SANDRIDGE ENERGY, INC. 2024 ANNUAL REPORT ON FORM 10-K
SandRidge Energy, Inc. filed its 2024 Annual Report on Form 10-K with the Securities and Exchange Commission, reporting financial results for the fiscal year ended December 31, 2024. The company’s aggregate market value of common stock held by non-affiliates was approximately $411.9 million as of June 30, 2024. As of March 4, 2025, there were 37,145,231 shares of common stock outstanding. The report includes financial statements, management’s discussion and analysis, and other information required by the Securities Exchange Act of 1934.
Overview
SandRidge Energy is an independent oil and natural gas company focused on acquisition, development, and production activities in the U.S. Mid-Continent region. The company’s financial performance in 2024 was impacted by lower commodity prices, which led to a decline in revenues compared to the prior year. However, SandRidge remained focused on prudent capital allocation and returning cash to shareholders through a dividend program.
Operational Activities
In 2024, SandRidge completed 3 operated wells and 1 non-operated well, down from 2 operated wells drilled and 4 wells completed in 2023. Production decreased slightly in 2024 due to natural decline, but was partially offset by new wells acquired in September 2024 and periods of higher ethane recovery.
The company’s production mix in 2024 was 15.2% oil, 53.6% natural gas, and 31.2% NGLs, compared to 17.0% oil, 55.3% natural gas, and 27.7% NGLs in 2023.
Highlighted Events
In August 2024, SandRidge closed the acquisition of certain producing oil and natural gas properties in the Cherokee Play of the Western Anadarko Basin for $121.9 million. In December 2024, the company closed a subsequent $5.2 million acquisition that increased its ownership in the same area.
In September 2024, the company appointed Jonathan Frates as Executive Vice President and Chief Financial Officer, and Vincent Intrieri as Chairman of the Board. Brandon Brown was also appointed as Senior Vice President and Chief Accounting Officer.
In April 2024, Dean Parrish was appointed as Senior Vice President and Chief Operating Officer.
Outlook
SandRidge remains committed to growing its asset base in a safe and efficient manner, with a focus on high-return organic growth projects. Key initiatives for 2025 include:
- One rig development in the Cherokee Shale Play, consisting of 9 wells to be spud, 8 wells to be drilled, and 6 wells to be completed.
- A production optimization program through artificial lift conversions and high-graded recompletions.
- A leasing program to bolster future development and extend the company’s position in the Cherokee assets.
The company will continue to monitor commodity prices, project results, costs, and other factors to shape its development decisions. SandRidge also remains vigilant in evaluating merger and acquisition opportunities while prioritizing its capital return program.
Consolidated Results of Operations
Revenues and Pricing:
| Metric | 2024 | 2023 | Change |
|---|---|---|---|
| Oil ($/Bbl) | $74.31 | $74.69 | $(0.38) |
| Natural Gas ($/Mcf) | $1.10 | $1.71 | $(0.61) |
| NGLs ($/Bbl) | $18.87 | $20.83 | $(1.96) |
| Total ($/Boe) | $20.69 | $24.16 | $(3.47) |
Revenues decreased by $23.4 million in 2024 compared to 2023, primarily due to lower commodity prices, partially offset by increased production volumes from the company’s acquisition in the Cherokee Play.
Operating Expenses:
| Expense | 2024 ($000s) | 2023 ($000s) | Change ($000s) |
|---|---|---|---|
| Lease Operating Expenses | $40,012 | $41,862 | $(1,850) |
| Production, Ad Valorem, and Other Taxes | $6,780 | $10,870 | $(4,090) |
| Depreciation and Depletion - Oil and Gas | $25,976 | $15,657 | $10,319 |
| Depreciation and Amortization - Other | $6,503 | $6,518 | $(15) |
Lease operating expenses decreased due to lower workover expenses. Production, ad valorem, and other taxes declined primarily due to a $1.4 million ad valorem tax refund and lower production taxes from decreased revenues. The increase in depreciation and depletion for oil and gas properties was driven by the acquisition in the Cherokee Play.
SandRidge did not record any full cost ceiling impairments in 2024 or 2023. However, the company noted that future impairments could still be realized based on changes in SEC prices, production, and other factors.
Other Operating Expenses:
| Expense | 2024 ($000s) | 2023 ($000s) | Change ($000s) |
|---|---|---|---|
| General and Administrative | $11,695 | $10,735 | $960 |
| Restructuring Expenses | $474 | $406 | $68 |
| (Gain) Loss on Derivative Contracts | $(748) | $(1,447) | $699 |
| Other Operating Expense (Income) | $1,372 | $(157) | $1,529 |
The increase in general and administrative expenses was due to higher personnel and other costs. Other operating expense increased primarily due to a $1.3 million impairment on equipment inventory.
Interest Income (Expense), Net:
Interest income, net decreased to $7.7 million in 2024 from $10.6 million in 2023, primarily due to the company’s lower cash balance from acquisitions, capital expenditures, and dividend payments.
Income Tax:
SandRidge recorded an income tax benefit of $22.2 million in 2024, compared to an expense of $14.0 million in 2023. The benefit was due to a higher partial valuation allowance release against the company’s deferred tax assets.
Liquidity and Capital Resources
At December 31, 2024, SandRidge had $99.5 million in cash and cash equivalents, including restricted cash. The company’s working capital decreased to $67.1 million, primarily due to cash used for acquisitions, dividends, and capital expenditures, partially offset by cash flow from operations.
Cash Flows:
| Cash Flow | 2024 ($000s) | 2023 ($000s) |
|---|---|---|
| Operating Activities | $73,933 | $115,578 |
| Investing Activities | $(154,696) | $(36,164) |
| Financing Activities | $(73,670) | $(82,938) |
The decrease in operating cash flows was mainly due to lower revenues from commodity price declines. Investing cash flows were higher in 2024 due to the $129.7 million acquisition in the Cherokee Play. Financing activities used $73.7 million, primarily for dividend payments.
Capital Expenditures:
| Expenditure | 2024 ($000s) | 2023 ($000s) |
|---|---|---|
| Drilling, Completion, and Capital Workovers | $15,562 | $22,478 |
| Leasehold and Geophysical | $11,246 | $(46) |
| Acquisitions | $129,664 | $11,232 |
| Total | $156,472 | $33,664 |
SandRidge’s 2025 capital budget is expected to be between $66 million and $85 million, which the company plans to fund using cash flows from operations and cash on hand.
Dividends and Share Repurchases:
In 2024, SandRidge paid a one-time $1.50 per share dividend and increased its ongoing quarterly dividend to $0.11 per share, for a total payout of $72.3 million. The company also repurchased $0.2 million of its common stock under a $75 million share repurchase program.
Outlook and Risks
SandRidge’s outlook remains focused on prudent capital allocation, organic growth, and returning cash to shareholders. Key risks include volatility in commodity prices, changes in proved reserves estimates, and potential cybersecurity incidents affecting its operations or distribution systems.
The company’s ability to pay dividends and execute its capital program will depend on its cash flow from operations and access to capital markets. SandRidge remains vigilant in evaluating acquisition opportunities while prioritizing its capital return program.
