What changed in this filing

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Item 1A. Risk Factors

2023-03-15 compared with 2022-03-10 · 124 added, 94 removed, 363 unchanged (38% of the section changed)

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In any such circumstance and others described below, the trading price of our securities could decline and you could lose part or all of your investment.

Risks Related to the Oil and Natural Gas Industry and Our Business

Risk Factors Summary

The following is a summary of the material risk factors that could adversely affect our business, financial condition, and results of operations:

• Risks Relating to the Oil and Natural Gas Industry and Our Business

◦ Oil, natural gas and NGL prices fluctuate widely due to a number of factors that are beyond our control

◦ Drilling for and producing oil and natural gas are high risk activities with many uncertainties

◦ Market conditions or operational impediments may hinder our access to oil, natural gas and NGL markets or delay production

◦ A financial downturn could negatively affect our business, results of operations, financial condition, cash flows and access to capital

◦ Future drilling activities face substantial uncertainties

◦ Certain of our undeveloped acreage is subject to leases that will expire over the next several years unless production is established on units containing the acreage or we renew the leases

◦ We may be unable to obtain needed capital or financing on satisfactory terms, which could lead to a loss of properties and our ability to offset the natural decline in our oil, natural gas and NGL reserves

◦ Future commodity price declines may result in reductions of the asset carrying values of our oil and natural gas properties

◦ Significant inaccuracies in our reserve estimates or underlying assumptions could materially affect the quantities and present value of our reserves

◦ The loss of senior management or technical personnel or our inability to hire additional qualified personnel could adversely affect our operations

◦ We are subject to litigation and adverse outcomes in such litigation could have a material effect on our financial condition

◦ Changes affecting the availability of the London Inter-bank Offered Rate (“LIBOR”) may have consequences for us that cannot yet be reasonably predicted

◦ The present value of future net cash flows from our proved reserves are not the same as the current market value of our estimated oil, natural gas and NGL reserves

◦ We will not know conclusively prior to drilling whether oil or natural gas will be present in sufficient quantities to be economically producible

◦ Production of oil, natural gas and NGLs could be materially and adversely affected by natural disasters or severe weather

◦ Capital market volatility could adversely affect our ability to obtain capital, cause us to incur additional financing expense or affect the value of certain assets

◦ Properties we acquire may not produce as projected, and we may be unable to determine reserve potential, identify liabilities associated with the properties or obtain protection from sellers against them

◦ All of our operations are located in the Mid-Continent region, making us vulnerable to risks associated with operating in a limited number of major geographic areas

◦ Oil and natural gas wells are subject to operational hazards that can cause substantial losses for which we may not be adequately insured

◦ Shortages or increases in costs of equipment, services and qualified personnel could adversely affect our ability to execute our development plans

◦ Intense competition in the oil and natural gas industry may adversely affect our ability to succeed

◦ Seismic data may not accurately identify the presence of oil and natural gas, and the use of such technology requires greater predrilling expenditures

◦ Inflation may increase costs which can adversely impact cash flows and reserves value

◦ Disruptions or delays at our third-party service providers could adversely impact our operations

◦ Complex laws and regulations could adversely affect the cost, manner or feasibility of conducting our operations or expose us to significant liabilities

◦ Should we fail to comply with all applicable statutes, rules, regulations and orders of the FERC, the CFTC, the FTC or other regulators, we could be subject to substantial penalties and fines

◦ Our operations are subject to environmental and occupational safety and health laws and regulations that could adversely affect the cost, manner or feasibility of conducting operations

◦ Legislative or regulatory initiatives relating to hydraulic fracturing could result in increased costs and additional operating restrictions or delays and adversely affect our production

◦ Legislative or regulatory initiatives relating to seismic activity could limit our ability to produce oil and natural gas economically

◦ Climate change laws and regulations restricting emissions of GHGs could result in increased operating costs and reduced demand for the oil and natural gas that we produce

◦ Our failure to maintain an adequate system of internal control over financial reporting could adversely affect our ability to accurately report our results

◦ Our derivative activities could result in financial losses and are subject to new derivatives legislation and regulation, which could adversely affect our ability to hedge risks associated with our business

◦ Cyber-attacks or other failures in telecommunications or IT systems could result in information theft, data corruption and significant disruption of our business operations

◦ Repercussions from terrorist activities or armed conflict could harm our business

◦ Conservation measures and technological advances could reduce demand for oil and natural gas

◦ Events outside of our control, including an epidemic or outbreak of an infectious disease, such as COVID-19, may materially adversely affect our business

• Risks Relating to our NOLs

◦ Our ability to use our NOLs may be limited, and our Tax Benefits Preservation Plan may not prevent an ownership change resulting in loss of the Company’s NOLs

• Risks Relating to our Common Stock

◦ We have adopted a Tax Benefits Preservation Plan, which may discourage a corporate takeover

◦ Anti-takeover provisions in our charter documents may make it more difficult to acquire us, even though such acquisitions may be beneficial to our stockholders

For a more complete discussion of the material risk factors relevant to us, see below.

• Risks Relating to the Oil and Natural Gas Industry and Our Business

Oil, natural gas and NGL prices fluctuate widely due to a number of factors that are beyond our control.

Declines in oil, natural gas or NGL prices significantly affect our financial condition and results of operations.

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• energy conservation and environmental measures;

• the price and availability of alternative fuels;

• the price and availability of alternative fuels and energy sources;

• the strength or weakness of the U.S.

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These factors and the volatility of the energy markets, which we expect will continue, make it extremely difficult to predict future oil, natural gas and NGL price movements with any certainty.

For oil, from January 2017 through December 2021, the NYMEX settled price fluctuated between a high of $85.64 per Bbl and a low of $(36.98) per Bbl.

For natural gas, from January 2017 through December 2021, the month-end NYMEX settled price fluctuated between a high of $23.86 per MMBtu and a low of $1.33 per MMBtu.

For oil, from January 2018 through December 2022, the NYMEX West Texas Intermediate ("WTI") settled price fluctuated between a high of $123.64 per Bbl and a low of $(36.98) per Bbl.

For natural gas, from January 2018 through December 2022, the month-end NYMEX Henry Hub settled price fluctuated between a high of $24.74 per Mcf and a low of $1.38 per Mcf.

In addition, the market price of natural gas is generally higher in the winter months than during other months of the year due to increased demand for natural gas for heating purposes during the winter season.

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The estimated cost of drilling, completing and operating wells is uncertain before drilling commences.

Overruns in budgeted expenditures are common risks that can make a

particular project uneconomical.

Overruns in budgeted expenditures are common risks that can make a particular project uneconomical.

In addition, our drilling and producing operations may be curtailed, delayed or canceled as a result of various factors, including among others the following:

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• unexpected subsurface conditions;

• lack of qualified labor;

• lack of hydrocarbon content;

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Our failure to obtain such services on acceptable terms in the future or to expand our midstream assets could have a material adverse effect on our business.

We may be required to shut in wells for a lack of a market or because access to natural gas pipelines,

gathering system capacity, treating facilities or disposal wells may be limited or unavailable.

We may be required to shut in wells for a lack of a market or because access to natural gas pipelines, gathering system capacity, treating facilities or disposal wells may be limited or unavailable.

We would be unable to realize revenue from any shut-in wells until production arrangements were made to deliver the production to market.

A financial downturn could negatively affect our business, results of operations, financial condition and liquidity.

A financial downturn could negatively affect our business, results of operations, financial condition, cash flows and access to capital.

Actual or anticipated declines in domestic or foreign economic growth rates, regional or worldwide increases in tariffs or other trade restrictions, turmoil affecting the U.S.

or global financial system and markets and a severe economic contraction either regionally or worldwide, resulting from current efforts to contain the COVID-19 coronavirus or other factors, could materially affect our business and financial condition and impact our ability to finance operations by worsening the actual or anticipated future drop in worldwide commodity demand, negatively impacting the price we receive for our oil and natural gas production.

or global financial system and markets and a severe economic contraction either regionally or worldwide, resulting from a variety of factors including COVID-19, could materially affect our business and financial condition and impact our ability to finance operations or acquisitions by worsening the actual or anticipated future drop in worldwide commodity demand, negatively impacting the price we receive for our oil and natural gas production.

Negative economic conditions could also adversely affect the collectability of our trade receivables or performance by our vendors and suppliers.

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Future drilling activities face substantial uncertainties.

Our ability to drill and develop wells on our existing acreage depends on a number of uncertainties, including oil and natural gas and NGL prices, the availability and cost of capital, drilling and production costs, availability of drilling services and equipment, drilling results, lease expirations, gathering and midstream system and pipeline transportation constraints, access to and availability of water sourcing and distribution systems, regulatory approvals and other factors.

Because of these uncertain factors, we do not know if certain locations will ever drilled or if we will be able to produce natural gas or oil from any of our potential locations.

Our acreage must be drilled before lease expiration, generally within three to five years of the original date of the lease, in order to hold the acreage by production.

In a highly competitive market for acreage, failure to drill sufficient wells to hold acreage may result in additional renewal cost, or if renewal is not feasible or economically desirable, loss of our lease and prospective drilling opportunities.

Leases on our oil and natural gas properties typically have a term of three to five years, after which they expire unless, prior to expiration, production is established within the spacing units covering the undeveloped acres, or the leases are renewed.

The cost to renew such leases may increase significantly, and we may not be able to renew such leases on commercially reasonable terms or at all.

Unless we begin drilling, we could lose undeveloped acreage through lease expirations.

Our reserves and future production and, therefore, our future cash flow and income are highly dependent on successfully developing our undeveloped leasehold acreage and the loss of any leases could materially and adversely affect our ability to develop such acreage.

Our ability to drill and develop wells on our existing acreage depends on a number of uncertainties, including oil, natural gas and NGL prices, availability of qualified labor, the availability and cost of capital, drilling and production costs, availability of drilling services and equipment, drilling results, lease expirations, gathering and midstream system and pipeline transportation constraints, access to and availability of water sourcing and distribution systems, regulatory approvals and other factors.

Because of these uncertain factors, we do not know if certain locations will ever be drilled or if we will be able to produce natural gas or oil from any of our potential locations.

Certain of our undeveloped acreage is subject to leases that will expire over the next several years unless production is established on units containing the acreage or we renew the leases.

A portion of our acreage is undeveloped and subject to leases that will expire unless we exercise our contractual rights to extend or renew the terms of the leases or we establish production in paying quantities prior to expiration.

Our ability to establish production in paying quantities on or renew our expiring leases is based on various factors that may be beyond our control, such as the availability and cost of capital, equipment, services and personnel;

the ability to renew leases on commercially favorable terms or at all;

market prices of oil and natural gas;

drilling costs and results;

and production costs, among other factors.

Renewing such leases may cause us to incur additional costs.

If we are unable to establish production in paying quantities on or renew such leases, those leases will expire, and we will lose our right to participate in the development of the subject leases, which may adversely affect our results of operations.

As of December 31, 2022, we hold approximately 365,000 total net acres (including developed and undeveloped net acres), of which 27,011 net aces is undeveloped.

Of our undeveloped acreage, less than 5% are subject to expiration at the end of their primary terms.

For additional information on our developed and undeveloped acreage please see the section “Item 1.

Business—Developed and Undeveloped Acreage.”

Our development operations or ability to acquire oil and gas properties and reserves require substantial capital.

Outside our cash assets, we may be unable to obtain needed capital or financing on satisfactory terms, which could lead to a loss of properties and our ability to offset the natural decline in our oil, natural gas and NGL reserves, which would adversely affect our business, financial condition and results of operations.

Outside of our cash assets, we may be unable to obtain needed capital or financing on satisfactory terms, which could lead to a loss in our ability to offset the natural decline in our oil, natural gas and NGL reserves, which would adversely affect our business, financial condition and results of operations.

The oil and natural gas industry is capital intensive.

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The full cost ceiling is evaluated at the end of each quarter using the SEC prices, adjusted for the impact of derivatives accounted for as cash flow hedges, if any.

The Company did not recognize any full cost ceiling impairment charges for the year ended December 31, 2021.

The Company incurred full cost ceiling impairment charges of $218.4 million for the year ended December 31, 2020.

The Company did not recognize any full cost ceiling impairment charges for the years ended December 31, 2022 or 2021.

Cumulative full cost ceiling impairment from the Emergence Date through December 31, 2022 totaled $947.1 million.

If oil, natural gas and NGL prices decline further in the near term, and without other mitigating circumstances, we may experience additional losses of future net revenues, including losses attributable to quantities that cannot be economically produced at lower prices, which would likely cause us to record additional write-downs of capitalized costs of oil and natural gas properties and non-cash charges against future earnings.

If oil, natural gas and NGL prices decline further in the

near term, and without other mitigating circumstances, we may experience additional losses of future net revenues, including losses attributable to quantities that cannot be economically produced at lower prices, which would likely cause us to record additional write-downs of capitalized costs of oil and natural gas properties and non-cash charges against future earnings.

The amount of such future write-downs and non-cash charges could be substantial.

Our estimated reserves are based on many assumptions that may turn out to be inaccurate.

Our estimated reserves are based on many assumptions that may turn out to be different.

Any significant inaccuracies in these reserve estimates or underlying assumptions could materially affect the quantities and present value of our reserves.

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We may need to enter into retention or other arrangements that could be costly to maintain.

If executives, managers or other key personnel resign, retire or are terminated, or their service is otherwise interrupted, we may not be able to replace them in a timely manner and we could experience significant declines in productivity.

We are subject to litigation and adverse outcomes in such litigation could have a material effect on our financial condition.

We are, and from time to time may become, subject to litigation and various legal proceedings, including stockholder derivative suits, class action lawsuits and other matters, that involve claims for substantial amounts of money or for other relief or that might necessitate changes to our business or operations.

Additionally, we remain a nominal defendant in certain litigation matters discussed in Item 3.

“Legal Proceedings,” for the purposes of fulfilling indemnification obligations for legal expenses, including any settlement amounts, to certain former officers of the Company and the SandRidge Mississippian Trust I.

The defense of these actions has been and may continue to be both time consuming and expensive.

We evaluate these litigation claims and legal proceedings to assess the likelihood of unfavorable outcomes and to estimate, if possible, the amount of potential losses.

Based on these assessments and estimates, we may establish reserves and/or disclose the relevant litigation claims or legal proceedings, as and when required or appropriate.

These assessments and estimates are based on information available to management at the time of such assessment or estimation and involve a significant amount of judgment.

As a result, actual outcomes or losses could differ materially from those envisioned by our current assessments and estimates.

Our failure to successfully defend or settle any litigation or legal proceedings could result in liability that, to the extent not covered by our insurance, could have a material effect on our business, financial condition and results of operations.

Refer to Item 3.

“Legal Proceedings” for additional information.

Changes affecting the availability of the London Inter-bank Offered Rate (“LIBOR”) may have consequences for us that cannot yet be reasonably predicted.

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There is uncertainty about how applicable law and the courts will address the replacement of LIBOR with alternative rates on variable rate retail loan contracts and other contracts that do not include alternative rate fallback provisions.

After June 30, 2023, the interest rates on our revolving credit facility and our term loan facility will be based on the Base Rate or an alternative benchmark rate (which may or may not be based on SOFR), which may result in higher interest rates.

In addition, any changes to benchmark rates may have an uncertain impact on our cost of funds and our access to the capital markets, which could impact our results of operations and cash flows.

Uncertainty as to the nature of such potential changes may also adversely affect the trading market for our securities.

Uncertainty as to the nature of such potential changes may also adversely affect the trading market for our securities.The full effects of the transition away from LIBOR remain uncertain.

The present value of future net cash flows from our proved reserves calculated in accordance with SEC guidelines are not the same as the current market value of our estimated oil, natural gas and NGL reserves.

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The timing of both our production and incurrence of expenses in connection with the development and production of oil and natural gas properties will affect the timing of actual future net cash flows from proved reserves, and thus their actual present value.

In addition, we use a 10% discount factor when calculating discounted future net cash flows, which may not be the most appropriate discount factor based on interest rates in effect from time to time and risks associated with us or the oil and natural gas industry in general.

We will not know conclusively prior to drilling whether oil or natural gas will be present in sufficient quantities to be economically producible.

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Any diminished access to water for use in hydraulic fracturing, whether due to usage restrictions or drought or other weather conditions, could curtail our operations or otherwise result in delays in operations or increased costs.

Our business could be affected by macroeconomic risks.

Our operations and performance depend significantly on global and regional economic conditions.

Macroeconomic conditions, including inflation, slower growth or recession, changes to fiscal and monetary policy, tighter credit, higher interest rates, high unemployment and currency fluctuations can materially adversely affect demand for our products and services.

In addition, confidence and spending can be materially adversely affected in response to financial market volatility, negative financial news, declines in income or asset values, energy shortages and cost increases, labor costs and other economic factors.

An adverse impact on demand for our products and services, uncertainty about, or a decline in, global or regional economic conditions can have a significant impact on our operations.

Potential effects include financial instability;

inability to obtain credit to finance operations and purchases of our products.

We cannot predict the timing or scale of these various macroeconomic conditions, but they could have a material adverse affect on our business, results of operations and financial condition.

The capital markets could be volatile, and such volatility could adversely affect our ability to obtain capital, cause us to incur additional financing expense or affect the value of certain assets.

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Even when problems are identified, we may assume certain environmental and other risks and liabilities in connection with acquired properties, and such risks and liabilities could have a material adverse effect on our results of operations and financial condition.

A significant portion of our operations are located in the Mid-Continent region, making us vulnerable to risks associated with operating in a limited number of major geographic areas.

Substantially all of our production and reserves were located in the Mid-Continent region.

We divested all of our North Park Basin assets in February 2021, making substantially all of our future proved reserves and production located in the Mid-Continent.

All of our operations are located in the Mid-Continent region, making us vulnerable to risks associated with operating in a limited number of major geographic areas.

With the divestment of our North Park Basin assets in February 2021, all of our production and reserves are located in the Mid-Continent region.

This concentration could disproportionately expose us to operational and regulatory risk in this area.

This relative

lack of diversification in location of our key operations could expose us to adverse developments in the Mid-Continent or the oil and natural gas markets, including, for example, transportation or treatment capacity constraints, curtailment of production due to weather, electrical outages, treatment plant closures for scheduled maintenance, changes in the regulatory environment or other factors.

This relative lack of diversification in location of our key operations could expose us to adverse developments in the Mid-Continent or the oil and natural gas markets, including, for example, transportation or treatment capacity constraints, curtailment of production due to weather, electrical outages, treatment plant closures for scheduled maintenance, changes in the regulatory environment or other factors.

These factors could have a significantly greater impact on our financial condition, results of operations and cash flows than if our properties were more diversified.

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If we are not able to lease those locations on acceptable terms, we will have made substantial expenditures to acquire and analyze 2-D and 3-D seismic data without having an opportunity to benefit from those expenditures.

Inflation may adversely affect us by increasing costs beyond what we can recover through price increases and limit our ability to enter into future traditional debt financing.

Inflation may increase costs which can adversely impact cash flows and reserves value

Inflation can adversely affect us by increasing costs of critical materials, equipment, labor, and other services.

In addition, inflation is often accompanied by higher interest rates.

Continued inflationary pressures could impact our profitability.

Inflation may also affect our ability to enter into future traditional debt financing, as high inflation may result in an increase in cost.

Continued inflationary pressures could impact our cash flows, reserves value, and our profitability.

Additionally, inflation can impact the economics of future projects which could result in reduced investment activity and our ability to offset natural declines.

As we outsource functions, we become more dependent on the entities performing those functions.

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While we believe we conduct appropriate diligence before entering into agreements with any outsourcing entity, the failure of one or more of such entities to meet our performance standards and expectations, including with respect to providing services on a timely basis or providing services at the prices we expect, may have an adverse effect on our results of operations or financial condition.

For example, our outsourcing entities and other third-party service providers may experience difficulties, disruptions, delays, or failures in their ability to deliver services to us as a result of the COVID-19 pandemic.

We could face increased costs or disruption associated with finding replacement vendors or hiring new employees in order to return these services in-house, which may have a significant impact on the cost of operations.

Any failures of these vendors to properly deliver their services could similarly have a material effect on our business.

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Under the EPAct 2005 and implementing regulations, the FERC prohibits market manipulation in connection with the purchase or sale of natural gas.

The CFTC has similar authority under the Commodity Exchange Act and regulations it has promulgated thereunder with respect to certain segments of the physical and futures energy commodities market including oil

and natural gas.

The FTC also prohibits manipulative or fraudulent conduct in the wholesale petroleum market with respect to sales of commodities, including crude oil, condensate and natural gas liquids.

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Additional rules and legislation pertaining to these and other matters may be considered or adopted from time to time.

Our failure to comply with these or other laws and regulations administered by these agencies could subject us to criminal and civil penalties, as described in Item 1.

Our failure to comply with these or other

laws and regulations administered by these agencies could subject us to criminal and civil penalties, as described in Item 1.

“Business— Other Regulation of the Oil and Natural Gas Industry.”

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On June 30, 2021, Congress issued a joint resolution pursuant to the Congressional Review Act disapproving the September 2020 rule, and on November 15, 2021, EPA issued a proposed rule to revise the Quad Oa regulations that, if finalized, would require methane emissions reductions and implementation of a fugitive emissions monitoring and repair program.

EPA has also announced its intention to issue a supplemental proposal in 2022 that may expand on or modify the 2021 proposal in response to public input.

On November 8, 2022, EPA issued a supplemental notice of proposed rulemaking that would impose standards for certain sources that were not addressed in the November 2021 proposal, revise the previously proposed emissions standards, and establish a “super emitter response program” allowing local regulatory agencies and EPA-certified third parties to issue notices to owners and operators of regulated facilities when they detect a so-called “super-emitting event.” EPA is expected to finalize the rulemaking in late 2023.

It is possible that these rules will continue to require oil and gas operators to expend material sums.

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On July 21, 2020, a Wyoming federal court vacated almost all of the 2016 rule, including all provisions relating to the loss of gas through venting, flaring, and leaks, and on July 15, 2020, a California federal court vacated the 2018 rule.

On November 28, 2022, BLM announced a new proposed rule regulating emissions of methane in connection with the production of oil and gas on federal and Tribal lands.

If finalized, the proposed rule would require various technology upgrades, impose limits related to flaring, and require LDAR plans.

The final rule is expected to be announced later this year.

While, as a result of these developments, future implementation of the EPA and BLM methane rules is uncertain, given the long-term trend towards increasing regulation, future federal GHG regulations of the oil and gas industry remain a possibility.

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However, the Paris Agreement did not impose any binding obligations on the United States.

In June 2017, President Trump announced that the United States would withdraw from the Paris Agreement, which became effective November 4, 2020.

On January 20, 2021, President Joe Biden rejoined the Paris Agreement.

In June 2017, the United States announced it would withdraw from the Paris Agreement, which became effective November 4, 2020.

The United States has rejoined the Paris Agreement as of February 19, 2021.

The adoption and implementation of any laws or regulations imposing reporting obligations on, or limiting emissions of GHGs from, our equipment and our operations could require us to incur additional costs to monitor, report and potentially reduce emissions of GHGs associated with our operations or could adversely affect demand for the oil and natural gas that we produce, and thus possibly have a material adverse effect on our revenues, as well as having the potential effect of lowering the value of our reserves.

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Finally, to the extent increasing concentrations of GHGs in the Earth’s atmosphere may produce climate changes that could have significant physical effects, such as increased frequency and severity of storms, droughts, floods and other climatic events, such events could have a material adverse effect on our assets and operations, and potentially subject us to greater regulation.

Carbon capture technology and sequestration is not currently deployed on a wide-spread basis, and regulations are not developed.

Carbon capture and sequestration of the CO2 is an emerging technology.

While the technology to capture CO2 from refining is available, it is not in wide-spread use.

Sequestering the CO2 after it is captured in underground formations is a new technology and the regulations and legal framework is evolving.

Today the technical, legal and regulatory framework for injecting CO2 may change dramatically over time and may adversely impact our business model.

Our failure to maintain an adequate system of internal control over financial reporting, could adversely affect our ability to accurately report our results.

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Our derivative activities could result in financial losses and are subject to new derivatives legislation and regulation, which could adversely affect our ability to hedge risks associated with our business.

We may enter into financial derivative instruments with respect to a portion of our production to manage our exposure to oil, gas, and NGL price volatility.

We have entered and may enter into financial derivative instruments with respect to a portion of our production to manage our exposure to oil, gas, and NGL price volatility.

To the extent that we engage in price risk management activities to protect the Company from commodity price declines, we would be prevented from fully realizing the benefits of commodity price increases above the prices established by our hedging contracts.

In addition, our hedging arrangements may expose us to the risk of financial loss in certain circumstances, including instances in which the contract counterparties fail to perform under the contracts.

Further, to date, we have not designated and do not currently plan to designate any of our derivative contracts as hedges for accounting purposes and, as a result, record all derivative contracts on our balance sheet at fair value with changes in fair value

recognized in current period earnings.

Accordingly, our earnings may fluctuate significantly as a result of changes in the fair value of our derivative contracts.

The Dodd-Frank Wall Street Reform and Consumer Protection Act (the "Dodd-Frank Act") Act created a new regulatory framework for oversight of derivatives transactions by the CFTC and the SEC.

The Dodd-Frank Wall Street Reform and Consumer Protection Act (the "Dodd-Frank Act") created a new regulatory framework for oversight of derivatives transactions by the CFTC and the SEC.

Among other things, the Dodd-Frank Act subjects certain swap participants to new capital, margin and business conduct standards.

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Any cyber-attack could have a material adverse effect on our reputation, competitive position, business, financial condition and results of operations.

Cyber-attacks or security breaches also could result in litigation or regulatory action, as well as significant additional expense to implement further data protection measures.

Cyber-attacks or security breaches also could result in litigation and legal risks, including regulatory actions by state, federal, and non-US governmental authorities, as well as significant additional expense to implement further data protection measures.

In addition to the risks presented to our systems and networks, cyber-attacks affecting oil and natural gas distribution systems maintained by third parties, or the networks and infrastructure on which they rely, could delay or prevent delivery of our production to markets.

A cyber-attack of this nature would be outside our control, but could have a material, adverse effect on our business, financial condition and results of operations.

We have programs, processes and technologies in place to attempt to prevent, detect, contain, respond to and mitigate security-related threats and potential incidents.

We have programs, processes and technologies in place to attempt to prevent, detect, contain, respond to and mitigate security-related threats and potential incidents, as well as internal accounting controls to prevent unauthorized or fraudulent payments by ensuring that transactions are executed only with management authorization.

We undertake ongoing improvements to our systems, connected devices and information-sharing products in order to minimize vulnerabilities, in accordance with industry and regulatory standards;

however, because the techniques used to obtain unauthorized access change frequently and can be difficult to detect,

anticipating, identifying or preventing these intrusions or mitigating them if and when they occur is challenging and makes us more vulnerable to cyber-attacks than other companies not similarly situated.

however, because the techniques used to obtain unauthorized access change frequently and can be difficult to detect, anticipating, identifying or preventing these intrusions or mitigating them if and when they occur is challenging and makes us more vulnerable to cyber-attacks than other companies not similarly situated.

If our security measures are circumvented, proprietary information may be misappropriated, our operations may be disrupted, and our computers or those of our customers or other third parties may be damaged.

Compromises of our security may result in an interruption of operations, violation of applicable privacy and other laws, significant legal and financial exposure, damage to our reputation, and a loss of confidence in our security measures.

Additional impacts from cyber-attacks could include remediation costs, such as liability for stolen assets or information, repairs of system damage, and incentives to our business partners;

increased cybersecurity protection costs, which may include the costs of making organizational changes, deploying additional personnel and security technologies, training employees, and engaging third-party experts and consultants;

lost revenue resulting from the unauthorized use of proprietary information or the failure to retain or attract business partners following an attack;

increased insurance premiums;

and damage to the company’s competitiveness, stock price, and long-term shareholder value.

Repercussions from terrorist activities or armed conflict could harm our business.

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The impact of the changing demand for oil and natural gas services and products may have a material adverse effect on our business, financial condition, results of operations and cash flows.

Risks Relating to COVID-19

The COVID-19 pandemic could adversely affected our business, and the ultimate effect on our operations and financial condition will depend on future developments, which are highly uncertain and cannot be predicted.

The COVID-19 pandemic has adversely affected the global economy, disrupted global supply chains and created significant volatility in the financial markets.

In addition, the pandemic has resulted in travel restrictions, business closures and the institution of quarantining and other restrictions on movement in many communities.

As a result, there was a significant reduction in demand for and prices of crude oil, natural gas and NGL.

If the reduced demand for and prices of crude oil, natural gas and NGL continue for a prolonged period, our operations, financial condition, cash flows, level of expenditures and the quantity of estimated proved reserves that may be attributed to our properties may be materially and adversely affected.

Our operations also may be adversely affected if significant portions of our workforce are unable to work effectively, including because of illness, quarantines, government actions, or other restrictions in connection with the pandemic.

We have implemented workplace restrictions, including guidance for our employees to work remotely if necessary, in our offices and work sites for health and safety reasons and are continuing to monitor national, state and local government directives where we have operations and/or offices.

The extent to which the COVID-19 pandemic adversely affects our business, results of operations, and financial condition will depend on future developments, which are highly uncertain and cannot be predicted, including the scope and duration of the pandemic and actions taken by governmental authorities and other third parties in response to the pandemic.

Price Fluctuations, Global Supply Chain Disruptions and Inflation may Adversely Impact our Results of Operations.

With the global economic uncertainty surrounding the COVID-19 pandemic and its severity and duration and supply chain disruptions, we may continue to incur significant prices increases in the future which would likely have an adverse effect on our operating margins.

The disruptions to the global economy in 2020 and into 2021 have impeded global supply chains, resulting in longer lead times and also increased costs.

We have taken steps to minimize the impact of these increased costs by working closely with our suppliers.

Despite the actions we have undertaken to minimize the impacts from disruptions to the global economy, there can be no assurances that unforeseen future events in the global supply chain, and inflationary pressures, will not have a material adverse effect on our business, financial condition and results of operations.

Labor shortages and increased turnover or increases in employee and employee-related costs could have adverse effects on our profitability.

While we have historically experienced some level of ordinary course turnover of employees, the COVID-19 pandemic and resulting actions and impacts have exacerbated labor shortages and increased turnover.

A number of factors have had and may continue to have adverse effects on the labor force available to us, including reduced employment pools, federal unemployment subsidies, including unemployment benefits offered in response to the COVID-19 pandemic, and other government regulations, which include laws and regulations related to workers’ health and safety, wage and hour practices.

Labor shortages and increased turnover rates within our team members have led to and could in the future lead to increased costs, such as increased overtime to meet demand and increased wage rates to attract and retain employees and could negatively affect our ability to efficiently operate our production facilities or otherwise operate at full capacity.

An overall or prolonged labor shortage, lack of skilled labor, increased turnover or labor inflation could have a material adverse impact on our operations, results of operations, liquidity or cash flows.

Events outside of our control, including an epidemic or outbreak of an infectious disease, such as COVID-19, may materially adversely affect our business.

We face risks related to epidemics, outbreaks or other public health events that are outside of our control, and could significantly disrupt our operations and adversely affect our financial condition.

The global or national outbreak of an illness or other communicable disease, or any other public health crisis, such as COVID-19, may cause disruptions to our business and operational plans, which may include (i) shortages of employees, (ii) unavailability of contractors or subcontractors, (iii) interruption of supplies from third parties upon which we rely, (iv) recommendations of, or restrictions imposed by government and health authorities, including quarantines, to address an outbreak and (v) restrictions that we and our contractors, subcontractors and our customers impose, including facility shutdowns, to ensure the safety of employees.

The effects of COVID-19 and other infectious diseases and concerns regarding their global spread could negatively impact the domestic and international demand for crude oil, natural gas and NGL, which could contribute to price volatility, impact the price we receive for crude oil, natural gas and NGL and materially and adversely affect the demand for and marketability of our production.

The potential impact from COVID-19, both now and in the future, is difficult to predict, and the extent to which it may negatively affect our operating results or the duration of any potential business disruption is uncertain.

Risks Relating to our NOLs

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As of December 31, 2022, we had U.S.

federal NOLs of $1.7 billion, net of NOLs expected to expire unused due to the 2016 IRC Section 382 limitation, the majority of which will expire between 2025 and 2038, if not limited by additional triggering events prior to such time.

federal NOLs of $1.6 billion, net of NOLs expected to expire unused due to the 2016 IRC Section 382 limitation, approximately half of which will expire between 2025 and 2037, if not limited by additional triggering events prior to such time.

Under the provisions of the Internal Revenue Code of 1986, as amended (“IRC”), changes in our ownership, in certain circumstances, will limit the amount of U.S.

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Calculations pursuant to Section 382 of the IRC can be very complicated and no assurance can be given that upon further analysis, our ability to take advantage of our NOLs may be limited to a greater extent than we currently anticipate.

We may experience ownership changes in the future as a result of subsequent shifts in our stock ownership that we cannot predict or control that could result in further limitations being placed on our ability to utilize our federal NOLs.

may experience ownership changes in the future as a result of subsequent shifts in our stock ownership that we cannot predict or control that could result in further limitations being placed on our ability to utilize our federal NOLs.

If we are limited in our ability to use our NOLs in future years in which we have taxable income, we will pay more taxes than if we were able to utilize our NOLs fully.

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Risks Relating to our Common Stock

The exercise of all or any number of outstanding Warrants or the issuance of stock-based awards may dilute your holding of shares of our common stock.

As of the date of filing this report, we have outstanding Warrants to purchase approximately 7.0 million shares of our common stock at average exercise prices of either $41.34 and $42.03 per share.

In addition, we have as of the date of this report, 1.0 million shares of common stock reserved for future issuance under the SandRidge Energy, Inc.

2016 Omnibus Incentive Plan (the, “Omnibus Incentive Plan”).

The exercise of equity awards, including any stock options that we may grant in the future, the Warrants, and the sale of shares of our common stock underlying any such options or the Warrants, could have an adverse effect on the market for our common stock, including the price that an investor could obtain for their shares.

Investors may experience dilution in the net tangible book value of their investment upon the exercise of the Warrants and any stock options that may be granted or issued pursuant to the Omnibus Incentive Plan in the future.

We have adopted a Tax Benefits Preservation Plan, which may discourage a corporate takeover.

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Each share of our common stock issued thereafter will also include one right.

Each right entitles

its holder, under certain circumstances, to purchase from us one one-thousandth of a share of our Series A Junior Participating Preferred Stock at an exercise price of $5.00 per right, subject to adjustment.

Each right entitles its holder, under certain circumstances, to purchase from us one one-thousandth of a share of our Series A Junior Participating Preferred Stock at an exercise price of $5.00 per right, subject to adjustment.

The Board adopted the Tax Benefits Preservation Plan in an effort to protect stockholder value by attempting to protect against a possible limitation on our ability to use our NOLs.

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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-K

Item 1A. Risk Factors