SANDRIDGE ENERGY INC 10-K

Item 8. Financial Statements and Supplementary Data INDEX TO CONSOLIDATED FINANCIAL STATEMENTS Page(s) Management’s Report on Internal Control Over Financial Reporting 58 Reports of Independent Registered Public Accounting Firm (PCAOB ID No . 248 ) 59 Report of Independent Registered Public Accounting Firm (PCAOB ID No . 659) 62 Consolidated Balance Sheets at December 31, 2024 and 2023 63 Consolidated Statements of Operations for the Years Ended December 31, 2024, 2023 and 2022 64 Consolidated Statements of Changes in Stockholders’ Equity for the Years Ended December 31, 2024, 2023 and 2022 65 Consolidated Statements Cash Flows for the Years Ended December 31, 2024, 2023 and 2022 66 Notes to Consolidated Financial Statements 67 57 Table of Contents Management’s Report on Internal Control over Financial Reporting Management of SandRidge Energy, Inc. is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rules 13a-15(f) and 15d-15(f) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Internal control over financial reporting is a process designed by, or under the supervision of, the Company’s Chief Executive Officer and Chief Financial Officer to provide reasonable assurance regarding the reliability of financial reporting and the preparation of the Company’s financial statements for external purposes in accordance with generally accepted accounting principles. Management assessed the effectiveness of the Company’s internal control over financial reporting as of December 31, 2024. In making this assessment, management used the criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013) (the COSO criteria). Based on management’s assessment using the COSO criteria, management concluded the Company’s internal control over financial reporting was effective as of December 31, 2024. The effectiveness of our internal control over financial reporting as of December 31, 2024 has been audited by Grant Thornton LLP, an independent registered public accounting firm, which also audited our Consolidated Financial Statements for the year ended December 31, 2024. Grant Thornton LLP’s report on our internal control over financial reporting is set forth below. 58 Table of Contents REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM Board of Directors and Stockholders SandRidge Energy, Inc. Opinion on the financial statements We have audited the accompanying consolidated balance sheets of SandRidge Energy, Inc. (a Delaware corporation) and subsidiaries (the “Company”) as of December 31, 2024 and 2023, the related consolidated statements of operations, changes in stockholders’ equity, and cash flows for each of the two years in the period ended December 31, 2024, and the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2024 and 2023, and the results of its operations and its cash flows for each of the two years in the period ended December 31, 2024, in conformity with accounting principles generally accepted in the United States of America. We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”), the Company’s internal control over financial reporting as of December 31, 2024, based on criteria established in the 2013 Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”), and our report dated March 11, 2025 expressed an unqualified opinion. Basis for opinion These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion. Critical audit matter The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates. Estimation of proved reserves as it relates to the calculation and recognition of depletion expense As described further in Note 1 to the consolidated financial statements, the Company accounts for its oil and natural gas properties using the full cost method of accounting, which requires management to make estimates of proved reserve volumes and future revenues to record depletion expense. To estimate the volume of proved reserves and future revenues, management makes significant estimates and assumptions, including forecasting the timing and volumetric amounts of production and corresponding decline rates of producing properties associated with the Company’s development and maintenance plan. In addition, the estimation of proved reserves is also impacted by management’s judgments and estimates regarding the financial performance of wells to determine if wells are expected, with reasonable certainty, to be economical under the appropriate pricing assumptions. We identified the estimation of proved reserves attributable to oil and natural gas properties due to its impact on depletion expense as a critical audit matter. The principal consideration for our determination that the estimation of proved reserves is a critical audit matter is that changes in certain inputs and assumptions, which require a high degree of subjectivity, necessary to estimate the volume and future revenues of the Company’s proved reserves could have a significant impact on the measurement of depletion expense. In turn, auditing those inputs and assumptions requires subjective and complex auditor judgment. 59 Table of Contents Our audit procedures related to the estimation of proved reserves included the following, among others. • We tested the design and operating effectiveness of key controls relating to management’s estimation of proved reserves for the purpose of estimating depletion expense. • We evaluated the level of knowledge, skill, and ability of the Company’s reservoir engineering specialists and independent petroleum engineering specialists, made inquiries of those reservoir engineers regarding the process followed and judgments made to estimate the Company’s proved reserve volumes, and read the year-end reserve report prepared by the reservoir engineering specialists. • Identified inputs and assumptions that were significant to the period end determination of proved reserve volumes and tested management’s process of determining the significant inputs and assumptions, as follows: ◦ Compared the estimated pricing and pricing differentials used in the reserve report to actual realized prices related to revenue transactions recorded in the current year for the pricing differentials; ◦ Assessed operating cost inputs by comparing the forecasted amount to historical actual costs; ◦ Assessed the reasonableness of forecasted capital expenditures by comparing to recent drilling costs; ◦ Assessed forecasted production estimates by (i) comparing prior year forecasted production amounts to current year actual results and (ii) comparing forecasted production amounts in the current year reserve report to the actual historical production amounts in the current year, in total and for a sample of individual wells; ◦ Vouched, on a sample basis, the working and net revenue interests used in the reserve report to underlying land and division order records; and ◦ Applied analytical procedures on inputs to the reserve report by comparing to historical actual results and to the prior year reserve report. /s/ GRANT THORNTON LLP We have served as the Company’s auditor since 2023. Oklahoma City, Oklahoma March 11, 2025 60 Table of Contents REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM Board of Directors and Stockholders SandRidge Energy, Inc. Opinion on internal control over financial reporting We have audited the internal control over financial reporting of SandRidge Energy, Inc. (a Delaware corporation) and subsidiaries (the “Company”) as of December 31, 2024, based on criteria established in the 2013 Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”). In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2024, based on criteria established in the 2013 Internal Control—Integrated Framework issued by COSO. We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”), the consolidated financial statements of the Company as of and for the year ended December 31, 2024, and our report dated March 11, 2025 expressed an unqualified opinion on those financial statements. Basis for opinion The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion. Definition and limitations of internal control over financial reporting A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. /s/ GRANT THORNTON LLP Oklahoma City, Oklahoma March 11, 2025 61 Table of Contents REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Stockholders and the Board of Directors of SandRidge Energy, Inc. Opinion on the Financial Statements We have audited the accompanying consolidated statements of operations, changes in stockholders’ equity and cash flows of SandRidge Energy, Inc. and subsidiaries (the “Company”) for the year ended December 31, 2022, and the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the consolidated results of the Company’s operations and its cash flows for the year ended December 31, 2022, in conformity with accounting principles generally accepted in the United States of America. Basis for Opinion These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. Our audit included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures to respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audit provides a reasonable basis for our opinion. /s/ MOSS ADAMS LLP Houston, Texas March 15, 2023, except for Note 18, as to which the date is March 11, 2025 We served as the Company's auditor from 2022 to 2023. 62 Table of Contents SandRidge Energy, Inc. and Subsidiaries Consolidated Balance Sheets December 31, 2024 2023 (In thousands) ASSETS Current assets Cash and cash equivalents $ 98,128 $ 252,407 Restricted cash 1,383 1,537 Accounts receivable, net 23,878 22,166 Derivative contracts 114 — Prepaid expenses 3,370 430 Other current assets 780 1,314 Total current assets 127,653 277,854 Oil and natural gas properties, using full cost method of accounting Proved 1,689,807 1,538,724 Unproved 23,504 11,197 Less: accumulated depreciation, depletion and impairment ( 1,415,110 ) ( 1,393,801 ) 298,201 156,120 Other property, plant and equipment, net 80,689 86,493 Derivative contracts 86 — Other assets 2,081 3,130 Deferred tax assets, net of valuation allowance 72,801 50,569 Total assets $ 581,511 $ 574,166 LIABILITIES AND STOCKHOLDERS’ EQUITY Current liabilities Accounts payable and accrued expenses $ 50,625 $ 38,828 Asset retirement obligations 9,131 9,851 Other current liabilities 839 645 Total current liabilities 60,595 49,324 Asset retirement obligations 59,449 54,553 Other long-term obligations 936 2,178 Total liabilities 120,980 106,055 Commitments and contingencies (Note 11) Stockholders’ Equity Common stock, $ 0.001 par value; 250,000 shares authorized; 37,203 issued and outstanding at December 31, 2024 and 37,091 issued and outstanding at December 31, 2023 37 37 Additional paid-in capital 1,000,455 1,071,021 Accumulated deficit ( 539,961 ) ( 602,947 ) Total stockholders’ equity 460,531 468,111 Total liabilities and stockholders’ equity $ 581,511 $ 574,166 The accompanying notes are an integral part of these consolidated financial statements. 63 Table of Contents SandRidge Energy, Inc. and Subsidiaries Consolidated Statements of Operations Year Ended December 31, 2024 2023 2022 (In thousands, except per share amounts) Revenues Oil, natural gas and NGL $ 125,290 $ 148,641 $ 254,258 Total revenues 125,290 148,641 254,258 Expenses Lease operating expenses 40,012 41,862 41,286 Production, ad valorem, and other taxes 6,780 10,870 15,880 Depreciation and depletion—oil and natural gas 25,976 15,657 11,542 Depreciation and amortization—other 6,503 6,518 6,342 General and administrative 11,695 10,735 9,449 Restructuring expenses 474 406 382 Employee termination benefits — 19 — (Gain) loss on derivative contracts ( 748 ) ( 1,447 ) ( 5,975 ) Other operating (income) expense 1,372 ( 157 ) ( 99 ) Total expenses 92,064 84,463 78,807 Income (loss) from operations 33,226 64,178 175,451 Other income (expense) Interest income (expense), net 7,744 10,552 1,810 Other income (expense), net ( 216 ) 87 378 Total other income (expense) 7,528 10,639 2,188 Income (loss) before income taxes 40,754 74,817 177,639 Income tax (benefit) ( 22,232 ) 13,960 ( 64,529 ) Net income (loss) $ 62,986 $ 60,857 $ 242,168 Net income (loss) per share Basic $ 1.70 $ 1.65 $ 6.59 Diluted $ 1.69 $ 1.64 $ 6.52 Weighted average number of common shares outstanding Basic 37,106 36,939 36,745 Diluted 37,188 37,134 37,154 The accompanying notes are an integral part of these consolidated financial statements. 64 Table of Contents SandRidge Energy, Inc. and Subsidiaries Consolidated Statements of Changes in Stockholders’ Equity Common Stock Warrants Additional Paid-In Capital Accumulated Deficit Total Shares Amount Shares Amount (In thousands) Balance at January 1, 2022 36,675 $ 37 6,981 $ 88,520 $ 1,062,737 $ ( 905,972 ) $ 245,322 Issuance of stock awards, net of cancellations 193 — — — — — — Stock-based compensation — — — — 1,603 — 1603 Tax withholdings paid in exchange for shares withheld on employee vested stock awards — — — — ( 1,177 ) — ( 1,177 ) Warrants exercised — — — ( 2 ) 8 — 6 Cancellation of expired warrants — — ( 6,981 ) ( 88,518 ) 88,518 — — Net income — — — — — 242,168 242,168 Balance at December 31, 2022 36,868 $ 37 — $ — $ 1,151,689 $ ( 663,804 ) $ 487,922 Issuance of stock awards, net of cancellations 223 — — — — — — Stock-based compensation — — — — 2,039 — 2,039 Tax withholdings paid in exchange for shares withheld on employee vested stock awards — — — — ( 929 ) — ( 929 ) Dividends to shareholders — — — — ( 81,778 ) — ( 81,778 ) Net income — — — — — 60,857 60,857 Balance at December 31, 2023 37,091 $ 37 — $ — $ 1,071,021 $ ( 602,947 ) $ 468,111 Issuance of stock awards, net of cancellations 133 — — — — — — Stock-based compensation — — — — 2,354 — 2,354 Tax withholdings paid in exchange for shares withheld on employee vested stock awards — — — — ( 393 ) — ( 393 ) Dividends to shareholders — — — — ( 72,294 ) — ( 72,294 ) Repurchases of common stock ( 21 ) — — — ( 233 ) — ( 233 ) Net income — — — — — 62,986 62,986 Balance at December 31, 2024 37,203 $ 37 — $ — $ 1,000,455 $ ( 539,961 ) $ 460,531 The accompanying notes are an integral part of these consolidated financial statements. 65 Table of Contents SandRidge Energy, Inc. and Subsidiaries Consolidated Statements of Cash Flows Year Ended December 31, 2024 2023 2022 (In thousands) CASH FLOWS FROM OPERATING ACTIVITIES Net income (loss) $ 62,986 $ 60,857 $ 242,168 Adjustments to reconcile net income (loss) to net cash provided by operating activities Depreciation, depletion and amortization 32,479 22,176 17,884 Deferred income taxes ( 22,232 ) 13,960 ( 64,529 ) (Gain) loss on derivative contracts ( 748 ) ( 1,447 ) ( 5,975 ) Settlement gains (losses) on derivative contracts 548 5,876 1,525 Stock-based compensation 2,354 1,945 1,526 Other 1,517 159 153 Changes in operating assets and liabilities increasing (decreasing) cash Receivables ( 842 ) 12,130 ( 13,211 ) Prepaid expenses ( 2,940 ) 93 ( 1,507 ) Other current assets 375 2,203 ( 5378 ) Other assets and liabilities, net ( 1,501 ) ( 56 ) ( 129 ) Accounts payable and accrued expenses 2,812 ( 1,409 ) ( 5,246 ) Asset retirement obligations ( 875 ) ( 909 ) ( 2,585 ) Net cash provided by operating activities 73,933 115,578 164,696 CASH FLOWS FROM INVESTING ACTIVITIES Capital expenditures for property, plant and equipment ( 26,404 ) ( 26,375 ) ( 44,085 ) Acquisitions of assets ( 129,664 ) ( 11,232 ) ( 1,431 ) Purchase of other property and equipment ( 1 ) ( 29 ) ( 49 ) Proceeds from sale of assets 1,373 1,472 448 Net cash (used in) provided by investing activities ( 154,696 ) ( 36,164 ) ( 45,117 ) CASH FLOWS FROM FINANCING ACTIVITIES Dividends paid to shareholders ( 72,336 ) ( 81,515 ) — Reduction of financing lease liability ( 708 ) ( 588 ) ( 541 ) Proceeds from exercise of stock options — 94 77 Tax withholdings paid in exchange for shares withheld on employee vested stock awards ( 393 ) ( 929 ) ( 1,177 ) Common stock repurchases ( 233 ) — — Cash received on warrant exercises — — 6 Net cash (used in) financing activities ( 73,670 ) ( 82,938 ) ( 1,635 ) NET (DECREASE) INCREASE IN CASH, CASH EQUIVALENTS and RESTRICTED CASH ( 154,433 ) ( 3,524 ) 117,944 CASH, CASH EQUIVALENTS and RESTRICTED CASH, beginning of year 253,944 257,468 139,524 CASH, CASH EQUIVALENTS and RESTRICTED CASH, end of year $ 99,511 $ 253,944 $ 257,468 The accompanying notes are an integral part of these consolidated financial statements. 66 Table of Contents SandRidge Energy, Inc. and Subsidiaries Notes to Consolidated Financial Statements 1. Summary of Significant Accounting Policies Nature of Business. 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. Principles of Consolidation. The 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. All intercompany accounts and transactions have been eliminated in consolidation. Use of Estimates. The preparation of the consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. The more significant areas requiring the use of assumptions, judgments and estimates include: oil, natural gas and NGL reserves; impairment tests of long-lived assets; the carrying value of unproved oil and natural gas properties; depreciation, depletion and amortization; asset retirement obligations; determinations of significant additions or alterations to the full cost pool and related estimates of fair value used to allocate the full cost pool net book value to acquired or divested properties, as necessary; valuation allowances for deferred tax assets; income taxes; valuation of derivative instruments; contingencies; and accrued revenue and related receivables. Although management believes these estimates are reasonable, actual results could differ significantly from those estimates. Going Concern Consideration. The accompanying consolidated financial statements are prepared in accordance with generally accepted accounting principles applicable to a going concern, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. Cash and Cash Equivalents. The Company considers all highly-liquid instruments with an original maturity of three months or less to be cash equivalents as these instruments are readily convertible to known amounts of cash and bear insignificant risk of changes in value due to their short maturity period. Additionally, the Company considers demand deposits or accounts that have the general characteristics of demand deposits where we may deposit additional funds at any time and also effectively withdraw funds at any time without prior notice or penalty to be cash equivalents. As of December 31, 2024, 2023, and 2022, the Company had $ 98.1 million, $ 252.4 million, and $ 255.7 million in cash and cash equivalents, respectively. Restricted Cash. The Company maintains funds related to collateralized letters of credit and secured credit cards. As of December 31, 2024, 2023, and 2022, the Company had $ 1.4 million, $ 1.5 million, and $ 1.7 million in restricted cash, respectively. Accounts Receivable, Net. The Company has receivables for sales of oil, natural gas and NGLs, as well as receivables related to the drilling, completion, and production of oil and natural gas, which have a contractual maturity of one year or less. An allowance for expected credit losses has been established based on management’s review of the collectability of the receivables in light of historical experience, the nature and volume of the receivables and other subjective factors. Accounts receivable are charged against the allowance, upon approval by management, when they are deemed uncollectible. Refer to Note 5 for further information on the Company’s accounts receivable and allowance for expected credit losses. Fair Value of Financial Instruments. Certain of the Company’s financial assets and liabilities are measured at fair value. Fair value represents the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. The Company’s financial instruments, not otherwise recorded at fair value, consist primarily of cash, restricted cash, prepaid expenses, receivables, and payables and accrued expenses. The carrying values of cash, restricted cash, trade receivables, trade payables and accrued expenses are considered to reflect fair values due to the short-term maturity of these instruments. See Note 4 for further discussion of the Company’s fair value measurements. 67 Table of Contents SandRidge Energy, Inc. and Subsidiaries Notes to Consolidated Financial Statements Fair Value of Non-financial Assets and Liabilities. The Company also applies fair value accounting guidance to initially, or as events dictate, measure non-financial assets and liabilities such as those obtained through business acquisitions, property, plant and equipment and asset retirement obligations. These assets and liabilities are subject to fair value adjustments only in certain circumstances and are not subject to recurring revaluations. Fair value may be estimated using comparable market data, a discounted cash flow method, or a combination of the two as considered appropriate based on the circumstances. Under the discounted cash flow method, estimated future cash flows are based on management’s expectations for the future and include estimates of future oil and natural gas production or other applicable sales estimates, operational costs and a risk-adjusted discount rate. The Company may use the present value of estimated future cash inflows and/or outflows, third-party offers or prices of comparable assets with consideration of current market conditions to fair value its non-financial assets and liabilities when necessary. Derivative Financial Instruments. The Company enters into oil and natural gas derivative contracts to manage risks related to fluctuations in prices of its expected oil and natural gas production. The Company considers current and anticipated market conditions, planned capital expenditures, and any debt service requirements when determining whether to enter into oil and gas derivative contracts. The Company may also, from time to time, enter into interest rate swaps in order to manage risk associated with its exposure to variable interest rates. The Company recognizes its derivative instruments as either assets or liabilities at fair value with changes in fair value recognized in earnings unless designated as a hedging instrument. The Company has elected not to designate price risk management activities as accounting hedges under applicable accounting guidance. The Company nets derivative assets and liabilities whenever it has a legally enforceable master netting agreement with the counterparty to a derivative contract. The related cash flow impact of the Company’s derivative activities are reflected as cash flows from operating activities unless the derivative contract contains a significant financing element, in which case, cash settlements are classified as cash flows from financing activities in the consolidated statements of cash flows. See Note 6 for further discussion of the Company’s derivatives. Other Assets. Other assets consist of capitalized operating leases and production equipment inventories not placed in service. See Note 7 for discussion of the Company’s leases. Production equipment inventories are stated at the lower of cost or net realizable value as of December 31, 2024, and 2023. The Company’s production equipment inventory primarily comprises oil and natural gas drilling or repair items such as tubing, casing and pumping units. Inventory expected to be placed in service within one year is reflected in other current assets on the accompanying consolidated balance sheets, while inventory expected to be place in service beyond one year is reflected in other assets on the accompanying consolidated balance sheets. For the year ended December 31, 2024, the Company recorded a $ 1.3 million impairment in other operating (income) expense on the accompanying consolidated statements of operations to reflect production equipment inventory at the lower of cost or net realizable value. There were no inventory impairments recorded for the years ended December 31, 2023 and 2022. Oil and Natural Gas Operations. The Company uses the full cost method to account for its oil and natural gas properties. Under full cost accounting, all costs directly associated with the acquisition, exploration and development of oil, natural gas and NGL reserves are capitalized into a full cost pool. These capitalized costs include costs of unproved properties and internal costs directly related to the Company’s acquisition, development, and exploration activities and capitalized interest. The Company capitalized gross internal costs of $ 0.2 million, $ 0.2 million and $ 0.3 million during the years ended December 31, 2024, 2023 and 2022, respectively. Capitalized costs are amortized using the unit-of-production method. Under this method, depreciation and depletion is computed at the end of each quarter by multiplying total production for the quarter by a depletion rate. The depletion rate is determined by dividing the total unamortized cost base plus future development costs by net equivalent proved reserves at the beginning of the quarter. 68 Table of Contents SandRidge Energy, Inc. and Subsidiaries Notes to Consolidated Financial Statements Costs associated with unproved properties are excluded from the amortizable cost base until it has been determined that proved reserves exist or a lease is impaired. Unproved properties are reviewed at the end of each quarter to determine whether the costs incurred should be reclassified to the full cost pool and amortized. The costs associated with unproved properties are primarily the costs to acquire unproved acreage. All items classified as unproved property are assessed, on an individual basis or as a group if properties are individually insignificant, on a quarterly basis for possible impairment. The assessment includes consideration of various factors, including, but not limited to, the following: intent to drill; remaining lease term; geological and geophysical evaluations; drilling results and activity; assignment of proved reserves; and whether the proved reserves can be developed economically. During any period in which these factors indicate an impairment, all or a portion of the associated leasehold costs are transferred to the full cost pool and become subject to amortization. Costs of seismic data are allocated to unproved leaseholds and transferred to the amortization base with the associated leasehold costs on a specific project basis. Under the full cost method of accounting, total capitalized costs of oil and natural gas properties, net of accumulated depreciation, depletion and impairment, less related deferred income taxes and electrical infrastructure costs may not exceed the ceiling limitation. A ceiling limitation calculation is performed at the end of each quarter. If the ceiling limitation is exceeded, a write-down or impairment of the full cost pool is required. A write-down of the carrying value of the full cost pool is a non-cash charge that reduces earnings and impacts stockholders’ equity and typically results in lower depreciation and depletion expense in future periods. Once incurred, a write-down cannot be reversed at a later date. The ceiling limitation calculation is prepared using SEC prices adjusted for basis or location differentials, held constant over the life of the reserves. If applicable, these prices would be further adjusted to include the effects of any fixed price arrangements for the sale of oil and natural gas. Derivative contracts that qualify and are designated as cash flow hedges are included in estimated future cash flows, although the Company historically has not designated any of its derivative contracts as cash flow hedges. The future cash outflows associated with future development or abandonment of wells are included in the computation of the discounted present value of future net revenues for purposes of the ceiling limitation calculation. Sales and abandonments of oil and natural gas properties being amortized are accounted for as adjustments to the full cost pool, with no gain or loss recognized, unless the adjustments would significantly alter the relationship between capitalized costs and proved oil, natural gas and NGL reserves. A significant alteration would not ordinarily be expected to occur upon the sale of reserves involving less than 25 % of the proved reserve quantities of a cost center, unless it results in a greater than 10 % change to the depletion rate. Property, Plant and Equipment, Net. Other capitalized costs, including other property and equipment, such as electrical infrastructure assets and buildings, are carried at cost or fair value established on the Emergence Date less applicable depreciation. Renewals and improvements are capitalized while repairs and maintenance are expensed. Depreciation of such property and equipment is computed using the straight-line method over the estimated useful lives of the assets, which range from 7 to 39 years for buildings and 1 to 27 years for the electrical infrastructure assets and other equipment. When property and equipment components are disposed, the cost and the related accumulated depreciation are removed and any resulting gain or loss is reflected in the consolidated statements of operations. Realization of the carrying value of property and equipment is reviewed for possible impairment whenever events or changes in circumstances indicate that estimated future net operating cash flows directly related to the asset or asset group including disposal value is less than the carrying amount of the asset or asset group. Impairment is measured as the excess of the carrying amount of the impaired asset or asset group over its fair value. Capitalized Interest. Interest is capitalized on assets being made ready for use using a weighted average interest rate based on the Company’s borrowings outstanding during that time. The Company did not capitalize any interest on unproved properties during the years ended December 31, 2024 or 2023. Debt Issuance Costs. The Company includes unamortized debt issuance costs, if any, in other assets in the consolidated balance sheets. Other debt issuance costs related to long-term debt, if any, are presented in the balance sheets as a direct deduction from the associated debt liability, if material. Debt issuance costs are amortized to interest expense over the term of the related debt. When debt is retired, any unamortized costs, if material are written off and included in gain or loss on extinguishment of debt. 69 Table of Contents SandRidge Energy, Inc. and Subsidiaries Notes to Consolidated Financial Statements Asset Retirement Obligations. The Company owns oil and natural gas assets that require expenditures to plug, abandon and remediate associated property at the end of their productive lives, in accordance with applicable federal and state laws. Liabilities for these asset retirement obligations are recorded at the estimated present value at the time the wells are drilled or acquired, with the offsetting increase to property cost. These property costs are depreciated on a unit-of-production basis within the full cost pool. The liability accretes each period until it is settled or the asset is sold and the liability is removed. Both the accretion and the depreciation are included in the consolidated statements of operations. The Company determines its asset retirement obligations by calculating the present value of estimated expenses related to the liability. Estimating future asset retirement obligations requires management to make estimates and judgments regarding timing, existence of a liability and what constitutes adequate restoration. Inherent in the present value calculation are the timing of settlement and changes in the legal, regulatory, environmental and political environments, which are subject to change. See Note 10 for further discussion of the Company’s asset retirement obligations. Revenue Recognition and Natural Gas Balancing. Sales of oil, natural gas and NGLs are recorded at a point in time when control of the oil, natural gas and NGL production passes to the customer at the inlet of the processing plant or pipeline, or the delivery point for onloading to a delivery truck, net of royalties, discounts and allowances, as applicable. Additionally, the Company deducts transportation costs from oil, natural gas and NGL revenues. Taxes assessed by governmental authorities on oil, natural gas and NGL sales are included in production, ad valorem and other taxes in the consolidated statements of operations. See Note 14 for further information on the Company's accounting policies related to revenues. The Company accounts for natural gas production imbalances using the sales method, which recognizes revenue on all natural gas sold even though the natural gas volumes sold may be more or less than the Company's ownership entitles it to sell. Liabilities are recorded for imbalances greater than the Company’s proportionate share of remaining estimated natural gas reserves. The Company has not recorded a liability for natural gas imbalance positions as of December 31, 2024 and recorded a $ 1.5 million liability at December 31, 2023. The Company includes the gas imbalance positions in other long-term obligations in the consolidated balance sheets. Allocation of Share-Based Compensation. Equity compensation provided to employees directly involved in exploration and development activities is capitalized to the Company’s oil and natural gas properties. Equity compensation not capitalized is recognized in general and administrative expenses, production expenses, and other operating expense in the accompanying consolidated statements of operations. Restructuring expenses . Restructuring expenses represent fees and costs associated with our outsourcing and relocation of certain corporate specific functions that are of a non-recurring nature, expenses related to our predecessor company's 2016 bankruptcy, and our exit from North Park Basin in Colorado. Income Taxes. Deferred income taxes reflect the net tax effects of temporary differences between the amounts of assets and liabilities reported for financial statement purposes and their tax basis. Deferred tax assets are reduced by a valuation allowance if it is deemed more likely than not that some or all of the deferred tax assets will not be realized. The Company has elected an accounting policy in which interest and penalties on income taxes resulting from the underpayment or late payment of income taxes due to a taxing authority or relating to income tax contingencies are presented as a component of the income tax provision, rather than as interest expense. Earnings per Share. Basic earnings per common share is calculated by dividing earnings available to common stockholders by the weighted average number of common shares outstanding during the period. Diluted earnings per common share is calculated by dividing earnings available to common stockholders by the weighted average number of diluted common shares outstanding, which includes the effect of potentially dilutive securities. Potentially dilutive securities consist of unvested restricted stock awards and units, performance share units, warrants, and stock options using the treasury method. Under the treasury method, the amount of unrecognized compensation expense related to unvested stock-based compensation grants or the proceeds that would be received if the warrants were exercised are assumed to be used to repurchase shares at the average market price. When a loss exists, all potentially dilutive securities are anti-dilutive and are therefore excluded from the computation of diluted earnings per share. See Note 17 for the Company’s earnings per share calculation. 70 Table of Contents SandRidge Energy, Inc. and Subsidiaries Notes to Consolidated Financial Statements Commitments and Contingencies. Liabilities for loss contingencies arising from claims, assessments, litigation or other sources are recorded when it is probable that a liability has been incurred and the amount can be reasonably estimated. Environmental expenditures are expensed or capitalized, as appropriate, depending on future economic benefit. Expenditures that relate to an existing condition caused by past operations and that have no future economic benefit are expensed. Environmental liabilities related to future costs are recorded on an undiscounted basis when assessments and/or remediation activities are probable and costs can be reasonably estimated. See Note 11 for discussion of the Company’s commitments and contingencies. Concentration of Risk. We regularly maintain cash in excess of federally insured limits at financial institutions. Additionally, all of the Company’s commodity derivative transactions have been carried out in the over-the-counter market, which involves the risk that the counterparties may be unable to meet the financial terms of the transactions. The counterparty for all of the Company’s commodity derivative transactions have an “investment grade” credit rating. The Company monitors the credit ratings of its commodity derivative counterparties on an ongoing basis and considers their credit default risk ratings in determining the fair value of its commodity derivative contracts. Historically, the Company’s commodity derivative contracts have been with multiple counterparties to minimize exposure to any individual counterparty. The Company enters into master netting agreements with all of its commodity derivative counterparties, which allows the Company to net its commodity derivative assets and liabilities for like commodities and derivative instruments with the same counterparty. 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 the counterparties under the commodity derivative contracts. The Company operates a substantial portion of its oil and natural gas properties. As the operator of a property, the Company makes full payment for costs associated with the property and seeks reimbursement from the other working interest owners in the property for their share of those costs. The Company’s joint interest partners are primarily independent oil and natural gas producers. If the oil and natural gas exploration and production industry in general was adversely affected, the ability of the joint interest partners to reimburse the Company could be adversely affected. Purchasers of the Company’s oil, natural gas and NGL production consist primarily of independent marketers, large oil and natural gas companies and gas pipeline companies. The number of available purchasers and markets in the areas where we sell our production reduces the risk that the loss of a single downstream customer would materially affect our sales. We do not have any material commitments to deliver fixed and determinable quantities of oil and natural gas in the future under existing sales contracts or sales agreements. The Company had sales exceeding 10% of total revenues to the following oil and natural gas purchasers (in thousands): Sales % of Revenue December 31, 2024 Plains Marketing, L.P. $ 50,465 40.3 % Targa Pipeline Mid-Continent West OK LLC $ 46,248 36.9 % December 31, 2023 Plains Marketing, L.P. $ 71,832 48.3 % Targa Pipeline Mid-Continent West OK LLC $ 69,743 46.9 % December 31, 2022 Targa Pipeline Mid-Continent West OK LLC $ 147,902 58.2 % Plains Marketing, L.P. $ 76,342 30.0 % 71 Table of Contents SandRidge Energy, Inc. and Subsidiaries Notes to Consolidated Financial Statements Recently Adopted Accounting Pronouncements . 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. The Company applied the amendments in this ASU retrospectively to all prior periods presented in the financial statements. See Note 18 for additional discussion of the Company's segment information. 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 improve the transparency of 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 improves the effectiveness and comparability of 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. 2. Supplemental Cash Flow Information Supplemental disclosures to the consolidated statements of cash flows are presented below (in thousands): Year Ended December 31, 2024 2023 2022 Supplemental Disclosure of Cash Flow Information Cash paid for interest, net of amounts capitalized $ ( 131 ) $ ( 104 ) $ ( 215 ) Supplemental Disclosure of Noncash Investing and Financing Activities Capital expenditures for property, plant and equipment in accounts payables and accrued expenses $ 1,182 $ 919 $ 6,151 Non-cash acquisition purchase price adjustments $ 8,819 $ ( 651 ) $ — Right-of-use assets obtained in exchange for financing lease obligations $ 790 $ 760 $ 713 Inventory material transfers to oil and natural gas properties $ 141 $ 1,289 $ — Asset retirement obligation capitalized $ 353 $ 113 $ 86 Asset retirement obligation removed due to divestiture $ — $ ( 1,413 ) $ ( 623 ) Asset retirement obligation revisions $ 31 $ ( 939 ) $ 2,656 Change in dividends payable $ 42 $ ( 263 ) $ — 3. Acquisitions of Assets and Oil and Gas Properties 2024 Acquisitions On August 30, 2024, the Company closed the previously announced acquisition of oil and natural gas properties in the Cherokee Play of the Western Anadarko Basin, pursuant to the Purchase and Sale Agreement signed on July 29, 2024, as amended on August 30, 2024 (the “Cherokee Play Acquisition”). The Company funded the acquisition with cash on hand. The Cherokee Play Acquisition has been accounted for as an asset acquisition in accordance with ASC 805. The fair value of the consideration paid by the Company and allocation of that amount to the underlying assets acquired, on a relative fair value basis, was recorded on the Company’s books as of the date of the closing. Determining the fair value of the assets acquired and liabilities assumed requires judgment and certain assumptions to be made, the most significant of these being related to the valuation of oil and natural gas properties. The inputs and assumptions related to the oil and natural gas properties are categorized as Level 3 in the fair value hierarchy. 72 Table of Contents SandRidge Energy, Inc. and Subsidiaries Notes to Consolidated Financial Statements The following table represents the allocation of the total cost of the Cherokee Play Acquisition to the assets acquired and liabilities assumed after customary post-closing adjustments: (in thousands) Total Consideration Cash paid $ 121,908 Allocation of Total Consideration Assets Oil and natural gas properties $ 129,825 Total Assets $ 129,825 Liabilities (1) Accounts payable and accrued expenses $ 7,917 Total liabilities assumed 7,917 Net Assets Acquired and Liabilities Assumed $ 121,908 ____________________ (1) Asset retirement obligations assumed were de minimis. On December 13, 2024, the Company closed an acquisition that increased its ownership interest in proved and unproved oil and gas properties within the Cherokee Play for $ 5.2 million, before customary post-closing adjustments. The Company used its cash on hand to fund the acquisition. On June 13, 2024, the Company closed an acquisition that increased its ownership interest in twenty-nine producing wells and five saltwater disposal wells for $ 2.1 million, before customary post-closing adjustments. The Company used its cash on hand to fund the acquisition. 2023 Acquisitions 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. 73 Table of Contents SandRidge Energy, Inc. and Subsidiaries Notes to Consolidated Financial Statements 4. 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, certain other current assets, accounts payable and accrued expenses and other current liabilities and other long-term obligations included in the consolidated balance sheets approximated fair value at December 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. Level 2 Quoted prices in markets that are not active, or inputs which are observable, either directly or indirectly, for substantially the full term of the asset or liability. Level 3 Measurement based on prices or valuation models that require inputs that are both significant to the fair value measurement and less observable for objective sources ( i.e., supported by little or no market activity). 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. The Company’s assessment of the significance of a particular input to the fair value measurement requires judgment, which may affect the valuation of the fair value assets and liabilities and their placement within the fair value hierarchy levels. The determination of the fair values, stated below, considers the market for the Company's financial assets and liabilities, the associated credit risk and other factors. The Company considers active markets as those in which transactions for the assets or liabilities occur in sufficient frequency and volume to provide pricing information on an ongoing basis. The Company had assets classified in Level 2 and 3 of the hierarchy as of December 31, 2024. Level 2 Fair Value Measurements Commodity Derivative Contracts. 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. 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. Level 3 Fair Value Measurements Acquisitions. The Company applies the provisions of the fair value measurement standard on a non-recurring basis to its oil and gas properties acquired. The Company recognized the assets acquired in our acquisitions at cost at a relative fair value basis (See “Note 3 — Acquisitions” for additional information). Fair value was determined using a discounted cash flow model. The underlying future commodity prices included in the Company’s estimated future cash flows of its oil and gas properties were determined using NYMEX forward strip prices as of the closing date of each acquisition. The estimated future cash flows also included assumptions independently prepared by Cawley, Gillespie & Associates for the estimates of production from the oil and natural gas properties, future operating expenses, development costs and income taxes of the acquired properties and risk adjusted discount rates. 74 Table of Contents SandRidge Energy, Inc. and Subsidiaries Notes to Consolidated Financial Statements Fair Value - Recurring Measurement Basis As of December 31, 2024 the following table summarizes the Company’s assets measured at fair value on a recurring basis by the fair value hierarchy (in thousands): Fair Value Measurements Netting(1) Assets at Fair Value Level 1 Level 2 Level 3 Assets Commodity derivative contracts $ — $ 830 $ — $ 630 $ 200 Total $ — $ 830 $ — $ 630 $ 200 (1) Represents the impact of netting assets and liabilities with counterparties where the right of offset exists. There were no open commodity derivative contracts as of December 31, 2023. Transfers. During the years ended December 31, 2024, 2023 and 2022, the Company did not have any transfers between Level 1, Level 2 or Level 3 fair value measurements. 5. Accounts Receivable A summary of accounts receivable is as follows (in thousands): December 31, 2024 2023 Oil, natural gas and NGL sales $ 15,320 $ 14,545 Joint interest billing 9,957 7,405 Other 628 2,243 Total accounts receivable 25,905 24,193 Less: allowance for expected credit losses ( 2,027 ) ( 2,027 ) Total accounts receivable, net $ 23,878 $ 22,166 For the years ended December 31, 2024 and 2023, there was no activity for our allowance for expected credit losses. As of December 31, 2024 and 2023, our allowance for expected credit losses was $ 2.0 million. 6. Derivatives Commodity Derivatives The Company is exposed to commodity price risk, which impacts the predictability of its cash flows from the sale of oil, natural gas and NGL. 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. Historically, the Company has not designated any of its derivative contracts as hedges for accounting purposes. As applicable, if the Company has open derivative contracts, the Company has recorded such contracts at fair value with changes in derivative contract fair values recognized as a gain or loss on derivative contracts in the condensed consolidated income statements. Commodity derivative contracts were settled on a monthly basis, and the commodity derivative contract valuations were adjusted on a mark-to-market valuation basis quarterly. 75 Table of Contents SandRidge Energy, Inc. and Subsidiaries Notes to Consolidated Financial Statements The following table summarizes derivative activity for the years ended December 31, 2024, 2023 and 2022, (in thousands): Year Ended December 31, 2024 2023 2022 (Gain) loss on derivative contracts $ ( 748 ) $ ( 1,447 ) $ ( 5,975 ) Realized settlement gains (losses) on derivative contracts $ 548 $ 5,876 $ 1,525 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. As of December 31, 2024, the Company’s open commodity derivative contracts were held with one counterparty. The following tables summarize (i) the Company's commodity derivative contracts on a gross basis, (ii) the effects of netting assets and liabilities for which the right of offset exists based on master netting arrangements and (iii) for the Company’s net derivative asset positions as of December 31, 2024 (in thousands): December 31, 2024 Gross Amounts Gross Amounts Offset Amounts Net of Offset Financial Collateral Net Amount Assets Derivative contracts - current $ 744 $ 630 $ 114 $ — $ 114 Derivative contracts - non-current 86 — 86 — 86 Total $ 830 $ 630 $ 200 $ — $ 200 There were no open derivative positions as of 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. As of December 31, 2024, the Company's open derivative contracts consisted of oil and NGL commodity derivative contracts under which we will receive a fixed price for the contract and pay a floating market price to the counterparty over a specified period for a contracted volume. These commodity derivative contracts consisted of the following: Period Type of Derivative Instrument Index (1) Daily Volume (Bbl) Weighted Average Price Per Barrel 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 76 Table of Contents SandRidge Energy, Inc. and Subsidiaries Notes to Consolidated Financial Statements Fair Value of Derivatives The following table presents the fair value of the Company’s derivative contracts on a net basis with same counterparty netting (in thousands): Type of Contract Balance Sheet Classification December 31, 2024 Oil and NGL price swaps Current assets - Derivative Contracts $ 114 Oil and NGL price swaps Non-current assets - Derivative Contracts 86 Total net derivative contracts $ 200 See Note 4 for additional discussion of the fair value measurement of the Company’s derivative contracts. 7. Leases The Company determines if an arrangement is or contains a lease at inception. A lease is defined as a contract, or part of a contract, that conveys the right to control the use of identified property, plant or equipment for a period of time in exchange for consideration. As most of the Company's leases do not provide an implicit rate, the Company's incremental borrowing rate was used as the discount rate when determining the present value of future payments. Lease assets are recognized based on the lease liability plus any prepaid lease payments and excluding lease incentives and initial direct costs incurred for the same periods. The Company's lease terms may include options to extend or terminate the lease when it is reasonably certain that option will be exercised. The Company recognizes right-of-use assets and current and non-current lease liabilities on the balance sheet for all leases with lease terms of greater than one year. Short-term leases that have an initial term of one year or less are not capitalized. Lease expense for minimum lease payments is recognized on a straight-line basis over the lease term. Capitalized operating leases are included in other assets, other current liabilities and other long-term obligations , and finance leases are included in other property, plant and equipment, other current liabilities and other long-term obligations on the accompanying consolidated balance sheet as of December 31, 2024 and 2023. The Company had operating and financing leases for vehicles, office space and equipment outstanding during the year ended December 31, 2024, 2023 and 2022 which were not significant to the consolidated financial statements. The components of lease costs recognized for the Company's right-of-use leases are shown below (in thousands): Year Ended December 31, 2024 Year Ended December 31, 2023 Year Ended December 31, 2022 Short-term lease cost (1) $ 1,815 $ 3,139 $ 4,208 Financing lease cost 904 874 673 Operating lease cost 167 167 161 Total lease cost $ 2,886 $ 4,180 $ 5,042 ___________________ (1) During the year ended December 31, 2024, there were no short-term lease costs capitalized associated with drilling rig leases. During the year ended December 31, 2023, there were $ 1.6 million in short-term lease costs capitalized associated with our drilling rig lease. During the year ended December 31, 2022, there were $ 3.3 million in short-term lease costs capitalized associated with our drilling rig lease. Portions of these costs were reimbursed to the Company by other working interest owners. 77 Table of Contents SandRidge Energy, Inc. and Subsidiaries Notes to Consolidated Financial Statements 8. Property, Plant and Equipment Property, plant and equipment consists of the following (in thousands): December 31, 2024 2023 Oil and natural gas properties Proved $ 1,689,807 $ 1,538,724 Unproved 23,504 11,197 Total oil and natural gas properties 1,713,311 1,549,921 Less accumulated depreciation, depletion and impairment ( 1,415,110 ) ( 1,393,801 ) Net oil and natural gas properties capitalized costs 298,201 156,120 Land 200 200 Electrical infrastructure 121,818 121,819 Non-oil and natural gas equipment 1,634 1,656 Buildings and structures 3,603 3,603 Financing Leases 1,286 1,399 Total 128,541 128,677 Less accumulated depreciation and amortization ( 47,852 ) ( 42,184 ) Other property, plant and equipment, net 80,689 86,493 Total property, plant and equipment, net $ 378,890 $ 242,613 The average rates used for depreciation and depletion of oil and natural gas properties were $ 3.52 per Boe in 2024, $ 1.82 per Boe in 2023 and $ 1.18 per Boe in 2022. Costs Excluded from Amortization Costs excluded from amortization were related to unproved properties and were $ 23.5 million and $ 11.2 million, at December 31, 2024 and 2023, respectively. For leases that do not have existing production that would otherwise extend the lease term, the Company estimates that any associated unproved costs will be evaluated and transferred to the amortization base of the full cost pool within a three to five-year period from the original lease date. In addition, the Company’s internal engineers evaluate all properties on a quarterly basis. 9. Accounts Payable and Accrued Expenses Accounts payable and accrued expenses consist of the following (in thousands): December 31, 2024 2023 Accounts payable and other accrued expenses $ 19,502 $ 12,854 Production payable 27,557 21,086 Payroll and benefits 2,912 4,146 Taxes payable 654 742 Total accounts payable and accrued expenses $ 50,625 $ 38,828 78 Table of Contents SandRidge Energy, Inc. and Subsidiaries Notes to Consolidated Financial Statements 10. Asset Retirement Obligations The following table presents the balance and activity of the Company’s asset retirement obligations (in thousands): Year Ended December 31, 2024 2023 2022 Beginning balance $ 64,404 $ 63,709 $ 59,368 Liability incurred upon acquiring and drilling wells 353 113 86 Revisions in estimated cash flows (1) 31 ( 939 ) 2,656 Liability settled or disposed in current period ( 889 ) ( 2,927 ) ( 2,296 ) Accretion (2) 4,681 4,448 3,895 Ending balance 68,580 64,404 63,709 Less: current portion 9,131 9,851 16,074 Asset retirement obligations, net of current $ 59,449 $ 54,553 $ 47,635 ____________________ (1) Revisions for the years ended December 31, 2023 and 2022 relate primarily to changes in working interest and estimated well lives. (2) Included on the Depreciation and depletion - oil and natural gas line item on the Consolidated Statements of Operations. 11. Commitments and Contingencies Included below is a discussion of the Company's various future commitments and contingencies as of December 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. The Company continuously assesses the potential liability related to the Company's pending litigation and revises its estimates when additional information becomes available. Additionally, the Company currently expenses all legal costs as they are incurred. The commitments and contingencies under these arrangements are not recorded in the accompanying consolidated balance sheets. Legal Proceedings. As previously disclosed, on May 16, 2016, the Company and certain of its direct and indirect subsidiaries (collectively, the “Debtors”) filed voluntary petitions for reorganization under Chapter 11 of the United States Bankruptcy Code in the United States Bankruptcy Court for the Southern District of Texas (the “Bankruptcy Court”). The Bankruptcy Court confirmed the joint plan of organization (the “Plan”) of the Debtors on September 9, 2016, and the Debtors subsequently emerged from bankruptcy on October 4, 2016. Pursuant to the Plan, claims against the Company were discharged without recovery in each of the following consolidated cases (the “Cases”): • In re SandRidge Energy, Inc. Securities Litigation, Case No. 5:12-cv-01341-LRW, USDC, Western District of Oklahoma (“In re SandRidge Energy, Inc. Securities Litigation”); and • Ivan Nibur, Lawrence Ross, Jase Luna, Matthew Willenbucher, and the Duane & Virginia Lanier Trust v. SandRidge Mississippian Trust I, et al., Case No. 5:15-cv-00634-SLP, USDC, Western District of Oklahoma (“Lanier Trust”) Both cases were settled with all defendants except the SandRidge Mississippian Trust I (“the Trust”) in Lanier Trust , which is being sued by a class of purchasers of units under the remaining claims under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, and Rule 10b-5 promulgated thereunder, based on allegations that the Trust, made misrepresentations or omissions concerning various topics including the performance of wells operated by the Company. The Company may be contractually obligated to indemnify the Trust for losses, claims, damages, liabilities and expenses, including reasonable costs of investigation and attorneys’ fees and expenses, which it is required to advance. Such indemnification may not be covered by insurance. Considering the status of the Lanier Trust matter, and the facts, circumstances and legal theories relating thereto, the Company is not able to determine the likelihood of an outcome or provide an estimate of any reasonably possible loss or range of possible loss related thereto. However, such losses, if incurred, could be material. The Company has not established any liabilities relating to the Lanier Trust matter and believes that the plaintiffs’ claims are without merit. 79 Table of Contents SandRidge Energy, Inc. and Subsidiaries Notes to Consolidated Financial Statements Separately, the Company had received a demand by two of the settling individual defendants to fund a proposed settlement of $ 17 million with those defendants. The Company refused and filed an action in Oklahoma state court seeking a declaratory judgment that the defendants were not entitled to indemnification. The insurance carriers funded the settlement of $ 17 million and filed a counterclaim, which seeks reimbursement of the $ 17 million settlement, with each carrier to receive their funded portion of the $ 17 million. The Company disputes any liability, as it believes it has meritorious defenses, and intends to continue to vigorously defend against this claim. Considering the status of this matter, and the facts, circumstances and legal theories thereto, the Company is not able to determine the likelihood of an outcome. 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. 12. Income Taxes The Company’s income tax (benefit) provision consisted of the following components (in thousands): Year Ended December 31, 2024 2023 2022 Current Federal $ — $ — $ — State — — — — — — Deferred Federal ( 19,370 ) 12,002 ( 55,796 ) State ( 2,862 ) 1,958 ( 8,733 ) ( 22,232 ) 13,960 ( 64,529 ) Total (benefit) provision $ ( 22,232 ) $ 13,960 $ ( 64,529 ) 80 Table of Contents SandRidge Energy, Inc. and Subsidiaries Notes to Consolidated Financial Statements A reconciliation of the (benefit) provision for income taxes at the statutory federal tax rate to the Company’s actual income tax (benefit) provision is as follows (in thousands): Year Ended December 31, 2024 2023 2022 Computed at federal statutory rate $ 8,559 $ 15,712 $ 37,304 State taxes, net of federal benefit 1,317 2,433 5,843 Non-deductible expenses 23 2 3 Stock-based compensation ( 22 ) ( 71 ) 23 Return to provision adjustments — 738 1,015 Change in statutory tax rate 948 2,665 25,499 Change in state net operating loss carryforwards 673 — 31,762 Change in valuation allowance ( 33,730 ) ( 7,537 ) ( 165,978 ) Other — 18 — Total (benefit) provision $ ( 22,232 ) $ 13,960 $ ( 64,529 ) Effective tax rate ( 54.5 ) % 18.7 % ( 36.3 ) % Deferred income taxes are provided to reflect the future tax consequences of temporary differences between the tax basis of assets and liabilities and their reported amounts in the financial statements. In assessing the realizability of the deferred tax assets, we consider whether it is more likely than not that some or all of the deferred tax assets will not be realized. The ultimate realization of the deferred tax assets is dependent upon the generation of future income in periods in which the deferred tax assets can be utilized. 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. As of December 31, 2024, we partially released our valuation allowance on our deferred tax assets by $ 72.8 million. 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. Our partial valuation allowance release of $ 50.6 million as of December 31, 2023 was increased by $ 22.2 million due to changes in expected future income, resulting in net deferred tax assets of $ 72.8 million as of December 31, 2024. Significant components of the Company’s deferred tax assets and liabilities are as follows (in thousands): December 31, 2024 December 31, 2023 Deferred tax liabilities Investments (1) $ — $ — Derivative contracts — — Total deferred tax liabilities — — Deferred tax assets Property, plant and equipment 57,061 68,750 Net operating loss carryforwards 373,506 372,903 Tax credits and other carryforwards 33,851 33,851 Asset retirement obligations 13,327 13,551 Investments (1) 97 121 Other 1,454 1,618 Total deferred tax assets 479,296 490,794 Valuation allowance ( 406,495 ) ( 440,225 ) Net deferred tax asset $ 72,801 $ 50,569 ____________________ (1) Includes the Company’s deferred tax liability resulting from its investment in the Royalty Trusts. 81 Table of Contents SandRidge Energy, Inc. and Subsidiaries Notes to Consolidated Financial Statements 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. As a result of the Chapter 11 reorganization and related transactions, the Company experienced an ownership change within the meaning of IRC Section 382 during 2016 that subjected certain of the Company’s tax attributes, including net operating losses ("NOLs"), to an IRC Section 382 limitation. This limitation has not resulted in cash taxes for any period subsequent to the ownership change. 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. As of December 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 $ 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 $ 199 million are derived from states the Company currently does not operate in. Of the remaining state NOL carryforwards, $ 652 million do not have an expiration date and $ 223 million expire during the years 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 any unrecognized tax benefits at December 31, 2024, 2023 or 2022. The Company’s only taxing jurisdiction is the United States (federal and state). The Company’s tax years 2021 to present remain open for federal examination. Additionally, tax years 2005 through 2020 remain subject to examination for the purpose of determining the amount of federal NOL and other carryforwards. The number of years open for state tax audits varies, depending on the state, but is generally from three to five years . 13. Equity 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 and 50 million shares of preferred stock, par value $ 0.001 per share. At December 31, 2024, the Company had 37.2 million shares of common stock issued and outstanding, including 0.1 million of shares of unvested restricted stock awards. The Company also has 0.2 million restricted stock units, an immaterial amount of performance share units and 0.1 million stock options outstanding at December 31, 2024 as discussed further in Note 15. At December 31, 2023, the Company had 37.1 million shares of common stock issued and outstanding, including 0.1 million of shares of unvested restricted stock awards. The Company also had 0.1 million restricted stock units, an immaterial amount of performance share units and 0.2 million stock options outstanding at December 31, 2023. Warrants. Since 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. During the year ended December 31, 2022, warrant holders exercised 103 Series A warrants and 44 Series B warrants for 147 shares of common stock. Upon expiration, the remaining 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 consolidated balance sheets. 82 Table of Contents SandRidge Energy, Inc. and Subsidiaries Notes to Consolidated Financial Statements 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 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, can be modified or discontinued by the Board at any time and does not have an expiration date. For the year ended December 31, 2024, the Company repurchased 21,308 shares for $ 0.2 million. The Company did not repurchase any common stock under the existing or prior Program during the year ended December 31, 2023. Dividends . 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 paid in March, May, August, and November 2024. The aggregate total payout was $ 16.3 million. The $ 0.11 per share dividend is subject to quarterly approval by the Board. Dividend payments for the year ended December 31, 2024 totaled $ 72.3 million, which included $ 0.5 million of dividends on vested stock awards. Cash dividends for the year ended December 31, 2023 totaled $ 81.5 million. 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, par value $ 0.001 per share to stockholders of record at the close of business on July 13, 2020. Each Right entitles its holder, under certain circumstances, to purchase from the Company one one-thousandth of a share of Series A Junior Participating Preferred Stock of the Company, par value $ 0.001 per share, at an exercise price of $ 5.00 per Right, subject to adjustment. The description and terms of the Rights are set forth in the tax benefits preservation plan, dated as of July 1, 2020, between the Company and American Stock Transfer & Trust Company, LLC, as rights agent (and any successor rights agent, the “Rights Agent”). The Company adopted the Tax Benefits Preservation Plan, as amended on March 16, 2021, in order to protect shareholder value against a possible limitation on the Company’s ability to use its tax net operating losses (the “NOLs”) and certain other tax benefits to reduce potential future U.S. federal income tax obligations. The NOLs are a valuable asset to the Company, which may inure to the benefit of the Company and its stockholders. However, if the Company experiences an “ownership change,” as defined in Section 382 of the Internal Revenue Code of 1986, as amended (the “Code”), its ability to fully utilize the NOLs and certain other tax benefits will be substantially limited and the timing of the usage of the NOLs and such other benefits could be substantially delayed, which could significantly impair the value of those assets. Generally, an “ownership change” occurs if the percentage of the Company’s stock owned by one or more of its “ five -percent shareholders” (as such term is defined in Section 382 of the Code) increases by more than 50 percentage points over the lowest percentage of stock owned by such stockholder or stockholders at any time over a three-year period. 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. Subject to certain exceptions, the Rights become exercisable and trade separately from Common Stock only upon the “Distribution Time,” which occurs upon the earlier of: • the close of business on the tenth (10th) day after the “Stock Acquisition Date,” which is (a) the first date of public announcement that a person or group of affiliated or associated persons (with certain exceptions, an “Acquiring Person”) has acquired, or obtained the right or obligation to acquire, beneficial ownership of 4.9 % or more of the outstanding shares of Common Stock (with certain exceptions) or (b) such other date, as determined by the Board, on which a person or group has become an Acquiring Person, or • the close of business on the tenth (10th) business day (or later date as may be determined by the Board prior to such time as any person or group becomes an Acquiring Person) following the commencement of a tender offer or exchange offer which, if consummated, would result in a person or group becoming an Acquiring Person. 83 Table of Contents SandRidge Energy, Inc. and Subsidiaries Notes to Consolidated Financial Statements Any existing stockholder or group that beneficially owns 4.9 % or more of Common Stock has been grandfathered at its current ownership level, but the Rights will not be exercisable if, at any time after the announcement of the Tax Benefits Preservation Plan, such stockholder or group increases its ownership of Common Stock by one share of Common Stock. Certain synthetic interests in securities created by derivative positions, whether or not such interests are considered to be ownership of the underlying Common Stock or are reportable for purposes of Regulation 13D of the Securities Exchange Act of 1934, as amended, are treated as beneficial ownership of the number of shares of Common Stock equivalent to the economic exposure created by the derivative position, to the extent actual shares of Common Stock are directly or indirectly held by counterparties to the derivatives contracts. Until the earlier of the Distribution Time and the Expiration Time, the surrender for transfer of any shares of Common Stock will also constitute the transfer of the Rights associated with those shares. As soon as practicable after the Distribution Time, separate rights certificates will be mailed to holders of record of Common Stock as of the close of business on the Distribution Time. From and after the Distribution Time, the separate rights certificates alone will represent the Rights. Except as otherwise provided in the Tax Benefits Preservation Plan, only shares of Common Stock issued prior to the Distribution Time will be issued with Rights. The Rights are not exercisable until the Distribution Time. The Tax Benefits Preservation Plan was approved at the 2021 annual meeting of stockholders on May 25, 2021. On June 20, 2023, our Board of Directors approved an amendment to the Tax Benefits Preservation Plan, approved by shareholders, to extend the expiration time of the Tax Benefits Preservation Plan from July 1, 2023 to July 1, 2026. This amendment was approved at the Company’s 2024 Annual Meeting. In the event that any person or group (other than certain exempt persons) becomes an Acquiring Person (a “Flip-in Event”), each holder of a Right (other than any Acquiring Person and certain related parties, whose Rights automatically become null and void) will have the right to receive, upon exercise, shares of Common Stock having a value equal to two times the exercise price of the Right. In the event that, at any time following the Stock Acquisition Date, any of the following occurs (each, a “Flip-over Event”): • the Company consolidates with, or merges with and into, any other entity, and the Company is not the continuing or surviving entity • any entity engages in a share exchange with or consolidates with, or merges with or into, the Company, and the Company is the continuing or surviving entity and, in connection with such share exchange, consolidation or merger, all or part of the outstanding shares of Common Stock are changed into or exchanged for stock or other securities of any other entity or cash or any other property; or • the Company sells or otherwise transfers, in one transaction or a series of related transactions, fifty percent (50%) or more of the Company’s assets, cash flow or earning power, each holder of a Right (except Rights which previously have been voided as described above) will have the right to receive, upon exercise, common stock of the acquiring company having a value equal to two times the exercise price of the Right. Shares Withheld for Taxes. The following table shows the number of shares withheld for taxes and the associated value of those shares. These shares were accounted for as treasury stock when withheld, and then immediately retired. Year Ended December 31, 2024 2023 2022 (In thousands) Number of shares withheld for taxes 29 59 66 Value of shares withheld for taxes $ 393 $ 929 $ 1,177 84 Table of Contents SandRidge Energy, Inc. and Subsidiaries Notes to Consolidated Financial Statements 14. Revenues The following table disaggregates the Company’s revenue by source for the years ended December 31, 2024, 2023 and 2022 (in thousands): Year Ended December 31, 2024 2023 2022 Oil $ 68,231 $ 78,174 $ 87,528 Natural gas 21,397 34,941 103,067 NGL 35,662 35,526 63,663 Total revenues $ 125,290 $ 148,641 $ 254,258 Oil, natural gas and NGL revenues. A majority of the Company’s revenues come from sales of oil, natural gas and NGLs. In accordance with the contracts governing these sales, performance obligations to customers are satisfied and revenues are recorded at a point in time when control of the oil, natural gas and NGL production passes to the customer at the inlet of the processing plant or pipeline, or the delivery point for onloading to a delivery truck. As the Company’s customers obtain control of the production prior to selling it to other end customers, the Company presents its revenues on a net basis, rather than on a gross basis. 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 customer, 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 taxes expense in the consolidated statements of operations. Revenues Receivable. The Company records an asset in accounts receivable, net on its consolidated balance sheet for revenues receivable from contracts with customers at the end of each period. Pricing for revenues receivable is estimated using current month crude oil, natural gas and NGL prices, net of deductions. Revenues receivable on operated properties are typically collected the month after the Company delivers the related production to its customers. As of December 31, 2024 and 2023, the Company had revenues receivable of $ 15.3 million and $ 14.5 million, respectively, and we did no t record any credit losses on revenue receivable as of December 31, 2024 , 2023 and 2022. As of December 31, 2024, three purchasers accounted for approximately 70.9 % of our revenues receivable. 15. Share-Based Compensation Share-Based Compensation Omnibus Incentive Plan. The Omnibus Incentive Plan became effective on October 4, 2016 and authorizes the issuance of up to 4.6 million shares of SandRidge common stock. Persons eligible to receive awards under the Omnibus Incentive Plan include non-employee directors of the Company, employees of the Company or any of its affiliates, and certain consultants and advisors to the Company or any of its affiliates. The types of awards that may be granted under the Omnibus Incentive Plan include stock options, restricted stock, performance awards and other forms of awards granted or denominated in shares of common stock, as well as certain cash-based awards. At December 31, 2024, the Company had restricted stock awards, restricted stock units, performance share units and stock options outstanding under the Omnibus Incentive Plan. Forfeitures for these awards are recognized as they occur. Restricted Stock Awards. The Company’s restricted stock awards are equity-classified awards and are valued based upon the market value of the Company’s common stock on the date of grant. Outstanding restricted shares at December 31, 2024 will generally vest over a one-year period with a remaining weighted average contractual period of 0.51 years and have $ 0.3 million of associated unrecognized compensation cost. 85 Table of Contents SandRidge Energy, Inc. and Subsidiaries Notes to Consolidated Financial Statements The following table presents a summary of the Company’s unvested restricted stock awards: Number of Shares Weighted- Average Grant Date Fair Value (In thousands) Unvested restricted shares outstanding at January 1, 2022 57 $ 5.26 Granted 18 $ 18.93 Vested ( 57 ) $ 5.26 Forfeited / Canceled — $ — Unvested restricted shares outstanding at December 31, 2022 18 $ 18.93 Granted 54 $ 13.85 Vested ( 18 ) $ 18.93 Forfeited / Canceled — $ — Unvested restricted shares outstanding at December 31, 2023 54 $ 13.85 Granted 65 $ 13.20 Vested (1) ( 65 ) $ 13.76 Forfeited / Canceled — $ — Unvested restricted shares outstanding at December 31, 2024 53 $ 13.17 Totals may not sum or recalculate due to rounding ____________________ (1) The aggregate intrinsic value of restricted stock that vested during 2024 was approximately $ 0.9 million based on the stock price at the time of vesting. Restricted Stock Units. The Company’s restricted stock units awards are equity-classified awards and are valued based upon the market value of the Company’s common stock on the date of grant. Outstanding restricted stock units at December 31, 2024 will generally vest over a three-year period with a remaining weighted average contractual period of 2.14 years and have $ 1.6 million associated unrecognized compensation cost at December 31, 2024. The following table presents a summary of the Company’s unvested restricted stock units: Number of Units Weighted- Average Grant Date Fair Value (In thousands) Unvested restricted stock units outstanding at January 1, 2022 406 $ 4.18 Granted 39 $ 13.51 Vested ( 175 ) $ 3.61 Forfeited / Canceled ( 18 ) $ 5.51 Unvested restricted stock units outstanding at December 31, 2022 252 $ 5.93 Granted 79 $ 15.13 Vested ( 175 ) $ 4.33 Forfeited / Canceled ( 18 ) $ 11.50 Unvested restricted stock units outstanding at December 31, 2023 138 $ 12.51 Granted 96 $ 13.14 Vested (1) ( 81 ) $ 10.85 Forfeited / Canceled — $ — Unvested restricted stock units outstanding at December 31, 2024 153 $ 13.78 Totals may not sum or recalculate due to rounding ____________________ (1) The aggregate intrinsic value of restricted stock units that vested during 2024 was approximately $ 1.1 million based on the stock price at the time of vesting. 86 Table of Contents SandRidge Energy, Inc. and Subsidiaries Notes to Consolidated Financial Statements Performance Share Units. The Company’s performance share units awards are equity-classified awards and are valued based upon the market value of the Company’s common stock on the date of grant. Outstanding performance share units at December 31, 2024 will generally vest over a one year period with a remaining weighted average contractual period of 0.37 years and an $ 0.1 million amount of unrecognized compensation cost at December 31, 2024. The following table presents a summary of the Company's performance share units: Number of Units Weighted- Average Grant Date Fair Value (In thousands) Unvested performance share units outstanding at January 1, 2022 34 $ 5.01 Granted 19 $ 13.51 Vested ( 34 ) $ 5.01 Forfeited / Canceled ( 2 ) $ 13.51 Unvested performance share units outstanding at December 31, 2022 17 $ 13.51 Granted 19 $ 15.31 Vested ( 17 ) $ 13.51 Forfeited / Canceled ( 3 ) $ 15.31 Unvested performance share units outstanding at December 31, 2023 16 $ 15.31 Granted 23 $ 13.63 Vested (1) ( 16 ) $ 15.31 Forfeited / Canceled — $ — Unvested performance share units outstanding at December 31, 2024 23 $ 13.63 Totals may not sum or recalculate due to rounding ____________________ (1) The aggregate intrinsic value of performance share units that vested during 2024 was approximately $ 0.2 million. Stock Options The fair value of stock options was estimated on the date of the grant using a Black-Scholes valuation model that used the weighted average assumptions noted in the following table. Expected volatility is based on historical volatility of the Company’s common stock and other factors. The Company uses historical data on the exercise of stock options, post-vesting forfeitures and other factors to estimate the expected term of the stock-based payments granted. The risk-free interest rate is based on the U.S. Treasury yield curve in effect at the time of grant. Generally, stock options granted to employees and directors vest ratably over three years from the grant date and expire seven years from the date of grant. There were no stock options granted during the years ended December 31, 2024, 2023 or 2022. Assumptions For the Year Ended December 31, 2021 Risk-free interest rate 0.79 % Expected dividend yield — % Expected volatility 78.2 % Expected term 5 years 87 Table of Contents SandRidge Energy, Inc. and Subsidiaries Notes to Consolidated Financial Statements The following table presents a summary of the Company's stock option activity for the years ended December 31, 2024, 2023 and 2022: Number of Shares Weighted Average Exercise Price per Share Weighted Average Remaining Contractual Term(years) Aggregate Intrinsic Value (in millions) (In thousands) Outstanding at January 1, 2022 324 $ — 7.80 $ 0.80 Granted — — — — Exercised ( 31 ) $ 17.53 — — Expired — — — — Forfeited / Canceled ( 7 ) — — — Outstanding at December 31, 2022 286 $ — 7.64 $ 2.38 Exercisable at December 31, 2022 68 $ — 6.49 $ 0.64 Outstanding at December 31, 2022 286 $ — 7.64 $ 2.38 Granted — — — — Exercised ( 36 ) $ 15.68 — — Expired — — — — Forfeited / Canceled — — — — Outstanding at December 31, 2023 250 $ — 7.66 $ 1.02 Exercisable at December 31, 2023 100 $ — 7.66 $ 0.41 Outstanding at December 31, 2023 250 $ — 7.66 $ 1.02 Granted — — — — Exercised — $ — — — Expired — — — — Forfeited / Canceled — — — — Outstanding at December 31, 2024 (1) 250 $ — 6.65 $ 0.53 Exercisable at December 31, 2024 150 $ — 6.65 $ 0.32 Totals may not sum or recalculate due to rounding ____________________ (1) All outstanding stock options as of December 31, 2024 are expected to vest. In August 2021, the Company granted nonqualified stock options. As of December 31, 2024, the total unrecognized compensation expense was $ 0.5 million and will be recognized over a weighted average period of 1.65 years. The Company issues new shares upon stock option exercises. 88 Table of Contents SandRidge Energy, Inc. and Subsidiaries Notes to Consolidated Financial Statements The following tables summarize the Company's share and incentive-based compensation for the years ended December 31, 2024, 2023 and 2022 (in thousands): Recurring Compensation Expense (1) Year Ended December 31, 2024 Equity-classified awards: Restricted stock awards and units $ 1,790 Performance share units 264 Stock options 300 Total share-based compensation expense $ 2,354 Year Ended December 31, 2023 Equity-classified awards: Restricted stock awards and units $ 1,415 Performance share units 229 Stock options 301 Total share-based compensation expense $ 1,945 Year Ended December 31, 2022 Equity-classified awards: Restricted stock awards and units $ 997 Performance share units 215 Stock options 314 Total share-based compensation expense $ 1,526 ____________________ (1) Recorded in general and administrative expense in the accompanying consolidated statements of operations. 16. Incentive and Deferred Compensation Plans Annual Incentive Plan. The Annual Incentive Plan ("AIP") incorporates quantitative performance measures, strategic qualitative goals and competitive target award levels for management and employees for the 2024 and 2023 performance years. Incentive bonus awards for 2024 will be provided based on performance measures related to health, safety and environment, production, operating expenses, capital expenditures, general and administrative expenses, among other metrics and will be paid in 2025 at the discretion of the Board of Directors. As of December 31, 2024 and 2023, the Company accrued approximately $ 2.2 million and $ 2.2 million, respectively for AIP. AIP Payments totaling $ 2.2 million were paid in 2024 for the 2023 performance year and $ 1.5 million were paid in 2023 for the 2022 performance year. 401(k) Plan. The Company maintains a 401(k) retirement plan for its employees. Under this plan, eligible employees may elect to defer a portion of their earnings up to the maximum allowed by the IRS. For the years ended December 31, 2024, 2023 and 2022, the Company made matching contributions to the plan equal to 100 % on the first 10 % of employee deferred wages, excluding incentive compensation, totaling $ 0.9 million for the year ended December 31, 2024 and $ 0.8 million for the years ended December 31, 2023 and 2022. Participants in the plan are immediately 100 % vested in the discretionary employee contributions and related earnings on those contributions. The Company's matching contributions and related earnings vest based on years of service, with full vesting occurring on the four th anniversary of employment. 89 Table of Contents SandRidge Energy, Inc. and Subsidiaries Notes to Consolidated Financial Statements 17. Earnings per Share The following table summarizes the calculation of weighted average common shares outstanding used in the computation of diluted earnings (loss) per share: Net Income (loss) Weighted Average Shares Earnings (Loss) Per Share (In thousands, except per share amounts) Year Ended December 31, 2024 Basic earnings per share $ 62,986 37,106 $ 1.70 Effect of dilutive securities Restricted stock awards (1) — 28 Restricted share units (1) — 32 Performance share units (1) — 11 Stock options (1) — 11 Diluted earnings per share $ 62,986 37,188 $ 1.69 Year Ended December 31, 2023 Basic earnings per share $ 60,857 36,939 $ 1.65 Effect of dilutive securities Restricted stock awards (1) — 19 Restricted share units (1) — 120 Performance share units (1) — 13 Stock options (1) — 43 Diluted earnings per share $ 60,857 37,134 $ 1.64 Year Ended December 31, 2022 Basic earnings per share $ 242,168 36,745 $ 6.59 Effect of dilutive securities Restricted stock awards (1) — 20 Restricted share units (1) — 285 Performance share units (1) — 20 Stock options (1) — 84 Diluted earnings per share $ 242,168 37,154 $ 6.52 ____________________ (1) The incremental shares of potentially dilutive restricted stock awards, restricted stock units, performance share units and stock options were included for the years ended December 31, 2024, 2023 and 2022 as their effect was dilutive under the treasury stock method. See Note 15 for discussion of the Company’s share-based compensation awards. 90 Table of Contents SandRidge Energy, Inc. and Subsidiaries Notes to Consolidated Financial Statements 18. Segment Reporting The Company operates as one operating segment, which is engaged in the acquisition, development, and production of oil, natural gas, and NGL in the U.S. Mid-Continent. The Company's chief operating decision maker ("CODM") is its Chief Executive Officer who reviews financial information on a consolidated basis and uses net income (loss) to make key operating decisions and assess financial performance. The CODM considers significant segment expenses to be those presented in the below table. Interest expense was not significant for the years ended December 31, 2024, 2023 or 2022. The CODM regularly reviews total assets which were $ 581.5 million and $ 574.2 million as of December 31, 2024 and 2023, respectively. The following table presents selected financial information with respect to the Company’s single operating segment for the years ended December 31, 2024, 2023 and 2022: Year Ended December 31, 2024 2023 2022 (In thousands) Revenues Oil $ 68,231 $ 78,174 $ 87,528 Natural gas 21,397 34,941 103,067 NGL 35,662 35,526 63,663 Total revenues 125,290 148,641 254,258 Expenses Lease operating expenses 40,012 41,862 41,286 Production, ad valorem, and other taxes 6,780 10,870 15,880 Depreciation and depletion—oil and natural gas 25,976 15,657 11,542 Depreciation and amortization—other 6,503 6,518 6,342 General and administrative 11,695 10,735 9,449 Restructuring expenses 474 406 382 Employee termination benefits — 19 — (Gain) loss on derivative contracts ( 748 ) ( 1,447 ) ( 5,975 ) Other operating (income) expense 1,372 ( 157 ) ( 99 ) Total expenses 92,064 84,463 78,807 Income (loss) from operations 33,226 64,178 175,451 Other income (expense) Interest income (expense), net 7,744 10,552 1,810 Other income (expense), net ( 216 ) 87 378 Total other income (expense) 7,528 10,639 2,188 Income (loss) before income taxes 40,754 74,817 177,639 Income tax (benefit) ( 22,232 ) 13,960 ( 64,529 ) Net income (loss) $ 62,986 $ 60,857 $ 242,168 Capital expenditures, including acquisitions $ 156,472 $ 33,664 $ 50,639 91 Table of Contents SandRidge Energy, Inc. and Subsidiaries Notes to Consolidated Financial Statements 19. Subsequent Events On March 7, 2025, the Board declared a cash dividend of $ 0.11 per share of the Company’s common stock, payable on March 31, 2025 to shareholders of record on March 20, 2025. Subsequent to December 31, 2024, the Company entered into the following natural gas derivative swap contracts: Period Index Daily Volume (MMBtu) Weighted Average Price Per MMBtu March 2025 - December 2025 NYMEX Henry Hub 8,500 $ 4.17 January 2026 - December 2026 NYMEX Henry Hub 4,500 $ 4.09 Subsequent to December 31, 2024, the Company entered into the following natural gas derivative producer costless collar contracts: Period Index Daily Volume (MMBtu) Put (Per MMBtu) Call (Per MMBtu) March 2025 - December 2025 NYMEX Henry Hub 8,500 $ 3.50 $ 5.50 April 2025 - December 2025 NYMEX Henry Hub 12,000 $ 4.00 $ 8.20 January 2026 - December 2026 NYMEX Henry Hub 4,500 $ 3.35 $ 5.35 Subsequent to December 31, 2024, the Company entered into the following ethane derivative swap contracts: Period Index Daily Volume (Bbl) Weighted Average Price Per Bbl March 2025 - December 2025 Mont Belvieu OPIS 325 $ 11.76 20. Supplemental Information on Oil and Natural Gas Producing Activities (Unaudited) The supplemental information below includes capitalized costs related to oil and natural gas producing activities; costs incurred in oil and natural gas property acquisition, exploration and development; and the results of operations for oil and natural gas producing activities. Supplemental information is also provided for oil, natural gas and NGL production and average sales prices; the estimated quantities of proved oil, natural gas and NGL reserves; the standardized measure of discounted future net cash flows associated with proved oil, natural gas and NGL reserves; and a summary of the changes in the standardized measure of discounted future net cash flows associated with proved oil, natural gas and NGL reserves. 92 Table of Contents SandRidge Energy, Inc. and Subsidiaries Notes to Consolidated Financial Statements Capitalized Costs Related to Oil and Natural Gas Producing Activities The Company’s capitalized costs for oil and natural gas activities consisted of the following (in thousands): December 31, 2024 2023 Oil and natural gas properties Proved $ 1,689,807 $ 1,538,724 Unproved 23,504 11,197 Total oil and natural gas properties 1,713,311 1,549,921 Less accumulated depreciation, depletion and impairment ( 1,415,110 ) ( 1,393,801 ) Net oil and natural gas properties capitalized costs $ 298,201 $ 156,120 Costs Incurred in Oil and Natural Gas Property Acquisition, Exploration and Development Costs incurred in oil and natural gas property acquisition, exploration and development activities which have been capitalized are summarized as follows (in thousands): Year Ended December 31, 2024 2023 2022 Acquisitions of properties Proved $ 126,998 $ 11,232 $ 1,431 Unproved 2,666 — — Exploration (1) 11,246 ( 46 ) 809 Development 15,562 22,478 48,399 Total cost incurred $ 156,472 $ 33,664 $ 50,639 ____________________ (1) Includes land, geological, geophysical and leasehold costs. Costs Excluded from Amortization The following table summarizes the costs, by year incurred, related to unproved properties, which were excluded from oil and natural gas properties subject to amortization at December 31, 2024 (in thousands): Year Ended December 31, Total 2024 2023 2022 2021 and Prior Acquisition and exploration 22,432 11,860 ( 270 ) ( 599 ) 11,441 Capitalized interest 1,072 — — — 1,072 Total costs incurred (1) $ 23,504 $ 11,860 $ ( 270 ) $ ( 599 ) $ 12,513 ____________________ (1) Includes application of fresh start accounting in 2016 and reflects remaining balance at December 31, 2024. 93 Table of Contents SandRidge Energy, Inc. and Subsidiaries Notes to Consolidated Financial Statements Results of Operations for Oil and Natural Gas Producing Activities The following table presents the Company’s results of operations from oil and natural gas producing activities (in thousands), which exclude any interest costs or indirect general and administrative costs and, therefore, are not necessarily indicative of the impact the Company’s operations have on actual net earnings. Year Ended December 31, 2024 2023 2022 Revenues $ 125,290 $ 148,641 $ 254,258 Expenses Production costs 46,832 53,099 57,221 Depreciation and depletion 25,976 15,657 11,542 Total expenses 72,808 68,756 68,763 Income (loss) before income taxes 52,482 79,885 185,495 Income tax expense (benefit) (1) 12,728 19,374 45,055 Results of operations for oil and natural gas producing activities (excluding corporate overhead and interest costs) $ 39,754 $ 60,511 $ 140,440 ____________________ (1) Income tax (benefit) expense is hypothetical and is calculated by applying the Company’s statutory tax rate to (loss) income before income taxes attributable to our oil and natural gas producing activities, after giving effect to permanent differences and tax credits. Oil, Natural Gas and NGL Reserve Quantities Proved oil, natural gas and NGL reserves are those quantities, which, by analysis of geoscience and engineering data, can be estimated with reasonable certainty to be economically producible, based on oil, natural gas and NGL prices used to estimate reserves, from a given date forward from known reservoirs, and under existing economic conditions, operating methods, and government regulation prior to the time at which contracts providing the right to operate expire, unless evidence indicates that renewal is reasonably certain. The term “reasonable certainty” implies a high degree of confidence that the quantities of oil, natural gas and NGLs actually recovered will equal or exceed the estimate. To achieve reasonable certainty, the Company’s engineers and independent petroleum consultants relied on technologies that have been demonstrated to yield results with consistency and repeatability. The technologies and economic data used to estimate the Company’s proved reserves include, but are not limited to, well logs, geologic maps, seismic data, well test data, production data, historical price and cost information and property ownership interests. The accuracy of the reserve estimates is dependent on many factors, including the following: • the quality and quantity of available data and the engineering and geological interpretation of that data; • estimates regarding the amount and timing of future costs, which could vary considerably from actual costs; • the accuracy of mandated economic assumptions; and • the judgment of the personnel preparing the estimates. Proved developed reserves are proved reserves expected to be recovered through existing wells with existing equipment and operating methods or in which the cost of the required equipment is relatively minor compared with the cost of a new well. Proved undeveloped reserves are reserves that are expected to be recovered from new wells on undrilled acreage, or from existing wells where a relatively large major expenditure is required for recompletion. Approximately 97.5 % of the Company’s proved reserves estimates have been prepared by independent reservoir engineers and geoscience professionals and the remaining 2.5 % of proved reserves are estimated internally and are reviewed by members of the Company’s senior management to ensure that the Company consistently applies rigorous professional standards and the reserve definitions prescribed by the SEC. 94 Table of Contents SandRidge Energy, Inc. and Subsidiaries Notes to Consolidated Financial Statements Cawley, Gillespie & Associates, independent oil and natural gas consultants, prepared the estimates of proved reserves of oil, natural gas and NGLs for approximately 97.5 % of the Company’s net interest in oil and natural gas properties as of the years ended December 31, 2024 and 2023. Cawley, Gillespie & Associates are independent petroleum engineers, geologists, geophysicists and petrophysicists and do not own an interest in the Company or its properties and are not employed on a contingent basis. The remaining proved reserves were based on Company estimates. The Company believes the geoscience and engineering data examined provides reasonable assurance that the proved reserves are economically producible in future years from known reservoirs, and under recent, past or historical economic conditions, operating methods and governmental regulations. Estimates of proved reserves are subject to change, either positively or negatively, as additional information is available and contractual and economic conditions change. 2024 Activity . Proved reserves increased from 55.7 MMBoe at December 31, 2023 to 63.1 MMBoe at December 31, 2024, primarily due to purchases of 16.0 MMBoe, 3.5 MMBoe associated with other commercial improvements, and positive revisions of 2.3 MMBoe related to NGL Yield. These were partially offset by negative revisions including 6.6 MMBoe due to a decrease in year-end SEC commodity prices for oil and natural gas and price realizations, as well as 6.1 MMBoe from the Company’s production during 2024, and 1.7 MMboe attributable to well performance, well shut-ins and other revisions. 2023 Activity . Proved reserves decreased from 74.3 MMBoe at December 31, 2022 to 55.7 MMBoe at December 31, 2023, primarily due to a decrease in year-end SEC commodity prices for oil and natural gas, price realizations and NGL yield which resulted in a decrease of 17.5 MMBoe, as well as 6.2 MMBoe from the Company's production during 2023, 1.4 MMBoe attributable to well shut-ins and other revisions, and 0.1 MMBoe in sales. The Company also had positive revisions including purchases of 1.8 MMBoe, extensions of 1.2 MMBoe, 1.9 MMBoe associated with well positive performance revisions, and 1.7 MMBoe associated with other commercial improvements. 2022 Activity . Proved reserves increased from 71.3 MMBoe at December 31, 2021 to 74.3 MMBoe at December 31, 2022, primarily as a result of positive revisions of 9.1 MMBoe associated with the increase in year-end SEC commodity prices for oil and natural gas, 1.8 MMBoe related to the Company's well reactivation program, and 1.0 MMBoe associated with other commercial improvements. Further, extensions added 1.2 MMBoe and purchases added 0.2 MMBoe of proved reserves. These increases were offset by 2022 production totaling 6.5 MMBoe, a decrease of 1.0 MMBoe due to higher operating expenses in the trailing twelve month period used in the projections, and a decrease of 2.8 MMBoe attributable to other revisions. 95 Table of Contents SandRidge Energy, Inc. and Subsidiaries Notes to Consolidated Financial Statements The summary below presents changes in the Company’s estimated reserves. Oil NGL Natural Gas Total (MBbls) (MBbls) (MMcf) (1) MBoe Proved developed and undeveloped reserves As of December 31, 2021 7,850 24,313 234,731 71,285 Revisions of previous estimates (2) 971 2,825 25,841 8,102 Acquisitions of new reserves 39 65 528 192 Extensions and discoveries 510 227 2,823 1,208 Production ( 949 ) ( 1,997 ) ( 21,101 ) ( 6,463 ) As of December 31, 2022 8,421 25,433 242,822 74,324 Revisions of previous estimates (2) ( 1,027 ) ( 8,200 ) ( 36,464 ) ( 15,304 ) Acquisitions of new reserves 453 379 5,474 1,745 Extensions and discoveries 283 357 3,431 1,211 Sales of reserves in place ( 26 ) ( 49 ) ( 427 ) ( 147 ) Production ( 1,047 ) ( 1,705 ) ( 20,403 ) ( 6,152 ) As of December 31, 2023 7,057 16,215 194,433 55,677 Revisions of previous estimates (2) ( 535 ) 489 ( 14,754 ) ( 2,503 ) Acquisitions of new reserves 4,131 5,884 35,738 15,971 Extensions and discoveries 10 ( 6 ) ( 21 ) 1 Production ( 918 ) ( 1,889 ) ( 19,488 ) ( 6,056 ) As of December 31, 2024 9,745 20,693 195,908 63,090 Proved developed reserves As of December 31, 2021 7,850 24,313 234,731 71,285 As of December 31, 2022 8,421 25,433 242,822 74,324 As of December 31, 2023 7,057 16,215 194,433 55,677 As of December 31, 2024 7,863 18,499 183,647 56,970 Proved undeveloped reserves As of December 31, 2021 — — — — As of December 31, 2022 — — — — As of December 31, 2023 — — — — As of December 31, 2024 1,882 2,194 12,261 6,120 Totals may not sum or recalculate due to rounding _________________ (1) Natural gas reserves are computed at 14.65 pounds per square inch absolute and 60 degrees Fahrenheit. (2) Revisions include changes due to commodity prices, production costs, previous quantity estimates, and other commercial factors. Primary factor for revisions in years ended 2024, 2023 and 2022 were changes in SEC prices, among other factors. See Proved Reserves discussion in Part I, Item 1 of this Form 10-K for additional detail. 96 Table of Contents SandRidge Energy, Inc. and Subsidiaries Notes to Consolidated Financial Statements Standardized Measure of Discounted Future Net Cash Flows (Unaudited) The standardized measure of discounted cash flows and summary of the changes in the standardized measure computation from year to year are prepared in accordance with ASC Topic 932, Extractive Activities—Oil and Gas, ("ASC Topic 932"). The assumptions underlying the computation of the standardized measure of discounted cash flows may be summarized as follows: • the standardized measure includes the Company’s estimate of proved oil, natural gas and NGL reserves and projected future production volumes based upon economic conditions; • pricing is applied based upon SEC prices at December 31, 2024, 2023 and 2022, adjusted for fixed or determinable contracts that are in existence at year-end. The calculated weighted average per unit prices for the Company’s proved reserves and future net revenues were as follows: At December 31, 2024 2023 2022 Oil (per Bbl) $ 74.04 $ 76.65 $ 93.73 Natural gas (per Mcf) $ 1.02 $ 1.62 $ 4.76 NGL (per Bbl) $ 19.40 $ 21.53 $ 33.42 • future development and production costs are determined based on trailing 12 month average cost at year-end; • the standardized measure includes projections of future abandonment costs based upon actual costs at year-end; and • a discount factor of 10 % per year is applied annually to the future net cash flows. The summary below presents the Company’s future net cash flows relating to proved oil, natural gas and NGL reserves based on the standardized measure in ASC Topic 932 (in thousands). December 31, 2024 2023 2022 Future cash inflows from production $ 1,322,371 $ 1,204,568 $ 2,795,762 Future production costs (1) ( 584,452 ) ( 627,715 ) ( 1,131,145 ) Future development costs (2) ( 108,821 ) ( 39,288 ) ( 36,730 ) Future income tax expenses (3) — — ( 17,780 ) Undiscounted future net cash flows 629,098 537,565 1,610,107 10% annual discount ( 266,402 ) ( 241,272 ) ( 803,242 ) Standardized measure of discounted future net cash flows $ 362,696 $ 296,293 $ 806,865 ____________________ (1) Consists of severance taxes, ad valorem taxes, and lease operating expenses. (2) Includes abandonment costs. (3) The future income tax expenses have been computed using statutory tax rates, giving effect to allowable tax deductions and tax credits under current laws, including expected tax benefits to be realized from the utilization of net operating loss carryforwards. 97 Table of Contents SandRidge Energy, Inc. and Subsidiaries Notes to Consolidated Financial Statements The following table represents the Company’s estimate of changes in the standardized measure of discounted future net cash flows from proved reserves (in thousands): Year Ended December 31, 2024 2023 2022 Beginning present value $ 296,293 $ 806,865 $ 432,914 Changes during the year Revenues less production ( 78,497 ) ( 95,909 ) ( 197,419 ) Net changes in prices, production and other costs ( 43,115 ) ( 372,897 ) 465,116 Development costs incurred — 645 846 Net changes in future development costs ( 6,991 ) ( 1,307 ) 3,028 Extensions and discoveries 137 18,422 36,984 Revisions of previous quantity estimates (1) ( 14,213 ) ( 171,758 ) 98,579 Accretion of discount 29,629 81,066 34,138 Net change in income taxes — 3,798 ( 3,798 ) Purchases of reserves in-place 168,590 14,450 3,039 Sales of reserves in-place — ( 1,394 ) — Timing differences and other (2) 10,863 14,312 ( 66,562 ) Net change for the year 66,403 ( 510,572 ) 373,951 Ending present value (3) $ 362,696 $ 296,293 $ 806,865 ____________________ (1) A significant portion of the revisions of previous quantity estimates is related to the decrease in pricing which affects well life and other economic factors. See Proved Reserves discussion. (2) The change in timing differences and other are related to revisions in the Company's estimated time of production and development. (3) Standardized Measure was determined using SEC prices, and does not reflect actual prices received or current market prices. 98 Table of Contents Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure Not applicable.