What changed in this filing

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Item 1. Financial Statements

2024-05-08 compared with 2023-11-07 · 100 added, 166 removed, 308 unchanged (46% of the section changed)

4 unchanged sentences

(In thousands)

September 30,

2024 December 31,

3 unchanged sentences

Accounts receivable, net 22,316 22,166

Derivative contracts — 4,429

Prepaid expenses 2,384 430

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Other assets 3,250 3,130

Deferred tax assets 64,529 64,529

Deferred tax assets, net of valuation allowance 50,569 50,569

Total assets $ 527,357 $ 574,166

LIABILITIES AND SHAREHOLDERS’ EQUITY

LIABILITIES AND STOCKHOLDERS’ EQUITY

Current liabilities

Accounts payable and accrued expenses $ 39,276 $ 38,828

Asset retirement obligation 15,574 16,074

Asset retirement obligations 9,789 9,851

Other current liabilities 778 645

Total current liabilities 49,843 49,324

Asset retirement obligation 50,382 47,635

Asset retirement obligations 55,545 54,553

Other long-term obligations 2,265 2,178

1 unchanged sentence

Commitments and contingencies (Note 6)

Shareholders’ Equity

Stockholders’ Equity

Common stock, $ 0.001 par value;

250,000 shares authorized;

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

37,118 issued and outstanding at March 31, 2024 and 37,091 issued and outstanding at December 31, 2023

Additional paid-in capital 1,011,489 1,071,021

Accumulated deficit ( 591,822 ) ( 602,947 )

Total shareholders’ equity 469,517 487,922

Total liabilities and shareholders’ equity $ 577,101 $ 600,497

Total stockholders’ equity 419,704 468,111

Total liabilities and stockholders’ equity $ 527,357 $ 574,166

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

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(In thousands, except per share data)

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

2023 2022 2023 2022

Three Months Ended March 31,

Oil, natural gas and NGL $ 30,283 $ 43,147

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Employee termination benefits — 19

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

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

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

Other operating (income) expense, net ( 9 ) ( 94 )

Total expenses 21,865 21,943

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Interest income (expense), net 2,698 2,499

Other income, net 31 147 88 235

Other income (expense), net 9 55

Total other income (expense) 2,707 2,554

Income before income taxes 18,670 53,725 59,065 136,941

Income (loss) before income taxes 11,125 23,758

Income tax (benefit) expense — —

Net income $ 18,670 $ 53,725 $ 59,065 $ 136,941

Net income per share

Net income (loss) $ 11,125 $ 23,758

Net income (loss) per share

Basic $ 0.30 $ 0.64

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(In thousands)

Warrants Additional Paid-In Capital

Additional Paid-In Capital

Accumulated Deficit Total

Shares Amount

Nine Months Ended September 30, 2023

Three Months Ended March 31, 2024

Balance at January 1, 2024

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Stock-based compensation — — 536 — 536

— — — — — 23,758 23,758

Balance at March 31, 2023 36,902 $ 37 — $ — $ 1,151,874 $ ( 640,046 ) $ 511,865

Issuance of stock awards, net of cancellations 64 — — — — — —

Stock-based compensation — — — — 576 — 576

Dividends to shareholders — — ( 59,965 ) ( 59,965 )

— — — 11,125 11,125

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

Balance at September 30, 2023

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

Nine Months Ended September 30, 2022

Balance at March 31, 2024 37,118 $ 37 $ 1,011,489 $ ( 591,822 ) $ 419,704

Three Months Ended March 31, 2023

Balance at January 1, 2023

5 unchanged sentences

Balance at March 31, 2023 36,902 $ 37 $ 1,151,874 $ ( 640,046 ) $ 511,865

Issuance of stock awards, net of cancellations 16 — — — — — —

Stock-based compensation — — — — 440 — 440

— — — — — 48,492 48,492

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 .

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(In thousands)

Nine Months Ended September 30,

Three Months Ended March 31,

CASH FLOWS FROM OPERATING ACTIVITIES

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Depreciation, depletion, and amortization 5,754 5,072

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

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

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

Settlement gains (losses) on derivative contracts — 5,876

Stock-based compensation 536 396

Other 118 115

Changes in operating assets and liabilities ( 1,774 ) 6,154

2 unchanged sentences

Capital expenditures for property, plant and equipment ( 1,124 ) ( 9,392 )

Acquisition of assets ( 11,232 ) ( 1,431 )

Purchase of other property and equipment ( 18 ) ( 16 )

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Reduction of financing lease liability ( 207 ) ( 132 )

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 ( 103 ) ( 211 )

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Asset retirement obligation capitalized $ — $ 12

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

Dividend payable $ 253 $ —

Change in dividends payable $ 247 $ —

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

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SandRidge Energy, Inc.

is an oil and natural gas acquisition, development and production company headquartered in Oklahoma City, Oklahoma with a principal focus on developing and producing hydrocarbon resources in the United States Mid-Continent region (“Mid-Con”).

is an oil and natural gas acquisition, development and production company headquartered in Oklahoma City, Oklahoma and organized in 2006 with a principal focus on developing and producing hydrocarbon resources in the United States.

Principles of Consolidation.

The condensed consolidated financial statements include the accounts of the Company and its wholly owned or majority-owned subsidiaries, including its proportionate share of the Royalty Trusts.

The condensed consolidated financial statements include the accounts of the Company and its wholly owned or majority-owned subsidiaries, including its proportionate share of the Royalty Trust.

All intercompany accounts and transactions have been eliminated in consolidation.

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Although management believes the estimates used in the areas noted above are reasonable, actual results could differ significantly from those estimates.

Recent Accounting Pronouncements Not Yet Adopted.

The FASB issued ASU 2023-09, Income Taxes (Topic 740):

Improvements to Income Tax Disclosures, which require greater disaggregation of income tax disclosures.

The amendments in this update change income tax disclosures by requiring (1) consistent categories and greater disaggregation of information in the rate reconciliation and (2) income taxes paid disaggregated by jurisdiction.

This update changes said disclosures by requiring disaggregation by jurisdiction of disclosures of pretax income (or loss) and income tax expense (or benefit).

This ASU is to be applied on a prospective basis, with retrospective application permitted.

The guidance in this update is effective for fiscal years beginning after December 15, 2024.

We are currently evaluating the potential effect of the adoption of this ASU will have on our consolidated financial statements and related disclosures.

The FASB issued ASU 2023-07, Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures, which requires entities to disclose significant segment expenses and other segment items on an annual and interim basis and provide in interim periods all disclosures about a reportable segment’s profit or loss and assets that are currently required annually.

Additionally, it requires entities to disclose the title and position of the Chief Operating Decision Maker.

The new standard is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted.

A public entity should apply the amendments in this ASU retrospectively to all prior periods presented in the financial statements.

We expect this ASU to only impact our disclosures with no impact to our consolidated financial statements.

SANDRIDGE ENERGY, INC.

AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

The FASB issued ASU No.

2020-04, Reference Rate Reform (Topic 848):

Facilitation of the Effects of Reference Rate Reform on Financial Reporting, amended by ASU 2022-06, Reference Rate Reform (Topic 848):

Deferral of the Sunset Date of Topic 848.

This guidance provides optional practical expedients and exceptions for applying United States Generally Accepted Accounting Principles ("US GAAP") provisions to contracts, hedging relationships, and other transactions that reference LIBOR, or other reference rates expected to be discontinued because of reference rate changes, if certain criteria are met.

The guidance in this update was effective upon its issuance.

If elected, the guidance is to be applied prospectively through December 31, 2024.

At this time, we do not expect this ASU to impact our disclosures or consolidated financial statements.

Fair Value Measurements

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 September 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.

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Level 3 Measurement based on prices or valuation models that require inputs that are both significant to the fair value measurement and less observable from objective sources (i.e., supported by little or no market activity).

SANDRIDGE ENERGY, INC.

AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

Assets and liabilities that are measured at fair value are classified based on the lowest level of input that is significant to the fair value measurement.

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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 September 30, 2023.

The Company had no assets or liabilities classified in Level 2 of the hierarchy as of March 31, 2024 and December 31, 2023

Level 2 Fair Value Measurements

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As applicable, the fair values of the Company’s oil, natural gas and NGL fixed price swaps are based upon inputs that are either readily available in the public market, such as oil, natural gas and NGL futures prices, volatility factors and discount rates, or can be corroborated from active markets.

As applicable, if the Company has a commodity derivative contract in place, the fair value is determined through the use of a discounted cash flow model or option pricing model using the applicable inputs discussed above.

Historically, if the Company has a commodity derivative contract in place, the fair value is determined through the use of a discounted cash flow model or option pricing model using the applicable inputs discussed above.

The Company applies a weighted average credit default risk rating factor for its counterparties or gives effect to its credit default risk rating, as applicable, in determining the fair value of these derivative contracts.

Credit default risk ratings are based on current published credit default swap rates.

Fair Value - Recurring Measurement Basis

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):

December 31, 2022

Fair Value Measurements Netting Assets at Fair Value

Level 1 Level 2 Level 3

Commodity derivative contracts $ — $ 4,429 $ — $ — $ 4,429

Total $ — $ 4,429 $ — $ — $ 4,429

Commodity Derivatives

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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 September 30, 2023.

There were no open commodity derivative contracts as of March 31, 2024 and December 31, 2023.

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

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

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

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

M aster Netting Agreements and the Right of Offset.

The following table summarizes derivative activity for the three-month periods ended March 31, 2024 and 2023 (in thousands):

Three Months Ended March 31,

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

Settlement gains (losses) on derivative contracts $ — $ 5,876

Master Netting Agreements and the Right of Offset.

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 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 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):

Gross Amounts

Gross Amounts Offset

Amounts Net of Offset

Financial Collateral

Derivative contracts - current

$ 4,429 $ — $ 4,429 $ — $ 4,429

There were no open commodity derivatives contracts as of March 31, 2024 and December 31, 2023.

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 the earnings of the relevant period.

As a result, and as applicable, our current period earnings could have been significantly affected by changes in the fair value of our commodity derivative contracts.

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 on a net basis with the same counterparty (in thousands):

Type of Contract Balance Sheet Classification December 31, 2022

Natural Gas Current assets - Derivative Contracts $ 4,429

Total net derivative contracts $ 4,429

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

SANDRIDGE ENERGY, INC.

AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

Property, Plant and Equipment

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

September 30,

2024 December 31,

5 unchanged sentences

accumulated depreciation, depletion and impairment ( 1,396,534 ) ( 1,393,801 )

Net oil and natural gas properties 161,271 138,632

Net oil and natural gas properties capitalized costs 154,178 156,120

Electrical infrastructure 121,819 121,819

Other non-oil and natural gas equipment 1,656 1,644

Non-oil and natural gas equipment 1,673 1,656

Building and structures 3,603 3,603

6 unchanged sentences

$ 239,240 $ 242,613

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.

SANDRIDGE ENERGY, INC.

AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

Accounts Payable and Accrued Expenses

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

September 30,

2024 December 31,

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Commitments and Contingencies

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

Included below is a discussion of the Company's various future commitments and contingencies as of March 31, 2024.

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.

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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.

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The Company has not established any liabilities relating to this matter.

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.

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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.

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In prior years, we determined that the deferred tax assets did not meet the more likely than not threshold of being utilized and thus recorded a valuation allowance.

During the year ended December 31, 2022, we partially released our valuation allowance on our deferred tax assets by $ 64.5 million.

We have partially released our valuation allowance on our deferred tax assets by $ 50.6 million as of March 31, 2024 and December 31, 2023.

We anticipate being able to utilize these deferred tax assets based on the generation of future income.

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 nine-month periods ended September 30, 2023 and 2022.

The Company had no federal or state income tax expense or benefit for the three-month periods ended March 31, 2024 and 2023.

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.

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Since the 2016 ownership change, the Company has generated additional NOLs and other tax attributes that are not currently subject to an IRC Section 382 limitation.

The Company's ability to use NOLs and other tax attributes to reduce taxable income and income taxes could be materially impacted by a future IRC 382 ownership change.

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.

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.

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.

As of March 31, 2024, 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.

In addition, the Company had approximately $ 1.1 billion of state NOL carryforwards, net of NOLs expected to expire unused due to the 2016 IRC Section 382 limitation.

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, $ 650.0 million do not have an expiration date and $ 247.0 million will begin expiring in 2023 through 2037.

Of the $ 1.1 billion in state NOL carryforwards, $ 199.0 million are derived from states the Company currently does not operate in.

$ 651.0 million do not have an expiration date and $ 237.0 million will begin expiring in 2026 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 September 30, 2023 and December 31, 2022.

The Company did not have unrecognized tax benefits at March 31, 2024 or December 31, 2023.

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

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The number of years open for state tax audits varies, depending on the state, but are generally from three to five years .

Capital Stock and Equity Awards .

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 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.

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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.

These warrants were exercisable until October 4, 2022 for one share of common stock per warrant at initial exercise prices of $ 41.34 and $ 42.03 per share, respectively, subject to adjustments pursuant to the terms of the warrants.

The warrants contained customary anti-dilution adjustments in the event of any stock split, reverse stock split, reclassification, stock dividend or other distributions.

Upon expiration, the entirety of the 4.9 million Series A warrants and 2.1 million Series B warrants were cancelled and the carrying value was transferred to Additional paid-in capital in the accompanying condensed consolidated balance sheets.

Capital Stock and Equity Awards .

At March 31, 2024, the Company had 37.1 million shares of common stock issued and outstanding.

Further, at March 31, 2024, the Company had 0.1 million of unvested restricted stock awards, 0.1 million shares of unvested restricted stock units, 0.2 million unvested stock options outstanding and no unvested performance share units.

Share Repurchase Program.

In May 2023, the Company's Board of Directors (the “Board”) approved a share repurchase program (the “Program”) authorizing the Company to repurchase up to an aggregate of $ 75.0 million of the Company’s outstanding common stock with the Company’s cash on hand.

The Program replaced the prior share repurchase program previously approved by the Board in August 2021.

The Program replaced the prior share repurchase program previously approved by the Board in August 2021 of $ 25.0 million.

Purchases under the Program are intended to meet the requirements of Rule 10b5-1 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.

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 $ 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 Company did not repurchase any common stock under the Program or the prior share repurchase program during the three-month periods ended March 31, 2024 or 2023.

In January 2024, the Board approved a one-time cash dividend of $ 1.50 per share of the Company's common stock, which was paid on February 20, 2024 to shareholders of record as of the close of business on February 5, 2024.

The aggregate total payout was approximately $ 55.6 million.

Additionally, in March 2024, the Board increased the on-going quarterly dividend to $ 0.11 per share which was first paid on March 29, 2024, to shareholders of record as of the close of business on March 15, 2024.

The aggregate total payout was $ 4.1 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 $ 0.11 per share dividend is subject to quarterly approval by the Board.

Dividend payments for the three-month period ended March 31, 2024 totaled $ 59.7 million, which included $ 0.1 million of dividends on vested stock awards.

The Tax Benefits Preservation Plan .

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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

The following table disaggregates the Company’s revenue by source for the three-month periods ended March 31, 2024 and 2023:

Three Months Ended March 31,

(In thousands)

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Oil, natural gas and NGL revenues.

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 purchaser 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 sales of oil, natural gas and NGLs.

In accordance with the contracts governing these sales, revenues are recorded at a point in time when control of the oil, natural gas and NGL production passes to the purchaser at the inlet of the processing plant or pipeline, or the delivery point for onloading to a delivery truck.

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.

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.

Pricing for the Company’s oil, natural gas and NGL contracts is variable and is based on volumes sold multiplied by either an index price, net of deductions, or a percentage of the sales price obtained by the purchaser, which is also based on index prices.

The transaction price is allocated on a pro-rata basis to each unit of oil, natural gas or NGL sold based on the terms of the contract.

Oil, natural gas and NGL revenues are also recorded net of royalties, discounts and allowances, and transportation costs, as applicable.

Taxes assessed by governmental authorities on oil, natural gas and NGL sales are presented separately from revenues and are included in production, ad valorem, and other tax expense in the condensed consolidated income statements.

Taxes assessed by governmental authorities on oil, natural gas and NGL sales are presented separately from revenues and are included in production, ad valorem, and other taxes expense in the condensed consolidated income statements.

Revenues Receivable.

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Pricing for revenues receivable is estimated using current month crude oil, natural gas and NGL prices, net of deductions.

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

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 .

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

As of March 31, 2024 and December 31, 2023, the Company had revenues receivable of $ 13.7 million and $ 14.5 million, respectively.

The Company did no t record any credit losses on revenues receivable nor write-offs during the three-month periods ended March 31, 2024 or 2023, 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.

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The following table summarizes the calculation of weighted average common shares outstanding used in the computation of diluted earnings per share:

Net income (loss)

Weighted Average Shares Earnings Per Share

(In thousands, except per share amounts)

Three Months Ended September 30, 2023

Basic earnings per share

$ 18,670 36,969 $ 0.51

Effect of dilutive securities

Restricted stock units — 118

Restricted stock awards — 15

Performance share units (1) — —

Stock options — 59

Diluted earnings per share (2)

$ 18,670 37,161 $ 0.50

Three Months Ended September 30, 2022

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

Effect of dilutive securities

Restricted stock units — 263

Restricted stock awards — 2

Performance share units (1) — —

Stock options — 88

Diluted earnings per share (2)

$ 53,725 37,150 $ 1.45

Nine Months Ended September 30, 2023

Three Months Ended March 31, 2024

Basic earnings per share

7 unchanged sentences

$ 11,125 37,134 $ 0.30

Nine Months Ended September 30, 2022

Three Months Ended March 31, 2023

Basic earnings per share $ 23,758 36,859 $ 0.64

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, 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.

AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

(2) The incremental shares of potentially dilutive restricted stock units, restricted stock awards, performance share units, and stock options were included for the three-month periods ended March 31, 2024 and 2023 as their effect was dilutive under the treasury stock method.

Subsequent Events

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.

On May 2, 2024, the Board declared a cash dividend of $ 0.11 per share of the Company’s common stock, payable on May 31, 2024 to shareholders of record on May 17, 2024.

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