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SandRidge Energy Shares Trade 12% Higher on Q2 Earnings, Raised FY Production Outlook

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SandRidge Energy shares rose to a new 52-week high after the company reported Q2/21 financial results and raised FY/21 production guidance after reactivating 49 producing wells.

After U.S. markets closed for trading yesterday, independent oil and gas company SandRidge Energy Inc. (SD:NYSE) announced financial and operational results its second quarter ended June 30, 2021.

The company reported that in Q2/21 it earned net income of $16.252 million, or $0.45 per share, compared to a net loss of $215.8 million, or a net loss of $6.06 per share in Q2/20. During Q2/20, the company recognized a very large impairment charge of $201.8 million, which appears to be the primary reason for the loss in that quarter. The firm added that, during the same period, adjusted EBITDA was $20.8 million, versus $8.8 million in the prior year's corresponding quarter.

The company advised that, during Q2/21, average realized oil prices increased by 19.89% to $64.73, compared to $53.99 in Q2/20. In addition, realized natural gas and natural gas liquids prices averaged $1.66 and $17.33, respectively, versus $1.85 and $17.00 in Q2/20.

SandRidge stated that in H1/21 it earned net income of $51.3 million, or $1.42 per share, compared to a net loss of $228.4 million, or a net loss of $6.42 per share in H1/20. The company added that in H1/21, it posted adjusted net income of $33.9 million, or $0.94 per share, and adjusted EBITDA of $42.5 million.

SandRidge mentioned that its Board of Directors approved a share repurchase program authorizing the firm to buy up to a total of $25 million of the company's outstanding common stock at its discretion starting on August 16, 2021.

The company commented that 100% of its operations are now strictly focused on the U.S. Mid-Continent region after selling its North Park Basin assets in Q1/21. The firm listed that it produced a total of 1,733 MBoe in Q2/21 and a total of 3,374 MBoe during H1/21.

SandRidge stated that in Q2/21, it initiated a well reactivation program and began returning disabled wells to full production if they had been taken out of service in H1/20 due to falling oil prices. The company advised that as of June 30, 2021, it had brought 49 wells back online. With modest spending on capital improvement, it has been able to improve the overall economics of the reactivated wells.

SandRidge indicated that following the sale of its North Park Basin assets in Colorado in Q1/21, it is no longer engaged in the practice of routinely flaring natural gas.

The company listed that as of July 1, 2021, its unaudited proved developed PV-10 reserve value of its Mid-Continent assets were approximately $321 million.

SandRidge advised that due to the increase in the number of operating wells achieved in its reactivation program it is revising its FY/21 production, expense and capital expenditures guidance. The company noted that "it is also updating 2021 commodity price realization guidance to midpoints of 95% and 27% of WTI for oil and NGLs, respectively and 60% of Henry Hub for natural gas."

The company reported that it now expects total production for FY/21 will be in the range of 5.8-7.1 MMBoe, up from its prior estimates of 4.8-6.2 MMBoe.

SandRidge Energy is an independent oil and gas company headquartered in Oklahoma City, Okla. The firm concentrates its efforts on developing and acquiring oil and gas properties in the mid-continent region of Kansas and Oklahoma.

SandRidge Energy began the day with a market cap of around $267.5 million with approximately 36.5 million shares outstanding and a short interest of about 2.1%. SD shares opened 5.6% higher today at $7.74 (+$0.41, +5.59%) over yesterday's $7.33 closing price and reached a new 52-week high price this morning of $8.25. The stock traded today between $7.46 to $8.25 per share and closed at $8.20 (+$0.87, +11.87%).


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