What changed in this filing

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Item 1. Financial Statements

2024-08-08 compared with 2024-05-08 · 83 added, 31 removed, 377 unchanged (23% of the section changed)

34 unchanged sentences

250,000 shares authorized;

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

37,182 issued and outstanding at June 30, 2024 and 37,091 issued and outstanding at December 31, 2023

Additional paid-in capital 1,007,798 1,071,021

7 unchanged sentences

(In thousands, except per share data)

Three Months Ended March 31,

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

2024 2023 2024 2023

Oil, natural gas and NGL $ 25,977 $ 33,419 $ 56,260 $ 76,566

31 unchanged sentences

Accumulated Deficit Total

Three Months Ended March 31, 2024

Six Months Ended June 30, 2024

Balance at January 1, 2024

6 unchanged sentences

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

Three Months Ended March 31, 2023

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

Tax withholdings paid in exchange for shares withheld on employee vested stock awards — — ( 124 ) — ( 124 )

Stock-based compensation — — 536 — 536

Dividends to shareholders — — ( 4,103 ) — ( 4,103 )

— — — 8,794 8,794

Balance at June 30, 2024 37,182 $ 37 $ 1,007,798 $ ( 583,028 ) $ 424,807

Six Months Ended June 30, 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 64 — — — —

Stock-based compensation — — 576 — 576

Dividends to shareholders — — ( 74,380 ) — ( 74,380 )

— — — 16,637 16,637

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

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

3 unchanged sentences

(In thousands)

Three Months Ended March 31,

Six Months Ended June 30,

CASH FLOWS FROM OPERATING ACTIVITIES

9 unchanged sentences

Capital expenditures for property, plant and equipment ( 3,575 ) ( 24,327 )

Acquisition of assets ( 2,103 ) —

Purchase of other property and equipment ( 12 ) ( 31 )

4 unchanged sentences

Reduction of financing lease liability ( 396 ) ( 261 )

Proceeds from exercise of stock options — 26

Tax withholdings paid in exchange for shares withheld on employee vested stock awards ( 227 ) ( 211 )

70 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 March 31, 2024 and December 31, 2023.

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

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

The Company had no assets or liabilities classified in Level 2 of the hierarchy as of June 30, 2024 and December 31, 2023.

Level 2 Fair Value Measurements

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 March 31, 2024 and December 31, 2023.

There were no open commodity derivative contracts as of June 30, 2024 and December 31, 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-month periods ended March 31, 2024 and 2023 (in thousands):

Three Months Ended March 31,

The following table summarizes derivative activity for the six-month periods ended June 30, 2024 and 2023 (in thousands):

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

2024 2023 2024 2023

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

3 unchanged sentences

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 March 31, 2024 and December 31, 2023.

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

5 unchanged sentences

$ 1,545,318 $ 1,538,724

11,215 11,197

Total oil and natural gas properties

24 unchanged sentences

Commitments and Contingencies

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

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

34 unchanged sentences

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.

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 have partially released our valuation allowance on our deferred tax assets by $ 50.6 million as of June 30, 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-month periods ended March 31, 2024 and 2023.

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

5 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.

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.

As of June 30, 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.

3 unchanged sentences

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 March 31, 2024 or December 31, 2023.

The Company did not have unrecognized tax benefits at June 30, 2024 or December 31, 2023.

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

7 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 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.

At June 30, 2024, the Company had 37.2 million shares of common stock issued and outstanding.

Further, at June 30, 2024, the Company had 0.1 million of unvested restricted stock awards, 0.2 million shares of unvested restricted stock units, 0.2 million unvested stock options outstanding and an immaterial number of unvested performance share units.

Share Repurchase Program.

3 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 or the prior share repurchase program during the three-month periods ended March 31, 2024 or 2023.

The Company did not repurchase any common stock under the Program or the prior share repurchase program during the three or six-month periods ended June 30, 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.

Additionally, in March 2024, the Board increased the on-going quarterly dividend to $ 0.11 per share which was paid on March 29 and May 31, 2024, to shareholders of record as of the close of business on March 15 and May 17, 2024, respectively.

The aggregate total payout was $ 8.2 million.

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.

Dividend payments for the six-month period ended June 30, 2024 totaled $ 64.0 million, which included $ 0.3 million of dividends on vested stock awards.

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.

The Tax Benefits Preservation Plan .

5 unchanged sentences

(i) the time at which the Rights are redeemed pursuant to the Tax Benefits Preservation Plan, (ii) the time at which the Rights are exchanged pursuant to the Tax Benefits Preservation Plan, (iii) the closing of any merger or other acquisition transaction involving the Company pursuant to an agreement of the type described in Section 13(f) of the Tax Benefits Preservation Plan, at which time, the Rights are terminated, (iv) the time at which the Board determines that the NOLs are utilized in all material respects or that an ownership change under Section 382 would not adversely impact in any material respect the time period in which the Company could use the NOLs, or materially impair the amount of the NOLs that could be used by the Company in any particular time period, for applicable tax purposes and (v) the Close of Business on July 1, 2026.

The Board plans to request shareholder approval for the Tax Benefits Preservation Plan at the 2024 annual meeting.

At the Company's 2024 Annual Meeting held on June 12, 2024, the Company's stockholders approved the extension of the Tax Benefits Preservation Plan to July 1, 2026.

The Company adopted the Tax Benefits Preservation Plan, as amended on March 16, 2021, and June 20, 2023, in order to protect shareholder value against a possible limitation on the Company’s ability to use its tax net operating losses (the “NOLs”) and certain other tax benefits to reduce potential future U.S.

7 unchanged sentences

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

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,

The following table disaggregates the Company’s revenue by source for the three and six-month periods ended June 30, 2024 and 2023:

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

2024 2023 2024 2023

(In thousands)

15 unchanged sentences

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 .

As of June 30, 2024 and December 31, 2023, the Company had revenues receivable of $ 11.5 million and $ 14.5 million, respectively.

The Company did no t record any credit losses on revenues receivable nor write-offs during the three and six-month periods ended June 30, 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.

6 unchanged sentences

(In thousands, except per share amounts)

Three Months Ended March 31, 2024

Three Months Ended June 30, 2024

Basic earnings per share

7 unchanged sentences

$ 8,794 37,158 $ 0.24

Three Months Ended March 31, 2023

Three Months Ended June 30, 2023

Basic earnings per share $ 16,637 36,892 $ 0.45

6 unchanged sentences

$ 16,637 $ 37,097 $ 0.45

Six Months Ended June 30, 2024

Basic earnings per share

19,919 37,063 $ 0.54

Effect of dilutive securities

Restricted stock units — 12

Restricted stock awards — 15

Performance share units (1) — 1

Stock options — 17

Diluted earnings per share (2)

$ 19,919 37,108 $ 0.54

Six Months Ended June 30, 2023

Basic earnings per share $ 40,395 36,876 $ 1.10

Effect of dilutive securities

Restricted stock units — 168

Restricted stock awards — —

Performance share units (1) — —

Stock options — 41

Diluted earnings per share (2)

$ 40,395 $ 37,085 $ 1.09

____________________

(1) The performance share unit awards are contingently issuable and are considered in the calculation of diluted earnings per share.

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, 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.

(2) The incremental shares of potentially dilutive restricted stock units, restricted stock awards, performance share units, and stock options were included for the three and six-month periods ended June 30, 2024 as their effect was dilutive under the treasury stock method.

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 as their effect was dilutive under the treasury stock method.

SANDRIDGE ENERGY, INC.

AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

Subsequent Events

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.

• On July 29, 2024, the Company entered into a purchase and sale agreement to acquire certain producing assets and leasehold interests in the Western Anadarko Basin for cash consideration of $ 144 million, before customary purchase price adjustments, with an effective date of July 1, 2024.

The Company also entered into a joint development agreement governing its participation in the future development of certain leasehold interests acquired in the acquisition.

The transaction is expected to be funded with cash on hand and is targeted to close by the end of the third quarter of 2024.

• Subsequent to June 30, 2024, the Company entered into the following oil and NGL derivative contracts:

Period Type of Derivative Instrument Index (1)

Daily Volume (Bbl) Weighted Average Price Per Barrel

September 2024 - December 2024 Swaps Mont Belvieu OPIS 400 $ 42.76

September 2024 - December 2024 Swaps NYMEX WTI 900 $ 74.85

January 2025 - December 2025 Swaps Mont Belvieu OPIS 300 $ 39.69

January 2025 - December 2025 Swaps NYMEX WTI 500 $ 71.60

January 2026 - June 2026 Swaps NYMEX WTI 300 $ 68.67

(1) NGL swaps exclude ethane

• On August 6, 2024, the Board declared a cash dividend of $ 0.11 per share of the Company’s common stock, payable on August 30, 2024 to shareholders of record on August 16, 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