10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q

(Mark One)

☑ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2021

OR

☐ 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.)
1 E. Sheridan Ave, Suite 500 Oklahoma City, Oklahoma	73104
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: (405) 429-5500

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

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol	Name of each exchange on which registered
Common Stock, $.001 par value	SD	New York Stock Exchange

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 has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes ☑ No ☐

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

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☑	Smaller reporting company	☑
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

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

Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13, or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court. Yes ☑ No o

The number of shares outstanding of the registrant’s common stock, par value $0.001 per share, as of the close of business on August 5, 2021, was 36,588,775.

References in this report to the “Company,” “SandRidge,” “we,” “our,” and “us” mean SandRidge Energy, Inc., including its consolidated subsidiaries and its proportionately consolidated share of SandRidge Mississippian Trust I and SandRidge Mississippian Trust II, (collectively, the “Royalty Trusts”).

DISCLOSURES REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q (“Quarterly Report”) of the Company includes “forward-looking statements” as defined by the SEC. These forward-looking statements may include projections and estimates concerning our capital expenditures, liquidity, capital resources and debt profile, the timing and success of specific projects, the impact of the COVID-19 pandemic, the potential impact of international negotiations on the supply and demand of oil and gas, outcomes and effects of litigation, claims and disputes, elements of our business strategy, compliance with governmental regulation of the oil and natural gas industry, including environmental regulations, acquisitions and divestitures and the potential effects on our financial condition and other statements concerning our operations, financial performance and financial condition.

Forward-looking statements are generally accompanied by words such as “estimate,” “assume,” “target,” “project,” “predict,” “believe,” “expect,” “anticipate,” “potential,” “could,” “may,” “foresee,” “plan,” “goal,” “should,” “intend” or other words that convey the uncertainty of future events or outcomes. These forward-looking statements are based on certain assumptions and analyses based on our experience and perception of historical trends, current conditions and expected future developments as well as other factors we believe are appropriate under the circumstances. Such statements are not guarantees of future performance and actual results or developments may differ materially from those projected. The Company disclaims any obligation to update or revise these forward-looking statements unless required by law, and it cautions readers not to rely on them unduly. While we consider these expectations and assumptions to be reasonable, they are inherently subject to significant business, economic, competitive, regulatory and other risks, contingencies and uncertainties relating to, among other matters, the risks and uncertainties discussed in “Risk Factors” in Item 1A of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2020 (the “2020 Form 10-K”) and in Item 1A of this Quarterly Report.

SANDRIDGE ENERGY, INC. AND SUBSIDIARIES

FORM 10-Q

Quarter Ended June 30, 2021

INDEX

PART I. FINANCIAL INFORMATION
ITEM 1.	Financial Statements (Unaudited):
	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	20
ITEM 3.	Quantitative and Qualitative Disclosures About Market Risk	30
ITEM 4.	Controls and Procedures	31
PART II. OTHER INFORMATION
ITEM 1.	Legal Proceedings	32
ITEM 1A.	Risk Factors	33
ITEM 2.	Unregistered Sales of Equity Securities and Use of Proceeds	33
ITEM 3.	Defaults Upon Senior Securities	33
ITEM 4.	Mine Safety Disclosures	33
ITEM 5.	Other Information	33
ITEM 6.	Exhibits	34
Signature

PART I. Financial Information

ITEM 1. Financial Statements

SANDRIDGE ENERGY, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)

(In thousands)

	June 30, 2021		December 31, 2020
ASSETS
Current assets
Cash and cash equivalents	$	88,338	$	22,130
Restricted cash - other	2,271		6,136
Accounts receivable, net	20,681		19,576
Prepaid expenses	2,186		2,890
Other current assets	80		80
Total current assets	113,556		50,812
Oil and natural gas properties, using full cost method of accounting
Proved	1,439,904		1,463,950
Unproved	13,365		17,964
Less: accumulated depreciation, depletion and impairment	(1,370,544)		(1,375,692)
	82,725		106,222
Other property, plant and equipment, net	99,572		103,118
Other assets	594		680
Total assets	$	296,447	$	260,832

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities
Accounts payable and accrued expenses	$	42,896	$	51,426
Asset retirement obligation	15,939		16,467
Other current liabilities	408		984
Total current liabilities	59,243		68,877
Long-term debt	20,000		20,000
Asset retirement obligation	36,197		40,701
Other long-term obligations	1,439		3,188
Total liabilities	116,879		132,766
Commitments and contingencies (Note 9)
Stockholders’ Equity
Common stock, $0.001 par value; 250,000 shares authorized; 36,560 issued and outstanding at June 30, 2021 and 35,928 issued and outstanding at December 31, 2020	37		36
Warrants	88,520		88,520
Additional paid-in capital	1,062,426		1,062,220
Accumulated deficit	(971,415)		(1,022,710)
Total stockholders’ equity	179,568		128,066
Total liabilities and stockholders’ equity	$	296,447	$	260,832

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

4

SANDRIDGE ENERGY, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)

(In thousands, except per share data)

	Three Months Ended June 30,				Six Months Ended June 30,
	2021		2020		2021		2020
Revenues
Oil, natural gas and NGL	$	34,196	$	16,448	$	67,819	$	56,587
Other	—		207		—		397
Total revenues	34,196		16,655		67,819		56,984
Expenses
Lease operating expenses	9,232		8,698		17,186		24,340
Production, ad valorem, and other taxes	2,534		1,854		4,710		5,053
Depreciation and depletion — oil and natural gas	2,193		13,348		4,698		38,203
Depreciation and amortization — other	1,475		1,739		2,969		4,373
Impairment	—		201,784		—		209,754
General and administrative	2,522		4,314		4,612		9,797
Restructuring expenses	256		444		2,310		444
Employee termination benefits	—		1,993		49		5,247
(Gain) loss on derivative contracts	—		(2,241)		—		(12,467)
(Gain) loss on sale of assets	—		(42)		(19,713)		78
Other operating (income) expense, net	(65)		150		(113)		307
Total expenses	18,147		232,041		16,708		285,129
Income (loss) from operations	16,049		(215,386)		51,111		(228,145)
Other income (expense)
Interest expense, net	(84)		(447)		(131)		(1,084)
Other income (expense), net	287		58		315		134
Total other income (expense)	203		(389)		184		(950)
Income (loss) before income taxes	16,252		(215,775)		51,295		(229,095)
Income tax expense (benefit)	—		4		—		(646)
Net income (loss)	$	16,252	$	(215,779)	$	51,295	$	(228,449)
Net income (loss) per share
Basic	$	0.45	$	(6.06)	$	1.42	$	(6.42)
Diluted	$	0.44	$	(6.06)	$	1.38	$	(6.42)
Weighted average number of common shares outstanding
Basic	36,416		35,611		36,187		35,581
Diluted	37,345		35,611		37,283		35,581

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 (Unaudited)

(In thousands)

	Common Stock			Warrants			Additional Paid-In Capital		Accumulated Deficit		Total
	Shares	Amount		Shares	Amount
Six Months Ended June 30, 2021
Balance at December 31, 2020	35,928	$	36	6,734	$	88,520	$	1,062,220	$	(1,022,710)	$	128,066
Issuance of stock awards, net of cancellations	6	—		—	—		—		—		—
Stock-based compensation	—	—		—	—		236		—		236
Issuance of common stock for general unsecured claims	201	—		—	—		—		—		—
Issuance of warrants for general unsecured claims	—	—		247	—		—		—		—
Cash paid for tax obligations on vested stock awards	—	—		—	—		(19)		—		(19)
Net Income	—	—		—	—		—		35,043		35,043
Balance at March 31, 2021	36,135	$	36	6,981	$	88,520	$	1,062,437	$	(987,667)	$	163,326
Issuance of stock awards, net of cancellations	425	1		—	—		(1)		—		—
Stock options exercised and Stock-based compensation	—	—		—	—		584		—		584
Issuance of common stock for general unsecured claims	—	—		—	—		—		—		—
Issuance of warrants for general unsecured claims	—	—		—	—		—		—		—
Cash paid for tax obligations on vested stock awards	—	—		—	—		(594)		—		(594)
Net Income	—	—		—	—				16,252		16,252
Balance at June 30, 2021	36,560	$	37	6,981	$	88,520	$	1,062,426	$	(971,415)	$	179,568

	Common Stock			Warrants			Additional Paid-In Capital		Accumulated Deficit		Total
	Shares	Amount		Shares	Amount
Six Months Ended June 30, 2020
Balance at December 31, 2019	35,772	$	36	6,659	$	88,520	$	1,059,253	$	(745,357)	$	402,452
Common stock issued for general unsecured claims	38	—		—	—		—		—		—
Stock-based compensation	—	—		—	—		185		—		185
Issuance of warrants for general unsecured claims	—	—		47	—		—		—		—
Cash paid for tax obligations on vested stock awards	—	—		—	—		(1)		—		(1)
Net loss	—	—		—	—		—		(12,670)		(12,670)
Balance at March 31, 2020	35,810	$	36	6,706	$	88,520	$	1,059,437	$	(758,027)	$	389,966
Issuance of stock awards, net of cancellations	55	—		—	—		—		—		—
Stock-based compensation	—	—		—	—		583		—		583
Cash paid for tax obligations on vested stock awards	—	—		—	—		(1)		—		(1)
Net loss	—	—		—	—		—		(215,779)		(215,779)
Balance at June 30, 2020	35,865	$	36	6,706	$	88,520	$	1,060,019	$	(973,806)	$	174,769

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 (Unaudited)

(In thousands)

	Six Months Ended June 30,
	2021		2020
CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss)	$	51,295	$	(228,449)
Adjustments to reconcile net loss to net cash provided by operating activities
Provision for doubtful accounts	21		283
Depreciation, depletion, and amortization	7,667		42,576
Impairment	—		209,754
Debt issuance costs amortization	36		318
(Gain) loss on derivative contracts	—		(12,467)
Cash received on settlement of derivative contracts	—		10,577
(Gain) loss on sale of assets	(19,713)		78
Stock-based compensation	799		749
Other	71		68
Changes in operating assets and liabilities	(6,945)		(10,025)
Net cash provided by (used in) operating activities	33,231		13,462
CASH FLOWS FROM INVESTING ACTIVITIES
Capital expenditures for property, plant and equipment	(4,389)		(6,814)
Acquisition of Assets	(3,545)		—
Purchase of other property and equipment	(59)		—
Proceeds from sale of assets	37,900		1,506
Net cash provided by (used in) investing activities	29,907		(5,308)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from borrowings	—		39,000
Repayments of borrowings	—		(37,500)
Reduction of financing lease liability	(122)		(694)
Debt issuance costs	(81)		—
Proceeds from exercise of stock options	21		—
Cash paid for tax obligations on vested stock awards	(613)		(1)
Net cash provided by (used in) financing activities	(795)		805
NET INCREASE (DECREASE) IN CASH, CASH EQUIVALENTS and RESTRICTED CASH	62,343		8,959
CASH, CASH EQUIVALENTS and RESTRICTED CASH, beginning of year	28,266		5,968
CASH, CASH EQUIVALENTS and RESTRICTED CASH, end of period	$	90,609	$	14,927
Supplemental Disclosure of Cash Flow Information
Cash paid for interest, net of amounts capitalized	$	(106)	$	(812)
Cash received for income taxes	$	—	$	616
Supplemental Disclosure of Noncash Investing and Financing Activities
Purchase of PP&E in accounts payable	$	1,260	$	704
Right-of-use assets obtained in exchange for financing lease obligations	$	363	$	67
Carrying value of properties exchanged	$	—	$	3,890

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. is an oil and natural gas acquisition, development and production company headquartered in Oklahoma City, Oklahoma with a principal focus on developing and producing hydrocarbon resources in the United States.

Principles of Consolidation. The consolidated financial statements include the accounts of the Company and its wholly owned or majority owned subsidiaries, including its proportionate share of the Royalty Trusts. All intercompany accounts and transactions have been eliminated in consolidation.

Interim Financial Statements. The accompanying unaudited condensed consolidated financial statements and notes should be read in conjunction with the audited financial statements and notes contained in the Company’s 2020 Form 10-K. Certain information and 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, the financial statements include all adjustments, which consist of normal recurring adjustments unless otherwise disclosed, necessary to fairly state the Company’s unaudited condensed consolidated financial statements.     

Significant Accounting Policies. The unaudited condensed consolidated financial statements were prepared in accordance with the accounting policies stated in the 2020 Form 10-K as well as the items noted below.

Use of Estimates. The preparation of the unaudited condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period.

The more significant areas requiring the use of assumptions, judgments and estimates include: oil, natural gas and natural gas liquids (“NGL”) reserves; impairment tests of long-lived assets; the carrying value of unproved oil and natural gas properties; depreciation, depletion and amortization; asset retirement obligations; determinations of significant alterations to the full cost pool and related estimates of fair value used to allocate the full cost pool net book value to divested properties, as necessary; valuation allowances for deferred tax assets; income taxes; valuation of derivative instruments; contingencies; and accrued revenue and related receivables. Although management believes the estimates used in the areas noted above are reasonable, actual results could differ significantly from those estimates.

Going Concern Consideration. The accompanying condensed consolidated financial statements are prepared in accordance with GAAP generally accepted accounting principles applicable to a going concern, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business.

Recently Adopted Accounting Pronouncements ASU 2019-12. In December 2019, the FASB issued ASU 2019-12, “Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes,” which simplifies various aspects of accounting for income taxes, including requirements related to hybrid tax regimes, the tax basis step-up in goodwill obtained in a transaction that is not a business combination, separate financial statements of entities not subject to tax, the intraperiod tax allocation exception to the incremental approach, ownership changes in investments, interim-period accounting for enacted changes in tax laws, and year-to-date loss limitation in interim-period tax accounting. The Company adopted this ASU on January 1, 2021 using an applied prospective basis; however, the impact was not material upon adoption.

Recent Accounting Pronouncements Not Yet Adopted ASU 2020-04. In March 2020, FASB issued ASU No. 2020-04, Reference Rate Reform (Topic 848), to facilitate the effects of reference rate reform on financial reporting. This ASU provides optional practical expedients and exceptions for applying GAAP provisions to contracts, hedging relationships, and other transactions that reference London Inter-Bank Offered Rate ("LIBOR"), or other reference rates expected to be discontinued because of reference rate reform, if certain criteria are met. The provisions of this ASU do not apply to contract modifications made and hedging transactions entered into or evaluated after December 31, 2022, except for hedging relationships existing as of December 31, 2022, that an entity has elected certain optional expedients for and that are retained through the end of the hedging relationship. The amendments in ASU 2020-04 are effective, for all entities, as of March 12, 2020 through December 31, 2022. The Company is currently reviewing the potential impact of the upcoming LIBOR reference rate change on its current contracts and will determine the applicable provisions of ASU 2020-04.

8

SANDRIDGE ENERGY, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

(Unaudited)

2. Fair Value Measurements

The Company measures and reports certain assets and liabilities on a fair value basis and has classified and disclosed its fair value measurements using the levels of the fair value hierarchy noted below. The carrying values of cash, restricted cash, accounts receivable, prepaid expenses, certain other current and non-current assets, accounts payable and accrued expenses, and other current liabilities and other long-term obligations included in the unaudited condensed consolidated balance sheets approximated fair value at June 30, 2021 and December 31, 2020. Additionally, the carrying amount of debt associated with borrowings outstanding under the credit facility dated November 30, 2020 ("New Credit Facility") approximates fair value as borrowings bear interest at variable rates. As a result, these financial assets and liabilities are not discussed below.

Level 1	Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities.
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	Measurement based on prices or valuation models that require inputs that are both significant to the fair value measurement and less observable from objective sources (i.e., supported by little or no market activity).

Assets and liabilities that are measured at fair value 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, which may affect the valuation of the fair value of assets and liabilities and their placement within the fair value hierarchy levels. The determination of the fair values, stated below, considers the market for the Company’s financial assets and liabilities, the associated credit risk and other factors. 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 Fair Value Measurements

Commodity Derivative Contracts. As applicable, the fair values of the Company’s oil and natural gas fixed price swaps are based upon inputs that are either readily available in the public market, such as oil and natural gas futures prices, volatility factors and discount rates, or can be corroborated from active markets. Fair value is determined through the use of a discounted cash flow model or option pricing model using the applicable inputs discussed above. The Company applies a weighted average credit default risk rating factor for its counterparties or gives effect to its credit default risk rating, as applicable, in determining the fair value of these derivative contracts. Credit default risk ratings are based on current published credit default swap rates.

Fair Value - Recurring Measurement Basis

There were no open commodity derivative contracts as of June 30, 2021 and December 31, 2020.

Transfers. The Company did not have any transfers between Level 1, Level 2 or Level 3 fair value measurements during the three and six-month periods ended June 30, 2021 and 2020.

3. Derivatives

Commodity Derivatives 

The Company is exposed to commodity price risk, which impacts the predictability of its cash flows from the sale of oil and natural gas. On occasion, the Company has attempted to manage this risk on a portion of its forecasted oil or natural gas production sales through the use of commodity derivative contracts. There were no open commodity derivative contracts as of June 30, 2021 and December 31, 2020.

9

SANDRIDGE ENERGY, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

(Unaudited)

Historically, the Company has not designated any of its derivative contracts as hedges for accounting purposes. All derivative contracts have historically been recorded at fair value with changes in derivative contract fair values recognized as a gain or loss on derivative contracts in the condensed consolidated statements of operations. None of the Company’s previous commodity derivative contracts could be terminated prior to contractual maturity solely as a result of a downgrade in the credit rating of a party to the contract. Commodity derivative contracts were settled on a monthly basis, and the commodity derivative contract valuations were adjusted to the mark-to-market valuation on a quarterly basis.

The following table summarizes derivative activity for the three and six-month periods ended June 30, 2021, and 2020 (in thousands):

	Three Months Ended June 30,				Six Months Ended June 30,
	2021		2020		2021		2020
(Gain) loss on commodity derivative contracts	$	—	$	(2,241)	$	—	$	(12,467)
Cash received on settlements	$	—	$	6,490	$	—	$	10,577

Master Netting Agreements and the Right of Offset. As applicable, The Company historically had master netting agreements with all of its commodity derivative counterparties and has presented its derivative assets and liabilities with the same counterparty on a net basis in the unaudited condensed consolidated balance sheets. As a result of the netting provisions, the Company's maximum amount of loss under commodity derivative transactions due to credit risk is limited to the net amounts due from its counterparties. There were no open commodity derivatives contracts as of June 30, 2021 and December 31, 2020.

Because we did not designate any of our derivative contracts as hedges for accounting purposes, changes in the fair value of our derivative contracts were recognized as gains and losses in current period earnings. As a result, and as applicable, our current period earnings could have been significantly affected by changes in the fair value of our commodity derivative contracts. Changes in fair value were principally measured based on a comparison of future prices to the contract price at the end of the period.

4. Property, Plant and Equipment

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

	June 30, 2021		December 31, 2020
Oil and natural gas properties
Proved	$	1,439,904	$	1,463,950
Unproved	13,365		17,964
Total oil and natural gas properties	1,453,269		1,481,914
Less: accumulated depreciation, depletion and impairment	(1,370,544)		(1,375,692)
Net oil and natural gas properties	82,725		106,222
Land	200		200
Electrical infrastructure	121,819		121,819
Other non-oil and natural gas equipment	1,603		1,563
Buildings and structures	3,603		3,603
Financing leases	319		1,051
Total	127,544		128,236
Less accumulated depreciation and amortization	(27,972)		(25,118)
Other property, plant and equipment, net	99,572		103,118
Total property, plant and equipment, net	$	182,297	$	209,340

See Note 5 for discussion of impairment of property, plant and equipment.

10

SANDRIDGE ENERGY, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

(Unaudited)

5. Impairment

The Company assesses the need to impair its oil and gas properties during its quarterly full cost pool ceiling limitation calculation. The Company analyzes various property, plant and equipment for impairment when certain triggering events occur by comparing the carrying values of the assets to their estimated fair values. The full cost pool ceiling limitation and estimated fair values of midstream and other assets were determined in accordance with the policies discussed in Note 1, as applicable.

Calculation of the full cost ceiling test is based on, among other factors, average prices for the trailing twelve-month period determined by reference to the first-day-of-the-month index prices ("SEC Prices") as adjusted for price differentials and other contractual arrangements. The SEC Prices utilized in the calculation of proved reserves included in the full cost ceiling test at June 30, 2021 were $49.78 per barrel of oil and $2.43 per Mcf of natural gas, before price differential adjustments.

In the three and six-month periods ended June 30, 2021, we did not record a full cost ceiling limitation impairment charge.

The Company recorded a total impairment charge of $201.8 million for the three-month period ended June 30, 2020, which included a full cost ceiling limitation impairment charge of $163.8 million, and an impairment charge of $38.0 million to write down the value of the Company's office headquarters. The Company recorded a total impairment charge of $209.8 million for the six-month period ended June 30, 2020, which included a full cost ceiling limitation impairment charge of $171.8 million, and an impairment charge of $38.0 million to write down the value of the Company's office headquarters.

The June 30, 2020, asset impairment charge of $38.0 million resulted from the write down of the net carrying amount of the office headquarters building assets to their estimated fair value less estimated costs to sell the building. In May 2020, the Company entered into an agreement for the sale of its corporate headquarters building located in Oklahoma City, OK. The building sale closed on August 31, 2020. Prior to the sale of the corporate headquarters building, the Company was required to report the building at its carrying amount, as a result the building was assessed for recoverability and impairment using undiscounted cash flow measures of the consolidated Company as prescribed under ASC 360-10-35, rather than fair value as prescribed under ASC 360-10-45-9.

6. Acquisitions and Divestitures

Overriding Royalty Interest Assets

On April 22, 2021, we acquired all of the overriding royalty interest assets of SandRidge Mississippian Trust I (the “Trust”). The gross purchase price was $4.9 million (net $3.6 million, given our 26.9% ownership of the Trust).

North Park Basin Sale

On February 5, 2021, the Company sold all of its oil and natural gas properties and related assets of the North Park Basin (“NPB”or “North Park”), in Colorado, for a purchase price of $47 million. The sale closed for net proceeds of $39.7 million in cash, which amounts to the purchase price of $47 million net of effective date to close date adjustments. Consequently, the Company allocated a portion of the full cost pool net book value, using the income approach, to the divested oil and gas properties and recognized a reduction of full cost pool assets of $22.0 million and a reduction of $4.6 million to its non-full cost pool assets. As the sale significantly altered the relationship between capitalized costs and proved reserves, the Company recognized a $19.7 million gain related to the assets sold. The gain represents net proceeds of $39.7 million coupled with the release of revenues in suspense of $0.5 million and the relief of asset retirement obligations of $6.1 million offset by the reduction of $26.6 million in oil and gas properties related to NPB.

For the three-months ended June 30, 2021, NPB did not have an impact on our financials due to the sale of the NPB assets.

For the six-months ended June 30, 2021, NPB represented $3.2 million, or 4.7% of the Company's $67.8 million total consolidated Revenues, NPB represented $0.9 million, or 5.4% of the Company's $17.2 million consolidated Lease operating expense, it represented $0.2 million, or 5.3% of the Company's $4.7 million consolidated Production, ad valorem and other taxes and NPB represented 0.1 MMBoe, or 2.0% of the Company's consolidated total production volumes of 3.4 MMBoe.

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(Unaudited)

For the three-months ended June 30, 2020, NPB represented $4.6 million, or 27.8% of the Company's $16.7 million total consolidated Revenues, NPB represented $2.2 million or 25.6% of the Company's $8.7 million consolidated Lease operating expense, it represented $0.3 million, or 16.7% of the Company's $1.9 million consolidated Production, ad valorem and other taxes and NPB represented 0.2 MMBoe, or 10.3% of the Company's consolidated total production volumes of 2.2 MMBoe.

For the six-months ended June 30, 2020, NPB represented $17.4 million, or 30.5% of the Company's $57.0 million total consolidated Revenues, NPB represented $5.8 million or 23.7% of the Company's $24.3 million consolidated Lease operating expense, it represented $1.1 million, or 21.4% of the Company's $5.1 million consolidated Production, ad valorem and other taxes and NPB represented 0.6 MMBoe, or 11.7% of the Company's consolidated total production volumes of 4.7 MMBoe.

7. Accounts Payable and Accrued Expenses

Accounts payable and accrued expenses consist of the following (in thousands):

	June 30, 2021		December 31, 2020
Accounts payable and other accrued expenses	$	19,555	$	23,017
Production payable	15,645		15,367
Payroll and benefits	2,775		5,640
Taxes payable	4,645		6,864
Drilling advances	234		477
Accrued interest	42		61
Total accounts payable and accrued expenses	$	42,896	$	51,426

8. Long-Term Debt

Credit Facility.

Credit Facility. On November 30, 2020 the Company entered into the New Credit Facility of $30.0 million credit facility with a related party and affiliate of Icahn Enterprises and Icahn Agency Services LLC, as administrative agent. As of June 30, 2021 and December 31, 2020, the Company had a $20.0 million term loan outstanding under the New Credit Facility. The New Credit Facility consists of a $10.0 million revolving loan facility and a $20 million term loan facility. There are no scheduled borrowing base redeterminations under the New Credit Facility. At June 30, 2021, the Company had $10.0 million available to be drawn under the revolving loan facility. The New Credit Facility matures on November 30, 2023.

On July 26, 2021, the Company entered into an amendment (the “First Amendment”) to the New Credit Facility. Pursuant to the First Amendment, the Company will be permitted to grant liens securing its obligations under swap contracts with certain counterparties to the extent such swap contracts are permitted under the Credit Agreement and approved by the Company’s board of directors.

The outstanding borrowings under the New Credit Facility bear interest at a rate tied to a utilization ratio of (a) LIBOR plus an applicable margin that varies from 200 to 300 basis points or (b) the base rate plus an applicable margin that varies from 100 basis points to 200 basis points. During the three and six-months ended June 30, 2021, the weighted average interest rate paid for borrowings outstanding under the New Credit Facility was approximately 2.60% and 2.62%, respectively.

The Company has the right to prepay loans under the New Credit Facility at any time without a prepayment penalty, other than customary “breakage” costs with respect to LIBOR loans.

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The New Credit Facility is secured by (i) first-priority mortgages on at least 95% of the PV-9 pricing of all the proved reserves included in the most recently delivered reserve report of the Company, (ii) a first-priority perfected pledge of substantially all of the capital stock owned by each credit party, (iii) a first-priority security interest in the cash, cash equivalents, deposit, securities and other similar accounts, and (iv) a first-priority perfected security interest in substantially all other tangible and intangible assets of the credit parties (including but not limited to as-extracted collateral, accounts receivable, inventory, equipment, general intangibles, investment property, intellectual property, real property and the proceeds of the foregoing).

The New Credit Facility includes events of default and certain customary affirmative and negative covenants. The Company is required maintain certain financial covenants, commencing with the first full quarter ending after the effective date thereof, to maintain (i) a maximum consolidated total net leverage ratio, measured as of the end of any fiscal quarter, of no greater than 3.50 to 1.00 and (ii) a minimum consolidated interest coverage ratio, measured as of the end of any fiscal quarter, of no less than 2.25 to 1.00. As of June 30, 2021, the Company was in compliance with all applicable covenants and had a consolidated total net leverage ratio of (0.15) and consolidated interest coverage ratio of 59.73.

During the three and six-months ended June 30, 2021, the Company paid a related party, an affiliate of Icahn Enterprises, $0.1 million and $0.3 million, respectively of interest expense which is included on the Interest expense, net line item on the Condensed Consolidated Statement of Operations. The total outstanding balance of the New Credit facility is recorded in long-term debt on the Condensed Consolidated Balance Sheet as of June 30, 2021.

9. Commitments and Contingencies

Legal Proceedings. The Company is subject to various legal proceedings and claims arising in the ordinary course of its business. The Company has provided accruals where necessary for contingent liabilities, based on ASC 450, Contingencies, when it has determined that a liability is probable and reasonably estimable. The Company continuously assesses the potential liability related to the Company's pending litigation and revises its estimates when additional information becomes available. Additionally, the Company currently expenses all legal costs as they are incurred.

As previously disclosed in the Company's 2020 Form 10-K, there are certain ongoing Cases (as that term is defined in the Company's 2020 Form 10-K).

In each of the Cases, lead plaintiffs seek to recover unspecified damages, interest, costs and expenses incurred in the litigation on behalf of themselves and class members. Although the claims against the Company in each Case have been discharged pursuant to the Plan, the Company remains a nominal defendant because of a technical connection with the Cases, and is necessary for the court to decide all issues and make a proper judgement. The Company may also be contractually obligated to indemnify two former officers who are defendants and the SandRidge Mississippian Trust I against losses, claims, damages, liabilities and expenses, including reasonable costs of investigation and attorney’s fees and expenses, which it is required to advance, arising out of the Cases, although the Company disputes any such obligations. Such indemnification is not covered by insurance with respect to the Trust. As of October 2020, we have exhausted all remaining insurance coverage for the costs of indemnification and expect no further reimbursements.

In light of the status of the Cases, and the facts, circumstances and legal theories relating thereto, the Company is not able to determine the likelihood of an outcome in either case or provide an estimate of any reasonably possible loss or range of possible loss related thereto. Accordingly, the Company has not established or accrued any liabilities relating to the Cases and believes that the plaintiffs' claims are without merit. However, considering the exhaustion of insurance coverage available to the Company, such losses, if incurred, could be material. The Company intends to continue to vigorously defend against the Cases in its capacity as a nominal defendant.

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(Unaudited)

10. Income Taxes

For each interim reporting period, the Company estimates the effective tax rate expected for the full fiscal year and uses that estimated rate in providing for income taxes on a current year-to-date basis.

Deferred income taxes are provided to reflect the future tax consequences of temporary differences between the tax basis of assets and liabilities and their reported amounts in the financial statements. The Company’s deferred tax assets have been reduced by a valuation allowance due to a determination that it is more likely than not that some or all of the deferred assets will not be realized based on the weight of all available evidence. The Company continues to closely monitor and weigh all available evidence, including both positive and negative, in making its determination whether to maintain a valuation allowance. As a result of the significant weight placed on the Company's cumulative negative earnings position, the Company continued to maintain a full valuation allowance against its net deferred tax asset at June 30, 2021 and December 31, 2020. As a result, the Company had no federal or state income tax expense or benefit for the three and six-month periods ended June 30, 2021 and recorded an insignificant income tax benefit for the year ended December 21, 2020. The benefit is related to previously sequestered alternative minimum tax (AMT) refund amounts released to the Company during 2020. The Company has no remaining AMT credits to be refunded.

Internal Revenue Code (“IRC”) Section 382 addresses company ownership changes and specifically limits the utilization of certain deductions and other tax attributes on an annual basis following an ownership change. As a result of the Chapter 11 reorganization and related transactions, the Company experienced an ownership change within the meaning of IRC Section 382 during 2016 that subjected certain of the Company’s tax attributes, including net operating losses ("NOLs"), to an IRC Section 382 limitation. This limitation has not resulted in cash taxes for any period subsequent to the ownership change. Since the 2016 ownership change, the Company has generated additional NOLs and other tax attributes that are not currently subject to an IRC Section 382 limitation. The Company's ability to use NOLs and other tax attributes to reduce taxable income and income taxes could be materially impacted by a future IRC 382 ownership change. Future transactions involving the Company's stock, including those outside of the Company's control, could cause an IRC 382 ownership change resulting in a limitation on tax attributes currently not limited and a more restrictive limitation on tax attributes currently subject to the previous IRC 382 limitation.

As of June 30, 2021, the Company had approximately $1.6 billion of federal NOL carryforwards, net of NOLs expected to expire unused due to the 2016 IRC Section 382 limitation. Of the $1.6 billion of federal NOL carryforwards, $0.8 billion expire during the years 2025 through 2037, while $0.8 billion do not have an expiration date. Additionally, the Company had federal tax credits in excess of $33.5 million which begin expiring in 2029.

The Company did not have unrecognized tax benefits at June 30, 2021 and December 31, 2020.

The Company’s only taxing jurisdiction is the United States (federal and state). The Company’s tax years 2017 to present remain open for federal examination. Additionally, tax years 2005 through 2016 remain subject to examination for the purpose of determining the amount of federal NOL and other carryforwards. The number of years open for state tax audits varies, depending on the state, but are generally from three to five years.

11. Equity

Common Stock, Performance Share Units, and Stock Options. At June 30, 2021, the Company had approximately 250.0 million shares of common stock authorized, 36.6 million shares of common stock, par value $0.001 per share, issued and outstanding. Further, at June 30, 2021, the Company had approximately 0.1 million shares of unvested restricted stock awards, 1.1 million shares of unvested restricted stock units, 0.1 million stock options outstanding, and an immaterial number of unvested performance share units.

Warrants. The Company has issued approximately 4.9 million Series A warrants and 2.1 million Series B warrants that are exercisable until October 4, 2022 for one share of common stock per warrant at initial prices of $41.34 and $42.03 per share, respectively, subject to adjustments pursuant to the terms of the warrants, to certain holders of general unsecured claims as defined in the Plan. The warrants contain customary anti-dilution adjustments in the event of any stock split, reverse stock split, reclassification, stock dividend or other distributions. 

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(Unaudited)

The Tax Benefits Preservation Plan. On July 1, 2020, the Board declared a dividend distribution of one right (a “Right”) for each outstanding share of Company common stock, par value $0.001 per share to stockholders of record at the close of business on July 13, 2020. Each Right entitles its holder, under certain circumstances, to purchase from the Company one one-thousandth of a share of Series A Junior Participating Preferred Stock of the Company, par value $0.001 per share, at an exercise price of $5.00 per Right, subject to adjustment. The description and terms of the Rights are set forth in the tax benefits preservation plan, dated as of July 1, 2020, between the Company and American Stock Transfer & Trust Company, LLC, as rights agent (the “Tax Benefits Preservation Plan”).

The Company adopted the Tax Benefits Preservation Plan, as amended on March 16, 2021, in order to protect shareholder value against a possible limitation on the Company’s ability to use its tax net operating losses (the “NOLs”) and certain other tax benefits to reduce potential future U.S. federal income tax obligations. The NOLs are a valuable to the Company, which may inure to the benefit of the Company and its stockholders. However, if the Company experiences an “ownership change,” as defined in Section 382 of the Internal Revenue Code of 1986, as amended, its ability to fully utilize the NOLs and certain other tax benefits will be substantially limited and the timing of the usage of the NOLs and such other benefits could be substantially delayed, which could significantly impair the value of those assets. Generally, an “ownership change” occurs if the percentage of the Company’s stock owned by one or more of its “five-percent shareholders” (as such term is defined in Section 382 of the Code) increases by more than 50 percentage points over the lowest percentage of stock owned by such stockholder or stockholders at any time over a three-year period. The Tax Benefits Preservation Plan is intended to prevent against such an “ownership change” by deterring any person or group from acquiring beneficial ownership of 4.9% or more of the Company’s securities.

Subject to certain exceptions, the Rights become exercisable and trade separately from Common Stock only upon the “Distribution Time,” which occurs upon the earlier of:

•the close of business on the tenth (10th) day after the “Stock Acquisition Date,” which is (a) the first date of public announcement that a person or group of affiliated or associated persons (with certain exceptions, an “Acquiring Person”) has acquired, or obtained the right or obligation to acquire, beneficial ownership of 4.9% or more of the outstanding shares of Common Stock (with certain exceptions) or (b) such other date, as determined by the Board, on which a person or group has become an Acquiring Person, or

•the close of business on the tenth (10th) business day (or later date as may be determined by the Board prior to such time as any person or group becomes an Acquiring Person) following the commencement of a tender offer or exchange offer which, if consummated, would result in a person or group becoming an Acquiring Person.

Any existing stockholder or group that beneficially owns 4.9% or more of Common Stock has been grandfathered at its current ownership level, but the Rights will not be exercisable if, at any time after the announcement of the Tax Benefits Preservation Plan, such stockholder or group increases its ownership of Common Stock by one share of Common Stock. Certain synthetic interests in securities created by derivative positions, whether or not such interests are considered to be ownership of the underlying Common Stock or are reportable for purposes of Regulation 13D of the Securities Exchange Act of 1934, as amended, are treated as beneficial ownership of the number of shares of Common Stock equivalent to the economic exposure created by the derivative position, to the extent actual shares of Common Stock are directly or indirectly held by counterparties to the derivatives contracts.

Until the earlier of the Distribution Time and the Expiration Time (as defined herein), the surrender for transfer of any shares of Common Stock will also constitute the transfer of the Rights associated with those shares. As soon as practicable after the Distribution Time, separate rights certificates will be mailed to holders of record of Common Stock as of the close of business on the Distribution Time. From and after the Distribution Time, the separate rights certificates alone will represent the Rights. Except as otherwise provided in the Tax Benefits Preservation Plan, only shares of Common Stock issued prior to the Distribution Time will be issued with Rights. The Rights are not exercisable until the Distribution Time.

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

(Unaudited)

The Tax Benefits Preservation Plan will expire on the earliest of: (i) the close of business on the day following the certification of the voting results of the Company’s 2021 annual meeting of stockholders or any prior special meeting of stockholders, if at such stockholder meeting a proposal to approve this Agreement has not been passed by the affirmative vote of the holders of at least majority of the shares of Common Stock entitled to vote at the 2021 annual meeting of stockholders or any other meeting of the stockholders of the Company duly held prior to such meeting, (ii) the time at which the Rights are redeemed pursuant to the Tax Benefits Preservation Plan, (iii) the time at which the Rights are exchanged pursuant to the Tax Benefits Preservation Plan, (iv) the closing of any merger or other acquisition transaction involving the Company pursuant to an agreement of the type described in Section 13(f) of the Tax Benefits Preservation Plan, at which time, the Rights are terminated, (v) the time at which the Board determines that the NOLs are utilized in all material respects or that an ownership change under Section 382 would not adversely impact in any material respect the time period in which the Company could use the NOLs, or materially impair the amount of the NOLs that could be used by the Company in any particular time period, for applicable tax purposes and (vi) the Close of Business on July 1, 2023 (the earliest of (i), (ii), (iii), (iv), (v), and (vi) being herein referred to as the “Expiration Time”).

In the event that any person or group (other than certain exempt persons) becomes an Acquiring Person, each holder of a Right (other than any Acquiring Person and certain related parties, whose Rights automatically become null and void) will have the right to receive, upon exercise, shares of Common Stock having a value equal to two times the exercise price of the Right.

In the event that, at any time following the Stock Acquisition Date, any of the following occurs:

•the Company consolidates with, or merges with and into, any other entity, and the Company is not the continuing or surviving entity;

•any entity engages in a share exchange with or consolidates with, or merges with or into, the Company, and the Company is the continuing or surviving entity and, in connection with such share exchange, consolidation or merger, all or part of the outstanding shares of Common Stock are changed into or exchanged for stock or other securities of any other entity or cash or any other property; or

•the Company sells or otherwise transfers, in one transaction or a series of related transactions, fifty percent (50%) or more of the Company’s assets, cash flow or earning power,

•each holder of a Right (except Rights which previously have been voided as described above) will have the right to receive, upon exercise, common stock of the acquiring company having a value equal to two times the exercise price of the Right.

12. Revenues

The following table disaggregates the Company’s revenue by source for the three and six-month periods ended June 30, 2021 and 2020:

	Three Months Ended June 30,				Six Months Ended June 30,
	2021		2020		2021		2020
	(In thousands)
Oil	$	14,666	$	11,554	$	30,214	$	40,208
NGL	10,625		1,591		19,481		7,525
Natural gas	8,905		3,303		18,124		8,854
Other	—		207		—		397
Total revenues	$	34,196	$	16,655	$	67,819	$	56,984

Oil, natural gas and NGL revenues. A majority of the Company’s revenues come from sales of oil, natural gas and NGLs are recorded at a point in time when control of the oil, natural gas and NGL production passes to the customer at the inlet of the processing plant or pipeline, or the delivery point for onloading to a delivery truck. As the Company’s customers obtain control of the production prior to selling it to other end customers, the Company presents its revenues on a net basis, rather than on a gross basis.

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(Unaudited)

Pricing for the Company’s oil, natural gas and NGL contracts is variable and is based on either an index price, net of deductions, or a percentage of the sales price obtained by the customer, which is also based on index prices. The transaction price is allocated on a pro-rata basis to each unit of oil, natural gas or NGL sold based on the terms of the contract. Oil, natural gas and NGL revenues are also recorded net of royalties, discounts and allowances, and transportation costs, as applicable. Taxes assessed by governmental authorities on oil, natural gas and NGL sales are presented separately from revenues and are included in production, ad valorem, and other tax expense in the consolidated statements of operations.

Revenues Receivable. The Company records an asset in accounts receivable, net on its consolidated balance sheet for revenues receivable from contracts with customers at the end of each period. Pricing for revenues receivable is estimated using current month crude oil, natural gas and NGL prices, net of deductions. Revenues receivable are typically collected the month after the Company delivers the related production to its customers. As of June 30, 2021, and December 31, 2020, the Company had revenues receivable of $14.5 million and $12.8 million, respectively, and did not record any bad debt expense on revenues receivable during the three and six-month periods ended June 30, 2021 and 2020.

13. Employee Termination Benefits

During the three month period ended June 30, 2021, no employees received termination benefits. Certain employees received termination benefits including cash severance and accelerated share-based compensation upon separation of service from the Company as a result of the sale of North Park assets and other employee terminations during the six-month period ended June 30, 2021 and as a result of a reduction in workforce during the three and six-month periods ended June 30, 2020. The following tables presents a summary of employee termination benefits for the three and six-month periods ended June 30, 2021 and 2020 (in thousands):

	Cash		Share-Based Compensation (1)		Number of Shares	Total Employee Termination Benefits
Three Months Ended June 30, 2021
Executive Employee Termination Benefits	$	—	$	—	—	$	—
Other Employee Termination Benefits	—		—		—	—
	$	—	$	—	—	$	—
Three Months Ended June 30, 2020
Executive Employee Termination Benefits	$	1	$	—	—	$	1
Other Employee Termination Benefits	1,992		—		—	1,992
	$	1,993	$	—	—	$	1,993
Six Months Ended June 30, 2021
Executive Employee Termination Benefits	$	—	$	—	—	$	—
Other Employee Termination Benefits	32		17		—	49
	$	32	$	17	—	$	49
Six Months Ended June 30, 2020
Executive Employee Termination Benefits	$	4	$	—	—	$	4
Other Employee Termination Benefits	5,203		40		4	5,243
	$	5,207	$	40	4	$	5,247

____________________

(1)    Share-based compensation recognized in connection with the accelerated vesting of restricted stock awards due to the sale of the North Park assets for the six-month period ended June 30, 2021 and as a result of the reduction in workforce for the three and six-month periods ended June 30, 2020. The remaining unrecognized compensation expense associated with these awards at the date of termination was recorded as employee termination benefits. The unrecognized compensation expense was calculated using the grant date fair value for restricted stock awards. One share of the Company’s common stock was issued per restricted stock award.

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(Unaudited)

14. Earnings (Loss) per Share

The following table summarizes the calculation of weighted average common shares outstanding used in the computation of diluted earnings (loss) per share:

	Earnings (Loss)		Weighted Average Shares	Earnings (Loss) Per Share
	(In thousands, except per share amounts)
Three Months Ended June 30, 2021
Basic earnings per share	$	16,252	36,416	$	0.45
Effect of dilutive securities
Restricted stock units	—		855
Restricted stock awards	—		36
Performance share units (1)	—		—
Warrants	—		—
Stock options	—		38
Diluted earnings share (2)	$	16,252	37,345	$	0.44
Three Months Ended June 30, 2020
Basic loss per share	$	(215,779)	35,611	$	(6.06)
Effect of dilutive securities
Restricted stock awards	—		—
Performance share units	—		—
Warrants	—		—
Stock options	—		—
Diluted loss per share (3)	$	(215,779)	35,611	$	(6.06)
Six Months Ended June 30, 2021
Basic earnings per share	$	51,295	36,187	$	1.42
Effect of dilutive securities
Restricted stock units	—		1,019
Restricted stock awards	—		39
Performance share units (1)	—		—
Warrants	—		—
Stock options	—		38
Diluted earnings per share (2)	$	51,295	37,283	$	1.38
Six Months Ended June 30, 2020
Basic loss per share	$	(228,449)	35,581	$	(6.42)
Effect of dilutive securities
Restricted stock awards	—		—
Performance share units	—		—
Warrants
Stock options	—		—
Diluted loss per share (3)	$	(228,449)	35,581	$	(6.42)

____________________

(1)The performance share unit awards are contingently issuable and are considered in the calculation of diluted earnings per share. The Company assesses the number of awards that would be issuable, if any, under the terms of the agreement if the end of the reporting period were the end of the contingency period.

(2)The incremental shares of potentially dilutive restricted stock units, restricted stock awards and stock options were included for the three and six-month periods ended June 30, 2021 as their effect was dilutive under the treasury stock method.

(3)No incremental shares of potentially dilutive restricted stock awards, performance share units, warrants or stock options were included for the three and six-month periods ended June 30, 2020, as their effect was antidilutive under the treasury stock method.

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(Unaudited)

15. Subsequent Events

Share Repurchase Program

In August 2021, the Company's Board of Directors (the “Board”) approved the initiation of a share repurchase program (the "Program") authorizing the Company to purchase up to an aggregate of $25.0 million of the Company’s common stock beginning as early as August 16, 2021. The Program is in accordance with Rule 10b-18 of the Exchange Act. Subject to applicable rules and regulations, repurchases under the Program can be made from time to time in open markets at the Company's discretion and in compliance with safe harbor provisions, or in privately negotiated transactions. The Program does not require any specific number of shares to be acquired, and can be modified or discontinued by the Board at any time.

First Amendment to Credit Agreement

On July 26, 2021, the Company entered into an amendment (the “First Amendment”) to the New Credit Facility. Pursuant to the First Amendment, the Company will be permitted to grant liens securing its obligations under swap contracts with certain counterparties to the extent such swap contracts are permitted under the Credit Agreement and approved by our board of directors.

Appointment of Chief Executive Officer

In connection with the resignation of the Company's previous Chief Executive Officer ("CEO"), the Board appointed Grayson Pranin as President and CEO effective July 16, 2021 and in addition will maintain his role as Chief Operating Officer. Mr. Pranin’s compensation will be determined at a later time. Mr. Pranin, age 41, has held the role of Senior Vice President and Chief Operating Officer since March 3, 2021. Prior to that Mr. Pranin most recently served as the Company’s Vice President of Engineering and Reservoir beginning June 1, 2020, and has served in various engineering, operational and leadership roles with the Company since December 2011. Prior to joining the Company, Mr. Pranin served in various engineering and operational roles for Pioneer Natural Resources from June 2010 to November 2011. Mr. Pranin has served his country as a non-commissioned and commissioned officer in the U.S. Army Engineering Corps. Mr. Pranin received his Bachelor of Science from the University of Nevada at Reno.

Resignation of Chief Executive Officer and Director

On July 9, 2021, Carl F. Giesler, Jr. submitted his resignation from his positions as CEO, President and as a member of the Board of the Company, effective July 16, 2021 in order to pursue another career opportunity. Mr. Giesler did not resign as a result of any disagreement with the Company on any matter relating to the Company’s operations, policies or practices.

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Table of Contents

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 the accompanying unaudited condensed consolidated financial statements and the accompanying notes included in this Quarterly Report, as well as our audited consolidated financial statements and the accompanying notes included in the 2020 Form 10-K. Our discussion and analysis includes the following subjects:

•Overview;

•Consolidated Results of Operations;

•Liquidity and Capital Resources; and

•Critical Accounting Policies and Estimates.

The financial information with respect to the three and six-month periods ended June 30, 2021, and 2020, discussed below, is unaudited. In the opinion of management, this information contains all adjustments, which consist only of normal recurring adjustments unless otherwise disclosed, necessary to state fairly the accompanying 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

We are an independent oil and natural gas company with a principal focus on acquisition, development and production activities in the U.S. Mid-Continent. Prior to February 5, 2021, we held assets in the North Park Basin of Colorado, which have been sold in their entirety.

The chart below shows production by product for the three and six-month periods ended June 30, 2021 and 2020:

(1)For the three-months ended June 30, 2021, there was no NPB oil production as a result of the sale. For the six-months ended June 30, 2021, North Park Basin had 67 MBoe of oil production.

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(2)For the three and six-months ended June 30, 2020, North Park Basin had 222 MBoe and 550 MBoe, respectively of oil production.

Total production for the three-month periods ended June 30, 2021 and June 30, 2020 were comprised of approximately 13.1% oil, 51.5% natural gas and 35.4% NGLs compared to 24.2% oil, 44.1% natural gas and 31.7% NGLs, respectively.

Total production for the six-month periods ended June 30, 2021 and June 30, 2020 were comprised of approximately 15.3% oil, 51.1% natural gas and 33.6% NGLs compared to 25.5% oil, 43.7% natural gas and 30.8% NGLs, respectively.

Mid-Continent total production for the three and six-month periods ended June 30, 2021 and 2020 was comprised of the following:

	Three Months Ended June 30,				Six Months Ended June 30,
	2021		2020		2021		2020
Oil	13.1	%	15.4	%	13.5	%	15.6	%
NGL	35.4	%	35.3	%	34.3	%	34.8	%
Natural gas	51.5	%	49.3	%	52.2	%	49.6	%
Total	100.0	%	100.0	%	100.0	%	100.0	%

Recent Events

•In August 2021, our Board of Directors (the “Board”) approved the initiation of a share repurchase program (the "Program") authorizing us to purchase up to an aggregate of $25.0 million of our common stock beginning as early as August 16, 2021. The Program is in accordance with Rule 10b-18 of the Exchange Act. Subject to applicable rules and regulations, repurchases under the Program can be made from time to time in open markets at our discretion and in compliance with safe harbor provisions, or in privately negotiated transactions. The Program does not require any specific number of shares to be acquired, and can be modified or discontinued by the Board at any time.

•On July 26, 2021, we entered into an amendment (the “First Amendment”) to the New Credit Facility. Pursuant to the First Amendment, we will be permitted to grant liens securing its obligations under swap contracts with certain counterparties to the extent such swap contracts are permitted under the Credit Agreement and approved by our board of directors.

•In connection with the resignation of our previous Chief Executive Officer ("CEO"), the Board appointed Grayson Pranin as President and CEO effective July 16, 2021 and in addition will maintain his role as Chief Operating Officer. Mr. Pranin’s compensation will be determined at a later time. Mr. Pranin, age 41, has held the role of Senior Vice President and Chief Operating Officer since March 3, 2021.

•On July 9, 2021, Carl F. Giesler, Jr. submitted his resignation from his positions as CEO, President and as a member of the Board of the Company, effective July 16, 2021 in order to pursue another career opportunity. Mr. Giesler did not resign as a result of any disagreement with the Company on any matter relating to the Company’s operations, policies or practices.

•On April 22, 2021, we announced the acquisition of all the overriding royalty interest assets of SandRidge Mississippian Trust I (the “Trust”). The gross purchase price is $4.9 million (net $3.6 million, given our 26.9% ownership of the Trust).

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•During the second quarter of 2021, we began returning wells to production that were previously curtailed due to the commodity price downturn in the first half of 2020 and, in many cases, improving their production potential through modest capital improvements. Focused efforts to improve operating costs, along with commodity prices rebounding from their 2020 lows, have bolstered the economics of these well reactivation projects. High rates of return and low execution risk support our belief that these projects represent an efficient use of capital. As of June 30, 2021, we returned 49 wells to production, resulting in average incremental production of 0.8 MBoed in the first half of 2021. Approximately 30 of these wells required workovers to return to service and accounted for capital expenditures of $0.6 million and $0.8 million of expense workovers. The balance of the wells required little to no expenditures to reactivate.

•Subsequent to the sale of NPB assets in the first quarter of 2021, we are no longer engaged in the routine flaring of produced natural gas.

Outlook

Throughout 2021, we have focused and will continue to focus on maximizing free cash flow in 2021 through a combination of cost control measures and the continued exercise of financial discipline and prudent capital allocation, which includes limiting our capital projects to projects we believe will provide high rates of return in the current commodity price environment. As a result, our planned capital expenditures for 2021 will likely be of similar magnitude, but potentially an increase to 2020 levels. Given this expected level of capital expenditures, our oil, natural gas and NGL production will likely decline in 2021. However, wells brought back online during the period, as well as potential future well reactivations may partially stem the natural decline of our base production. We may consider further expanding our capital program after assessing all factors, including commodity prices. We will also continue our pursuit of acquisitions and business combinations which provide high margin properties with attractive returns at current commodity prices.

The COVID-19 pandemic reduced global economic activity and negatively impacted energy demand during the previous twelve months. Demand for oil and natural gas is slowly returning to pre-pandemic levels as COVID-19 vaccination rates and economic activity have increased. However, the spread of COVID-19 variants and the effectiveness of the vaccines against these variants are significant risk factors to a full and sustained recovery. If the vaccines currently available are not effective against COVID-19 or its other variants, we will have to continue to rely on mobility and activity restrictions to mitigate the spread, which will lead to a longer, more drawn-out return in demand for certain products.

Additionally, we have implemented several additional initiatives to maximize free cash flow, our liquidity position and, ultimately realize greater shareholder value. These initiatives included personnel and non-personnel cost reductions, along with the sale of our headquarters during 2020. Prior to February 5, 2021, we held assets in the North Park Basin, which have been sold in their entirety.

Consolidated Results of Operations

The majority of our consolidated revenues and cash flow are generated from the production and sale of oil, natural gas and NGLs. Our revenues, profitability and future growth depend substantially on prevailing prices received for our production, the quantity of oil, natural gas and NGLs we produce, and our ability to find and economically develop and produce our reserves. Prices for oil, natural gas and NGLs fluctuate widely and are difficult to predict. To provide information on the general trend in pricing, the average New York Mercantile Exchange "NYMEX" prices for oil and natural gas are shown in the table below:

    

	Three month periods ended
	June 30, 2021		March 31, 2021		December 31, 2020		September 30, 2020
NYMEX Oil (per Bbl)	$	66.18	$	58.09	$	42.58	$	40.92
NYMEX Natural gas (per MMBtu)	$	2.98	$	2.72	$	2.76	$	2.12

In order to reduce our exposure to price fluctuations, we have historically entered into commodity derivative contracts for a portion of our anticipated future oil and natural gas production as discussed in “Item 3. Quantitative and Qualitative Disclosures About Market Risk.” As of June 30, 2021, we had no open commodity derivative contracts and there was no commodity derivative activity during the three and six-month periods ended June 30, 2021.

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Revenues

Consolidated revenues for the three and six-month periods ended June 30, 2021, and 2020 are presented in the table below (in thousands):

	Three Months Ended June 30,				Six Months Ended June 30,
	2021		2020		2021		2020
Oil	$	14,666	$	11,554	$	30,214	$	40,208
NGL	10,625		1,591		19,481		7,525
Natural gas	8,905		3,303		18,124		8,854
Other	—		207		—		397
Total revenues (1)	$	34,196	$	16,655	$	67,819	$	56,984

Oil, Natural Gas and NGL Production and Pricing

Our production and pricing information for the three and six-month periods ended June 30, 2021, and 2020 is shown in the table below:

	Three Months Ended June 30,				Six Months Ended June 30,
	2021		2020		2021		2020
Production data
Oil (MBbls)	227		520		515		1,202
NGL (MBbls)	613		681		1,134		1,451
Natural gas (MMcf)	5,356		5,697		10,349		12,391
Total volumes (MBoe)	1,733		2,151		3,374		4,718
Average daily total volumes (MBoe/d)	19.0		23.6		18.6		25.9
Average prices—as reported (1)
Oil (per Bbl)	$	64.73	$	22.22	$	58.70	$	33.45
NGL (per Bbl)	$	17.33	$	2.34	$	17.18	$	5.19
Natural gas (per Mcf)	$	1.66	$	0.58	$	1.75	$	0.71
Total (per Boe)	$	19.74	$	7.65	$	20.10	$	11.99
Average prices—including impact of derivative contract settlements
Oil (per Bbl)	$	64.73	$	33.47	$	58.70	$	41.72
NGL (per Bbl)	$	17.33	$	2.34	$	17.18	$	5.19
Natural gas (per Mcf)	$	1.66	$	0.69	$	1.75	$	0.77
Total (per Boe)	$	19.74	$	10.67	$	20.10	$	14.24

__________________

(1)Prices represent actual average sales prices for the periods presented and do not include effects of derivatives.

The table below presents production by area of operation for the three and six-month periods ended June 30, 2021, and 2020:

	Three Months Ended June 30,						Six Months Ended June 30,
	2021			2020			2021			2020
	Production (MBoe)	% of Total		Production (MBoe)	% of Total		Production (MBoe)	% of Total		Production (MBoe)	% of Total
Mid-Continent	1,733	100.0	%	1,929	89.7	%	3,307	98.0	%	4,168	88.3	%
North Park Basin	—	—	%	222	10.3	%	67	2.0	%	550	11.7	%
Total	1,733	100.0	%	2,151	100.0	%	3,374	100.0	%	4,718	100.0	%

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Variances in oil, natural gas and NGL revenues attributable to changes in the average prices received for our production and total production volumes sold for the three and six-month periods ended June 30, 2021, and 2020 are shown in the table below (in thousands):

	Three Months Ended June 30, 2021		Six Months Ended June 30, 2021
2020 oil, natural gas and NGL revenues	$	16,448	$	56,587
Change due to production volumes	(8,271)		(27,015)
Change due to average prices	26,019		38,247
2021 oil, natural gas and NGL revenues	$	34,196	$	67,819

Revenues from oil, natural gas and NGL sales increased $17.7 million or 107.9% for three-months ended June 30, 2021 as compared to the three-months ended June 30, 2020. Revenues from oil, natural gas and NGL sales increased $11.2 million or 19.8% for the six months ended June 30, 2021 as compared to the six months ended June 30, 2020. Revenue for the three and six months ended has increased primarily due to increased oil, natural gas and NGL realized prices primarily as a result of increased economic activity and recovery from the COVID-19 pandemic and related increase in energy demand, in addition to a contraction of differentials on realized commodity prices. Further, natural gas revenue increased due to higher realized prices as a result of growth in demand outpacing supply. These increases were partially offset by an overall decline in production due to the natural declines in our existing producing wells and divestiture of the NPB properties, partially stemmed by the reactivation of wells.

Mid-Continent and North Park revenues for the three and six-month periods ended June 30, 2021, and 2020 consisted of the following (in thousands):

	Three Months Ended June 30,								Six Months Ended June 30,
	2021				2020				2021				2020
	$		% of Total		$		% of Total		$		% of Total		$		% of Total
Mid-Continent	$	34,196	100.0	%	$	11,821	71.9	%	$	64,649	95.3	%	$	39,201	69.3	%
North Park	$	—	—	%	$	4,627	28.1	%	$	3,170	4.7	%	$	17,386	30.7	%

See "Item 1A—Risk Factors" included in our 2020 Form 10-K for additional discussion of the potential impact these events may have on our future revenues.

Operating Expenses

Operating expenses for the three and six-month periods ended June 30, 2021, and 2020 consisted of the following (in thousands):    

	Three Months Ended June 30,						Six Months Ended June 30,
	2021			2020			2021			2020
Lease operating expenses	$	9,232		$	8,698		$	17,186		$	24,340
Production, ad valorem, and other taxes	2,534			1,854			4,710			5,053
Depreciation and depletion—oil and natural gas	2,193			13,348			4,698			38,203
Depreciation and amortization—other	1,475			1,739			2,969			4,373
Total operating expenses	$	15,434		$	25,639		$	29,563		$	71,969
Lease operating expenses ($/Boe)	$	5.33		$	4.04		$	5.09		$	5.16
Production, ad valorem, and other taxes ($/Boe)	$	1.46		$	0.86		$	1.40		$	1.07
Depreciation and depletion—oil and natural gas ($/Boe)	$	1.27		$	6.21		$	1.39		$	8.10
Production, ad valorem, and other taxes (% of oil, natural gas, and NGL revenue)	7.4		%	11.3		%	6.9		%	8.9		%

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North Park Lease operating expenses and Production, ad valorem, and other taxes for the three and six-month periods ended June 30, 2021, and 2020 consisted of the following (in thousands):

	Three Months Ended June 30,								Six Months Ended June 30,
	2021				2020				2021				2020
	$		% of Total		$		% of Total		$		% of Total		$		% of Total
Lease operating expense	$	—	—	%	$	2,225	25.6	%	$	921	5.4	%	$	5,774	23.7	%
Production, ad valorem and other taxes	$	—	—	%	$	309	16.7	%	$	249	5.3	%	$	1,080	21.4	%

Lease operating expenses increased by $0.5 million or $1.28/Boe for the three-months ended June 30, 2021, as compared to the three months ended June 30, 2020. The increase was the result of reactivating wells that are now considered economic due to increased commodity prices. Lease operating expenses decreased by $7.2 million or $0.06/Boe for the six months ended June 30, 2021, as compared to the six months ended June 30, 2020. These decreases primarily resulted from field personnel reductions in force, the sale of NPB and other cost reduction efforts.

Production, ad valorem, and other taxes for the three months ended June 30, 2021 have increased primarily due to increases in revenues. Further, they have decreased as a percentage of oil, natural gas, and NGL revenue for the three months ended June 30, 2021 as compared to the same period in 2020, primarily due to ad valorem taxes remaining flat and increased revenue. Production, ad valorem, and other taxes for the six months ended June 30, 2021 have decreased primarily due to declining production as discussed above, partially offset by higher commodity prices. Further, they have decreased as a percentage of oil, natural gas, and NGL revenue for the six months ended June 30, 2021 as compared to the same period in 2020, primarily due to decreases in production taxes as a result of tax credits and deductions.

The average depreciation and depletion rate for our oil and natural gas properties for the three months ended June 30, 2021 decreased by $4.94/Boe from the three months ended June 30, 2020. The average depreciation and depletion rate for our oil and natural gas properties for the six months ended June 30, 2021 decreased by $6.71/Boe from the six months ended June 30, 2020. These decreases are primarily due to the sale of the North Park Basin properties and full cost ceiling test impairments recorded during 2020, which lowered the net cost basis of our oil and gas properties significantly.

Impairment

We did not record a full cost ceiling limitation impairment during the three and six-months ended June 30, 2021. In the three-month period ended June 30, 2020, we recorded a total impairment charge of $201.8 million, which included a full cost ceiling limitation impairment charge of $163.8 million, and an impairment charge of $38.0 million to write down the value of our office headquarters to its estimated fair value less estimated costs to sell the building. The ceiling limitation impairment charges recorded in the three and six-month periods ended June 30, 2020 resulted from various factors including a decrease in the trailing twelve-month weighted average natural gas price in 2020.

Calculation of the full cost ceiling test is based on, among other factors, trailing twelve-month SEC Prices as adjusted for price differentials and other contractual arrangements. The SEC Prices utilized in the calculation of proved reserves included in the full cost ceiling test at June 30, 2021 were $49.78 per barrel of oil and $2.43 per Mcf of natural gas, before price differential adjustments.

Based on the SEC Prices over the eleven months ended August 1, 2021, as well as one month of NYMEX strip pricing for September of 2021 as of August 5 2021 we anticipate the SEC Prices utilized in the June 30, 2021 full cost ceiling test may be $57.70 per barrel of oil and $2.93 per Mcf of natural gas, (the "estimated third quarter prices"). Applying these estimated third quarter prices, and holding all other inputs constant to those used in the calculation of our June 30, 2021 ceiling test, we expect that no full cost ceiling limitation impairment is indicated for the third quarter of 2021.

Any actual full cost ceiling limitation impairment recognized in future quarters may fluctuate significantly from projected amounts based on the outcome of numerous other factors such as declines in the actual trailing twelve-month SEC Prices, lower NGL pricing, changes in estimated future development costs and operating expenses, and other adjustments to our levels of proved reserves. Any such ceiling test impairments in 2021 could be material to our net earnings.

Full cost pool impairments have no impact to our cash flow or liquidity.

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Other Operating Expenses

Other operating expenses for the three and six-month periods ended June 30, 2021, and 2020 consisted of the following (in thousands):

	Three Months Ended June 30,				Six Months Ended June 30,
	2021		2020		2021		2020
General and administrative	$	2,522	$	4,314	$	4,612	$	9,797
Restructuring expenses	256		444		2,310		444
Employee termination benefits	—		1,993		49		5,247
(Gain) loss on derivative contracts	—		(2,241)		—		(12,467)
(Gain) loss on sale of assets	—		(42)		(19,713)		78
Other operating (income) expense	(65)		150		(113)		307
Total non-operating expenses	$	2,713	$	4,618	$	(12,855)	$	3,406

General and administrative expenses decreased by $1.8 million for the three months ended June 30, 2021, compared to the same period in 2020. General and administrative expenses decreased by $5.2 million for the six months ended June 30, 2021, compared to the same period in 2020. These decreases resulted primarily from a reduction in compensation related costs after completing reductions in force during 2020, significant reductions in information technology and software costs and overhead related to our previously held corporate headquarters building and other cost cutting efforts. Part of the decrease is also due to reductions in professional costs such as legal expenses, audit fees and consulting services. General and administrative expenses for the first six months of 2021 were impacted by a refund of a $0.4 million legal retainer related to prior periods.

Restructuring expenses represent fees and costs associated with the 2016 bankruptcy and exit from North Park Basin in Colorado. Restructuring expenses included payments of $1.3 million to settle general unsecured claims related to our 2016 bankruptcy during the six-month period ended June 30, 2021.

Employee termination benefits for the three and six-month periods ended June 30, 2021 and 2020 include cash and share-based severance costs incurred for the reduction in force, sale of NPB and other employee terminations in the relevant periods. See “Note 13 - Employee Termination Benefits” in the accompanying unaudited condensed consolidated financial statements for additional discussion of these expenses.

The following table summarizes derivative activity for the three and six-month periods ended June 30, 2021, and 2020 (in thousands):

	Three Months Ended June 30,				Six Months Ended June 30,
	2021		2020		2021		2020
(Gain) loss on commodity derivative contracts	$	—	$	(2,241)	$	—	$	(12,467)
Cash received on settlements	$	—	$	6,490	$	—	$	10,577

There were no open commodity derivative contracts during the three and six-months periods ended June 30, 2021. As applicable, our derivative contracts were not designated as accounting hedges and, as a result, changes in their fair values were recorded each quarter as a component of operating expenses. Management has historically viewed the settlement of commodity derivative contracts at contractual maturity as adjustments to the price received for oil and natural gas production to determine “effective prices.” In general, cash is received on settlement of contracts due to lower oil and natural gas prices at the time of settlement compared to the contract price for our commodity derivative contracts, and cash is paid on settlement of contracts due to higher oil and natural gas prices at the time of settlement compared to the contract price for our commodity derivative contracts. See further discussion of derivative contracts in “Item 3. Quantitative and Qualitative Disclosures about Market Risk” included in Part I of this Quarterly Report.

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Other Income (Expense)

Our other income (expense) for the three and six-month periods ended June 30, 2021, and 2020 are presented in the table below (in thousands):

	Three Months Ended June 30,				Six Months Ended June 30,
	2021		2020		2021		2020
Other income (expense)
Interest expense, net	$	(84)	$	(447)	$	(131)	$	(1,084)
Other income (expense), net	287		58		315		134
Total other income (expense)	$	203	$	(389)	$	184	$	(950)

Interest expense incurred during the three and six-month periods ended June 30, 2021 is primarily comprised of interest paid on the New Credit Facility. Interest expense incurred during the three and six-month periods ended June 30, 2020 is primarily comprised of interest and fees paid on the prior credit facility that was terminated on November 30, 2020. Interest expense is net of amounts capitalized.

Liquidity and Capital Resources

As of June 30, 2021, we had cash and cash equivalents, excluding restricted cash, of $88.3 million. Additionally, we had a $20.0 million term loan outstanding and $10.0 million available under our $30.0 million New Credit Facility, which matures on November 30, 2023. See "Note 8—Long-Term Debt" to the accompanying condensed consolidated financial statements in Item 1 of this Quarterly Report. As of August 6, 2021, we had approximately $104.9 million of cash on hand, including restricted cash, $20.0 million outstanding under our term loan facility and no balance outstanding under the $10.0 million revolving loan facility. For the next twelve months, we expect to have ample liquidity with amounts available to be drawn on our New Credit Facility, cash on hand, and cash from operations.

On July 26, 2021, we entered into the First Amendment to the New Credit Facility. Pursuant to the First Amendment, we will be permitted to grant liens securing our obligations under swap contracts with certain counterparties to the extent such swap contracts are permitted under the Credit Agreement and approved by our board of directors.

In August, 2021, our Board approved the initiation of a share repurchase program authorizing us to purchase up to an aggregate of $25.0 million of our Company’s common stock beginning as early as August 16, 2021.

Working Capital and Sources and Uses of Cash

Our principal sources of liquidity for the next year include cash flows from operations, cash on hand and amounts available under our New Credit Facility, as discussed in “Note 8— Long-Term Debt” to the accompanying unaudited condensed consolidated financial statements and “Item 1A. Risk Factors” included in Part I of our Form 10-K Report, we expect market volatility factors to have a material, adverse impact on future revenue growth and overall profitability for the foreseeable future.

Our working capital increased to $54.3 million at June 30, 2021, compared to a deficit of $18.1 million at December 31, 2020, the positive impact on working capital resulted primarily from an increase in cash and cash equivalents at June 30, 2021 as a result of proceeds from the sale of NPB and cash from operations. In addition, accounts payable and accrued liabilities decreased due to our continuous cost reduction efforts, the sale of NPB and the timing of payments.

Cash Flows

Our cash flows from operations are substantially dependent on current and future prices for oil and natural gas, which historically have been, and may continue to be, volatile. Cash flows from operations are also affected by timing of cash receipts and disbursements and changes in other working capital assets and liabilities.

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Our cash flows for the six-month periods ended June 30, 2021, and 2020 are presented in the following table and discussed below (in thousands):

	Six Months Ended June 30,
	2021		2020
Cash flows provided by (used in ) operating activities	$	33,231	$	13,462
Cash flows provided by (used in) investing activities	29,907		(5,308)
Cash flows provided by (used in) financing activities	(795)		805
Net increase (decrease) in cash and cash equivalents	$	62,343	$	8,959

Cash Flows from Operating Activities

The $19.8 million increase in operating cash flows for the six-month period ended June 30, 2021 compared to the same period in 2020, is primarily due to the increases in revenues as a result of improved commodity prices as discussed above and reductions in expenses due to our cost reduction efforts.

Cash Flows from Investing Activities

Our cash flows provided in investing activities during the six-month period ended June 30, 2021 primarily reflects $37.9 million of net cash proceeds from the sale of assets offset by capital expenditures of $4.4 million. See "Note 6—Acquisitions and Divestitures" to the accompanying unaudited condensed consolidated financial statements included in Item 1 of this Quarterly Report for additional information.

During the six-month period ended June 30, 2020, cash flows used in investing activities primarily reflects cash payments made for capital expenditures accrued at December 31, 2019.

Capital expenditures for the six-month periods ended June 30, 2021, and 2020 are summarized below (in thousands):

	Six Months Ended June 30,
	2021		2020
Capital Expenditures
Drilling, completion and capital workovers	$	3,242	$	2,430
Leasehold and geophysical	283		497
Capital expenditures, excluding acquisitions (on an accrual basis)	3,525		2,927
Acquisitions	3,604		—
Capital expenditures, including acquisitions	7,129		2,927
Change in capital accruals (1)	864		3,887
Total cash paid for capital expenditures	$	7,993	$	6,814

__________________

1.Reflects cash paid or adjustments to accruals during the period presented for expenditures related to prior period capital expenditures program.

Cash Flows from Financing Activities

Cash used in financing activities for the six-month period ended June 30, 2021 consisted primarily of finance lease payments and cash paid for tax obligations on vested awards.

Indebtedness

See “Note 8—Long-Term Debt” to the accompanying unaudited condensed consolidated financial statements for additional discussion of our debt at June 30, 2021 and December 31, 2020.

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Contractual Obligations and Off-Balance Sheet Arrangements

At June 30, 2021, our contractual obligations included asset retirement obligations, long-term debt obligations and short-term leases and other individually insignificant obligations. Additionally, we have certain financial instruments representing potential commitments that were incurred in the normal course of business to support our operations, including surety bonds. The underlying liabilities insured by these instruments are reflected in our balance sheets, where applicable. Therefore, no additional liability is reflected for the surety bonds or other instruments.

There were no other significant changes in total contractual obligations and off-balance sheet arrangements from those reported in the 2020 Form 10-K.

Critical Accounting Policies and Estimates

For a description of our critical accounting policies and estimates, refer to Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations included in the 2020 Form 10-K. For a discussion of recent accounting pronouncements, newly adopted and recent accounting pronouncements not yet adopted, see “Note 1 - Basis of Presentation” to the accompanying unaudited condensed consolidated financial statements included in Item 1 of this Quarterly Report. We did not have any material changes in critical accounting policies, estimates, judgments and assumptions during the first six months of 2021.

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ITEM 3. Quantitative and Qualitative Disclosures About Market Risk

General

This discussion provides information about the financial instruments we have historically used to manage commodity prices. All contracts were settled in cash and did not require the actual delivery of a commodity at settlement. Additionally, our exposure to credit risk and interest rate risk is also discussed.

Commodity Price Risk. Our most significant market risk relates to the prices we receive for our oil, natural gas and NGLs. Due to the historical price volatility of these commodities, from time to time, depending upon our view of opportunities under the then-prevailing current market conditions, we have historically entered into commodity derivative contracts for a portion of our anticipated production volumes for the purpose of reducing variability of oil and natural gas prices we receive.

We have used, and may use, a variety of commodity-based derivative contracts, including fixed price swaps, basis swaps and collars. At June 30, 2021, we had no open commodity derivative contracts.

Because we historically have not designated any of our derivative contracts as hedges for accounting purposes, changes in the fair value of our derivative contracts were recognized as gains and losses in current period earnings. As a result, and when applicable, current period earnings could have been significantly affected by changes in the fair value of our commodity derivative contracts. Changes in fair value were principally measured based on a comparison of future prices to the contract price at the end of the period.

The following table summarizes derivative activity for the three and six-month periods ended June 30, 2021, and 2020 (in thousands):

	Three Months Ended June 30,				Six Months Ended June 30,
	2021		2020		2021		2020
(Gain) loss on commodity derivative contracts	$	—	$	(2,241)	$	—	$	(12,467)
Cash received on settlements	$	—	$	6,490	$	—	$	10,577

See “Note 3 - Derivatives” to the accompanying unaudited condensed consolidated financial statements included in this Quarterly Report for additional information regarding our commodity derivatives.

Credit Risk. As applicable, we were exposed to credit risk related to counterparties to our derivative financial contracts. All of our derivative transactions have been carried out in the over-the-counter market. The use of derivative transactions in over-the-counter markets involves the risk that the counterparties may be unable to meet the financial terms of the transactions. The counterparties for all of our derivative transactions have had an “investment grade” credit rating. We have monitored the credit ratings of our derivative counterparties and considered our counterparties’ credit default risk ratings in determining the fair value of our derivative contracts. Our derivative contracts have historically been with multiple counterparties to minimize exposure to any individual counterparty, and in addition our counterparties have been large financial institutions.

We did not require collateral or other security from counterparties to support derivative instruments. We historically had master netting agreements with each of our derivative contract counterparties, which allowed us to net our derivative assets and liabilities by commodity type with the same counterparty. As a result of the netting provisions, our maximum amount of loss under derivative transactions due to credit risk was limited to the net amounts due from the counterparties under the commodity derivative contracts. Therefore, we were not required to post additional collateral under our commodity derivative contracts.

We are also exposed to credit risk related to the collection of receivables from our joint interest partners for their proportionate share of expenditures made on projects we operate. Historically, our credit losses on joint interest receivables have been immaterial.

Interest Rate Risk. We are exposed to interest rate risk on our New Credit Facility. This variable interest rate on our New Credit Facility fluctuates, and exposes us to short-term changes in market interest rates as our interest obligations on this instrument is periodically redetermined based on prevailing market interest rates, primarily LIBOR. We had $20.0 million in outstanding variable rate debt as of June 30, 2021.

30

Table of Contents

ITEM 4. Controls and Procedures

Disclosure Controls and Procedures

Under the supervision and with the participation of the Company’s management, including the Company’s CEO and CFO, the Company performed an evaluation of the effectiveness of the design and operation of its disclosure controls and procedures pursuant to Exchange Act Rules 13a-15 and 15d-15 as of the end of the period covered by this Quarterly Report. Based on that evaluation, the Company’s CEO and CFO concluded that the Company’s disclosure controls and procedures were effective as of June 30, 2021, to provide reasonable assurance that the information required to be disclosed by the Company in its 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.

Changes in Internal Control Over Financial Reporting

There was no change in the Company’s internal control over financial reporting during the quarter ended June 30, 2021 that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

31

Table of Contents

PART II. Other Information

ITEM 1. Legal Proceedings

See "Note 9—Commitments and Contingencies” to the accompanying condensed consolidated financial statements in Item 1 of this Quarterly Report.

32

Table of Contents

ITEM 1A. Risk Factors

There have been no material changes to the risk factors previously discussed in Item 1A—Risk Factors in the Company's 2020 Form 10-K.

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

The following table presents a summary of share repurchases made by the Company during the three-month period ended June 30, 2021.

Period	Total Number of Shares Purchased(1)	Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Program	Maximum Approximate Dollar Value of Shares that May Yet Be Purchased Under the Program (in Millions)
April 1, 2021 - April 30, 2021	152,101	$	3.90	N/A	N/A
May 1, 2021 - May 31, 2021	—	$	—	N/A	N/A
June 1, 2021 - June 30, 2021	—	$	—	N/A	N/A
Total	152,101			—

___________________

(1)    Includes shares of common stock tendered by employees in order to satisfy tax withholding requirements upon vesting of their stock awards. Shares withheld are initially recorded as treasury shares, then immediately retired.

ITEM 3. Defaults Upon Senior Securities

None.

ITEM 4. Mine Safety Disclosures

Not applicable.

ITEM 5. Other Information

None.

33

Table of Contents

ITEM 6. Exhibits

		Incorporated by Reference
Exhibit No.	Exhibit Description	Form	SEC File No.	Exhibit	Filing Date	Filed Herewith
2.1	Amended Joint Chapter 11 Plan of Reorganization of SandRidge Energy, Inc., et al., dated September 19, 2016	8-A	001-33784	2.1	10/4/2016
3.1	Amended and Restated Certificate of Incorporation of SandRidge Energy, Inc.	8-A	001-33784	3.1	10/4/2016
3.2	Amended and Restated Bylaws of SandRidge Energy, Inc.	8-A	001-33784	3.2	10/4/2016
4.7	First Amendment to Tax Benefits Preservation Plan, dated July 1, 2020, between SandRidge Energy, Inc. and American Stock Transfer & Trust Company, LLC as Rights Agent	8-K	001-33784	4.1	3/16/2021
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					*
101.INS	XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.					*
101.SCH	XBRL Taxonomy Extension Schema Document					*
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document					*
101.DEF	XBRL Taxonomy Extension Definition Document					*
101.LAB	XBRL Taxonomy Extension Label Linkbase Document					*
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document					*
104	Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)					*

34

Table of Contents

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.
Date: August 11, 2021	By:	/s/    Salah Gamoudi
		Salah Gamoudi Senior Vice President, Chief Financial Officer and Chief Accounting Officer (Principal Financial and Accounting Officer)

35

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, Grayson Pranin, 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)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) 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.Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c.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

d.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/ Grayson Pranin

Grayson Pranin

 President, Chief Executive Officer and Chief Operating Officer

Date: August 11, 2021

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, Salah Gamoudi, 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)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) 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.Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c.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

d.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/ Salah Gamoudi

Salah Gamoudi

Senior Vice President, Chief Financial Officer and Chief Accounting Officer

Date: August 11, 2021

EX-32.1

Exhibit 32.1

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 quarterly period ended June 30, 2021 (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/ Grayson Pranin

Grayson Pranin

President, Chief Executive Officer and Chief Operating Officer

August 11, 2021

/s/ Salah Gamoudi

Salah Gamoudi

Senior Vice President, Chief Financial Officer and Chief Accounting Officer

August 11, 2021

XML

Cover - shares	6 Months Ended
	Jun. 30, 2021	Aug. 05, 2021
Cover [Abstract]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Jun. 30, 2021
Document Transition Report	false
Entity File Number	001-33784
Entity Registrant Name	SANDRIDGE ENERGY, INC.
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	20-8084793
Entity Address, Address Line One	1 E. Sheridan Ave, Suite 500
Entity Address, City or Town	Oklahoma City
Entity Address, State or Province	OK
Entity Address, Postal Zip Code	73104
City Area Code	405
Local Phone Number	429-5500
Title of 12(b) Security	Common Stock, $.001 par value
Trading Symbol	SD
Security Exchange Name	NYSE
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Non-accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Bankruptcy Proceedings, Reporting Current	true
Entity Common Stock, Shares Outstanding		36,588,775
Document Fiscal Year Focus	2021
Document Fiscal Period Focus	Q2
Amendment Flag	false
Entity Central Index Key	0001349436
Current Fiscal Year End Date	--12-31

XML

CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) - USD ($) $ in Thousands	Jun. 30, 2021	Dec. 31, 2020
Current assets
Cash and cash equivalents	$ 88,338	$ 22,130
Restricted cash - other	2,271	6,136
Accounts receivable, net	20,681	19,576
Prepaid expenses	2,186	2,890
Other current assets	80	80
Total current assets	113,556	50,812
Oil and natural gas properties, using full cost method of accounting
Proved	1,439,904	1,463,950
Unproved	13,365	17,964
Less: accumulated depreciation, depletion and impairment	(1,370,544)	(1,375,692)
Net oil and natural gas properties	82,725	106,222
Other property, plant and equipment, net	99,572	103,118
Other assets	594	680
Total assets	296,447	260,832
Current liabilities
Accounts payable and accrued expenses	42,896	51,426
Asset retirement obligation	15,939	16,467
Other current liabilities	408	984
Total current liabilities	59,243	68,877
Long-term debt	20,000	20,000
Asset retirement obligation	36,197	40,701
Other long-term obligations	1,439	3,188
Total liabilities	116,879	132,766
Commitments and contingencies (Note 9)
Stockholders’ Equity
Common stock, $0.001 par value; 250,000 shares authorized; 36,560 issued and outstanding at June 30, 2021 and 35,928 issued and outstanding at December 31, 2020	37	36
Warrants	88,520	88,520
Additional paid-in capital	1,062,426	1,062,220
Accumulated deficit	(971,415)	(1,022,710)
Total stockholders’ equity	179,568	128,066
Total liabilities and stockholders’ equity	$ 296,447	$ 260,832

XML

CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares	Jun. 30, 2021	Dec. 31, 2020
Statement of Financial Position [Abstract]
Common stock, par value (in dollars per share)	$ 0.001	$ 0.001
Common stock, shares authorized (in shares)	250,000,000	250,000,000
Common stock, shares issued (in shares)	36,560,000	35,928,000
Common stock, shares outstanding (in shares)	36,560,000	35,928,000

XML

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2021	Jun. 30, 2020	Jun. 30, 2021	Jun. 30, 2020
Revenues
Total revenues	$ 34,196	$ 16,655	$ 67,819	$ 56,984
Expenses
Lease operating expenses	9,232	8,698	17,186	24,340
Production, ad valorem, and other taxes	2,534	1,854	4,710	5,053
Depreciation and depletion — oil and natural gas	2,193	13,348	4,698	38,203
Depreciation and amortization — other	1,475	1,739	2,969	4,373
Impairment	0	201,784	0	209,754
General and administrative	2,522	4,314	4,612	9,797
Restructuring expenses	256	444	2,310	444
Employee termination benefits	0	1,993	49	5,247
(Gain) loss on derivative contracts	0	(2,241)	0	(12,467)
Gain (Loss) on Disposition of Assets	0	(42)	(19,713)	78
Other operating (income) expense, net	(65)	150	(113)	307
Total expenses	18,147	232,041	16,708	285,129
Income (loss) from operations	16,049	(215,386)	51,111	(228,145)
Other income (expense)
Interest expense, net	(84)	(447)	(131)	(1,084)
Other income (expense), net	287	58	315	134
Total other income (expense)	203	(389)	184	(950)
Income (loss) before income taxes	16,252	(215,775)	51,295	(229,095)
Income tax expense (benefit)	0	4	0	(646)
Net income (loss)	$ 16,252	$ (215,779)	$ 51,295	$ (228,449)
Net income (loss) per share
Basic (in dollars per share)	$ 0.45	$ (6.06)	$ 1.42	$ (6.42)
Diluted (in dollars per share)	$ 0.44	$ (6.06)	$ 1.38	$ (6.42)
Weighted average number of common shares outstanding
Basic (in shares)	36,416,000	35,611,000	36,187,000	35,581,000
Diluted (in shares)	37,345,000	35,611,000	37,283,000	35,581,000
Oil, natural gas and NGL
Revenues
Total revenues	$ 34,196	$ 16,448	$ 67,819	$ 56,587
Other
Revenues
Total revenues	$ 0	$ 207	$ 0	$ 397

XML

CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY (Unaudited) - USD ($) $ in Thousands	Total	Common Stock	Warrants	Additional Paid-In Capital	Accumulated Deficit
Beginning balance (in shares) at Dec. 31, 2019		35,772,000	6,659,000
Beginning balance at Dec. 31, 2019	$ 402,452	$ 36	$ 88,520	$ 1,059,253	$ (745,357)
Increase (Decrease) in Stockholders' Equity
Stock-based compensation	185			185
Issuance of common stock for general unsecured claims (in shares)		38,000
Issuance of warrants for general unsecured claims (in shares)			47,000
Cash paid for tax obligations on vested stock awards	(1)			(1)
Net Income (Loss)	(12,670)				(12,670)
Ending balance (in shares) at Mar. 31, 2020		35,810,000	6,706,000
Ending balance at Mar. 31, 2020	389,966	$ 36	$ 88,520	1,059,437	(758,027)
Beginning balance (in shares) at Dec. 31, 2019		35,772,000	6,659,000
Beginning balance at Dec. 31, 2019	402,452	$ 36	$ 88,520	1,059,253	(745,357)
Increase (Decrease) in Stockholders' Equity
Net Income (Loss)	(228,449)
Ending balance (in shares) at Jun. 30, 2020		35,865,000	6,706,000
Ending balance at Jun. 30, 2020	174,769	$ 36	$ 88,520	1,060,019	(973,806)
Beginning balance (in shares) at Mar. 31, 2020		35,810,000	6,706,000
Beginning balance at Mar. 31, 2020	389,966	$ 36	$ 88,520	1,059,437	(758,027)
Increase (Decrease) in Stockholders' Equity
Issuance of stock awards, net of cancellations (in shares)		55,000
Stock-based compensation	583			583
Cash paid for tax obligations on vested stock awards	(1)			(1)
Net Income (Loss)	(215,779)				(215,779)
Ending balance (in shares) at Jun. 30, 2020		35,865,000	6,706,000
Ending balance at Jun. 30, 2020	$ 174,769	$ 36	$ 88,520	1,060,019	(973,806)
Beginning balance (in shares) at Dec. 31, 2020	35,928,000	35,928,000	6,734,000
Beginning balance at Dec. 31, 2020	$ 128,066	$ 36	$ 88,520	1,062,220	(1,022,710)
Increase (Decrease) in Stockholders' Equity
Issuance of stock awards, net of cancellations (in shares)		6,000
Stock-based compensation	236			236
Issuance of common stock for general unsecured claims (in shares)		201,000
Issuance of warrants for general unsecured claims (in shares)			247,000
Issuance of warrants for general unsecured claims	0		$ 0
Cash paid for tax obligations on vested stock awards	(19)			(19)
Net Income (Loss)	35,043				35,043
Ending balance (in shares) at Mar. 31, 2021		36,135,000	6,981,000
Ending balance at Mar. 31, 2021	$ 163,326	$ 36	$ 88,520	1,062,437	(987,667)
Beginning balance (in shares) at Dec. 31, 2020	35,928,000	35,928,000	6,734,000
Beginning balance at Dec. 31, 2020	$ 128,066	$ 36	$ 88,520	1,062,220	(1,022,710)
Increase (Decrease) in Stockholders' Equity
Net Income (Loss)	$ 51,295
Ending balance (in shares) at Jun. 30, 2021	36,560,000	36,560,000	6,981,000
Ending balance at Jun. 30, 2021	$ 179,568	$ 37	$ 88,520	1,062,426	(971,415)
Beginning balance (in shares) at Mar. 31, 2021		36,135,000	6,981,000
Beginning balance at Mar. 31, 2021	163,326	$ 36	$ 88,520	1,062,437	(987,667)
Increase (Decrease) in Stockholders' Equity
Issuance of stock awards, net of cancellations (in shares)		425,000
Issuance of stock awards, net of cancellations	0	$ 1		(1)
Stock-based compensation	584			584
Cash paid for tax obligations on vested stock awards	(594)			(594)
Net Income (Loss)	$ 16,252				16,252
Ending balance (in shares) at Jun. 30, 2021	36,560,000	36,560,000	6,981,000
Ending balance at Jun. 30, 2021	$ 179,568	$ 37	$ 88,520	$ 1,062,426	$ (971,415)

XML

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2021	Jun. 30, 2020
CASH FLOWS FROM OPERATING ACTIVITIES
Net Income (Loss)	$ 51,295	$ (228,449)
Adjustments to reconcile net loss to net cash provided by operating activities
Provision for doubtful accounts	21	283
Depreciation, depletion, and amortization	7,667	42,576
Impairment	0	209,754
Debt issuance costs amortization	36	318
(Gain) loss on derivative contracts	0	(12,467)
Cash received on settlement of derivative contracts	0	10,577
(Gain) loss on sale of assets	(19,713)	78
Stock-based compensation	799	749
Other	71	68
Changes in operating assets and liabilities	(6,945)	(10,025)
Net cash provided by (used in) operating activities	33,231	13,462
CASH FLOWS FROM INVESTING ACTIVITIES
Capital expenditures for property, plant and equipment	(4,389)	(6,814)
Acquisition of Assets	(3,545)	0
Purchase of other property and equipment	(59)	0
Proceeds from sale of assets	37,900	1,506
Net cash provided by (used in) investing activities	29,907	(5,308)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from borrowings	0	39,000
Repayments of borrowings	0	(37,500)
Reduction of financing lease liability	(122)	(694)
Debt issuance costs	(81)	0
Proceeds from exercise of stock options	21	0
Cash paid for tax obligations on vested stock awards	(613)	(1)
Net cash provided by (used in) financing activities	(795)	805
NET INCREASE (DECREASE) IN CASH, CASH EQUIVALENTS and RESTRICTED CASH	62,343	8,959
CASH, CASH EQUIVALENTS and RESTRICTED CASH, beginning of year	28,266	5,968
CASH, CASH EQUIVALENTS and RESTRICTED CASH, end of period	90,609	14,927
Supplemental Disclosure of Cash Flow Information
Cash paid for interest, net of amounts capitalized	(106)	(812)
Cash received for income taxes	0	616
Supplemental Disclosure of Noncash Investing and Financing Activities
Purchase of PP&E in accounts payable	1,260	704
Right-of-use assets obtained in exchange for financing lease obligations	363	67
Carrying value of properties exchanged	$ 0	$ 3,890

XML

Basis of Presentation

6 Months Ended

Jun. 30, 2021

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Basis of Presentation

Basis of Presentation

Nature of Business. SandRidge Energy, Inc. is an oil and natural gas acquisition, development and production company headquartered in Oklahoma City, Oklahoma with a principal focus on developing and producing hydrocarbon resources in the United States.

Principles of Consolidation. The consolidated financial statements include the accounts of the Company and its wholly owned or majority owned subsidiaries, including its proportionate share of the Royalty Trusts. All intercompany accounts and transactions have been eliminated in consolidation.

Interim Financial Statements. The accompanying unaudited condensed consolidated financial statements and notes should be read in conjunction with the audited financial statements and notes contained in the Company’s 2020 Form 10-K. Certain information and 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, the financial statements include all adjustments, which consist of normal recurring adjustments unless otherwise disclosed, necessary to fairly state the Company’s unaudited condensed consolidated financial statements.     

Significant Accounting Policies. The unaudited condensed consolidated financial statements were prepared in accordance with the accounting policies stated in the 2020 Form 10-K as well as the items noted below.

Use of Estimates. The preparation of the unaudited condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period.

The more significant areas requiring the use of assumptions, judgments and estimates include: oil, natural gas and natural gas liquids (“NGL”) reserves; impairment tests of long-lived assets; the carrying value of unproved oil and natural gas properties; depreciation, depletion and amortization; asset retirement obligations; determinations of significant alterations to the full cost pool and related estimates of fair value used to allocate the full cost pool net book value to divested properties, as necessary; valuation allowances for deferred tax assets; income taxes; valuation of derivative instruments; contingencies; and accrued revenue and related receivables. Although management believes the estimates used in the areas noted above are reasonable, actual results could differ significantly from those estimates.

Going Concern Consideration. The accompanying condensed consolidated financial statements are prepared in accordance with GAAP generally accepted accounting principles applicable to a going concern, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business.

Recently Adopted Accounting Pronouncements ASU 2019-12. In December 2019, the FASB issued ASU 2019-12, “Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes,” which simplifies various aspects of accounting for income taxes, including requirements related to hybrid tax regimes, the tax basis step-up in goodwill obtained in a transaction that is not a business combination, separate financial statements of entities not subject to tax, the intraperiod tax allocation exception to the incremental approach, ownership changes in investments, interim-period accounting for enacted changes in tax laws, and year-to-date loss limitation in interim-period tax accounting. The Company adopted this ASU on January 1, 2021 using an applied prospective basis; however, the impact was not material upon adoption.

Recent Accounting Pronouncements Not Yet Adopted ASU 2020-04. In March 2020, FASB issued ASU No. 2020-04, Reference Rate Reform (Topic 848), to facilitate the effects of reference rate reform on financial reporting. This ASU provides optional practical expedients and exceptions for applying GAAP provisions to contracts, hedging relationships, and other transactions that reference London Inter-Bank Offered Rate ("LIBOR"), or other reference rates expected to be discontinued because of reference rate reform, if certain criteria are met. The provisions of this ASU do not apply to contract modifications made and hedging transactions entered into or evaluated after December 31, 2022, except for hedging relationships existing as of December 31, 2022, that an entity has elected certain optional expedients for and that are retained through the end of the hedging relationship. The amendments in ASU 2020-04 are effective, for all entities, as of March 12, 2020 through December 31, 2022. The Company is currently reviewing the potential impact of the upcoming LIBOR reference rate change on its current contracts and will determine the applicable provisions of ASU 2020-04.

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Fair Value Measurements

6 Months Ended

Jun. 30, 2021

Fair Value Disclosures [Abstract]

Fair Value Measurements

Fair Value Measurements

The Company measures and reports certain assets and liabilities on a fair value basis and has classified and disclosed its fair value measurements using the levels of the fair value hierarchy noted below. The carrying values of cash, restricted cash, accounts receivable, prepaid expenses, certain other current and non-current assets, accounts payable and accrued expenses, and other current liabilities and other long-term obligations included in the unaudited condensed consolidated balance sheets approximated fair value at June 30, 2021 and December 31, 2020. Additionally, the carrying amount of debt associated with borrowings outstanding under the credit facility dated November 30, 2020 ("New Credit Facility") approximates fair value as borrowings bear interest at variable rates. As a result, these financial assets and liabilities are not discussed below.

Level 1	Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities.
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	Measurement based on prices or valuation models that require inputs that are both significant to the fair value measurement and less observable from objective sources (i.e., supported by little or no market activity).

Assets and liabilities that are measured at fair value 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, which may affect the valuation of the fair value of assets and liabilities and their placement within the fair value hierarchy levels. The determination of the fair values, stated below, considers the market for the Company’s financial assets and liabilities, the associated credit risk and other factors. 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 Fair Value Measurements

Commodity Derivative Contracts. As applicable, the fair values of the Company’s oil and natural gas fixed price swaps are based upon inputs that are either readily available in the public market, such as oil and natural gas futures prices, volatility factors and discount rates, or can be corroborated from active markets. Fair value is determined through the use of a discounted cash flow model or option pricing model using the applicable inputs discussed above. The Company applies a weighted average credit default risk rating factor for its counterparties or gives effect to its credit default risk rating, as applicable, in determining the fair value of these derivative contracts. Credit default risk ratings are based on current published credit default swap rates.

Fair Value - Recurring Measurement Basis

There were no open commodity derivative contracts as of June 30, 2021 and December 31, 2020.

Transfers. The Company did not have any transfers between Level 1, Level 2 or Level 3 fair value measurements during the three and six-month periods ended June 30, 2021 and 2020.

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Derivatives

6 Months Ended

Jun. 30, 2021

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivatives

Derivatives

Commodity Derivatives 

The Company is exposed to commodity price risk, which impacts the predictability of its cash flows from the sale of oil and natural gas. On occasion, the Company has attempted to manage this risk on a portion of its forecasted oil or natural gas production sales through the use of commodity derivative contracts. There were no open commodity derivative contracts as of June 30, 2021 and December 31, 2020.

Historically, the Company has not designated any of its derivative contracts as hedges for accounting purposes. All derivative contracts have historically been recorded at fair value with changes in derivative contract fair values recognized as a gain or loss on derivative contracts in the condensed consolidated statements of operations. None of the Company’s previous commodity derivative contracts could be terminated prior to contractual maturity solely as a result of a downgrade in the credit rating of a party to the contract. Commodity derivative contracts were settled on a monthly basis, and the commodity derivative contract valuations were adjusted to the mark-to-market valuation on a quarterly basis.

The following table summarizes derivative activity for the three and six-month periods ended June 30, 2021, and 2020 (in thousands):

	Three Months Ended June 30,				Six Months Ended June 30,
	2021		2020		2021		2020
(Gain) loss on commodity derivative contracts	$	—	$	(2,241)	$	—	$	(12,467)
Cash received on settlements	$	—	$	6,490	$	—	$	10,577

Master Netting Agreements and the Right of Offset. As applicable, The Company historically had master netting agreements with all of its commodity derivative counterparties and has presented its derivative assets and liabilities with the same counterparty on a net basis in the unaudited condensed consolidated balance sheets. As a result of the netting provisions, the Company's maximum amount of loss under commodity derivative transactions due to credit risk is limited to the net amounts due from its counterparties. There were no open commodity derivatives contracts as of June 30, 2021 and December 31, 2020.

Because we did not designate any of our derivative contracts as hedges for accounting purposes, changes in the fair value of our derivative contracts were recognized as gains and losses in current period earnings. As a result, and as applicable, our current period earnings could have been significantly affected by changes in the fair value of our commodity derivative contracts. Changes in fair value were principally measured based on a comparison of future prices to the contract price at the end of the period.

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Property, Plant and Equipment

6 Months Ended

Jun. 30, 2021

Property, Plant and Equipment [Abstract]

Property, Plant and Equipment

Property, Plant and Equipment

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

	June 30, 2021		December 31, 2020
Oil and natural gas properties
Proved	$	1,439,904	$	1,463,950
Unproved	13,365		17,964
Total oil and natural gas properties	1,453,269		1,481,914
Less: accumulated depreciation, depletion and impairment	(1,370,544)		(1,375,692)
Net oil and natural gas properties	82,725		106,222
Land	200		200
Electrical infrastructure	121,819		121,819
Other non-oil and natural gas equipment	1,603		1,563
Buildings and structures	3,603		3,603
Financing leases	319		1,051
Total	127,544		128,236
Less accumulated depreciation and amortization	(27,972)		(25,118)
Other property, plant and equipment, net	99,572		103,118
Total property, plant and equipment, net	$	182,297	$	209,340

See Note 5 for discussion of impairment of property, plant and equipment.

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Impairment

6 Months Ended

Jun. 30, 2021

Property, Plant and Equipment [Abstract]

Impairment

Impairment

The Company assesses the need to impair its oil and gas properties during its quarterly full cost pool ceiling limitation calculation. The Company analyzes various property, plant and equipment for impairment when certain triggering events occur by comparing the carrying values of the assets to their estimated fair values. The full cost pool ceiling limitation and estimated fair values of midstream and other assets were determined in accordance with the policies discussed in Note 1, as applicable.

Calculation of the full cost ceiling test is based on, among other factors, average prices for the trailing twelve-month period determined by reference to the first-day-of-the-month index prices ("SEC Prices") as adjusted for price differentials and other contractual arrangements. The SEC Prices utilized in the calculation of proved reserves included in the full cost ceiling test at June 30, 2021 were $49.78 per barrel of oil and $2.43 per Mcf of natural gas, before price differential adjustments.

In the three and six-month periods ended June 30, 2021, we did not record a full cost ceiling limitation impairment charge.

The Company recorded a total impairment charge of $201.8 million for the three-month period ended June 30, 2020, which included a full cost ceiling limitation impairment charge of $163.8 million, and an impairment charge of $38.0 million to write down the value of the Company's office headquarters. The Company recorded a total impairment charge of $209.8 million for the six-month period ended June 30, 2020, which included a full cost ceiling limitation impairment charge of $171.8 million, and an impairment charge of $38.0 million to write down the value of the Company's office headquarters.

The June 30, 2020, asset impairment charge of $38.0 million resulted from the write down of the net carrying amount of the office headquarters building assets to their estimated fair value less estimated costs to sell the building. In May 2020, the Company entered into an agreement for the sale of its corporate headquarters building located in Oklahoma City, OK. The building sale closed on August 31, 2020. Prior to the sale of the corporate headquarters building, the Company was required to report the building at its carrying amount, as a result the building was assessed for recoverability and impairment using undiscounted cash flow measures of the consolidated Company as prescribed under ASC 360-10-35, rather than fair value as prescribed under ASC 360-10-45-9.

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Acquisitions and Divestitures

6 Months Ended

Jun. 30, 2021

Discontinued Operations and Disposal Groups [Abstract]

Acquisitions and Divestitures

Acquisitions and Divestitures

Overriding Royalty Interest Assets

On April 22, 2021, we acquired all of the overriding royalty interest assets of SandRidge Mississippian Trust I (the “Trust”). The gross purchase price was $4.9 million (net $3.6 million, given our 26.9% ownership of the Trust).

North Park Basin Sale

On February 5, 2021, the Company sold all of its oil and natural gas properties and related assets of the North Park Basin (“NPB”or “North Park”), in Colorado, for a purchase price of $47 million. The sale closed for net proceeds of $39.7 million in cash, which amounts to the purchase price of $47 million net of effective date to close date adjustments. Consequently, the Company allocated a portion of the full cost pool net book value, using the income approach, to the divested oil and gas properties and recognized a reduction of full cost pool assets of $22.0 million and a reduction of $4.6 million to its non-full cost pool assets. As the sale significantly altered the relationship between capitalized costs and proved reserves, the Company recognized a $19.7 million gain related to the assets sold. The gain represents net proceeds of $39.7 million coupled with the release of revenues in suspense of $0.5 million and the relief of asset retirement obligations of $6.1 million offset by the reduction of $26.6 million in oil and gas properties related to NPB.

For the three-months ended June 30, 2021, NPB did not have an impact on our financials due to the sale of the NPB assets.

For the six-months ended June 30, 2021, NPB represented $3.2 million, or 4.7% of the Company's $67.8 million total consolidated Revenues, NPB represented $0.9 million, or 5.4% of the Company's $17.2 million consolidated Lease operating expense, it represented $0.2 million, or 5.3% of the Company's $4.7 million consolidated Production, ad valorem and other taxes and NPB represented 0.1 MMBoe, or 2.0% of the Company's consolidated total production volumes of 3.4 MMBoe.

For the three-months ended June 30, 2020, NPB represented $4.6 million, or 27.8% of the Company's $16.7 million total consolidated Revenues, NPB represented $2.2 million or 25.6% of the Company's $8.7 million consolidated Lease operating expense, it represented $0.3 million, or 16.7% of the Company's $1.9 million consolidated Production, ad valorem and other taxes and NPB represented 0.2 MMBoe, or 10.3% of the Company's consolidated total production volumes of 2.2 MMBoe.

For the six-months ended June 30, 2020, NPB represented $17.4 million, or 30.5% of the Company's $57.0 million total consolidated Revenues, NPB represented $5.8 million or 23.7% of the Company's $24.3 million consolidated Lease operating expense, it represented $1.1 million, or 21.4% of the Company's $5.1 million consolidated Production, ad valorem and other taxes and NPB represented 0.6 MMBoe, or 11.7% of the Company's consolidated total production volumes of 4.7 MMBoe.

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Accounts Payable and Accrued Expenses

6 Months Ended

Jun. 30, 2021

Payables and Accruals [Abstract]

Accounts Payable and Accrued Expenses

Accounts Payable and Accrued ExpensesAccounts payable and accrued expenses consist of the following (in thousands):

	June 30, 2021		December 31, 2020
Accounts payable and other accrued expenses	$	19,555	$	23,017
Production payable	15,645		15,367
Payroll and benefits	2,775		5,640
Taxes payable	4,645		6,864
Drilling advances	234		477
Accrued interest	42		61
Total accounts payable and accrued expenses	$	42,896	$	51,426

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Long-Term Debt

6 Months Ended

Jun. 30, 2021

Debt Disclosure [Abstract]

Long-Term Debt

Long-Term Debt

Credit Facility.

Credit Facility. On November 30, 2020 the Company entered into the New Credit Facility of $30.0 million credit facility with a related party and affiliate of Icahn Enterprises and Icahn Agency Services LLC, as administrative agent. As of June 30, 2021 and December 31, 2020, the Company had a $20.0 million term loan outstanding under the New Credit Facility. The New Credit Facility consists of a $10.0 million revolving loan facility and a $20 million term loan facility. There are no scheduled borrowing base redeterminations under the New Credit Facility. At June 30, 2021, the Company had $10.0 million available to be drawn under the revolving loan facility. The New Credit Facility matures on November 30, 2023.

On July 26, 2021, the Company entered into an amendment (the “First Amendment”) to the New Credit Facility. Pursuant to the First Amendment, the Company will be permitted to grant liens securing its obligations under swap contracts with certain counterparties to the extent such swap contracts are permitted under the Credit Agreement and approved by the Company’s board of directors.

The outstanding borrowings under the New Credit Facility bear interest at a rate tied to a utilization ratio of (a) LIBOR plus an applicable margin that varies from 200 to 300 basis points or (b) the base rate plus an applicable margin that varies from 100 basis points to 200 basis points. During the three and six-months ended June 30, 2021, the weighted average interest rate paid for borrowings outstanding under the New Credit Facility was approximately 2.60% and 2.62%, respectively.

The Company has the right to prepay loans under the New Credit Facility at any time without a prepayment penalty, other than customary “breakage” costs with respect to LIBOR loans.

The New Credit Facility is secured by (i) first-priority mortgages on at least 95% of the PV-9 pricing of all the proved reserves included in the most recently delivered reserve report of the Company, (ii) a first-priority perfected pledge of substantially all of the capital stock owned by each credit party, (iii) a first-priority security interest in the cash, cash equivalents, deposit, securities and other similar accounts, and (iv) a first-priority perfected security interest in substantially all other tangible and intangible assets of the credit parties (including but not limited to as-extracted collateral, accounts receivable, inventory, equipment, general intangibles, investment property, intellectual property, real property and the proceeds of the foregoing).

The New Credit Facility includes events of default and certain customary affirmative and negative covenants. The Company is required maintain certain financial covenants, commencing with the first full quarter ending after the effective date thereof, to maintain (i) a maximum consolidated total net leverage ratio, measured as of the end of any fiscal quarter, of no greater than 3.50 to 1.00 and (ii) a minimum consolidated interest coverage ratio, measured as of the end of any fiscal quarter, of no less than 2.25 to 1.00. As of June 30, 2021, the Company was in compliance with all applicable covenants and had a consolidated total net leverage ratio of (0.15) and consolidated interest coverage ratio of 59.73.

During the three and six-months ended June 30, 2021, the Company paid a related party, an affiliate of Icahn Enterprises, $0.1 million and $0.3 million, respectively of interest expense which is included on the Interest expense, net line item on the Condensed Consolidated Statement of Operations. The total outstanding balance of the New Credit facility is recorded in long-term debt on the Condensed Consolidated Balance Sheet as of June 30, 2021

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Commitments and Contingencies

6 Months Ended

Jun. 30, 2021

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

Commitments and Contingencies

Legal Proceedings. The Company is subject to various legal proceedings and claims arising in the ordinary course of its business. The Company has provided accruals where necessary for contingent liabilities, based on ASC 450, Contingencies, when it has determined that a liability is probable and reasonably estimable. The Company continuously assesses the potential liability related to the Company's pending litigation and revises its estimates when additional information becomes available. Additionally, the Company currently expenses all legal costs as they are incurred.

As previously disclosed in the Company's 2020 Form 10-K, there are certain ongoing Cases (as that term is defined in the Company's 2020 Form 10-K).

In each of the Cases, lead plaintiffs seek to recover unspecified damages, interest, costs and expenses incurred in the litigation on behalf of themselves and class members. Although the claims against the Company in each Case have been discharged pursuant to the Plan, the Company remains a nominal defendant because of a technical connection with the Cases, and is necessary for the court to decide all issues and make a proper judgement. The Company may also be contractually obligated to indemnify two former officers who are defendants and the SandRidge Mississippian Trust I against losses, claims, damages, liabilities and expenses, including reasonable costs of investigation and attorney’s fees and expenses, which it is required to advance, arising out of the Cases, although the Company disputes any such obligations. Such indemnification is not covered by insurance with respect to the Trust. As of October 2020, we have exhausted all remaining insurance coverage for the costs of indemnification and expect no further reimbursements.

In light of the status of the Cases, and the facts, circumstances and legal theories relating thereto, the Company is not able to determine the likelihood of an outcome in either case or provide an estimate of any reasonably possible loss or range of possible loss related thereto. Accordingly, the Company has not established or accrued any liabilities relating to the Cases and believes that the plaintiffs' claims are without merit. However, considering the exhaustion of insurance coverage available to the Company, such losses, if incurred, could be material. The Company intends to continue to vigorously defend against the Cases in its capacity as a nominal defendant.

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Income Taxes

6 Months Ended

Jun. 30, 2021

Income Tax Disclosure [Abstract]

Income Taxes

Income Taxes

For each interim reporting period, the Company estimates the effective tax rate expected for the full fiscal year and uses that estimated rate in providing for income taxes on a current year-to-date basis.

Deferred income taxes are provided to reflect the future tax consequences of temporary differences between the tax basis of assets and liabilities and their reported amounts in the financial statements. The Company’s deferred tax assets have been reduced by a valuation allowance due to a determination that it is more likely than not that some or all of the deferred assets will not be realized based on the weight of all available evidence. The Company continues to closely monitor and weigh all available evidence, including both positive and negative, in making its determination whether to maintain a valuation allowance. As a result of the significant weight placed on the Company's cumulative negative earnings position, the Company continued to maintain a full valuation allowance against its net deferred tax asset at June 30, 2021 and December 31, 2020. As a result, the Company had no federal or state income tax expense or benefit for the three and six-month periods ended June 30, 2021 and recorded an insignificant income tax benefit for the year ended December 21, 2020. The benefit is related to previously sequestered alternative minimum tax (AMT) refund amounts released to the Company during 2020. The Company has no remaining AMT credits to be refunded.

Internal Revenue Code (“IRC”) Section 382 addresses company ownership changes and specifically limits the utilization of certain deductions and other tax attributes on an annual basis following an ownership change. As a result of the Chapter 11 reorganization and related transactions, the Company experienced an ownership change within the meaning of IRC Section 382 during 2016 that subjected certain of the Company’s tax attributes, including net operating losses ("NOLs"), to an IRC Section 382 limitation. This limitation has not resulted in cash taxes for any period subsequent to the ownership change. Since the 2016 ownership change, the Company has generated additional NOLs and other tax attributes that are not currently subject to an IRC Section 382 limitation. The Company's ability to use NOLs and other tax attributes to reduce taxable income and income taxes could be materially impacted by a future IRC 382 ownership change. Future transactions involving the Company's stock, including those outside of the Company's control, could cause an IRC 382 ownership change resulting in a limitation on tax attributes currently not limited and a more restrictive limitation on tax attributes currently subject to the previous IRC 382 limitation.

As of June 30, 2021, the Company had approximately $1.6 billion of federal NOL carryforwards, net of NOLs expected to expire unused due to the 2016 IRC Section 382 limitation. Of the $1.6 billion of federal NOL carryforwards, $0.8 billion expire during the years 2025 through 2037, while $0.8 billion do not have an expiration date. Additionally, the Company had federal tax credits in excess of $33.5 million which begin expiring in 2029.

The Company did not have unrecognized tax benefits at June 30, 2021 and December 31, 2020.

The Company’s only taxing jurisdiction is the United States (federal and state). The Company’s tax years 2017 to present remain open for federal examination. Additionally, tax years 2005 through 2016 remain subject to examination for the purpose of determining the amount of federal NOL and other carryforwards. The number of years open for state tax audits varies, depending on the state, but are generally from three to five years.

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Equity

6 Months Ended

Jun. 30, 2021

Equity [Abstract]

Equity

Equity

Common Stock, Performance Share Units, and Stock Options. At June 30, 2021, the Company had approximately 250.0 million shares of common stock authorized, 36.6 million shares of common stock, par value $0.001 per share, issued and outstanding. Further, at June 30, 2021, the Company had approximately 0.1 million shares of unvested restricted stock awards, 1.1 million shares of unvested restricted stock units, 0.1 million stock options outstanding, and an immaterial number of unvested performance share units.

Warrants. The Company has issued approximately 4.9 million Series A warrants and 2.1 million Series B warrants that are exercisable until October 4, 2022 for one share of common stock per warrant at initial prices of $41.34 and $42.03 per share, respectively, subject to adjustments pursuant to the terms of the warrants, to certain holders of general unsecured claims as defined in the Plan. The warrants contain customary anti-dilution adjustments in the event of any stock split, reverse stock split, reclassification, stock dividend or other distributions. 

The Tax Benefits Preservation Plan. On July 1, 2020, the Board declared a dividend distribution of one right (a “Right”) for each outstanding share of Company common stock, par value $0.001 per share to stockholders of record at the close of business on July 13, 2020. Each Right entitles its holder, under certain circumstances, to purchase from the Company one one-thousandth of a share of Series A Junior Participating Preferred Stock of the Company, par value $0.001 per share, at an exercise price of $5.00 per Right, subject to adjustment. The description and terms of the Rights are set forth in the tax benefits preservation plan, dated as of July 1, 2020, between the Company and American Stock Transfer & Trust Company, LLC, as rights agent (the “Tax Benefits Preservation Plan”).

The Company adopted the Tax Benefits Preservation Plan, as amended on March 16, 2021, in order to protect shareholder value against a possible limitation on the Company’s ability to use its tax net operating losses (the “NOLs”) and certain other tax benefits to reduce potential future U.S. federal income tax obligations. The NOLs are a valuable to the Company, which may inure to the benefit of the Company and its stockholders. However, if the Company experiences an “ownership change,” as defined in Section 382 of the Internal Revenue Code of 1986, as amended, its ability to fully utilize the NOLs and certain other tax benefits will be substantially limited and the timing of the usage of the NOLs and such other benefits could be substantially delayed, which could significantly impair the value of those assets. Generally, an “ownership change” occurs if the percentage of the Company’s stock owned by one or more of its “five-percent shareholders” (as such term is defined in Section 382 of the Code) increases by more than 50 percentage points over the lowest percentage of stock owned by such stockholder or stockholders at any time over a three-year period. The Tax Benefits Preservation Plan is intended to prevent against such an “ownership change” by deterring any person or group from acquiring beneficial ownership of 4.9% or more of the Company’s securities.

Subject to certain exceptions, the Rights become exercisable and trade separately from Common Stock only upon the “Distribution Time,” which occurs upon the earlier of:

•the close of business on the tenth (10th) day after the “Stock Acquisition Date,” which is (a) the first date of public announcement that a person or group of affiliated or associated persons (with certain exceptions, an “Acquiring Person”) has acquired, or obtained the right or obligation to acquire, beneficial ownership of 4.9% or more of the outstanding shares of Common Stock (with certain exceptions) or (b) such other date, as determined by the Board, on which a person or group has become an Acquiring Person, or

•the close of business on the tenth (10th) business day (or later date as may be determined by the Board prior to such time as any person or group becomes an Acquiring Person) following the commencement of a tender offer or exchange offer which, if consummated, would result in a person or group becoming an Acquiring Person.

Any existing stockholder or group that beneficially owns 4.9% or more of Common Stock has been grandfathered at its current ownership level, but the Rights will not be exercisable if, at any time after the announcement of the Tax Benefits Preservation Plan, such stockholder or group increases its ownership of Common Stock by one share of Common Stock. Certain synthetic interests in securities created by derivative positions, whether or not such interests are considered to be ownership of the underlying Common Stock or are reportable for purposes of Regulation 13D of the Securities Exchange Act of 1934, as amended, are treated as beneficial ownership of the number of shares of Common Stock equivalent to the economic exposure created by the derivative position, to the extent actual shares of Common Stock are directly or indirectly held by counterparties to the derivatives contracts.

Until the earlier of the Distribution Time and the Expiration Time (as defined herein), the surrender for transfer of any shares of Common Stock will also constitute the transfer of the Rights associated with those shares. As soon as practicable after the Distribution Time, separate rights certificates will be mailed to holders of record of Common Stock as of the close of business on the Distribution Time. From and after the Distribution Time, the separate rights certificates alone will represent the Rights. Except as otherwise provided in the Tax Benefits Preservation Plan, only shares of Common Stock issued prior to the Distribution Time will be issued with Rights. The Rights are not exercisable until the Distribution Time.

The Tax Benefits Preservation Plan will expire on the earliest of: (i) the close of business on the day following the certification of the voting results of the Company’s 2021 annual meeting of stockholders or any prior special meeting of stockholders, if at such stockholder meeting a proposal to approve this Agreement has not been passed by the affirmative vote of the holders of at least majority of the shares of Common Stock entitled to vote at the 2021 annual meeting of stockholders or any other meeting of the stockholders of the Company duly held prior to such meeting, (ii) the time at which the Rights are redeemed pursuant to the Tax Benefits Preservation Plan, (iii) the time at which the Rights are exchanged pursuant to the Tax Benefits Preservation Plan, (iv) the closing of any merger or other acquisition transaction involving the Company pursuant to an agreement of the type described in Section 13(f) of the Tax Benefits Preservation Plan, at which time, the Rights are terminated, (v) the time at which the Board determines that the NOLs are utilized in all material respects or that an ownership change under Section 382 would not adversely impact in any material respect the time period in which the Company could use the NOLs, or materially impair the amount of the NOLs that could be used by the Company in any particular time period, for applicable tax purposes and (vi) the Close of Business on July 1, 2023 (the earliest of (i), (ii), (iii), (iv), (v), and (vi) being herein referred to as the “Expiration Time”).

In the event that any person or group (other than certain exempt persons) becomes an Acquiring Person, each holder of a Right (other than any Acquiring Person and certain related parties, whose Rights automatically become null and void) will have the right to receive, upon exercise, shares of Common Stock having a value equal to two times the exercise price of the Right.

In the event that, at any time following the Stock Acquisition Date, any of the following occurs:

•the Company consolidates with, or merges with and into, any other entity, and the Company is not the continuing or surviving entity;

•any entity engages in a share exchange with or consolidates with, or merges with or into, the Company, and the Company is the continuing or surviving entity and, in connection with such share exchange, consolidation or merger, all or part of the outstanding shares of Common Stock are changed into or exchanged for stock or other securities of any other entity or cash or any other property; or

•the Company sells or otherwise transfers, in one transaction or a series of related transactions, fifty percent (50%) or more of the Company’s assets, cash flow or earning power,

•each holder of a Right (except Rights which previously have been voided as described above) will have the right to receive, upon exercise, common stock of the acquiring company having a value equal to two times the exercise price of the Right.

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Revenues

6 Months Ended

Jun. 30, 2021

Revenue from Contract with Customer [Abstract]

Revenues

Revenues

The following table disaggregates the Company’s revenue by source for the three and six-month periods ended June 30, 2021 and 2020:

	Three Months Ended June 30,				Six Months Ended June 30,
	2021		2020		2021		2020
	(In thousands)
Oil	$	14,666	$	11,554	$	30,214	$	40,208
NGL	10,625		1,591		19,481		7,525
Natural gas	8,905		3,303		18,124		8,854
Other	—		207		—		397
Total revenues	$	34,196	$	16,655	$	67,819	$	56,984

Oil, natural gas and NGL revenues. A majority of the Company’s revenues come from sales of oil, natural gas and NGLs are recorded at a point in time when control of the oil, natural gas and NGL production passes to the customer at the inlet of the processing plant or pipeline, or the delivery point for onloading to a delivery truck. As the Company’s customers obtain control of the production prior to selling it to other end customers, the Company presents its revenues on a net basis, rather than on a gross basis.

Pricing for the Company’s oil, natural gas and NGL contracts is variable and is based on either an index price, net of deductions, or a percentage of the sales price obtained by the customer, which is also based on index prices. The transaction price is allocated on a pro-rata basis to each unit of oil, natural gas or NGL sold based on the terms of the contract. Oil, natural gas and NGL revenues are also recorded net of royalties, discounts and allowances, and transportation costs, as applicable. Taxes assessed by governmental authorities on oil, natural gas and NGL sales are presented separately from revenues and are included in production, ad valorem, and other tax expense in the consolidated statements of operations.

Revenues Receivable. The Company records an asset in accounts receivable, net on its consolidated balance sheet for revenues receivable from contracts with customers at the end of each period. Pricing for revenues receivable is estimated using current month crude oil, natural gas and NGL prices, net of deductions. Revenues receivable are typically collected the month after the Company delivers the related production to its customers. As of June 30, 2021, and December 31, 2020, the Company had revenues receivable of $14.5 million and $12.8 million, respectively, and did not record any bad debt expense on revenues receivable during the three and six-month periods ended June 30, 2021 and 2020.

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Employee Termination Benefits

6 Months Ended

Jun. 30, 2021

Postemployment Benefits [Abstract]

Employee Termination Benefits

Employee Termination Benefits

During the three month period ended June 30, 2021, no employees received termination benefits. Certain employees received termination benefits including cash severance and accelerated share-based compensation upon separation of service from the Company as a result of the sale of North Park assets and other employee terminations during the six-month period ended June 30, 2021 and as a result of a reduction in workforce during the three and six-month periods ended June 30, 2020. The following tables presents a summary of employee termination benefits for the three and six-month periods ended June 30, 2021 and 2020 (in thousands):

	Cash		Share-Based Compensation (1)		Number of Shares	Total Employee Termination Benefits
Three Months Ended June 30, 2021
Executive Employee Termination Benefits	$	—	$	—	—	$	—
Other Employee Termination Benefits	—		—		—	—
	$	—	$	—	—	$	—
Three Months Ended June 30, 2020
Executive Employee Termination Benefits	$	1	$	—	—	$	1
Other Employee Termination Benefits	1,992		—		—	1,992
	$	1,993	$	—	—	$	1,993
Six Months Ended June 30, 2021
Executive Employee Termination Benefits	$	—	$	—	—	$	—
Other Employee Termination Benefits	32		17		—	49
	$	32	$	17	—	$	49
Six Months Ended June 30, 2020
Executive Employee Termination Benefits	$	4	$	—	—	$	4
Other Employee Termination Benefits	5,203		40		4	5,243
	$	5,207	$	40	4	$	5,247

____________________

(1)    Share-based compensation recognized in connection with the accelerated vesting of restricted stock awards due to the sale of the North Park assets for the six-month period ended June 30, 2021 and as a result of the reduction in workforce for the three and six-month periods ended June 30, 2020. The remaining unrecognized compensation expense associated with these awards at the date of termination was recorded as employee termination benefits. The unrecognized compensation expense was calculated using the grant date fair value for restricted stock awards. One share of the Company’s common stock was issued per restricted stock award.

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Earnings (Loss) per Share

6 Months Ended

Jun. 30, 2021

Earnings Per Share [Abstract]

Earnings (Loss) per Share

Earnings (Loss) per Share

The following table summarizes the calculation of weighted average common shares outstanding used in the computation of diluted earnings (loss) per share:

	Earnings (Loss)		Weighted Average Shares	Earnings (Loss) Per Share
	(In thousands, except per share amounts)
Three Months Ended June 30, 2021
Basic earnings per share	$	16,252	36,416	$	0.45
Effect of dilutive securities
Restricted stock units	—		855
Restricted stock awards	—		36
Performance share units (1)	—		—
Warrants	—		—
Stock options	—		38
Diluted earnings share (2)	$	16,252	37,345	$	0.44
Three Months Ended June 30, 2020
Basic loss per share	$	(215,779)	35,611	$	(6.06)
Effect of dilutive securities
Restricted stock awards	—		—
Performance share units	—		—
Warrants	—		—
Stock options	—		—
Diluted loss per share (3)	$	(215,779)	35,611	$	(6.06)
Six Months Ended June 30, 2021
Basic earnings per share	$	51,295	36,187	$	1.42
Effect of dilutive securities
Restricted stock units	—		1,019
Restricted stock awards	—		39
Performance share units (1)	—		—
Warrants	—		—
Stock options	—		38
Diluted earnings per share (2)	$	51,295	37,283	$	1.38
Six Months Ended June 30, 2020
Basic loss per share	$	(228,449)	35,581	$	(6.42)
Effect of dilutive securities
Restricted stock awards	—		—
Performance share units	—		—
Warrants
Stock options	—		—
Diluted loss per share (3)	$	(228,449)	35,581	$	(6.42)

____________________

(1)The performance share unit awards are contingently issuable and are considered in the calculation of diluted earnings per share. The Company assesses the number of awards that would be issuable, if any, under the terms of the agreement if the end of the reporting period were the end of the contingency period.

(2)The incremental shares of potentially dilutive restricted stock units, restricted stock awards and stock options were included for the three and six-month periods ended June 30, 2021 as their effect was dilutive under the treasury stock method.

(3)No incremental shares of potentially dilutive restricted stock awards, performance share units, warrants or stock options were included for the three and six-month periods ended June 30, 2020, as their effect was antidilutive under the treasury stock method.

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Subsequent Events

6 Months Ended

Jun. 30, 2021

Subsequent Events [Abstract]

Subsequent Events

Subsequent Events

Share Repurchase Program

In August 2021, the Company's Board of Directors (the “Board”) approved the initiation of a share repurchase program (the "Program") authorizing the Company to purchase up to an aggregate of $25.0 million of the Company’s common stock beginning as early as August 16, 2021. The Program is in accordance with Rule 10b-18 of the Exchange Act. Subject to applicable rules and regulations, repurchases under the Program can be made from time to time in open markets at the Company's discretion and in compliance with safe harbor provisions, or in privately negotiated transactions. The Program does not require any specific number of shares to be acquired, and can be modified or discontinued by the Board at any time.

First Amendment to Credit Agreement

On July 26, 2021, the Company entered into an amendment (the “First Amendment”) to the New Credit Facility. Pursuant to the First Amendment, the Company will be permitted to grant liens securing its obligations under swap contracts with certain counterparties to the extent such swap contracts are permitted under the Credit Agreement and approved by our board of directors.

Appointment of Chief Executive Officer

In connection with the resignation of the Company's previous Chief Executive Officer ("CEO"), the Board appointed Grayson Pranin as President and CEO effective July 16, 2021 and in addition will maintain his role as Chief Operating Officer. Mr. Pranin’s compensation will be determined at a later time. Mr. Pranin, age 41, has held the role of Senior Vice President and Chief Operating Officer since March 3, 2021. Prior to that Mr. Pranin most recently served as the Company’s Vice President of Engineering and Reservoir beginning June 1, 2020, and has served in various engineering, operational and leadership roles with the Company since December 2011. Prior to joining the Company, Mr. Pranin served in various engineering and operational roles for Pioneer Natural Resources from June 2010 to November 2011. Mr. Pranin has served his country as a non-commissioned and commissioned officer in the U.S. Army Engineering Corps. Mr. Pranin received his Bachelor of Science from the University of Nevada at Reno.

Resignation of Chief Executive Officer and Director

On July 9, 2021, Carl F. Giesler, Jr. submitted his resignation from his positions as CEO, President and as a member of the Board of the Company, effective July 16, 2021 in order to pursue another career opportunity. Mr. Giesler did not resign as a result of any disagreement with the Company on any matter relating to the Company’s operations, policies or practices.

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Basis of Presentation (Policies)

6 Months Ended

Jun. 30, 2021

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Nature of Business

Nature of Business. SandRidge Energy, Inc. is an oil and natural gas acquisition, development and production company headquartered in Oklahoma City, Oklahoma with a principal focus on developing and producing hydrocarbon resources in the United States.

Principles of Consolidation

Principles of Consolidation. The consolidated financial statements include the accounts of the Company and its wholly owned or majority owned subsidiaries, including its proportionate share of the Royalty Trusts. All intercompany accounts and transactions have been eliminated in consolidation.

Interim Financial Statements

Interim Financial Statements. The accompanying unaudited condensed consolidated financial statements and notes should be read in conjunction with the audited financial statements and notes contained in the Company’s 2020 Form 10-K. Certain information and 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, the financial statements include all adjustments, which consist of normal recurring adjustments unless otherwise disclosed, necessary to fairly state the Company’s unaudited condensed consolidated financial statements.

Significant Accounting Policies

Significant Accounting Policies. The unaudited condensed consolidated financial statements were prepared in accordance with the accounting policies stated in the 2020 Form 10-K as well as the items noted below.

Use of Estimates

Use of Estimates. The preparation of the unaudited condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period.

The more significant areas requiring the use of assumptions, judgments and estimates include: oil, natural gas and natural gas liquids (“NGL”) reserves; impairment tests of long-lived assets; the carrying value of unproved oil and natural gas properties; depreciation, depletion and amortization; asset retirement obligations; determinations of significant alterations to the full cost pool and related estimates of fair value used to allocate the full cost pool net book value to divested properties, as necessary; valuation allowances for deferred tax assets; income taxes; valuation of derivative instruments; contingencies; and accrued revenue and related receivables. Although management believes the estimates used in the areas noted above are reasonable, actual results could differ significantly from those estimates.

Going Concern Consideration. The accompanying condensed consolidated financial statements are prepared in accordance with GAAP generally accepted accounting principles applicable to a going concern, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business.

Recent Accounting Pronouncements

Recently Adopted Accounting Pronouncements ASU 2019-12. In December 2019, the FASB issued ASU 2019-12, “Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes,” which simplifies various aspects of accounting for income taxes, including requirements related to hybrid tax regimes, the tax basis step-up in goodwill obtained in a transaction that is not a business combination, separate financial statements of entities not subject to tax, the intraperiod tax allocation exception to the incremental approach, ownership changes in investments, interim-period accounting for enacted changes in tax laws, and year-to-date loss limitation in interim-period tax accounting. The Company adopted this ASU on January 1, 2021 using an applied prospective basis; however, the impact was not material upon adoption.Recent Accounting Pronouncements Not Yet Adopted ASU 2020-04. In March 2020, FASB issued ASU No. 2020-04, Reference Rate Reform (Topic 848), to facilitate the effects of reference rate reform on financial reporting. This ASU provides optional practical expedients and exceptions for applying GAAP provisions to contracts, hedging relationships, and other transactions that reference London Inter-Bank Offered Rate ("LIBOR"), or other reference rates expected to be discontinued because of reference rate reform, if certain criteria are met. The provisions of this ASU do not apply to contract modifications made and hedging transactions entered into or evaluated after December 31, 2022, except for hedging relationships existing as of December 31, 2022, that an entity has elected certain optional expedients for and that are retained through the end of the hedging relationship. The amendments in ASU 2020-04 are effective, for all entities, as of March 12, 2020 through December 31, 2022. The Company is currently reviewing the potential impact of the upcoming LIBOR reference rate change on its current contracts and will determine the applicable provisions of ASU 2020-04.

Oil, natural gas and NGL revenues

Oil, natural gas and NGL revenues. A majority of the Company’s revenues come from sales of oil, natural gas and NGLs are recorded at a point in time when control of the oil, natural gas and NGL production passes to the customer at the inlet of the processing plant or pipeline, or the delivery point for onloading to a delivery truck. As the Company’s customers obtain control of the production prior to selling it to other end customers, the Company presents its revenues on a net basis, rather than on a gross basis. Pricing for the Company’s oil, natural gas and NGL contracts is variable and is based on either an index price, net of deductions, or a percentage of the sales price obtained by the customer, which is also based on index prices. The transaction price is allocated on a pro-rata basis to each unit of oil, natural gas or NGL sold based on the terms of the contract. Oil, natural gas and NGL revenues are also recorded net of royalties, discounts and allowances, and transportation costs, as applicable. Taxes assessed by governmental authorities on oil, natural gas and NGL sales are presented separately from revenues and are included in production, ad valorem, and other tax expense in the consolidated statements of operations.

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Derivatives (Tables)

6 Months Ended

Jun. 30, 2021

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivative Instruments, Gain (Loss)

The following table summarizes derivative activity for the three and six-month periods ended June 30, 2021, and 2020 (in thousands):

	Three Months Ended June 30,				Six Months Ended June 30,
	2021		2020		2021		2020
(Gain) loss on commodity derivative contracts	$	—	$	(2,241)	$	—	$	(12,467)
Cash received on settlements	$	—	$	6,490	$	—	$	10,577

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Property, Plant and Equipment (Tables)

6 Months Ended

Jun. 30, 2021

Property, Plant and Equipment [Abstract]

Property, Plant and Equipment

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

	June 30, 2021		December 31, 2020
Oil and natural gas properties
Proved	$	1,439,904	$	1,463,950
Unproved	13,365		17,964
Total oil and natural gas properties	1,453,269		1,481,914
Less: accumulated depreciation, depletion and impairment	(1,370,544)		(1,375,692)
Net oil and natural gas properties	82,725		106,222
Land	200		200
Electrical infrastructure	121,819		121,819
Other non-oil and natural gas equipment	1,603		1,563
Buildings and structures	3,603		3,603
Financing leases	319		1,051
Total	127,544		128,236
Less accumulated depreciation and amortization	(27,972)		(25,118)
Other property, plant and equipment, net	99,572		103,118
Total property, plant and equipment, net	$	182,297	$	209,340

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Accounts Payable and Accrued Expenses (Tables)

6 Months Ended

Jun. 30, 2021

Payables and Accruals [Abstract]

Accounts Payable and Accrued Expenses

Accounts payable and accrued expenses consist of the following (in thousands):

	June 30, 2021		December 31, 2020
Accounts payable and other accrued expenses	$	19,555	$	23,017
Production payable	15,645		15,367
Payroll and benefits	2,775		5,640
Taxes payable	4,645		6,864
Drilling advances	234		477
Accrued interest	42		61
Total accounts payable and accrued expenses	$	42,896	$	51,426

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Revenues (Tables)

6 Months Ended

Jun. 30, 2021

Revenue from Contract with Customer [Abstract]

Schedule of Disaggregation of Revenue

The following table disaggregates the Company’s revenue by source for the three and six-month periods ended June 30, 2021 and 2020:

	Three Months Ended June 30,				Six Months Ended June 30,
	2021		2020		2021		2020
	(In thousands)
Oil	$	14,666	$	11,554	$	30,214	$	40,208
NGL	10,625		1,591		19,481		7,525
Natural gas	8,905		3,303		18,124		8,854
Other	—		207		—		397
Total revenues	$	34,196	$	16,655	$	67,819	$	56,984

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Employee Termination Benefits (Tables)

6 Months Ended

Jun. 30, 2021

Postemployment Benefits [Abstract]

Schedule of Employee Termination Benefits

The following tables presents a summary of employee termination benefits for the three and six-month periods ended June 30, 2021 and 2020 (in thousands):

	Cash		Share-Based Compensation (1)		Number of Shares	Total Employee Termination Benefits
Three Months Ended June 30, 2021
Executive Employee Termination Benefits	$	—	$	—	—	$	—
Other Employee Termination Benefits	—		—		—	—
	$	—	$	—	—	$	—
Three Months Ended June 30, 2020
Executive Employee Termination Benefits	$	1	$	—	—	$	1
Other Employee Termination Benefits	1,992		—		—	1,992
	$	1,993	$	—	—	$	1,993
Six Months Ended June 30, 2021
Executive Employee Termination Benefits	$	—	$	—	—	$	—
Other Employee Termination Benefits	32		17		—	49
	$	32	$	17	—	$	49
Six Months Ended June 30, 2020
Executive Employee Termination Benefits	$	4	$	—	—	$	4
Other Employee Termination Benefits	5,203		40		4	5,243
	$	5,207	$	40	4	$	5,247

____________________

(1)    Share-based compensation recognized in connection with the accelerated vesting of restricted stock awards due to the sale of the North Park assets for the six-month period ended June 30, 2021 and as a result of the reduction in workforce for the three and six-month periods ended June 30, 2020. The remaining unrecognized compensation expense associated with these awards at the date of termination was recorded as employee termination benefits. The unrecognized compensation expense was calculated using the grant date fair value for restricted stock awards. One share of the Company’s common stock was issued per restricted stock award.

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Earnings (Loss) per Share (Tables)

6 Months Ended

Jun. 30, 2021

Earnings Per Share [Abstract]

Schedule of Earnings (Loss) per Share

The following table summarizes the calculation of weighted average common shares outstanding used in the computation of diluted earnings (loss) per share:

	Earnings (Loss)		Weighted Average Shares	Earnings (Loss) Per Share
	(In thousands, except per share amounts)
Three Months Ended June 30, 2021
Basic earnings per share	$	16,252	36,416	$	0.45
Effect of dilutive securities
Restricted stock units	—		855
Restricted stock awards	—		36
Performance share units (1)	—		—
Warrants	—		—
Stock options	—		38
Diluted earnings share (2)	$	16,252	37,345	$	0.44
Three Months Ended June 30, 2020
Basic loss per share	$	(215,779)	35,611	$	(6.06)
Effect of dilutive securities
Restricted stock awards	—		—
Performance share units	—		—
Warrants	—		—
Stock options	—		—
Diluted loss per share (3)	$	(215,779)	35,611	$	(6.06)
Six Months Ended June 30, 2021
Basic earnings per share	$	51,295	36,187	$	1.42
Effect of dilutive securities
Restricted stock units	—		1,019
Restricted stock awards	—		39
Performance share units (1)	—		—
Warrants	—		—
Stock options	—		38
Diluted earnings per share (2)	$	51,295	37,283	$	1.38
Six Months Ended June 30, 2020
Basic loss per share	$	(228,449)	35,581	$	(6.42)
Effect of dilutive securities
Restricted stock awards	—		—
Performance share units	—		—
Warrants
Stock options	—		—
Diluted loss per share (3)	$	(228,449)	35,581	$	(6.42)

____________________

(1)The performance share unit awards are contingently issuable and are considered in the calculation of diluted earnings per share. The Company assesses the number of awards that would be issuable, if any, under the terms of the agreement if the end of the reporting period were the end of the contingency period.

(2)The incremental shares of potentially dilutive restricted stock units, restricted stock awards and stock options were included for the three and six-month periods ended June 30, 2021 as their effect was dilutive under the treasury stock method.

(3)No incremental shares of potentially dilutive restricted stock awards, performance share units, warrants or stock options were included for the three and six-month periods ended June 30, 2020, as their effect was antidilutive under the treasury stock method.

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Fair Value Measurements (Details) - USD ($)	Jun. 30, 2021	Dec. 31, 2020
Commodity derivative contracts | Fair Value, Measurements, Recurring
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Assets at fair value	$ 0	$ 0

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Derivatives - Narrative (Details) - USD ($)	Jun. 30, 2021	Dec. 31, 2020
Current assets
Derivative Instruments And Hedging Activities Disclosure [Line Items]
Open commodity derivatives	$ 0	$ 0

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Derivatives - Derivative Activity (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2021	Jun. 30, 2020	Jun. 30, 2021	Jun. 30, 2020
Derivative Instruments and Hedging Activities Disclosure
(Gain) loss on commodity derivative contracts	$ 0	$ (2,241)	$ 0	$ (12,467)
Cash received on settlements			0	10,577
Commodity derivative contracts
Derivative Instruments and Hedging Activities Disclosure
(Gain) loss on commodity derivative contracts	0	(2,241)	0	(12,467)
Cash received on settlements	$ 0	$ 6,490	$ 0	$ 10,577

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Property, Plant and Equipment - Schedule of Property, Plant and Equipment (Details) - USD ($) $ in Thousands	Jun. 30, 2021	Dec. 31, 2020
Oil and natural gas properties
Proved	$ 1,439,904	$ 1,463,950
Unproved	13,365	17,964
Total oil and natural gas properties	1,453,269	1,481,914
Less: accumulated depreciation, depletion and impairment	(1,370,544)	(1,375,692)
Net oil and natural gas properties	82,725	106,222
Property, Plant and Equipment, net
Financing leases	319	1,051
Total	127,544	128,236
Less accumulated depreciation and amortization	(27,972)	(25,118)
Other property, plant and equipment, net	99,572	103,118
Total property, plant and equipment, net	182,297	209,340
Land
Property, Plant and Equipment, net
Property, plant and equipment, gross	200	200
Electrical infrastructure
Property, Plant and Equipment, net
Property, plant and equipment, gross	121,819	121,819
Other non-oil and natural gas equipment
Property, Plant and Equipment, net
Property, plant and equipment, gross	1,603	1,563
Buildings and structures
Property, Plant and Equipment, net
Property, plant and equipment, gross	$ 3,603	$ 3,603

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Impairment (Details) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2021 USD ($) $ / bbl	Jun. 30, 2020 USD ($)	Jun. 30, 2021 USD ($) $ / bbl	Jun. 30, 2020 USD ($)	Jun. 30, 2021 MMcf
Impaired Long-Lived Assets Held and Used [Line Items]
Commodity price (usd per unit)	49.78		49.78		2.43
Full cost ceiling limitation impairment	$ 0.0	$ 201.8	$ 0.0	$ 209.8
Disposal Group, Held-for-sale, Not Discontinued Operations | Corporate Headquarters Building
Impaired Long-Lived Assets Held and Used [Line Items]
Full cost ceiling limitation impairment		163.8		171.8
Impairment charge		$ 38.0		$ 38.0

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Acquisitions and Disposal of Assets (Details) $ in Thousands			3 Months Ended		6 Months Ended
	Apr. 22, 2021 USD ($)	Feb. 05, 2021 USD ($)	Jun. 30, 2021 USD ($)	Jun. 30, 2020 USD ($) MMBoe	Jun. 30, 2021 USD ($) MMBoe	Jun. 30, 2020 USD ($) MMBoe
Assets and Liabilities Held for Sale [Line Items]
Proceeds from sale of assets					$ 37,900	$ 1,506
Total revenues			$ 34,196	$ 16,655	67,819	56,984
Lease operating expenses			9,232	8,698	17,186	24,340
Production, ad valorem, and other taxes			$ 2,534	$ 1,854	$ 4,710	$ 5,053
Production volume (MMBoe) | MMBoe				2,200,000	3,400,000	4,700,000
Royalty Interest of SandRidge Mississippian Trust I
Assets and Liabilities Held for Sale [Line Items]
Gross purchase price	$ 4,900
Net purchase price	$ 3,600
Royalty Interest of SandRidge Mississippian Trust I | SandRidge Energy, Inc
Assets and Liabilities Held for Sale [Line Items]
Ownership interest in trust	26.90%
Disposal Group, Held-for-sale, Not Discontinued Operations | North Park Basin, Colorado
Assets and Liabilities Held for Sale [Line Items]
Purchase price		$ 47,000
Proceeds from sale of assets		39,700
Reduction of full cost pool assets		22,000
Reduction in non-full cost pool assets		4,600
Gain on sale		19,700
Gain from release of revenues in suspense		500
Gain from relief of asset retirement obligations		6,100
Reduction in oil and gas properties related to NPB		$ 26,600
Total revenues				$ 4,600	$ 3,200	$ 17,400
Lease operating expenses				2,200	900	5,800
Production, ad valorem, and other taxes				$ 300	$ 200	$ 1,100
Production volume (MMBoe) | MMBoe				200,000	100,000	600,000
Disposal Group, Held-for-sale, Not Discontinued Operations | North Park Basin, Colorado | Revenue Benchmark | Revenue from Rights Concentration Risk
Assets and Liabilities Held for Sale [Line Items]
Concentration risk, percent of total				27.80%	4.70%	30.50%
Disposal Group, Held-for-sale, Not Discontinued Operations | North Park Basin, Colorado | Consolidated Lease Operating Expense | Revenue from Rights Concentration Risk
Assets and Liabilities Held for Sale [Line Items]
Concentration risk, percent of total				25.60%	5.40%	23.70%
Disposal Group, Held-for-sale, Not Discontinued Operations | North Park Basin, Colorado | Consolidated Production, Ad Valorem and Other Taxes | Revenue from Rights Concentration Risk
Assets and Liabilities Held for Sale [Line Items]
Concentration risk, percent of total				16.70%	5.30%	21.40%
Disposal Group, Held-for-sale, Not Discontinued Operations | North Park Basin, Colorado | Consolidated Production | Revenue from Rights Concentration Risk
Assets and Liabilities Held for Sale [Line Items]
Concentration risk, percent of total				10.30%	2.00%	11.70%

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Accounts Payable and Accrued Expenses (Details) - USD ($) $ in Thousands	Jun. 30, 2021	Dec. 31, 2020
Payables and Accruals [Abstract]
Accounts payable and other accrued expenses	$ 19,555	$ 23,017
Production payable	15,645	15,367
Payroll and benefits	2,775	5,640
Taxes payable	4,645	6,864
Drilling advances	234	477
Accrued interest	42	61
Total accounts payable and accrued expenses	$ 42,896	$ 51,426

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Long-Term Debt (Details) - USD ($)	3 Months Ended	6 Months Ended
	Jun. 30, 2021	Jun. 30, 2021	Dec. 31, 2020	Nov. 30, 2020
Icahn Enterprises
Debt Instrument
Interest expense paid to related party	$ 100,000	$ 300,000
New Credit Facility
Debt Instrument
Maximum borrowing capacity				$ 30,000,000.0
Total net leverage ratio (no greater than)	3.50	3.50
Interest coverage ratio (no less than)	2.25	2.25
Leverage ratio	(0.15)	(0.15)
Coverage ratio	59.73	59.73
New Credit Facility | Revolving Credit Facility
Debt Instrument
Maximum borrowing capacity	$ 10,000,000.0	$ 10,000,000.0
Remaining borrowing capacity	10,000,000.0	10,000,000.0
New Credit Facility | Term Loan
Debt Instrument
Maximum borrowing capacity	20,000,000	$ 20,000,000
New Credit Facility | Minimum | LIBOR
Debt Instrument
Basis spread on variable rate (basis points)		2.00%
New Credit Facility | Minimum | Base Rate
Debt Instrument
Basis spread on variable rate (basis points)		1.00%
New Credit Facility | Maximum | LIBOR
Debt Instrument
Basis spread on variable rate (basis points)		3.00%
New Credit Facility | Maximum | Base Rate
Debt Instrument
Basis spread on variable rate (basis points)		2.00%
New Credit Facility | Revolving Credit Facility
Debt Instrument
Maximum borrowing capacity	$ 20,000,000.0	$ 20,000,000.0	$ 20,000,000.0
Average interest rate during period	2.60%	2.62%
Percentage of proved reserves pledged as collateral	95.00%	95.00%

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Income Taxes - Narrative (Details) $ in Millions	6 Months Ended
	Jun. 30, 2021 USD ($)
Minimum
Income Taxes
Number of tax years open for state tax audit (in years)	3 years
Maximum
Income Taxes
Number of tax years open for state tax audit (in years)	5 years
Domestic Tax Authority
Income Taxes
Operating loss carryforwards	$ 1,600.0
Operating loss carryforwards, subject to expiration	800.0
Operating loss carryforwards, not subject to expiration	800.0
Tax credit carryforward, amount	$ 33.5

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Equity - Narrative (Details)		6 Months Ended
	Mar. 16, 2021 swap shares	Jun. 30, 2021 $ / shares shares	Dec. 31, 2020 $ / shares shares	Jul. 01, 2020 $ / shares shares
Class of Stock
Common stock, shares authorized (in shares)		250,000,000	250,000,000
Common stock, shares issued (in shares)		36,560,000	35,928,000
Common stock, shares outstanding (in shares)		36,560,000	35,928,000
Common stock, par value (in dollars per share) | $ / shares		$ 0.001	$ 0.001
Unvested options (in shares)		100,000
Increase in percentage points over lowest percentage of stock owned (more than)	0.50%
Change in beneficial ownership, period	3 years
Increase in number of shares that triggers Rights to not be exercisable	1
Stock acquisition, acquiring entity Flip-Over Event, exercisable common stock rights times exercise price | swap	2
Stock acquisition, acquiring entity Flip-Over Event, transfer threshold of assets, cash flow or earning power, percent	5000.00%
Series A Warrants
Class of Stock
Plan of reorganization, equity interest issuable (in shares)		4,900,000
Number of common shares exercised for each warrant (in shares)		1
Exercise price (in usd per share) | $ / shares		$ 41.34
Series B Warrants
Class of Stock
Plan of reorganization, equity interest issuable (in shares)		2,100,000
Number of common shares exercised for each warrant (in shares)		1
Exercise price (in usd per share) | $ / shares		$ 42.03
The Tax Benefits Preservation Plan
Class of Stock
Common stock, par value (in dollars per share) | $ / shares				$ 0.001
Number of rights per outstanding share of common stock				1
Preferred stock, par value (in dollars per share) | $ / shares				$ 0.001
Threshold for beneficial ownership declaration, percent	4.90%
The Tax Benefits Preservation Plan | Preferred Stock
Class of Stock
Exercise price (in usd per share) | $ / shares				$ 5.00
Restricted Stock
Class of Stock
Unvested awards (in shares)		100,000
Restricted Stock Units (RSUs)
Class of Stock
Unvested awards (in shares)		1,100,000

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Revenues - Disaggregation of Revenue (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2021	Jun. 30, 2020	Jun. 30, 2021	Jun. 30, 2020
Disaggregation of Revenue
Total revenues	$ 34,196	$ 16,655	$ 67,819	$ 56,984
Oil
Disaggregation of Revenue
Total revenues	14,666	11,554	30,214	40,208
NGL
Disaggregation of Revenue
Total revenues	10,625	1,591	19,481	7,525
Natural gas
Disaggregation of Revenue
Total revenues	8,905	3,303	18,124	8,854
Other
Disaggregation of Revenue
Total revenues	$ 0	$ 207	$ 0	$ 397

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Revenues - Narrative (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2021	Jun. 30, 2020	Jun. 30, 2021	Jun. 30, 2020	Dec. 31, 2020
Revenues Receivable from Customer
Bad debt expense on revenues receivable	$ 0	$ 0	$ 0	$ 0
Revenue Receivable from Contract With Customers
Revenues Receivable from Customer
Revenues receivable	$ 14,500		$ 14,500		$ 12,800

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Employee Termination Benefits (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2021	Jun. 30, 2020	Jun. 30, 2021	Jun. 30, 2020
Employee Termination Benefits
Cash	$ 0	$ 1,993	$ 32	$ 5,207
Share-Based Compensation	$ 0	$ 0	$ 17	$ 40
Number of Shares (in shares)	0	0	0	4,000
Total Employee Termination Benefits	$ 0	$ 1,993	$ 49	$ 5,247
Restricted Stock
Employee Termination Benefits
Restricted stock granted (in shares)			1
Executive Employee Termination Benefits
Employee Termination Benefits
Cash	0	1	$ 0	4
Share-Based Compensation	$ 0	$ 0	$ 0	$ 0
Number of Shares (in shares)	0	0	0	0
Total Employee Termination Benefits	$ 0	$ 1	$ 0	$ 4
Other Employee Termination Benefits
Employee Termination Benefits
Cash	0	1,992	32	5,203
Share-Based Compensation	$ 0	$ 0	$ 17	$ 40
Number of Shares (in shares)	0	0	0	4,000
Total Employee Termination Benefits	$ 0	$ 1,992	$ 49	$ 5,243

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Earnings (Loss) per Share (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended				6 Months Ended
	Jun. 30, 2021	Mar. 31, 2021	Jun. 30, 2020	Mar. 31, 2020	Jun. 30, 2021	Jun. 30, 2020
(Loss) Earnings Per Share, Diluted, by Common Class, Including Two Class Method
Basic earnings per share, Earnings (Loss)	$ 16,252	$ 35,043	$ (215,779)	$ (12,670)	$ 51,295	$ (228,449)
Basic shares outstanding, Weighted Average Shares (in shares)	36,416,000		35,611,000		36,187,000	35,581,000
Basic earnings per share, Earnings (Loss) Per Share (in dollars per share)	$ 0.45		$ (6.06)		$ 1.42	$ (6.42)
Effect of dilutive securities
Restricted stock units, Earnings (Loss)	$ 0				$ 0
Restricted stock units (Weighted Average Shares (in shares)	855,000				1,019,000
Restricted stock awards, Earnings (Loss)	$ 0		$ 0		$ 0	$ 0
Restricted stock awards, Weighted Average Shares (in shares)	36,000		0		39,000	0
Performance share units, Earnings (Loss)	$ 0		$ 0		$ 0	$ 0
Performance share units, Weighted Average Shares (in shares)	0		0		0	0
Warrants, Earnings (Loss)	$ 0		$ 0		$ 0
Warrants, Weighted Average Shares (in shares)	0		0		0
Stock options, Earnings (Loss)	$ 0		$ 0		$ 0	$ 0
Stock options, Weighted Average Shares (in shares)	38,000		0		38,000	0
Diluted earnings per share, Earnings (Loss)	$ 16,252		$ (215,779)		$ 51,295	$ (228,449)
Diluted (in shares)	37,345,000		35,611,000		37,283,000	35,581,000
Diluted earnings per share, Earnings (Loss) Per Share (in dollars per share)	$ 0.44		$ (6.06)		$ 1.38	$ (6.42)
Restricted Stock awards
Potentially Dilutive Securities
Antidilutive securities excluded from computation of (loss) earnings per share (in shares)	0		0		0	0
Performance Share Units
Potentially Dilutive Securities
Antidilutive securities excluded from computation of (loss) earnings per share (in shares)	0		0		0	0
Warrants
Potentially Dilutive Securities
Antidilutive securities excluded from computation of (loss) earnings per share (in shares)	0		0		0	0
Stock Option
Potentially Dilutive Securities
Antidilutive securities excluded from computation of (loss) earnings per share (in shares)	0		0		0	0

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Subsequent Events (Details) $ in Millions	Aug. 11, 2021 USD ($)
Subsequent Event
Subsequent Event [Line Items]
Stock repurchase program, authorized amount	$ 25.0