8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): May 18, 2012

SANDRIDGE ENERGY, INC.

(Exact name of registrant as specified in its charter)

Delaware	1-33784	20-8084793
(State or Other Jurisdiction of Incorporation or Organization)	(Commission File Number)	(I.R.S. Employer Identification No.)

123 Robert S. Kerr Avenue Oklahoma City, Oklahoma	73102
(Address of Principal Executive Offices)	(Zip Code)

Registrant’s Telephone Number, including Area Code: (405) 429-5500

Not Applicable.

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 8.01 Other Events

On April 17, 2012, SandRidge Energy, Inc. (“SandRidge”) completed its acquisition of Dynamic Offshore Resources, LLC (“Dynamic”) for consideration valued at approximately $1.2 billion, consisting of approximately $680 million of cash and 73,961,554 shares of SandRidge common stock valued at $7.33 per share, the closing price per share on April 17, 2012 (the “Dynamic Acquisition”).

Also on April 17, 2012, SandRidge completed the issuance and sale of $750 million in aggregate principal amount of its 8.125% Senior Notes due 2022 (the “Notes”) to Merrill Lynch, Pierce, Fenner & Smith Incorporated, SunTrust Robinson Humphrey, Inc. and RBS Securities Inc., as representatives of the several initial purchasers of the Notes. The cash portion of the consideration paid pursuant to the Dynamic Acquisition was funded by proceeds from the issuance and sale of the Notes.

On April 23, 2012, SandRidge Mississippian Trust II (the “Trust”) completed its initial public offering of 29,900,000 units of beneficial interest in the Trust denominated as common units. In connection with the offering, SandRidge conveyed to the Trust royalty interests in certain oil and natural gas properties located in northern Oklahoma and southern Kansas (the “Royalty Interests”) in exchange for 7,393,750 common units, 12,431,250 units of beneficial interest in the Trust denominated as subordinated units, and the net proceeds of the Trust’s initial public offering equal to approximately $590 million, after deducting underwriting discounts and commissions. The Royalty Interests entitle the Trust to a percentage of the proceeds received by SandRidge from the production of oil, natural gas and natural gas liquids from currently producing wells and development wells to be drilled by SandRidge within an area of mutual interest.

SandRidge is filing this Current Report on Form 8-K to provide certain financial information to give effect to (i) the Dynamic Acquisition and the issuance of SandRidge common stock and the Notes to fund the Dynamic Acquisition and (ii) the conveyance of Royalty Interests to the Trust by SandRidge. The SandRidge pro forma financial information is filed as Exhibit 99.1 to this Current Report on Form 8-K. SandRidge is also filing this Current Report on Form 8-K to provide certain financial information about Dynamic, which is filed as Exhibit 99.2.

Item 9.01 Financial Statements and Exhibits

(d) Exhibits:

99.1 Pro Forma Financial Information. Unaudited Pro Forma Condensed Combined Balance Sheet as of March 31, 2012, Unaudited Pro Forma Condensed Combined Statements of Operations for the three months ended March 31, 2012 and the year ended December 31, 2011 and related notes showing the pro forma effects of (i) the acquisition of Dynamic Offshore Resources, LLC (“Dynamic”) by SandRidge Energy, Inc. (“SandRidge”) and the issuance of approximately 74 million shares of SandRidge common stock and 8.125% Senior Notes due 2022 to fund the Dynamic acquisition and (ii) the conveyance of royalty interests in certain oil and natural gas properties to SandRidge Mississippian Trust II

99.2 Financial Statements of Businesses Acquired. Unaudited Financial Statements of Dynamic Offshore Resources, LLC as of March 31, 2012 and for the three month periods ended March 31, 2012 and 2011 and the related notes

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.
	(Registrant)
Date: May 18, 2012	By:	/s/ James D. Bennett
		James D. Bennett
		Executive Vice President and Chief Financial Officer

Exhibit Index

No.	Description
99.1	Pro Forma Financial Information. Unaudited Pro Forma Condensed Combined Balance Sheet as of March 31, 2012, Unaudited Pro Forma Condensed Combined Statements of Operations for the three months ended March 31, 2012 and the year ended December 31, 2011 and related notes showing the pro forma effects of (i) the acquisition of Dynamic Offshore Resources, LLC (“Dynamic”) by SandRidge Energy, Inc. (“SandRidge”) and the issuance of approximately 74 million shares of SandRidge common stock and 8.125% Senior Notes due 2022 to fund the Dynamic acquisition and (ii) the conveyance of royalty interests in certain oil and natural gas properties to SandRidge Mississippian Trust II
99.2	Financial Statements of Businesses Acquired. Unaudited Financial Statements of Dynamic Offshore Resources, LLC as of March 31, 2012 and for the three month periods ended March 31, 2012 and 2011 and the related notes

EX-99.1

Exhibit 99.1

SANDRIDGE ENERGY, INC. AND SUBSIDIARIES

UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION

The following unaudited pro forma condensed combined financial information reflects the historical financial statements of SandRidge Energy, Inc. (“SandRidge”) and Dynamic Offshore Resources, LLC (“Dynamic”), each as adjusted for certain acquisition or divesture transactions, and further adjusted to give effect to (i) the acquisition of Dynamic by SandRidge and the issuance of approximately 74.0 million shares of SandRidge common stock and 8.125% Senior Notes due 2022, herein referred to as the financing transactions, to fund the Dynamic acquisition and (ii) the conveyance of royalty interests in certain oil and natural gas properties (the “Mississippian Trust II Royalty Interests”) to SandRidge Mississippian Trust II by SandRidge. These transactions are described further below.

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

• 8.125% Senior Notes due 2022. On April 17, 2012, concurrent with the closing of the Dynamic Acquisition, SandRidge issued 8.125% Senior Notes due 2022 (the “8.125% Senior Notes”). Net proceeds from the offering were approximately $730.7 million after deducting offering expenses, and were used to finance the cash portion of the Dynamic Acquisition.

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

The unaudited pro forma condensed combined balance sheet is based on the unaudited March 31, 2012 SandRidge and Dynamic balance sheets and includes pro forma adjustments to give effect to the Dynamic Acquisition, the financing transactions and the conveyance of the Mississippian Trust II Royalty Interests as if those transactions occurred on March 31, 2012. The unaudited pro forma condensed combined statement of operations for the three months ended March 31, 2012 is based on the unaudited statements of operations of SandRidge and Dynamic for the three months ended March 31, 2012 and includes pro forma adjustments to give effect to the Dynamic Acquisition, the financing transactions and the Mississippian Trust II Royalty Interests conveyance as if those transactions occurred on January 1, 2011. The unaudited pro forma condensed combined statement of operations for the year ended December 31, 2011 is based on the audited statements of operations of SandRidge and Dynamic for the year ended December 31, 2011, as further discussed below, and includes pro forma adjustments to give effect to the Dynamic Acquisition and the financing transactions as if they occurred on January 1, 2011.

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

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

• SandRidge Permian Trust. On August 16, 2011, the SandRidge Permian Trust (the “Permian Trust”) completed its initial public offering of 34,500,000 common units representing beneficial interests in the Permian Trust. Net proceeds to the Permian Trust, after certain offering expenses, were $580.6 million. Concurrent with the closing, SandRidge conveyed the Permian Trust Royalty Interests to the Permian Trust in exchange for the net proceeds of the Permian Trust’s initial public offering and 18,000,000 units (4,875,000 common units and 13,125,000 subordinated units), representing approximately 34.3% of the beneficial interest in the Permian Trust. The Permian Trust Royalty Interests conveyed to the Permian Trust are in certain oil and natural gas properties located in the Central Basin Platform of the Permian Basin in Andrews County, Texas and entitle the Permian Trust to a

percentage of the proceeds from the sale of oil, natural gas and natural gas liquids production from currently producing wells and development wells to be drilled by SandRidge within an area of mutual interest. SandRidge used a portion of the net proceeds from the offering to repay borrowings under its senior credit facility and for general corporate purposes.

• Arena Acquisition. On July 16, 2010, SandRidge completed the acquisition of all of the outstanding shares of common stock of Arena, referred to herein as the Arena Acquisition. In connection with the acquisition, SandRidge paid $4.50 in cash and issued 4.7771 shares of SandRidge common stock for each share of Arena common stock outstanding for a total value per share of $35.79, based upon the $6.55 closing price of SandRidge common stock on July 16, 2010, the closing date of the acquisition. The consideration received by Arena shareholders was valued at $1.4 billion in the aggregate. SandRidge was the surviving parent company after completion of the acquisition. Arena was an oil and natural gas exploration, development and production company with operations in Texas, Oklahoma, Kansas and New Mexico. In the second quarter of 2011, SandRidge completed its valuation of assets acquired and liabilities assumed related to the acquisition of Arena.

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

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

The pro forma adjustments reflecting: (i) SandRidge’s conveyance of the Mississippian Trust II Royalty Interests to the Mississippian Trust II, (ii) SandRidge’s sale of the East Texas Properties, (iii) SandRidge’s conveyance of the Permian Trust Royalty Interests to the Permian Trust, (iv) final adjustments recorded in 2011 related to SandRidge’s Arena Acquisition, (v) Dynamic’s acquisition of the XTO Acquisition Properties and (vi) the acquisition of Dynamic by SandRidge under the acquisition method of accounting are preliminary and include the use of estimates and assumptions as described in the related notes. The pro forma adjustments are based on information available to management at the time these unaudited pro forma condensed combined financial statements were prepared. SandRidge believes the estimates and assumptions used are reasonable and the significant effects of the transaction are properly reflected. However, the estimates and assumptions are subject

to change as additional information becomes available. The pro forma financial statements do not reflect any cost savings (or associated costs to achieve such savings) from operating efficiencies, synergies or other restructuring that could result from the acquisition. Additionally, the unaudited pro forma condensed combined statements of operations exclude the impact of non-recurring expenses SandRidge and Dynamic have incurred or will incur as a result of the acquisition and related financing, primarily non-capitalizable banking and legal fees, the bargain purchase gain, an income tax benefit resulting from a partial release of the valuation allowance on SandRidge’s deferred tax asset and certain non-recurring adjustments recorded in 2011 relating to SandRidge’s July 2010 acquisition of Arena.

The unaudited pro forma condensed combined financial information is for informational purposes only and is not intended to represent or to be indicative of the results that actually would have occurred had the transactions described above been completed as of the dates set forth in this unaudited pro forma condensed combined financial information and should not be taken as indicative of SandRidge’s future combined results of operations or financial position. The actual results may differ significantly from that reflected in the unaudited pro forma condensed combined financial information for a number of reasons, including, but not limited to, differences between the assumptions used to prepare the unaudited pro forma condensed combined financial information and actual results. The unaudited pro forma financial information should be read in conjunction with the accompanying footnotes, SandRidge’s Quarterly Report on Form 10-Q for the three months ended March 31, 2012 and Annual Report on Form 10-K for the year ended December 31, 2011, the Permian Trust’s Annual Report on Form 10-K for the year ended December 31, 2011, the Mississippian Trust II’s Registration Statement on Forms S-1 and S-3 filed by SandRidge with the United States Securities and Exchange Commission (the “SEC”) on January 5, 2012 and subsequent amendments thereto, Dynamic’s financial statements and related notes for the year ended December 31, 2011 in the Current report on Form 8-K filed on April 9, 2012 and for the three months ended March 31, 2012 included as Exhibit 99.2 to this Current report and other information that SandRidge has filed with the SEC.

SANDRIDGE ENERGY, INC. AND SUBSIDIARIES

UNAUDITED PRO FORMA CONDENSED COMBINED BALANCE SHEET

MARCH 31, 2012

	SandRidge Historical			Dynamic Historical		Dynamic Acquisition Pro Forma Adjustments			SandRidge as  Adjusted for Dynamic Acquisition			SandRidge Mississippian Trust II Pro Forma Adjustments			SandRidge Pro Forma Combined
	(In thousands, except per share amounts)
ASSETS
Current assets
Cash and cash equivalents	$	127,842		$	48,468	$	(48,468	)(a)
							24,483	(b)	$	152,325		$	587,087	(m)	$	739,412
Accounts receivable, net		240,636			81,569		—			322,205			—			322,205
Derivative contracts		7,526			22,967		—			30,493			—			30,493
Inventories		9,491			—		—			9,491			—			9,491
Costs in excess of billings		1,621			—		—			1,621			—			1,621
Notes receivable — abandonments		—			4,097		2,075	(c)
							(6,172	)(d)		—			—			—
Other current assets		32,324			17,431		(2,571	)(e)
							6,172	(d)		53,356			—			53,356
Total current assets		419,440			174,532		(24,481	)		569,491			587,087			1,156,578
Oil and natural gas properties, net (full cost method)		5,034,146			—		1,180,776	(d)
							505,060	(e)		6,719,982			—			6,719,982
Other property, plant and equipment, net		576,668			—		1,342	(d)		578,010			—			578,010
Property and equipment, net		—			1,182,118		(1,182,118	)(d)		—			—			—
Restricted deposits		27,904			—		1,500	(d)		29,404			—			29,404
Derivative contracts		1,109			3,020		—			4,129			—			4,129
Goodwill		235,396			—		—			235,396			—			235,396
Notes receivable — abandonments		—			17,108		(3,775	)(c)
							(13,333	)(d)		—			—			—
Other assets		83,436			14,029		(3,286	)(f)
							11,833	(d)
							(9,243	)(g)
							19,300	(h)		116,069			—			116,069
Total assets	$	6,378,099		$	1,390,807	$	483,575		$	8,252,481		$	587,087		$	8,839,568
LIABILITIES AND EQUITY
Current liabilities
Current maturities of long-term debt	$	1,070		$	—	$	—		$	1,070		$	—		$	1,070
Accounts payable and accrued expenses		601,785			64,758		51,498	(d)		718,041			—			718,041
Billings and estimated contract loss in excess of costs incurred		34,310			—		—			34,310			—			34,310
Derivative contracts		97,462			—		20,238	(d)		117,700			—			117,700
Asset retirement obligation		32,906			74,433		(8,228	)(c)		99,111			—			99,111
Other current liabilities		—			71,736		(71,736	)(d)		—			—			—
Total current liabilities		767,533			210,927		(8,228	)		970,232			—			970,232
Long-term debt		2,813,484			345,000		(345,000	)(f)
							750,000	(b)		3,563,484			—			3,563,484
Derivative contracts		292,110			—		3,627	(d)		295,737			—			295,737
Asset retirement obligation		100,126			295,637		(45,659	)(c)		350,104			—			350,104
Deferred income taxes		—			42,561		(42,561	)(i)		—			—			—
Other long-term obligations		13,787			9,525		(3,627	)(d)
							(5,898	)(g)		13,787			—			13,787
Total liabilities		3,987,040			903,650		302,654			5,193,344			—			5,193,344
Equity
SandRidge Energy, Inc. stockholders’ equity:
Preferred stock, $0.001 par value, 50,000 shares authorized 8.5% Convertible perpetual preferred stock; 2,650 shares issued and outstanding at March 31, 2012; aggregate liquidation preference of $265,000		3			—		—			3			—			3
6.0% Convertible perpetual preferred stock; 2,000 shares issued and outstanding at March 31, 2012; aggregate liquidation preference of $200,000		2			—		—			2			—			2
7.0% Convertible perpetual preferred stock; 3,000 shares issued and outstanding at March 31, 2012; aggregate liquidation preference of $300,000		3			—		—			3			—			3
Common stock, $0.001 par value, 800,000 shares authorized; 416,478 issued and 415,544 outstanding (historical) and 490,440 issued and 489,506 outstanding (pro forma)		401			—		74	(e)		475			—			475
Members’ capital		—			487,157		(487,157	)(j)		—			—			—
Additional paid-in capital		4,632,544			—		541,964	(k)		5,174,508			—			5,174,508
Treasury stock, at cost		(6,617	)		—		—			(6,617	)		—			(6,617	)
Accumulated deficit		(3,169,153	)		—		67,360	(e)
					—		71,706	(i)
					—		(13,026	)(l)		(3,043,113	)		—			(3,043,113	)
Total SandRidge Energy, Inc. stockholders’ equity		1,457,183			487,157		180,921			2,125,261			—			2,125,261
Noncontrolling interest		933,876			—		—			933,876			587,087	(m)		1,520,963
Total equity		2,391,059			487,157		180,921			3,059,137			587,087			3,646,224
Total liabilities and equity	$	6,378,099		$	1,390,807	$	483,575		$	8,252,481		$	587,087		$	8,839,568

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

SANDRIDGE ENERGY, INC. AND SUBSIDIARIES

UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS

FOR THE THREE MONTHS ENDED MARCH 31, 2012

	SandRidge Historical			Dynamic Historical			Dynamic Acquisition Pro Forma Adjustments			SandRidge as Adjusted for Dynamic Acquisition			SandRidge Mississippian Trust II Pro Forma Adjustments			SandRidge Pro Forma Combined
	(In thousands, except per share amounts)
Revenues
Oil and natural gas	$	341,365		$	143,792		$	(1,504	)(a)	$	483,653		$	—		$	483,653
Drilling and services		29,309			—			—			29,309			—			29,309
Midstream and marketing		8,306			—			—			8,306			—			8,306
Other		2,655			2,874			—			5,529			—			5,529
Total revenues		381,635			146,666			(1,504	)		526,797			—			526,797
Expenses
Production		83,310			37,814			15,499	(b)		136,623			—			136,623
Production taxes		12,254			—			642	(b)		12,896			—			12,896
Drilling and services		17,560			—			—			17,560			—			17,560
Midstream and marketing		7,954			—			—			7,954			—			7,954
Exploration		—			2,222			(2,222	)(c)		—			—			—
Depreciation and depletion — oil and natural gas		87,066			45,109			416	(d)
								(149	)(e)		132,442			—			132,442
Depreciation, depletion and amortization — other		14,513			—			—			14,513			—			14,513
Accretion of asset retirement obligation		2,607			—			4,015	(b)
								2,086	(f)		8,708			—			8,708
General and administrative		50,301			7,511			(2,444	)(g)
								(2,474	)(h)		52,894			250	(n)		53,144
Loss on derivative contracts		254,646			—			33,838	(b)		288,484			—			288,484
Loss on sale of assets		3,080			—			—			3,080			—			3,080
Other operating		—			21,463			(20,156	)(b)
								(1,307	)(i)		—			—			—
Total expenses		533,291			114,119			27,744			675,154			250			675,404
(Loss) income from operations		(151,656	)		32,547			(29,248	)		(148,357	)		(250	)		(148,607	)
Other income (expense)
Interest expense		(66,965	)		(2,960	)		2,960	(j)
								(15,234	)(j)
								(409	)(j)
								10,875	(k)		(71,733	)		—			(71,733	)
Loss on derivative contracts		—			(33,838	)		33,838	(b)		—			—			—
Other income (expense), net		2,468			(2,099	)		—			369			—			369
Total other expense		(64,497	)		(38,897	)		32,030			(71,364	)		—			(71,364	)
Loss before income taxes		(216,153	)		(6,350	)		2,782			(219,721	)		(250	)		(219,971	)
Income tax expense (benefit)		71			(920	)		920	(l)		71			—			71
Net loss		(216,224	)		(5,430	)		1,862			(219,792	)		(250	)		(220,042	)
Less: net income attributable to noncontrolling interest		1,954			—			—			1,954			9,740	(o)		11,694
Net loss attributable to SandRidge Energy, Inc.		(218,178	)		(5,430	)		1,862			(221,746	)		(9,990	)		(231,736	)
Preferred stock dividends		13,881			—			—			13,881			—			13,881
Loss applicable to SandRidge Energy, Inc. common stockholders	$	(232,059	)	$	(5,430	)	$	1,862		$	(235,627	)	$	(9,990	)	$	(245,617	)
Loss per share available to SandRidge Energy, Inc. common stockholders
Basic	$	(0.58	)							$	(0.50	)				$	(0.52	)
Diluted	$	(0.58	)							$	(0.50	)				$	(0.52	)
Weighted average number of SandRidge Energy, Inc. common shares outstanding
Basic		400,597						73,962	(m)		474,559						474,559
Diluted		400,597						73,962	(m)		474,559						474,559

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

SANDRIDGE ENERGY, INC. AND SUBSIDIARIES

UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS

FOR THE YEAR ENDED DECEMBER 31, 2011

	SandRidge Pro Forma Historical (Note 4)			Dynamic Pro Forma Historical (Note 5)			Pro Forma Adjustments			SandRidge Pro  Forma Combined
	(In thousands, except per share amounts)
Revenues
Oil and natural gas	$	1,187,259		$	616,420		$	(16,496	)(b)
								3,050	(a)	$	1,790,233
Drilling and services		103,298			—			—			103,298
Midstream and marketing		66,690			—			—			66,690
Other		18,431			—			16,496	(b)		34,927
Total revenues		1,375,678			616,420			3,050			1,995,148
Expenses
Production		309,367			133,094			58,087	(b)		500,548
Production taxes		44,850			—			797	(b)		45,647
Drilling and services		65,654			—			—			65,654
Midstream and marketing		66,007			—			—			66,007
Exploration expense		—			15,085			(15,085	)(c)		—
Depreciation and depletion — oil and natural gas		311,459			203,457			(9,843	)(d)
								(10,851	)(e)		494,222
Depreciation and amortization — other		53,630			—			—			53,630
Accretion of asset retirement obligations		9,215			—			15,028	(b)
								7,443	(f)		31,686
Impairment		2,825			—			—			2,825
General and administrative		150,143			24,400			(9,279	)(g)		165,264
Gain on derivative contracts		(44,075	)		—			(43,734	)(b)		(87,809	)
Gain on sale of assets		(2,044	)		—			(19	)(b)		(2,063	)
Other operating		—			84,124			(73,893	)(b)
								(10,231	)(i)		—
Total expenses		967,031			460,160			(91,580	)		1,335,611
Income from operations		408,647			156,260			94,630			659,537
Other income (expense)
Interest expense		(234,200	)		(13,007	)		13,007	(j)
								(60,938	)(j)
								(1,636	) (j)		(296,774	)
Loss on extinguishment of debt		(38,232	)		—			—			(38,232	)
Gain on derivative contracts		—			43,734			(43,734	)(b)		—
Bargain purchase gain		—			282			—			282
Other income (expense), net		970			(145	)		—			825
Total other (expense) income		(271,462	)		30,864			(93,301	)		(333,899	)
Income before income taxes		137,185			187,124			1,329			325,638
Income tax expense (benefit)		377			(5,359	)		5,359	(l)		377
Net income		136,808			192,483			(4,030	)		325,261
Less: net income attributable to noncontrolling interest		97,547			460			—			98,007
Net income attributable to SandRidge Energy, Inc.		39,261			192,023			(4,030	)		227,254
Preferred stock dividends		55,583			—			—			55,583
(Loss applicable) income available to SandRidge Energy, Inc. common stockholders	$	(16,322	)	$	192,023		$	(4,030	)	$	171,671
(Loss) earnings per share
Basic	$	(0.04	)							$	0.36
Diluted	$	(0.04	)							$	0.36
Weighted average number of common shares outstanding
Basic		398,851						73,759	(m)		472,610
Diluted		398,851						81,553	(m)		480,404

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

SANDRIDGE ENERGY, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS

Note 1. Basis of Presentation

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

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

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

The unaudited pro forma condensed combined balance sheet is based on the unaudited March 31, 2012 SandRidge and Dynamic balance sheets and includes pro forma adjustments to give effect to the Dynamic Acquisition, the financing transactions and the conveyance of the Mississippian Trust II Royalty Interests as if those transactions occurred on March 31, 2012. The unaudited pro forma condensed combined statement of operations for the three months ended March 31, 2012 is based on the unaudited statements of operations of SandRidge and Dynamic for the three months ended March 31, 2012 and includes pro forma adjustments to give effect to the Dynamic Acquisition, the financing transactions and the Mississippian Trust II Royalty Interests conveyance as if those transactions occurred on January 1, 2011. The unaudited pro forma condensed combined statement of operations for the three months ended March 31, 2012 excludes the impact of non-recurring expenses SandRidge and Dynamic have incurred or will incur as a result of the acquisition and financing transactions, primarily banking and legal fees, the bargain purchase gain and an income tax benefit resulting from a partial release of the valuation allowance on SandRidge’s deferred tax asset. The unaudited pro forma condensed combined statement of operations for the year ended December 31, 2011 is based on the audited statements of operations of SandRidge and Dynamic for the year ended December 31, 2011 and includes pro forma adjustments to give effect to the acquisition of Dynamic by SandRidge and the financing transactions as if they had occurred on January 1, 2011. The unaudited pro forma condensed combined statement of operations for the year ended December 31, 2011 excludes the impact of non-recurring expenses SandRidge and Dynamic have incurred or will incur as a result of the acquisition and related financings, primarily banking and legal fees, the bargain purchase gain, an income tax benefit resulting from a partial release of the valuation allowance on SandRidge’s deferred tax asset and certain non-recurring adjustments recorded in 2011 relating to SandRidge’s July 2010 acquisition of Arena Resources, Inc. (“Arena”). SandRidge’s historical results for the year ended December 31, 2011 have been adjusted on a pro forma basis to give effect to (i) its conveyance of the Mississippian Trust II Royalty Interests to the Mississippian Trust II , (ii) the sale of certain producing properties located in eastern Texas (the “East Texas Properties”) and (iii) its conveyance of the royalty interests in certain oil and natural gas properties located in Andrews County, Texas (the “Permian Trust Royalty Interests”) to the SandRidge Permian Trust (the “Permian Trust”). SandRidge’s historical results have also been adjusted to give effect to final adjustments recorded in 2011 by SandRidge with respect to its July 2010 acquisition of Arena as if they had occurred prior to 2011. See Note 4 to the unaudited pro forma condensed combined financial statements for further discussion of these pro forma adjustments to the SandRidge historical statement of operations. Dynamic’s historical consolidated statement of operations for the year ended December 31, 2011 has also been adjusted on a pro forma basis to give effect to Dynamic’s 2011 acquisition of certain oil and natural gas interests in the Gulf of Mexico. See Note 5 to the unaudited pro forma condensed combined financial statements for further discussion of these pro forma adjustments to the Dynamic historical statement of operations.

SandRidge believes that the assumptions used in the preparation of these unaudited pro forma condensed combined financial statements provide a reasonable basis for presenting the effects directly attributable to the transactions described above. The unaudited pro forma financial information should be read in conjunction with the accompanying footnotes, SandRidge’s Quarterly

Report on Form 10-Q for the three months ended March 31, 2012 and Annual Report on Form 10-K for the year ended December 31, 2011, the Permian Trust’s Annual Report on Form 10-K for the year ended December 31, 2011, the Mississippian Trust II’s Registration Statement on Forms S-1 and S-3 filed by SandRidge with the United States Securities and Exchange Commission (the “SEC”) on January 5, 2012 and subsequent amendments thereto, Dynamic’s financial statements and related notes for the year ended December 31, 2011 in the Current report on Form 8-K filed on April 9, 2012 and for the three months ended March 31, 2012 included as Exhibit 99.2 to this Current report and other information that SandRidge has filed with the SEC.

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

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

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

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

(b) In connection with the closing of the Dynamic Acquisition, SandRidge received funds, net of approximately $19.3 million in costs, associated with its issuance of $750.0 million principal amount of 8.125% Senior Notes. The net proceeds from the issuance were used to fund the cash portion of the Dynamic purchase price and will be used to pay associated transaction costs of approximately $13.1 million with the remainder of the proceeds used for general corporate purposes.

(c) Adjustment to Dynamic’s asset retirement obligation and related notes receivable balance as a result of calculating these amounts based on SandRidge’s discount rate of 7.87%. Based on applicable agreements, Dynamic is to be reimbursed specified amounts by sellers of oil and natural gas properties following the performance of decommissioning operations. These reimbursable amounts are presented as notes receivable — abandonments.

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

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

Consideration(1)
Shares of SandRidge common stock issued		73,962
SandRidge common stock price	$	7.33
Fair value of common stock issued		542,138
Cash consideration(2)		680,000
Cash balance adjustment(3)		13,091
Total purchase price		1,235,229
Estimated Fair Value of Liabilities Assumed
Current liabilities		136,494
Asset retirement obligation(4)		316,183
Long-term deferred tax liability(5)		71,706
Other non-current liabilities		3,627
Amount attributable to liabilities assumed		528,010
Total purchase price plus liabilities assumed		1,763,239
Estimated Fair Value of Assets Acquired
Current assets		125,568
Oil and natural gas properties(6)		1,685,836
Other property, plant and equipment		1,342
Other non-current assets		17,853
Amount attributable to assets acquired		1,830,599
Bargain purchase gain(7)	$	(67,360	)

(1) Consideration paid by SandRidge consists of 73,961,554 shares of SandRidge common stock and cash of approximately $680.0 million. The value of the stock consideration is based upon the closing price of $7.33 per share of SandRidge common stock on April 17, 2012 (the closing date of the acquisition). Under the acquisition method of accounting, the purchase price is determined based on the total cash paid and the fair value of SandRidge common stock issued on the acquisition date.

(2) Cash paid to Dynamic, including amounts paid to retire Dynamic’s long-term debt, was funded through a portion of the net proceeds from SandRidge’s issuance of $750.0 million of 8.125% Senior Notes.

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

(4) The estimated fair value of the acquired asset retirement obligation was determined using SandRidge’s applicable discount rate of 7.87%.

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

(6) The fair value of oil and natural gas properties acquired was estimated using a discounted cash flow model, with future cash flows estimated based upon estimated oil and natural gas reserve quantities and forward strip oil and natural gas prices as of April 17, 2012, discounted to present value using SandRidge’s risk weighted assessments for proved, probable and possible reserves and an industry-based weighted average cost of capital. The actual fair value of oil and natural gas properties may differ from this estimate based upon SandRidge’s additional evaluation of Dynamic’s reserves.

(7) The bargain purchase gain results from an excess estimated fair value of the net assets acquired over the fair value of the consideration paid. The fair value of the acquired assets and assumed liabilities is ongoing and will be updated as additional information becomes available. As such, the bargain purchase gain is subject to adjustment.

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

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

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

(i) Adjustment to recognize offset of newly created net deferred tax liability with SandRidge’s existing net deferred tax assets and the resulting release of approximately $71.7 million in the current valuation allowance against those existing net deferred tax assets and to adjust Dynamic’s deferred tax liability to $0 as a result of SandRidge’s net deferred tax asset. The release of the valuation allowance has been reflected as a credit to accumulated deficit in the accompanying unaudited pro forma condensed combined balance sheet, but has not been included in the accompanying unaudited pro forma condensed combined statement of operations due to its non-recurring nature.

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

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

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

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

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

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

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

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

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

(d) Adjustment to depreciation and depletion resulting from the pro forma calculation of the combined entity’s depletion expense under the full cost method of accounting for oil and natural gas properties. The pro forma depletion adjustment utilizes a depletion rate of $15.81 and $15.80 per Boe for the three months ended March 31, 2012 and year ended December 31, 2011, respectively. Under the successful efforts method of accounting, proved property acquisition costs are amortized on a unit-of-production basis over total proved reserves and costs of wells, related equipment and facilities are depreciated over the life of the proved developed reserves that will utilize those capitalized assets on a field-by-field basis. Under the full cost method of accounting, property acquisition costs, costs of wells, related equipment and facilities and future development costs are included in a single full cost pool, which is amortized on a unit-of-production basis over total proved reserves.

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

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

(g) Adjustment to capitalize a portion of Dynamic’s general and administrative expenses as allowed under the full cost method, using capitalization rates of approximately 33% and 38% estimated based upon an analysis of SandRidge’s historical capitalization rate for the three months ended March 31, 2012 and the year ended December 31, 2011, respectively.

(h) Adjustment to eliminate non-recurring transaction costs related to the acquisition, which were included in SandRidge’s historical statement of operations for the three months ended March 31, 2012.

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

(j) Adjustment to eliminate historical interest expense on Dynamic’s debt, which was repaid at closing, record interest expense on the $750.0 million principal amount of 8.125% Senior Notes and amortize estimated debt issuance costs of $19.3 million related to the 8.125% Senior Notes over the term of the notes.

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

(l) Adjustment to reverse Dynamic’s income tax benefit. There was no pro forma income tax provision related to the acquisition of Dynamic due to SandRidge’s net deferred tax asset position and the corresponding full valuation allowance.

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

(n) The Mississippian Trust II’s general and administrative expenses are estimated at $1.3 million annually and include an annual administrative services fee of $0.3 million payable by the Mississippian Trust II to SandRidge that will be eliminated in consolidation.

(o) Reflects net income of the Mississippian Trust II attributable to the third-party beneficial ownership of 60.1%. Such amounts were estimated based on pro forma distributable income of the Mississippian Trust II of $22.5 million less estimated depletion of $6.3 million for the three months ended March 31, 2012.

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

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

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

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

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

• Arena Acquisition. On July 16, 2010, SandRidge completed the acquisition of all of the outstanding shares of common stock of Arena. In connection with the acquisition, SandRidge paid $4.50 in cash and issued 4.7771 shares of SandRidge common stock for each share of Arena common stock outstanding for a total value per share of $35.79, based upon the $6.55 closing price of SandRidge common stock on July 16, 2010, the closing date of the acquisition. The consideration received by Arena shareholders was valued at $1.4 billion in the aggregate. SandRidge was the surviving parent company after completion of the acquisition. In the second quarter of 2011, SandRidge completed its valuation of assets acquired and liabilities assumed related to the Arena Acquisition.

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

SandRidge Energy, Inc.

Unaudited Pro forma Condensed Historical Statement of Operations

Year Ended December 31, 2011

				Pro Forma Adjustments
							Dispositions
	SandRidge Historical			Arena Acquisition			SandRidge Permian Trust			East Texas Sale			SandRidge Mississippian Trust II			SandRidge Pro  Forma Historical
	(In thousands, except per share amounts)
Revenues
Oil and natural gas	$	1,226,794			—			—		$	(39,535	)(f)		—		$	1,187,259
Drilling and services		103,298			—			—			—			—			103,298
Midstream and marketing		66,690			—			—			—			—			66,690
Other		18,431			—			—			—			—			18,431
Total revenues		1,415,213			—			—			(39,535	)		—			1,375,678
Expenses
Production		322,877			—			—			(13,510	)(f)		—			309,367
Production taxes		46,069			—			—			(1,219	)(f)		—			44,850
Drilling and services		65,654			—			—			—			—			65,654
Midstream and marketing		66,007			—			—			—			—			66,007
Depreciation and depletion — oil and natural gas		317,246			—			—			(5,787	)(g)		—			311,459
Depreciation and amortization — other		53,630			—			—			—			—			53,630
Accretion of asset retirement obligation		9,368			—			—			(153	)(g)		—			9,215
Impairment		2,825			—			—			—			—			2,825
General and administrative		148,643			—			500	(c)		—			1,000	(c)		150,143
Gain on derivative contracts		(44,075	)		—			—			—			—			(44,075	)
Gain on sale of assets		(2,044	)		—			—			—			—			(2,044	)
Total expenses		986,200			—			500			(20,669	)		1,000			967,031
Income from operations		429,013			—			(500	)		(18,866	)		(1,000	)		408,647
Other income (expense)
Interest expense		(237,332	)		—			3,132	(d)		—			—			(234,200	)
Loss on extinguishment of debt		(38,232	)		—			—			—			—			(38,232	)
Other income, net		3,122			(2,152	)(a)		—			—			—			970
Total other expense		(272,442	)		(2,152	)		3,132			—			—			(271,462	)
Income before income taxes		156,571			(2,152	)		2,632			(18,866	)		(1,000	)		137,185
Income tax (benefit) expense		(5,817	)		6,247	(b)		—			(53	) (h)		—			377
Net income		162,388			(8,399	)		2,632			(18,813	)		(1,000	)		136,808
Less: net income attributable to noncontrolling interest		54,323			—			26,612	(e)		—			16,612	(i)		97,547
Net income attributable to SandRidge Energy, Inc.		108,065			(8,399	)		(23,980	)		(18,813	)		(17,612	)		39,261
Preferred stock dividends		55,583			—			—			—			—			55,583
Income available (loss applicable) to SandRidge Energy, Inc. common stockholders	$	52,482		$	(8,399	)	$	(23,980	)	$	(18,813	)	$	(17,612	)	$	(16,322	)
Earnings (loss) per share
Basic	$	0.13														$	(0.04	)
Diluted	$	0.13														$	(0.04	)
Weighted average number of common shares outstanding
Basic		398,851															398,851
Diluted		406,645												(7,794	)(j)		398,851

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

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

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

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

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

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

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

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

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

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

Note 5. Dynamic Unaudited Pro Forma Condensed Statement of Operations

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

Dynamic Offshore Resources, LLC

Unaudited Condensed Consolidated Pro Forma Statement of Operations

For the Year Ended December 31, 2011

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

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

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

EX-99.2

Exhibit 99.2

DYNAMIC OFFSHORE RESOURCES, LLC

CONSOLIDATED BALANCE SHEETS

(In thousands)

	March 31, 2012			December 31, 2011
	(Unaudited)
Assets
Current assets:
Cash and cash equivalents	$	48,468		$	58,696
Accounts receivable—third parties		81,559			92,635
Accounts receivable—affiliates		10			4
Derivative assets		22,967			44,471
Current portion of notes receivable—abandonments		4,097			3,843
Other current assets		17,431			21,834
Total current assets		174,532			221,483
Property and equipment:
Oil and gas properties, successful efforts method		1,755,808			1,728,289
Other property and equipment		4,370			4,073
Accumulated depreciation, depletion and amortization		(578,060	)		(532,951	)
Property and equipment, net		1,182,118			1,199,411
Long-term derivative assets		3,020			9,953
Notes receivable—abandonments		17,108			17,108
Other assets		14,029			15,814
Total assets	$	1,390,807		$	1,463,769
Liabilities and Member’s Capital
Current liabilities:
Accounts payable—third parties	$	64,758		$	65,488
Accounts payable—affiliates		—			601
Current portion of asset retirement obligations		74,433			51,133
Other current liabilities		71,736			83,952
Total current liabilities		210,927			201,174
Long-term debt		345,000			365,000
Asset retirement obligations		295,637			326,483
Deferred income taxes		42,561			43,481
Other long-term liabilities		9,525			8,544
Total liabilities		903,650			944,682
Commitments and contingencies (see Note 13)
Member’s capital		487,157			519,087
Total liabilities and member’s capital	$	1,390,807		$	1,463,769

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DYNAMIC OFFSHORE RESOURCES, LLC

CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands)

(Unaudited)

	Three Months Ended March 31,
	2012			2011
Oil and gas revenues	$	143,792		$	96,177
Other operating revenues		2,874			4,045
		146,666			100,222
Operating expenses:
Lease operating expense		37,814			25,252
Exploration expense		2,222			6,183
Depreciation, depletion and amortization		45,109			26,579
General and administrative expense		7,511			6,027
Other operating expense		21,463			12,973
		114,119			77,014
Income from operations		32,547			23,208
Other expense:
Interest expense, net		(2,960	)		(2,163	)
Commodity derivative expense		(33,838	)		(37,504	)
Other		(2,099	)		—
Loss before income taxes		(6,350	)		(16,459	)
Income tax benefit		920			458
Net loss		(5,430	)		(16,001	)
Less: Net income attributable to noncontrolling interests		—			467
Net loss attributable to Dynamic Offshore Resources, LLC	$	(5,430	)	$	(16,468	)

See notes to consolidated financial statements

2

DYNAMIC OFFSHORE RESOURCES, LLC

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)

	Three Months Ended March 31,
	2012			2011
Cash flows from operating activities:
Net loss	$	(5,430	)	$	(16,001	)
Adjustments to reconcile net loss to net cash provided by operating activities:
Amortization in interest expense, net		261			233
Accretion of asset retirement obligations		4,015			2,891
Depreciation, depletion and amortization		45,109			26,579
Commodity derivative expense		33,838			37,504
Deferred income tax benefit		(920	)		(458	)
Changes in operating assets and liabilities, net of acquisitions:
Accounts receivable and other assets		11,605			(2,922	)
Accounts payable and other liabilities		(32,043	)		(4,658	)
Net cash provided by operating activities		56,435			43,168
Cash flows from investing activities:
Additions to property and equipment		(20,787	)		(20,751	)
Acquisitions, net of cash acquired		(4,542	)		(14,881	)
Derivative settlements		5,166			(760	)
Proceeds from asset sales		—			—
Net cash used in investing activities		(20,163	)		(36,392	)
Cash flows from financing activities:
Repayments of revolving credit facility		(20,000	)		(20,000	)
Contributions from member		—			524
Distributions to member		(26,500	)		—
Acquisition of noncontrolling interest in DBH, LLC		—			(1,380	)
Net cash used in financing activities		(46,500	)		(20,856	)
Net decrease in cash and cash equivalents		(10,228	)		(14,080	)
Cash and cash equivalents, beginning of period		58,696			75,162
Cash and cash equivalents, end of period	$	48,468		$	61,082

See notes to consolidated financial statements

3

DYNAMIC OFFSHORE RESOURCES, LLC

CONSOLIDATED STATEMENT OF MEMBER’S CAPITAL

(In thousands)

(Unaudited)

Balance, December 31, 2011	$	519,087
Distributions		(26,500	)
Net loss		(5,430	)
Balance, March 31, 2012	$	487,157

See notes to consolidated financial statements

4

Dynamic Offshore Resources, LLC

Notes to Consolidated Financial Statements

Except as noted within the context of each footnote disclosure, the dollar amounts presented in the tabular data within these footnote disclosures are stated in thousands of dollars.

Note 1—Organization and Basis of Presentation

Dynamic Offshore Resources, LLC (“DOR”) is a Delaware limited liability company wholly owned by Dynamic Offshore Holding, LP (“DOH”), a Delaware limited partnership. DOR was organized on September 17, 2007 for the purpose of acquiring and developing oil and gas properties. As a limited liability company, DOR is solely responsible for the debts, obligations and liabilities of the Company and no member or manager of the Company is obligated personally for any such debt, obligation or liability of the Company. Unless the context requires otherwise, references to “we”, “us”, “our”, or “the Company” are intended to mean the consolidated business and operations of DOR.

Basis of Presentation. These unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. The year-end balance sheet data was derived from audited financial statements, but does not include all disclosures required by GAAP. The unaudited consolidated financial statements for the three months ended March 31, 2012 and 2011 include all adjustments, both normal and recurring, which are, in the opinion of management, necessary for a fair statement of the results for the interim periods. All significant intercompany balances and transactions have been eliminated in consolidation. Our financial results for the three months ended March 31, 2012 are not necessarily indicative of the results that may be expected for the full year ending December 31, 2012. These unaudited consolidated financial statements and other information included in this interim report should be read in conjunction with our audited consolidated financial statements and notes thereto for the year ended December 31, 2011.

In preparing the accompanying consolidated financial statements, the Company has reviewed, as determined necessary by the Company’s management, events that have occurred after March 31, 2012, up until the issuance of the consolidated financial statements, which occurred on May 4, 2012.

Note 2—Significant Accounting Policies and Related Matters

The accounting policies followed by the Company are set forth in Note 2 of the Notes to Consolidated Financial Statements in our annual financial statements for the year ended December 31, 2011. There have been no significant changes to these policies during the three months ended March 31, 2012.

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Note 3—Consolidated Financial Statements Information

The following table shows additional consolidated balance sheets information at the dates indicated:

	March 31, 2012		December 31, 2011
Accounts receivable from third parties
Operating revenues	$	57,299	$	70,231
Joint interest receivables		21,295		13,565
Derivative assets		70		2,590
Other		2,895		6,249
	$	81,559	$	92,635
Other current assets
Prepaid insurance	$	3,530	$	5,067
Prepaid royalties		10,438		10,782
Advances to operators		736		1,543
Deferred income taxes		2,571		2,571
Other		156		1,871
	$	17,431	$	21,834
Other assets
Natural gas imbalances receivable (1)	$	9,243	$	10,768
Debt issue costs, net		3,286		3,546
Restricted cash		1,500		1,500
	$	14,029	$	15,814
Other current liabilities
Accrued expenses	$	51,498	$	69,702
Derivative liabilities		20,238		14,250
	$	71,736	$	83,952
Other long-term liabilities
Natural gas imbalances payable (1)	$	5,898	$	5,919
Long-term derivative liabilities		3,627		2,625
	$	9,525	$	8,544

(1) As of March 31, 2012 and December 31, 2011, natural gas imbalances receivable were 2,731 MMcf and 3,068 MMcf. Natural gas imbalances payable were 1,241 MMcf and 1,282 MMcf as of the same dates.

6

Other operating expense comprised the following for the periods indicated:

	Three Months Ended March 31,
	2012		2011
Other operating expense
Insurance expense	$	9,051	$	9,501
Workover expense		6,963		564
Accretion expense		4,015		2,891
Casualty loss (gain), net		38		(161	)
Loss on abandonments		1,307		178
Other		89		—
	$	21,463	$	12,973

Note 4—Property and Equipment

The components of property and equipment were as follows at the dates indicated:

	March 31, 2012			December 31, 2011
Proved oil and gas properties	$	1,620,217		$	1,592,698
Unproved oil and gas properties		135,591			135,591
Other property and equipment		4,370			4,073
		1,760,178			1,732,362
Accumulated depreciation, depletion and amortization		(578,060	)		(532,951	)
	$	1,182,118		$	1,199,411

Substantially all of the Company’s assets serve as collateral under its revolving credit agreement.

Note 5—Asset Retirement Obligations

The following table summarizes the activity for the Company’s asset retirement obligations for the three months ended March 31, 2012:

Beginning of period	$	377,616
Liabilities acquired		1,528
Liabilities settled		(13,089	)
Accretion expense		4,015
End of period	$	370,070
Current portion	$	74,433
Long-term portion		295,637
	$	370,070

Note 6—Notes Receivable

Notes receivable consist primarily of contractual obligations of sellers of oil and gas properties to reimburse the Company a specified amount following the abandonment of acquired properties. The Company invoices the seller specified amounts following the performance of decommissioning

7

operations (abandonment and structure removal) in accordance with the applicable agreements with the seller. These receivables are recorded at present value, and the related discounts are amortized to interest income, based on the expected timing of the decommissioning.

Note 7—Noncontrolling Interests in Subsidiaries

The following is a reconciliation of our noncontrolling interests for the three months ended March 31, 2011:

Balance, December 31, 2010	$	95,648
Acquisition of noncontrolling interests in subsidiaries		(88,561	)
Net income		467
Balance, March 31, 2011	$	7,554

During 2011, DOR acquired all the noncontrolling interests in its consolidated subsidiaries.

Note 8—Long-Term Debt

The Company had the following debt outstanding at the dates indicated:

	March 31, 2012		December 31, 2011
Revolving Credit Agreement, variable rate, due June 2015	$	345,000	$	365,000
Letters of credit issued	$	—	$	—

The Company’s management believes DOR was in compliance with its debt covenants as of March 31, 2012.

Note 9—Risk Management Activities

The Company’s principal market risks are its exposure to changes in commodity prices, particularly to the prices of oil and gas, nonperformance by the Company’s counterparties, and changes in interest rates.

The Company’s revenues are derived principally from the sale of oil and gas. The prices of oil and gas are subject to market fluctuations in response to changes in supply, demand, market uncertainty and a variety of additional factors beyond the Company’s control. The Company monitors these risks and enters into commodity derivative transactions designed to mitigate the impact of commodity price fluctuations on the Company’s business.

The primary purpose of the Company’s commodity risk management activities is to hedge the Company’s exposure to commodity price risk and reduce fluctuations in the Company’s operating cash flows despite fluctuations in commodity prices. As of March 31, 2012, the Company has hedged the commodity price associated with a portion of its expected oil and gas sales volumes for the years 2012 through 2013 by entering into derivative financial instruments comprising swaps, basis swaps and collars. The percentages of the Company’s expected oil and gas that are hedged decrease over time.

8

With swaps, the Company receives an agreed upon fixed price for a specified notional quantity of oil or gas and the Company pays the hedge counterparty a floating price for that same quantity based upon published index prices. Since the Company receives from its oil and gas marketing counterparties a price based on the same floating index price from the sale of the underlying physical commodity, these transactions are designed to effectively lock-in the agreed fixed price in advance for the volumes hedged.

For basis swaps, the Company receives a fixed differential between two regional oil index prices and pays a floating differential on the same two index prices to the contract counterparty. Since the Company receives from its oil and gas marketing counterparties a price based on the same floating differential from the sale of the underlying physical commodity, these transactions are designed to effectively lock-in the agreed fixed differential in advance for the volumes hedged.

In order to avoid having a greater volume hedged than the Company’s actual oil and gas sales volumes, the Company typically limits its use of swaps and basis swaps to hedge the prices of less than the Company’s expected sales volumes.

In a typical collar transaction, if the floating price based on a market index is below the floor price in the derivative contract, the Company receives from the counterparty an amount equal to this difference multiplied by the specified volume. If the floating price exceeds the floor price and is less than the ceiling price, no payment is required by either party. If the floating price exceeds the ceiling price, the Company must pay the counterparty an amount equal to the difference multiplied by the specified volume. If the Company has less production than the volumes specified under the collar transaction when the floating price exceeds the ceiling price, the Company must make payments against which there is no offsetting revenues from production.

The Company’s commodity hedges may expose the Company to the risk of financial loss in certain circumstances. The Company’s hedging arrangements provide the Company protection on the hedged volumes if market prices decline below the prices at which these hedges are set. If market prices rise above the prices at which the Company has hedged, the Company will receive less revenue on the hedged volumes than in the absence of hedges.

Interest Rate Risk. The Company is exposed to changes in interest rates, primarily as a result of variable rate borrowings under its debt agreements. To the extent that interest rates increase, interest expense for the Company’s variable rate debt will also increase.

Credit Risk. The Company’s credit exposure related to commodity derivative instruments is represented by the fair value of contracts with a net positive fair value to the Company at the reporting date. At such times, these outstanding instruments expose the Company to credit loss in the event of nonperformance by the counterparties to the agreements. Should the creditworthiness of one or more of the Company’s counterparties decline, the Company’s ability to mitigate nonperformance risk is limited to a counterparty agreeing to either a voluntary termination and subsequent cash settlement or a novation of the derivative contract to a third party. In the event of a counterparty default, the Company may sustain a loss and the Company’s cash receipts could be negatively impacted.

As of March 31, 2012, Deutsche Bank, an affiliate of RBS and Credit Suisse accounted for 61%, 37%, and 2% of the Company’s counterparty credit exposure related to commodity derivative instruments. These counterparties are major financial institutions possessing investment grade credit ratings, based upon minimum credit ratings assigned by Standard & Poor’s Ratings Services, a division of the McGraw-Hill Companies, Inc.

9

The Company had commodity derivatives with the following terms outstanding as of March 31, 2012, none of which have been designated as cash-flow hedges:

	Year Ending December 31,
	2012		2013
Crude Oil
Swaps (Bbl)		1,188,000		1,250,000
Average price ($ per Bbl)		92.34		100.47
Collars (Bbl)		300,000		168,000
Average price ($ per Bbl)
Floor price (put)		82.90		80.00
Ceiling price (call)		108.27		102.50
LLS-WTI Differential Spread (Bbl)		1,495,000		—
Average price ($ per Bbl)		17.27		—
Natural Gas
Swaps (MMBtu)		2,385,000		—
Average price ($ per MMBtu)		6.12		—
Collars (MMBtu)		6,100,000		6,000,000
Average price ($ per MMBtu)
Floor price (put)		4.08		3.75
Ceiling price (call)		6.62		6.65

The following reflects the fair values of derivative instruments in the Company’s consolidated balance sheets as of the dates indicated:

	Asset Derivatives
	Balance Sheet Location	Fair Value as of
Derivatives not designated as hedging instruments under ASC 815		March  31, 2012		December  31, 2011
Commodity derivatives	Current assets	$	22,967	$	44,471
Commodity derivatives	Long-term assets		3,020		9,953
	Liability Derivatives
Derivatives not designated as hedging instruments under ASC 815	Balance Sheet Location	Fair Value as of
		March  31, 2012		December  31, 2011
Commodity derivatives	Current liabilities	$	20,238	$	14,250
Commodity derivatives	Long-term liabilities		3,627		2,625

See Note 10 for additional disclosures related to derivative instruments.

10

Note 10—Fair Value Measurements

Accounting standards pertaining to fair value measurements establish a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. These tiers include:

• Level 1, defined as observable inputs such as quoted prices in active markets;

• Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable; and

• Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions.

The Company’s derivative contracts are reported in its consolidated financial statements at fair value. These contracts consist of over-the-counter swaps and collars, which are not traded on a public exchange.

The fair values of swap contracts are determined based on inputs that are readily available in public markets or can be derived from information available in publicly quoted markets. Therefore, the Company has categorized these swap contracts as Level 2.

For collars, the Company estimates the option value of the contract floors and ceilings using an option pricing model which takes into account market volatility, market prices and contract terms. Therefore, the Company has categorized its collars as Level 2.

The Company has consistently applied these valuation techniques and believes it has obtained the most accurate information available for the types of derivative contracts it holds.

The following table sets forth, by level within the fair value hierarchy, the Company’s financial assets and liabilities measured at fair value on a recurring basis as of the dates indicated:

As of March 31, 2012	Total		Level 1		Level 2		Level 3
Commodity derivative assets	$	25,987	$	—	$	25,987	$	—
Commodity derivative liabilities	$	23,865	$	—	$	23,865	$	—
As of December 31, 2011	Total		Level 1		Level 2		Level 3
Commodity derivative assets	$	54,424	$	—	$	54,424	$	—
Commodity derivative liabilities	$	16,875	$	—	$	16,875	$	—

These financial assets and liabilities are classified in their entirety 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 fair value of assets and liabilities and their placement within the fair value hierarchy levels.

11

Note 11—Related Party Transactions

Relationship with Superior

Superior owns a 10% interest in DOH and provides various field-level services to the Company. These transactions were recorded in the consolidated financial statements as follows:

	Three Months Ended March  31,
	2012		2011
Insurance receivable	$	—	$	7
Additions to property and equipment		5,016		1,532
Asset retirement obligations settled		3,977		974
Lease operating expense		299		583
Workover expense		775		437
	$	10,067	$	3,533

Relationship with DOH GP

The Company has no employees. Dynamic Offshore Holding GP, LLC (“DOH GP”), charges all of its employee costs to the Company, at cost, as part of the administrative services agreement between DOH GP and the Company. The Company allocates employee costs charged by DOH GP and other general and administrative costs, at cost, among its consolidated subsidiaries based on an agreed sharing percentage. For the three months ended March 31, 2012 and 2011, DOH GP charged DOR $5.1 million and $7.8 million under the agreement, which is included in the accompanying consolidated statements of operations as general and administrative expense and lease operating expense.

Affiliate receivables and payables were as follows as of the dates indicated:

	March 31, 2012		December 31, 2011
Receivable from DOH GP	$	10	$	4
Payable to SESI and its affiliates	$	—	$	601

Note 12—Supplemental Cash Flow Information

The following table provides supplemental cash flow information for the periods indicated:

	Three Months Ended March  31
	2012		2011
Non-cash:
Increase arising from purchase accounting:
Purchase of noncontrolling interest in DBH (see Note 7)		—		(87,181	)

12

Note 13—Commitments and Contingencies

Operating Leases

During the three months ended March 31, 2012 and 2011, the Company paid $0.5 million and $0.4 million in rent under its operating leases. There has been no material change in the Company’s noncancellable commitments since December 31, 2011.

Legal Proceedings

From time to time, the Company may be involved in litigation arising out of the normal course of its business. In management’s opinion, the Company is not involved in any litigation, the outcome of which would have a material effect on its consolidated financial position, results of operations, or liquidity.

Note 14—Sale of the Company

On April 17, 2012, SandRidge Energy, Inc. acquired DOR for aggregate consideration of approximately $1.25 billion, consisting of $682 million in cash and 74 million shares of SandRidge common stock.

13