the Company converted the remaining outstanding 1,844,464 shares of its redeemable convertible preferred stock into 18,810,260 shares of its common stock as permitted under the terms of the redeemable convertible preferred stock. This conversion resulted in a one-time charge to retained earnings of $6.1 million in accelerated accretion expense related to the remaining offering costs of the redeemable convertible preferred shares. Prorated dividends totaling $0.5 million for the period from May 2, 2008 to the date of conversion (May 7, 2008) were paid to the holders of the converted shares on May 7, 2008.

Sale of Assets.  In May 2008, we entered into an agreement, along with other parties, to sell substantially all of our assets located in the Piceance Basin of Colorado to a subsidiary of The Williams Companies, Inc. The total purchase price is $285 million with net proceeds to the Company estimated to be approximately $140 million, subject to closing adjustments and allocation of the sales price among multiple sellers. Assets to be sold include undeveloped acreage, working interests in wells, gathering and compression systems and other facilities related to the wells. The sale is subject to customary closing conditions and is expected to close during the second quarter of 2008.

Capital Expenditures

We make and expect to continue to make substantial capital expenditures in the exploration, development, production and acquisition of natural gas and crude oil reserves.

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During the first quarter of 2008 and 2007, our capital expenditures by segment were:

	Three Months Ended
	March 31,
	2008		2007
	(In thousands)
Capital Expenditures:
Exploration and production	$	354,765	$	127,582
Drilling and oil field services		17,921		41,242
Midstream gas services		38,721		9,543
Other		7,243		2,728
Total	$	418,650	$	181,095

We estimate that our total capital expenditures for 2008, excluding acquisitions, will be approximately $1.5 billion. Our planned 2008 capital expenditures are consistent with 2007 levels. As in 2007, our 2008 capital expenditures for our exploration and production segment will be focused on growing and developing our reserves and production on our existing acreage and acquiring additional leasehold interests, primarily in the WTO. Of our total $1.5 billion capital expenditure budget, approximately $1.2 billion is budgeted for exploration and production activities. Included in our 2008 exploration and production capital expenditure budget is $723 million for drilling in the WTO, including the Piñon field, $241 million for drilling in areas other than the WTO, $33 million dedicated to our tertiary oil recovery program and $241 million for land and seismic. Based on encouraging initial results from our 3-D seismic acquisition program that we commenced in 2007, we have budgeted $151 million of our 2008 WTO capital expenditures to explore for new fields within the WTO. We plan to drill approximately 440 gross wells in 2008.

During 2008, we expect to complete our rig fleet expansion program that we started in 2005. We have accepted the delivery of all of the rigs ordered from Chinese manufacturers. We are in the process of retro-fitting and rigging up one of these rigs, which we expect to join our fleet during the second quarter of 2008. We are also continuing to upgrade and modernize our rig fleet. Approximately $67 million of our 2008 capital expenditure budget will be spent on our drilling and oil field services segment.

We anticipate spending approximately $195 million in capital expenditures in our midstream gas services and other segments as we expand our network of gas gathering lines and plant and compression capacity.

We believe that our cash flows from operations, current cash and investments on hand and availability under our senior credit facility will be sufficient to meet our capital expenditure budget for the next twelve months. The majority of our capital expenditures will be discretionary and could be curtailed if our cash flows decline from expected levels or we are unable to obtain capital on attractive terms; however, we have various sources of capital in the form of our revolving credit facility, potential asset sales or the incurrence of additional long-term debt.

Cash Flows

Our cash flows for the three months ended March 31, 2008 and 2007 were as follows:

	Three Months Ended
	March 31,
	2008			2007
	(In thousands)
Cash flows provided by operating activities	$	156,689		$	43,963
Cash flows used in investing activities		(418,979	)		(182,546	)
Cash flows provided by financing activities		199,881			293,094
Net (decrease) increase in cash and cash equivalents	$	(62,409	)	$	154,511

Operating Activities.  Net cash provided by operating activities for the three months ended March 31, 2008 and 2007 were $156.7 million and $44.0 million, respectively. The increase in cash provided by operating activities from 2007 to 2008 was primarily due to our 78.1% increase in production volumes as a result of our drilling success

31

in the WTO as well as various acquisitions throughout 2007 and the first three months of 2008. Also, contributing to this increase was a 27.8% increase in the combined average prices we received for the natural gas and crude oil produced. These increases were partially offset by increases in general and administrative costs, such as salaries and wages.

Investing Activities.  Cash flows used in investing activities increased to $419.0 million in the three month period ended March 31, 2008 from $182.5 million in the comparable 2007 period as we continued to ramp up our capital expenditure program. For the three month period ended March 31, 2008, our capital expenditures were $354.8 million in our exploration and production segment, $17.9 million for drilling and oil field services, $38.7 million for midstream gas services and $7.2 million for other capital expenditures. During the same period in 2007, capital expenditures were $127.6 million in our exploration and production segment, $41.2 million for drilling and oil field services, $9.5 million for midstream gas services and $2.7 million for other capital expenditures.

Financing Activities.  Since December 2005, we have used equity issuances, borrowings and, to a lesser extent, our cash flows from operations to fund our rapid growth. Proceeds from borrowings decreased to $340.2 million for the three months ended March 31, 2008, and we repaid approximately $128.9 million leaving net borrowings during the period of approximately $211.3 million. Our financing activities provided $199.9 million in cash for the three month period ended March 31, 2008 compared to $293.1 million in the comparable period in 2007.

Credit Facilities and Other Indebtedness

Senior Credit Facility.  On November 21, 2006, we entered into a new $750.0 million senior secured revolving credit facility (the “senior credit facility”) with Bank of America, N.A., as Administrative Agent. The senior credit facility matures on November 21, 2011 and is available to be drawn on and repaid without restriction so long as we are in compliance with its terms, including certain financial covenants. The initial proceeds of the senior credit facility were used to (i) partially finance the NEG acquisition, (ii) refinance our existing senior secured revolving credit facility and NEG’s existing credit facility, and (iii) pay fees and expenses related to the NEG acquisition and our existing credit facility.

The senior credit facility contains various covenants that limit our and certain of our subsidiaries’ ability to grant certain liens; make certain loans and investments; make distributions; redeem stock; redeem or prepay debt; merge or consolidate with or into a third party; or engage in certain asset dispositions, including a sale of all or substantially all of our assets. Additionally, the senior credit facility limits our and certain of our subsidiaries’ ability to incur additional indebtedness.

The senior credit facility also contains financial covenants, including maintenance of agreed upon levels for (i) the ratio of total funded debt to EBITDAX (as defined in the senior credit facility), which may not exceed 4.5:1.0 calculated using the last fiscal quarter on an annualized basis as of the end of fiscal quarters ending on or before September 30, 2008 and calculated using the last four completed fiscal quarters thereafter, (ii) the ratio of EBITDAX to interest expense plus current maturities of long-term debt, which must be at least 2.5:1.0 calculated using the last four completed fiscal quarters, and (iii) the current ratio, which must be at least 1.0:1.0. As of March 31, 2008, we were in compliance with all of the covenants under the senior credit facility.

The obligations under the senior credit facility are secured by first priority liens on all shares of capital stock of each of our present and future subsidiaries; all intercompany debt of us and our subsidiaries; and substantially all of our assets and the assets of our guarantor subsidiaries, including proved natural gas and crude oil reserves representing at least 80% of the present discounted value (as defined in the senior credit facility) of our proved natural gas and crude oil reserves reviewed in determining the borrowing base for the senior credit facility (as determined by the administrative agent). Additionally, the obligations under the senior credit facility are guaranteed by certain of our subsidiaries.

The borrowing base is subject to review semi-annually; however, the lenders reserve the right to have one additional redetermination of the borrowing base per calendar year. Unscheduled redeterminations may be made at our request, but are limited to one request per year. The borrowing base is determined based on proved developed

32

producing reserves, proved developed non-producing reserves and proved undeveloped reserves and was $700.0 million as of March 31, 2008. As of March 31, 2008, we had outstanding indebtedness of $237.7 million under our senior credit facility, including outstanding letters of credit of $22.7 million. The committed loan amount for the facility was increased to $1.75 billion and the borrowing base was increased to $1.2 billion during April 2008. As of May 5, 2008, the balance outstanding under our senior credit facility was $410.0 million.

At our election, interest under the senior credit facility is determined by reference to (i) LIBOR plus an applicable margin between 1.25% and 2.00% per annum or (ii) the higher of the federal funds rate plus 0.5% or the prime rate plus, in either case, an applicable margin between 0.25% and 1.00% per annum. Interest is payable quarterly for prime rate loans and at the applicable maturity date for LIBOR loans, except that if the interest period for a LIBOR loan is six months, interest is paid at the end of each three-month period. The average interest rate paid on amounts outstanding under our senior credit facility for the three month period ended March 31, 2008 was 4.57%.

Senior Term Loans.  On March 22, 2007, we issued $1.0 billion principal amount of senior unsecured term loans. The proceeds of the term loans were used to partially repay the senior bridge facility described below. The senior term loans include both a floating rate tranche and fixed rate tranche as described below.

We issued $350.0 million at a variable rate with interest payable quarterly and principal due on April 1, 2014 (the “variable rate term loans”). The variable rate term loans bear interest, at our option, at LIBOR plus 3.625% or the higher of (i) the federal funds rate, as defined, plus 3.125% or (ii) a bank’s prime rate plus 2.625%. After April 1, 2009, the variable rate term loans may be prepaid in whole or in part with a prepayment penalty. The average interest rates paid on amounts outstanding under our variable rate term loans for the three month period ended March 31, 2008 was 8.36%. In January 2008, we entered into a $350 million notional amount interest rate swap agreement with a financial institution that effectively fixed our interest rate on the variable rate term loans at 6.2625% for the period from April 1, 2008 to April 1, 2011.

We also issued $650.0 million at a fixed rate of 8.625% with principal due on April 1, 2015 (the “fixed rate term loans”). Under the terms of the fixed rate term loans, interest is payable quarterly and during the first four years interest may be paid, at our option, either entirely in cash or entirely with additional fixed rate term loans. If we elect to pay the interest due during any period in additional fixed rate term loans, the interest rate increases to 9.375% during such period. After April 1, 2011, the fixed rate term loans may be prepaid in whole or in part with prepayment penalties.

On March 28, 2008, we commenced an offer to exchange the senior term loans for senior unsecured notes with registration rights, as required under the senior term loan credit agreement. The offer expired on April 28, 2008, and on May 1, 2008, we issued $650.0 million of Senior Notes due 2015 in exchange for an equal outstanding principal amount of fixed rate term loans and $350.0 million of Senior Floating Rate Notes due 2014 in exchange for an equal outstanding principal amount of variable rate term loans. The newly issued senior notes have terms that are substantially identical to those of the exchanged senior term loans, except that the senior notes have been issued with registration rights.

Debt covenants under the senior term loans include financial covenants similar to those of the senior credit facility and include limitations on the incurrence of indebtedness, payment of dividends, asset sales, certain asset purchases, transactions with related parties and consolidation or merger agreements. We incurred $26.1 million of debt issuance costs in connection with the senior term loans. These costs are included in other assets and amortized over the term of the senior term loans.

Other Indebtedness.  We have financed a portion of our drilling rig fleet and related oil field services equipment through notes payable. At March 31, 2008, the aggregate outstanding balance of these notes was $44.3 million, with annual fixed interest rates ranging from 7.64% to 8.87%. The notes have a final maturity date of December 1, 2011, require aggregate monthly installments for principal and interest in the amount of $1.2 million and are secured by the equipment. The notes have a prepayment penalty (currently ranging from 1 to 3%) that is triggered if we repay the notes prior to maturity.

Building Mortgage.  On November 15, 2007, we entered into a $20.0 million note payable which is fully secured by one of the buildings and a parking garage located on our property in downtown Oklahoma City,

33

Oklahoma which we purchased in July 2007 to serve as its corporate headquarters. The mortgage bears interest at 6.08% per annum, and matures on November 15, 2022. Payments of principal and interest in the amount of approximately $0.5 million are due on a quarterly basis through the maturity date. We expect to make payments of principal and interest on this note totaling $0.8 million and $1.2 million, respectively, over the next twelve months.

We have financed the purchase of other equipment used in our business. At March 31, 2007, the aggregate outstanding balance on these financings was $6.8 million. We substantially repaid such borrowings during July 2007 with borrowings under our senior credit facility.

Senior Bridge Facility.  On November 21, 2006, we entered into an $850.0 million senior unsecured bridge facility in conjunction with the acquisition of NEG. This facility was repaid in full in March 2007 with proceeds from our senior unsecured term loans.

Redeemable Convertible Preferred Stock

We had 1,844,464 shares of redeemable convertible preferred stock issued and outstanding at March 31, 2008. Each holder of our redeemable convertible preferred stock is entitled to quarterly cash dividends at the annual rate of 7.75% of the accreted value of its redeemable convertible preferred stock. At our option, we may choose to increase the accreted value of the redeemable convertible preferred stock in lieu of paying any quarterly cash dividend. We have paid all dividends in cash, including $33.3 million in 2007 and $9.5 million in the first quarter of 2008. The accreted value was $210 per share as of March 31, 2008 and each share of redeemable convertible preferred stock was convertible into approximately 10.2 shares of common stock at the option of the holder, subject to certain anti-dilution adjustments. During March 2008, holders of 339,823 shares of our redeemable convertible preferred stock elected to convert those shares into 3,465,593 shares of our common stock. In May 2008, we converted the remaining outstanding 1,844,464 shares of our redeemable convertible preferred stock into 18,810,260 shares of our common stock as permitted under the terms of the redeemable convertible preferred stock. This conversion resulted in a one-time charge to retained earnings of $6.1 million in accelerated accretion expense related to the converted redeemable convertible preferred shares. Prorated dividends totaling $0.5 million for the period from May 2, 2008 to the date of conversion (May 7, 2008) were paid to the holders of the converted shares on May 7, 2008.

ITEM 3.   Quantitative and Qualitative Disclosures About Market Risk

General

The discussion in this section provides information about the financial instruments we use to manage commodity price and interest rate volatility. All contracts are financial contracts, which are settled in cash and do not require the delivery of a physical quantity to satisfy settlement.

Commodity Price Risk.  Our most significant market risk is the prices we receive for our natural gas and crude oil production. In light of the historical volatility of these commodities, we periodically have entered into, and expect in the future to enter into, derivative arrangements aimed at reducing the variability of natural gas and crude oil prices we receive for our production. From time to time, we enter into commodities pricing derivative contracts for a portion of our anticipated production volumes depending upon our management’s view of opportunities under the then current market conditions. We do not intend to enter into derivative contracts that would exceed our expected production volumes for the period covered by the derivative arrangement. Our current credit agreement limits our ability to enter into derivatives transactions to 85% of expected production volumes from estimated proved reserves. Future credit agreements could require a minimum level of commodity price hedging.

We use, or may use, a variety of commodity-based derivative contracts, including collars, fixed-price swaps and basis protection swaps. These transactions generally require no cash payment upfront and are settled in cash at maturity. While our derivative strategy may result in lower operating profits than if we were not party to these derivative contracts in times of high natural gas prices, we believe that the stabilization of prices and protection afforded us by providing a revenue floor for our production is very beneficial.

For natural gas derivatives, transactions are settled based upon the New York Mercantile Exchange price of natural gas at the Waha hub, a West Texas gas marketing and delivery center, on the final trading day of each month.

34

Settlement for natural gas derivative contracts occurs in the month following the production month. Generally, our trade counterparties are affiliates of the financial institution that is a party to our credit agreement, although we do have transactions with counterparties that are not affiliated with this institution.

While we believe that the natural gas and crude oil price derivative arrangements we enter into are important to our program to manage price variability for our production, we have not designated any of our derivative contracts as hedges for accounting purposes. We record all derivative contracts on the balance sheet at fair value, which reflects changes in natural gas and crude oil prices. We establish fair value of our derivative contracts by market price quotations of the derivative contract or, if not available, market price quotations obtained from counterparties. Changes in fair values of our derivative contracts that are not designated as hedges for accounting purposes are recognized as unrealized gains and losses in current period earnings. As a result, our current period earnings may be significantly affected by changes in fair value of our commodities derivative arrangements. Changes in fair value are principally measured based on period end prices as compared to the contract price.

The following table summarizes the cash settlements and valuation gains and losses on our natural gas and crude oil commodity derivative contracts for the three months ended March 31, 2008 and 2007:

	Three Months Ended
	March 31,
	2008			2007
	(In thousands)
Realized (gain) loss	$	(7,329	)	$	1,519
Unrealized loss		144,173			21,662
Loss on derivative contracts	$	136,844		$	23,181

At March 31, 2008, our open natural gas and crude oil commodity derivative contracts consisted of the following:

Natural Gas

	Notional		Weighted Avg.
Period and Type of Contract	(in MMBtus)		Fixed Price
April 2008 — June 2008
Price swap contracts		17,900	$	7.69
Basis swap contracts		13,350	$	(0.59	)
July 2008 — September 2008
Price swap contracts		18,100	$	8.23
Basis swap contracts		15,640	$	(0.57	)
October 2008 — December 2008
Price swap contracts		17,480	$	8.67
Basis swap contracts		14,720	$	(0.65	)
January 2009 — March 2009
Price swap contracts		6,300	$	9.12
Basis swap contracts		2,700	$	(0.49	)
April 2009 — June 2009
Price swap contracts		910	$	8.10
Basis swap contracts		2,730	$	(0.49	)
July 2009 — September 2009
Basis swap contracts		2,760	$	(0.49	)
October 2009 — December 2009
Basis swap contracts		2,760	$	(0.49	)

35

	Notional		Weighted Avg.
Period and Type of Contract	(in MMBtus)		Fixed Price
January 2011 — March 2011
Basis swap contracts		1,350	$	(0.47	)
April 2011 — June 2011
Basis swap contracts		1,365	$	(0.47	)
July 2011 — September 2011
Basis swap contracts		1,380	$	(0.47	)
October 2011 — December 2011
Basis swap contracts		1,380	$	(0.47	)

Crude Oil

	Notional		Weighted Avg.
Period and Type of Contract	(in MBbls)		Fixed Price
April 2008 — June 2008
Price swap contracts		270	$	95.04
Collar contracts		21	$	50.00 — 83.35
July 2008 — September 2008
Price swap contracts		225	$	94.33
Collar contracts		27	$	50.00 — 82.60
October 2008 — December 2008
Price swap contracts		225	$	93.17
Collar contracts		27	$	50.00 — 82.60

These derivatives have not been designated as hedges and the Company records all derivatives on the balance sheet at fair value. Changes in derivative fair values are recognized in earnings. Cash settlements and valuation gains and losses on commodity derivative contracts are included in loss on derivative contracts in the consolidated statements of operations.

Interest Rate Risk.  We are subject to interest rate risk on our long-term fixed and variable interest rate borrowings. Fixed rate debt, where the interest rate is fixed over the life of the instrument, exposes us to (i) changes in market interest rates reflected in the fair value of the debt and (ii) the risk that we may need to refinance maturing debt with new debt at a higher rate. Variable rate debt, where the interest rate fluctuates, exposes us to short-term changes in market interest rates as our interest obligations on these instruments are periodically redetermined based on prevailing market interest rates, primarily LIBOR and the federal funds rate.

We use sensitivity analysis to determine the impact that market risk exposures may have on our variable interest rate borrowings. Based on the approximately $350.0 million outstanding balance of the variable rate portion of our senior term loans at March 31, 2008, and $215.0 million outstanding balance on our senior credit facility a one percent change in the applicable rates, with all other variables held constant, would result in a change in our interest expense of approximately $1.4 million for the three months ended March 31, 2008.

In addition to commodity price derivative arrangements, we may enter into derivative transactions to fix the interest we pay on a portion of the money we borrow under our credit agreements. At March 31, 2008, we did not have any interest rate swap contracts in effect. In January 2008, we entered into a $350.0 million notional amount interest rate swap agreement with a financial institution that effectively fixed our interest rate on the variable rate term loans at 6.2625% for the period from April 1, 2008 through April 1, 2011. This swap has not been designated as a hedge.

An unrealized gain of $0.8 million was recorded in interest expense in the condensed consolidated statement of operation for the change in fair value of the interest rate swap for the three months ended March 31, 2008.

36

ITEM 4.  Controls and Procedures

We performed an evaluation, under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures pursuant to Exchange Act Rules 13a-15 and 15d-15 as of the end of the period covered by this report. Based on that evaluation, our Chief Executive Officer and our Chief Financial Officer concluded that our disclosure controls and procedures were effective to provide reasonable assurance that the information required to be disclosed by us in our reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the Securities and Exchange Commission, and such information is accumulated and communicated to management, as appropriate to allow timely decisions regarding required disclosure.

There were no changes in our internal control over financial reporting during the quarter ended March 31, 2008 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II. Other Information

ITEM 1.   Legal Proceedings

The Company is a defendant in lawsuits from time to time in the normal course of business. In management’s opinion, the Company is not currently involved in any legal proceedings which, individually or in the aggregate, could have a material adverse effect on its results of operations, financial condition or cash flows.

ITEM 1A.   Risk Factors

There have been no material changes to the risk factors previously disclosed in Item 1A — Risk Factors in our 2007 Form 10-K.

ITEM 2.   Unregistered Sales of Equity Securities and Use of Proceeds

As part of our restricted stock program, we make required tax payments on behalf of employees as their stock awards vest and then withhold a number of vested shares having a value on the date of vesting equal to the tax obligation. The shares withheld are recorded as treasury shares. During the quarter ended March 31, 2008, the following shares were withheld in satisfaction of tax withholding obligations arising from the vesting of restricted stock:

					Total Number of		Maximum Number
					Shares Purchased		of Shares that May
	Total Number		Average		as Part of Publicly		Yet Be Purchased
	of Shares		Price Paid		Announced Plans		Under the Plans
Period	Purchased		per Share		or Programs		or Programs
January 1, 2008 — January 31, 2008		36,218	$	32.81		N/A		N/A
February 1, 2008 — February 29, 2008		779		36.00		N/A		N/A
March 1, 2008 — March 31, 2008		992		37.96		N/A		N/A

ITEM 6.   Exhibits

See the Exhibit Index accompanying this report.

37

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

SandRidge Energy, Inc.

By:   /s/ Dirk M. Van Doren

Dirk M. Van Doren

Executive Vice President and

Chief Financial Officer

Date: May 8, 2008

38

EXHIBIT INDEX

				Filed Herewith (*) or
Exhibit				Incorporated by	File
Number			Description	Reference to Exhibit No.	Number
	3	.1	Certificate of Incorporation	3.1 to Registration Statement on Form S-1 filed on January 30, 2008	333-148956
	3	.2	Certificate of Designation of convertible preferred stock	3.2 to Registration Statement on Form S-1 filed on January 30, 2008	333-148956
	3	.3	Bylaws	*
	4	.1	Indenture dated as of May 1, 2008 among SandRidge Energy, Inc. and the several guarantors named therein, and Wells Fargo Bank, National Association, as trustee	4.1 to Current Report on Form 8-K filed on May 1, 2008	1-33784
	4	.2	Registration Rights Agreement dated as of May 1, 2008 among SandRidge Energy, Inc. and the several guarantors named therein for the benefit of the holders of the Company’s Senior Notes Due 2015 and the Company’s Senior Floating Rate Notes Due 2014	4.2 to Current Report on Form 8-K filed on May 1, 2008	1-33784
	10	.5.2†	Employment Agreement of Dirk M. Van Doren, effective January 1, 2008	*
	10	.5.3†	Employment Agreement of Matthew K. Grubb, effective January 1, 2008	*
	10	.5.4†	Employment Agreement of Todd N. Tipton, effective January 1, 2008	*
	10	.5.5†	Employment Agreement of Larry K. Coshow, effective January 1, 2008	*
	10	.5.6†	Form of Employment Agreement for Senior Vice Presidents	*
	10	.5.7†	Employment Separation Agreement of Larry K. Coshow, dated April 14, 2008	*
	10	.7.3	Amendment No. 3, dated September 14, 2007, to Senior Credit Facility, dated November 21, 2006, by and among SandRidge Energy, Inc. (as successor by merger to Riata Energy, Inc.) and Bank of America, N.A., as Administrative Agent and Banc of America Securities LLC as Lead Arranger and Book Running Manager	*
	10	.7.4	Amendment No. 4, dated April 4, 2008, to Senior Credit Facility, dated November 21, 2006, by and among SandRidge Energy, Inc. (as successor by merger to Riata Energy, Inc.) and Bank of America, N.A., as Administrative Agent and Banc of America Securities LLC as Lead Arranger and Book Running Manager	*
	31	.1	Section 302 Certification — Chief Executive Officer	*
	31	.2	Section 302 Certification — Chief Financial Officer	*
	32	.1	Section 906 Certifications of Chief Executive Officer and Chief Financial Officer	*

† Management contract or compensatory plan or arrangement

EX-3.3

AMENDED AND RESTATED BYLAWS

OF

SANDRIDGE ENERGY, INC.

A Delaware Corporation

TABLE OF CONTENTS

Article I. Registered Office		1
Article II. Stockholders		1
	Section 1. Place of Meetings	1
	Section 2. Quorum; Required Vote for Stockholder Action; Adjournment of Meetings	1
	Section 3. Annual Meetings	2
	Section 4. Special Meetings	2
	Section 5. Record Date	2
	Section 6. Notice of Meetings	3
	Section 7. Voting List	3
	Section 8. Proxies	3
	Section 9. Voting; Elections; Inspectors	4
	Section 10. Conduct of Meetings	4
	Section 11. Notice of Stockholder Business and Nominations	4
	Section 12. Action by Written Consent of Stockholders	7
Article III. Board of Directors		7
	Section 1. Power; Number; Classification; Term of Office; Election Procedures	7
	Section 2. Quorum; Required Vote for Director Action	8
	Section 3. Meeting; Order of Business	8
	Section 4. First Meeting	9
	Section 5. Regular Meetings	9
	Section 6. Special Meetings	9
	Section 7. Compensation	9
	Section 8. Telephonic Meetings Permitted	9
	Section 9. Action by Unaminous Consent of Directors	9
Article IV. Committees		9
	Section 1. Designation; Powers	9
	Section 2. Procedure; Meetings; Quorum	10
	Section 3. Substitution of Members	10
	Section 4. Dissolution	10
Article V. Officers		10
	Section 1. Number, Titles and Term of Office	10
	Section 2. Salaries	10
	Section 3. Removal	10
	Section 4. Vacancies	10
	Section 5. Powers and Duties of the Chief Executive Officer	11
	Section 6. Powers and Duties of the Chairman of the Board	11

	Section 7. Powers and Duties of the President	11
	Section 8. Vice Presidents	11
	Section 9. Treasurer	11
	Section 10. Assistant Treasurers	11
	Section 11. Secretary	12
	Section 12. Assistant Secretaries	12
	Section 13. Action With Respect to Securities of Other Corporations	12
Article VI. Indemnification of Directors, Officers, Employees and Agents		12
	Section 1. Right to Indemnification	12
	Section 2. Advance Payment	13
	Section 3. Indemnification of Employees and Agents	13
	Section 4. Appearance as a Witness	13
	Section 5. Nonexclusivity of Rights	14
	Section 6. Insurance	14
	Section 7. Claims	14
	Section 8. Savings Clause	14
Article VII. Capital Stock		14
	Section 1. Certificates of Stock	14
	Section 2. Transfer of Shares	15
	Section 3. Ownership of Shares	15
	Section 4. Regulations Regarding Certificates	15
	Section 5. Lost, Stolen, Destroyed or Mutilated Certificates	15
Article VIII. Miscellaneous Provisions		16
	Section 1. Fiscal Year	16
	Section 2. Corporate Seal	16
	Section 3. Notice and Waiver of Notice	16
	Section 4. Resignations	16
	Section 5. Facsimile Signatures	16
	Section 6. Books and Records	16
	Section 7. Reliance Upon Books, Reports and Records	17
Article IX. Amendments		17

AMENDED AND RESTATED BYLAWS

OF

SANDRIDGE ENERGY, INC.

A Delaware Corporation

Article I.

Registered Office

     The registered office of the SandRidge Energy, Inc. (the “Corporation”) required by the General Corporation Law of the State of Delaware (the “General Corporation Law”) to be maintained in the State of Delaware shall be the registered office named in the original Certificate of Incorporation of the Corporation or such other office (which need not be a place of business of the Corporation) as may be designated from time to time by the Board of Directors in the manner provided by law.

Article II.

Stockholders

     Section 1. Place of Meetings. All meetings of the stockholders shall be held at the principal place of business of the Corporation or at such other place within or without the State of Delaware as shall be specified or fixed in the notices or waivers of notice thereof.

     Section 2. Quorum; Required Vote for Stockholder Action; Adjournment of Meetings. Unless otherwise required by law or provided in the Certificate of Incorporation or these Bylaws, the holders of issued and outstanding shares representing a majority of the votes entitled to be cast thereat, present in person or represented by proxy, shall constitute a quorum at any meeting of stockholders for the transaction of business, and the act of a majority of the voting power of such stock so represented at any meeting of stockholders at which a quorum is present shall constitute the act of the meeting of stockholders.

     Notwithstanding the other provisions of the Certificate of Incorporation or these Bylaws, the chairman of the meeting or the holders of a majority of the voting power of the issued and outstanding stock present in person or represented by proxy at any meeting of stockholders, whether or not a quorum is present, shall have the power to adjourn such meeting from time to time, without any notice other than announcement at the meeting of the time and place of the holding of the adjourned meeting. At such adjourned meeting any business may be transacted that might have been transacted at the meeting as originally called. If the adjournment is for more than thirty (30) days, or if after the adjournment a new record date is fixed for the adjourned meeting, notice of the adjourned meeting shall be given to each stockholder of record entitled to vote at the meeting.

     Section 3. Annual Meetings. An annual meeting of the stockholders, for the election of directors to succeed those whose terms expire and for the transaction of such other business as may properly come before the meeting, shall be held at such place, within or without the State of Delaware, on such date and at such time as the Board of Directors shall fix and set forth in the notice of the meeting, which date shall be within 13 months subsequent to the date of incorporation or the last annual meeting of stockholders, whichever most recently occurred.

     Section 4. Special Meetings. Unless otherwise provided in the Certificate of Incorporation, special meetings of the stockholders for any proper purpose or purposes may be called at any time by (a) the Chairman of the Board (if any), the President, the Board of Directors, or such other person or persons as may be authorized in the Certificate of Incorporation or (b) unless the Certificate of Incorporation provides otherwise, the holders of issued and outstanding shares representing at least fifty percent of all the votes entitled to be cast at the proposed special meeting.

     Only business within the purpose or purposes described in the notice (or waiver thereof) required by these Bylaws may be conducted at a special meeting of the stockholders.

     Section 5. Record Date. In order that the Corporation may determine the stockholders entitled to notice of or to vote at any meeting of stockholders or any adjournment thereof, or to express consent to corporate action in writing without a meeting, or entitled to receive payment of any dividend or other distribution or allotment of any rights, or entitled to exercise any rights in respect of any change, conversion or exchange of stock or for the purpose of any other lawful action, the Board of Directors may fix a record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted by the Board of Directors, and which record date: (1) in the case of determination of stockholders entitled to vote at any meeting of stockholders or adjournment thereof, shall, unless otherwise required by law, not be more than sixty (60) nor less than ten (10) days before the date of such meeting; (2) in the case of determination of stockholders entitled to express consent to corporate action in writing without a meeting, shall not be more than ten (10) days from the date upon which the resolution fixing the record date is adopted by the Board of Directors; and (3) in the case of any other action, shall not be more than sixty (60) days prior to such other action. If no record date is fixed; (1) the record date for determining stockholders entitled to notice of or to vote at a meeting of stockholders shall be at the close of business on the day next preceding the day on which notice is given, or, if notice is waived, at the close of business on the day next preceding the day on which the meeting is held; (2) the record date for determining stockholders entitled to express consent to corporate action in writing without a meeting, when no prior action of the Board of Directors is required by law, shall be the first date on which a signed written consent setting forth the action taken or proposed to be taken is delivered to the corporation in accordance with applicable law, or, if prior action by the Board of Directors is required by law, shall be at the close of business on the day on which the Board of Directors adopts the resolution taking such prior action; and (3) the record date for determining stockholders for any other purpose shall be at the close of business on the day on which the Board of Directors adopts the resolution relating thereto. A determination of stockholders of record entitled to notice of or to vote at a meeting of stockholders shall apply to any adjournment of the meeting; provided, however, that the Board of Directors may fix a new record date for the adjourned meeting.

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     Section 6. Notice of Meetings. Unless otherwise provided by law, notice stating the place, day and hour of the meeting and, in the case of a special meeting, the purpose or purposes for which the meeting is called, shall be given not less than ten nor more than 60 days before the date of the meeting by or at the direction of the President, the Secretary or the officer or person calling the meeting, to each stockholder of record entitled to vote at such meeting. If mailed, any such notice shall be deemed to be delivered when deposited in the United States mail, addressed to the stockholder at his address as it appears on the stock transfer books of the Corporation, with postage thereon prepaid.

     Any notice required to be given to any stockholder, under any provision of the General Corporation Law or the Certificate of Incorporation or these Bylaws need not be given to the stockholder if (a) notice of two consecutive annual meetings and all notices of meetings or the taking of action by written consent without a meeting to such person during the period between those annual meetings, or (b) all (but in no event less than two) payments of distributions or interest on securities during a 12-month period have been mailed to that person by first-class mail, addressed to him at his address as shown on the records of the Corporation, and have been returned undeliverable. Any action or meeting taken or held without notice to such person shall have the same force and effect as if the notice had been duly given and, if the action taken by the Corporation is reflected in any document filed with the Secretary of State, such document may state that notice was duly given to all persons to whom notice was required to be given. If such a person delivers to the Corporation written notice setting forth his then current address, the requirement that notice be given to that person shall be reinstated.

     Section 7. Voting List. The officer who has charge of the stock ledger of the Corporation shall make, at least ten days before each meeting of stockholders, a complete list of the stockholders entitled to vote at such meeting or any adjournment thereof, arranged in alphabetical order, with the address of and the number of shares held by each, which list, for a period of ten days prior to such meeting, shall be open to examination of any stockholder (i) on a reasonably accessible electronic network, provided that the information required to gain access to such list is provided with the notice of meeting or (ii) during ordinary business hours at the principal place of business of the Corporation. Such list shall also be produced and kept open at the time and place of the meeting and shall be subject to the inspection of any stockholder during the whole time of the meeting. Except as otherwise provided by law, the stock ledger shall be the only evidence as to who are the stockholders entitled to examine the list of stockholders required by this Section 7 or to vote in person or by proxy at any meeting of stockholders.

     Section 8. Proxies. Except as otherwise provided by or pursuant to the provisions of the certificate of incorporation, each stockholder entitled to vote at any meeting of stockholders shall be entitled to one vote for each share of stock held by such stockholder which has voting power upon the matter in question. Each stockholder entitled to vote at a meeting of stockholders or to express consent to corporate action in writing without a meeting may authorize another person or persons to act for such stockholder by proxy, but no such proxy shall be voted or acted upon after three years from its date, unless the proxy provides for a longer period. No proxy shall be valid after three years from the date of its execution unless otherwise provided in the proxy. A proxy shall be revocable unless the proxy form conspicuously states that the proxy is irrevocable and the proxy is coupled with an interest sufficient in law to support an irrevocable power.

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     Section 9. Voting; Elections; Inspectors. Unless otherwise required by law or provided in the Certificate of Incorporation, each outstanding share, regardless of class, shall be entitled to one vote on each matter submitted to a vote at a meeting of stockholders.

     All voting, except as required by the Certificate of Incorporation or where otherwise required by law, may be by a voice vote; provided, however, that a vote by ballot shall be taken upon demand therefor by stockholders holding issued and outstanding shares representing a majority of the voting power present in person or by proxy at any meeting. Every vote by ballot shall be taken by written ballots, each of which shall state the name of the stockholder or proxy voting and such other information as may be required under the procedure established for the meeting.

     At any meeting at which a vote is taken by ballots, the chairman of the meeting may appoint one or more inspectors, each of whom shall subscribe an oath or affirmation to execute faithfully the duties of inspector at such meeting with strict impartiality and according to the best of his ability. Such inspector shall receive the ballots, count the votes and make and sign a certificate of the result thereof. The chairman of the meeting may appoint any person to serve as inspector, except no candidate for the office of director shall be appointed as an inspector.

     At each election of directors each stockholder entitled to vote thereat shall, unless otherwise provided by law or by the Certificate of Incorporation, have the right to vote the number of shares owned by him for as many persons as there are to be elected and for whose election he has a right to vote. No stockholder shall have the right to cumulate his votes.

     At all meetings of stockholders for the election of directors at which a quorum is present, a plurality of the votes cast shall be sufficient to elect. All other elections and questions presented to the stockholders at a meeting at which a quorum is present, shall, unless otherwise provided by the Certificate of Incorporation, these Bylaws, the rules or regulations of any stock exchange applicable to the Corporation, or applicable law or pursuant to any regulation applicable to the Corporation or its securities, be decided by the affirmative vote of the holders of a majority in voting power of the shares of stock of the Corporation which are present in person or by proxy and entitled to vote thereon.

     Section 10. Conduct of Meetings. All meetings of the stockholders shall be presided over by the chairman of the meeting, who shall be the Chairman of the Board (if any), or if he is not present, the President, or if neither the Chairman of the Board (if any) nor President is present, a chairman elected at the meeting. The Secretary of the Corporation, if present, shall act as secretary of such meetings, or if he is not present, an Assistant Secretary (if any) shall so act; if neither the Secretary nor an Assistant Secretary (if any) is present, then a secretary shall be appointed by the chairman of the meeting. The chairman of any meeting of stockholders shall determine the order of business and the procedure at the meeting, including such regulation of the manner of voting and the conduct of discussion as seem to him in order.

     Section 11. Notice of Stockholder Business and Nominations

     (a) Annual Meetings of Stockholders. (1) Nominations of persons for election to the Board of Directors of the Corporation and the proposal of business to be considered by the

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stockholders may be made at an annual meeting of stockholders (a) pursuant to the Corporation’s notice of meeting, (b) by or at the direction of the Board of Directors or (c) by any stockholder of the Corporation who was a stockholder of record at the time of giving of notice provided for in this Bylaw, who is entitled to vote at such meeting and who complies with the notice procedures set forth in this Bylaw.

          (2) For nominations or other business to be properly brought before an annual meeting by a stockholder pursuant to clause (c) of paragraph (a)(1) of Section 11 of this Bylaw, the stockholder must have given timely notice thereof in writing to the Secretary of the Corporation and such other business must otherwise be a proper matter for stockholder action. To be timely, a stockholder’s notice shall be delivered to the Secretary at the principal executive offices of the Corporation not later than the close of business on the 90th day, nor earlier than the close of business on the 120th day, prior to the first anniversary of the preceding year’s annual meeting; provided, however, that in the event that the date of the annual meeting is more than 30 days before or more than 60 days after such anniversary date, notice by the stockholder to be timely must be so delivered not earlier than the close of business on the 120th day prior to such annual meeting and not later than the close of business on the later of the 90th day prior to such annual meeting or the 10th day following the day on which public announcement of the date of such meeting is first made by the Corporation. In no event shall the public announcement of an adjournment of an annual meeting commence a new time period for the giving of a stockholder’s notice as described above. Such stockholder’s notice shall set forth (a) as to each person whom the stockholder proposes to nominate for election or reelection as a director all information relating to such person that is required to be disclosed in solicitations of proxies for election of directors in an election contest, or is otherwise required, in each case pursuant to Regulation 14A under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and Rule 14a-l1 thereunder (including such person’s written consent to being named in the proxy statement as a nominee and to serving as a director if elected); (b) as to any other business that the stockholder proposes to bring before the meeting, a brief description of the business desired to be brought before the meeting, the reasons for conducting such business at the meeting and any material interest in such business of such stockholder and the beneficial owner, if any, on whose behalf the proposal is made; and (c) as to the stockholder giving the notice and the beneficial owner, if any, on whose behalf the nomination or proposal is made (i) the name and address of such stockholder, as they appear on the Corporation’s books, and of such beneficial owner and (ii) the class or series and number of shares of the Corporation which are owned beneficially and of record by such stockholder and such beneficial owner.

          (3) Notwithstanding anything in the second sentence of paragraph (a)(2) of Section 11 of this Bylaw to the contrary, in the event that the number of directors to be elected to the Board of Directors of the Corporation is increased and there is no public announcement by the Corporation naming all of the nominees for director or specifying the size of the increased Board of Directors at least 100 days prior to the first anniversary of the preceding year’s annual meeting, a stockholder’s notice required by this Bylaw shall also be considered timely, but only with respect to nominees for any new positions created by such increase, if it shall be delivered to the Secretary at the principal executive offices of the Corporation not later than the close of business on the 10th day following the day on which such public announcement of the increased Board is first made by the Corporation.

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     (b) Special Meetings of Stockholders. Only such business shall be conducted at a special meeting of stockholders as shall have been brought before the meeting pursuant to the Corporation’s notice of meeting. Nominations of persons for election to the Board of Directors may be made at a special meeting of stockholders at which directors are to be elected pursuant to the Corporation’s notice of meeting (1) by or at the direction of the Board of Directors or (2) provided that the Board of Directors has determined that directors shall be elected at such meeting, by any stockholder of the Corporation who is a stockholder of record at the time of giving of notice provided for in this Bylaw, who shall be entitled to vote at the meeting and who complies with the notice procedures set forth in this Bylaw. In the event the Corporation calls a special meeting of stockholders for the purpose of electing one or more directors to the Board of Directors, any such stockholder may nominate a person or persons (as the case may be), for election to such position(s) as specified in the Corporation’s notice of meeting, if the stockholder’s notice required by paragraph (a)(2) of this Bylaw shall be delivered to the Secretary at the principal executive offices of the Corporation not earlier than the close of business on the 120th day prior to such special meeting and not later than the close of business on the later of the 90th day prior to such special meeting or the 10th day following the day on which public announcement is first made of the date of the special meeting and of the nominees proposed by the Board of Directors to be elected at such meeting. In no event shall the public announcement of an adjournment of a special meeting commence a new time period (or extend any time period) for the giving of a stockholder’s notice as described above.

     (c) General. (1) Only such persons who are nominated in accordance with the procedures set forth in this Bylaw shall be eligible to serve as directors, and only such business shall be conducted at a meeting of stockholders as shall have been brought before the meeting in accordance with the procedures set forth in this Bylaw. Except as otherwise provided by law, the Certificate of Incorporation or these Bylaws, the chairman of the meeting shall have the power and duty to determine whether a nomination or any business proposed to be brought before the meeting was made or proposed, as the case may be, in accordance with the procedures set forth in this Bylaw and, if any proposed nomination or business is not in compliance with this Bylaw, to declare that such defective proposal or nomination shall be disregarded. Notwithstanding the foregoing provisions of this Section 11, unless otherwise required by law, if the stockholder (or a qualified representative of the stockholder) does not appear at the annual or special meeting of stockholders of the corporation to present a nomination or proposed business, such nomination shall be disregarded and such proposed business shall not be transacted, notwithstanding that proxies in respect of such vote may have been received by the corporation. For purposes of this Section 11, to be considered a qualified representative of the stockholder, a person must be authorized by a writing executed by such stockholder or an electronic transmission delivered by such stockholder to act for such stockholder as proxy at the meeting of stockholders and such person must produce such writing or electronic transmission, or a reliable reproduction of the writing or electronic transmission, at the meeting of stockholders.

          (2) For purposes of this Bylaw, “public announcement” shall mean disclosure in a press release reported by the Dow Jones News Service, Associated Press or comparable national news service or in a document publicly filed by the Corporation with the Securities and Exchange Commission pursuant to Section 13, 14 or 15(d) of the Exchange Act.

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          (3) Notwithstanding the foregoing provisions of this Bylaw, a stockholder shall also comply with all applicable requirements of the Exchange Act and the rules and regulations thereunder with respect to the matters set forth in this Bylaw. Nothing in this Bylaw shall be deemed to affect any rights (a) of stockholders to request inclusion of proposals in the Corporation’s proxy statement pursuant to Rule 14a-8 under the Exchange Act or (b) of the holders of any series of Preferred Stock to elect directors under specified circumstances.

     Section 12. Action by Written Consent of Stockholders. Unless otherwise restricted by the certificate of incorporation, any action required or permitted to be taken at any annual or special meeting of the stockholders may be taken without a meeting, without prior notice and without a vote, if a consent or consents in writing, setting forth the action so taken, shall be signed by the holders of outstanding stock having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon were present and voted and shall be delivered to the corporation by delivery to its registered office in the State of Delaware, its principal place of business, or an officer or agent of the corporation having custody of the book in which minutes of proceedings of stockholders are recorded. Delivery made to the Corporation’s registered office shall be by hand or by certified or registered mail, return receipt requested. Prompt notice of the taking of the corporate action without a meeting by less than unanimous written consent shall, to the extent required by law, be given to those stockholders who have not consented in writing and who, if the action had been taken at a meeting, would have been entitled to notice of the meeting if the record date for such meeting had been the date that written consents signed by a sufficient number of holders to take the action were delivered to the Corporation.

Article III.

Board of Directors

     Section 1. Power; Number; Classification; Term of Office; Election Procedures. The following provisions are inserted for the management of the business and for the conduct of the affairs of the Corporation, and for further definition, limitation and regulation of the powers of the Corporation and of its directors and stockholders:

     The number, classification, and terms of the board of directors of the Corporation and the procedures to elect directors, to remove directors, and to fill vacancies in the board of directors shall be as follows:

     (a) Unless otherwise provided in the Certificate of Incorporation, the number of directors that shall constitute the whole board of directors shall from time to time be fixed exclusively by the Board of Directors by a resolution adopted by a majority of the whole board of directors serving at the time of that vote. No decrease in the number of directors shall have the effect of shortening the term of any incumbent director. Directors of the Corporation need not be elected by written ballot unless the by-laws of the Corporation otherwise provide. Unless otherwise provided in the Certificate of Incorporation, directors need not be stockholders of the Corporation or residents of the State of Delaware.

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     (b) The board of directors of the Corporation shall be divided into three classes designated Class I, Class II, and Class III, respectively, all as nearly equal in number as possible. The initial term of office of directors of Class I shall expire at the first annual meeting of stockholders of the Corporation following the effectiveness of these Amended and Restated Bylaws, of Class II shall expire at the second annual meeting of stockholders of the Corporation following the effectiveness of these Amended and Restated Bylaws, and of Class III shall expire at the third annual meeting of stockholders of the Corporation following the effectiveness of these Amended and Restated Bylaws, and in all cases as to each director until his successor is elected and qualified or until his earlier death, resignation or removal. At each annual meeting of stockholders, each director elected to succeed a director whose term is then expiring shall hold his office until the third annual meeting of stockholders after his election and until his successor is elected and qualified or until his earlier death, resignation or removal.

     (c) Vacancies in the board of directors resulting from death, resignation, retirement, disqualification, removal from office, or other cause and newly-created directorships resulting from any increase in the authorized number of directors shall be filled by the Board of Directors by no less than a majority vote of the remaining directors then in office, though less than a quorum, and each director so chosen shall receive the classification of the vacant directorship to which he has been appointed or, if it is a newly-created directorship, shall receive the classification that at least a majority of the board of directors designates and shall hold office until the first meeting of stockholders held after his election for the purpose of electing directors of that classification and until his successor is elected and qualified or until his earlier death, resignation, or removal from office.

     (d) A director of any class of directors of the Corporation may be removed before the expiration date of that director’s term of office, only for cause, by an affirmative vote of the holders of not less than a majority of the votes of the outstanding shares of the class or classes or series of stock then entitled to be voted at an election of directors, voting together as a single class, cast at the annual meeting of stockholders or at any special meeting of stockholders called by a majority of the whole board of directors for this purpose.

     Section 2. Quorum; Required Vote for Director Action. Unless otherwise required by law or provided in the Certificate of Incorporation or these Bylaws, a majority of the total number of directors shall constitute a quorum for the transaction of business of the Board of Directors, and the vote of a majority of the directors present at a meeting at which a quorum is present shall be the act of the Board of Directors.

     Section3. Meetings; Order of Business. Meetings of the Board of Directors may be held at such place or places as shall be determined from time to time by resolution of the Board of Directors. At all meetings of the Board of Directors business shall be transacted in such order as shall from time to time be determined by the Chairman of the Board (if any), or in his absence by the President (if the President is director), or by resolution of the Board of Directors.

     Attendance of a director at a meeting shall constitute a waiver of notice of such meeting, except where a director attends a meeting for the express purpose of objecting to the transaction of any business an the ground that the meeting is not lawfully called or convened.

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     Section 4. First Meeting. In connection with any annual meeting of stockholders at which directors were elected, the Board of Directors may, if a quorum is present, hold its first meeting for the transaction of business immediately after and at the same place as such annual meeting of the stockholders. Notice of such meeting at such time and place shall not be required.

     Section 5. Regular Meetings. Regular meetings of the Board of Directors shall be held at such times and places as shall be designated from time to time by resolution of the Board of Directors. Notice of such regular meetings shall not be required.

     Section 6. Special Meetings. Special meetings of the Board of Directors may be called by the Chairman of the Board (if any), the President or, on the written request of any one director, by the Secretary, in each case on at least 24 hours personal, written, electronic or wireless notice to each director. Such notice, or any waiver thereof pursuant to Article VIII, Section 3 hereof, need not state the purpose or purposes of such meeting, except as may otherwise be required by law or provided for by the Certificate of Incorporation or these Bylaws.

     Section 7. Compensation. Unless restricted by the Certificate of Incorporation, the Board of Directors shall have the authority to fix the compensation, if any, of directors.

     Section 8. Telephonic Meetings Permitted. Members of the Board of Directors, or any committee designated by the Board of Directors, may participate in a meeting thereof by means of conference telephone or other communications equipment by means of which all persons participating in the meeting can hear each other, and participation in a meeting pursuant to this by-law shall constitute presence in person at such meeting.

     Section 9. Action by Unanimous Consent of Directors. Unless otherwise restricted by the certificate of incorporation or these by-laws, any action required or permitted to be taken at any meeting of the Board of Directors, or of any committee thereof, may be taken without a meeting if all members of the Board of Directors or such committee, as the case may be, consent thereto in writing or by electronic transmission and the writing or writings or electronic transmissions are filed with the minutes of proceedings of the board or committee in accordance with applicable law.

Article IV.

Committees

     Section 1. Designation; Powers. The Board of Directors may designate one or more committees, each committee to consist of one or more of the directors of the corporation. The Board of Directors may designate one or more directors as alternate members of any committee, who may replace any absent or disqualified member at any meeting of the committee. In the absence or disqualification of a member of the committee, the member or members thereof present at any meeting and not disqualified from voting, whether or not he, she or they constitute a quorum, may unanimously appoint another member of the Board of Directors to act at the meeting in place of any such absent or disqualified member. Any such committee, to the extent permitted by law and to the extent provided in the resolution of the Board of Directors, shall have and may exercise all the powers and authority of the Board of Directors in the management

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of the business and affairs of the corporation, and may authorize the seal of the corporation to be affixed to all papers which may require it.

     Section 2. Procedure; Meetings; Quorum. Any committee designated pursuant to Section 1 of this Article shall choose its own chairman and secretary, shall keep regular minutes of its proceedings and report the same to the Board of Directors when requested, shall fix its own rules or procedures, and shall meet at such times and at such place or places as may be provided by such rules, or by resolution of such committee or of the Board of Directors. At every meeting of any such committee, the presence of a majority of all the members thereof shall constitute a quorum, and the affirmative vote of a majority of the members present shall be necessary for the adoption by it of any resolution.

     Section 3. Substitution of Members. The Board of Directors may designate one or more directors as alternate members of any committee, who may replace any absent or disqualified member at any meeting of such committee.

     Section 4. Dissolution. The Board of Directors may dissolve any committee at any time, unless otherwise provided in the Certificate of Incorporation or these Bylaws.

Article V.

Officers

     .Section 1. Number, Titles and Term of Office. The officers of the Corporation shall be a President and a Secretary and such other officers as the Board of Directors may from time to elect or appoint, including, without limitation, a chairman of the Board, one or more Vice Presidents (any one or more of whom may be designated Executive Vice President or Senior Vice President), a Treasurer, one or more Assistant Treasurers and one or more Assistant Secretaries. Each officer shall hold office until his successor shall be duly elected and shall qualify or until his death or until he shall resign or shall have been removed in the manner hereinafter provided. Any number of offices may be held by the same person. Except for the Chairman of the Board, if any, no officer need be a director.

     Section 2. Salaries. The salaries or other compensation, if any, of the officers and agents of the Corporation shall be fixed from time to time by the Board of Directors.

     Section 3. Removal. Any officer or agent or member of a committee elected or appointed by the Board of Directors may be removed, either with or without cause, by the Board of Directors whenever in its judgment the best interests of the Corporation will be served thereby, but such removal shall be without prejudice to the contract rights, if any, of the person so removed. Election or appointment of an officer or agent or member of a committee shall not of itself create contract rights.

     Section 4. Vacancies. Any vacancy occurring in any office of the Corporation may be filled by the Board of Directors.

     Section 5. Powers and Duties of the Chief Executive Officer. The President shall be the chief executive officer of the Corporation unless the Board of Directors designates the

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Chairman of the Board (if any) or other officer as chief executive officer. Subject to the control of the Board of Directors, the chief executive officer shall have general executive charge, management and control of the properties, business and operations of the Corporation with all such powers as may be reasonably incident to such responsibilities; he may agree upon and execute all leases, contracts, evidences of indebtedness and other obligations in the name of the Corporation and may sign all certificates for shares of capital stock of the Corporation; and he shall have such other powers and duties as designated in accordance with these Bylaws and as from time to time may be assigned to him by the Board of Directors.

     Section 6. Powers and Duties of the Chairman of the Board. The chairman of the Board (if any) shall preside at all meetings of the stockholders and of the Board of Directors; and the Chairman shall have such other powers and duties as designated in these Bylaws and as from time to time may be assigned to him by the Board of Directors.

     Section 7. Powers and Duties of the President. Unless the Board of Directors otherwise determines, the President shall have the authority to agree upon and execute all leases, contracts, evidences of indebtedness and other obligations in the name of the Corporation; and, unless the Board of Directors otherwise determines, he shall, in the absence of the Chairman of the Board or if there be no Chairman of the Board, preside at all meetings of the stockholders and (should he be a director) of the Board of Directors; and the President shall have such other powers and duties as designated in accordance with these Bylaws and as from time to time may be assigned to him by the Board of Directors.

     Section 8. Vice Presidents. The Vice President(s), if any, shall perform such duties and have such powers as the Board of Directors may from time to time prescribe. In addition, in the absence of the Chairman of the Board (if any) or President, or in the event of their inability or refusal to act, (i) a Vice President designated by the Board of Directors or (ii) in the absence of such designation, the Vice President who is present and who is senior in terms of time as a Vice President of the Corporation, shall perform the duties of the Chairman of the Board (if any), or the President, as the case may be, and when so acting shall have all the powers of and be subject to all the restrictions upon the Chairman of the Board (if any), or the President; provided that he shall not preside at meetings of the Board of Directors unless he is a director.

     Section 9. Treasurer. The Treasurer, if any, shall have responsibility for the custody and control of all the funds and securities of the Corporation, and he shall have such other powers and duties as designated in these Bylaws and as from time to time may be assigned to him by the Board of Directors. He shall perform all acts incident to the position of Treasurer subject to the control of the chief executive officer and the Board of Directors; and the Treasurer shall, if required by the Board of Directors, give such bond for the faithful discharge of his duties in such form as the Board of Directors may require.

     Section 10. Assistant Treasurers. Each Assistant Treasurer, if any, shall have the usual powers and duties pertaining to his office, together with such other powers and duties as designated in these Bylaws and as from time to time may be assigned to him by the chief executive officer or the Board of Directors or the Treasurer. The Assistant Treasurers shall exercise the powers of the Treasurer during that officer’s absence or inability or refusal to act.

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     Section 11. Secretary. The Secretary shall keep the minutes of all meetings of the Board of Directors, and the minutes of all meetings of the stockholders, in books provided for that purpose; he shall attend to the giving and serving of all notices; he may in the name of the Corporation affix the seal (if any) of the Corporation to all contracts of the Corporation and attest thereto; he may sign with the other appointed officers permitted by law all certificates for shares of capital stock of the Corporation; he shall have charge of the certificate books, transfer books and stock ledgers, and such other books and papers as the Board of Directors may direct, all of which shall at all reasonable times be open to inspection of any director upon application at the office of the Corporation during business hours; he shall have such other powers and duties as designated in these Bylaws and as from time to time may be assigned to him by the chief executive officer or the Board of Directors; and he shall in general perform all duties incident to the office of Secretary, subject to the control of the chief executive officer and the Board of Directors.

     Section 12. Assistant Secretaries. Each Assistant Secretary, if any, shall have the usual powers and duties pertaining to his office, together with such other powers and duties as designated in these Bylaws and as from time to time may be assigned to him by the chief executive officer or the Board of Directors or the Secretary. The Assistant Secretaries shall exercise the powers of the Secretary during that officer’s absence or inability or refusal to act.

     Section 13. Action With Respect to Securities of Other Corporations. Unless otherwise directed by the Board of Directors, each of the chief executive officer and the Treasurer (if any), or either of them, shall have power to vote and otherwise act on behalf of the Corporation, in person or by proxy, at any meeting of stockholders of or with respect to any action of stockholders of any other corporation in which this Corporation may hold securities and otherwise to exercise any and all rights and powers which this Corporation may possess by reason of its ownership of securities in such other corporation.

Article VI.

Indemnification of Directors,

Officers, Employees and Agents

     Section 1. Right to Indemnification. Subject to the limitations and conditions as provided in this Article VI, each person who was or is made a party or is threatened to be made a party to or is involved in any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative arbitrative or investigative (hereinafter a “proceeding”), or any appeal in such a proceeding or any inquiry or investigation that could lead to such a proceeding, by reason of the fact that he or she, or a person of whom he or she is the legal representative, is or was a director or officer of the Corporation or while a director or officer of the Corporation is or was serving at the request of the Corporation as a director, officer, partner, venturer, proprietor, trustee, employee, agent, or similar functionary of another foreign or domestic corporation, partnership, joint venture, sole proprietorship, trust, employee benefit plan or other enterprise shall be indemnified by the Corporation to the fullest extent permitted by the General Corporation Law of the State of Delaware, as the same exists or may hereafter be amended against judgments, penalties (including excise and similar taxes and punitive damages),

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fines, settlements and reasonable expenses (including, without limitation, attorneys’ fees) actually incurred by such person in connection with such proceeding, and indemnification under this Article VI shall continue as to a person who has ceased to serve in the capacity which initially entitled such person to indemnity hereunder. The rights granted pursuant to this Article VI shall be deemed contract rights, and no amendment modification or repeal of this Article VI shall have the effect of limiting or denying any such rights with respect to actions taken or proceedings arising prior to any such amendment, modification or repeal. It is expressly acknowledged that the indemnification, provided in this Article VI could involve indemnification for negligence or under theories of strict liability. Notwithstanding the preceding sentences in this Section 1, except as otherwise provided in Section 7 hereof, the Corporation shall be required to indemnify any person in connection with a proceeding (or part thereof) commenced by such person only if the commencement of such proceeding (or part thereof) by such person was authorized in the specific case by the Board of Directors of the Corporation.

     Section 2. Advance Payment. The right to indemnification conferred in this Article VI shall include the right to be paid or reimbursed by the Corporation the reasonable expenses incurred by a person of the type entitled to be indemnified under Section 1 who was, is or is threatened to be made a named defendant or respondent in a proceeding in advance of the final disposition of the proceeding and without any determination as to the person’s ultimate entitlement to indemnification; provided, however, that the payment of such expenses incurred by any such person in advance of the final disposition of a proceeding, shall be made only upon delivery to the Corporation of a written affirmation by such director or officer of his or her good faith belief that he or she has met the standard of conduct necessary for indemnification under this Article VI and a written undertaking, by or on behalf of such person, to repay all amounts so advanced if it shall ultimately be determined that such indemnified person is not entitled to be indemnified under this Article VI or otherwise.

     Section 3. Indemnification of Employees and Agents. The Corporation, by adoption of a resolution of the Board of Directors, may indemnify and advance expenses to an employee, or agent of the Corporation to the same extent and subject to the same conditions under which it may indemnify and advance expenses to directors and officers under this Article VI; and, the Corporation may indemnify and advance expenses to persons who are not or were not directors, officers, employees or agents of the Corporation but who are or were serving at the request of the Corporation as a director, officer, partner, venturer, proprietor, trustee, employee, agent or similar functionary of another foreign or domestic corporation, partnership, joint venture, sole proprietorship, trust, employee benefit plan or other enterprise against any liability asserted against him and incurred by him in such a capacity or arising out of his status as such a person to the same extent that it may indemnify and advance expenses to directors under this Article VI.

     Section 4. Appearance as a Witness. Notwithstanding any other provision of this Article VI, the Corporation may pay or reimburse expenses incurred by a director or officer in connection with his or her appearance as a witness or other participation in a proceeding at a time when he or she is not a named defendant or respondent in the proceeding.

     Section 5. Nonexclusivity of Rights. The right to indemnification and the advancement and payment of expenses conferred in this Article VI shall not be exclusive of any other right which a director or officer or other person indemnified pursuant to Section 3 of this

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Article VI may have or hereafter acquire under any law (common or statutory), provision of the Certificate of Incorporation of the Corporation or these Bylaws, agreement, vote of stockholders or disinterested directors or otherwise.

     Section 6. Insurance. The Corporation may purchase and maintain insurance, at its expense, to protect itself and any person who is or was serving as a director, officer, employee or agent of the Corporation or is or was serving at the request of the Corporation as a director, officer, partner, venturer, proprietor, trustee, employee, agent or similar functionary of another foreign or domestic corporation, partnership, joint venture, proprietorship, employee benefit plan, trust or other enterprise against any expense, liability or loss, whether or not the Corporation would have the power to indemnify such person against such expense, liability or loss under this Article VI.

     Section 7. Claims. If a claim for indemnification (following the final disposition of such action, suit or proceeding) or advancement of expenses under this Article VI is not paid in full within thirty days after a written claim therefor by a person covered by Section 1 of this Article VI has been received by the Corporation, such person may file suit to recover the unpaid amount of such claim and, if successful in whole or in part, shall be entitled to be paid the expense of prosecuting such claim. In any such action the corporation shall have the burden of proving that the person is not entitled to the requested indemnification or advancement of expenses under applicable law.

     Section 8. Savings Clause. If this Article VI or any portion hereof shall be invalidated on any ground by any court of competent jurisdiction, then the Corporation shall nevertheless indemnify and hold harmless each director, officer or any other person indemnified pursuant to this Article VI as to costs, charges and expenses (including attorneys’ fees), judgments, fines and amounts paid in settlement with respect to any action, suit or proceeding, whether civil, criminal, administrative or investigative to the ‘full extent permitted by any applicable portion of this Article VI. that shall not have been invalidated and to the fullest extent permitted by applicable law.

Article VII.

Capital Stock

     Section 1. Certificates of Stock. The shares of the Corporation shall be represented by certificates, provided that the Board of Directors may provide by resolution or resolutions that some or all of any or all classes or series of stock shall be uncertificated shares. If certificated, the certificates for shares of the capital stock of the Corporation shall be in such form, not inconsistent with that required by law and the Certificate of Incorporation, as shall be approved by the Board of Directors. The Chairman of the Board (if any), President or a Vice President (if any) shall cause to be Issued to each stockholder one or more certificates, which shall be signed by the Chairman of the Board (if any), President or a Vice President (if any) and the Secretary or an Assistant Secretary (if any) or the Treasurer or an Assistant Treasurer (if any) certifying the number of shares (and, if the stock of the Corporation shall be divided into classes or series, the class and series of such shares) owned by such stockholder in the Corporation; provided, however, that any of or all the signatures on the certificate may be facsimile. If the Board of

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Directors shall have provided for a seal, such certificates shall bear such seal or a facsimile thereof, The stock record books and the blank stock certificate books shall be kept by the Secretary, or at the office of such transfer agent or transfer agents as the Board of Directors may from time to time by resolution determine. In case any officer, transfer agent or registrar who shall have signed or whose facsimile signature or signatures shall have been placed upon any such certificate or certificates shall have ceased to be such officer, transfer agent or registrar before such certificate is issued by the Corporation, such certificate may nevertheless be issued by the Corporation with the same affect as if such person were such officer, transfer agent or registrar at the date of issue. The stock certificates shall be consecutively numbered and shall be entered in the books of the Corporation as they are issued and shall exhibit the holder’s name and number of shares.

     Each certificate shall conspicuously bear any legend required pursuant to Section 15 l(f) and/or Section 202 of the General Corporation Law, as well as any other legend required by law.

     Section 2. Transfer of Shares. The shares of stock of the Corporation, shall be transferable only on the books of the Corporation by the holders thereof in person or by their duly authorized attorneys or legal representatives. If such shares are certificated, upon surrender to the Corporation or a transfer agent of the Corporation of a certificate for shares duly endorsed or accompanied by proper evidence of succession, assignment or authority to transfer (or upon compliance with the provisions of Section 5 of this Article VII, if applicable) and of compliance with any transfer restrictions applicable thereto contained in an agreement to which the Corporation is a party or of which the Corporation has knowledge by reason of legend with respect thereto placed an any such surrendered stock certificate, it shall be the duty of the Corporation to cancel the old certificate, issue new equivalent certificated shares to or register uncertificated shares in the name of the person entitled thereto, and record the transaction upon its books. Upon the receipt of proper transfer instructions of uncertificated shares by the holders thereof in person or by their duly authorized attorney, it shall be the duty of the Corporation to cancel such uncertificated shares, issue new equivalent certificated shares to or register uncertificated shares in the name of the person entitled thereto, and record the transaction upon its book.

     Section 3. Ownership of Shares. To the fullest extent permitted by law, the Corporation shall be entitled to treat the holder of record of any share or shares of capital stock of the Corporation as the holder in fact thereof and, accordingly, shall not be bound to recognize any equitable or other claim to or interest in such share or shares on the part of any other person, whether or not it shall have express or other notice thereof, except as otherwise provided by law.

     Section 4. Regulations Regarding Certificates. The Board of Directors shall have the power and authority to make all such rules and regulations as they may deem expedient concerning the issue, transfer and registration or the replacement of certificates for shares of capital stock of the Corporation.

     Section 5. Lost, Stolen, Destroyed or Mutilated Certificates. The Board of Directors may determine the conditions upon which a new certificate of stock may be issued or uncertificated shares registered in place of a certificate that is alleged to have been lost, stolen, destroyed or mutilated; and may, in its discretion, require the owner of such certificate or his legal representative to give bond, with sufficient surety, to indemnify the Corporation and each transfer agent and registrar against any and all losses or claims which may arise by reason of the issuance of a new certificate or registration of uncertificated shares in the place of the one so lost, stolen, destroyed or mutilated.

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Article VIII.

Miscellaneous Provisions

     Section 1. Fiscal Year. The fiscal year of the Corporation shall be such as established from time to time by the Board of Directors.

     Section 2. Corporate Seal. The Board of Directors may provide a suitable seal, containing the name of the Corporation. The Secretary shall have charge of the seal (if any). If and when so directed by the Board of Directors, duplicates of the seal may be kept and used by the Treasurer, if any, or by any Assistant Secretary or Assistant Treasurer.

     Section 3. Notice and Waiver of Notice. Whenever any notice is required to be given by law, the Certificate of Incorporation or these Bylaws, except with respect to notices of meetings of stockholders (with respect to which the provisions of Article II, Section 6 apply) and except with respect to notices of special meetings of directors (with respect to which the provisions of Article VIII, Section 6 apply), said notice shall be deemed to be sufficient if given (a) by electronic or wireless transmission to the fullest extent permitted by the General Corporation Law of the State of Delaware or (b) by deposit of same in a post office box in a sealed prepaid wrapper addressed to the person entitled thereto at his address as it appears on the records of the Corporation, and such notice shall be deemed to have been given on the day of such transmission or mailing, as the case may be.

     Whenever notice is required to be given by law, the Certificate of Incorporation or these Bylaws, a waiver thereof, given by the person entitled to notice, whether before or after the time stated therein, shall be deemed equivalent to notice.

     Section 4. Resignations. Any director, member of a committee or officer may resign at any time. Such resignation shall be made in writing and shall take effect at the time specified therein, or if no time be specified, at the time of its receipt by the chief executive officer or secretary. The acceptance of a resignation shall not be necessary to make it effective, unless expressly so provided in the resignation.

     Section 5. Facsimile Signatures. In addition to the provisions for the use of facsimile signatures elsewhere specifically authorized in these Bylaws, facsimile signatures of any officer or officers of the Corporation may be used whenever and as authorized by the Board of Directors.

     Section 6. Books and Records. The Corporation shall keep correct and complete books and records of account and shall keep minutes of the proceedings of its stockholders and Board of Directors and shall keep at its registered office or principal place of business, or at the office of its transfer agent or registrar, a record of its stockholders, giving the names and addresses of all stockholders and the number and class of the shares held by each. Any books, records and minutes may be in written form or in any other form capable of being converted into written form within a reasonable time.

     Section 7. Reliance Upon Books, Reports and Records. A member of the Board of Directors, or a member of any committee designated by the board of directors, shall, in the

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performance of such member’s duties, be fully protected in relying in good faith upon the records of the corporation and upon such information, opinions, reports or statements presented to the Corporation by any of the Corporation’s officers or employees, or committees of the Board of Directors, or by any other person as to matters the member reasonably believes are within such other person’s professional or expert competence and who has been selected with reasonable care by or on behalf of the Corporation.

Article IX.

Amendments

     The Bylaws may be altered, amended or repealed, and new Bylaws made, by the Board of Directors, but the stockholders may make additional Bylaws and may later and repeal any Bylaws whether adopted by them or otherwise.

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EX-10.5.2

EMPLOYMENT AGREEMENT

     THIS AGREEMENT is made effective January 1, 2008 (the “Effective Date”), between SANDRIDGE ENERGY, INC., a Delaware corporation (the “Company”), and DIRK M. VAN DOREN, an individual (the “Executive”).

WITNESSETH:

     WHEREAS, the Company and the Executive desire to set forth the terms of their agreements relating to the employment of Executive by the Company; and

     NOW, THEREFORE, in consideration of the mutual promises herein contained, the Company and the Executive agree as follows:

     1. Employment. The Company hereby employs the Executive and the Executive hereby accepts such employment subject to the terms and conditions contained in this Agreement. The Executive is engaged as an employee of the Company and the Executive and the Company do not intend to create a joint venture, partnership or other relationship that might impose a fiduciary obligation on the Executive or the Company in the performance of this Agreement, other than as an officer and director of the Company.

     2. Executive’s Duties. The Executive is employed on a full-time basis. Throughout the term of this Agreement, the Executive will use his/her best efforts and due diligence to assist the Company in the objective of achieving the most profitable operation of the Company and the Company’s affiliated entities consistent with developing and maintaining a quality business operation. The Executive shall also devote all of Executive’s working time, attention and energies to the performance of Executive’s duties and responsibilities under this Agreement.

     2.1 Specific Duties. During the term of this Agreement, the Executive will serve as the Executive Vice President and Chief Financial Officer for the Company. The Executive will perform all of the services required to fully and faithfully execute the position to which the Executive is appointed and such other services as may be assigned by the Company’s Board of Directors in their sole discretion. The Executive agrees to use the Executive’s best efforts to perform all of the services required to fully and faithfully execute the offices and positions to which the Executive is appointed and elected. In addition, the precise duties to be performed by Executive may be changed or curtailed in the sole discretion of the Board of Directors of the Company.

     2.2 Rules and Regulations. From time to time, the Company may issue policies and procedures applicable to employees and the Executive including an employment policies manual. The Executive agrees to comply with such policies and procedures, except to the extent such policies are inconsistent with this Agreement. Such policies and procedures may be supplemented, modified, changed or adopted without notice in the sole discretion of the

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Company at any time. In the event of a conflict between such policies and procedures and this Agreement, this Agreement will control unless compliance with this Agreement will violate any law or regulation applicable to the Company or its affiliated entities.

     3. Other Activities. The Executive shall not engage in any business activity that in the judgment of the Board conflicts with the Executive’s duties hereunder, whether or not such activity is pursued for gain, profit, or other pecuniary advantage. In addition, except for the activities permitted under paragraph 3.1 of this Agreement or approved by the Board of Directors in writing, the Executive will not: (a) engage in activities which require such substantial services on the part of the Executive that the Executive is unable to perform the duties assigned to the Executive in accordance with this Agreement; (b) serve as an officer or director of any publicly held entity; or (c) directly or indirectly invest in, participate in or acquire an interest in any oil and gas business, including, without limitation, (i) producing oil and gas, (ii) drilling, owning or operating oil and gas leases or wells, (iii) providing services or materials to the oil and gas industry, (iv) marketing or refining oil or gas, or (v) owning any interest in any corporation, partnership, company or entity which conducts any of the foregoing activities. The limitations in this paragraph 3 will not prohibit an investment by the Executive in publicly traded securities. The Executive is not restricted from maintaining or making investments, or engaging in other businesses, enterprises or civic, charitable or public service functions if such activities, investments, businesses or enterprises do not result in a violation of clauses (a) through (c) of this paragraph 3. Notwithstanding the foregoing, the Executive will be permitted to participate in the activities set forth in Section 3.1 that will be deemed to be approved by the Company, if such activities are undertaken in strict compliance with this Agreement.

     3.1 Royalty Interests and Gifts. The foregoing restriction in clause (c) will not prohibit the ownership of royalty interests where the Executive owns or previously owned the surface of the land covered by the royalty interest and the ownership of the royalty interest is incidental to the ownership of the surface estate or the ownership of royalty, overriding royalty or working interests that are received by gift or inheritance subject to disclosure by Executive to the Company in writing.

     4. Executive’s Compensation. The Company agrees to compensate the Executive as follows:

     4.1 Base Salary. Executive will be paid a base salary (the “Base Salary”) in an annual rate of not less than Five Hundred Fifty Thousand Dollars ($550,000.00), which will be paid to the Executive in installments consistent with the Company’s customary payroll practices, beginning January 23, 2008, during the term of this Agreement.

     4.2 Bonus. In addition to the Base Salary described at paragraph 4.1 of this Agreement, the Company may periodically pay bonus compensation to the Executive. Any bonus compensation will be paid by separate check apart

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from Executive’s Base Salary less appropriate deductions pursuant to Internal Revenue Service guidelines. In order to be entitled to the bonus compensation set forth herein and any future bonuses, Executive must be an active full-time employee of the Company on the date the bonus is to be paid. Upon notice of intent to separate employment or separation of employment for any reason prior to the date any bonuses are paid, Executive shall not be eligible for any pro rata bonus compensation. Executive recognizes and acknowledges that except as provided above, the award of bonus is not guaranteed or promised in any way. Any additional bonus compensation will be at the absolute discretion of the Company in such amounts and at such times as the Board of Directors of the Company (or a Compensation Committee thereof) may determine.

     4.3 Equity Compensation. In addition to the compensation set forth in paragraphs 4.1 and 4.2 of this Agreement, the Executive may periodically be granted awards of Company restricted stock under and subject to the Company’s equity compensation plans (the “Equity Compensation Plans”). Such equity compensation will vest over a four (4) year period which begins to run from the date of each grant. In order to be entitled to the award of equity compensation, the Executive must be an active full-time employee of the Company on the grant date. Further, the terms and provisions of the Equity Compensation Plans control and direct the award of Company restricted stock.

     4.4 Benefits. The Company agrees to extend to the Executive retirement benefits and deferred compensation (if any and if made available) and reimbursement of reasonable expenditures. The Company will also provide the Executive the opportunity to apply for coverage under the Company’s medical, life and disability plans, if any. If the Executive is accepted for coverage under such plans, the Company will provide such coverage on the same terms as is customarily provided by the Company to the plan participants as modified from time to time. The Executive is subject to all of the terms and provisions of the Company’s benefit plans or policies.

     4.5 Paid Time Off. The Executive shall be eligible for thirty (30) days of Paid Time Off (“PTO”) each continuous year of employment during the term of this Agreement under the Company’s PTO policy. Such PTO shall be calculated from the Executive’s original date of hire. No additional compensation will be paid for failure to take PTO and no PTO may be carried forward from one twelve (12) month period to another.

     4.6 Membership Dues. The Company will reimburse the Executive for: (a) the monthly dues necessary to maintain a full membership in a club in the Oklahoma City area selected by the Executive; and (b) the reasonable cost of any approved business entertainment at such club. All other costs, including, without implied limitation, any initiation costs, initial membership costs, personal use and business entertainment unrelated to the Company will be the sole obligation of the Executive and the Company will have no liability with respect to such amounts.

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     5. Term. The employment relationship evidenced by this Agreement is an “at will” employment relationship and the Company reserves the right to terminate the Executive at any time with or without cause. In the absence of termination as set forth in paragraph 6 below, this Agreement will extend for a term commencing on the Effective Date, and ending on December 31, 2009 (the “Expiration Date”). Unless the Company provides thirty (30) days prior written notice of non-extension to the Executive, on or before the Expiration Date, the term and the Expiration Date will be automatically extended for one (1) additional year from the Expiration Date.

     6. Termination. This Agreement will continue in effect until the expiration of the term stated in paragraph 5 of this Agreement unless earlier terminated pursuant to this paragraph 6.

     6.1 Termination by Company. The Company will have the following rights to terminate Executive’s employment:

     6.1.1 Termination without Cause. The Company may terminate Executive’s employment without Cause at any time by the service of written notice of termination to the Executive specifying an effective date of such termination not sooner than ten (10) days after the date of such notice (the “Termination Date”). In the event the Executive is terminated without Cause (other than a CC Termination under paragraph 6.3 of this Agreement), the Executive will receive as termination compensation a lump sum payment equal to twelve (12) months Base Salary (as in effect on the Termination Date). If on the Termination Date, the Executive is a “specified employee” as defined in regulations under Section 409A of the Code, such payment will commence on the first payroll payment date which is more than six months following the Termination Date. The right to the foregoing termination compensation set forth above is subject to the Executive’s execution of the Company’s severance agreement which will operate as a release of all legally waivable claims against the Company. Such payment is further conditioned upon the Executive’s compliance with all of the provisions of this Agreement, including all post-employment obligations.

     6.1.2 Termination for Cause. The Company may terminate the employment of the Executive hereunder at any time for Cause (as hereinafter defined) (such a termination being referred to in this Agreement as a “Termination For Cause”) by giving the Executive written notice of such termination, which shall take effect immediately upon the giving of such notice to the Executive. As used in this Agreement, “Cause” means (A) the Executive’s material breach or threatened breach of this Agreement; (B) the Executive fails to substantially perform the Executive’s duties hereunder; (C) the misappropriation or fraudulent conduct by the Executive with respect to the assets or operations of the Company or any of its subsidiaries or affiliated companies; (D) the

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Executive’s willful disregard of the instructions of the Board or the Executive’s material neglect of duties or failure to act, other than by reason of disability or death; (E) the Executive’s personal misconduct which substantially injures the Company; or (F) the conviction of the Executive for, or a plea of guilty or no contest to, a felony or any crime involving fraud, theft or dishonesty. In the event Executive’s employment is terminated for Cause, the company will not have any obligation to provide any further payments or benefits to the Executive after the effective date of such termination.

     6.2 Termination by Executive. The Executive may voluntarily terminate his employment with or without Cause by the service of written notice of such termination to the Company specifying an effective date of such termination thirty (30) days after the date of such notice. The Company may in its sole discretion, elect to waive all or any part of the 30-day notice period with no further obligations being owed to the Executive by the Company. In the event employment is terminated by the Executive, neither the Company nor the Executive will have any further obligations hereunder, except for any obligations which expressly survive termination of employment including Sections 7, 8, 9, 10, 11 ,12 and 13.

     6.3 Termination After Change in Control. If during the term of this Agreement there is a “Change of Control” and within one (1) year thereafter there is a CC Termination (as hereafter defined), then the Executive will be entitled to a severance payment (in addition to any other rights and other amounts payable to the Executive under Section 6.7 or under Company plans in which Executive is a participant) payable in a lump sum in cash within 10 days following the CC Termination in an amount equal to the sum of the following: (a) two (2) times the Executive’s Base Salary for the last 12 calendar months ending immediately prior to the CC Termination and bonus paid during such 12 month period pursuant to Section 4.2 (based on the average of the last three years’ annual bonuses or such lesser number of years as Executive may have been employed). If the foregoing amount is not paid within ten (10) days after the CC Termination, the unpaid amount will bear interest at the per annum rate of 12%. The right to the foregoing termination compensation under clause (a) above is subject to the Executive’s execution of the Company’s severance agreement which will operate as a release of all legally waivable claims against the Company. Such payment is further conditioned upon the Executive’s compliance with all of the provisions of this Agreement, including all post- employment obligations. Notwithstanding the foregoing, if at the time of a CC Termination, the Executive is a “specified employee” as defined in regulations under Section 409A of the Code, such payment will be made on the first day which is more than six months following the CC Termination. In connection with any Change of Control, the Company shall obtain the assumption of this Agreement, without limitation or reduction, by any successor to the Company or any parent corporation of the Company.

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     6.3.1 Change of Control. For the purpose of this Agreement, a “Change of Control” means the occurrence of any of the following:

     (a) The acquisition by any individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) (a “Person”), other than Executive or his affiliates or Tom L. Ward or his affiliates (the “Exempt Persons”), of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of 40% or more of either (i) the then outstanding shares of common stock of the Company (the “Outstanding Company Common Stock”) or (ii) the combined voting power of the then outstanding voting securities of the Company entitled to vote generally in the election of directors (the “Outstanding Company Voting Securities”). For purposes of this paragraph (a) the following acquisitions by a Person will not constitute a Change of Control: (i) any acquisition directly from the Company; (ii) any acquisition by the Company; (iii) any acquisition by any employee benefit plan (or related trust) sponsored or maintained by the Company or any corporation controlled by the Company; or (iv) any acquisition by any corporation pursuant to a transaction which complies with clauses (i), (ii) and (iii) of paragraph (c) of this paragraph 6.3.1.

     (b) The individuals who, as of the date hereof, constitute the Board of Directors (the “Incumbent Board”) cease for any reason to constitute at least a majority of the Board of Directors. Any individual becoming a director subsequent to the date hereof whose election, or nomination for election by the Company’s shareholders, is approved by a vote of at least a majority of the directors then comprising the Incumbent Board will be considered a member of the Incumbent Board as of the date hereof, but any such individual whose initial assumption of office occurs as a result of an actual or threatened election contest with respect to the election or removal of directors or other actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the Incumbent Board will not be deemed a member of the Incumbent Board as of the date hereof.

     (c) The consummation of a reorganization, merger, consolidation or sale or other disposition of all or substantially all of the assets of the Company (a “Business Combination”), unless following such Business Combination: (i) the individuals and entities who were the beneficial owners, respectively, of the Outstanding Company Common Stock and Outstanding Company Voting Securities immediately prior to such Business Combination beneficially own, directly or indirectly, more than 60% of, respectively, the then outstanding shares of common stock and the combined voting power of the then outstanding voting securities entitled to vote generally in the election of directors, as the case may be, of the corporation resulting from such Business Combination (including,

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without limitation, a corporation which as a result of such transaction owns the Company or all or substantially all of the Company’s assets either directly or through one or more subsidiaries) in substantially the same proportions as their ownership, immediately prior to such Business Combination of the Outstanding Company Common Stock and Outstanding Company Voting Securities, as the case may be, (ii) no Person (excluding any corporation resulting from such Business Combination or any employee benefit plan (or related trust) of the Company or such corporation resulting from such Business Combination) other than one or more of the Exempt Persons beneficially owns, directly or indirectly, 40% or more of, respectively, the then outstanding shares of common stock of the corporation resulting from such Business Combination or the combined voting power of the then outstanding voting securities of such corporation except to the extent that such ownership existed prior to the Business Combination and (iii) at least a majority of the members of the board of directors of the corporation resulting from such Business Combination were members of the Incumbent Board at the time of the execution of the initial agreement, or of the action of the Board, providing for such Business Combination.

     (d) The approval by the shareholders of the Company of a complete liquidation or dissolution of the Company.

     6.3.2 CC Termination. The term “CC Termination” means any of the following: (a) the Executive’s employment is terminated by the Company other than under paragraphs 6.1.2, 6.4 or 6.5; or (b) the Executive resigns as a result of a change in the Executive’s duties or title, a reduction in the Executive’s then current Base Salary or a significant reduction in the Executive’s then current benefits as provided in Section 4, a relocation of more than 25 miles from the Executive’s then current place of employment being required by the Board of Directors or a default by the Company under this Agreement.

     6.4 Incapacity of Executive. If the Executive suffers from a physical or mental condition, which in the reasonable judgment of the Company’s Board of Directors, prevents the Executive in whole or in part from performing the duties specified herein for a period of sixteen (16) consecutive weeks, the Executive’s employment may be terminated by the Company, in which event, the Company will pay Executive the equivalent of six (6) months Base Salary in effect on the date of termination. If, on the termination date, the Executive is a “specified employee” as defined in regulations under Section 409A of the Code, such payment will commence on the first payroll payment date which is more than six months following the termination date. Notwithstanding the foregoing, the amount payable hereunder will be reduced by any benefits payable under any disability plans provided by the Company under paragraph 4.4 of this Agreement. The right to the compensation due under this paragraph 6.4 is subject to the execution by the Executive or the Executive’s legal representative

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of the Company’s severance agreement which will operate as a release of all legally waivable claims against the Company. In applying this section, the Company will comply with any applicable legal requirements, including the Americans with Disabilities Act.

     6.5 Death of Executive. If the Executive dies during the term of this Agreement, Executive’s employment will terminate without compensation to the Executive’s estate except: (a) the obligation to continue the Base Salary payments under paragraph 4.1 of this Agreement for twelve (12) months after the effective date of such termination.

     6.6 Effect of Termination. The termination of Executive’s employment will terminate all obligations of the Executive to render services on behalf of the Company. The Executive will maintain the confidentiality of all information acquired by the Executive during the term of his employment in accordance with paragraph 7 of this Agreement and the Executive shall comply with all other post employment requirements including paragraphs 7, 8, 9, 10, 11, 12 and 13. Except as otherwise provided in this paragraph 6, no accrued bonus, severance pay or other form of compensation will be payable by the Company to the Executive by reason of the termination of his employment. All keys, entry cards, credit cards, files, records, financial information, furniture, furnishings, computers, equipment, supplies and other items relating to the Company will remain the property of the Company. The Executive will have the right to retain and remove all personal property and effects that are owned by the Executive and located in the offices of the Company. All such personal items will be removed from such offices no later than ten (10) days after the effective date of termination, and the Company is hereby authorized to discard any items remaining and to reassign the Executive’s office space after such date. Prior to the effective date of termination, the Executive will cooperate with the Company to provide for the orderly separation of the Executive’s employment.

     6.7 Equity Compensation Provisions. Notwithstanding any provision to the contrary in any option agreement, restricted stock agreement, plan or other agreement relating to equity based compensation, in the event of a termination under paragraph 6.3 of this Agreement, or in the event of a termination under paragraph 6.1.1 of this Agreement if at the time of such termination Tom L. Ward is not the Chairman and Chief Executive Officer of the Company: (a) all units, stock options, incentive stock options, performance shares, stock appreciation rights and restricted stock granted and held by Executive immediately prior to such termination will immediately become 100% vested; and (b) the Executive’s right to exercise any previously unexercised options will not terminate until the latest date on which such option would expire but for Executive’s termination of employment. To the extent Company is unable to provide for one or both of the foregoing rights the Company will provide in lieu thereof a lump-sum cash payment equal to the difference between the total value of such units, stock options, incentive stock options,

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performance shares, stock appreciation rights and shares of restricted stock (the “Equity Compensation Rights”) with the foregoing rights as of the date of Executive’s termination of employment and the total value of the Equity Compensation Rights without the foregoing rights as of the date of the Executive’s termination of employment. The foregoing amounts will be determined by the Board of Directors in good faith based on a valuation performed by an independent consultant selected by the Board of Directors and the cash payment, if any, will be paid in a lump sum in the case of a termination under Section 6.1.1, at the same time as the severance payment is otherwise due under such Section, and in the case of a termination under Section 6.3, at the same time the payment is due under such Section. The right to the foregoing termination compensation under clauses (a) and (b) above is subject to the Executive’s execution of the Company’s severance agreement which will operate as a release of all legally waivable claims against the Company. Such payment is further conditioned upon the Executive’s compliance with all of the provisions of this Agreement, including all post-employment obligations.

     7. Confidentiality. The Executive recognizes that the nature of the Executive’s services are such that the Executive will have access to information which constitutes trade secrets, is of a confidential nature, is of great value to the Company or is the foundation on which the business of the Company is predicated. The Executive agrees not to disclose to any person other than the Company’s employees or the Company’s legal counsel or other parties authorized by the Company to receive confidential information (“Confidential Information”) nor use for any purpose, other than the performance of this Agreement, any Confidential Information. Confidential Information includes data or material (regardless of form) which is: (a) a trade secret; (b) provided, disclosed or delivered to Executive by the Company, any officer, director, employee, agent, attorney, accountant, consultant, or other person or entity employed by the Company in any capacity, any customer, borrower or business associate of the Company or any public authority having jurisdiction over the Company of any business activity conducted by the Company; or (c) produced, developed, obtained or prepared by or on behalf of Executive or the Company (whether or not such information was developed in the performance of this Agreement) with respect to the Company or any assets oil and gas prospects, business activities, officers, directors, employees, borrowers or customers of the foregoing. However, Confidential Information will not include any information, data or material which at the time of disclosure or use was generally available to the public other than by a breach of this Agreement, was available to the party to whom disclosed on a non-confidential basis by disclosure or access provided by the Company or a third party, or was otherwise developed or obtained independently by the person to whom disclosed without a breach of this Agreement. On request by the Company, the Company will be entitled to a copy of any Confidential Information in the possession of the Executive. The provisions of this paragraph 7 will survive the termination, expiration or cancellation of Executive’s employment for a period of one (1) year after the date of termination. The Executive will deliver to the Company all originals and copies of the documents or materials containing Confidential Information. For purposes of paragraphs 7, 8, and 9 of this

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Agreement, the Company expressly includes any of the Company’s subsidiaries or affiliates.

     8. Non-Solicitation. The Executive agrees that during the Non-Solicitation Period (as hereafter defined), Executive will not directly, either personally or by or through his agent, on behalf of himself or on behalf of any other individual, association or entity, (i) use any of the Confidential Information for the purposes of calling on any established customer of the Company or soliciting or inducing any of such customers to acquire, or providing to any of such customers, any product or service provided by the Company or any affiliate or subsidiary of the Company; (ii) solicit, influence or encourage any established customer of the Company to divert or direct such customer’s business to the Executive or any person or entity by which or with which the Executive is employed, associated, affiliated or otherwise related; or (iii) solicit, divert or attempt to solicit or divert any entity which has been identified and contacted by the Company, either directly or through such entity’s agent(s), with respect to a possible acquisition by the Company. For the purposes hereof, the term “Non-Solicitation Period” shall mean a period of six (6) months after Executive’s employment ceases for any reason.

     9. Non-Interference. The Executive agrees that during the Non-Interference Period (as hereafter defined) he will not, directly or indirectly, either personally or by or through his agent, on behalf of himself or on behalf of any other individual, association or entity, hire, solicit or seek to hire any employee of the Company or any affiliate or subsidiary of the Company, or any individual who was an employee of the Company or any affiliate or subsidiary of the Company during the twelve-month period prior to the Termination Date, or in any other manner attempt, directly or indirectly, to persuade any such employee to discontinue his or her status of employment with the Company or any affiliate or subsidiary of the Company or to become employed in a business or activities likely to be competitive with the business of the Company or any affiliate or subsidiary of the Company. For the purposes hereof, the term “Non-Interference Period” shall mean a period of six (6) months after Executive’s employment ceases for any reason.

     10. Severability. It is the desire and intent of the parties hereto that the provisions of this Agreement be enforced to the fullest extent permissible under the laws and public policies applied in each jurisdiction in which enforcement is sought. Accordingly, if any particular provision of this Agreement shall be adjudicated by a court of competent jurisdiction to be invalid, prohibited or unenforceable for any reason, such provision, as to such jurisdiction, shall be ineffective, without invalidating the remaining provisions of this Agreement or affecting the validity or enforceability of such provision in any other jurisdiction. Notwithstanding the foregoing, if such provision could be more narrowly drawn so as not to be invalid, prohibited or unenforceable in such jurisdiction, it shall, as to such jurisdiction, be so narrowly drawn, without invalidating the remaining provisions of this Agreement or affecting the validity or enforceability of such provision in any other jurisdiction.

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     11. Remedies. The Executive acknowledges and understands that the provisions of this Agreement are of a special and unique nature, the loss of which cannot be adequately compensated for in damages by an action at law, and that the breach or threatened breach of the provisions of this Agreement would cause the Company or any of its Subsidiaries irreparable harm. In the event of a breach or threatened breach by the Executive of the provisions of this Agreement, the Company or any of its subsidiaries or affiliates shall be entitled to an injunction restraining the Executive from such breach. In addition to the foregoing and not in any way in limitation thereof, or in limitation of any right or remedy otherwise available, if the Executive violates any provision of Paragraphs 7, 8 or 9 hereof, any compensation or severance payments then or thereafter due from the Company to the Executive shall be terminated forthwith and the Company’s obligation to pay and the Executive’s right to receive such compensation as severance payments shall terminate and be of no further force or effect, in each case without limiting or affecting the Executive’s obligations under such Paragraphs 7, 8 and 9 or the Company’s or its subsidiaries’ or affiliates’ other rights and remedies available at law or equity. Nothing contained in this Agreement shall be construed as prohibiting the Company or any of its subsidiaries or affiliates from pursuing, or limiting the Company’s or any of its subsidiaries’ or affiliates’ ability to pursue, any other remedies available for any breach or threatened breach of this Agreement by the Executive. The provisions of Paragraph 13 of this Agreement relating to arbitration shall not be applicable to the Company to the extent it seeks an injunction in any court to restrain the Executive from violating Paragraphs 7, 8 or 9 hereof.

     12. Proprietary Matters.

     12.1 The Executive acknowledges and agrees that the Company owns all right, title and interest (including patent rights, copyrights, trade secret rights, trademark rights and all other intellectual and industrial property rights) relating to any and all inventions (whether or not patentable), works of authorship, design, know-how, ideas and information made or conceived or reduced to practice, in whole or in part, by the Executive during the term of this Agreement which are useful in, or directly or indirectly related to, the business of the Company or any Confidential Information (collectively, the “Proprietary Rights”). The Executive further acknowledges and agrees that all such Proprietary Rights are “works made for hire” of which the Company is the author. The Executive agrees to promptly disclose and provide all Proprietary Rights to the Company; provided, in the event the Proprietary Rights shall not be deemed to constitute “works made for hire,” or in the event the Executive should, by operation of law or otherwise, be deemed to retain any rights in the Proprietary Rights, the Executive agrees to assign to the Company, without further consideration, the Executive’s entire right, title and interest in and to each and every such Proprietary Right.

     12.2 The Executive hereby agrees to assist Company in obtaining and enforcing United States and/or foreign letters patent and copyright registrations covering the Proprietary Rights and further agrees that Executive’s obligation to

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assist Company shall continue beyond the termination of Executive’s employment hereunder. If Company is unable because of Executive’s mental or physical incapacity or for any other reason to secure Executive’s signature to apply for or to pursue any application for any United States or foreign letters patent or copyright registrations covering inventions assigned to Company, then Executive hereby irrevocably designates and appoints Company and its duly authorized officers and agents as Executive’s agent and attorney-in-fact to act for and on Executive’s behalf to execute and file any such applications and to do all other lawfully permitted acts to further the prosecution and issuance of letters patent or copyright registrations thereon with the same legal force and effect as if executed by Executive. Executive hereby waives and quitclaims to Company any and all claims of any nature whatsoever which Executive now or hereafter may have for infringement of any patent or copyright resulting from any such application for letters patent or copyright registrations assigned hereunder to Company. Executive will further assist Company in every lawful way to enforce any copyrights or patents obtained, including without limitation, testifying in any suit or proceeding involving any of the copyrights or patents or executing any documents deemed necessary by Company, all without further consideration except as contemplated by the immediately following sentence but at the expense of Company. If Executive is called upon to render such assistance after termination of Executive’s employment hereunder, then Executive shall be entitled to a fair and reasonable per diem fee (which shall not be less than Executive’s equivalent daily Base Salary) in addition to reimbursement of any expenses incurred at the request of Company.

     13. Arbitration. Any dispute between the parties out of or related to this Agreement or the employment relationship, whether arising during the term of this Agreement or afterwards, and involving a claim for money damages shall be subject to binding arbitration and resolved pursuant to the rules of the American Arbitration Association. All arbitration shall be final and binding and shall be governed by the Federal Arbitration Act and the arbitration decision shall be enforceable in any court of competent jurisdiction. This obligation to arbitrate shall survive even if this Agreement shall be alleged to be rescinded or terminated. The arbitration hearing shall be convened in Oklahoma City, Oklahoma. The Company will pay the costs and expenses of the arbitration including, without limitation, the fees for the arbitrators.

     14. Miscellaneous. The parties further agree as follows:

     14.1 Time. Time is of the essence of each provision of this Agreement.

     14.2 Notices. Any notice, payment, demand or communication required or permitted to be given by any provision of this Agreement will be in writing and will be deemed to have been given when received by personal delivery, by facsimile, by overnight courier, or by certified mail, postage and charges prepaid, directed to the following address or to such other or additional addresses as any party might designate by written notice to the other party:

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To the Company:	SandRidge Energy, Inc.
	1601 N.W. Expressway, Suite 1600
	Oklahoma City, OK 73118
	Attn: Mary L. Whitson
To the Executive:	Dirk M. Van Doren
	6910 Avondale Drive
	Nichols Hills, OK 73116

     14.3 Assignment. Neither this Agreement nor any of the parties’ rights or obligations hereunder can be transferred or assigned without the prior written consent of the other parties to this Agreement.

     14.4 Construction. If any provision of this Agreement or the application thereof to any person or circumstances is determined, to any extent, to be invalid or unenforceable, the remainder of this Agreement, or the application of such provision to persons or circumstances other than those as to which the same is held invalid or unenforceable, will not be affected thereby, and each term and provision of this Agreement will be valid and enforceable to the fullest extent permitted by law. This Agreement is intended to be interpreted, construed and enforced in accordance with the laws of the state of Oklahoma

     14.5 Entire Agreement. This Agreement constitutes the entire agreement between the parties hereto with respect to the subject matter herein contained, and no modification hereof will be effective unless made by a supplemental written agreement executed by all of the parties hereto.

     14.6 Binding Effect; Third Party Beneficiary; Assignment. This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective affiliates, officers, employees, agents, successors and assigns (including, in the case of the Company or any of its subsidiaries or affiliated companies, the successor to the business of the Company as a result of the transfer of all or substantially all of the assets or capital stock of the Company or any of its subsidiaries or affiliates); provided, that the Executive may not assign this Agreement or any of his rights or interests herein, in whole or in part, to any other person or entity without the prior written consent of the Company.

     14.7 Supercession. This Agreement is the final, complete and exclusive expression of the agreement between the Company and the Executive and supersedes and replaces in all respects any prior oral or written employment agreements. On execution of this Agreement by the Company and the Executive, the relationship between the Company and the Executive after the effective date of this Agreement will be governed by the terms of this Agreement and not by any other agreements, oral or otherwise.

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     14.8 Non-Contravention. Executive represents and warrants to the Company that the execution and performance of this Agreement will not violate, constitute a default under, or otherwise give rights to any third party, pursuant to the terms of any Agreement to which Executive is a party.

     14.9 Indemnity. EXECUTIVE AGREES TO INDEMNIFY AND HOLD HARMLESS THE COMPANY, ITS DIRECTORS, OFFICERS AND EMPLOYEES AND AGENTS (THE “INDEMNIFIED PARTIES”) AGAINST ANY LOSS, CLAIM, DAMAGE, LIABILITY OR EXPENSE, AS INCURRED, (“LOSS”) TO WHICH THE INDEMNIFIED PARTIES MAY BECOME SUBJECT OR INCUR, INSOFAR AS SUCH LOSS ARISES OUT OF OR IS BASED UPON ANY INACCURACY IN ANY REPRESENTATION OR WARRANTY GIVEN BY EXECUTIVE IN THIS AGREEMENT AND TO REIMBURSE THE INDEMNIFIED PARTIES FOR ANY AND ALL EXPENSES (INCLUDING THE FEES AND DISBURSEMENTS OF COUNSEL CHOSEN BY THE INDEMNIFIED PARTIES) AS SUCH EXPENSES ARE REASONABLY INCURRED BY THE INDEMNIFIED PARTIES IN CONNECTION WITH INVESTIGATING, DEFENDING, SETTLING, COMPROMISING OR PAYING ANY SUCH LOSS.

     14.10 Compliance with Section 409A of the Code. This Agreement is intended to comply with Section 409A of the Code and shall be construed and interpreted in accordance with such intent. To the extent any benefit paid under this Agreement shall be subject to Section 409A of the Code, such benefit shall be paid in a manner that will comply with Section 409A, including any IRS 409A Guidance. Any provision of this Agreement that would cause the payment of any benefit to fail to satisfy Section 409A of the Code shall have no force and effect until amended to comply with Section 409A (which amendment may be retroactive to the extent permitted by the IRS 409A Guidance.

     IN WITNESS WHEREOF, the undersigned have executed this Agreement effective the date first above written.

[SIGNATURES ON FOLLOWING PAGE]

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SANDRIDGE ENERGY, INC.
By:	/s/ Tom L. Ward	03/19/08
	Tom L. Ward	Date
	Chief Executive Officer (the “Company”)
By:	/s/ Dirk M. Van Doren	01/16/08
	Dirk M. Van Doren	Date
	(the “Executive”)

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EX-10.5.3

EMPLOYMENT AGREEMENT

     THIS AGREEMENT is made effective January 1, 2008 (the “Effective Date”), between SANDRIDGE ENERGY, INC., a Delaware corporation (the “Company”), and MATTHEW K. GRUBB, an individual (the “Executive”).

WITNESSETH:

     WHEREAS, the Company and the Executive desire to set forth the terms of their agreements relating to the employment of Executive by the Company; and

     NOW, THEREFORE, in consideration of the mutual promises herein contained, the Company and the Executive agree as follows:

     1. Employment. The Company hereby employs the Executive and the Executive hereby accepts such employment subject to the terms and conditions contained in this Agreement. The Executive is engaged as an employee of the Company and the Executive and the Company do not intend to create a joint venture, partnership or other relationship that might impose a fiduciary obligation on the Executive or the Company in the performance of this Agreement, other than as an officer and director of the Company.

     2. Executive’s Duties. The Executive is employed on a full-time basis. Throughout the term of this Agreement, the Executive will use his/her best efforts and due diligence to assist the Company in the objective of achieving the most profitable operation of the Company and the Company’s affiliated entities consistent with developing and maintaining a quality business operation. The Executive shall also devote all of Executive’s working time, attention and energies to the performance of Executive’s duties and responsibilities under this Agreement.

     2.1 Specific Duties. During the term of this Agreement, the Executive will serve as the Executive Vice President and Chief Operating Officer for the Company. The Executive will perform all of the services required to fully and faithfully execute the position to which the Executive is appointed and such other services as may be assigned by the Company’s Board of Directors in their sole discretion. The Executive agrees to use the Executive’s best efforts to perform all of the services required to fully and faithfully execute the offices and positions to which the Executive is appointed and elected. In addition, the precise duties to be performed by Executive may be changed or curtailed in the sole discretion of the Board of Directors of the Company.

     2.2 Rules and Regulations. From time to time, the Company may issue policies and procedures applicable to employees and the Executive including an employment policies manual. The Executive agrees to comply with such policies and procedures, except to the extent such policies are inconsistent with this Agreement. Such policies and procedures may be supplemented, modified, changed or adopted without notice in the sole discretion of the

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Company at any time. In the event of a conflict between such policies and procedures and this Agreement, this Agreement will control unless compliance with this Agreement will violate any law or regulation applicable to the Company or its affiliated entities.

     3. Other Activities. The Executive shall not engage in any business activity that in the judgment of the Board conflicts with the Executive’s duties hereunder, whether or not such activity is pursued for gain, profit, or other pecuniary advantage. In addition, except for the activities permitted under paragraph 3.1 of this Agreement or approved by the Board of Directors in writing, the Executive will not: (a) engage in activities which require such substantial services on the part of the Executive that the Executive is unable to perform the duties assigned to the Executive in accordance with this Agreement; (b) serve as an officer or director of any publicly held entity; or (c) directly or indirectly invest in, participate in or acquire an interest in any oil and gas business, including, without limitation, (i) producing oil and gas, (ii) drilling, owning or operating oil and gas leases or wells, (iii) providing services or materials to the oil and gas industry, (iv) marketing or refining oil or gas, or (v) owning any interest in any corporation, partnership, company or entity which conducts any of the foregoing activities. The limitations in this paragraph 3 will not prohibit an investment by the Executive in publicly traded securities. The Executive is not restricted from maintaining or making investments, or engaging in other businesses, enterprises or civic, charitable or public service functions if such activities, investments, businesses or enterprises do not result in a violation of clauses (a) through (c) of this paragraph 3. Notwithstanding the foregoing, the Executive will be permitted to participate in the activities set forth in Section 3.1 that will be deemed to be approved by the Company, if such activities are undertaken in strict compliance with this Agreement.

     3.1 Royalty Interests and Gifts. The foregoing restriction in clause (c) will not prohibit the ownership of royalty interests where the Executive owns or previously owned the surface of the land covered by the royalty interest and the ownership of the royalty interest is incidental to the ownership of the surface estate or the ownership of royalty, overriding royalty or working interests that are received by gift or inheritance subject to disclosure by Executive to the Company in writing.

     4. Executive’s Compensation. The Company agrees to compensate the Executive as follows:

     4.1 Base Salary. Executive will be paid a base salary (the “Base Salary”) in an annual rate of not less than Five Hundred Thousand Dollars ($500,000.00), which will be paid to the Executive in installments consistent with the Company’s customary payroll practices, beginning January 23, 2008, during the term of this Agreement.

     4.2 Bonus. In addition to the Base Salary described at paragraph 4.1 of this Agreement, the Company may periodically pay bonus compensation to the Executive. Any bonus compensation will be paid by separate check apart

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from Executive’s Base Salary less appropriate deductions pursuant to Internal Revenue Service guidelines. In order to be entitled to the bonus compensation set forth herein and any future bonuses, Executive must be an active full-time employee of the Company on the date the bonus is to be paid. Upon notice of intent to separate employment or separation of employment for any reason prior to the date any bonuses are paid, Executive shall not be eligible for any pro rata bonus compensation. Executive recognizes and acknowledges that except as provided above, the award of bonus is not guaranteed or promised in any way. Any additional bonus compensation will be at the absolute discretion of the Company in such amounts and at such times as the Board of Directors of the Company (or a Compensation Committee thereof) may determine.

     4.3 Equity Compensation. In addition to the compensation set forth in paragraphs 4.1 and 4.2 of this Agreement, the Executive may periodically be granted awards of Company restricted stock under and subject to the Company’s equity compensation plans (the “Equity Compensation Plans”). Such equity compensation will vest over a four (4) year period which begins to run from the date of each grant. In order to be entitled to the award of equity compensation, the Executive must be an active full-time employee of the Company on the grant date. Further, the terms and provisions of the Equity Compensation Plans control and direct the award of Company restricted stock.

     4.4 Benefits. The Company agrees to extend to the Executive retirement benefits and deferred compensation (if any and if made available) and reimbursement of reasonable expenditures. The Company will also provide the Executive the opportunity to apply for coverage under the Company’s medical, life and disability plans, if any. If the Executive is accepted for coverage under such plans, the Company will provide such coverage on the same terms as is customarily provided by the Company to the plan participants as modified from time to time. The Executive is subject to all of the terms and provisions of the Company’s benefit plans or policies.

     4.5 Paid Time Off. The Executive shall be eligible for thirty (30) days of Paid Time Off (“PTO”) each continuous year of employment during the term of this Agreement under the Company’s PTO policy. Such PTO shall be calculated from the Executive’s original date of hire. No additional compensation will be paid for failure to take PTO and no PTO may be carried forward from one twelve (12) month period to another.

     4.6 Membership Dues. The Company will reimburse the Executive for: (a) the monthly dues necessary to maintain a full membership in a club in the Oklahoma City area selected by the Executive; and (b) the reasonable cost of any approved business entertainment at such club. All other costs, including, without implied limitation, any initiation costs, initial membership costs, personal use and business entertainment unrelated to the Company will be the sole obligation of the Executive and the Company will have no liability with respect to such amounts.

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     5. Term. The employment relationship evidenced by this Agreement is an “at will” employment relationship and the Company reserves the right to terminate the Executive at any time with or without cause. In the absence of termination as set forth in paragraph 6 below, this Agreement will extend for a term commencing on the Effective Date, and ending on December 31, 2009 (the “Expiration Date”). Unless the Company provides thirty (30) days prior written notice of non-extension to the Executive, on or before the Expiration Date, the term and the Expiration Date will be automatically extended for one (1) additional year from the Expiration Date.

     6. Termination. This Agreement will continue in effect until the expiration of the term stated in paragraph 5 of this Agreement unless earlier terminated pursuant to this paragraph 6.

               6.1 Termination by Company. The Company will have the following rights to terminate Executive’s employment:

     6.1.1 Termination without Cause. The Company may terminate Executive’s employment without Cause at any time by the service of written notice of termination to the Executive specifying an effective date of such termination not sooner than ten (10) days after the date of such notice (the “Termination Date”). In the event the Executive is terminated without Cause (other than a CC Termination under paragraph 6.3 of this Agreement), the Executive will receive as termination compensation a lump sum payment equal to twelve (12) months Base Salary (as in effect on the Termination Date). If on the Termination Date, the Executive is a “specified employee” as defined in regulations under Section 409A of the Code, such payment will commence on the first payroll payment date which is more than six months following the Termination Date. The right to the foregoing termination compensation set forth above is subject to the Executive’s execution of the Company’s severance agreement which will operate as a release of all legally waivable claims against the Company. Such payment is further conditioned upon the Executive’s compliance with all of the provisions of this Agreement, including all post-employment obligations.

     6.1.2 Termination for Cause. The Company may terminate the employment of the Executive hereunder at any time for Cause (as hereinafter defined) (such a termination being referred to in this Agreement as a “Termination For Cause”) by giving the Executive written notice of such termination, which shall take effect immediately upon the giving of such notice to the Executive. As used in this Agreement, “Cause” means (A) the Executive’s material breach or threatened breach of this Agreement; (B) the Executive fails to substantially perform the Executive’s duties hereunder; (C) the misappropriation or fraudulent conduct by the Executive with respect to the assets or operations of the Company or any of its subsidiaries or affiliated companies; (D) the

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Executive’s willful disregard of the instructions of the Board or the Executive’s material neglect of duties or failure to act, other than by reason of disability or death; (E) the Executive’s personal misconduct which substantially injures the Company; or (F) the conviction of the Executive for, or a plea of guilty or no contest to, a felony or any crime involving fraud, theft or dishonesty. In the event Executive’s employment is terminated for Cause, the company will not have any obligation to provide any further payments or benefits to the Executive after the effective date of such termination.

     6.2 Termination by Executive. The Executive may voluntarily terminate his employment with or without Cause by the service of written notice of such termination to the Company specifying an effective date of such termination thirty (30) days after the date of such notice. The Company may in its sole discretion, elect to waive all or any part of the 30-day notice period with no further obligations being owed to the Executive by the Company. In the event employment is terminated by the Executive, neither the Company nor the Executive will have any further obligations hereunder, except for any obligations which expressly survive termination of employment including Sections 7, 8, 9, 10, 11 ,12 and 13.

     6.3 Termination After Change in Control. If during the term of this Agreement there is a “Change of Control” and within one (1) year thereafter there is a CC Termination (as hereafter defined), then the Executive will be entitled to a severance payment (in addition to any other rights and other amounts payable to the Executive under Section 6.7 or under Company plans in which Executive is a participant) payable in a lump sum in cash within 10 days following the CC Termination in an amount equal to the sum of the following: (a) two (2) times the Executive’s Base Salary for the last 12 calendar months ending immediately prior to the CC Termination and bonus paid during such 12 month period pursuant to Section 4.2 (based on the average of the last three years’ annual bonuses or such lesser number of years as Executive may have been employed). If the foregoing amount is not paid within ten (10) days after the CC Termination, the unpaid amount will bear interest at the per annum rate of 12%. The right to the foregoing termination compensation under clause (a) above is subject to the Executive’s execution of the Company’s severance agreement which will operate as a release of all legally waivable claims against the Company. Such payment is further conditioned upon the Executive’s compliance with all of the provisions of this Agreement, including all post-employment obligations. Notwithstanding the foregoing, if at the time of a CC Termination, the Executive is a “specified employee” as defined in regulations under Section 409A of the Code, such payment will be made on the first day which is more than six months following the CC Termination. In connection with any Change of Control, the Company shall obtain the assumption of this Agreement, without limitation or reduction, by any successor to the Company or any parent corporation of the Company.

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     6.3.1 Change of Control. For the purpose of this Agreement, a “Change of Control” means the occurrence of any of the following:

     (a) The acquisition by any individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) (a “Person”), other than Executive or his affiliates or Tom L. Ward or his affiliates (the “Exempt Persons”), of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of 40% or more of either (i) the then outstanding shares of common stock of the Company (the “Outstanding Company Common Stock”) or (ii) the combined voting power of the then outstanding voting securities of the Company entitled to vote generally in the election of directors (the “Outstanding Company Voting Securities”). For purposes of this paragraph (a) the following acquisitions by a Person will not constitute a Change of Control: (i) any acquisition directly from the Company; (ii) any acquisition by the Company; (iii) any acquisition by any employee benefit plan (or related trust) sponsored or maintained by the Company or any corporation controlled by the Company; or (iv) any acquisition by any corporation pursuant to a transaction which complies with clauses (i), (ii) and (iii) of paragraph (c) of this paragraph 6.3.1.

     (b) The individuals who, as of the date hereof, constitute the Board of Directors (the “Incumbent Board”) cease for any reason to constitute at least a majority of the Board of Directors. Any individual becoming a director subsequent to the date hereof whose election, or nomination for election by the Company’s shareholders, is approved by a vote of at least a majority of the directors then comprising the Incumbent Board will be considered a member of the Incumbent Board as of the date hereof, but any such individual whose initial assumption of office occurs as a result of an actual or threatened election contest with respect to the election or removal of directors or other actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the Incumbent Board will not be deemed a member of the Incumbent Board as of the date hereof.

     (c) The consummation of a reorganization, merger, consolidation or sale or other disposition of all or substantially all of the assets of the Company (a “Business Combination”), unless following such Business Combination: (i) the individuals and entities who were the beneficial owners, respectively, of the Outstanding Company Common Stock and Outstanding Company Voting Securities immediately prior to such Business Combination beneficially own, directly or indirectly, more than 60% of, respectively, the then outstanding shares of common stock and the combined voting power of the then outstanding voting securities entitled to vote generally in the election of directors, as the case may be, of the corporation resulting from such Business Combination (including,

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without limitation, a corporation which as a result of such transaction owns the Company or all or substantially all of the Company’s assets either directly or through one or more subsidiaries) in substantially the same proportions as their ownership, immediately prior to such Business Combination of the Outstanding Company Common Stock and Outstanding Company Voting Securities, as the case may be, (ii) no Person (excluding any corporation resulting from such Business Combination or any employee benefit plan (or related trust) of the Company or such corporation resulting from such Business Combination) other than one or more of the Exempt Persons beneficially owns, directly or indirectly, 40% or more of, respectively, the then outstanding shares of common stock of the corporation resulting from such Business Combination or the combined voting power of the then outstanding voting securities of such corporation except to the extent that such ownership existed prior to the Business Combination and (iii) at least a majority of the members of the board of directors of the corporation resulting from such Business Combination were members of the Incumbent Board at the time of the execution of the initial agreement, or of the action of the Board, providing for such Business Combination.

     (d) The approval by the shareholders of the Company of a complete liquidation or dissolution of the Company.

     6.3.2 CC Termination. The term “CC Termination” means any of the following: (a) the Executive’s employment is terminated by the Company other than under paragraphs 6.1.2, 6.4 or 6.5; or (b) the Executive resigns as a result of a change in the Executive’s duties or title, a reduction in the Executive’s then current Base Salary or a significant reduction in the Executive’s then current benefits as provided in Section 4, a relocation of more than 25 miles from the Executive’s then current place of employment being required by the Board of Directors or a default by the Company under this Agreement.

     6.4 Incapacity of Executive. If the Executive suffers from a physical or mental condition, which in the reasonable judgment of the Company’s Board of Directors, prevents the Executive in whole or in part from performing the duties specified herein for a period of sixteen (16) consecutive weeks, the Executive’s employment may be terminated by the Company, in which event, the Company will pay Executive the equivalent of six (6) months Base Salary in effect on the date of termination. If, on the termination date, the Executive is a “specified employee” as defined in regulations under Section 409A of the Code, such payment will commence on the first payroll payment date which is more than six months following the termination date. Notwithstanding the foregoing, the amount payable hereunder will be reduced by any benefits payable under any disability plans provided by the Company under paragraph 4.4 of this Agreement. The right to the compensation due under this paragraph 6.4 is subject to the execution by the Executive or the Executive’s legal representative

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of the Company’s severance agreement which will operate as a release of all legally waivable claims against the Company. In applying this section, the Company will comply with any applicable legal requirements, including the Americans with Disabilities Act.

6.5 Death of Executive. If the Executive dies during the term of this Agreement, Executive’s employment will terminate without compensation to the Executive’s estate except: (a) the obligation to continue the Base Salary payments under paragraph 4.1 of this Agreement for twelve (12) months after the effective date of such termination.

6.6 Effect of Termination. The termination of Executive’s employment will terminate all obligations of the Executive to render services on behalf of the Company. The Executive will maintain the confidentiality of all information acquired by the Executive during the term of his employment in accordance with paragraph 7 of this Agreement and the Executive shall comply with all other post employment requirements including paragraphs 7, 8, 9, 10, 11, 12 and 13. Except as otherwise provided in this paragraph 6, no accrued bonus, severance pay or other form of compensation will be payable by the Company to the Executive by reason of the termination of his employment. All keys, entry cards, credit cards, files, records, financial information, furniture, furnishings, computers, equipment, supplies and other items relating to the Company will remain the property of the Company. The Executive will have the right to retain and remove all personal property and effects that are owned by the Executive and located in the offices of the Company. All such personal items will be removed from such offices no later than ten (10) days after the effective date of termination, and the Company is hereby authorized to discard any items remaining and to reassign the Executive’s office space after such date. Prior to the effective date of termination, the Executive will cooperate with the Company to provide for the orderly separation of the Executive’s employment.

6.7 Equity Compensation Provisions. Notwithstanding any provision to the contrary in any option agreement, restricted stock agreement, plan or other agreement relating to equity based compensation, in the event of a termination under paragraph 6.3 of this Agreement, or in the event of a termination under paragraph 6.1.1 of this Agreement if at the time of such termination Tom L. Ward is not the Chairman and Chief Executive Officer of the Company: (a) all units, stock options, incentive stock options, performance shares, stock appreciation rights and restricted stock granted and held by Executive immediately prior to such termination will immediately become 100% vested; and (b) the Executive’s right to exercise any previously unexercised options will not terminate until the latest date on which such option would expire but for Executive’s termination of employment. To the extent Company is unable to provide for one or both of the foregoing rights the Company will provide in lieu thereof a lump-sum cash payment equal to the difference between the total value of such units, stock options, incentive stock options,

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performance shares, stock appreciation rights and shares of restricted stock (the “Equity Compensation Rights”) with the foregoing rights as of the date of Executive’s termination of employment and the total value of the Equity Compensation Rights without the foregoing rights as of the date of the Executive’s termination of employment. The foregoing amounts will be determined by the Board of Directors in good faith based on a valuation performed by an independent consultant selected by the Board of Directors and the cash payment, if any, will be paid in a lump sum in the case of a termination under Section 6.1.1, at the same time as the severance payment is otherwise due under such Section, and in the case of a termination under Section 6.3, at the same time the payment is due under such Section. The right to the foregoing termination compensation under clauses (a) and (b) above is subject to the Executive’s execution of the Company’s severance agreement which will operate as a release of all legally waivable claims against the Company. Such payment is further conditioned upon the Executive’s compliance with all of the provisions of this Agreement, including all post-employment obligations.

     7. Confidentiality. The Executive recognizes that the nature of the Executive’s services are such that the Executive will have access to information which constitutes trade secrets, is of a confidential nature, is of great value to the Company or is the foundation on which the business of the Company is predicated. The Executive agrees not to disclose to any person other than the Company’s employees or the Company’s legal counsel or other parties authorized by the Company to receive confidential information (“Confidential Information”) nor use for any purpose, other than the performance of this Agreement, any Confidential Information. Confidential Information includes data or material (regardless of form) which is: (a) a trade secret; (b) provided, disclosed or delivered to Executive by the Company, any officer, director, employee, agent, attorney, accountant, consultant, or other person or entity employed by the Company in any capacity, any customer, borrower or business associate of the Company or any public authority having jurisdiction over the Company of any business activity conducted by the Company; or (c) produced, developed, obtained or prepared by or on behalf of Executive or the Company (whether or not such information was developed in the performance of this Agreement) with respect to the Company or any assets oil and gas prospects, business activities, officers, directors, employees, borrowers or customers of the foregoing. However, Confidential Information will not include any information, data or material which at the time of disclosure or use was generally available to the public other than by a breach of this Agreement, was available to the party to whom disclosed on a non-confidential basis by disclosure or access provided by the Company or a third party, or was otherwise developed or obtained independently by the person to whom disclosed without a breach of this Agreement. On request by the Company, the Company will be entitled to a copy of any Confidential Information in the possession of the Executive. The provisions of this paragraph 7 will survive the termination, expiration or cancellation of Executive’s employment for a period of one (1) year after the date of termination. The Executive will deliver to the Company all originals and copies of the documents or materials containing Confidential Information. For purposes of paragraphs 7, 8, and 9 of this

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Agreement, the Company expressly includes any of the Company’s subsidiaries or affiliates.

     8. Non-Solicitation. The Executive agrees that during the Non-Solicitation Period (as hereafter defined), Executive will not directly, either personally or by or through his agent, on behalf of himself or on behalf of any other individual, association or entity, (i) use any of the Confidential Information for the purposes of calling on any established customer of the Company or soliciting or inducing any of such customers to acquire, or providing to any of such customers, any product or service provided by the Company or any affiliate or subsidiary of the Company; (ii) solicit, influence or encourage any established customer of the Company to divert or direct such customer’s business to the Executive or any person or entity by which or with which the Executive is employed, associated, affiliated or otherwise related; or (iii) solicit, divert or attempt to solicit or divert any entity which has been identified and contacted by the Company, either directly or through such entity’s agent(s), with respect to a possible acquisition by the Company. For the purposes hereof, the term “Non-Solicitation Period” shall mean a period of six (6) months after Executive’s employment ceases for any reason.

     9. Non-Interference. The Executive agrees that during the Non-Interference Period (as hereafter defined) he will not, directly or indirectly, either personally or by or through his agent, on behalf of himself or on behalf of any other individual, association or entity, hire, solicit or seek to hire any employee of the Company or any affiliate or subsidiary of the Company, or any individual who was an employee of the Company or any affiliate or subsidiary of the Company during the twelve-month period prior to the Termination Date, or in any other manner attempt, directly or indirectly, to persuade any such employee to discontinue his or her status of employment with the Company or any affiliate or subsidiary of the Company or to become employed in a business or activities likely to be competitive with the business of the Company or any affiliate or subsidiary of the Company. For the purposes hereof, the term “Non-Interference Period” shall mean a period of six (6) months after Executive’s employment ceases for any reason.

     10. Severability. It is the desire and intent of the parties hereto that the provisions of this Agreement be enforced to the fullest extent permissible under the laws and public policies applied in each jurisdiction in which enforcement is sought. Accordingly, if any particular provision of this Agreement shall be adjudicated by a court of competent jurisdiction to be invalid, prohibited or unenforceable for any reason, such provision, as to such jurisdiction, shall be ineffective, without invalidating the remaining provisions of this Agreement or affecting the validity or enforceability of such provision in any other jurisdiction. Notwithstanding the foregoing, if such provision could be more narrowly drawn so as not to be invalid, prohibited or unenforceable in such jurisdiction, it shall, as to such jurisdiction, be so narrowly drawn, without invalidating the remaining provisions of this Agreement or affecting the validity or enforceability of such provision in any other jurisdiction.

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     11. Remedies. The Executive acknowledges and understands that the provisions of this Agreement are of a special and unique nature, the loss of which cannot be adequately compensated for in damages by an action at law, and that the breach or threatened breach of the provisions of this Agreement would cause the Company or any of its Subsidiaries irreparable harm. In the event of a breach or threatened breach by the Executive of the provisions of this Agreement, the Company or any of its subsidiaries or affiliates shall be entitled to an injunction restraining the Executive from such breach. In addition to the foregoing and not in any way in limitation thereof, or in limitation of any right or remedy otherwise available, if the Executive violates any provision of Paragraphs 7, 8 or 9 hereof, any compensation or severance payments then or thereafter due from the Company to the Executive shall be terminated forthwith and the Company’s obligation to pay and the Executive’s right to receive such compensation as severance payments shall terminate and be of no further force or effect, in each case without limiting or affecting the Executive’s obligations under such Paragraphs 7, 8 and 9 or the Company’s or its subsidiaries’ or affiliates’ other rights and remedies available at law or equity. Nothing contained in this Agreement shall be construed as prohibiting the Company or any of its subsidiaries or affiliates from pursuing, or limiting the Company’s or any of its subsidiaries’ or affiliates’ ability to pursue, any other remedies available for any breach or threatened breach of this Agreement by the Executive. The provisions of Paragraph 13 of this Agreement relating to arbitration shall not be applicable to the Company to the extent it seeks an injunction in any court to restrain the Executive from violating Paragraphs 7, 8 or 9 hereof.

     12. Proprietary Matters.

     12.1 The Executive acknowledges and agrees that the Company owns all right, title and interest (including patent rights, copyrights, trade secret rights, trademark rights and all other intellectual and industrial property rights) relating to any and all inventions (whether or not patentable), works of authorship, design, know-how, ideas and information made or conceived or reduced to practice, in whole or in part, by the Executive during the term of this Agreement which are useful in, or directly or indirectly related to, the business of the Company or any Confidential Information (collectively, the “Proprietary Rights”). The Executive further acknowledges and agrees that all such Proprietary Rights are “works made for hire” of which the Company is the author. The Executive agrees to promptly disclose and provide all Proprietary Rights to the Company; provided, in the event the Proprietary Rights shall not be deemed to constitute “works made for hire,” or in the event the Executive should, by operation of law or otherwise, be deemed to retain any rights in the Proprietary Rights, the Executive agrees to assign to the Company, without further consideration, the Executive’s entire right, title and interest in and to each and every such Proprietary Right.

     12.2 The Executive hereby agrees to assist Company in obtaining and enforcing United States and/or foreign letters patent and copyright registrations covering the Proprietary Rights and further agrees that Executive’s obligation to

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assist Company shall continue beyond the termination of Executive’s employment hereunder. If Company is unable because of Executive’s mental or physical incapacity or for any other reason to secure Executive’s signature to apply for or to pursue any application for any United States or foreign letters patent or copyright registrations covering inventions assigned to Company, then Executive hereby irrevocably designates and appoints Company and its duly authorized officers and agents as Executive’s agent and attorney-in-fact to act for and on Executive’s behalf to execute and file any such applications and to do all other lawfully permitted acts to further the prosecution and issuance of letters patent or copyright registrations thereon with the same legal force and effect as if executed by Executive. Executive hereby waives and quitclaims to Company any and all claims of any nature whatsoever which Executive now or hereafter may have for infringement of any patent or copyright resulting from any such application for letters patent or copyright registrations assigned hereunder to Company. Executive will further assist Company in every lawful way to enforce any copyrights or patents obtained, including without limitation, testifying in any suit or proceeding involving any of the copyrights or patents or executing any documents deemed necessary by Company, all without further consideration except as contemplated by the immediately following sentence but at the expense of Company. If Executive is called upon to render such assistance after termination of Executive’s employment hereunder, then Executive shall be entitled to a fair and reasonable per diem fee (which shall not be less than Executive’s equivalent daily Base Salary) in addition to reimbursement of any expenses incurred at the request of Company.

     13. Arbitration. Any dispute between the parties out of or related to this Agreement or the employment relationship, whether arising during the term of this Agreement or afterwards, and involving a claim for money damages shall be subject to binding arbitration and resolved pursuant to the rules of the American Arbitration Association. All arbitration shall be final and binding and shall be governed by the Federal Arbitration Act and the arbitration decision shall be enforceable in any court of competent jurisdiction. This obligation to arbitrate shall survive even if this Agreement shall be alleged to be rescinded or terminated. The arbitration hearing shall be convened in Oklahoma City, Oklahoma. The Company will pay the costs and expenses of the arbitration including, without limitation, the fees for the arbitrators.

     14. Miscellaneous. The parties further agree as follows:

     14.1 Time. Time is of the essence of each provision of this Agreement.

     14.2 Notices. Any notice, payment, demand or communication required or permitted to be given by any provision of this Agreement will be in writing and will be deemed to have been given when received by personal delivery, by facsimile, by overnight courier, or by certified mail, postage and charges prepaid, directed to the following address or to such other or additional addresses as any party might designate by written notice to the other party:

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To the Company:	SandRidge Energy, Inc.
	1601 N.W. Expressway, Suite 1600
	Oklahoma City, OK 73118
	Attn: Mary L. Whitson
To the Executive:	Matthew K. Grubb
	17213 Whimbrel Lane
	Edmond, OK 73003

     14.3 Assignment. Neither this Agreement nor any of the parties’ rights or obligations hereunder can be transferred or assigned without the prior written consent of the other parties to this Agreement.

     14.4 Construction. If any provision of this Agreement or the application thereof to any person or circumstances is determined, to any extent, to be invalid or unenforceable, the remainder of this Agreement, or the application of such provision to persons or circumstances other than those as to which the same is held invalid or unenforceable, will not be affected thereby, and each term and provision of this Agreement will be valid and enforceable to the fullest extent permitted by law. This Agreement is intended to be interpreted, construed and enforced in accordance with the laws of the state of Oklahoma

     14.5 Entire Agreement. This Agreement constitutes the entire agreement between the parties hereto with respect to the subject matter herein contained, and no modification hereof will be effective unless made by a supplemental written agreement executed by all of the parties hereto.

     14.6 Binding Effect; Third Party Beneficiary; Assignment. This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective affiliates, officers, employees, agents, successors and assigns (including, in the case of the Company or any of its subsidiaries or affiliated companies, the successor to the business of the Company as a result of the transfer of all or substantially all of the assets or capital stock of the Company or any of its subsidiaries or affiliates); provided, that the Executive may not assign this Agreement or any of his rights or interests herein, in whole or in part, to any other person or entity without the prior written consent of the Company.

     14.7 Supercession. This Agreement is the final, complete and exclusive expression of the agreement between the Company and the Executive and supersedes and replaces in all respects any prior oral or written employment agreements. On execution of this Agreement by the Company and the Executive, the relationship between the Company and the Executive after the effective date of this Agreement will be governed by the terms of this Agreement and not by any other agreements, oral or otherwise.

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     14.8 Non-Contravention. Executive represents and warrants to the Company that the execution and performance of this Agreement will not violate, constitute a default under, or otherwise give rights to any third party, pursuant to the terms of any Agreement to which Executive is a party.

     14.9 Indemnity. EXECUTIVE AGREES TO INDEMNIFY AND HOLD HARMLESS THE COMPANY, ITS DIRECTORS, OFFICERS AND EMPLOYEES AND AGENTS (THE “INDEMNIFIED PARTIES”) AGAINST ANY LOSS, CLAIM, DAMAGE, LIABILITY OR EXPENSE, AS INCURRED, (“LOSS”) TO WHICH THE INDEMNIFIED PARTIES MAY BECOME SUBJECT OR INCUR, INSOFAR AS SUCH LOSS ARISES OUT OF OR IS BASED UPON ANY INACCURACY IN ANY REPRESENTATION OR WARRANTY GIVEN BY EXECUTIVE IN THIS AGREEMENT AND TO REIMBURSE THE INDEMNIFIED PARTIES FOR ANY AND ALL EXPENSES (INCLUDING THE FEES AND DISBURSEMENTS OF COUNSEL CHOSEN BY THE INDEMNIFIED PARTIES) AS SUCH EXPENSES ARE REASONABLY INCURRED BY HE INDEMNIFIED PARTIES IN CONNECTION WITH INVESTIGATING, DEFENDING, SETTLING, COMPROMISING OR PAYING ANY SUCH LOSS.

     14.10 Compliance with Section 409A of the Code. This Agreement is intended to comply with Section 409A of the Code and shall be construed and interpreted in accordance with such intent. To the extent any benefit paid under this Agreement shall be subject to Section 409A of the Code, such benefit shall be paid in a manner that will comply with Section 409A, including any IRS 409A Guidance. Any provision of this Agreement that would cause the payment of any benefit to fail to satisfy Section 409A of the Code shall have no force and effect until amended to comply with Section 409A (which amendment may be retroactive to the extent permitted by the IRS 409A Guidance.

     IN WITNESS WHEREOF, the undersigned have executed this Agreement effective the date first above written.

[SIGNATURES ON FOLLOWING PAGE]

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SANDRIDGE ENERGY, INC.
By:
	/s/ Tom L. Ward	03/19/08
	Tom L. Ward	Date
	Chief Executive Officer
	(the “Company”)
By	/s/ Matthew K. Grubb	02/06/08
	Matthew K. Grubb	Date
	(the “Executive”)

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EX-10.5.4

EMPLOYMENT AGREEMENT

     THIS AGREEMENT is made effective January 1, 2008 (the “Effective Date”), between SANDRIDGE ENERGY, INC., a Delaware corporation (the “Company”), and TODD N. TIPTON, an individual (the “Executive”).

WITNESSETH:

     WHEREAS, the Company and the Executive desire to set forth the terms of their agreements relating to the employment of Executive by the Company; and

     NOW, THEREFORE, in consideration of the mutual promises herein contained, the Company and the Executive agree as follows:

     1. Employment. The Company hereby employs the Executive and the Executive hereby accepts such employment subject to the terms and conditions contained in this Agreement. The Executive is engaged as an employee of the Company and the Executive and the Company do not intend to create a joint venture, partnership or other relationship that might impose a fiduciary obligation on the Executive or the Company in the performance of this Agreement, other than as an officer and director of the Company.

     2. Executive’s Duties. The Executive is employed on a full-time basis. Throughout the term of this Agreement, the Executive will use his/her best efforts and due diligence to assist the Company in the objective of achieving the most profitable operation of the Company and the Company’s affiliated entities consistent with developing and maintaining a quality business operation. The Executive shall also devote all of Executive’s working time, attention and energies to the performance of Executive’s duties and responsibilities under this Agreement.

     2.1 Specific Duties. During the term of this Agreement, the Executive will serve as the Executive Vice President — Exploration for the Company. The Executive will perform all of the services required to fully and faithfully execute the position to which the Executive is appointed and such other services as may be assigned by the Company’s Board of Directors in their sole discretion. The Executive agrees to use the Executive’s best efforts to perform all of the services required to fully and faithfully execute the offices and positions to which the Executive is appointed and elected. In addition, the precise duties to be performed by Executive may be changed or curtailed in the sole discretion of the Board of Directors of the Company.

     2.2 Rules and Regulations. From time to time, the Company may issue policies and procedures applicable to employees and the Executive including an employment policies manual. The Executive agrees to comply with such policies and procedures, except to the extent such policies are inconsistent with this Agreement. Such policies and procedures may be supplemented, modified, changed or adopted without notice in the sole discretion of the

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Company at any time. In the event of a conflict between such policies and procedures and this Agreement, this Agreement will control unless compliance with this Agreement will violate any law or regulation applicable to the Company or its affiliated entities.

     3. Other Activities. The Executive shall not engage in any business activity that in the judgment of the Board conflicts with the Executive’s duties hereunder, whether or not such activity is pursued for gain, profit, or other pecuniary advantage. In addition, except for the activities permitted under paragraph 3.1 of this Agreement or approved by the Board of Directors in writing, the Executive will not: (a) engage in activities which require such substantial services on the part of the Executive that the Executive is unable to perform the duties assigned to the Executive in accordance with this Agreement; (b) serve as an officer or director of any publicly held entity; or (c) directly or indirectly invest in, participate in or acquire an interest in any oil and gas business, including, without limitation, (i) producing oil and gas, (ii) drilling, owning or operating oil and gas leases or wells, (iii) providing services or materials to the oil and gas industry, (iv) marketing or refining oil or gas, or (v) owning any interest in any corporation, partnership, company or entity which conducts any of the foregoing activities. The limitations in this paragraph 3 will not prohibit an investment by the Executive in publicly traded securities. The Executive is not restricted from maintaining or making investments, or engaging in other businesses, enterprises or civic, charitable or public service functions if such activities, investments, businesses or enterprises do not result in a violation of clauses (a) through (c) of this paragraph 3. Notwithstanding the foregoing, the Executive will be permitted to participate in the activities set forth in Section 3.1 that will be deemed to be approved by the Company, if such activities are undertaken in strict compliance with this Agreement.

     3.1 Royalty Interests and Gifts. The foregoing restriction in clause (c) will not prohibit the ownership of royalty interests where the Executive owns or previously owned the surface of the land covered by the royalty interest and the ownership of the royalty interest is incidental to the ownership of the surface estate or the ownership of royalty, overriding royalty or working interests that are received by gift or inheritance subject to disclosure by Executive to the Company in writing.

     4. Executive’s Compensation. The Company agrees to compensate the Executive as follows:

     4.1 Base Salary. Executive will be paid a base salary (the “Base Salary”) in an annual rate of not less than Three Hundred Forty-five Thousand Dollars ($345,000.00), which will be paid to the Executive in installments consistent with the Company’s customary payroll practices, beginning January 23, 2008, during the term of this Agreement.

     4.2 Bonus. In addition to the Base Salary described at paragraph 4.1 of this Agreement, the Company may periodically pay bonus compensation to the Executive. Any bonus compensation will be paid by separate check apart

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from Executive’s Base Salary less appropriate deductions pursuant to Internal Revenue Service guidelines. In order to be entitled to the bonus compensation set forth herein and any future bonuses, Executive must be an active full-time employee of the Company on the date the bonus is to be paid. Upon notice of intent to separate employment or separation of employment for any reason prior to the date any bonuses are paid, Executive shall not be eligible for any pro rata bonus compensation. Executive recognizes and acknowledges that except as provided above, the award of bonus is not guaranteed or promised in any way. Any additional bonus compensation will be at the absolute discretion of the Company in such amounts and at such times as the Board of Directors of the Company (or a Compensation Committee thereof) may determine.

     4.3 Equity Compensation. In addition to the compensation set forth in paragraphs 4.1 and 4.2 of this Agreement, the Executive may periodically be granted awards of Company restricted stock under and subject to the Company’s equity compensation plans (the “Equity Compensation Plans”). Such equity compensation will vest over a four (4) year period which begins to run from the date of each grant. In order to be entitled to the award of equity compensation, the Executive must be an active full-time employee of the Company on the grant date. Further, the terms and provisions of the Equity Compensation Plans control and direct the award of Company restricted stock.

     4.4 Benefits. The Company agrees to extend to the Executive retirement benefits and deferred compensation (if any and if made available) and reimbursement of reasonable expenditures. The Company will also provide the Executive the opportunity to apply for coverage under the Company’s medical, life and disability plans, if any. If the Executive is accepted for coverage under such plans, the Company will provide such coverage on the same terms as is customarily provided by the Company to the plan participants as modified from time to time. The Executive is subject to all of the terms and provisions of the Company’s benefit plans or policies.

     4.5 Paid Time Off. The Executive shall be eligible for thirty (30) days of Paid Time Off (“PTO”) each continuous year of employment during the term of this Agreement under the Company’s PTO policy. Such PTO shall be calculated from the Executive’s original date of hire. No additional compensation will be paid for failure to take PTO and no PTO may be carried forward from one twelve (12) month period to another.

     4.6 Membership Dues. The Company will reimburse the Executive for: (a) the monthly dues necessary to maintain a full membership in a club in the Oklahoma City area selected by the Executive; and (b) the reasonable cost of any approved business entertainment at such club. All other costs, including, without implied limitation, any initiation costs, initial membership costs, personal use and business entertainment unrelated to the Company will be the sole obligation of the Executive and the Company will have no liability with respect to such amounts.

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     5. Term. The employment relationship evidenced by this Agreement is an “at will” employment relationship and the Company reserves the right to terminate the Executive at any time with or without cause. In the absence of termination as set forth in paragraph 6 below, this Agreement will extend for a term commencing on the Effective Date, and ending on December 31, 2009 (the “Expiration Date”). Unless the Company provides thirty (30) days prior written notice of non-extension to the Executive, on or before the Expiration Date, the term and the Expiration Date will be automatically extended for one (1) additional year from the Expiration Date.

     6. Termination. This Agreement will continue in effect until the expiration of the term stated in paragraph 5 of this Agreement unless earlier terminated pursuant to this paragraph 6.

          6.1 Termination by Company. The Company will have the following rights to terminate Executive’s employment:

     6.1.1 Termination without Cause. The Company may terminate Executive’s employment without Cause at any time by the service of written notice of termination to the Executive specifying an effective date of such termination not sooner than ten (10) days after the date of such notice (the “Termination Date”). In the event the Executive is terminated without Cause (other than a CC Termination under paragraph 6.3 of this Agreement), the Executive will receive as termination compensation a lump sum payment equal to twelve (12) months Base Salary (as in effect on the Termination Date). If on the Termination Date, the Executive is a “specified employee” as defined in regulations under Section 409A of the Code, such payment will commence on the first payroll payment date which is more than six months following the Termination Date. The right to the foregoing termination compensation set forth above is subject to the Executive’s execution of the Company’s severance agreement which will operate as a release of all legally waivable claims against the Company. Such payment is further conditioned upon the Executive’s compliance with all of the provisions of this Agreement, including all post-employment obligations.

     6.1.2 Termination for Cause. The Company may terminate the employment of the Executive hereunder at any time for Cause (as hereinafter defined) (such a termination being referred to in this Agreement as a “Termination For Cause”) by giving the Executive written notice of such termination, which shall take effect immediately upon the giving of such notice to the Executive. As used in this Agreement, “Cause” means (A) the Executive’s material breach or threatened breach of this Agreement; (B) the Executive fails to substantially perform the Executive’s duties hereunder; (C) the misappropriation or fraudulent conduct by the Executive with respect to the assets or operations of the Company or any of its subsidiaries or affiliated companies; (D) the

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Executive’s willful disregard of the instructions of the Board or the Executive’s material neglect of duties or failure to act, other than by reason of disability or death; (E) the Executive’s personal misconduct which substantially injures the Company; or (F) the conviction of the Executive for, or a plea of guilty or no contest to, a felony or any crime involving fraud, theft or dishonesty. In the event Executive’s employment is terminated for Cause, the company will not have any obligation to provide any further payments or benefits to the Executive after the effective date of such termination.

     6.2 Termination by Executive. The Executive may voluntarily terminate his employment with or without Cause by the service of written notice of such termination to the Company specifying an effective date of such termination thirty (30) days after the date of such notice. The Company may in its sole discretion, elect to waive all or any part of the 30-day notice period with no further obligations being owed to the Executive by the Company. In the event employment is terminated by the Executive, neither the Company nor the Executive will have any further obligations hereunder, except for any obligations which expressly survive termination of employment including Sections 7, 8, 9, 10, 11 ,12 and 13.

     6.3 Termination After Change in Control. If during the term of this Agreement there is a “Change of Control” and within one (1) year thereafter there is a CC Termination (as hereafter defined), then the Executive will be entitled to a severance payment (in addition to any other rights and other amounts payable to the Executive under Section 6.7 or under Company plans in which Executive is a participant) payable in a lump sum in cash within 10 days following the CC Termination in an amount equal to the sum of the following: (a) two (2) times the Executive’s Base Salary for the last 12 calendar months ending immediately prior to the CC Termination and bonus paid during such 12 month period pursuant to Section 4.2 (based on the average of the last three years’ annual bonuses or such lesser number of years as Executive may have been employed). If the foregoing amount is not paid within ten (10) days after the CC Termination, the unpaid amount will bear interest at the per annum rate of 12%. The right to the foregoing termination compensation under clause (a) above is subject to the Executive’s execution of the Company’s severance agreement which will operate as a release of all legally waivable claims against the Company. Such payment is further conditioned upon the Executive’s compliance with all of the provisions of this Agreement, including all post- employment obligations. Notwithstanding the foregoing, if at the time of a CC Termination, the Executive is a “specified employee” as defined in regulations under Section 409A of the Code, such payment will be made on the first day which is more than six months following the CC Termination. In connection with any Change of Control, the Company shall obtain the assumption of this Agreement, without limitation or reduction, by any successor to the Company or any parent corporation of the Company.

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     6.3.1 Change of Control. For the purpose of this Agreement, a “Change of Control” means the occurrence of any of the following:

     (a) The acquisition by any individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) (a “Person”), other than Executive or his affiliates or Tom L. Ward or his affiliates (the “Exempt Persons”), of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of 40% or more of either (i) the then outstanding shares of common stock of the Company (the “Outstanding Company Common Stock”) or (ii) the combined voting power of the then outstanding voting securities of the Company entitled to vote generally in the election of directors (the “Outstanding Company Voting Securities”). For purposes of this paragraph (a) the following acquisitions by a Person will not constitute a Change of Control: (i) any acquisition directly from the Company; (ii) any acquisition by the Company; (iii) any acquisition by any employee benefit plan (or related trust) sponsored or maintained by the Company or any corporation controlled by the Company; or (iv) any acquisition by any corporation pursuant to a transaction which complies with clauses (i), (ii) and (iii) of paragraph (c) of this paragraph 6.3.1.

     (b) The individuals who, as of the date hereof, constitute the Board of Directors (the “Incumbent Board”) cease for any reason to constitute at least a majority of the Board of Directors. Any individual becoming a director subsequent to the date hereof whose election, or nomination for election by the Company’s shareholders, is approved by a vote of at least a majority of the directors then comprising the Incumbent Board will be considered a member of the Incumbent Board as of the date hereof, but any such individual whose initial assumption of office occurs as a result of an actual or threatened election contest with respect to the election or removal of directors or other actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the Incumbent Board will not be deemed a member of the Incumbent Board as of the date hereof.

     (c) The consummation of a reorganization, merger, consolidation or sale or other disposition of all or substantially all of the assets of the Company (a “Business Combination”), unless following such Business Combination: (i) the individuals and entities who were the beneficial owners, respectively, of the Outstanding Company Common Stock and Outstanding Company Voting Securities immediately prior to such Business Combination beneficially own, directly or indirectly, more than 60% of, respectively, the then outstanding shares of common stock and the combined voting power of the then outstanding voting securities entitled to vote generally in the election of directors, as the case may be, of the corporation resulting from such Business Combination (including,

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without limitation, a corporation which as a result of such transaction owns the Company or all or substantially all of the Company’s assets either directly or through one or more subsidiaries) in substantially the same proportions as their ownership, immediately prior to such Business Combination of the Outstanding Company Common Stock and Outstanding Company Voting Securities, as the case may be, (ii) no Person (excluding any corporation resulting from such Business Combination or any employee benefit plan (or related trust) of the Company or such corporation resulting from such Business Combination) other than one or more of the Exempt Persons beneficially owns, directly or indirectly, 40% or more of, respectively, the then outstanding shares of common stock of the corporation resulting from such Business Combination or the combined voting power of the then outstanding voting securities of such corporation except to the extent that such ownership existed prior to the Business Combination and (iii) at least a majority of the members of the board of directors of the corporation resulting from such Business Combination were members of the Incumbent Board at the time of the execution of the initial agreement, or of the action of the Board, providing for such Business Combination.

     (d) The approval by the shareholders of the Company of a complete liquidation or dissolution of the Company.

     6.3.2 CC Termination. The term “CC Termination” means any of the following: (a) the Executive’s employment is terminated by the Company other than under paragraphs 6.1.2, 6.4 or 6.5; or (b) the Executive resigns as a result of a change in the Executive’s duties or title, a reduction in the Executive’s then current Base Salary or a significant reduction in the Executive’s then current benefits as provided in Section 4, a relocation of more than 25 miles from the Executive’s then current place of employment being required by the Board of Directors or a default by the Company under this Agreement.

     6.4 Incapacity of Executive. If the Executive suffers from a physical or mental condition, which in the reasonable judgment of the Company’s Board of Directors, prevents the Executive in whole or in part from performing the duties specified herein for a period of sixteen (16) consecutive weeks, the Executive’s employment may be terminated by the Company, in which event, the Company will pay Executive the equivalent of six (6) months Base Salary in effect on the date of termination. If, on the termination date, the Executive is a “specified employee” as defined in regulations under Section 409A of the Code, such payment will commence on the first payroll payment date which is more than six months following the termination date. Notwithstanding the foregoing, the amount payable hereunder will be reduced by any benefits payable under any disability plans provided by the Company under paragraph 4.4 of this Agreement. The right to the compensation due under this paragraph 6.4 is subject to the execution by the Executive or the Executive’s legal representative

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of the Company’s severance agreement which will operate as a release of all legally waivable claims against the Company. In applying this section, the Company will comply with any applicable legal requirements, including the Americans with Disabilities Act.

     6.5 Death of Executive. If the Executive dies during the term of this Agreement, Executive’s employment will terminate without compensation to the Executive’s estate except: (a) the obligation to continue the Base Salary payments under paragraph 4.1 of this Agreement for twelve (12) months after the effective date of such termination.

     6.6 Effect of Termination. The termination of Executive’s employment will terminate all obligations of the Executive to render services on behalf of the Company. The Executive will maintain the confidentiality of all information acquired by the Executive during the term of his employment in accordance with paragraph 7 of this Agreement and the Executive shall comply with all other post employment requirements including paragraphs 7, 8, 9, 10, 11, 12 and 13. Except as otherwise provided in this paragraph 6, no accrued bonus, severance pay or other form of compensation will be payable by the Company to the Executive by reason of the termination of his employment. All keys, entry cards, credit cards, files, records, financial information, furniture, furnishings, computers, equipment, supplies and other items relating to the Company will remain the property of the Company. The Executive will have the right to retain and remove all personal property and effects that are owned by the Executive and located in the offices of the Company. All such personal items will be removed from such offices no later than ten (10) days after the effective date of termination, and the Company is hereby authorized to discard any items remaining and to reassign the Executive’s office space after such date. Prior to the effective date of termination, the Executive will cooperate with the Company to provide for the orderly separation of the Executive’s employment.

     6.7 Equity Compensation Provisions. Notwithstanding any provision to the contrary in any option agreement, restricted stock agreement, plan or other agreement relating to equity based compensation, in the event of a termination under paragraph 6.3 of this Agreement, or in the event of a termination under paragraph 6.1.1 of this Agreement if at the time of such termination Tom L. Ward is not the Chairman and Chief Executive Officer of the Company: (a) all units, stock options, incentive stock options, performance shares, stock appreciation rights and restricted stock granted and held by Executive immediately prior to such termination will immediately become 100% vested; and (b) the Executive’s right to exercise any previously unexercised options will not terminate until the latest date on which such option would expire but for Executive’s termination of employment. To the extent Company is unable to provide for one or both of the foregoing rights the Company will provide in lieu thereof a lump-sum cash payment equal to the difference between the total value of such units, stock options, incentive stock options,

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performance shares, stock appreciation rights and shares of restricted stock (the “Equity Compensation Rights”) with the foregoing rights as of the date of Executive’s termination of employment and the total value of the Equity Compensation Rights without the foregoing rights as of the date of the Executive’s termination of employment. The foregoing amounts will be determined by the Board of Directors in good faith based on a valuation performed by an independent consultant selected by the Board of Directors and the cash payment, if any, will be paid in a lump sum in the case of a termination under Section 6.1.1, at the same time as the severance payment is otherwise due under such Section, and in the case of a termination under Section 6.3, at the same time the payment is due under such Section. The right to the foregoing termination compensation under clauses (a) and (b) above is subject to the Executive’s execution of the Company’s severance agreement which will operate as a release of all legally waivable claims against the Company. Such payment is further conditioned upon the Executive’s compliance with all of the provisions of this Agreement, including all post-employment obligations.

     7. Confidentiality. The Executive recognizes that the nature of the Executive’s services are such that the Executive will have access to information which constitutes trade secrets, is of a confidential nature, is of great value to the Company or is the foundation on which the business of the Company is predicated. The Executive agrees not to disclose to any person other than the Company’s employees or the Company’s legal counsel or other parties authorized by the Company to receive confidential information (“Confidential Information”) nor use for any purpose, other than the performance of this Agreement, any Confidential Information. Confidential Information includes data or material (regardless of form) which is: (a) a trade secret; (b) provided, disclosed or delivered to Executive by the Company, any officer, director, employee, agent, attorney, accountant, consultant, or other person or entity employed by the Company in any capacity, any customer, borrower or business associate of the Company or any public authority having jurisdiction over the Company of any business activity conducted by the Company; or (c) produced, developed, obtained or prepared by or on behalf of Executive or the Company (whether or not such information was developed in the performance of this Agreement) with respect to the Company or any assets oil and gas prospects, business activities, officers, directors, employees, borrowers or customers of the foregoing. However, Confidential Information will not include any information, data or material which at the time of disclosure or use was generally available to the public other than by a breach of this Agreement, was available to the party to whom disclosed on a non-confidential basis by disclosure or access provided by the Company or a third party, or was otherwise developed or obtained independently by the person to whom disclosed without a breach of this Agreement. On request by the Company, the Company will be entitled to a copy of any Confidential Information in the possession of the Executive. The provisions of this paragraph 7 will survive the termination, expiration or cancellation of Executive’s employment for a period of one (1) year after the date of termination. The Executive will deliver to the Company all originals and copies of the documents or materials containing Confidential Information. For purposes of paragraphs 7, 8, and 9 of this

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Agreement, the Company expressly includes any of the Company’s subsidiaries or affiliates.

     8. Non-Solicitation. The Executive agrees that during the Non-Solicitation Period (as hereafter defined), Executive will not directly, either personally or by or through his agent, on behalf of himself or on behalf of any other individual, association or entity, (i) use any of the Confidential Information for the purposes of calling on any established customer of the Company or soliciting or inducing any of such customers to acquire, or providing to any of such customers, any product or service provided by the Company or any affiliate or subsidiary of the Company; (ii) solicit, influence or encourage any established customer of the Company to divert or direct such customer’s business to the Executive or any person or entity by which or with which the Executive is employed, associated, affiliated or otherwise related; or (iii) solicit, divert or attempt to solicit or divert any entity which has been identified and contacted by the Company, either directly or through such entity’s agent(s), with respect to a possible acquisition by the Company. For the purposes hereof, the term “Non-Solicitation Period” shall mean a period of six (6) months after Executive’s employment ceases for any reason.

     9. Non-interference. The Executive agrees that during the Non interference Period (as hereafter defined) he will not, directly or indirectly, either personally or by or through his agent, on behalf of himself or on behalf of any other individual, association or entity, hire, solicit or seek to hire any employee of the Company or any affiliate or subsidiary of the Company, or any individual who was an employee of the Company or any affiliate or subsidiary of the Company during the twelve-month period prior to the Termination Date, or in any other manner attempt, directly or indirectly, to persuade any such employee to discontinue his or her status of employment with the Company or any affiliate or subsidiary of the Company or to become employed in a business or activities likely to be competitive with the business of the Company or any affiliate or subsidiary of the Company. For the purposes hereof, the term “Non-Interference Period” shall mean a period of six (6) months after Executive’s employment ceases for any reason.

     10. Severability. It is the desire and intent of the parties hereto that the provisions of this Agreement be enforced to the fullest extent permissible under the laws and public policies applied in each jurisdiction in which enforcement is sought. Accordingly, if any particular provision of this Agreement shall be adjudicated by a court of competent jurisdiction to be invalid, prohibited or unenforceable for any reason, such provision, as to such jurisdiction, shall be ineffective, without invalidating the remaining provisions of this Agreement or affecting the validity or enforceability of such provision in any other jurisdiction. Notwithstanding the foregoing, if such provision could be more narrowly drawn so as not to be invalid, prohibited or unenforceable in such jurisdiction, it shall, as to such jurisdiction, be so narrowly drawn, without invalidating the remaining provisions of this Agreement or affecting the validity or enforceability of such provision in any other jurisdiction.

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     11. Remedies. The Executive acknowledges and understands that the provisions of this Agreement are of a special and unique nature, the loss of which cannot be adequately compensated for in damages by an action at law, and that the breach or threatened breach of the provisions of this Agreement would cause the Company or any of its Subsidiaries irreparable harm. In the event of a breach or threatened breach by the Executive of the provisions of this Agreement, the Company or any of its subsidiaries or affiliates shall be entitled to an injunction restraining the Executive from such breach. In addition to the foregoing and not in any way in limitation thereof, or in limitation of any right or remedy otherwise available, if the Executive violates any provision of Paragraphs 7, 8 or 9 hereof, any compensation or severance payments then or thereafter due from the Company to the Executive shall be terminated forthwith and the Company’s obligation to pay and the Executive’s right to receive such compensation as severance payments shall terminate and be of no further force or effect, in each case without limiting or affecting the Executive’s obligations under such Paragraphs 7, 8 and 9 or the Company’s or its subsidiaries’ or affiliates’ other rights and remedies available at law or equity. Nothing contained in this Agreement shall be construed as prohibiting the Company or any of its subsidiaries or affiliates from pursuing, or limiting the Company’s or any of its subsidiaries’ or affiliates’ ability to pursue, any other remedies available for any breach or threatened breach of this Agreement by the Executive. The provisions of Paragraph 13 of this Agreement relating to arbitration shall not be applicable to the Company to the extent it seeks an injunction in any court to restrain the Executive from violating Paragraphs 7, 8 or 9 hereof.

     12. Proprietary Matters.

     12.1 The Executive acknowledges and agrees that the Company owns all right, title and interest (including patent rights, copyrights, trade secret rights, trademark rights and all other intellectual and industrial property rights) relating to any and all inventions (whether or not patentable), works of authorship, design, know-how, ideas and information made or conceived or reduced to practice, in whole or in part, by the Executive during the term of this Agreement which are useful in, or directly or indirectly related to, the business of the Company or any Confidential Information (collectively, the “Proprietary Rights”). The Executive further acknowledges and agrees that all such Proprietary Rights are “works made for hire” of which the Company is the author. The Executive agrees to promptly disclose and provide all Proprietary Rights to the Company; provided, in the event the Proprietary Rights shall not be deemed to constitute “works made for hire,” or in the event the Executive should, by operation of law or otherwise, be deemed to retain any rights in the Proprietary Rights, the Executive agrees to assign to the Company, without further consideration, the Executive’s entire right, title and interest in and to each and every such Proprietary Right.

     12.2 The Executive hereby agrees to assist Company in obtaining and enforcing United States and/or foreign letters patent and copyright registrations covering the Proprietary Rights and further agrees that Executive’s obligation to

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assist Company shall continue beyond the termination of Executive’s employment hereunder. If Company is unable because of Executive’s mental or physical incapacity or for any other reason to secure Executive’s signature to apply for or to pursue any application for any United States or foreign letters patent or copyright registrations covering inventions assigned to Company, then Executive hereby irrevocably designates and appoints Company and its duly authorized officers and agents as Executive’s agent and attorney-in-fact to act for and on Executive’s behalf to execute and file any such applications and to do all other lawfully permitted acts to further the prosecution and issuance of letters patent or copyright registrations thereon with the same legal force and effect as if executed by Executive. Executive hereby waives and quitclaims to Company any and all claims of any nature whatsoever which Executive now or hereafter may have for infringement of any patent or copyright resulting from any such application for letters patent or copyright registrations assigned hereunder to Company. Executive will further assist Company in every lawful way to enforce any copyrights or patents obtained, including without limitation, testifying in any suit or proceeding involving any of the copyrights or patents or executing any documents deemed necessary by Company, all without further consideration except as contemplated by the immediately following sentence but at the expense of Company. If Executive is called upon to render such assistance after termination of Executive’s employment hereunder, then Executive shall be entitled to a fair and reasonable per diem fee (which shall not be less than Executive’s equivalent daily Base Salary) in addition to reimbursement of any expenses incurred at the request of Company.

     13. Arbitration. Any dispute between the parties out of or related to this Agreement or the employment relationship, whether arising during the term of this Agreement or afterwards, and involving a claim for money damages shall be subject to binding arbitration and resolved pursuant to the rules of the American Arbitration Association. All arbitration shall be final and binding and shall be governed by the Federal Arbitration Act and the arbitration decision shall be enforceable in any court of competent jurisdiction. This obligation to arbitrate shall survive even if this Agreement shall be alleged to be rescinded or terminated. The arbitration hearing shall be convened in Oklahoma City, Oklahoma. The Company will pay the costs and expenses of the arbitration including, without limitation, the fees for the arbitrators.

     14. Miscellaneous. The parties further agree as follows:

     14.1 Time. Time is of the essence of each provision of this Agreement.

     14.2 Notices. Any notice, payment, demand or communication required or permitted to be given by any provision of this Agreement will be in writing and will be deemed to have been given when received by personal delivery, by facsimile, by overnight courier, or by certified mail, postage and charges prepaid, directed to the following address or to such other or additional addresses as any party might designate by written notice to the other party:

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To the Company:  SandRidge Energy, Inc.

1601 N.W. Expressway, Suite 1600
Oklahoma City, OK 73118
Attn: Mary L. Whitson

To the Executive:  Todd N. Tipton

4224 The Ranch Road
Edmond, OK 73034

     14.3 Assignment. Neither this Agreement nor any of the parties’ rights or obligations hereunder can be transferred or assigned without the prior written consent of the other parties to this Agreement.

     14.4 Construction. If any provision of this Agreement or the application thereof to any person or circumstances is determined, to any extent, to be invalid or unenforceable, the remainder of this Agreement, or the application of such provision to persons or circumstances other than those as to which the same is held invalid or unenforceable, will not be affected thereby, and each term and provision of this Agreement will be valid and enforceable to the fullest extent permitted by law. This Agreement is intended to be interpreted, construed and enforced in accordance with the laws of the state of Oklahoma

     14.5 Entire Agreement. This Agreement constitutes the entire agreement between the parties hereto with respect to the subject matter herein contained, and no modification hereof will be effective unless made by a supplemental written agreement executed by all of the parties hereto.

     14.6 Binding Effect; Third Party Beneficiary; Assignment. This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective affiliates, officers, employees, agents, successors and assigns (including, in the case of the Company or any of its subsidiaries or affiliated companies, the successor to the business of the Company as a result of the transfer of all or substantially all of the assets or capital stock of the Company or any of its subsidiaries or affiliates); provided, that the Executive may not assign this Agreement or any of his rights or interests herein, in whole or in part, to any other person or entity without the prior written consent of the Company.

     14.7 Supercession. This Agreement is the final, complete and exclusive expression of the agreement between the Company and the Executive and supersedes and replaces in all respects any prior oral or written employment agreements. On execution of this Agreement by the Company and the Executive, the relationship between the Company and the Executive after the effective date of this Agreement will be governed by the terms of this Agreement and not by any other agreements, oral or otherwise.

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     14.8 Non-Contravention. Executive represents and warrants to the Company that the execution and performance of this Agreement will not violate, constitute a default under, or otherwise give rights to any third party, pursuant to the terms of any Agreement to which Executive is a party.

     14.9 Indemnity. EXECUTIVE AGREES TO INDEMNIFY AND HOLD HARMLESS THE COMPANY, ITS DIRECTORS, OFFICERS AND EMPLOYEES AND AGENTS (THE “INDEMNIFIED PARTIES”) AGAINST ANY LOSS, CLAIM, DAMAGE, LIABILITY OR EXPENSE, AS INCURRED, (“LOSS”) TO WHICH THE INDEMNIFIED PARTIES MAY BECOME SUBJECT OR INCUR, INSOFAR AS SUCH LOSS ARISES OUT OF OR IS BASED UPON ANY INACCURACY IN ANY REPRESENTATION OR WARRANTY GIVEN BY EXECUTIVE IN THIS AGREEMENT AND TO REIMBURSE THE INDEMNIFIED PARTIES FOR ANY AND ALL EXPENSES (INCLUDING THE FEES AND DISBURSEMENTS OF COUNSEL CHOSEN BY THE INDEMNIFIED PARTIES) AS SUCH EXPENSES ARE REASONABLY INCURRED BY THE INDEMNIFIED PARTIES IN CONNECTION WITH INVESTIGATING, DEFENDING, SETTLING, COMPROMISING OR PAYING ANY SUCH LOSS.

     14.10 Compliance with Section 409A of the Code. This Agreement is intended to comply with Section 409A of the Code and shall be construed and interpreted in accordance with such intent. To the extent any benefit paid under this Agreement shall be subject to Section 409A of the Code, such benefit shall be paid in a manner that will comply with Section 409A, including any IRS 409A Guidance. Any provision of this Agreement that would cause the payment of any benefit to fail to satisfy Section 409A of the Code shall have no force and effect until amended to comply with Section 409A (which amendment may be retroactive to the extent permitted by the IRS 409A Guidance.

     IN WITNESS WHEREOF, the undersigned have executed this Agreement effective the date first above written.

[SIGNATURES ON FOLLOWING PAGE]

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SANDRIDGE ENERGY, INC.
By:	/s/ Tom L. Ward                 03/19/08
	Tom L. Ward                           Date
	Chief Executive Officer
(the “Company”)
By:	/s/ Todd N. Tipton                01/14/08
	Todd N. Tipton                           Date
	(the “Executive”)

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EX-10.5.5

EMPLOYMENT AGREEMENT

     THIS AGREEMENT is made effective January 1, 2008 (the “Effective Date”), between SANDRIDGE ENERGY, INC., a Delaware corporation (the “Company”), and LARRY K. COSHOW, an individual (the “Executive”).

WITNESSETH:

     WHEREAS, the Company and the Executive desire to set forth the terms of their agreements relating to the employment of Executive by the Company; and

     NOW, THEREFORE, in consideration of the mutual promises herein contained, the Company and the Executive agree as follows:

     1. Employment. The Company hereby employs the Executive and the Executive hereby accepts such employment subject to the terms and conditions contained in this Agreement. The Executive is engaged as an employee of the Company and the Executive and the Company do not intend to create a joint venture, partnership or other relationship that might impose a fiduciary obligation on the Executive or the Company in the performance of this Agreement, other than as an officer and director of the Company.

     2. Executive’s Duties. The Executive is employed on a full-time basis. Throughout the term of this Agreement, the Executive will use his/her best efforts and due diligence to assist the Company in the objective of achieving the most profitable operation of the Company and the Company’s affiliated entities consistent with developing and maintaining a quality business operation. The Executive shall also devote all of Executive’s working time, attention and energies to the performance of Executive’s duties and responsibilities under this Agreement.

     2.1 Specific Duties. During the term of this Agreement, the Executive will serve as the Executive Vice President — Land for the Company. The Executive will perform all of the services required to fully and faithfully execute the position to which the Executive is appointed and such other services as may be assigned by the Company’s Board of Directors in their sole discretion. The Executive agrees to use the Executive’s best efforts to perform all of the services required to fully and faithfully execute the offices and positions to which the Executive is appointed and elected. In addition, the precise duties to be performed by Executive may be changed or curtailed in the sole discretion of the Board of Directors of the Company.

     2.2 Rules and Regulations. From time to time, the Company may issue policies and procedures applicable to employees and the Executive including an employment policies manual. The Executive agrees to comply with such policies and procedures, except to the extent such policies are inconsistent with this Agreement. Such policies and procedures may be supplemented, modified, changed or adopted without notice in the sole discretion of the

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Company at any time. In the event of a conflict between such policies and procedures and this Agreement, this Agreement will control unless compliance with this Agreement will violate any law or regulation applicable to the Company or its affiliated entities.

     3. Other Activities. The Executive shall not engage in any business activity that in the judgment of the Board conflicts with the Executive’s duties hereunder, whether or not such activity is pursued for gain, profit, or other pecuniary advantage. In addition, except for the activities permitted under paragraph 3.1 of this Agreement or approved by the Board of Directors in writing, the Executive will not: (a) engage in activities which require such substantial services on the part of the Executive that the Executive is unable to perform the duties assigned to the Executive in accordance with this Agreement; (b) serve as an officer or director of any publicly held entity; or (c) directly or indirectly invest in, participate in or acquire an interest in any oil and gas business, including, without limitation, (i) producing oil and gas, (ii) drilling, owning or operating oil and gas leases or wells, (iii) providing services or materials to the oil and gas industry, (iv) marketing or refining oil or gas, or (v) owning any interest in any corporation, partnership, company or entity which conducts any of the foregoing activities. The limitations in this paragraph 3 will not prohibit an investment by the Executive in publicly traded securities. The Executive is not restricted from maintaining or making investments, or engaging in other businesses, enterprises or civic, charitable or public service functions if such activities, investments, businesses or enterprises do not result in a violation of clauses (a) through (c) of this paragraph 3. Notwithstanding the foregoing, the Executive will be permitted to participate in the activities set forth in Section 3.1 that will be deemed to be approved by the Company, if such activities are undertaken in strict compliance with this Agreement.

     3.1 Royalty Interests and Gifts. The foregoing restriction in clause (c) will not prohibit the ownership of royalty interests where the Executive owns or previously owned the surface of the land covered by the royalty interest and the ownership of the royalty interest is incidental to the ownership of the surface estate or the ownership of royalty, overriding royalty or working interests that are received by gift or inheritance subject to disclosure by Executive to the Company in writing.

     4. Executive’s Compensation. The Company agrees to compensate the Executive as follows:

     4.1 Base Salary. Executive will be paid a base salary (the “Base Salary”) in an annual rate of not less than Three Hundred Nine Thousand Dollars ($309,000.00), which will be paid to the Executive in installments consistent with the Company’s customary payroll practices, beginning January 23, 2008, during the term of this Agreement.

     4.2 Bonus. In addition to the Base Salary described at paragraph 4.1 of this Agreement, the Company may periodically pay bonus compensation to the Executive. Any bonus compensation will be paid by separate check apart

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from Executive’s Base Salary less appropriate deductions pursuant to Internal Revenue Service guidelines. In order to be entitled to the bonus compensation set forth herein and any future bonuses, Executive must be an active full-time employee of the Company on the date the bonus is to be paid. Upon notice of intent to separate employment or separation of employment for any reason prior to the date any bonuses are paid, Executive shall not be eligible for any pro rata bonus compensation. Executive recognizes and acknowledges that except as provided above, the award of bonus is not guaranteed or promised in any way. Any additional bonus compensation will be at the absolute discretion of the Company in such amounts and at such times as the Board of Directors of the Company (or a Compensation Committee thereof) may determine.

     4.3 Equity Compensation. In addition to the compensation set forth in paragraphs 4.1 and 4.2 of this Agreement, the Executive may periodically be granted awards of Company restricted stock under and subject to the Company’s equity compensation plans (the “Equity Compensation Plans”). Such equity compensation will vest over a four (4) year period which begins to run from the date of each grant. In order to be entitled to the award of equity compensation, the Executive must be an active full-time employee of the Company on the grant date. Further, the terms and provisions of the Equity Compensation Plans control and direct the award of Company restricted stock.

     4.4 Benefits. The Company agrees to extend to the Executive retirement benefits and deferred compensation (if any and if made available) and reimbursement of reasonable expenditures. The Company will also provide the Executive the opportunity to apply for coverage under the Company’s medical, life and disability plans, if any. If the Executive is accepted for coverage under such plans, the Company will provide such coverage on the same terms as is customarily provided by the Company to the plan participants as modified from time to time. The Executive is subject to all of the terms and provisions of the Company’s benefit plans or policies.

     4.5 Paid Time Off. The Executive shall be eligible for thirty (30) days of Paid Time Off (“PTO”) each continuous year of employment during the term of this Agreement under the Company’s PTO policy. Such PTO shall be calculated from the Executive’s original date of hire. No additional compensation will be paid for failure to take PTO and no PTO may be carried forward from one twelve (12) month period to another.

     4.6 Membership Dues. The Company will reimburse the Executive for: (a) the monthly dues necessary to maintain a full membership in a club in the Oklahoma City area selected by the Executive; and (b) the reasonable cost of any approved business entertainment at such club. All other costs, including, without implied limitation, any initiation costs, initial membership costs, personal use and business entertainment unrelated to the Company will be the sole obligation of the Executive and the Company will have no liability with respect to such amounts.

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     5. Term. The employment relationship evidenced by this Agreement is an “at will” employment relationship and the Company reserves the right to terminate the Executive at any time with or without cause. In the absence of termination as set forth in paragraph 6 below, this Agreement will extend for a term commencing on the Effective Date, and ending on December 31, 2009 (the “Expiration Date”). Unless the Company provides thirty (30) days prior written notice of non-extension to the Executive, on or before the Expiration Date, the term and the Expiration Date will be automatically extended for one (1) additional year from the Expiration Date.

     6. Termination. This Agreement will continue in effect until the expiration of the term stated in paragraph 5 of this Agreement unless earlier terminated pursuant to this paragraph 6.

     6.1 Termination by Company. The Company will have the following rights to terminate Executive’s employment:

     6.1.1 Termination without Cause. The Company may terminate Executive’s employment without Cause at any time by the service of written notice of termination to the Executive specifying an effective date of such termination not sooner than ten (10) days after the date of such notice (the “Termination Date”). In the event the Executive is terminated without Cause (other than a CC Termination under paragraph 6.3 of this Agreement), the Executive will receive as termination compensation a lump sum payment equal to twelve (12) months Base Salary (as in effect on the Termination Date). If on the Termination Date, the Executive is a “specified employee” as defined in regulations under Section 409A of the Code, such payment will commence on the first payroll payment date which is more than six months following the Termination Date. The right to the foregoing termination compensation set forth above is subject to the Executive’s execution of the Company’s severance agreement which will operate as a release of all legally waivable claims against the Company. Such payment is further conditioned upon the Executive’s compliance with all of the provisions of this Agreement, including all post-employment obligations.

     6.1.2 Termination for Cause. The Company may terminate the employment of the Executive hereunder at any time for Cause (as hereinafter defined) (such a termination being referred to in this Agreement as a “Termination For Cause”) by giving the Executive written notice of such termination, which shall take effect immediately upon the giving of such notice to the Executive. As used in this Agreement, “Cause” means (A) the Executive’s material breach or threatened breach of this Agreement; (B) the Executive fails to substantially perform the Executive’s duties hereunder; (C) the misappropriation or fraudulent conduct by the Executive with respect to the assets or operations of the Company or any of its subsidiaries or affiliated companies; (D) the

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Executive’s willful disregard of the instructions of the Board or the Executive’s material neglect of duties or failure to act, other than by reason of disability or death; (E) the Executive’s personal misconduct which substantially injures the Company; or (F) the conviction of the Executive for, or a plea of guilty or no contest to, a felony or any crime involving fraud, theft or dishonesty. In the event Executive’s employment is terminated for Cause, the company will not have any obligation to provide any further payments or benefits to the Executive after the effective date of such termination.

     6.2 Termination by Executive. The Executive may voluntarily terminate his employment with or without Cause by the service of written notice of such termination to the Company specifying an effective date of such termination thirty (30) days after the date of such notice. The Company may in its sole discretion, elect to waive all or any part of the 30-day notice period with no further obligations being owed to the Executive by the Company. In the event employment is terminated by the Executive, neither the Company nor the Executive will have any further obligations hereunder, except for any obligations which expressly survive termination of employment including Sections 7, 8, 9, 10, 11, 12 and 13.

     6.3 Termination After Change in Control. If during the term of this Agreement there is a “Change of Control” and within one (1) year thereafter there is a CC Termination (as hereafter defined), then the Executive will be entitled to a severance payment (in addition to any other rights and other amounts payable to the Executive under Section 6.7 or under Company plans in which Executive is a participant) payable in a lump sum in cash within 10 days following the CC Termination in an amount equal to the sum of the following: (a) two (2) times the Executive’s Base Salary for the last 12 calendar months ending immediately prior to the CC Termination and bonus paid during such 12 month period pursuant to Section 4.2 (based on the average of the last three years’ annual bonuses or such lesser number of years as Executive may have been employed). If the foregoing amount is not paid within ten (10) days after the CC Termination, the unpaid amount will bear interest at the per annum rate of 12%. The right to the foregoing termination compensation under clause (a) above is subject to the Executive’s execution of the Company’s severance agreement which will operate as a release of all legally waivable claims against the Company. Such payment is further conditioned upon the Executive’s compliance with all of the provisions of this Agreement, including all post-employment obligations. Notwithstanding the foregoing, if at the time of a CC Termination, the Executive is a “specified employee” as defined in regulations under Section 409A of the Code, such payment will be made on the first day which is more than six months following the CC Termination. In connection with any Change of Control, the Company shall obtain the assumption of this Agreement, without limitation or reduction, by any successor to the Company or any parent corporation of the Company.

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     6.3.1 Change of Control. For the purpose of this Agreement, a “Change of Control” means the occurrence of any of the following:

     (a) The acquisition by any individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) (a “Person”), other than Executive or his affiliates or Tom L. Ward or his affiliates (the “Exempt Persons”), of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of 40% or more of either (i) the then outstanding shares of common stock of the Company (the “Outstanding Company Common Stock”) or (ii) the combined voting power of the then outstanding voting securities of the Company entitled to vote generally in the election of directors (the “Outstanding Company Voting Securities”). For purposes of this paragraph (a) the following acquisitions by a Person will not constitute a Change of Control: (i) any acquisition directly from the Company; (ii) any acquisition by the Company; (iii) any acquisition by any employee benefit plan (or related trust) sponsored or maintained by the Company or any corporation controlled by the Company; or (iv) any acquisition by any corporation pursuant to a transaction which complies with clauses (i), (ii) and (iii) of paragraph (c) of this paragraph 6.3.1.

     (b) The individuals who, as of the date hereof, constitute the Board of Directors (the “Incumbent Board”) cease for any reason to constitute at least a majority of the Board of Directors. Any individual becoming a director subsequent to the date hereof whose election, or nomination for election by the Company’s shareholders, is approved by a vote of at least a majority of the directors then comprising the Incumbent Board will be considered a member of the Incumbent Board as of the date hereof, but any such individual whose initial assumption of office occurs as a result of an actual or threatened election contest with respect to the election or removal of directors or other actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the Incumbent Board will not be deemed a member of the Incumbent Board as of the date hereof.

     (c) The consummation of a reorganization, merger, consolidation or sale or other disposition of all or substantially all of the assets of the Company (a “Business Combination”), unless following such Business Combination: (i) the individuals and entities who were the beneficial owners, respectively, of the Outstanding Company Common Stock and Outstanding Company Voting Securities immediately prior to such Business Combination beneficially own, directly or indirectly, more than 60% of, respectively, the then outstanding shares of common stock and the combined voting power of the then outstanding voting securities entitled to vote generally in the election of directors, as the case may be, of the corporation resulting from such Business Combination (including,

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without limitation, a corporation which as a result of such transaction owns the Company or all or substantially all of the Company’s assets either directly or through one or more subsidiaries) in substantially the same proportions as their ownership, immediately prior to such Business Combination of the Outstanding Company Common Stock and Outstanding Company Voting Securities, as the case may be, (ii) no Person (excluding any corporation resulting from such Business Combination or any employee benefit plan (or related trust) of the Company or such corporation resulting from such Business Combination) other than one or more of the Exempt Persons beneficially owns, directly or indirectly, 40% or more of, respectively, the then outstanding shares of common stock of the corporation resulting from such Business Combination or the combined voting power of the then outstanding voting securities of such corporation except to the extent that such ownership existed prior to the Business Combination and (iii) at least a majority of the members of the board of directors of the corporation resulting from such Business Combination were members of the Incumbent Board at the time of the execution of the initial agreement, or of the action of the Board, providing for such Business Combination.

     (d) The approval by the shareholders of the Company of a complete liquidation or dissolution of the Company.

     6.3.2 CC Termination. The term “CC Termination” means any of the following: (a) the Executive’s employment is terminated by the Company other than under paragraphs 6.1.2, 6.4 or 6.5; or (b) the Executive resigns as a result of a change in the Executive’s duties or title, a reduction in the Executive’s then current Base Salary or a significant reduction in the Executive’s then current benefits as provided in Section 4, a relocation of more than 25 miles from the Executive’s then current place of employment being required by the Board of Directors or a default by the Company under this Agreement.

     6.4 Incapacity of Executive. If the Executive suffers from a physical or mental condition, which in the reasonable judgment of the Company’s Board of Directors, prevents the Executive in whole or in part from performing the duties specified herein for a period of sixteen (16) consecutive weeks, the Executive’s employment may be terminated by the Company, in which event, the Company will pay Executive the equivalent of six (6) months Base Salary in effect on the date of termination. If, on the termination date, the Executive is a “specified employee” as defined in regulations under Section 409A of the Code, such payment will commence on the first payroll payment date which is more than six months following the termination date. Notwithstanding the foregoing, the amount payable hereunder will be reduced by any benefits payable under any disability plans provided by the Company under paragraph 4.4 of this Agreement. The right to the compensation due under this paragraph 6.4 is subject to the execution by the Executive or the Executive’s legal representative

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of the Company’s severance agreement which will operate as a release of all legally waivable claims against the Company. In applying this section, the Company will comply with any applicable legal requirements, including the Americans with Disabilities Act.

     6.5 Death of Executive. If the Executive dies during the term of this Agreement, Executive’s employment will terminate without compensation to the Executive’s estate except: (a) the obligation to continue the Base Salary payments under paragraph 4.1 of this Agreement for twelve (12) months after the effective date of such termination.

     6.6 Effect of Termination. The termination of Executive’s employment will terminate all obligations of the Executive to render services on behalf of the Company. The Executive will maintain the confidentiality of all information acquired by the Executive during the term of his employment in accordance with paragraph 7 of this Agreement and the Executive shall comply with all other post employment requirements including paragraphs 7, 8, 9, 10, 11, 12 and 13. Except as otherwise provided in this paragraph 6, no accrued bonus, severance pay or other form of compensation will be payable by the Company to the Executive by reason of the termination of his employment. All keys, entry cards, credit cards, files, records, financial information, furniture, furnishings, computers, equipment, supplies and other items relating to the Company will remain the property of the Company. The Executive will have the right to retain and remove all personal property and effects that are owned by the Executive and located in the offices of the Company. All such personal items will be removed from such offices no later than ten (10) days after the effective date of termination, and the Company is hereby authorized to discard any items remaining and to reassign the Executive’s office space after such date. Prior to the effective date of termination, the Executive will cooperate with the Company to provide for the orderly separation of the Executive’s employment.

     6.7 Equity Compensation Provisions. Notwithstanding any provision to the contrary in any option agreement, restricted stock agreement, plan or other agreement relating to equity based compensation, in the event of a termination under paragraph 6.3 of this Agreement, or in the event of a termination under paragraph 6.1.1 of this Agreement if at the time of such termination Tom L. Ward is not the Chairman and Chief Executive Officer of the Company: (a) all units, stock options, incentive stock options, performance shares, stock appreciation rights and restricted stock granted and held by Executive immediately prior to such termination will immediately become 100% vested; and (b) the Executive’s right to exercise any previously unexercised options will not terminate until the latest date on which such option would expire but for Executive’s termination of employment. To the extent Company is unable to provide for one or both of the foregoing rights the Company will provide in lieu thereof a lump-sum cash payment equal to the difference between the total value of such units, stock options, incentive stock options,

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performance shares, stock appreciation rights and shares of restricted stock (the “Equity Compensation Rights”) with the foregoing rights as of the date of Executive’s termination of employment and the total value of the Equity Compensation Rights without the foregoing rights as of the date of the Executive’s termination of employment. The foregoing amounts will be determined by the Board of Directors in good faith based on a valuation performed by an independent consultant selected by the Board of Directors and the cash payment, if any, will be paid in a lump sum in the case of a termination under Section 6.1.1, at the same time as the severance payment is otherwise due under such Section, and in the case of a termination under Section 6.3, at the same time the payment is due under such Section. The right to the foregoing termination compensation under clauses (a) and (b) above is subject to the Executive’s execution of the Company’s severance agreement which will operate as a release of all legally waivable claims against the Company. Such payment is further conditioned upon the Executive’s compliance with all of the provisions of this Agreement, including all post-employment obligations.

     7. Confidentiality. The Executive recognizes that the nature of the Executive’s services are such that the Executive will have access to information which constitutes trade secrets, is of a confidential nature, is of great value to the Company or is the foundation on which the business of the Company is predicated. The Executive agrees not to disclose to any person other than the Company’s employees or the Company’s legal counsel or other parties authorized by the Company to receive confidential information (“Confidential Information”) nor use for any purpose, other than the performance of this Agreement, any Confidential Information. Confidential Information includes data or material (regardless of form) which is: (a) a trade secret; (b) provided, disclosed or delivered to Executive by the Company, any officer, director, employee, agent, attorney, accountant, consultant, or other person or entity employed by the Company in any capacity, any customer, borrower or business associate of the Company or any public authority having jurisdiction over the Company of any business activity conducted by the Company; or (c) produced, developed, obtained or prepared by or on behalf of Executive or the Company (whether or not such information was developed in the performance of this Agreement) with respect to the Company or any assets oil and gas prospects, business activities, officers, directors, employees, borrowers or customers of the foregoing. However, Confidential Information will not include any information, data or material which at the time of disclosure or use was generally available to the public other than by a breach of this Agreement, was available to the party to whom disclosed on a non-confidential basis by disclosure or access provided by the Company or a third party, or was otherwise developed or obtained independently by the person to whom disclosed without a breach of this Agreement. On request by the Company, the Company will be entitled to a copy of any Confidential Information in the possession of the Executive. The provisions of this paragraph 7 will survive the termination, expiration or cancellation of Executive’s employment for a period of one (1) year after the date of termination. The Executive will deliver to the Company all originals and copies of the documents or materials containing Confidential Information. For purposes of paragraphs 7, 8, and 9 of this

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Agreement, the Company expressly includes any of the Company’s subsidiaries or affiliates.

     8. Non-Solicitation. The Executive agrees that during the Non-Solicitation Period (as hereafter defined), Executive will not directly, either personally or by or through his agent, on behalf of himself or on behalf of any other individual, association or entity, (i) use any of the Confidential Information for the purposes of calling on any established customer of the Company or soliciting or inducing any of such customers to acquire, or providing to any of such customers, any product or service provided by the Company or any affiliate or subsidiary of the Company; (ii) solicit, influence or encourage any established customer of the Company to divert or direct such customer’s business to the Executive or any person or entity by which or with which the Executive is employed, associated, affiliated or otherwise related; or (iii) solicit, divert or attempt to solicit or divert any entity which has been identified and contacted by the Company, either directly or through such entity’s agent(s), with respect to a possible acquisition by the Company. For the purposes hereof, the term “Non-Solicitation Period” shall mean a period of six (6) months after Executive’s employment ceases for any reason.

     9. Non-Interference. The Executive agrees that during the Non Interference Period (as hereafter defined) he will not, directly or indirectly, either personally or by or through his agent, on behalf of himself or on behalf of any other individual, association or entity, hire, solicit or seek to hire any employee of the Company or any affiliate or subsidiary of the Company, or any individual who was an employee of the Company or any affiliate or subsidiary of the Company during the twelve-month period prior to the Termination Date, or in any other manner attempt, directly or indirectly, to persuade any such employee to discontinue his or her status of employment with the Company or any affiliate or subsidiary of the Company or to become employed in a business or activities likely to be competitive with the business of the Company or any affiliate or subsidiary of the Company. For the purposes hereof, the term “Non-Interference Period” shall mean a period of six (6) months after Executive’s employment ceases for any reason.

     10. Severability. It is the desire and intent of the parties hereto that the provisions of this Agreement be enforced to the fullest extent permissible under the laws and public policies applied in each jurisdiction in which enforcement is sought. Accordingly, if any particular provision of this Agreement shall be adjudicated by a court of competent jurisdiction to be invalid, prohibited or unenforceable for any reason, such provision, as to such jurisdiction, shall be ineffective, without invalidating the remaining provisions of this Agreement or affecting the validity or enforceability of such provision in any other jurisdiction. Notwithstanding the foregoing, if such provision could be more narrowly drawn so as not to be invalid, prohibited or unenforceable in such jurisdiction, it shall, as to such jurisdiction, be so narrowly drawn, without invalidating the remaining provisions of this Agreement or affecting the validity or enforceability of such provision in any other jurisdiction.

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     11. Remedies. The Executive acknowledges and understands that the provisions of this Agreement are of a special and unique nature, the loss of which cannot be adequately compensated for in damages by an action at law, and that the breach or threatened breach of the provisions of this Agreement would cause the Company or any of its Subsidiaries irreparable harm. In the event of a breach or threatened breach by the Executive of the provisions of this Agreement, the Company or any of its subsidiaries or affiliates shall be entitled to an injunction restraining the Executive from such breach. In addition to the foregoing and not in any way in limitation thereof, or in limitation of any right or remedy otherwise available, if the Executive violates any provision of Paragraphs 7, 8 or 9 hereof, any compensation or severance payments then or thereafter due from the Company to the Executive shall be terminated forthwith and the Company’s obligation to pay and the Executive’s right to receive such compensation as severance payments shall terminate and be of no further force or effect, in each case without limiting or affecting the Executive’s obligations under such Paragraphs 7, 8 and 9 or the Company’s or its subsidiaries’ or affiliates’ other rights and remedies available at law or equity. Nothing contained in this Agreement shall be construed as prohibiting the Company or any of its subsidiaries or affiliates from pursuing, or limiting the Company’s or any of its subsidiaries’ or affiliates’ ability to pursue, any other remedies available for any breach or threatened breach of this Agreement by the Executive. The provisions of Paragraph 13 of this Agreement relating to arbitration shall not be applicable to the Company to the extent it seeks an injunction in any court to restrain the Executive from violating Paragraphs 7, 8 or 9 hereof.

     12. Proprietary Matters.

     12.1 The Executive acknowledges and agrees that the Company owns all right, title and interest (including patent rights, copyrights, trade secret rights, trademark rights and all other intellectual and industrial property rights) relating to any and all inventions (whether or not patentable), works of authorship, design, know-how, ideas and information made or conceived or reduced to practice, in whole or in part, by the Executive during the term of this Agreement which are useful in, or directly or indirectly related to, the business of the Company or any Confidential Information (collectively, the “Proprietary Rights”). The Executive further acknowledges and agrees that all such Proprietary Rights are “works made for hire” of which the Company is the author. The Executive agrees to promptly disclose and provide all Proprietary Rights to the Company; provided, in the event the Proprietary Rights shall not be deemed to constitute “works made for hire,” or in the event the Executive should, by operation of law or otherwise, be deemed to retain any rights in the Proprietary Rights, the Executive agrees to assign to the Company, without further consideration, the Executive’s entire right, title and interest in and to each and every such Proprietary Right.

     12.2 The Executive hereby agrees to assist Company in obtaining and enforcing United States and/or foreign letters patent and copyright registrations covering the Proprietary Rights and further agrees that Executive’s obligation to

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assist Company shall continue beyond the termination of Executive’s employment hereunder. If Company is unable because of Executive’s mental or physical incapacity or for any other reason to secure Executive’s signature to apply for or to pursue any application for any United States or foreign letters patent or copyright registrations covering inventions assigned to Company, then Executive hereby irrevocably designates and appoints Company and its duly authorized officers and agents as Executive’s agent and attorney-in-fact to act for and on Executive’s behalf to execute and file any such applications and to do all other lawfully permitted acts to further the prosecution and issuance of letters patent or copyright registrations thereon with the same legal force and effect as if executed by Executive. Executive hereby waives and quitclaims to Company any and all claims of any nature whatsoever which Executive now or hereafter may have for infringement of any patent or copyright resulting from any such application for letters patent or copyright registrations assigned hereunder to Company. Executive will further assist Company in every lawful way to enforce any copyrights or patents obtained, including without limitation, testifying in any suit or proceeding involving any of the copyrights or patents or executing any documents deemed necessary by Company, all without further consideration except as contemplated by the immediately following sentence but at the expense of Company. If Executive is called upon to render such assistance after termination of Executive’s employment hereunder, then Executive shall be entitled to a fair and reasonable per diem fee (which shall not be less than Executive’s equivalent daily Base Salary) in addition to reimbursement of any expenses incurred at the request of Company.

     13. Arbitration. Any dispute between the parties out of or related to this Agreement or the employment relationship, whether arising during the term of this Agreement or afterwards, and involving a claim for money damages shall be subject to binding arbitration and resolved pursuant to the rules of the American Arbitration Association. All arbitration shall be final and binding and shall be governed by the Federal Arbitration Act and the arbitration decision shall be enforceable in any court of competent jurisdiction. This obligation to arbitrate shall survive even if this Agreement shall be alleged to be rescinded or terminated. The arbitration hearing shall be convened in Oklahoma City, Oklahoma. The Company will pay the costs and expenses of the arbitration including, without limitation, the fees for the arbitrators.

     14. Miscellaneous. The parties further agree as follows:

     14.1 Time. Time is of the essence of each provision of this Agreement.

     14.2 Notices. Any notice, payment, demand or communication required or permitted to be given by any provision of this Agreement will be in writing and will be deemed to have been given when received by personal delivery, by facsimile, by overnight courier, or by certified mail, postage and charges prepaid, directed to the following address or to such other or additional addresses as any party might designate by written notice to the other party:

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To the Company:	SandRidge Energy, Inc. 1601 N.W. Expressway, Suite 1600 Oklahoma City, OK 73118 Attn: Mary L. Whitson
To the Executive:	Larry K. Coshow 2612 N.W. 176th Street Edmond, OK 73003

     14.3 Assignment. Neither this Agreement nor any of the parties’ rights or obligations hereunder can be transferred or assigned without the prior written consent of the other parties to this Agreement.

     14.4 Construction. If any provision of this Agreement or the application thereof to any person or circumstances is determined, to any extent, to be invalid or unenforceable, the remainder of this Agreement, or the application of such provision to persons or circumstances other than those as to which the same is held invalid or unenforceable, will not be affected thereby, and each term and provision of this Agreement will be valid and enforceable to the fullest extent permitted by law. This Agreement is intended to be interpreted, construed and enforced in accordance with the laws of the state of Oklahoma

     14.5 Entire Agreement. This Agreement constitutes the entire agreement between the parties hereto with respect to the subject matter herein contained, and no modification hereof will be effective unless made by a supplemental written agreement executed by all of the parties hereto.

     14.6 Binding Effect; Third Party Beneficiary; Assignment. This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective affiliates, officers, employees, agents, successors and assigns (including, in the case of the Company or any of its subsidiaries or affiliated companies, the successor to the business of the Company as a result of the transfer of all or substantially all of the assets or capital stock of the Company or any of its subsidiaries or affiliates); provided, that the Executive may not assign this Agreement or any of his rights or interests herein, in whole or in part, to any other person or entity without the prior written consent of the Company.

     14.7 Supercession. This Agreement is the final, complete and exclusive expression of the agreement between the Company and the Executive and supersedes and replaces in all respects any prior oral or written employment agreements. On execution of this Agreement by the Company and the Executive, the relationship between the Company and the Executive after the effective date of this Agreement will be governed by the terms of this Agreement and not by any other agreements, oral or otherwise.

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     14.8 Non-Contravention. Executive represents and warrants to the Company that the execution and performance of this Agreement will not violate, constitute a default under, or otherwise give rights to any third party, pursuant to the terms of any Agreement to which Executive is a party.

     14.9 Indemnity. EXECUTIVE AGREES TO INDEMNIFY AND HOLD HARMLESS THE COMPANY, ITS DIRECTORS, OFFICERS AND EMPLOYEES AND AGENTS (THE “INDEMNIFIED PARTIES”) AGAINST ANY LOSS, CLAIM, DAMAGE, LIABILITY OR EXPENSE, AS INCURRED, (“LOSS”) TO WHICH THE INDEMNIFIED PARTIES MAY BECOME SUBJECT OR INCUR, INSOFAR AS SUCH LOSS ARISES OUT OF OR IS BASED UPON ANY INACCURACY IN ANY REPRESENTATION OR WARRANTY GIVEN BY EXECUTIVE IN THIS AGREEMENT AND TO REIMBURSE THE INDEMNIFIED PARTIES FOR ANY AND ALL EXPENSES (INCLUDING THE FEES AND DISBURSEMENTS OF COUNSEL CHOSEN BY THE INDEMNIFIED PARTIES) AS SUCH EXPENSES ARE REASONABLY INCURRED BY THE INDEMNIFIED PARTIES IN CONNECTION WITH INVESTIGATING, DEFENDING, SETTLING, COMPROMISING OR PAYING ANY SUCH LOSS.

     14.10 Compliance with Section 409A of the Code. This Agreement is intended to comply with Section 409A of the Code and shall be construed and interpreted in accordance with such intent. To the extent any benefit paid under this Agreement shall be subject to Section 409A of the Code, such benefit shall be paid in a manner that will comply with Section 409A, including any IRS 409A Guidance. Any provision of this Agreement that would cause the payment of any benefit to fail to satisfy Section 409A of the Code shall have no force and effect until amended to comply with Section 409A (which amendment may be retroactive to the extent permitted by the IRS 409A Guidance.

     IN WITNESS WHEREOF, the undersigned have executed this Agreement effective the date first above written.

[SIGNATURES ON FOLLOWING PAGE]

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SANDRIDGE ENERGY, INC.
By:	/s/ Tom L. Ward                 03/19/08
	Tom L. Ward                           Date
	Chief Executive Officer
(the “Company”)
By:	/s/ Larry K. Coshow                03/19/08
	Larry K. Coshow                           Date
	(the “Executive”)

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EX-10.5.6

EMPLOYMENT AGREEMENT

     THIS AGREEMENT is made effective January 1, 2008 (the “Effective Date”), between SANDRIDGE ENERGY, INC., a Delaware corporation (the “Company”), and EXECUTIVE’S FIRST NAME, M.I., LAST NAME, an individual (the “Executive”).

WITNESSETH :

     WHEREAS, the Company and the Executive desire to set forth the terms of their agreements relating to the employment of Executive by the Company; and

     NOW, THEREFORE, in consideration of the mutual promises herein contained, the Company and the Executive agree as follows:

     1. Employment. The Company hereby employs the Executive and the Executive hereby accepts such employment subject to the terms and conditions contained in this Agreement. The Executive is engaged as an employee of the Company and the Executive and the Company do not intend to create a joint venture, partnership or other relationship that might impose a fiduciary obligation on the Executive or the Company in the performance of this Agreement, other than as an officer of the Company.

     2. Executive’s Duties. The Executive is employed on a full-time basis. Throughout the term of this Agreement, the Executive will use his/her best efforts and due diligence to assist the Company in the objective of achieving the most profitable operation of the Company and the Company’s affiliated entities consistent with developing and maintaining a quality business operation. The Executive shall also devote all of Executive’s working time, attention and energies to the performance of Executive’s duties and responsibilities under this Agreement.

     2.1 Specific Duties. During the term of this Agreement, the Executive will serve as the Executive’s Job Title for the Company. The Executive will perform all of the services required to fully and faithfully execute the position to which the Executive is appointed and such other services as may be assigned by the Company’s Board of Directors in their sole discretion. The Executive agrees to use the Executive’s best efforts to perform all of the services required to fully and faithfully execute the offices and positions to which the Executive is appointed and elected. In addition, the precise duties to be performed by Executive may be changed or curtailed in the sole discretion of the Board of Directors of the Company.

     2.2 Rules and Regulations. From time to time, the Company may issue policies and procedures applicable to employees and the Executive including an employment policies manual. The Executive agrees to comply with such policies and procedures, except to the extent such policies are inconsistent with this Agreement. Such policies and procedures may be supplemented, modified, changed or adopted without notice in the sole discretion of the

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Company at any time. In the event of a conflict between such policies and procedures and this Agreement, this Agreement will control unless compliance with this Agreement will violate any law or regulation applicable to the Company or its affiliated entities.

     3. Other Activities. The Executive shall not engage in any business activity that in the judgment of the Board conflicts with the Executive’s duties hereunder, whether or not such activity is pursued for gain, profit, or other pecuniary advantage. In addition, except for the activities permitted under paragraph 3.1 of this Agreement or approved by the Board of Directors in writing, the Executive will not: (a) engage in activities which require such substantial services on the part of the Executive that the Executive is unable to perform the duties assigned to the Executive in accordance with this Agreement; (b) serve as an officer or director of any publicly held entity; or (c) directly or indirectly invest in, participate in or acquire an interest in any oil and gas business, including, without limitation, (i) producing oil and gas, (ii) drilling, owning or operating oil and gas leases or wells, (iii) providing services or materials to the oil and gas industry, (iv) marketing or refining oil or gas, or (v) owning any interest in any corporation, partnership, company or entity which conducts any of the foregoing activities. The limitations in this paragraph 3 will not prohibit an investment by the Executive in publicly traded securities. The Executive is not restricted from maintaining or making investments, or engaging in other businesses, enterprises or civic, charitable or public service functions if such activities, investments, businesses or enterprises do not result in a violation of clauses (a) through (c) of this paragraph 3. Notwithstanding the foregoing, the Executive will be permitted to participate in the activities set forth in Section 3.1 that will be deemed to be approved by the Company, if such activities are undertaken in strict compliance with this Agreement.

     3.1 Royalty Interests and Gifts. The foregoing restriction in clause (c) will not prohibit the ownership of royalty interests where the Executive owns or previously owned the surface of the land covered by the royalty interest and the ownership of the royalty interest is incidental to the ownership of the surface estate or the ownership of royalty, overriding royalty or working interests that are received by gift or inheritance subject to disclosure by Executive to the Company in writing.

     4. Executive’s Compensation. The Company agrees to compensate the Executive as follows:

     4.1 Base Salary. Executive will be paid a base salary (the “Base Salary”) in an annual rate of not less Dollar Amount Dollars ($xxxx.00), which will be paid to the Executive in installments consistent with the Company’s customary payroll practices, beginning January 23, 2008 during the term of this Agreement.

     4.2 Bonus. In addition to the Base Salary described at paragraph 4.1 of this Agreement, the Company may periodically pay bonus compensation to the Executive. Any bonus compensation will be paid by separate check apart

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from Executive’s Base Salary less appropriate deductions pursuant to Internal Revenue Service guidelines. In order to be entitled to the bonus compensation set forth herein and any future bonuses, Executive must be an active full-time employee of the Company on the date the bonus is to be paid. Upon notice of intent to separate employment or separation of employment for any reason prior to the date any bonuses are paid, Executive shall not be eligible for any pro rata bonus compensation. Executive recognizes and acknowledges that except as provided above, the award of bonus is not guaranteed or promised in any way. Any additional bonus compensation will be at the absolute discretion of the Company in such amounts and at such times as the Board of Directors of the Company (or a Compensation Committee thereof) may determine.

     4.3 Equity Compensation. In addition to the compensation set forth in paragraphs 4.1 and 4.2 of this Agreement, the Executive may periodically be granted awards of Company restricted stock under and subject to the Company’s equity compensation plans (the “Equity Compensation Plans”). Such equity compensation will vest over a four (4) year period which begins to run from the date of each grant. In order to be entitled to the award of equity compensation, the Executive must be an active full-time employee of the Company on the grant date. Further, the terms and provisions of the Equity Compensation Plans control and direct the award of Company restricted stock.

     4.4 Benefits. The Company agrees to extend to the Executive retirement benefits and deferred compensation (if any and if made available) and reimbursement of reasonable expenditures. The Company will also provide the Executive the opportunity to apply for coverage under the Company’s medical, life and disability plans, if any. If the Executive is accepted for coverage under such plans, the Company will provide such coverage on the same terms as is customarily provided by the Company to the plan participants as modified from time to time. The Executive is subject to all of the terms and provisions of the Company’s benefit plans or policies.

     4.5 Paid Time Off. The Executive shall be eligible for thirty (30) days of Paid Time Off (“PTO”) each continuous year of employment during the term of this Agreement under the Company’s PTO policy. Such PTO shall be calculated from the Executive’s original date of hire. No additional compensation will be paid for failure to take PTO and no PTO may be carried forward from one twelve (12) month period to another.

     4.6 Membership Dues. The Company will reimburse the Executive for: (a) the monthly dues necessary to maintain a full membership in a club in the Oklahoma City area selected by the Executive in an amount not to exceed Seven Hundred Fifty Dollars ($750.00) per month; and (b) the reasonable cost of any approved business entertainment at such club. All other costs, including, without implied limitation, any initiation costs, initial membership costs, personal use and business entertainment unrelated to the Company will be the sole obligation of

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the Executive and the Company will have no liability with respect to such amounts.

     5. Term. The employment relationship evidenced by this Agreement is an “at will” employment relationship and the Company reserves the right to terminate the Executive at any time with or without cause. In the absence of termination as set forth in paragraph 6 below, this Agreement will extend for a term commencing on the Effective Date, and ending on December 31, 2009 (the “Expiration Date”). Unless the Company provides thirty (30) days prior written notice of non-extension to the Executive, on or before the Expiration Date, the term and the Expiration Date will be automatically extended for one (1) additional year from the Expiration Date.

     6. Termination. This Agreement will continue in effect until the expiration of the term stated in paragraph 5 of this Agreement unless earlier terminated pursuant to this paragraph 6.

          6.1 Termination by Company. The Company will have the following rights to terminate Executive’s employment:

     6.1.1 Termination without Cause. The Company may terminate Executive’s employment without Cause at any time by the service of written notice of termination to the Executive specifying an effective date of such termination not sooner than ten (10) days after the date of such notice (the “Termination Date”). In the event the Executive is terminated without Cause (other than a CC Termination under paragraph 6.3 of this Agreement), the Executive will receive as termination compensation a lump sum payment equal to twelve (12) months Base Salary (as in effect on the Termination Date). If on the Termination Date, the Executive is a “specified employee” as defined in regulations under Section 409A of the Code, such payment will commence on the first payroll payment date which is more than six months following the Termination Date. The right to the foregoing termination compensation set forth above is subject to the Executive’s execution of the Company’s severance agreement which will operate as a release of all legally waivable claims against the Company. Such payment is further conditioned upon the Executive’s compliance with all of the provisions of this Agreement, including all post-employment obligations.

     6.1.2 Termination for Cause. The Company may terminate the employment of the Executive hereunder at any time for Cause (as hereinafter defined) (such a termination being referred to in this Agreement as a “Termination For Cause”) by giving the Executive written notice of such termination, which shall take effect immediately upon the giving of such notice to the Executive. As used in this Agreement, “Cause” means (A) the Executive’s material breach or threatened breach of this Agreement; (B) the Executive fails to substantially perform the

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Executive’s duties hereunder; (C) the misappropriation or fraudulent conduct by the Executive with respect to the assets or operations of the Company or any of its subsidiaries or affiliated companies; (D) the Executive’s willful disregard of the instructions of the Board or the Executive’s material neglect of duties or failure to act, other than by reason of disability or death; (E) the Executive’s personal misconduct which substantially injures the Company; or (F) the conviction of the Executive for, or a plea of guilty or no contest to, a felony or any crime involving fraud, theft or dishonesty. In the event Executive’s employment is terminated for Cause, the company will not have any obligation to provide any further payments or benefits to the Executive after the effective date of such termination.

     6.2 Termination by Executive. The Executive may voluntarily terminate his employment with or without Cause by the service of written notice of such termination to the Company specifying an effective date of such termination thirty (30) days after the date of such notice. The Company may in its sole discretion, elect to waive all or any part of the 30-day notice period with no further obligations being owed to the Executive by the Company. In the event employment is terminated by the Executive, neither the Company nor the Executive will have any further obligations hereunder, except for any obligations which expressly survive termination of employment including Sections 7, 8, 9, 10, 11, 12 and 13.

     6.3 Termination After Change in Control. If during the term of this Agreement there is a “Change of Control” and within one (1) year thereafter there is a CC Termination (as hereafter defined), then the Executive will be entitled to a severance payment (in addition to any other rights and other amounts payable to the Executive under Section 6.7 or under Company plans in which Executive is a participant) payable in a lump sum in cash within 10 days following the CC Termination in an amount equal to the sum of the following: (a) two (2) times the Executive’s Base Salary for the last 12 calendar months ending immediately prior to the CC Termination and bonus paid during such 12 month period pursuant to Section 4.2 (based on the average of the last three years’ annual bonuses or such lesser number of years as Executive may have been employed). If the foregoing amount is not paid within ten (10) days after the CC Termination, the unpaid amount will bear interest at the per annum rate of 12%. The right to the foregoing termination compensation under clause (a) above is subject to the Executive’s execution of the Company’s severance agreement which will operate as a release of all legally waivable claims against the Company. Such payment is further conditioned upon the Executive’s compliance with all of the provisions of this Agreement, including all post-employment obligations. Notwithstanding the foregoing, if at the time of a CC Termination, the Executive is a “specified employee” as defined in regulations under Section 409A of the Code, such payment will be made on the first day which is more than six months following the CC Termination. In connection with

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any Change of Control, the Company shall obtain the assumption of this Agreement, without limitation or reduction, by any successor to the Company or any parent corporation of the Company.

     6.3.1 Change of Control. For the purpose of this Agreement, a “Change of Control” means the occurrence of any of the following:

     (a) The acquisition by any individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) (a “Person”), other than Executive or his affiliates or Tom L. Ward or his affiliates (the “Exempt Persons”), of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of 40% or more of either (i) the then outstanding shares of common stock of the Company (the “Outstanding Company Common Stock”) or (ii) the combined voting power of the then outstanding voting securities of the Company entitled to vote generally in the election of directors (the “Outstanding Company Voting Securities”). For purposes of this paragraph (a) the following acquisitions by a Person will not constitute a Change of Control: (i) any acquisition directly from the Company; (ii) any acquisition by the Company; (iii) any acquisition by any employee benefit plan (or related trust) sponsored or maintained by the Company or any corporation controlled by the Company; or (iv) any acquisition by any corporation pursuant to a transaction which complies with clauses (i), (ii) and (iii) of paragraph (c) of this paragraph 6.3.1.

     (b) The individuals who, as of the date hereof, constitute the Board of Directors (the “Incumbent Board”) cease for any reason to constitute at least a majority of the Board of Directors. Any individual becoming a director subsequent to the date hereof whose election, or nomination for election by the Company’s shareholders, is approved by a vote of at least a majority of the directors then comprising the Incumbent Board will be considered a member of the Incumbent Board as of the date hereof, but any such individual whose initial assumption of office occurs as a result of an actual or threatened election contest with respect to the election or removal of directors or other actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the Incumbent Board will not be deemed a member of the Incumbent Board as of the date hereof.

     (c) The consummation of a reorganization, merger, consolidation or sale or other disposition of all or substantially all of the assets of the Company (a “Business Combination”), unless following such Business Combination: (i) the individuals and entities who were the beneficial owners, respectively, of the Outstanding Company Common Stock and Outstanding Company Voting Securities immediately prior to such Business Combination beneficially own, directly or indirectly, more

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than 60% of, respectively, the then outstanding shares of common stock and the combined voting power of the then outstanding voting securities entitled to vote generally in the election of directors, as the case may be, of the corporation resulting from such Business Combination (including, without limitation, a corporation which as a result of such transaction owns the Company or all or substantially all of the Company’s assets either directly or through one or more subsidiaries) in substantially the same proportions as their ownership, immediately prior to such Business Combination of the Outstanding Company Common Stock and Outstanding Company Voting Securities, as the case may be, (ii) no Person (excluding any corporation resulting from such Business Combination or any employee benefit plan (or related trust) of the Company or such corporation resulting from such Business Combination) other than one or more of the Exempt Persons beneficially owns, directly or indirectly, 40% or more of, respectively, the then outstanding shares of common stock of the corporation resulting from such Business Combination or the combined voting power of the then outstanding voting securities of such corporation except to the extent that such ownership existed prior to the Business Combination and (iii) at least a majority of the members of the board of directors of the corporation resulting from such Business Combination were members of the Incumbent Board at the time of the execution of the initial agreement, or of the action of the Board, providing for such Business Combination.

     (d) The approval by the shareholders of the Company of a complete liquidation or dissolution of the Company.

     6.3.2 CC Termination. The term “CC Termination” means any of the following: (a) the Executive’s employment is terminated by the Company other than under paragraphs 6.1.2, 6.4 or 6.5; or (b) the Executive resigns as a result of a change in the Executive’s duties or title, a reduction in the Executive’s then current Base Salary or a significant reduction in the Executive’s then current benefits as provided in Section 4, a relocation of more than 25 miles from the Executive’s then current place of employment being required by the Board of Directors or a default by the Company under this Agreement.

     6.4 Incapacity of Executive. If the Executive suffers from a physical or mental condition, which in the reasonable judgment of the Company’s Board of Directors, prevents the Executive in whole or in part from performing the duties specified herein for a period of sixteen (16) consecutive weeks, the Executive’s employment may be terminated by the Company, in which event, the Company will pay Executive the equivalent of six (6) months Base Salary in effect on the date of termination. If, on the termination date, the Executive is a “specified employee” as defined in regulations under Section 409A of the Code, such payment will commence on the first payroll payment date which is more

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than six months following the termination date. Notwithstanding the foregoing, the amount payable hereunder will be reduced by any benefits payable under any disability plans provided by the Company under paragraph 4.4 of this Agreement. The right to the compensation due under this paragraph 6.4 is subject to the execution by the Executive or the Executive’s legal representative of the Company’s severance agreement which will operate as a release of all legally waivable claims against the Company. In applying this section, the Company will comply with any applicable legal requirements, including the Americans with Disabilities Act.

     6.5 Death of Executive. If the Executive dies during the term of this Agreement, Executive’s employment will terminate without compensation to the Executive’s estate except: (a) the obligation to continue the Base Salary payments under paragraph 4.1 of this Agreement for twelve (12) months after the effective date of such termination.

     6.6 Effect of Termination. The termination of Executive’s employment will terminate all obligations of the Executive to render services on behalf of the Company. The Executive will maintain the confidentiality of all information acquired by the Executive during the term of his employment in accordance with paragraph 7 of this Agreement and the Executive shall comply with all other post employment requirements including paragraphs 7, 8, 9, 10, 11, 12 and 13. Except as otherwise provided in this paragraph 6, no accrued bonus, severance pay or other form of compensation will be payable by the Company to the Executive by reason of the termination of his employment. All keys, entry cards, credit cards, files, records, financial information, furniture, furnishings, computers, equipment, supplies and other items relating to the Company will remain the property of the Company. The Executive will have the right to retain and remove all personal property and effects that are owned by the Executive and located in the offices of the Company. All such personal items will be removed from such offices no later than ten (10) days after the effective date of termination, and the Company is hereby authorized to discard any items remaining and to reassign the Executive’s office space after such date. Prior to the effective date of termination, the Executive will cooperate with the Company to provide for the orderly separation of the Executive’s employment.

     6.7 Equity Compensation Provisions. Notwithstanding any provision to the contrary in any option agreement, restricted stock agreement, plan or other agreement relating to equity based compensation, in the event of a termination under paragraph 6.3 of this Agreement, or in the event of a termination under paragraph 6.1.1 of this Agreement if at the time of such termination Tom L. Ward is not the Chairman and Chief Executive Officer of the Company: (a) all units, stock options, incentive stock options, performance shares, stock appreciation rights and restricted stock granted and held by Executive immediately prior to such termination will immediately become 100%

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vested; and (b) the Executive’s right to exercise any previously unexercised options will not terminate until the latest date on which such option would expire but for Executive’s termination of employment. To the extent Company is unable to provide for one or both of the foregoing rights the Company will provide in lieu thereof a lump-sum cash payment equal to the difference between the total value of such units, stock options, incentive stock options, performance shares, stock appreciation rights and shares of restricted stock (the “Equity Compensation Rights”) with the foregoing rights as of the date of Executive’s termination of employment and the total value of the Equity Compensation Rights without the foregoing rights as of the date of the Executive’s termination of employment. The foregoing amounts will be determined by the Board of Directors in good faith based on a valuation performed by an independent consultant selected by the Board of Directors and the cash payment, if any, will be paid in a lump sum in the case of a termination under Section 6.1.1, at the same time as the severance payment is otherwise due under such Section, and in the case of a termination under Section 6.3, at the same time the payment is due under such Section. The right to the foregoing termination compensation under clauses (a) and (b) above is subject to the Executive’s execution of the Company’s severance agreement which will operate as a release of all legally waivable claims against the Company. Such payment is further conditioned upon the Executive’s compliance with all of the provisions of this Agreement, including all post-employment obligations.

     7. Confidentiality. The Executive recognizes that the nature of the Executive’s services are such that the Executive will have access to information which constitutes trade secrets, is of a confidential nature, is of great value to the Company or is the foundation on which the business of the Company is predicated. The Executive agrees not to disclose to any person other than the Company’s employees or the Company’s legal counsel or other parties authorized by the Company to receive confidential information (“Confidential Information”) nor use for any purpose, other than the performance of this Agreement, any Confidential Information. Confidential Information includes data or material (regardless of form) which is: (a) a trade secret; (b) provided, disclosed or delivered to Executive by the Company, any officer, director, employee, agent, attorney, accountant, consultant, or other person or entity employed by the Company in any capacity, any customer, borrower or business associate of the Company or any public authority having jurisdiction over the Company of any business activity conducted by the Company; or (c) produced, developed, obtained or prepared by or on behalf of Executive or the Company (whether or not such information was developed in the performance of this Agreement) with respect to the Company or any assets oil and gas prospects, business activities, officers, directors, employees, borrowers or customers of the foregoing. However, Confidential Information will not include any information, data or material which at the time of disclosure or use was generally available to the public other than by a breach of this Agreement, was available to the party to whom disclosed on a non-confidential basis by disclosure or access provided by the Company or a third party, or was otherwise developed or obtained independently by the person to whom disclosed without a breach of this

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Agreement. On request by the Company, the Company will be entitled to a copy of any Confidential Information in the possession of the Executive. The provisions of this paragraph 7 will survive the termination, expiration or cancellation of Executive’s employment for a period of one (1) year after the date of termination. The Executive will deliver to the Company all originals and copies of the documents or materials containing Confidential Information. For purposes of paragraphs 7, 8, and 9 of this Agreement, the Company expressly includes any of the Company’s subsidiaries or affiliates.

     8. Non-Solicitation. The Executive agrees that during the Non-Solicitation Period (as hereafter defined), Executive will not directly, either personally or by or through his agent, on behalf of himself or on behalf of any other individual, association or entity, (i) use any of the Confidential Information for the purposes of calling on any established customer of the Company or soliciting or inducing any of such customers to acquire, or providing to any of such customers, any product or service provided by the Company or any affiliate or subsidiary of the Company; (ii) solicit, influence or encourage any established customer of the Company to divert or direct such customer’s business to the Executive or any person or entity by which or with which the Executive is employed, associated, affiliated or otherwise related; or (iii) solicit, divert or attempt to solicit or divert any entity which has been identified and contacted by the Company, either directly or through such entity’s agent(s), with respect to a possible acquisition by the Company. For the purposes hereof, the term “Non-Solicitation Period” shall mean a period of six (6) months after Executive’s employment ceases for any reason.

     9. Non-Interference. The Executive agrees that during the Non-Interference Period (as hereafter defined) he will not, directly or indirectly, either personally or by or through his agent, on behalf of himself or on behalf of any other individual, association or entity, hire, solicit or seek to hire any employee of the Company or any affiliate or subsidiary of the Company, or any individual who was an employee of the Company or any affiliate or subsidiary of the Company during the twelve-month period prior to the Termination Date, or in any other manner attempt, directly or indirectly, to persuade any such employee to discontinue his or her status of employment with the Company or any affiliate or subsidiary of the Company or to become employed in a business or activities likely to be competitive with the business of the Company or any affiliate or subsidiary of the Company. For the purposes hereof, the term “Non-Interference Period” shall mean a period of six (6) months after Executive’s employment ceases for any reason.

     10. Severability. It is the desire and intent of the parties hereto that the provisions of this Agreement be enforced to the fullest extent permissible under the laws and public policies applied in each jurisdiction in which enforcement is sought. Accordingly, if any particular provision of this Agreement shall be adjudicated by a court of competent jurisdiction to be invalid, prohibited or unenforceable for any reason, such provision, as to such jurisdiction, shall be ineffective, without invalidating the remaining provisions of this Agreement or affecting the validity or enforceability of such provision

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in any other jurisdiction. Notwithstanding the foregoing, if such provision could be more narrowly drawn so as not to be invalid, prohibited or unenforceable in such jurisdiction, it shall, as to such jurisdiction, be so narrowly drawn, without invalidating the remaining provisions of this Agreement or affecting the validity or enforceability of such provision in any other jurisdiction.

     11. Remedies. The Executive acknowledges and understands that the provisions of this Agreement are of a special and unique nature, the loss of which cannot be adequately compensated for in damages by an action at law, and that the breach or threatened breach of the provisions of this Agreement would cause the Company or any of its Subsidiaries irreparable harm. In the event of a breach or threatened breach by the Executive of the provisions of this Agreement, the Company or any of its subsidiaries or affiliates shall be entitled to an injunction restraining the Executive from such breach. In addition to the foregoing and not in any way in limitation thereof, or in limitation of any right or remedy otherwise available, if the Executive violates any provision of Paragraphs 7, 8 or 9 hereof, any compensation or severance payments then or thereafter due from the Company to the Executive shall be terminated forthwith and the Company’s obligation to pay and the Executive’s right to receive such compensation as severance payments shall terminate and be of no further force or effect, in each case without limiting or affecting the Executive’s obligations under such Paragraphs 7, 8 and 9 or the Company’s or its subsidiaries’ or affiliates’ other rights and remedies available at law or equity. Nothing contained in this Agreement shall be construed as prohibiting the Company or any of its subsidiaries or affiliates from pursuing, or limiting the Company’s or any of its subsidiaries’ or affiliates’ ability to pursue, any other remedies available for any breach or threatened breach of this Agreement by the Executive. The provisions of Paragraph 13 of this Agreement relating to arbitration shall not be applicable to the Company to the extent it seeks an injunction in any court to restrain the Executive from violating Paragraphs 7, 8 or 9 hereof.

     12. Proprietary Matters.

     12.1 The Executive acknowledges and agrees that the Company owns all right, title and interest (including patent rights, copyrights, trade secret rights, trademark rights and all other intellectual and industrial property rights) relating to any and all inventions (whether or not patentable), works of authorship, design, know-how, ideas and information made or conceived or reduced to practice, in whole or in part, by the Executive during the term of this Agreement which are useful in, or directly or indirectly related to, the business of the Company or any Confidential Information (collectively, the “Proprietary Rights”). The Executive further acknowledges and agrees that all such Proprietary Rights are “works made for hire” of which the Company is the author. The Executive agrees to promptly disclose and provide all Proprietary Rights to the Company; provided, in the event the Proprietary Rights shall not be deemed to constitute “works made for hire,” or in the event the Executive should, by operation of law or otherwise, be deemed to retain any rights in the Proprietary Rights, the

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Executive agrees to assign to the Company, without further consideration, the Executive’s entire right, title and interest in and to each and every such Proprietary Right.

     12.2 The Executive hereby agrees to assist Company in obtaining and enforcing United States and/or foreign letters patent and copyright registrations covering the Proprietary Rights and further agrees that Executive’s obligation to assist Company shall continue beyond the termination of Executive’s employment hereunder. If Company is unable because of Executive’s mental or physical incapacity or for any other reason to secure Executive’s signature to apply for or to pursue any application for any United States or foreign letters patent or copyright registrations covering inventions assigned to Company, then Executive hereby irrevocably designates and appoints Company and its duly authorized officers and agents as Executive’s agent and attorney-in-fact to act for and on Executive’s behalf to execute and file any such applications and to do all other lawfully permitted acts to further the prosecution and issuance of letters patent or copyright registrations thereon with the same legal force and effect as if executed by Executive. Executive hereby waives and quitclaims to Company any and all claims of any nature whatsoever which Executive now or hereafter may have for infringement of any patent or copyright resulting from any such application for letters patent or copyright registrations assigned hereunder to Company. Executive will further assist Company in every lawful way to enforce any copyrights or patents obtained, including without limitation, testifying in any suit or proceeding involving any of the copyrights or patents or executing any documents deemed necessary by Company, all without further consideration except as contemplated by the immediately following sentence but at the expense of Company. If Executive is called upon to render such assistance after termination of Executive’s employment hereunder, then Executive shall be entitled to a fair and reasonable per diem fee (which shall not be less than Executive’s equivalent daily Base Salary) in addition to reimbursement of any expenses incurred at the request of Company.

     13. Arbitration. Any dispute between the parties out of or related to this Agreement or the employment relationship, whether arising during the term of this Agreement or afterwards, and involving a claim for money damages shall be subject to binding arbitration and resolved pursuant to the rules of the American Arbitration Association. All arbitration shall be final and binding and shall be governed by the Federal Arbitration Act and the arbitration decision shall be enforceable in any court of competent jurisdiction. This obligation to arbitrate shall survive even if this Agreement shall be alleged to be rescinded or terminated. The arbitration hearing shall be convened in Oklahoma City, Oklahoma. The Company will pay the costs and expenses of the arbitration including, without limitation, the fees for the arbitrators.

     14. Miscellaneous. The parties further agree as follows:

     14.1 Time. Time is of the essence of each provision of this Agreement.

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     14.2 Notices. Any notice, payment, demand or communication required or permitted to be given by any provision of this Agreement will be in writing and will be deemed to have been given when received by personal delivery, by facsimile, by overnight courier, or by certified mail, postage and charges prepaid, directed to the following address or to such other or additional addresses as any party might designate by written notice to the other party:

To the Company:	SandRidge Energy, Inc.
	1601 N.W. Expressway, Suite 1600
	Oklahoma City, OK 73118
	Attn: Mary L. Whitson
To the Executive:	Executive’s First Name M.I. Last Name
	Address
	City, State Zip

     14.3 Assignment. Neither this Agreement nor any of the parties’ rights or obligations hereunder can be transferred or assigned without the prior written consent of the other parties to this Agreement.

     14.4 Construction. If any provision of this Agreement or the application thereof to any person or circumstances is determined, to any extent, to be invalid or unenforceable, the remainder of this Agreement, or the application of such provision to persons or circumstances other than those as to which the same is held invalid or unenforceable, will not be affected thereby, and each term and provision of this Agreement will be valid and enforceable to the fullest extent permitted by law. This Agreement is intended to be interpreted, construed and enforced in accordance with the laws of the state of Oklahoma

     14.5 Entire Agreement. This Agreement constitutes the entire agreement between the parties hereto with respect to the subject matter herein contained, and no modification hereof will be effective unless made by a supplemental written agreement executed by all of the parties hereto.

     14.6 Binding Effect; Third Party Beneficiary; Assignment. This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective affiliates, officers, employees, agents, successors and assigns (including, in the case of the Company or any of its subsidiaries or affiliated companies, the successor to the business of the Company as a result of the transfer of all or substantially all of the assets or capital stock of the Company or any of its subsidiaries or affiliates); provided, that the Executive may not assign this Agreement or any of his rights or interests herein, in whole or in part, to any other person or entity without the prior written consent of the Company.

     14.7 Supercession. This Agreement is the final, complete and exclusive expression of the agreement between the Company and the Executive

SVP Standard Agreement 01-01-08

13

and supersedes and replaces in all respects any prior oral or written employment agreements. On execution of this Agreement by the Company and the Executive, the relationship between the Company and the Executive after the effective date of this Agreement will be governed by the terms of this Agreement and not by any other agreements, oral or otherwise.

     14.8 Non-Contravention. Executive represents and warrants to the Company that the execution and performance of this Agreement will not violate, constitute a default under, or otherwise give rights to any third party, pursuant to the terms of any Agreement to which Executive is a party.

     14.9 Indemnity. EXECUTIVE AGREES TO INDEMNIFY AND HOLD HARMLESS THE COMPANY, ITS DIRECTORS, OFFICERS AND EMPLOYEES AND AGENTS (THE “INDEMNIFIED PARTIES”) AGAINST ANY LOSS, CLAIM, DAMAGE, LIABILITY OR EXPENSE, AS INCURRED, (“LOSS”) TO WHICH THE INDEMNIFIED PARTIES MAY BECOME SUBJECT OR INCUR, INSOFAR AS SUCH LOSS ARISES OUT OF OR IS BASED UPON ANY INACCURACY IN ANY REPRESENTATION OR WARRANTY GIVEN BY EXECUTIVE IN THIS AGREEMENT AND TO REIMBURSE THE INDEMNIFIED PARTIES FOR ANY AND ALL EXPENSES (INCLUDING THE FEES AND DISBURSEMENTS OF COUNSEL CHOSEN BY THE INDEMNIFIED PARTIES) AS SUCH EXPENSES ARE REASONABLY INCURRED BY THE INDEMNIFIED PARTIES IN CONNECTION WITH INVESTIGATING, DEFENDING, SETTLING, COMPROMISING OR PAYING ANY SUCH LOSS.

     14.10 Compliance with Section 409A of the Code. This Agreement is intended to comply with Section 409A of the Code and shall be construed and interpreted in accordance with such intent. To the extent any benefit paid under this Agreement shall be subject to Section 409A of the Code, such benefit shall be paid in a manner that will comply with Section 409A, including any IRS 409A Guidance. Any provision of this Agreement that would cause the payment of any benefit to fail to satisfy Section 409A of the Code shall have no force and effect until amended to comply with Section 409A (which amendment may be retroactive to the extent permitted by the IRS 409A Guidance.

     IN WITNESS WHEREOF, the undersigned have executed this Agreement effective the date first above written.

[SIGNATURES ON FOLLOWING PAGE]

SVP Standard Agreement 01-01-08

14

SANDRIDGE ENERGY, INC.
By:
	Tom L. Ward
	Chief Executive Officer

	(the “Company”)
By
	Executive’s First M.I. Last Name
	(the “Executive”)

SVP Standard Agreement 01-01-08

15

EX-10.5.7

EMPLOYMENT SEPARATION AGREEMENT

April 14, 2008

VIA HAND DELIVERY

Mr. Larry K. Coshow
2612 N.W. 176^th Street
Edmond, OK 73003

Re: Separation Agreement

Dear Larry:

Thank you for your services to SandRidge Energy, Inc. (“SandRidge” or “Company”). This letter will supersede the Employment Separation Agreement previously issued to you dated March 25, 2008, and when fully executed, will constitute the agreement between Larry K. Coshow (the “Executive”), and SandRidge concerning the terms of Executive’s separation from employment with the Company.

1.	Termination of Employment. The effective date of termination (the “Termination Date”) of Executive’s employment with SandRidge pursuant to paragraph 6.1.1 of Executive’s Employment Agreement dated January 1, 2008 shall be April 4, 2008.
2.	Final Payment. Executive has been paid or will be paid Executive’s earned salary through the Termination Date plus ten (10) days pay. Executive’s final paycheck will include payment for all accrued and unused days of earned PTO (Paid Time Off).
3.	Severance Payment. In consideration of Executive’s service to SandRidge and Executive’s execution of this Separation Agreement and the General Release contained hereafter, SandRidge will provide the Executive (1) a Severance Payment equal to twelve (12) months of Executive’s base salary in the amount of Three Hundred Nine Thousand and 00/100 Dollars ($309,000.00), less customary payroll deductions; (2) an additional cash payment equal to ten (10) days of base salary in the amount of Eleven Thousand Eight Hundred Eighty-four and 62/100 Dollars ($11,884.62), less customary payroll deductions, in lieu of notification pursuant to paragraph 6.1.1 of Executive’s current Employment Agreement; and (3) acceleration of vesting of Executive’s Twenty Nine Thousand Two Hundred Fifty (29,250) shares of currently unvested and outstanding SandRidge restricted stock grants, less shares for required taxes. The acceleration of vesting of the shares of restricted stock set forth above will be effective immediately after Executive returns an executed copy of this Separation Agreement, or seven (7) days after that return date, whichever is later, and after Executive has returned all SandRidge property, if any. The Executive is a “specified employee” as defined in regulations under

1601 N.W. Expressway, Suite 1600, Oklahoma City, OK 73118 • Phone 405-753-5500, Fax 405-753-5975 • sandridgeenergy.com

	Section 409A of the Internal Revenue Code; therefore, the Severance Payment will be paid on the first payroll payment date which is more than six (6) months following the Termination Date. In addition, the payment will be subject to all applicable state and federal withholdings and payroll deductions but will not otherwise be “benefit bearing” and will not be considered as compensation for purposes of SandRidge’s qualified 401 (k) and profit sharing plans or for accrual of paid time off or other leaves.
4.	Return of SandRidge Property. If Executive has any Company property in Executive’s possession, Executive agrees to immediately return it to the Human Resources Department. Company property includes work product, electronic devices and other physical property of the Company. This includes equipment, supplies, keys, security access items, passwords, credit cards, laptops, notebooks, cellular phones and Blackberries. Executive must also return all originals and any copies of Company records. This includes any disks, files, etc. Executive has personally generated or maintained with respect to the Company’s business, as well as any “official” Company records in Executive’s possession.
5.	Release of Claims. Executive waives and releases and promises never to assert any and all claims, known and unknown, that Executive has or might have against SandRidge and any related entities, directors, officers, members of leadership, agents, attorneys, employees, successors or assigns, arising from or related to Executive’s employment with SandRidge and/or the termination of Executive’s employment with SandRidge. These claims include, but are not limited to, personal injury claims, contract claims, employment claims, wage and hour claims, claims arising under federal, state and local statutory or common law such as (without limitation) Title VII of the Civil Rights Act of 1964, the Americans with Disabilities Act and the law of contract and tort.
6.	General Release. To accept this Separation Agreement and Executive’s Severance Payment, Executive will execute a copy of this Separation Agreement and the attached General Release and return it to SandRidge. Executive has twenty-one (21) days from the date of receipt of this letter to do this. By signing this Separation Agreement, Executive is agreeing that once seven (7) days have passed from the date Executive signs the Release, Executive will not attempt to revoke or rescind the General Release at any time in the future, and is agreeing not to commence any action against SandRidge in regard to Executive’s prior employment relationship. By signing this letter, Executive is representing to SandRidge that Executive fully understands the General Release and will have had an opportunity to seek legal advice regarding the General Release and the agreement proposed by this letter, if Executive desires to do so, before signing either document. Executive is also representing to SandRidge that between the date of this letter and the date Executive signs the General Release, Executive has not commenced, and will not commence, any charge, action or complaint with any court or with the Equal Employment Opportunity Commission, the United States Department of Labor or with any other federal or state judicial or administrative agency in regard to Executive’s employment relationship or any matters arising out of that relationship. These claims include, but are not limited to, claims arising under federal, state and local statutory or common law, such as Title VII of the Civil Rights Act of 1964, the Americans with Disabilities Act and the law of contract

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	and tort. Finally, Executive is representing that he fully understands that any such filing or actions shall constitute a rejection or breach of our agreement. Executive also waives and releases and promises never to assert any such claims, even if Executive does not believe that he has such claims.
7.	Continued Assistance. Executive will continue to cooperate with and assist SandRidge and its representatives and attorneys as reasonably requested with respect to any investigations, litigation, arbitration or other dispute resolutions by being available for interviews, depositions and/or testimony in regard to any matters in which Executive is or has been involved or with respect to which Executive has relevant information. SandRidge will reimburse Executive for reasonable expenses Executive may incur for travel in connection with this obligation to assist SandRidge. In addition, SandRidge will compensate Executive a reasonable hourly rate for all time spent by Executive in providing such assistance.
8.	Confidential Information. During the course of Executive’s employment with SandRidge, Executive has had access to and gained knowledge of confidential and proprietary information; therefore, Executive agrees not to make any independent use of or, except as required by applicable law, disclose to any other person or organization, including any governmental agency, any of the Company’s confidential, proprietary information unless Executive obtains the Company’s prior written consent. This includes written and unwritten information relating to operations, business planning and strategies, personnel, finance, accounting, costs of providing service, operating and maintenance costs and pricing matters. If Executive is asked to testify or provide information pertaining to the Company, Executive will promptly notify the Company’s attorneys, McAfee & Taft, 10th Floor, Two Leadership Square, 211 North Robinson, Oklahoma City, OK 73102, Attn: Michael F. Lauderdale, and provide a copy of the legal process documents so that, if appropriate, they may seek to have the legal process quashed or a protective order. In addition, and as noted below, certain provisions in Executive’s Employment Agreement with SandRidge regarding confidentiality remain in full force and effect.
	Executive also agrees that all such Confidential Information together with all copies in any format thereof and notes and other summaries thereof are and shall remain the sole property of SandRidge. Executive agrees to return to SandRidge any such Confidential Information and all copies, notes or other summaries thereof which Executive may have in his possession on the Executive’s Termination Date. These obligations described in this paragraph shall apply whether Executive accepts the Severance Payment or not. This commitment of confidentiality shall also apply to the terms of this Separation Agreement, except for discussions with Executive’s spouse, Executive’s personal attorney and/or accountants, or as needed to enforce our agreement. Any disclosure by such individuals shall be deemed a disclosure by Executive and shall have the same consequences as a breach of our agreement directly by the Executive.
9.	Future Activities. For a period of five (5) years from the execution of the Agreement, Executive will not at any time in the future voluntarily contact or voluntarily participate with any governmental agency in connection with any complaint or

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	investigation pertaining to the Company, and Executive will not be employed or otherwise act as an expert witness or consultant or in any similar paid capacity in any litigation, arbitration, regulatory or agency hearing or other adversarial or investigatory proceeding involving the Company. In addition, the Executive will not voluntarily have any contact with any of the Company’s current or former employees for purposes of soliciting, advising about or discussing their participation or potential participation in any litigation, arbitration, regulatory or agency hearing or other adversarial or investigatory proceeding involving the Company.
10.	Preserving the Company Name. Executive will not at any time in the future defame, disparage or make statements or disparaging remarks which could embarrass or cause harm to SandRidge’s name and reputation or the names and reputation of any of its officers, directors, representatives, agents, employees or SandRidge’s current, former or prospective vendors, professional colleagues, professional organizations, associates or contractors, to any governmental or regulatory agency or to the press or media. “Disparagement” as used herein means the form and substance of any communication, regardless of whether or not Executive believes it to be true, that tends to degrade or belittle SandRidge or subject it to ridicule or embarrassment. Executive agrees this paragraph is a material provision of this Separation Agreement and that in the event of breach, Executive will be liable for the return of the value of all consideration received as well as any other damages sustained by SandRidge. This non-disparagement provision shall be deemed mutual, insofar as the parties affected are within the control of SandRidge.
11.	Employment Verification. SandRidge may respond to inquiries from third parties about Executive’s employment with SandRidge by identifying Executive’s date of hire, Termination Date and position held on the Termination Date.
12.	Forfeiture. In the event that Executive breaches in any material respect any of his obligations under this Separation Agreement or as otherwise imposed by law, SandRidge shall be entitled to stop payment of any benefit due under this agreement and shall be entitled to recover any benefits paid under the agreement and to obtain all other relief provided by law or equity, including, but not limited to, injunctive relief.
13.	Additional Warranties. Executive represents and warrants that as of this date Executive has suffered no work related injury during his employment with SandRidge and that Executive has no intention of filing a claim for worker’s compensation benefits arising from any incident occurring during Executive’s employment with the Company. Executive further represents and warrants that he has accounted to the Company for any and all hours worked through the Termination Date, including overtime and that Executive has been paid for such hours worked at the appropriate rate. Executive also represents and warrants that he is not due any additional compensation for unused PTO.
14.	No Admission/Offer of Compromise. By making this severance offer, SandRidge is not admitting liability or responsibility for any past due wages or other consideration. Any alleged responsibility or liability on the part of the Company has been and continues to

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	be denied. In addition, this severance offer constitutes an offer of compromise pursuant to the applicable rules of evidence.
15.	Severability. If any portion, provision or part of this Separation Agreement is held, determined or adjudicated to be invalid, unenforceable or void for any reason whatsoever, each such portion, provision or part shall be severed from the remaining portions, provisions or parts of this Separation Agreement and shall not affect the validity or enforceability of such remaining portions, provisions or parts.
16.	Entire Agreement/Employment Agreement. Except as provided for below, Executive agrees that the Employment Agreement dated January 1, 2008 is void and of no further force or effect; however, Executive acknowledges and agrees that Sections 7, 8, 9, 10, 11, 12, 13 and 14 remain in full force and effect. This Separation Agreement between Executive and SandRidge, in the event Executive executes this letter, will be in consideration of the mutual promises described above. Except as provided for above, this Separation Agreement and the General Release will constitute the entire agreement between Executive and SandRidge with respect to Executive’s separation from employment. There are no agreements, written or oral, express or implied, between the parties hereto, concerning the subject matter hereof, except the agreements set forth in this Separation Agreement and except for the provisions in Executive’s current Employment Agreement that remain in force.

We are pleased that we were able to part ways on these amicable terms. We wish you every success in your future endeavors.

Sincerely,

SANDRIDGE ENERGY, INC.

Agreed to on behalf of SandRidge Energy, Inc.

/s/ Tom L. Ward                                        
Tom L. Ward
Chairman and CEO

By signing this letter, Executive acknowledges that he has been given the opportunity to review this Separation Agreement carefully; that Executive has read this Separation Agreement and understands the terms of the Separation Agreement; and that he voluntarily agrees to them.

ACCEPTED AND AGREED TO BY EXECUTIVE:
/s/ Larry K. Coshow Larry K. Coshow	4/14/08 Date

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NOTICE

Various laws, including Title VII of the Civil Rights Act of 1964, the Civil Rights Act of 1866, the Pregnancy Discrimination Act of 1978, the Equal Pay Act, the Civil Rights Act of 1991, the Age Discrimination in Employment Act, the Rehabilitation Act of 1973, the Americans with Disabilities Act, the Employee Retirement Income Security Act and the Veterans Reemployment Rights Act (all as amended from time to time), prohibit employment discrimination based on sex, race, color, national origin, religion, age, disability, eligibility for covered employee benefits and veteran status. Executive may also have rights under laws such as the Older Worker Benefit Protection Act of 1990, the Worker Adjustment and Retraining Act of 1988, the Fair Labor Standards Act, the Family and Medical Leave Act, the Occupational Health and Safety Act and other federal, state and/or municipal statutes, orders or regulations pertaining to labor, employment and/or employee benefits. These laws are enforced through the United States Department of Labor and its agencies, including the Equal Employment Opportunity Commission (EEOC), and various state and municipal labor departments, fair employment boards, human rights commissions and similar agencies.

This General Release is being provided to the Executive in connection with the special, individualized severance package outlined in the proposed Separation Agreement dated March 25, 2008. Executive has until the close of business twenty-one (21) days from the date Executive receives the March 25, 2008 letter and this General Release to make his decision. Executive may accept the special, individualized severance package by signing the Separation Agreement at any time during that period. If Executive does not accept the severance package and sign and return this General Release within twenty-one (21) days, Executive will not be eligible for the special, individualized severance package.

BEFORE EXECUTING EITHER THE PROPOSED SEPARATION AGREEMENT OR THIS GENERAL RELEASE EXECUTIVE SHOULD REVIEW THESE DOCUMENTS CAREFULLY AND CONSULT AN ATTORNEY.

Executive may revoke this General Release within seven (7) days after Executive signs it and it shall not become effective or enforceable until that revocation period has expired. Any revocation must be in writing and must be received by the Company’s Human Resource Department, Attn: Mary Whitson within the seven (7) day period following Executive’s execution of this General Release.

GENERAL RELEASE

Executive’s employment with SandRidge is terminated effective March 25, 2008. In consideration of the special, individualized severance package offered to the Executive by SandRidge and the separation benefits Executive will receive as reflected in a letter dated March 25, 2008 (the “Separation Agreement”), Executive hereby releases and discharges SandRidge and its predecessors, successors, affiliates, and partners and each of those entities’ employees, officers, directors and agents (hereafter collectively referred to as the “Company”) from all claims, liabilities, demands, and causes of action, known or unknown, fixed or contingent, which Executive may have or claim to have against the Company either as a result of Executive’s past employment with the

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Company and/or the severance of that relationship and/or otherwise, and hereby waive any and all rights I may have with respect to and promise not to file a lawsuit to assert any such claims.

This General Release includes, but is not limited to, claims arising under Title VII of the Civil Rights Act of 1964, the Civil Rights Act of 1866, the Pregnancy Discrimination Act of 1978, the Equal Pay Act, the Civil Rights Act of 1991, the Age Discrimination in Employment Act, the Rehabilitation Act of 1973, the Americans with Disabilities Act, the Employee Retirement Income Security Act or 1974 and the Veterans Reemployment Rights Act (all as amended from time to time). This General Release also includes, but is not limited to, any rights Executive may have under the Older Workers Benefit Protection Act of 1990, the Worker Adjustment and Retraining Act of 1988, the Fair Labor Standards Act, the Family and Medical Leave Act, the Occupational Health and Safety Act and any other federal, state and/or municipal statutes, orders or regulations pertaining to labor, employment and/or employee benefits. This General Release also applies to any claims or rights Executive may have growing out of any legal or equitable restrictions on the Company’s rights not to continue an employment relationship with its employees, including any express or implied employment contracts, and to any claims Executive may have against the Company for fraudulent inducement or misrepresentation, defamation, wrongful termination or other retaliation claims in connection with workers’ compensation or alleged “whistleblower” status or on any other basis whatsoever.

It is specifically agreed, however, that this General Release does not have any effect on any rights or claims Executive may have against the Company which arise after the date Executive executes this General Release or on any vested rights Executive may have under any of the Company’s qualified benefit plans or arrangements as of or after Executive’s last day of employment with the Company or on any of the Company’s obligations under the Separation Agreement.

Executive has carefully reviewed and fully understands all the provisions of the Separation Agreement and General Release, including the foregoing Notice. Executive has not relied on any representation or statement, oral or written, by the Company or any of its representatives, which is not set forth in those documents.

Except for the provisions in the Executive’s January 1, 2008 Employment Agreement that remain in effect as set forth in the Separation Agreement, the Separation Agreement and this General Release, including the foregoing Notice, set forth the entire agreement between Executive and the Company with respect to this subject. Executive understands that his receipt and retention of the Severance Payment covered by the Separation Agreement are contingent not only on Executive’s execution of this General Release, but also on Executive’s continued compliance with his other obligations under the Separation Agreement and the applicable provisions in Executive’s Employment Agreement.

Executive acknowledges that the Company gave the Executive twenty-one (21) days to consider whether he wishes to accept or reject the separation benefits Executive is eligible to receive under the Separation Agreement in exchange for this General Release. Executive also acknowledges that the Company advised him to seek independent legal advice as to these matters, if Executive chose to do so. Executive hereby represents and

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states that he has taken such actions and obtained such information and independent legal or other advice, if any, that Executive believed were necessary for him to fully understand the effects and consequences of the Separation Agreement and this General Release prior to signing those documents.

Date: 4/14/08, 2008

/s/ Larry K. Coshow                                          
Larry K. Coshow

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EX-10.7.3

AMENDMENT NO. 3

and

SCHEDULED DETERMINATION
OF THE BORROWING BASE

dated as of September 14, 2007

to the SENIOR CREDIT AGREEMENT

dated as of November 21, 2006

among

SANDRIDGE ENERGY, INC.
as the Borrower,

BANK OF AMERICA, N.A.,
as Administrative Agent, Swing Line Lender and L/C Issuer

and

The Other Lenders Party Thereto

BANC OF AMERICA SECURITIES LLC,
Sole Lead Arranger and Sole Book Manager

AMENDMENT NO. 3
AND SCHEDULED DETERMINATION OF THE BORROWING BASE

     AMENDMENT AND SCHEDULED DETERMINATION (this “Amendment and Determination”) dated as of September 14, 2007 under the Senior Credit Agreement dated as of November 21, 2006 (as amended, restated, supplemented, or otherwise modified from time to time, the “Credit Agreement”) among SANDRIDGE ENERGY, INC., a Delaware corporation (f/k/a Riata Energy, Inc.) (the “Borrower”), each LENDER from time to time party thereto and BANK OF AMERICA, N.A., as Administrative Agent (the “Administrative Agent”), Swing Line Lender and L/C Issuer.

     WHEREAS, the parties hereto desire to amend the Credit Agreement as set forth herein; and

     WHEREAS, the Administrative Agent proposes to increase the Borrowing Base amount in accordance with the Scheduled Determination procedure set forth in Section 2.05 of the Credit Agreement;

     NOW, THEREFORE, the parties hereto agree as follows:

     SECTION 1. Defined Terms. Unless otherwise specifically defined herein, each term used herein that is defined in the Credit Agreement has the meaning assigned to such term in the Credit Agreement. Each reference to “hereof, “hereunder”, “herein” and “hereby” and each other similar reference and each reference to “this Agreement” and each other similar reference contained in the Credit Agreement shall, after this Amendment becomes effective, refer to the Credit Agreement as amended hereby.

     SECTION 2. Amendments to the Credit Agreement. The Credit Agreement is hereby amended as follows:

     (a) Section 1.01 of the Credit Agreement is amended by adding, in appropriate alphabetical order, the following defined terms:

     “Oklahoma Properties” means certain properties in Oklahoma City which include the former Kerr-McGee Tower, the surrounding buildings and the three parking lots.

     “Piñon Field Interests” means 35 BCFE working interest in the Piñon Field.

     (b) The definition of “Consolidated Leverage Ratio” set forth in Section 1.01 of the Credit Agreement is amended by adding the following proviso at the end thereof: “; provided that for purposes of determining the Consolidated Leverage Ratio as of September 30, 2007, December 31, 2007, March 31, 2008,

June 30, 2008 and September 30, 2008, the amount in (b) shall equal Consolidated EBITDAX for the quarter ended on such date multiplied by four.”

     (c) Section 7.01 of the Credit Agreement is amended by renaming clauses (o) and (p) thereof as clauses (q) and (r), respectively, and adding new clauses (o) and (p) thereto that read in their entirety as follows:

     “(o) Liens on Oklahoma Properties securing Indebtedness permitted by Section 7.03(j);

     (p) Liens on Piñon Field Interests securing Indebtedness permitted by Section 7.03(k);”

     (d) Section 7.02 of the Credit Agreement is amended by renaming clauses (i) and (j) thereof as clauses (j) and (k), respectively, and adding a new clause (i) thereto that reads in its entirety as follows:

     “(i) Investments in Oklahoma Properties in an aggregate amount not exceeding $20,000,000;”

     (e) Section 7.03 of the Credit Agreement is amended by deleting Section 7.03(b) in its entirety and by substituting in lieu thereof the new Section 7.03(b) to read in its entirety as follows:

     “(b) Indebtedness in respect of the Bridge Facility and any refinancing thereof, provided that (i) the principal amount of such Indebtedness does not exceed $1,200,000,000, and (ii) such refinancing (A) is unsecured, (B) requires no scheduled amortization prior to the 6^th anniversary of the Closing Date and (C) is otherwise on market terms and conditions;”

     (f) Section 7.03 of the Credit Agreement is amended by deleting Section 7.03(h) in its entirety and by substituting in lieu thereof the new Section 7.03(h) to read in its entirety as follows:

     “(h) Indebtedness incurred by Lariat, and Guarantees of the Borrower in respect of such Indebtedness; provided that the principal amount of Indebtedness of Lariat guaranteed by the Borrower pursuant to this subsection (h) or otherwise shall at no time exceed $125,000,000;”

     (g) Section 7.03 of the Credit Agreement is amended by renaming clauses (j) and (k) thereof as clauses (l) and (m), respectively, and adding new clauses (j) and (k) thereto that read in their entirety as follows:

     “(j) Indebtedness incurred to finance Investments in Oklahoma Properties in an aggregate principal amount not exceeding $20,000,000;

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     (k) Indebtedness incurred to finance Investments in the Piñon Field Interest in an aggregate principal amount not exceeding $50,000,000;”

     (h) Section 7.11 of the Credit Agreement is amended by deleting Section 7.11(b) in its entirety and by substituting in lieu thereof the new Section 7.11(b) to read in its entirety as follows:

     “(b) Consolidated Leverage Ratio. Permit the Consolidated Leverage Ratio as of the end of any fiscal quarter of the Borrower to be greater than 4.5:1.0.”

     SECTION 3. Proposal to Increase the Borrowing Base. Based on the Engineering Report and other information concerning the businesses and properties of the Borrower and its Subsidiaries (including their Oil and Gas Properties and the reserves and production relating thereto) received pursuant to Sections 2.05(b)(i) and 6.01(e) of the Credit Agreement by the Administrative Agent from the Borrower, the Administrative Agent, pursuant to Sections 2.05(b)(i) and 2.05(b)(iii) of the Credit Agreement, hereby proposes to the Lenders for their approval to increase the amount of the Borrowing Base from $400,000,000 to $700,000,000.

     SECTION 4. Approval by Lenders. In accordance with Section 2.05(b)(iii) of the Credit Agreement, the undersigned Lenders hereby approve the new amount of the Borrowing Base as proposed by the Administrative Agent under Section 3 above.

     SECTION 5. Reallocation of Commitments.

     (a) On the effective date of the increase of the Borrowing Base pursuant to this Amendment and Determination, (i) each Person listed on the signature pages hereof which is not a party to the Agreement (a “New Lender”) shall become a Lender party to the Agreement and (ii) the Commitment and Applicable Percentage of each Lender shall be reset and shall equal to such amounts and percentages set forth opposite such Lender’s name on Schedule A attached hereto (such Commitments and Applicable Percentages as so reset, the “Reallocated Commitments”). Any Lender under the Agreement not listed on Schedule A (a “Departing Lender”) shall upon such effectiveness cease to be a Lender party to the Agreement and all accrued fees and other amounts payable under the Agreement for the account of each Departing Lender shall be due and payable on such date; provided that the provisions of Article III and Section 10.04 shall continue to inure to the benefit of each Departing Lender.

     (b) On the effective date of the Reallocated Commitments pursuant to this Amendment and Determination:

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     (i) the Borrower shall prepay each Loan then outstanding in its entirety and, to the extent the Borrower elects to do so and subject to the conditions specified in Section 4.02 of the Credit Agreement, the Borrower shall reborrow Committed Loans from the Lenders in proportion to their respective Reallocated Commitments, so that all outstanding Committed Loans are held by the Lenders in such proportion; and

     (ii) the participations in all outstanding Letters of Credit shall be determined such that all L/C Obligations are held by the Lenders in proportion to their respective Reallocated Commitments.

     (c) The foregoing is intended to effect (i) a reallocation of the Commitments within the limits of the existing Commitments and (ii) a reallocation of the outstanding Loans in accordance with the Commitments as so reallocated, and is not a novation of the credit facility under the Credit Agreement or of the Loans thereunder, and shall have no effect on any Lien securing the Obligations.

     SECTION 6. Fee. On the effective date of the increase of the Borrowing Base pursuant to this Amendment and Determination, the Borrower shall pay to the Administrative Agent for the account of the Lenders ratably (after giving effect to Reallocated Commitments) a fee equal to 0.125% of the amount of the Borrowing Base increase contemplated hereby.

     SECTION 7. Representations of the Borrower. The Borrower represents and warrants that, after giving effect to this Amendment and Determination in whole or in part pursuant to Section 9 hereof, (i) the representations and warranties of the Borrower set forth in Article V of the Credit Agreement will be true and (ii) no Default will have occurred and be continuing.

     SECTION 8. Governing Law. This Amendment and Determination shall be governed by and construed in accordance with the laws of the State of New York.

     SECTION 9. Counterparts. This Amendment and Determination may be signed in any number of counterparts, each of which shall be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument. Delivery of an executed counterpart of a signature page of this Amendment and Determination by telecopy shall be effective as delivery of a manually executed counterpart of this Agreement.

     SECTION 10. Effectiveness. The amendments to the Credit Agreement set forth in Section 2 of this Amendment and Determination shall become effective on and as of the date hereof provided that the Administrative Agent shall have received counterparts hereof signed by each of the Required Lenders and the Borrower. The increase in the amount of the Borrowing Base pursuant to Sections 3, 4 and 6 of this Amendment and Determination, and the change in the

4

Commitments and Applicable Percentages of the Lenders pursuant to Section 5 of this Amendment and Determination, shall become effective on and as of the date hereof provided that the Administrative Agent shall have received counterparts hereof signed by each of the Lenders (including each New Lender and Departing Lender) and the Borrower.

[Signature Pages Follow]

5

     IN WITNESS WHEREOF, the parties hereto have caused this Amendment and Determination to be duly executed as of the date first above written.

Proposed and Acknowledged by:

ADMINISTRATIVE AGENT

BANK OF AMERICA, N.A., as Administrative Agent

By:
	/s/ Suzanne M. Paul
	Name: Suzanne M. Paul
	Title: Vice President

Approved	by:
BORROWER
SANDRIDGE ENERGY, INC.
By:	/s/ Tom L. Wand
	Name: Tom L. Wand
	Title: Chairman and CEO
LENDERS
BANK OF AMERICA, N.A., as Lender
By:	/s/ Charles W. Patterson
	Name: Charles W. Patterson
	Title: Managing Director
UNION BANK OF CALIFORNIA, N.A.
By:	/s/ Whitney Randolph
	Name: Whitney Randolph
	Title: Investment Banking Officer

ROYAL BANK OF CANADA
By:	/s/ Don J. McKinnerney
	Name:	Don J. McKinnerney
	Title:	Authorized Signatory
BARCLAYS BANK PLC
By:	/s/ Joseph Gyurindak
	Name:	Joseph Gyurindak
	Title:	Director
CREDIT SUISSE, CAYMAN ISLANDS BRANCH
By:	/s/ Vanessa Gomez
	Name:	Vanessa Gomez
	Title:	Vice President
By:	/s/ Morenikeji Ajayi
	Name:	Morenikeji Ajayi
	Title:	Associate
BANK OF OKLAHOMA, N.A.
By:	/s/ Mike Weatherholt
	Name:	Mike Weatherholt
	Title:	Officer
COMERICA BANK
By:	/s/ Peter L. Sefzik
	Name:	Peter L. Sefzik
	Title:	Vice President
THE BANK OF NOVA SCOTIA
By:	/s/ David G. Mills
	Name:	David G. Mills
	Title:	Director

SUNTRUST BANK
By:	/s/ Sean Roche
	Name:	Sean Roche
	Title:	Vice President
THE ROYAL BANK OF SCOTLAND
By:	/s/ Lucy Walker
	Name:	Lucy Walker
	Title:	Vice President
BMO CAPITAL MARKETS FINANCING, INC.
By:	/s/ Mary Lou Allen
	Name:	Mary Lou Allen
	Title:	Vice President
AMARILLO NATIONAL BANK
By:	/s/ Sha Gearn
	Name:	Sha Gearn
	Title:	Vice President
MIDFIRST BANK
By:	/s/ James P. Boggs
	Name:	James P. Boggs
	Title:	Senior Vice President
U.S. BANK NATIONAL ASSOCIATION
By:	/s/ Daria Mahoney
	Name:	Daria Mahoney
	Title:	Vice President

WELLS FARGO BANK, NA
By:	/s/ Dustin S. Hansen
	Name:	Dustin S. Hansen
	Title:	Vice President
BANK OF SCOTLAND
By:	/s/ Joseph Fratus
	Name:	Joseph Fratus
	Title:	First Vice President
BNP PARIBAS
By:	/s/ Russell Otts
	Name:	Russell Otts
	Title:	Vice President
By:	/s/ David Dodd
	Name:	David Dodd
	Title:	Managing Director
ALLIED IRISH BANKS P.L.C.
By:	/s/ Vaughn Buck
	Name:	Vaughn Buck
	Title:	Director
By:	/s/ David O’Driscoll
	Name:	David O’Driscoll
	Title:	Assistant Vice President
FORTIS CAPITAL CORP.
By:	/s/ Michele Jones
	Name:	Michele Jones
	Title:	Senior Vice President
CALYON NEW YORK BRANCH
By:	/s/ Dennis Petito
	Name:	Dennis Petito
	Title:	Managing Director
By:	/s/ Michael Willis
	Name:	Michael Willis
	Title:	Director

MORGAN STANLEY BANK
By:	/s/ Daniel Twenge
	Name:	Daniel Twenge
	Title:	Authorized Signatory
DEUTSCHE BANK TRUST COMPANY AMERICAS
By:	/s/ Omayra Laucella
	Name:	Omayra Laucella
	Title:	Vice President
By:	/s/ Susan Le Fevre
	Name:	Susan Le Fevre
	Title:	Director

SCHEDULE A

COMMITMENTS
AND APPLICABLE PERCENTAGES

			Applicable
Lender	Commitment		Percentage			Borrowing Base
Bank of America, N.A.	$	47,142,857		6.285714267	%	$	44,000,000
Union Bank of California, N.A.	$	47,142,857		6.285714267	%	$	44,000,000
Royal Bank of Canada	$	47,142,857		6.285714267	%	$	44,000,000
Barclays Bank PLC	$	47,142,857		6.285714267	%	$	44,000,000
Credit Suisse	$	47,142,857		6.285714267	%	$	44,000,000
Bank of Oklahoma, N.A.	$	21,428,571		2.857142799	%	$	20,000,000
Comerica Bank	$	32,477,679		4.330357200	%	$	30,312,500
The Bank of Nova Scotia	$	32,477,679		4.330357200	%	$	30,312,500
Sun Trust Bank	$	32,477,679		4.330357200	%	$	30,312,500
The Royal Bank of Scotland plc	$	32,477,679		4.330357200	%	$	30,312,500
BMO Capital Markets Financing, Inc.	$	32,477,679		4.330357200	%	$	30,312,500
MiFirst Bank	$	21,428,571		2.857142799	%	$	20,000,000
U.S. Bank National Association	$	39,642,857		5.285714267	%	$	37,000,000
Wells Fargo Bank, N.A.	$	39,642,857		5.285714267	%	$	37,000,000
Bank of Scotland	$	39,642,857		5.285714267	%	$	37,000,000
BNP Paribas	$	32,477,679		4.330357200	%	$	30,312,500
Allied Irish Banks P.L.C.	$	32,477,679		4.330357200	%	$	30,312,500
Fortis Capital Corp.	$	39,642,857		5.285714267	%	$	37,000,000
Calyon New York Branch	$	39,642,857		5.285714267	%	$	37,000,000
Morgan Stanley Bank	$	13,392,856		1.785714132	%	$	12,500,000
Deutsche Bank Trust Company Americas	$	32,477,679		4.330357200	%	$	30,312,500
Total	$	750,000,000		100.000000000	%	$	700,000,000

EX-10.7.4

AMENDMENT NO. 4

and

SCHEDULED DETERMINATION
OF THE BORROWING BASE

dated as of April 4, 2008

to the CREDIT AGREEMENT

dated as of November 21, 2006

among

SANDRIDGE ENERGY, INC.
as the Borrower,

BANK OF AMERICA, N.A.,
as Administrative Agent, Swing Line Lender and L/C Issuer

and

The Other Lenders Party Thereto

BANC OF AMERICA SECURITIES LLC,
Sole Lead Arranger and Sole Book Manager

AMENDMENT NO. 4 AND
SCHEDULED DETERMINATION OF THE BORROWING BASE

     AMENDMENT AND SCHEDULED DETERMINATION (this “Amendment”) dated as of April 4, 2008 under the Credit Agreement dated as of November 21, 2006 (as amended, restated, supplemented, or otherwise modified from time to time, the “Credit Agreement”) among SANDRIDGE ENERGY, INC., a Delaware corporation (f/k/a Riata Energy, Inc.) (the “Borrower”), each LENDER from time to time party thereto and BANK OF AMERICA, N.A., as Administrative Agent (the “Administrative Agent”), Swing Line Lender and L/C Issuer.

     WHEREAS, the parties hereto desire to amend the Credit Agreement as set forth herein; and

     WHEREAS, the Administrative Agent proposes to increase the Borrowing Base amount in accordance with the Scheduled Determination procedure set forth in Section 2.05 of the Credit Agreement;

     NOW, THEREFORE, the parties hereto agree as follows:

     SECTION 1. Defined Terms. Unless otherwise specifically defined herein, each term used herein that is defined in the Credit Agreement has the meaning assigned to such term in the Credit Agreement. Each reference to “hereof”, “hereunder”, “herein” and “hereby” and each other similar reference and each reference to “this Agreement” and each other similar reference contained in the Credit Agreement shall, after this Amendment becomes effective, refer to the Credit Agreement as amended hereby.

     SECTION 2. Amendments to the Credit Agreement. The Credit Agreement is hereby amended as follows:

     (a) Section 1.01 of the Credit Agreement is amended by deleting the definition of “Guarantors” in its entirety and by substituting in lieu thereof the new definition of “Guarantors” to read in its entirety as follows:

     “Guarantors” means, collectively, (i) SandRidge Holdings, Inc., SandRidge Exploration and Production, LLC (f/k/a NEG Operating LLC), SandRidge Onshore, LLC (f/k/a National Onshore LP), SandRidge Offshore, LLC (f/k/a National Offshore LP), SandRidge Midstream Inc. (f/k/a ROC Gas Company), SandRidge Operating Company (f/k/a Alsate Management and Investment Company), Integra Energy, L.L.C., and SandRidge Tertiary, LLC, (f/k/a Petrosource Production Company, LP) and (ii) each Person which becomes a Guarantor after the Closing Date pursuant to Section 6.12.

     (b) Section 2.03(g) of the Credit Agreement is amended by replacing the reference to “2.05” contained in the sixth line thereof with “2.06”.

     (c) Section 2.05(b)(ii) of the Credit Agreement is amended by replacing the words “the Borrower may request the Lenders to make additional determinations of the Borrowing Base (x) twice during the twelve months following the Closing Date and (y) thereafter once during each twelve month interval between Scheduled Determinations” contained in the first four lines thereof with the words “the Borrower may request the Lenders to make additional determinations of the Borrowing Base twice during any twelve month interval between Scheduled Determinations”.

     (d) Section 6.12(b) of the Credit Agreement is amended by replacing the reference to “6.12(c)” contained in the tenth line thereof with “6.12(b)”.

     (e) Section 7.03(b) of the Credit Agreement is amended by replacing the dollar amount “$1,200,000,000” contained therein with the dollar amount “$1,000,000,000”.

     (f) Section 7.03 of the Credit Agreement is amended by deleting the word “and” at the end of clause (l), by replacing “.” at the end of clause (m) with “; and”, and by adding a new clause (n) thereto that reads in its entirety as follows:

     “(n) other unsecured Indebtedness not permitted by the previous clauses in an aggregate principal amount not to exceed $750,000,000 at any time outstanding; provided that such Indebtedness (A) requires no scheduled amortization prior to the 6^th anniversary of the Closing Date and (B) is otherwise on market terms and conditions; and provided further that during any period in which the aggregate principal amount of any such outstanding unsecured Indebtedness permitted by this subsection (n) exceeds $400,000,000, the Borrowing Base shall automatically be reduced by 30% of the amount of such excess.

     (g) Section 10.06(b)(iv) of the Credit Agreement is amended by inserting after the words “a processing and recordation fee” contained in the third line thereof the following words: “payable by the assignor (subject to Section 10.13(a)) directly to the Administrative Agent”.

     SECTION 3. Release of Guarantee. Lariat is hereby released from any obligations as a Guarantor under the Guaranty to the extent assumed by Lariat as the surviving party of the merger of Lariat Compression Company with and into Lariat.

     SECTION 4. Proposal to Increase the Borrowing Base. Based on the Engineering Report and other information concerning the businesses and properties of the Borrower and its Subsidiaries (including their Oil and Gas

2

Properties and the reserves and production relating thereto) received pursuant to Sections 2.05(b)(i) and 6.01(d) of the Credit Agreement by the Administrative Agent from the Borrower, the Administrative Agent, pursuant to Sections 2.05(b)(i) and 2.05(b)(iii) of the Credit Agreement, hereby proposes to the Lenders for their approval to increase the amount of the Borrowing Base from $700,000,000 to $1,200,000,000.

     SECTION 5. Approval by Lenders. In accordance with Section 2.05(b)(iii) of the Credit Agreement, the undersigned Lenders hereby approve the new amount of the Borrowing Base as proposed by the Administrative Agent under Section 3 above.

     SECTION 6. Increase in Aggregate Commitments.

     (a) On the effective date of the increase of the Borrowing Base pursuant to this Amendment, (i) the Aggregate Commitments shall be increased from $750,000,000 to $1,750,000,000, (ii) each Person listed on the signature pages hereof which is not a party to the Agreement (a “New Lender”) shall become a Lender party to the Agreement and (iii) the Commitment and Applicable Percentage of each Lender shall be reset and shall equal to such amounts and percentages set forth opposite such Lender’s name on Schedule A attached hereto (such Commitments and Applicable Percentages as so reset, the “Reset Commitments”).

     (b) On the effective date of the Reset Commitments pursuant to this Amendment:

     (i) Committed Loans outstanding on such effective date shall be reallocated among the Lenders by way of assignment and assumption in accordance with Section 7 hereof, such that all outstanding Committed Loans are held by the Lenders in proportion to their respective Reset Commitments; and

     (ii) the participations in all outstanding Letters of Credit shall be determined such that all L/C Obligations are held by the Lenders in proportion to their respective Reset Commitments.

     (c) For the avoidance of doubt, Section 6(b) and Section 7 are intended to effect a reallocation of the outstanding Loans in accordance with the Reset Commitments, and nothing in this Amendment shall be deemed to constitute a novation of the credit facility under the Credit Agreement or of the Loans thereunder, and shall not impair in any respect any Lien securing the Obligations.

     SECTION 7. Assignment and Assumption.

     (a) On and effective as of the Effective Date (and subject to the conditions set forth in Section 13(b)) (A) each Lender with an amount opposite its

3

name under the column “Assigned Amount” on Schedule A (each such Lender, an “Assignor” and each such amount, the “Assigned Amount”) hereby irrevocably assigns and sells to Assignees (as defined below) an amount of its Loans equal to the Assigned Amount and (B) each Lender with an amount opposite its name under the column “Assumed Amount” on Schedule A (each such Lender, an “Assignee” and each such amount, the “Assumed Amount”) hereby severally irrevocably purchases and assumes an amount of Loans from Assignors in an aggregate amount for all assumptions made by each Assignee equal to its Assumed Amount.

     (b) Each Assignor hereby makes the representations and warranties that are provided for in Section 1.1 of the Standard Terms and Conditions to the form Assignment & Acceptance set forth in Exhibit E of the Credit Agreement with respect to its Assigned Amount (as though it were the “Assigned Interest” thereunder). Each Assignee hereby makes such representations and warranties that are provided for in Section 1.2 of the Standard Terms and Conditions to the form Assignment & Acceptance set forth in Exhibit E of the Credit Agreement with respect to its Assumed Amount (as though it were the “Assigned Interest” thereunder). Each of the parties to this Amendment agrees that the assignments and assumptions provided for in this Section 7 comply with the requirements for an assignment and assumption of Loans under Section 10.06 of the Credit Agreement, notwithstanding the formal requirements set forth therein, and that the processing and recordation fee provided for in Section 10.06(b)(iv) of the Credit Agreement shall not be payable.

     (c) Not later than 12:00 Noon (Dallas time) on the Effective Date, each Assignee shall make available the full amount of its Assumed Amount in Federal or other funds immediately available in New York City, to the Administrative Agent at its address specified in or pursuant to Section 10.02 of the Credit Agreement. Unless the Administrative Agent determines that any applicable condition specified in Section 13(b) has not been satisfied, the Administrative Agent will make the funds so received from the Assignees available to the Assignors, as consideration for and in ratable proportion to their respective Assigned Amounts.

     SECTION 8. Fee. On the Effective Date, the Borrower shall pay to the Administrative Agent for the account of each Lender with an Exposure Increase (as defined below) a fee equal to (i) for each Lender with an Exposure Increase of $25,000,000 or more, 0.20% of such Lender’s Exposure Increase and (ii) for each Lender with an Exposure Increase of less than $25,000,000, 0.15% of such Lender’s Exposure Increase. As used above, the “Exposure Increase” of any Lender is the amount (if any) by which (x) such Lender’s Applicable Percentage multiplied by the Borrowing Base, in each case determined immediately after giving effect to any changes thereto on the Effective Date exceeds (y) such Lender’s Applicable Percentage multiplied by the Borrowing Base, in each case determined immediately before the Effective Date.

4

     SECTION 9. Reaffirmation of Guarantee and Security. Each Loan Party (i) consents to this Amendment, (ii) affirms that (A) the terms of the Guaranty guarantee, and shall continue to guarantee, all of the Obligations and (B) the terms of the Security Agreement secure, and shall continue to secure, all of the Obligations, in each case after giving effect to this Amendment and (iii) acknowledges and agrees that after giving effect to this Amendment, the Guaranty, the Security Agreement and all other Loan Documents are, and shall continue to be, in full force and effect, unimpaired or affected in any respect by this Amendment and the transactions contemplated hereby, and are hereby ratified in all respects.

     SECTION 10. Representations of the Borrower. The Borrower represents and warrants that, both before and immediately after giving effect to this Amendment in whole or in part pursuant to Section 9 hereof, (i) the representations and warranties set forth in Article V of the Credit Agreement will be true and correct and (ii) no Default will have occurred and be continuing.

     SECTION 11. Governing Law. This Amendment shall be governed by and construed in accordance with the laws of the State of New York.

     SECTION 12. Counterparts. This Amendment may be signed in any number of counterparts, each of which shall be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument. Delivery of an executed counterpart of a signature page of this Amendment by telecopy shall be effective as delivery of a manually executed counterpart of this Agreement.

     SECTION 13. Effectiveness.

     (a) The amendments to the Credit Agreement set forth in Section 2, the release of the Guarantee pursuant to Section 3 and reaffirmation of the guaranty and security pursuant to Section 9 of this Amendment shall become effective on and as of the date hereof provided that the Administrative Agent shall have received counterparts hereof signed by each of the Required Lenders and each Loan Party.

     (b) The increase in the amount of the Borrowing Base and the Aggregate Commitments pursuant to Sections 4 through 6 and other amendments and transactions contemplated by Sections 4 through 8 of this Amendment, shall become effective on and as of the date hereof (the “Effective Date”), provided that the Administrative Agent shall have received the following, each of which shall be originals or telecopies (followed promptly by originals) unless otherwise specified, each properly executed by a Responsible Officer of the signing Loan Party, each dated the Effective Date (or, in the case of certificates of governmental officials, a recent date before the Effective Date) and each in form and substance satisfactory to the Administrative Agent:

5

     (i) counterparts hereof duly executed by each of the Lenders (including each New Lender) and each Loan Party;

     (ii) such certificates of resolutions or other action, incumbency certificates and/or other certificates of Responsible Officers of each Loan Party as the Administrative Agent may reasonably require evidencing the identity, authority and capacity of each Responsible Officer thereof authorized to act as a Responsible Officer in connection with this Amendment and the other Loan Documents to which such Loan Party is a party or is to be a party;

     (iii) such documents and certifications as the Administrative Agent may reasonably require to evidence that each Loan Party is duly organized or formed, and is validly existing, in good standing and qualified to engage in business in each jurisdiction where its ownership, lease or operation of properties or the conduct of its business requires such qualification, except to the extent that failure to do so could not reasonably be expected to have a Material Adverse Effect;

     (iv) a favorable opinion of Vinson and Elkins LLP, counsel to the Loan Parties, addressed to the Administrative Agent and each Lender, as to the matters set forth in the opinion letter of Vinson & Elkins LLP dated November 21, 2006, delivered in connection with the Credit Agreement, in each case after giving effect to this Amendment and the transactions contemplated hereby;

     (v) a certificate of a Responsible Officer of each Loan Party either (A) attaching copies, or an exhibit, of all consents, licenses and approvals required in connection with the execution, delivery and performance by such Loan Party and the validity against such Loan Party of the Loan Documents to which it is a party, and such consents, licenses and approvals shall be in full force and effect, or (B) stating that no such consents, licenses or approvals are so required;

     (vi) a certificate signed by a Responsible Officer of the Borrower certifying (A) that the conditions specified in Sections 4.02(b) and (c) of the Credit Agreement have been satisfied and (B) that there has been no event or circumstance since December 31, 2007 that has had or could be reasonably expected to have, either individually or in the aggregate, a Material Adverse Effect;

     (vii) certificates attesting to the Solvency of each Loan Party before and after giving effect to this Amendment and the incurrence of indebtedness under the Credit Agreement, from its chief financial officer;

6

     (viii) such other certificates, documents, or opinions as the Administrative Agent, the L/C Issuer, the Swing Line Lender or the Required Lenders reasonably may require; and

     (ix) evidence that any fees required to be paid on or before the Effective Date shall have been paid.

     SECTION 14. Post-Effectiveness Condition. Within 30 days of the Effective Date, the Borrower shall deliver, each in form and substance satisfactory to the Administrative Agent:

     (i) evidence that counterparts of all necessary amendments to Mortgages as well as all affidavits regarding the change in the name and organization of the mortgagors have been duly executed, acknowledged and delivered and have been duly filed or recorded in all filing or recording offices that the Administrative Agent may deem necessary in order to preserve a valid first and subsisting Lien (subject to Permitted Liens) on the property described therein in favor of the Administrative Agent for the benefit of the Secured Parties and that all filing, documentary, stamp, intangible and recording taxes and fees have been paid; and

     (ii) evidence that all other action that the Administrative Agent may reasonably deem necessary or desirable in order to preserve valid first and subsisting Liens (subject to Permitted Liens) on the property described in the Mortgages has been taken.

     Failure to timely perform the obligations under Section 14 shall give rise to an Event of Default under the Credit Agreement.

[Signature Pages Follow]

7

     IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed as of the date first above written.

Proposed, Consented to and Accepted by:

ADMINISTRATIVE AGENT

BANK OF AMERICA, N.A.,

as Administrative Agent,
L/C Issuer and Swing Line Lender

By:
	Name:
	Title:

Approved by: LENDERS BANK OF AMERICA, N.A., as Lender
By:
	Name:
	Title:
UNION BANK OF CALIFORNIA, N.A.
By:
	Name:
	Title:
ROYAL BANK OF CANADA
By:
	Name:
	Title:

BARCLAYS BANK PLC
By:
	Name:
	Title:
CREDIT SUISSE, CAYMAN ISLANDS BRANCH
By:
	Name:
	Title:
By:
	Name:
	Title:
BANK OF OKLAHOMA, N.A.
By:
	Name:
	Title:
COMERICA BANK
By:
	Name:
	Title:
THE BANK OF NOVA SCOTIA
By:
	Name:
	Title:

SUN TRUST BANK
By:
	Name:
	Title:
THE ROYAL BANK OF SCOTLAND PLC
By:
	Name:
	Title:
BMO CAPITAL MARKETS FINANCING, INC.
By:
	Name:
	Title:
AMARILLO NATIONAL BANK
By:
	Name:
	Title:
MIDFIRST BANK
By:
	Name:
	Title:
U.S. BANK NATIONAL ASSOCIATION
By:
	Name:
	Title:

WELLS FARGO BANK, NA
By:
	Name:
	Title:
BANK OF SCOTLAND
By:
	Name:
	Title:
BNP PARIBAS
By:
	Name:
	Title:
ALLIED IRISH BANKS P.L.C.
By:
	Name:
	Title:
FORTIS CAPITAL CORP.
By:
	Name:
	Title:
CALYON NEW YORK BRANCH
By:
	Name:
	Title:

MORGAN STANLEY BANK
By:
	Name:
	Title:
DEUTSCHE BANK TRUST COMPANY AMERICAS
By:
	Name:
	Title:
By:
	Name:
	Title:
SUMITOMO MITSUI BANKING CORPORATION
By:
	Name:
	Title:
COMPASS BANK
By:
	Name:
	Title:
JPMORGAN CHASE BANK, N.A.
By:
	Name:
	Title:

GOLDMAN SACHS BANK USA
By:
	Name:
	Title:
STERLING BANK
By:
	Name:
	Title:

LOAN PARTIES SANDRIDGE ENERGY, INC.
By:
	Name:
	Title:
SANDRIDGE HOLDINGS, INC.
By:
	Name:
	Title:
SANDRIDGE EXPLORATION AND PRODUCTION, LLC (F/K/A NEG OPERATING LLC)
By:
	Name:
	Title:
SANDRIDGE ONSHORE, LLC (F/K/A NATIONAL ONSHORE LP)
By:
	Name:
	Title:
SANDRIDGE OFFSHORE, LLC (F/K/A NATIONAL OFFSHORE LP)
By:
	Name:
	Title:

SANDRIDGE MIDSTREAM INC. (F/K/A ROC GAS COMPANY)
By:
	Name:
	Title:
SANDRIDGE OPERATING COMPANY (F/K/A ALSATE MANAGEMENT AND INVESTMENT COMPANY)
By:
	Name:
	Title:
INTEGRA ENERGY, L.L.C.
By:
	Name:
	Title:
SANDRIDGE TERTIARY, LLC, (F/K/A PETROSOURCE PRODUCTION COMPANY, LP)
By:
	Name:
	Title:

SCHEDULE A

COMMITMENTS
AND APPLICABLE PERCENTAGES

			Applicable		Borrowing		Assigned		Assumed
Lender	Commitment		Percentage		Base		Amount		Amount
Bank of America, N.A.	$	110,450,520.84	6.311458334	%	$	75,737,500			$	65,647.31
Barclays Bank PLC	$	110,450,520.83	6.311458333	%	$	75,737,500			$	65,647.37
The Royal Bank of Scotland plc	$	110,450,520.83	6.311458333	%	$	75,737,500			$	5,051,807.91
Union Bank of California, N.A.	$	110,450,520.83	6.311458333	%	$	75,737,500			$	65,647.37
Wells Fargo Bank, N.A.	$	110,450,520.83	6.311458333	%	$	75,737,500			$	2,615,647.37
BNP Paribas	$	90,416,666.67	5.166666667	%	$	62,000,000			$	2,132,589.16
Calyon New York Branch	$	90,416,666.67	5.166666667	%	$	62,000,000	$	303,571.38
Fortis Capital Corp.	$	90,416,666.67	5.166666667	%	$	62,000,000	$	303,571.38
JPMorgan Chase Bank, N.A.	$	90,416,666.67	5.166666667	%	$	62,000,000			$	13,175,000.00
The Bank of Nova Scotia	$	80,208,333.33	4.583333333	%	$	55,000,000			$	645,089.16
Compass Bank	$	80,208,333.33	4.583333333	%	$	55,000,000			$	11,687,500.00
Deutsche Bank Trust Company Americas	$	80,208,333.33	4.583333333	%	$	55,000,000			$	645,089.16
Credit Suisse	$	64,166,666.67	3.666666667	%	$	44,000,000	$	6,678,571.38
Royal Bank of Canada	$	64,166,666.67	3.666666667	%	$	44,000,000	$	6,678,571.38
U.S. Bank National Association	$	58,333,333.33	3.333333333	%	$	40,000,000	$	4,978,571.38
Bank of Scotland	$	53,958,333.33	3.083333333	%	$	37,000,000	$	5,616,071.38
Allied Irish Banks P.L.C.	$	51,041,666.67	2.916666667	%	$	35,000,000	$	3,604,910.84
Sun Trust Bank	$	51,041,666.67	2.916666667	%	$	35,000,000	$	3,604,910.84
BMO Capital Markets Financing, Inc.	$	44,205,729.17	2.526041667	%	$	30,312,500	$	4,601,004.59
Bank of Oklahoma, N.A.	$	36,458,333.33	2.083333333	%	$	25,000,000	$	1,973,214.16
Comerica Bank	$	36,458,333.33	2.083333333	%	$	25,000,000	$	5,729,910.84
Sterling Bank	$	36,458,333.33	2.083333333	%	$	25,000,000			$	5,312,500.00
Sumitomo Mitsui Banking Corporation	$	36,458,333.33	2.083333333	%	$	25,000,000			$	5,312,500.00
MidFirst Bank	$	29,166,666.67	1.666666667	%	$	20,000,000	$	3,035,714.16
Morgan Stanley Bank	$	29,166,666.67	1.666666667	%	$	20,000,000	$	303,571.10
Goldman Sachs Bank USA	$	4,375,000.00	0.250000000	%	$	3,000,000			$	637,500.00
Total:	$	1,750,000,000	100.000000000	%	$	1,200,000,000	$	47,412,164.81	$	47,412,164.81

EX-31.1

Exhibit 31.1

Certification of the Company’s Chief Executive Officer Pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. Section 7241)

I, Tom L. Ward, certify that:

     1. I have reviewed this quarterly report on Form 10-Q of SandRidge Energy, Inc.;

     2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

     3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

     4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:

     (a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

     (b) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

     (c) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

     5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

     (a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

     (b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

/s/ TOM L. WARD  

Tom L. Ward 

President, Chief Executive Officer and
Chairman of the Board 

Date: May 8, 2008

EX-31.2

Exhibit 31.2

Certification of the Company’s Chief Financial Officer Pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. Section 7241)

I, Dirk M. Van Doren, certify that:

     1. I have reviewed this quarterly report on Form 10-Q of SandRidge Energy, Inc.;

     2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

     3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

     4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:

     (a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

     (b) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

     (c) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

     5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

     (a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

     (b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

/s/ DIRK M. VAN DOREN  

Dirk M. Van Doren 

Executive Vice President and
Chief Financial Officer 

Date: May 8, 2008

EX-32.1

Exhibit 32

Certification of the Company’s Chief Executive Officer and Chief Financial Officer Pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. Section 1350)

     Pursuant to 18 U.S.C. § 1350, the undersigned officers of SandRidge Energy, Inc. (the “Company”), hereby certify that the Company’s Quarterly Report on Form 10-Q for the three month period ended March 31, 2008 (the “Report”), fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934 and that the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ Tom L. Ward  

Tom L. Ward 

President, Chief Executive Officer and
Chairman of the Board 

May 8, 2008

/s/ Dirk M. Van Doren  

Dirk M. Van Doren 

Executive Vice President and Chief Financial Officer 

May 8, 2008