What changed in this filing

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Item 1. Financial Statements

2023-11-07 compared with 2023-08-03 · 75 added, 52 removed, 399 unchanged (24% of the section changed)

4 unchanged sentences

(In thousands)

September 30,

2023 December 31,

29 unchanged sentences

250,000 shares authorized;

36,966 issued and outstanding at June 30, 2023 and 36,868 issued and outstanding at December 31, 2022

37,091 issued and outstanding at September 30, 2023 and 36,868 issued and outstanding at December 31, 2022

Additional paid-in capital 1,074,219 1,151,689

7 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,

2023 2022 2023 2022

8 unchanged sentences

Employee termination benefits — — 19 —

(Gain) loss on derivative contracts — — ( 1,447 ) 1,064

Gain on derivative contracts — ( 4,258 ) ( 1,447 ) ( 3,194 )

Other operating (income) expense ( 31 ) ( 25 ) ( 152 ) ( 140 )

22 unchanged sentences

Shares Amount

Six Months Ended June 30, 2023

Nine Months Ended September 30, 2023

Balance at January 1, 2023

10 unchanged sentences

Balance at June 30, 2023 36,966 $ 37 — $ — $ 1,078,070 $ ( 623,409 ) $ 454,698

Issuance of stock awards, net of cancellations 125 — — — — — —

Tax withholdings paid in exchange for shares withheld on employee vested stock awards — — — — ( 718 ) — ( 718 )

Stock-based compensation — — — — 544 — 544

Dividends to shareholders — — — — ( 3,677 ) — ( 3,677 )

— — — — — 18,670 18,670

Six Months Ended June 30, 2022

Balance at September 30, 2023

37,091 $ 37 — $ — $ 1,074,219 $ ( 604,739 ) $ 469,517

Nine Months Ended September 30, 2022

Balance at January 1, 2022

9 unchanged sentences

Balance at June 30, 2022 36,742 $ 37 6,981 $ 88,520 $ 1,063,326 $ ( 822,756 ) $ 329,127

Issuance of stock awards, net of cancellations 123 — — — — — —

Tax withholdings paid in exchange for shares withheld on employee vested stock awards — — — — ( 942 ) — ( 942 )

Stock-based compensation — — — — 384 — 384

Warrants exercised ( 2 ) 7 5

— — — — — 53,725 53,725

Balance at September 30, 2022 36,865 $ 37 6,981 $ 88,518 $ 1,062,775 $ ( 769,031 ) $ 382,299

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

2 unchanged sentences

Depreciation, depletion, and amortization 16,285 13,038

(Gain) loss on derivative contracts ( 1,447 ) 1,064

Gain on derivative contracts ( 1,447 ) ( 3,194 )

Realized settlement gains (losses) on derivative contracts 5,876 ( 867 )

Stock-based compensation 1,422 1,131

Other 118 115

Changes in operating assets and liabilities 8,040 ( 12,534 )

10 unchanged sentences

Proceeds from exercise of stock options 94 77

Proceeds from exercise of warrants — 5

Tax withholdings paid in exchange for shares withheld on employee vested stock awards ( 929 ) ( 1,177 )

10 unchanged sentences

Asset retirement obligation capitalized $ 12 $ —

Asset retirement obligation removed due to divestiture $ ( 137 ) $ —

Dividend payable $ 253 $ —

33 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, accounts payable and accrued expenses and other current liabilities included in the unaudited condensed consolidated balance sheets approximated fair value at June 30, 2023 and December 31, 2022.

Level 1 Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities.

8 unchanged sentences

The Company considers active markets as those in which transactions for the assets and liabilities occur in sufficient frequency and volume to provide pricing information on an ongoing basis.

The Company had assets classified in Level 2 of the hierarchy as of December 31, 2022 and none as of June 30, 2023.

The Company had assets classified in Level 2 of the hierarchy as of December 31, 2022 and none as of September 30, 2023.

Level 2 Fair Value Measurements

5 unchanged sentences

Fair Value - Recurring Measurement Basis

There were no open commodity derivative contracts as of June 30, 2023.

There were no open commodity derivative contracts as of September 30, 2023.

As of December 31, 2022 the following table summarizes the Company’s assets measured at fair value on a recurring basis by the fair value hierarchy (in thousands):

7 unchanged sentences

On occasion, the Company has attempted to manage this risk on a portion of its forecasted oil, natural gas or NGL production sales through the use of commodity derivative contracts.

There were no open commodity derivative contracts as of June 30, 2023.

There were no open commodity derivative contracts as of September 30, 2023.

Historically, the Company has not designated any of its derivative contracts as hedges for accounting purposes.

4 unchanged sentences

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

The following table summarizes derivative activity for the three and six-month periods ended June 30, 2023 and 2022 (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, 2023 and 2022 (in thousands):

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

2023 2022 2023 2022

(Gain) loss on derivative contracts $ — $ — $ ( 1,447 ) $ 1,064

Gain on derivative contracts $ — $ ( 4,258 ) $ ( 1,447 ) $ ( 3,194 )

Realized settlement gains (losses) on derivative contracts $ — $ 218 $ 5,876 $ ( 867 )

1 unchanged sentence

As applicable, the Company historically has 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 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, 2023.

As a result of the netting provisions, the Company's maximum amount of loss under commodity derivative transactions due to credit risk was limited to the net amounts due from its counterparties.

There were no open commodity derivatives contracts as of September 30, 2023.

As of December 31, 2022, the Company’s open commodity derivative contracts were held with one counterparty.

There were no open derivative positions as of June 30, 2023.

There were no open derivative positions as of September 30, 2023.

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) the Company’s net derivative asset position as of December 31, 2022 (in thousands):

20 unchanged sentences

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

September 30,

2023 December 31,

16 unchanged sentences

$ 249,095 $ 230,876

On July 11, 2023, the Company closed an acquisition that increased its ownership interest in twenty-six producing wells operated by the Company within the Northwest Stack play for $ 10.6 million, after customary post-closing adjustments, with an effective date of April 1, 2023.

The Company used its cash on hand to fund the acquisition.

Accounts Payable and Accrued Expenses

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

September 30,

2023 December 31,

5 unchanged sentences

Commitments and Contingencies

Included below is a discussion of the Company's various future commitments and contingencies as of June 30, 2023.

Included below is a discussion of the Company's various future commitments and contingencies as of September 30, 2023.

The Company has provided accruals where necessary for contingent liabilities, based on ASC 450, Contingencies, when it has determined that a liability is probable and reasonably estimable.

2 unchanged sentences

The commitments and contingencies under these arrangements are not recorded in the accompanying consolidated balance sheets.

SANDRIDGE ENERGY, INC.

AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

Legal Proceedings.

2 unchanged sentences

Pursuant to the Plan, claims against the Company were discharged without recovery in each of the following consolidated cases (the “Cases”):

SANDRIDGE ENERGY, INC.

AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

• In re SandRidge Energy, Inc.

18 unchanged sentences

In addition to the matters described above, the Company is involved in various lawsuits, claims and proceedings, which are being handled and defended by the Company in the ordinary course of business.

SANDRIDGE ENERGY, INC.

AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

For each interim reporting period, the Company estimates the effective tax rate expected for the full fiscal year and uses that estimated rate in providing for income taxes on a current year-to-date basis.

6 unchanged sentences

A change in the estimate of future income could cause the valuation allowance to be adjusted in subsequent periods.

The Company had no federal or state income tax expense or benefit for the three and six-month periods ended June 30, 2023 and 2022.

The Company had no federal or state income tax expense or benefit for the three and nine-month periods ended September 30, 2023 and 2022.

Internal Revenue Code (“IRC”) Section 382 addresses company ownership changes and specifically limits the utilization of certain deductions and other tax attributes on an annual basis following an ownership change.

3 unchanged sentences

The Company adopted the Tax Benefits Preservation Plan, as amended on March 16, 2021 and June 20, 2023, in order to protect the Company’s ability to use its tax NOLs and certain other tax benefits.

SANDRIDGE ENERGY, INC.

AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

As of June 30, 2023, 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, 2023, 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, $ 0.7 billion expire during the years 2025 through 2037, while the remaining $ 0.9 billion do not have an expiration date.

1 unchanged sentence

Of the $ 1.1 billion in state NOL carryforwards, approximately $ 203.0 million are derived from states the Company currently does not operate in.

Of the remaining state NOL carryforwards, $ 658.1 million do not have an expiration date and $ 247.0 million expire during the years 2026 through 2037.

Of the remaining state NOL carryforwards, $ 650.0 million do not have an expiration date and $ 247.0 million will begin expiring in 2023 through 2037.

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, 2023 and December 31, 2022.

The Company did not have unrecognized tax benefits at September 30, 2023 and December 31, 2022.

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

4 unchanged sentences

Our authorized capital stock consists of 300 million shares, which include 250 million shares of common stock, $ 0.001 par value per share (“common stock”) and 50 million shares of preferred stock, par value $ 0.001 per share.

At June 30, 2023, the Company had 37.0 million shares of common stock issued and outstanding.

Further, at June 30, 2023, the Company had 0.1 million of unvested restricted stock awards, 0.3 million shares of unvested restricted stock units, an immaterial amount of unvested performance share units, and 0.2 million unvested stock options outstanding.

At September 30, 2023, the Company had 37.1 million shares of common stock issued and outstanding.

Further, at September 30, 2023, the Company had 0.1 million of unvested restricted stock awards, 0.1 million shares of unvested restricted stock units, an immaterial amount of unvested performance share units, and 0.2 million unvested stock options outstanding.

SANDRIDGE ENERGY, INC.

AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

During the fourth quarter of 2016, the Company issued approximately 4.9 million Series A warrants and 2.1 million Series B warrants to certain holders of general unsecured claims as defined in the 2016 bankruptcy reorganization plan.

7 unchanged sentences

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 three and six-month periods ended June 30, 2023.

There were no repurchases for the three and six-month periods ended June 30, 2023 under the Company’s prior share repurchase program.

The Company did not repurchase any common stock under the Program during the three and nine-month periods ended September 30, 2023.

There were no repurchases for the nine-month period ended September 30, 2023 under the Company’s prior share repurchase program.

In May 2023, the Board approved a one-time cash dividend of $ 2.00 per share of the Company’s common stock, which was paid on June 7, 2023 to shareholders of record as of the close of business on May 24, 2023.

The aggregate total payout was approximately $ 73.8 million.

Additionally, in May 2023, the Board announced that it plans a regular quarterly dividend of $ 0.10 per share of the Company’s common stock, to commence after the second quarter and to be first payable in August 2023, subject to quarterly approval by the Board.

SANDRIDGE ENERGY, INC.

AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

The aggregate total payout was $ 73.8 million.

Additionally, in May 2023, the Board announced plans for a regular quarterly dividend of $ 0.10 per share, subject to quarterly approval by the Board.

In August 2023, the Board declared a cash dividend of $ 0.10 per share of the Company’s common stock, which was paid on August 28, 2023 to shareholders of record as of the close of business on August 14, 2023.

The aggregate total payout was $ 3.7 million.

In addition to the quarterly dividend payments, the Company paid $ 0.3 million in cash dividends on vested stock awards during the three and nine-month periods ended September 30, 2023.

As of September 30, 2023, the Company had $ 0.3 million in dividends payable on unvested stock awards.

The Tax Benefits Preservation Plan .

On July 1, 2020, the Board declared a dividend distribution of one right (a “Right”) for each outstanding share of Company Common Stock to shareholders of record at the close of business on July 13, 2020.

On July 1, 2020, the Board declared a dividend distribution of one right (a “Right”) for each outstanding share of the Company’s common stock to shareholders of record at the close of business on July 13, 2020.

On June 20, 2023, the Company entered into an amendment to the Tax Benefits Preservation Plan to extend the expiration time of the Tax Benefits Preservation Plan from July 1, 2023 to July 1, 2026.

10 unchanged sentences

The Tax Benefits Preservation Plan is intended to prevent against such an “ownership change” by deterring any person or group from acquiring beneficial ownership of 4.9 % or more of the Company’s securities.

The following table disaggregates the Company’s revenue by source for the three and six-month periods ended June 30, 2023 and 2022:

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

SANDRIDGE ENERGY, INC.

AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

The following table disaggregates the Company’s revenue by source for the three and nine-month periods ended September 30, 2023 and 2022:

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

2023 2022 2023 2022

7 unchanged sentences

As the Company’s purchaser obtains 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 purchaser.

6 unchanged sentences

Revenues receivable are typically collected the month after the Company delivers the related production to its purchaser.

As of June 30, 2023 and December 31, 2022, the Company had revenues receivable of $ 13.5 million and $ 21.8 million, respectively.

The Company did no t record any bad debt expense on revenues receivable nor write-offs during the three and six and six-month periods ended June 30, 2023 and 2022, as the Company’s purchasers of oil, natural gas and NGL have had no issues of payment collectability or lack of credit worthiness with the Company .

As of September 30, 2023 and December 31, 2022, the Company had revenues receivable of $ 16.8 million and $ 21.8 million, respectively.

The Company did no t record any bad debt expense on revenues receivable nor write-offs during the three and nine-month periods ended September 30, 2023 and 2022, as the Company’s purchasers of oil, natural gas and NGL have had no issues of payment collectability or lack of credit worthiness with the Company .

SANDRIDGE ENERGY, INC.

5 unchanged sentences

(In thousands, except per share amounts)

Three Months Ended June 30, 2023

Three Months Ended September 30, 2023

Basic earnings per share

7 unchanged sentences

$ 18,670 37,161 $ 0.50

Three Months Ended June 30, 2022

Three Months Ended September 30, 2022

Basic earnings per share $ 53,725 36,797 $ 1.46

6 unchanged sentences

$ 53,725 37,150 $ 1.45

Six Months Ended June 30, 2023

Nine Months Ended September 30, 2023

Basic earnings per share

7 unchanged sentences

$ 59,065 37,123 $ 1.59

Six Months Ended June 30, 2022

Nine Months Ended September 30, 2022

Basic earnings per share $ 136,941 36,710 $ 3.73

9 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 and stock options were included for the three and six-month periods ended June 30, 2023 and 2022 as their effect was dilutive under the treasury stock method.

(2) The incremental shares of potentially dilutive restricted stock units, restricted stock awards and stock options were included for the three and nine-month periods ended September 30, 2023 and 2022 as their effect was dilutive under the treasury stock method.

SANDRIDGE ENERGY, INC.

2 unchanged sentences

Subsequent Events

On July 11, 2023, the Company closed an acquisition that increased its interest in twenty-six producing wells operated by the Company within the Northwest Stack play for approximately $ 11.3 million, with an effective date of April 1, 2023.

On August 1, 2023, the Board declared a cash dividend of $ 0.10 per share of the Company’s Common Stock, payable on August 28, 2023 to shareholders of record on August 14, 2023.

On November 2, 2023, the Board declared a cash dividend of $ 0.10 per share of the Company’s common stock, payable on November 27, 2023 to shareholders of record on November 13, 2023.

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