SandRidge Energy (SD) Q3 2024 earnings summary

Executive summary

• Closed a $123.8 million strategic acquisition in the Cherokee Play, Western Anadarko Basin, adding 44 producing wells and 4 DUCs, funded with cash on hand, boosting production and diversifying the commodity mix.

• Achieved a new peak average daily production rate of nearly 19 MBOE per day in September, up 27% from Q2, with 52% liquids and a 65% increase in oil production.

• Maintained a strong balance sheet with $94.1 million in cash and no debt as of September 30, 2024.

• Announced leadership changes, including a new Chairman, CFO, and Chief Accounting Officer effective October 2024.

• Continued focus on organic growth, production optimization, and disciplined capital allocation.

Financial highlights

• Q3 2024 net income was $25.5 million ($0.69 per share), up from $18.7 million in Q3 2023; adjusted EBITDA was $17.7 million.

• Revenues for Q3 2024 were $30.1 million, down from $38.1 million in Q3 2023; nine-month revenues were $86.3 million.

• Free cash flow for the first nine months was $34.4 million, with a 76% conversion rate relative to adjusted EBITDA.

• Lease operating expense per Boe decreased 9% sequentially to $5.82.

• Cash and cash equivalents at quarter-end were $94.1 million, with no outstanding debt.

Outlook and guidance

• Plan to develop up to 12 wells in the Cherokee Play next year using one rig, focusing on high-return projects with break-evens around $35 WTI.

• Committed to capital discipline and production optimization, monitoring commodity prices to guide future development.

• Evaluating further M&A opportunities while maintaining a strong balance sheet and capital return program.

• Legacy non-Cherokee assets remain 99% held by production, providing future development optionality.