What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2021-11-10 compared with 2021-08-11 · 132 added, 116 removed, 432 unchanged (36% of the section changed)

4 unchanged sentences

(In thousands)

September 30,

2021 December 31, 2020

17 unchanged sentences

Accounts payable and accrued expenses $ 46,778 $ 51,426

Derivative contracts 4,129 —

Asset retirement obligation 16,099 16,467

9 unchanged sentences

250,000 shares authorized;

36,560 issued and outstanding at June 30, 2021 and 35,928 issued and outstanding at December 31, 2020

36,674 issued and outstanding at September 30, 2021 and 35,928 issued and outstanding at December 31, 2020

Warrants 88,520 88,520

8 unchanged sentences

(In thousands, except per share data)

Three Months Ended June 30, Six Months Ended June 30,

Three Months Ended September 30, Nine Months Ended September 30,

2021 2020 2021 2020

36 unchanged sentences

Shares Amount

Six Months Ended June 30, 2021

Nine Months Ended September 30, 2021

Balance at December 31, 2020

9 unchanged sentences

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

— — — — 16,252 16,252

Balance at June 30, 2021 36,560 $ 37 6,981 $ 88,520 $ 1,062,426 $ ( 971,415 ) $ 179,568

Additional Paid-In Capital

Accumulated Deficit

Six Months Ended June 30, 2020

Stock-based compensation — — — — 236 — 236

Issuance of stock awards, net of cancellations 114 — — — — — —

Cash paid for tax obligations on vested stock awards — — — — ( 286 ) — ( 286 )

— — — — — 28,599 28,599

Balance at September 30, 2021

36,674 $ 37 6,981 $ 88,520 $ 1,062,376 $ ( 942,816 ) $ 208,117

Nine Months Ended September 30, 2020

Balance at December 31, 2019 35,772 $ 36 6,659 $ 88,520 $ 1,059,253 $ ( 745,357 ) $ 402,452

10 unchanged sentences

Balance at June 30, 2020 35,865 36 6,706 88,520 $ 1,060,019 $ ( 973,806 ) $ 174,769

Issuance of stock awards, net of cancellations 41 — — — — — —

Stock-based compensation — — — — 2,004 — 2,004

Cash paid for tax obligations on vested stock awards — — — — ( 62 ) — ( 62 )

— — — — — ( 48,749 ) ( 48,749 )

Balance at September 30, 2020 35,906 36 6,706 88,520 $ 1,061,961 $ ( 1,022,555 ) $ 127,962

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

3 unchanged sentences

(In thousands)

Six Months Ended June 30,

Nine Months Ended September 30,

CASH FLOWS FROM OPERATING ACTIVITIES

Net income (loss) $ 79,894 $ ( 277,198 )

Adjustments to reconcile net loss to net cash provided by operating activities

Adjustments to reconcile net income (loss) to net cash provided by operating activities

Provision for doubtful accounts ( 2,329 ) 469

2 unchanged sentences

Debt issuance costs amortization 57 477

Write off of debt issuance costs 174 —

(Gain) loss on derivative contracts 4,129 ( 7,168 )

2 unchanged sentences

Stock-based compensation 1,036 2,753

Other 107 114

Changes in operating assets and liabilities ( 9,073 ) ( 8,784 )

57 unchanged sentences

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.

The accompanying condensed consolidated financial statements are prepared in accordance with GAAP, as 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.

9 unchanged sentences

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.

The Company believes the impact upon adoptions will not have a material impact on the financial statements.

SANDRIDGE ENERGY, INC.

3 unchanged sentences

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.

7 unchanged sentences

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.

The Company had liabilities classified in Level 2 of the hierarchy as of September 30, 2021 and none as of December 31, 2020 as described below.

Level 2 Fair Value Measurements

5 unchanged sentences

Fair Value - Recurring Measurement Basis

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

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.

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.

The Company had liabilities classified in Level 2 of the hierarchy as of September 30, 2021 and no open commodity derivative contracts as of December 31, 2020.

The following table summarize the Company’s assets measured at fair value on a recurring basis by the fair value hierarchy (in thousands):

September 30, 2021

Fair Value Measurements

Assets/Liabilities at Fair Value

Commodity derivative contracts $ — $ 4,129 $ — $ — $ 4,129

$ — $ 4,129 $ — $ — $ 4,129

____________________

(1) Represents the effect of netting assets and liabilities for counterparties with which the right of offset exists.

SANDRIDGE ENERGY, INC.

1 unchanged sentence

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

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.

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

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.

The Company has not designated any of its derivative contracts as hedges for accounting purposes.

All derivative contracts have 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.

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,

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

Three Months Ended September 30, Nine Months Ended September 30,

2021 2020 2021 2020

(Gain) loss on commodity derivative contracts $ 4,129 $ 5,299 $ 4,129 $ ( 7,168 )

Cash received on settlements $ — $ 6,490 $ — $ 10,577

Cash (paid) received on settlements $ — $ 619 $ — $ 11,197

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 applicable, the Company has 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.

The following table summarizes (i) the Company's commodity derivative contracts on a gross basis, (ii) the effects of netting assets and liabilities for which the right of offset exists based on master netting arrangements and (iii) for the Company’s net derivative liability positions as of September 30, 2021 and no open positions as of December 31, 2020 (in thousands):

September 30, 2021

Gross Amounts

Gross Amounts Offset

Amounts Net of Offset

Financial Collateral

Derivative contracts - current

$ 4,129 $ — $ 4,129 $ — $ 4,129

SANDRIDGE ENERGY, INC.

AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

As of September 30, 2021, the Company's open derivative contracts consisted of natural gas and NGL commodity derivative contracts under which we will receive a fixed price for the contract and pay a floating market price to the counterparty over a specified period for a contracted volume.

These commodity derivative contracts consisted of the following:

Notional Units Weighted Average Fixed Price per Unit

NGL Price Swaps:

October 2021 - February 2022 2,605,000 Gallons $ 1.20

Natural Gas Price Swaps:

October 2021 - February 2022 1,800,000 MMBtu $ 4.07

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.

1 unchanged sentence

Changes in fair value were principally measured based on a comparison of future prices to the contract price at the end of the period.

Fair Value of Derivatives

The following table presents the fair value of the Company’s derivative contracts as of September 30, 2021 on a gross basis without regard to same counterparty netting (in thousands):

Type of Contract Balance Sheet Classification September 30, 2021

Derivative liabilities

NGL price swaps Derivative Contracts - Current $ 819

Natural gas price swaps Derivative Contracts - Current 3,310

Total net derivative contracts $ 4,129

See Note 2 for additional discussion of the fair value measurement of the Company’s derivative contracts.

Property, Plant and Equipment

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

September 30,

2021 December 31, 2020

6 unchanged sentences

Net oil and natural gas properties 84,754 106,222

82,725 106,222

Electrical infrastructure 121,819 121,819

3 unchanged sentences

Total 128,352 128,236

Less accumulated depreciation and amortization

( 27,972 ) ( 25,118 )

accumulated depreciation and amortization ( 29,401 ) ( 25,118 )

Other property, plant and equipment, net

10 unchanged sentences

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 no t 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 SEC Prices utilized in the calculation of proved reserves included in the full cost ceiling test at September 30, 2021 were $ 57.69 per barrel of oil and $ 2.94 per Mcf of natural gas, before price differential adjustments.

In the three and nine - month periods ended September 30, 2021, we did no t record a full cost ceiling limitation impairment charge.

In the three-month period ended September 30, 2020, the Company recorded a total impairment charge of $ 44.0 million, which related to the full cost ceiling limitation impairment charge.

The Company recorded a total impairment charge of $ 253.8 million for the nine-month period ended September 30, 2020, which included a full cost ceiling limitation impairment charge of $ 215.8 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.

4 unchanged sentences

Overriding Royalty Interest Assets

On April 22, 2021, we acquired all of the overriding royalty interest assets of SandRidge Mississippian Trust I (the “Trust”).

On April 22, 2021, the Company 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).

On September 10, 2020, the Company acquired all of the overriding royalty interest assets of SandRidge Mississippian Trust II.

The gross purchase price was $ 5.3 million (net $ 3.3 million, given our 37.6 % ownership of the Trust).

North Park Basin Sale

4 unchanged sentences

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.

The Company recorded a decrease to the sales price of $ 0.8 million as a result of post-closing adjustments made during the three months ended September 30, 2021.

As a result, (Gain) loss on sale of assets decreased to $ 18.9 million for the nine months ended September 30, 2021.

For the nine-months ended September 30, 2021, NPB represented $ 3.2 million, or 2.8 % of the Company's $ 114.4 million total consolidated Revenues, NPB represented $ 0.9 million, or 3.5 % of the Company's $ 26.3 million consolidated Lease

SANDRIDGE ENERGY, INC.

1 unchanged sentence

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

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.

operating expense and NPB represented 0.1 MMBoe, or 1.3 % of the Company's consolidated total production volumes of 5.1 MMBoe.

For the three-months ended September 30, 2020, NPB represented $ 7.1 million, or 25.6 % of the Company's $ 27.7 million total consolidated Revenues, NPB represented $ 1.3 million or 16.4 % of the Company's $ 8.1 million consolidated Lease operating expense, it represented $ 0.5 million, or 19.9 % of the Company's $ 2.3 million consolidated Production, ad valorem and other taxes and NPB represented 0.2 MMBoe, or 9.9 % of the Company's consolidated total production volumes of 2.0 MMBoe.

For the nine-months ended September 30, 2020, NPB represented $ 24.5 million, or 28.9 % of the Company's $ 84.7 million total consolidated Revenues, NPB represented $ 7.1 million or 21.9 % of the Company's $ 32.4 million consolidated Lease operating expense, it represented $ 1.5 million, or 20.9 % of the Company's $ 7.4 million consolidated Production, ad valorem and other taxes and NPB represented 0.8 MMBoe, or 11.1 % of the Company's consolidated total production volumes of 6.8 MMBoe.

Accounts Payable and Accrued Expenses

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

September 30,

2021 December 31, 2020

8 unchanged sentences

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.

On November 30, 2020 the Company entered into the New Credit Facility of $ 30.0 million with a related party and affiliate of Icahn Enterprises, as Lender and Icahn Agency Services LLC, as administrative agent.

As of September 30, 2021 the Company did no t have an outstanding balance and as of December 31, 2020, the Company had a $ 20.0 million term loan outstanding under the New Credit Facility.

The New Credit Facility consisted of a $ 10.0 million revolving loan facility and a $ 20 million term loan facility.

On September 2, 2021, the Company repaid its $ 20.0 million, term loan in full and terminated all commitments and obligations under the New Credit Facility.

The Company’s payment to the Lender under the Credit Agreement satisfied all of the Company’s remaining term debt and revolving debt obligations.

The Company did not incur any early termination penalties as a result of the repayment of indebtedness or termination of the Credit Agreement.

During the three and nine-months ended September 30, 2021, the weighted average interest rate paid for borrowings outstanding under the New Credit Facility was approximately 2.60 % and 2.61 %, respectively.

During the three and nine-months ended September 30, 2021, the Company paid the Lender, a related party, $ 0.1 million and $ 0.4 million, respectively of interest expense which is included on the Interest expense, net line item on the Condensed Consolidated Statement of Operations.

SANDRIDGE ENERGY, INC.

1 unchanged sentence

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

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 .

Commitments and Contingencies

21 unchanged sentences

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.

As a result, the Company had no federal or state income tax expense or benefit for the three and nine-month periods ended September 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.

6 unchanged sentences

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.

As of September 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 did not have unrecognized tax benefits at September 30, 2021 and December 31, 2020.

The Company’s only taxing jurisdiction is the United States (federal and state).

3 unchanged sentences

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.

At September 30, 2021, the Company had approximately 250.0 million shares of common stock authorized, 36.7 million shares of common stock, par value $ 0.001 per share, issued and outstanding.

Further, at September 30, 2021, the Company had approximately 0.1 million shares of unvested restricted stock awards, 0.4 million shares of unvested restricted stock units, 0.3 million stock options outstanding, and an immaterial number of unvested performance share units.

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.

3 unchanged sentences

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

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.

The Company did not repurchase any common stock under the Program during the third quarter ended September 30, 2021.

The Tax Benefits Preservation Plan.

2 unchanged sentences

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.

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 NOLs and certain other tax benefits to reduce potential future U.S.

federal income tax obligations.

16 unchanged sentences

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

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”).

The Tax Benefits Preservation Plan was approved at the 2021 annual meeting of stockholders on May 25, 2021.

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.

4 unchanged sentences

• 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.

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,

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

Three Months Ended September 30, Nine Months Ended September 30,

2021 2020 2021 2020

6 unchanged sentences

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.

A majority of the Company’s revenues come from the sale of oil, natural gas and NGLs and 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.

SANDRIDGE ENERGY, INC.

AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

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.

6 unchanged sentences

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 no t record any bad debt expense on revenues receivable during the three and six-month periods ended June 30, 2021 and 2020.

As of September 30, 2021, and December 31, 2020, the

SANDRIDGE ENERGY, INC.

AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

Company had revenues receivable of $ 19.0 million and $ 12.8 million, respectively, and did no t record any bad debt expense on revenues receivable during the three and nine-month periods ended September 30, 2021 and 2020.

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):

During the three-month period ended September 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 nine-month period ended September 30, 2021 and as a result of a reduction in workforce during the three and nine-month periods ended September 30, 2020.

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

Cash Share-Based Compensation (1) Number of Shares Total Employee Termination Benefits

Three Months Ended June 30, 2021

Three Months Ended September 30, 2021

Executive Employee Termination Benefits $ — $ — — $ —

1 unchanged sentence

$ — $ — — $ —

Three Months Ended June 30, 2020

Three Months Ended September 30, 2020

Executive Employee Termination Benefits

2 unchanged sentences

$ 1,400 $ 1,784 159 $ 3,184

$ 1,993 $ — — $ 1,993

Six Months Ended June 30, 2021

Nine Months Ended September 30, 2021

Executive Employee Termination Benefits $ — $ — — $ —

1 unchanged sentence

$ 32 $ 17 — $ 49

Six Months Ended June 30, 2020

Nine Months Ended September 30, 2020

Executive Employee Termination Benefits $ 1,009 $ 1,784 159 $ 2,793

2 unchanged sentences

____________________

(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.

(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 nine-month period ended September 30, 2021 and as a result of the reduction in workforce for the three and nine-month periods ended September 30, 2020.

The remaining unrecognized compensation expense associated with these awards at the date of termination was recorded as employee termination benefits.

9 unchanged sentences

(In thousands, except per share amounts)

Three Months Ended June 30, 2021

Three Months Ended September 30, 2021

Basic earnings per share

7 unchanged sentences

$ 28,599 36,996 $ 0.77

Three Months Ended June 30, 2020

Three Months Ended September 30, 2020

Basic loss per share $ ( 48,749 ) 35,783 $ ( 1.36 )

4 unchanged sentences

Diluted loss per share (3) $ ( 48,749 ) 35,783 $ ( 1.36 )

Six Months Ended June 30, 2021

Nine Months Ended September 30, 2021

Basic earnings per share

7 unchanged sentences

$ 79,894 37,200 $ 2.15

Six Months Ended June 30, 2020

Nine Months Ended September 30, 2020

Basic loss per share $ ( 277,198 ) 35,649 $ ( 7.78 )

7 unchanged sentences

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.

SANDRIDGE ENERGY, INC.

AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

Subsequent Events

Share Repurchase Program

The Program is in accordance with Rule 10b-18 of the Exchange Act.

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.

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.

Pranin’s compensation will be determined at a later time.

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.

Pranin has served his country as a non-commissioned and commissioned officer in the U.S.

Army Engineering Corps.

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.

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.

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.

(2) The incremental shares of potentially dilutive restricted stock units and restricted stock awards were included for the three and nine-month periods ended September 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 nine-month periods ended September 30, 2020, as their effect was antidilutive under the treasury stock method.

Tabl e of Contents

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements