☑ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2022 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number: 001-33784 Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Form 10-Q (Mark One) SANDRIDGE ENERGY, INC. (Exact name of registrant as specified in its charter) (State or other jurisdict ...

SandRidge Energy, Inc. (NYSE:SD) Q1 2022 Earnings Conference Call May 5, 2022 11:00 AM ET Company Participants Scott Prestridge – Director of Finance and Investor Relations Grayson Pranin – Chief Executive Officer and Chief Operating Officer Salah Gamoudi – Executive Vice President and Chief Financial Officer Conference Call Participants Joshua Young – Bison Interests Operator Good morning. My name is Julian, and I'll be your conference operator today. At this time, I'd like to welcome everyone to the SandR ...

Financial Highlights - SandRidge Energy's SEC Proved Developed Reserve PV-10 is approximately $433 million [5] with a net cash position of $140 million [5] - The company generated approximately $99 million of free cash flow in 2021 [6] - SandRidge Energy has approximately $1.7 billion of Net Operating Loss carryforwards as of YE21 [6] Operational Performance - SandRidge Energy maintained flat production over the trailing twelve months with approximately $11 million of invested capital [6] - The company's daily average base production rate was 186 MBoed in 2021 [13], with liquids accounting for approximately 47% of total production [17] - Lease operating costs were $390 per Boe for FY21 [8] - The company reactivated 129 wells in 2021, resulting in a gross production increase of 32 MBoed [23] Strategic Focus - The company plans to drill 9 new wells in the core of NW Stack in 2022 [6] - SandRidge Energy reduced its annual absolute LOE by approximately 75% since 2016 [26] - The company reduced its annual absolute G&A by approximately 75% since 2018 [36]

UNITED STATES SECURITIES AND EXCHANGE COMMISSION ☑ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2021 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number: 001-33784 SANDRIDGE ENERGY, INC. (Exact name of registrant as specified in its charter) Delaware 20-8084793 (State or other jurisdiction of incorporation or organization) (I.R.S. E ...

SandRidge Energy, Inc. (NYSE:SD) Q4 2021 Earnings Conference Call March 10, 2022 11:00 AM ET Company Participants Scott Prestridge - Director of Finance and Investor Relations Grayson Pranin - Chief Executive Officer and Chief Operating Officer Salah Gamoudi - Chief Financial Officer and Chief Accounting Officer Dean Parrish - Vice President of Operations Conference Call Participants Michael Furrow - Johnson Rice Joshua Young - Bison Interests Patrick Retzer - Retzer Capital Management Operator Good mornin ...

[Disclosures Regarding Forward-Looking Statements](index=2&type=section&id=DISCLOSURES%20REGARDING%20FORWARD-LOOKING%20STATEMENTS) This section details forward-looking statements, their inherent risks, and the Company's disclaimer regarding updates - The report includes forward-looking statements concerning capital expenditures, liquidity, debt, project timing, COVID-19 impact, litigation, business strategy, and regulatory compliance[7](index=7&type=chunk) - These statements are based on assumptions and analyses but are subject to significant business, economic, competitive, regulatory, and other risks, meaning actual results may differ materially[8](index=8&type=chunk) - The Company disclaims any obligation to update or revise these forward-looking statements unless legally required[8](index=8&type=chunk) [Part I. Financial Information](index=3&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) This part presents the Company's unaudited condensed consolidated financial statements and management's discussion and analysis [Item 1. Financial Statements (Unaudited)](index=4&type=section&id=ITEM%201.%20Financial%20Statements%20%28Unaudited%29) This section presents the unaudited condensed consolidated financial statements, covering balance sheets, operations, equity, cash flows, and detailed notes [Condensed Consolidated Balance Sheets](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) This section provides a snapshot of the Company's financial position, detailing assets, liabilities, and stockholders' equity at specific dates Condensed Consolidated Balance Sheets | Metric | Sep 30, 2021 (in thousands) | Dec 31, 2020 (in thousands) | | :-------------------------------- | :-------------------------- | :-------------------------- | | Cash and cash equivalents | $96,738 | $22,130 | | Total current assets | $129,726 | $50,812 | | Total assets | $313,789 | $260,832 | | Total current liabilities | $67,606 | $68,877 | | Long-term debt | $— | $20,000 | | Total liabilities | $105,672 | $132,766 | | Total stockholders' equity | $208,117 | $128,066 | - Total assets increased by **$52.957 million**, or **20.3%**, from December 31, 2020, to September 30, 2021, primarily driven by a significant increase in cash and cash equivalents[15](index=15&type=chunk) - Total liabilities decreased by **$27.094 million**, or **20.4%**, mainly due to the repayment of long-term debt[15](index=15&type=chunk) [Condensed Consolidated Statements of Operations](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) This section details the Company's financial performance over specific periods, showing revenues, expenses, and net income or loss Condensed Consolidated Statements of Operations | Metric (in thousands, except per share data) | Three Months Ended Sep 30, 2021 | Three Months Ended Sep 30, 2020 | Nine Months Ended Sep 30, 2021 | Nine Months Ended Sep 30, 2020 | | :------------------------------------------- | :------------------------------ | :------------------------------ | :----------------------------- | :----------------------------- | | Total revenues | $46,584 | $27,676 | $114,403 | $84,660 | | Total expenses | $20,125 | $75,727 | $36,833 | $360,856 | | Income (loss) from operations | $26,459 | $(48,051) | $77,570 | $(276,196) | | Net income (loss) | $28,599 | $(48,749) | $79,894 | $(277,198) | | Basic Net income (loss) per share | $0.78 | $(1.36) | $2.20 | $(7.78) | | Diluted Net income (loss) per share | $0.77 | $(1.36) | $2.15 | $(7.78) | - The Company reported a significant turnaround, moving from a net loss of **$(48.7) million** in Q3 2020 to a net income of **$28.6 million** in Q3 2021[16](index=16&type=chunk) - For the nine months ended September 30, 2021, net income was **$79.9 million**, a substantial improvement from a net loss of **$(277.2) million** in the prior year, driven by increased revenues and reduced expenses[16](index=16&type=chunk) [Condensed Consolidated Statement of Changes in Stockholders' Equity](index=6&type=section&id=Condensed%20Consolidated%20Statement%20of%20Changes%20in%20Stockholders%27%20Equity) This section outlines changes in the Company's stockholders' equity, reflecting movements in common stock, warrants, capital, and accumulated deficit Condensed Consolidated Statement of Changes in Stockholders' Equity | Metric (in thousands) | Balance at Dec 31, 2020 | Balance at Sep 30, 2021 | | :-------------------- | :---------------------- | :---------------------- | | Common Stock Amount | $36 | $37 | | Warrants Amount | $88,520 | $88,520 | | Additional Paid In Capital | $1,062,220 | $1,062,376 | | Accumulated Deficit | $(1,022,710) | $(942,816) | | Total Stockholders' Equity | $128,066 | $208,117 | - Total stockholders' equity increased by **$80.051 million** from December 31, 2020, to September 30, 2021, primarily due to net income[18](index=18&type=chunk) - The accumulated deficit decreased by **$79.894 million**, reflecting the Company's profitability during the nine-month period[18](index=18&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) This section presents the Company's cash inflows and outflows from operating, investing, and financing activities over specific periods Condensed Consolidated Statements of Cash Flows | Metric (in thousands) | Nine Months Ended Sep 30, 2021 | Nine Months Ended Sep 30, 2020 | | :------------------------------------------ | :----------------------------- | :----------------------------- | | Net cash provided by (used in) operating activities | $66,315 | $27,356 | | Net cash provided by (used in) investing activities | $25,867 | $25,857 | | Net cash provided by (used in) financing activities | $(21,446) | $(46,540) | | Net increase (decrease) in cash, cash equivalents and restricted cash | $70,736 | $6,673 | | Cash, cash equivalents and restricted cash, end of period | $99,002 | $12,641 | - Net cash provided by operating activities significantly increased by **$38.959 million**, or **142.4%**, for the nine months ended September 30, 2021, compared to the same period in 2020[19](index=19&type=chunk) - The Company experienced a substantial net increase in cash, cash equivalents, and restricted cash of **$70.736 million** for the nine months ended September 30, 2021, compared to **$6.673 million** in the prior year[19](index=19&type=chunk) [Notes to Condensed Consolidated Financial Statements](index=8&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) This section provides detailed explanations and disclosures supporting the condensed consolidated financial statements, covering accounting policies and specific financial items [Note 1. Basis of Presentation](index=8&type=section&id=1.%20Basis%20of%20Presentation) This note describes the Company's business, the basis for preparing its unaudited financial statements, and the key estimates and assumptions used - SandRidge Energy, Inc. is an oil and natural gas acquisition, development, and production company focused on hydrocarbon resources in the United States[21](index=21&type=chunk) - The unaudited condensed consolidated financial statements are prepared in accordance with GAAP, with certain information condensed or omitted, and include normal recurring adjustments[23](index=23&type=chunk) - Key estimates and assumptions are made in areas such as oil, natural gas, and NGL reserves, impairment tests, depreciation, depletion and amortization, asset retirement obligations, deferred tax assets, and derivative valuations[26](index=26&type=chunk) [Note 2. Fair Value Measurements](index=9&type=section&id=2.%20Fair%20Value%20Measurements) This note details the fair value measurements of the Company's financial instruments, particularly commodity derivative contracts, and their classification within the fair value hierarchy - The carrying values of most current assets and liabilities, and debt under the New Credit Facility, approximate fair value[30](index=30&type=chunk) - Commodity derivative contracts are classified as Level 2 fair value measurements, determined using discounted cash flow or option pricing models with observable inputs like futures prices, volatility, and discount rates[32](index=32&type=chunk) Liabilities | Liabilities | September 30, 2021 (in thousands) | | :-------------------------- | :-------------------------------- | | Commodity derivative contracts | $4,129 | [Note 3. Derivatives](index=10&type=section&id=3.%20Derivatives) This note explains the Company's use of commodity derivative contracts to manage price risk and how changes in their fair values are recognized in operations - The Company uses commodity derivative contracts (fixed price swaps) to manage commodity price risk for a portion of its forecasted oil and natural gas production[35](index=35&type=chunk) - Derivative contracts are not designated as accounting hedges, so changes in their fair values are recognized as gains or losses in the condensed consolidated statements of operations[36](index=36&type=chunk) Commodity Derivative Contracts | Contract Type | Notional | Units | Weighted Average Fixed Price per Unit | | :---------------------------------- | :------- | :------ | :------------------------------------ | | NGL Price Swaps: Oct 2021 - Feb 2022 | 2,605,000 | Gallons | $1.20 | | Natural Gas Price Swaps: Oct 2021 - Feb 2022 | 1,800,000 | MMBtu | $4.07 | [Note 4. Property, Plant and Equipment](index=11&type=section&id=4.%20Property%2C%20Plant%20and%20Equipment) This note provides a breakdown of the Company's property, plant, and equipment, including oil and natural gas properties, and changes over time Property, Plant and Equipment, Net | Metric (in thousands) | September 30, 2021 | December 31, 2020 | | :------------------------------------ | :----------------- | :---------------- | | Net oil and natural gas properties | $84,754 | $106,222 | | Other property, plant and equipment, net | $98,951 | $103,118 | | Total property, plant and equipment, net | $183,705 | $209,340 | - Net oil and natural gas properties decreased by **$21.468 million**, or **20.2%**, from December 31, 2020, to September 30, 2021[42](index=42&type=chunk) - Total property, plant and equipment, net, saw a decrease of **$25.635 million**, or **12.2%**, over the nine-month period[42](index=42&type=chunk) [Note 5. Impairment](index=12&type=section&id=5.%20Impairment) This note details the Company's impairment charges, specifically related to the full cost ceiling limitation for oil and natural gas properties and other assets - No full cost ceiling limitation impairment charge was recorded for the three and nine-month periods ended September 30, 2021[45](index=45&type=chunk) - In the three-month period ended September 30, 2020, the Company recorded a **$44.0 million** impairment charge related to the full cost ceiling limitation[46](index=46&type=chunk) - For the nine-month period ended September 30, 2020, a total impairment charge of **$253.8 million** was recorded, including a **$215.8 million** full cost ceiling limitation impairment and a **$38.0 million** write-down of the office headquarters[46](index=46&type=chunk) [Note 6. Acquisitions and Divestitures](index=12&type=section&id=6.%20Acquisitions%20and%20Divestitures) This note outlines the Company's recent acquisition of royalty interests and the divestiture of its North Park Basin oil and natural gas properties - On April 22, 2021, the Company acquired all overriding royalty interest assets of SandRidge Mississippian Trust I for a net purchase price of **$3.6 million**[48](index=48&type=chunk) - On February 5, 2021, the Company sold all its North Park Basin oil and natural gas properties and related assets for net proceeds of **$39.7 million**, recognizing a **$19.7 million** gain[50](index=50&type=chunk) - For the nine months ended September 30, 2021, North Park Basin represented **2.8%** of total consolidated revenues and **1.3%** of total production volumes prior to its sale[51](index=51&type=chunk) [Note 7. Accounts Payable and Accrued Expenses](index=13&type=section&id=7.%20Accounts%20Payable%20and%20Accrued%20Expenses) This note provides a detailed breakdown of the Company's accounts payable and accrued expenses, highlighting changes in various components Accounts Payable and Accrued Expenses | Metric (in thousands) | September 30, 2021 | December 31, 2020 | | :-------------------------------- | :----------------- | :---------------- | | Accounts payable and other accrued expenses | $15,907 | $23,017 | | Production payable | $22,476 | $15,367 | | Payroll and benefits | $2,765 | $5,640 | | Taxes payable | $5,396 | $6,864 | | Total accounts payable and accrued expenses | $46,778 | $51,426 | - Total accounts payable and accrued expenses decreased by **$4.648 million**, or **9.0%**, from December 31, 2020, to September 30, 2021[55](index=55&type=chunk) - Production payable increased by **$7.109 million**, while accounts payable and other accrued expenses, payroll and benefits, and taxes payable all decreased[55](index=55&type=chunk) [Note 8. Long-Term Debt](index=13&type=section&id=8.%20Long-Term%20Debt) This note details the Company's long-term debt, including the full repayment and termination of its New Credit Facility, resulting in no outstanding debt - On September 2, 2021, the Company fully repaid its **$20.0 million** term loan and terminated all commitments and obligations under the New Credit Facility[57](index=57&type=chunk) - As of September 30, 2021, the Company had no outstanding long-term debt, a reduction from **$20.0 million** at December 31, 2020[15](index=15&type=chunk)[56](index=56&type=chunk) - The weighted average interest rate for borrowings under the New Credit Facility was approximately **2.60%** for the three months and **2.61%** for the nine months ended September 30, 2021[58](index=58&type=chunk) [Note 9. Commitments and Contingencies](index=14&type=section&id=9.%20Commitments%20and%20Contingencies) This note discusses the Company's legal proceedings and claims, including potential indemnification obligations and the associated risks of material loss - The Company is subject to various legal proceedings and claims, including ongoing Cases where it remains a nominal defendant despite claims being discharged[59](index=59&type=chunk)[61](index=61&type=chunk) - The Company may be contractually obligated to indemnify two former officers and SandRidge Mississippian Trust I for losses arising from these Cases, with insurance coverage for indemnification costs exhausted as of October 2020[61](index=61&type=chunk) - The Company cannot determine the likelihood or estimate any reasonably possible loss related to these Cases, but potential losses, if incurred, could be material[62](index=62&type=chunk) [Note 10. Income Taxes](index=15&type=section&id=10.%20Income%20Taxes) This note explains the Company's income tax position, including its full valuation allowance against deferred tax assets and federal NOL carryforwards - The Company maintains a full valuation allowance against its net deferred tax asset due to cumulative negative earnings, resulting in no federal or state income tax expense or benefit for the three and nine-month periods ended September 30, 2021[65](index=65&type=chunk) - As of September 30, 2021, the Company had approximately **$1.6 billion** of federal NOL carryforwards (**$0.8 billion** expiring 2025-2037, **$0.8 billion** with no expiration date) and over **$33.5 million** in federal tax credits[67](index=67&type=chunk) - An IRC Section 382 ownership change in 2016 limits the utilization of certain tax attributes, and future ownership changes could further impact the Company's ability to use NOLs[66](index=66&type=chunk) [Note 11. Equity](index=15&type=section&id=11.%20Equity) This note details the Company's equity structure, including common stock, warrants, share repurchase program, and the Tax Benefits Preservation Plan - As of September 30, 2021, the Company had **36.7 million** shares of common stock outstanding, with **250.0 million** shares authorized[70](index=70&type=chunk) - The Company has **4.9 million** Series A and **2.1 million** Series B warrants exercisable until October 4, 2022, at initial prices of **$41.34** and **$42.03** per share, respectively[71](index=71&type=chunk) - The Board approved a **$25.0 million** share repurchase program in August 2021, but no common stock was repurchased under this program during the third quarter ended September 30, 2021[72](index=72&type=chunk) - The Tax Benefits Preservation Plan, adopted in July 2020 and amended in March 2021, aims to protect the Company's NOLs by deterring any person or group from acquiring beneficial ownership of **4.9%** or more of its securities[73](index=73&type=chunk)[74](index=74&type=chunk) [Note 12. Revenues](index=17&type=section&id=12.%20Revenues) This note provides a detailed breakdown of the Company's revenues by source, highlighting significant increases driven by commodity price recovery Revenues by Source | Revenue Source (in thousands) | Three Months Ended Sep 30, 2021 | Three Months Ended Sep 30, 2020 | Nine Months Ended Sep 30, 2021 | Nine Months Ended Sep 30, 2020 | | :---------------------------- | :------------------------------ | :------------------------------ | :----------------------------- | :----------------------------- | | Oil | $15,198 | $17,071 | $45,412 | $57,279 | | NGL | $14,863 | $4,983 | $34,344 | $12,508 | | Natural gas | $16,523 | $5,493 | $34,647 | $14,347 | | Total revenues | $46,584 | $27,676 | $114,403 | $84,660 | - Total revenues increased by **$18.908 million** (**68.3%**) for Q3 2021 and **$29.743 million** (**35.1%**) for the nine months ended September 30, 2021, compared to the respective prior-year periods[80](index=80&type=chunk) - NGL and Natural Gas revenues saw substantial increases, while Oil revenues slightly decreased for Q3 2021 compared to Q3 2020[80](index=80&type=chunk) [Note 13. Employee Termination Benefits](index=18&type=section&id=13.%20Employee%20Termination%20Benefits) This note details the Company's employee termination benefits, showing a significant decrease due to workforce reductions and asset sales - No employee termination benefits were recorded during the three-month period ended September 30, 2021[84](index=84&type=chunk) Employee Termination Benefits | Metric (in thousands) | Nine Months Ended Sep 30, 2021 | Nine Months Ended Sep 30, 2020 | | :-------------------------- | :----------------------------- | :----------------------------- | | Cash | $32 | $6,607 | | Share-Based Compensation | $17 | $1,824 | | Total Employee Termination Benefits | $49 | $8,431 | - Employee termination benefits significantly decreased to **$49 thousand** for the nine months ended September 30, 2021, from **$8.431 million** in the same period of 2020, which was due to workforce reductions and the sale of North Park assets[84](index=84&type=chunk) [Note 14. Earnings (Loss) per Share](index=19&type=section&id=14.%20Earnings%20%28Loss%29%20per%20Share) This note presents the Company's basic and diluted earnings per share, reflecting a significant improvement from prior-year losses Earnings (Loss) per Share | Metric | Three Months Ended Sep 30, 2021 | Three Months Ended Sep 30, 2020 | Nine Months Ended Sep 30, 2021 | Nine Months Ended Sep 30, 2020 | | :------------------------------------ | :------------------------------ | :------------------------------ | :----------------------------- | :----------------------------- | | Basic earnings (loss) per share | $0.78 | $(1.36) | $2.20 | $(7.78) | | Diluted earnings (loss) per share | $0.77 | $(1.36) | $2.15 | $(7.78) | | Weighted average common shares outstanding (Basic) | 36,577 | 35,783 | 36,318 | 35,649 | | Weighted average common shares outstanding (Diluted) | 36,996 | 35,783 | 37,200 | 35,649 | - Basic EPS improved significantly to **$0.78** for Q3 2021 from a loss of **$(1.36)** in Q3 2020, and to **$2.20** for the nine months ended September 30, 2021, from a loss of **$(7.78)** in the prior year[85](index=85&type=chunk) - Dilutive securities (restricted stock units, restricted stock awards, stock options) were included in diluted EPS calculations for 2021 periods as their effect was dilutive, unlike 2020 periods where they were anti-dilutive[86](index=86&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=20&type=section&id=ITEM%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's perspective on the Company's financial performance, condition, liquidity, and capital resources, highlighting key trends [Introduction](index=20&type=section&id=Introduction) This introduction sets the context for understanding the Company's financial condition and results, emphasizing the unaudited nature of interim data - The discussion and analysis aim to help readers understand the Company's business, financial condition, results of operations, liquidity, and capital resources[87](index=87&type=chunk) - It should be read in conjunction with the unaudited condensed consolidated financial statements and the 2020 Form 10-K[87](index=87&type=chunk) - Interim financial information is unaudited and includes normal recurring adjustments, with results not necessarily indicative of the full fiscal year[87](index=87&type=chunk) [Overview](index=20&type=section&id=Overview) This overview describes SandRidge Energy, Inc.'s business focus on oil and natural gas, recent financial actions, and strategic outlook for maximizing free cash flow - SandRidge Energy, Inc. is an independent oil and natural gas company primarily focused on acquisition, development, and production in the U.S. Mid-Continent, having sold all North Park Basin assets on February 5, 2021[88](index=88&type=chunk) Production Composition | Production Composition | Q3 2021 | Q3 2020 | 9M 2021 | 9M 2020 | | :--------------------- | :------ | :------ | :------ | :------ | | Oil | 12.7% | 22.2% | 14.4% | 24.5% | | Natural gas | 55.2% | 46.3% | 52.5% | 44.5% | | NGLs | 32.1% | 31.5% | 33.1% | 31.0% | - Recent events include the full repayment and termination of the **$20.0 million** term loan under the New Credit Facility on September 2, 2021, and the Board's approval of a **$25.0 million** share repurchase program in August 2021, with no repurchases made in Q3 2021[95](index=95&type=chunk) - The Company's outlook focuses on maximizing free cash flow through cost control, financial discipline, prudent capital allocation, and limiting capital projects to high-return opportunities, while also pursuing acquisitions and business combinations[93](index=93&type=chunk) [Consolidated Results of Operations](index=22&type=section&id=Consolidated%20Results%20of%20Operations) This section analyzes the Company's consolidated financial performance, detailing revenues, operating expenses, impairment charges, and other income/expenses [Revenues](index=22&type=section&id=Revenues) This section analyzes the Company's revenue performance, highlighting increases driven by higher realized commodity prices despite declining production volumes Revenues by Source | Revenue Source (in thousands) | Three Months Ended Sep 30, 2021 | Three Months Ended Sep 30, 2020 | Nine Months Ended Sep 30, 2021 | Nine Months Ended Sep 30, 2020 | | :---------------------------- | :------------------------------ | :------------------------------ | :----------------------------- | :----------------------------- | | Oil | $15,198 | $17,071 | $45,412 | $57,279 | | NGL | $14,863 | $4,983 | $34,344 | $12,508 | | Natural gas | $16,523 | $5,493 | $34,647 | $14,347 | | Total revenues | $46,584 | $27,676 | $114,403 | $84,660 | - Revenues from oil, natural gas, and NGL sales increased by **$19.0 million** (**69.1%**) for Q3 2021 and **$30.3 million** (**36.0%**) for the nine months ended September 30, 2021, compared to the prior year periods[100](index=100&type=chunk) - The increase in revenues was primarily driven by higher realized prices for oil, natural gas, and NGLs due to increased economic activity and recovery from the COVID-19 pandemic, partially offset by an overall decline in production volumes[101](index=101&type=chunk) [Operating Expenses](index=24&type=section&id=Operating%20Expenses) This section details the Company's operating expenses, including lease operating, production taxes, and depreciation, noting impacts from asset sales and cost-cutting Operating Expenses | Expense (in thousands) | Three Months Ended Sep 30, 2021 | Three Months Ended Sep 30, 2020 | Nine Months Ended Sep 30, 2021 | Nine Months Ended Sep 30, 2020 | | :------------------------------------ | :------------------------------ | :------------------------------ | :----------------------------- | :----------------------------- | | Lease operating expenses | $9,080 | $8,069 | $26,266 | $32,409 | | Production, ad valorem, and other taxes | $2,219 | $2,333 | $6,929 | $7,386 | | Depreciation and depletion—oil and natural gas | $2,092 | $7,525 | $6,790 | $45,728 | | Total operating expenses | $14,904 | $19,625 | $44,467 | $91,594 | - Lease operating expenses increased by **$1.0 million** for Q3 2021 YoY due to reactivating wells, but decreased by **$6.1 million** for 9M 2021 YoY due to personnel reductions, the NPB sale, and cost-cutting efforts[103](index=103&type=chunk) - Depreciation and depletion rates for oil and natural gas properties decreased significantly by **$2.46/Boe** for Q3 2021 YoY and **$5.43/Boe** for 9M 2021 YoY, primarily due to the sale of North Park Basin properties and full cost ceiling test impairments recorded in 2020[105](index=105&type=chunk) [Impairment](index=25&type=section&id=Impairment) This section discusses the Company's impairment charges, noting no full cost ceiling limitation impairment in 2021 compared to significant charges in 2020 - No full cost ceiling limitation impairment was recorded during the three and nine-month periods ended September 30, 2021[106](index=106&type=chunk) - In Q3 2020, a **$44.0 million** impairment charge was recorded, and for 9M 2020, a total impairment of **$253.8 million** was recorded, including a **$215.8 million** full cost ceiling limitation and a **$38.0 million** write-down of the office headquarters[106](index=106&type=chunk) - Based on estimated year-end prices, the Company anticipates no full cost ceiling limitation impairment for year-end 2021, though future impairments could fluctuate[108](index=108&type=chunk)[109](index=109&type=chunk) [Other Operating Expenses](index=25&type=section&id=Other%20Operating%20Expenses) This section reviews other operating expenses, including general and administrative, restructuring, employee termination benefits, and derivative gains/losses Other Operating Expenses | Expense (in thousands) | Three Months Ended Sep 30, 2021 | Three Months Ended Sep 30, 2020 | Nine Months Ended Sep 30, 2021 | Nine Months Ended Sep 30, 2020 | | :------------------------------------ | :------------------------------ | :------------------------------ | :----------------------------- | :----------------------------- | | General and administrative | $2,229 | $2,493 | $6,841 | $12,290 | | Restructuring expenses | $(1,696) | $1,199 | $614 | $1,643 | | Employee termination benefits | $— | $3,184 | $49 | $8,431 | | (Gain) loss on derivative contracts | $4,129 | $5,299 | $4,129 | $(7,168) | | (Gain) loss on sale of assets | $761 | $(178) | $(18,952) | $(100) | | Total non-operating expenses | $5,221 | $12,059 | $(7,634) | $15,465 | - General and administrative expenses decreased by **$0.3 million** for Q3 2021 YoY and **$5.4 million** for 9M 2021 YoY, primarily due to personnel reductions, lower IT/software costs, reduced corporate headquarters overhead, and professional cost reductions[111](index=111&type=chunk) - Restructuring expenses decreased by **$2.9 million** for Q3 2021 YoY and **$1.0 million** for 9M 2021 YoY, mainly due to the removal of previously accrued 2016 Bankruptcy expenses[112](index=112&type=chunk)[113](index=113&type=chunk) [Other Income (Expense)](index=26&type=section&id=Other%20Income%20%28Expense%29) This section analyzes other income and expenses, including interest expense and other net income, noting the impact of debt repayment Other Income (Expense) | Metric (in thousands) | Three Months Ended Sep 30, 2021 | Three Months Ended Sep 30, 2020 | Nine Months Ended Sep 30, 2021 | Nine Months Ended Sep 30, 2020 | | :-------------------------- | :------------------------------ | :------------------------------ | :----------------------------- | :----------------------------- | | Interest expense, net | $(256) | $(569) | $(387) | $(1,653) | | Other income (expense), net | $2,396 | $(129) | $2,711 | $5 | | Total other income (expense) | $2,140 | $(698) | $2,324 | $(1,648) | - Total other income (expense) shifted from an expense of **$(0.698) million** in Q3 2020 to an income of **$2.140 million** in Q3 2021, and from an expense of **$(1.648) million** to an income of **$2.324 million** for the nine months ended September 30, 2021[117](index=117&type=chunk) - Interest expense, net, decreased due to the full repayment and termination of the New Credit Facility, with **$0.2 million** of deferred financing costs expensed as a result[117](index=117&type=chunk) [Liquidity and Capital Resources](index=27&type=section&id=Liquidity%20and%20Capital%20Resources) This section assesses the Company's liquidity and capital resources, covering working capital, cash flows, indebtedness, and contractual obligations [Working Capital and Sources and Uses of Cash](index=27&type=section&id=Working%20Capital%20and%20Sources%20and%20Uses%20of%20Cash) This section examines the Company's working capital position and its sources and uses of cash, highlighting improvements from asset sales and operations - As of September 30, 2021, the Company had **$99.0 million** in cash and cash equivalents, including restricted cash, with the New Credit Facility terminated[119](index=119&type=chunk) - Working capital increased to **$62.1 million** at September 30, 2021, from a deficit of **$18.1 million** at December 31, 2020, primarily due to increased cash from the NPB sale and operations, and reduced accounts payable[123](index=123&type=chunk) - The Company expects ample liquidity for the next twelve months from cash on hand and cash flows from operations[119](index=119&type=chunk)[122](index=122&type=chunk) [Cash Flows](index=27&type=section&id=Cash%20Flows) This section analyzes the Company's cash flows from operating, investing, and financing activities, noting significant increases in operating cash flow Cash Flow Activity | Cash Flow Activity (in thousands) | Nine Months Ended Sep 30, 2021 | Nine Months Ended Sep 30, 2020 | | :-------------------------------- | :----------------------------- | :----------------------------- | | Operating activities | $66,315 | $27,356 | | Investing activities | $25,867 | $25,857 | | Financing activities | $(21,446) | $(46,540) | | Net increase (decrease) in cash | $70,736 | $6,673 | - Operating cash flows increased by **$39.0 million** for the nine months ended September 30, 2021, driven by improved commodity prices and cost reduction efforts[125](index=125&type=chunk) - Investing activities provided **$25.9 million** in cash for 9M 2021, primarily from **$38.1 million** in asset sales (NPB) offset by **$8.6 million** in capital expenditures and **$3.6 million** in acquisitions[126](index=126&type=chunk) - Cash used in financing activities decreased to **$21.4 million** for 9M 2021, mainly due to **$20.0 million** in debt repayments and other financing obligations[129](index=129&type=chunk) [Indebtedness](index=28&type=section&id=Indebtedness) This section confirms the Company's debt-free status as of September 30, 2021, following the full repayment of its New Credit Facility - The Company has no outstanding long-term debt as of September 30, 2021, following the full repayment and termination of the New Credit Facility[131](index=131&type=chunk) [Contractual Obligations and Off-Balance Sheet Arrangements](index=28&type=section&id=Contractual%20Obligations%20and%20Off-Balance%20Sheet%20Arrangements) This section outlines the Company's contractual obligations, including asset retirement obligations and surety bonds, and confirms no significant changes - Contractual obligations at September 30, 2021, include asset retirement obligations, short-term leases, and other individually insignificant obligations[132](index=132&type=chunk) - The Company has financial instruments representing potential commitments, such as surety bonds, incurred in the normal course of business, with underlying liabilities already reflected in the balance sheets[132](index=132&type=chunk) - There were no other significant changes in total contractual obligations and off-balance sheet arrangements from those reported in the 2020 Form 10-K[133](index=133&type=chunk) [Critical Accounting Policies and Estimates](index=28&type=section&id=Critical%20Accounting%20Policies%20and%20Estimates) This section states that there were no material changes to the Company's critical accounting policies and estimates during the first nine months of 2021 - There were no material changes in critical accounting policies, estimates, judgments, and assumptions during the first nine months of 2021[134](index=134&type=chunk) - For a description of critical accounting policies and estimates, refer to Item 7 of the 2020 Form 10-K[134](index=134&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=29&type=section&id=ITEM%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This section details the Company's exposure to market risks, primarily commodity price risk managed through derivatives, and addresses credit and interest rate risks - The most significant market risk relates to the volatile prices received for oil, natural gas, and NGLs, which the Company manages through commodity derivative contracts for a portion of its anticipated production[136](index=136&type=chunk) - As of September 30, 2021, open derivative contracts included NGL Price Swaps (**2.6 million Gallons** at **$1.20/Gallon**) and Natural Gas Price Swaps (**1.8 million MMBtu** at **$4.07/MMBtu**), covering October 2021 to February 2022[137](index=137&type=chunk) - The Company is exposed to credit risk from derivative counterparties (all investment grade with master netting agreements) and joint interest partners, with historical credit losses being immaterial[139](index=139&type=chunk)[141](index=141&type=chunk) - The Company is not exposed to interest rate risk as of September 30, 2021[142](index=142&type=chunk) [Item 4. Controls and Procedures](index=30&type=section&id=ITEM%204.%20Controls%20and%20Procedures) This section confirms the effectiveness of the Company's disclosure controls and procedures and reports no material changes in internal control over financial reporting - The Company's CEO and CFO concluded that disclosure controls and procedures were effective as of September 30, 2021, providing reasonable assurance for timely and accurate reporting[143](index=143&type=chunk) - There was no change in the Company's internal control over financial reporting during the quarter ended September 30, 2021, that materially affected or is reasonably likely to materially affect it[144](index=144&type=chunk) [Part II. Other Information](index=31&type=section&id=PART%20II.%20OTHER%20INFORMATION) This part provides additional information including legal proceedings, risk factors, equity sales, defaults, mine safety, and exhibits [Item 1. Legal Proceedings](index=31&type=section&id=ITEM%201.%20Legal%20Proceedings) This section refers to Note 9 for details on the Company's legal proceedings, which involve ongoing cases with potential indemnification obligations - For information on legal proceedings, refer to Note 9—Commitments and Contingencies in Item 1 of this Quarterly Report[147](index=147&type=chunk) [Item 1A. Risk Factors](index=32&type=section&id=ITEM%201A.%20Risk%20Factors) This section states that there have been no material changes to the risk factors previously discussed in the Company's 2020 Form 10-K - There have been no material changes to the risk factors previously discussed in Item 1A—Risk Factors in the Company's 2020 Form 10-K[149](index=149&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=32&type=section&id=ITEM%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This section summarizes share repurchases for tax withholding on vested stock awards, noting no repurchases under the publicly announced program in Q3 2021 Share Repurchases | Period | Total Number of Shares Purchased | Average Price Paid per Share | | :-------------------------- | :----------------------------- | :--------------------------- | | July 1, 2021 - July 31, 2021 | 2,431 | $6.30 | | August 1, 2021 - August 31, 2021 | 33,032 | $8.20 | | September 1, 2021 - September 30, 2021 | — | $— | | Total | 35,463 | | - Shares purchased include common stock tendered by employees to satisfy tax withholding requirements upon vesting of stock awards[151](index=151&type=chunk) - No shares were repurchased under the publicly announced share repurchase program during the third quarter ended September 30, 2021[95](index=95&type=chunk)[151](index=151&type=chunk) [Item 3. Defaults Upon Senior Securities](index=32&type=section&id=ITEM%203.%20Defaults%20Upon%20Senior%20Securities) This section confirms that there were no defaults upon senior securities during the reporting period - There were no defaults upon senior securities[152](index=152&type=chunk) [Item 4. Mine Safety Disclosures](index=32&type=section&id=ITEM%204.%20Mine%20Safety%20Disclosures) This section indicates that the disclosure requirements for mine safety are not applicable to the Company - Mine Safety Disclosures are not applicable to the Company[153](index=153&type=chunk) [Item 5. Other Information](index=32&type=section&id=ITEM%205.%20Other%20Information) This section states that no other information is reported under this item - No other information is reported under this item[154](index=154&type=chunk) [Item 6. Exhibits](index=33&type=section&id=ITEM%206.%20Exhibits) This section lists all exhibits filed as part of the Form 10-Q, including corporate governance documents, plan amendments, and officer certifications - Exhibits include the Amended Joint Chapter 11 Plan of Reorganization, Amended and Restated Certificate of Incorporation and Bylaws, and the First Amendment to Tax Benefits Preservation Plan[156](index=156&type=chunk) - Officer certifications (Section 302 and 906) and various XBRL taxonomy documents are also filed as exhibits[156](index=156&type=chunk) [Signature](index=34&type=section&id=Signature) This section confirms the official signing of the report by the Senior Vice President, Chief Financial Officer, and Chief Accounting Officer - The report was signed by Salah Gamoudi, Senior Vice President, Chief Financial Officer, and Chief Accounting Officer, on November 10, 2021[160](index=160&type=chunk)

SandRidge Energy, Inc (NYSE:SD) Q2 2021 Earnings Conference Call August 11, 2021 11:00 AM ET Company Participants Scott Prestridge – Director of Finance and Investor Relations Grayson Pranin – Chief Executive Officer and Chief Operating Officer Salah Gamoudi – Chief Financial Officer and Chief Accounting Officer Conference Call Participants Noel Parks – Tuohy Brothers Investment Brett Hendrickson – Nokomis Capital Josh Young – Bison Interests Michael Melby – Gate City Capital Market Operator Good day and th ...

[Report Information](index=1&type=section&id=Report%20Information) [Filing Details](index=1&type=section&id=Filing%20Details) This 10-Q quarterly report for SandRidge Energy, Inc. covers the period ending June 30, 2021, detailing its Delaware registration, NYSE listing, and status as a non-accelerated filer and smaller reporting company with 36,588,775 common shares outstanding as of August 5, 2021 - Registrant: SandRidge Energy, Inc., a company focused on the acquisition, development, and production of oil and natural gas resources in the United States[2](index=2&type=chunk)[20](index=20&type=chunk) Filing Status and Shares Outstanding | Metric | Value | | :--- | :--- | | Filing Type | 10-Q Quarterly Report | | Period End Date | June 30, 2021 | | Commission File Number | 001-33784 | | Registrant Status | Non-accelerated filer, Smaller reporting company | | Common Stock Outstanding (as of August 5, 2021) | 36,588,775 shares | [DISCLOSURES REGARDING FORWARD-LOOKING STATEMENTS](index=2&type=section&id=DISCLOSURES%20REGARDING%20FORWARD-LOOKING%20STATEMENTS) This quarterly report contains forward-looking statements regarding capital expenditures, liquidity, business strategies, and litigation outcomes, which are based on assumptions but are not guarantees of future performance and are subject to significant risks and uncertainties - The report includes forward-looking statements concerning capital expenditures, liquidity, project timing, litigation outcomes, business strategies, and regulatory compliance[7](index=7&type=chunk) - These statements are based on assumptions and analyses, but are not guarantees of future performance and are subject to significant business, economic, competitive, regulatory, and other risks, contingencies, and uncertainties[8](index=8&type=chunk) - The company undertakes no obligation to update or revise these forward-looking statements, except as required by law, and cautions readers not to place undue reliance on them[8](index=8&type=chunk) [PART I. FINANCIAL INFORMATION](index=3&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) - The unaudited financial statements include condensed consolidated balance sheets, statements of operations, changes in stockholders' equity, and cash flows, along with notes, prepared in accordance with GAAP[10](index=10&type=chunk)[12](index=12&type=chunk)[14](index=14&type=chunk)[16](index=16&type=chunk)[17](index=17&type=chunk)[19](index=19&type=chunk)[22](index=22&type=chunk) [ITEM 1. Financial Statements (Unaudited)](index=4&type=section&id=ITEM%201.%20Financial%20Statements%20(Unaudited)) This section presents SandRidge Energy, Inc.'s unaudited condensed consolidated financial statements, including balance sheets, statements of operations, changes in stockholders' equity, cash flows, and notes, providing detailed financial position and performance information for the reporting period [Condensed Consolidated Balance Sheets](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Total assets increased from **$260.8 million** to **$296.4 million** as of June 30, 2021, driven by a significant rise in cash and cash equivalents, while total liabilities decreased, leading to a substantial increase in stockholders' equity Condensed Consolidated Balance Sheet Highlights (Units: $ thousand) | Metric | June 30, 2021 | December 31, 2020 | Change | | :--- | :--- | :--- | :--- | | Cash and Cash Equivalents | $88,338 | $22,130 | +$66,208 | | Total Current Assets | $113,556 | $50,812 | +$62,744 | | Net Oil and Natural Gas Properties | $82,725 | $106,222 | -$23,497 | | Total Assets | $296,447 | $260,832 | +$35,615 | | Total Current Liabilities | $59,243 | $68,877 | -$9,634 | | Total Liabilities | $116,879 | $132,766 | -$15,887 | | Total Stockholders' Equity | $179,568 | $128,066 | +$51,502 | [Condensed Consolidated Statements of Operations](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) The company reported a **net income of $16.3 million** in Q2 2021, a significant reversal from a **$215.8 million net loss** in Q2 2020, primarily due to increased oil, natural gas, and NGL revenues and the absence of large impairment charges in 2020 Condensed Consolidated Statements of Operations Highlights (Units: $ thousand, except per share data) | Metric | Three Months Ended June 30, 2021 | Three Months Ended June 30, 2020 | Six Months Ended June 30, 2021 | Six Months Ended June 30, 2020 | | :--- | :--- | :--- | :--- | :--- | | Total Revenues | $34,196 | $16,655 | $67,819 | $56,984 | | Total Expenses | $18,147 | $232,041 | $16,708 | $285,129 | | Operating Income (Loss) | $16,049 | $(215,386) | $51,111 | $(228,145) | | Net Income (Loss) | $16,252 | $(215,779) | $51,295 | $(228,449) | | Basic Earnings Per Share | $0.45 | $(6.06) | $1.42 | $(6.42) | | Diluted Earnings Per Share | $0.44 | $(6.06) | $1.38 | $(6.42) | - The significant improvement in net income is primarily attributed to the absence of impairment charges in Q2 2021 (compared to **$201.8 million** in Q2 2020) and increased oil, natural gas, and NGL revenues[14](index=14&type=chunk)[41](index=41&type=chunk) [Condensed Consolidated Statement of Changes in Stockholders' Equity](index=6&type=section&id=Condensed%20Consolidated%20Statement%20of%20Changes%20in%20Stockholders'%20Equity) Total stockholders' equity increased from **$128.1 million** as of December 31, 2020, to **$179.6 million** as of June 30, 2021, primarily driven by **$51.3 million** in net income during the six-month period Changes in Stockholders' Equity (Units: $ thousand) | Metric | Balance as of December 31, 2020 | Net Income (H1 2021) | Stock-based Compensation (H1 2021) | Tax Payments for Vested Equity Awards (H1 2021) | Balance as of June 30, 2021 | | :--- | :--- | :--- | :--- | :--- | :--- | | Total Stockholders' Equity | $128,066 | $51,295 | $799 | $(613) | $179,568 | [Condensed Consolidated Statements of Cash Flows](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Net cash from operating activities significantly increased to **$33.2 million** for the six months ended June 30, 2021, while investing activities generated **$29.9 million** from asset sales, reversing prior period cash usage, and financing activities used **$0.8 million** Condensed Consolidated Statements of Cash Flows Highlights (Units: $ thousand) | Cash Flow Activity | Six Months Ended June 30, 2021 | Six Months Ended June 30, 2020 | | :--- | :--- | :--- | | Net Cash Provided by (Used in) Operating Activities | $33,231 | $13,462 | | Net Cash Provided by (Used in) Investing Activities | $29,907 | $(5,308) | | Net Cash Provided by (Used in) Financing Activities | $(795) | $805 | | Net Increase (Decrease) in Cash, Cash Equivalents, and Restricted Cash | $62,343 | $8,959 | | Cash, Cash Equivalents, and Restricted Cash, End of Period | $90,609 | $14,927 | - The increase in operating cash flow is primarily attributed to improved commodity prices and cost reduction measures, while investing cash flow significantly increased due to **$37.9 million** in proceeds from asset sales[17](index=17&type=chunk)[128](index=128&type=chunk)[129](index=129&type=chunk) [Notes to Condensed Consolidated Financial Statements](index=8&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) This section provides detailed disclosures and explanations for the condensed consolidated financial statements, covering accounting policies, fair value measurements, derivatives, property, plant and equipment, impairment, acquisitions, divestitures, debt, commitments and contingencies, income taxes, equity, revenues, employee termination benefits, earnings per share, and subsequent events - The notes provide essential context and details for the unaudited financial statements, covering significant accounting policies, estimates, and recent accounting pronouncements[19](index=19&type=chunk)[22](index=22&type=chunk)[23](index=23&type=chunk)[136](index=136&type=chunk) [1. Basis of Presentation](index=8&type=section&id=1.%20Basis%20of%20Presentation) SandRidge Energy, Inc. focuses on US oil and gas resource acquisition, development, and production; its unaudited interim financial statements are GAAP-compliant, involving estimates and assumptions, with ASU 2019-12 adopted without material impact and ASU 2020-04 under review - SandRidge Energy, Inc. is a company focused on the acquisition, development, and production of oil and natural gas resources in the United States[20](index=20&type=chunk) - The unaudited interim financial statements are prepared in accordance with GAAP, requiring management to make significant estimates and assumptions, particularly regarding reserves, impairment, and valuations[22](index=22&type=chunk)[24](index=24&type=chunk)[25](index=25&type=chunk) - The company adopted ASU 2019-12 (simplifying income tax accounting) on January 1, 2021, with no material impact, and is evaluating the potential future impact of ASU 2020-04 (reference rate reform)[27](index=27&type=chunk)[28](index=28&type=chunk) [2. Fair Value Measurements](index=9&type=section&id=2.%20Fair%20Value%20Measurements) The company measures and reports certain assets and liabilities at fair value, categorized by a fair value hierarchy, with most current assets/liabilities and long-term debt having book values approximating fair values, and no open commodity derivative contracts or transfers between fair value levels during the period - Assets and liabilities measured at fair value are categorized into Level 1, 2, or 3 based on the observability of inputs, with most current assets/liabilities and long-term debt having book values approximating fair values[29](index=29&type=chunk)[30](index=30&type=chunk)[33](index=33&type=chunk) - Fair values for commodity derivative contracts (Level 2) are determined using discounted cash flow or option pricing models with observable inputs like oil and gas futures prices and volatility, adjusted for credit default risk[31](index=31&type=chunk) - As of June 30, 2021, and December 31, 2020, there were no open commodity derivative contracts or transfers between fair value measurement levels for the three and six months ended June 30, 2021, and 2020[32](index=32&type=chunk)[33](index=33&type=chunk) [3. Derivatives](index=9&type=section&id=3.%20Derivatives) The company previously used commodity derivative contracts to manage oil and gas price risk but had no open contracts as of June 30, 2021, or December 31, 2020; historically, these contracts were not designated as accounting hedges, with fair value changes recognized in profit or loss - The company uses commodity derivative contracts to manage price risk for oil and natural gas production, but had no open contracts as of June 30, 2021, and December 31, 2020[33](index=33&type=chunk)[35](index=35&type=chunk) - Historically, derivative contracts were not designated as hedging instruments, so changes in their fair value were recognized as gains or losses in the condensed consolidated statements of operations[34](index=34&type=chunk)[36](index=36&type=chunk) Derivative Activities (Units: $ thousand) | Metric | Three Months Ended June 30, 2021 | Three Months Ended June 30, 2020 | Six Months Ended June 30, 2021 | Six Months Ended June 30, 2020 | | :--- | :--- | :--- | :--- | :--- | | Gain (Loss) on Commodity Derivative Contracts | $— | $(2,241) | $— | $(12,467) | | Cash Received on Settlements | $— | $6,490 | $— | $10,577 | [4. Property, Plant and Equipment](index=10&type=section&id=4.%20Property,%20Plant%20and%20Equipment) Net property, plant, and equipment decreased from **$209.3 million** to **$182.3 million** as of June 30, 2021, primarily due to a reduction in net oil and gas properties from **$106.2 million** to **$82.7 million**, influenced by depreciation, depletion, and impairment Property, Plant and Equipment (Units: $ thousand) | Asset Class | June 30, 2021 | December 31, 2020 | | :--- | :--- | :--- | | Proved Oil and Natural Gas Properties | $1,439,904 | $1,463,950 | | Unproved Oil and Natural Gas Properties | $13,365 | $17,964 | | Less: Accumulated Depreciation, Depletion, and Impairment | $(1,370,544) | $(1,375,692) | | Net Oil and Natural Gas Properties | $82,725 | $106,222 | | Other Property, Plant and Equipment, Net | $99,572 | $103,118 | | Total Property, Plant and Equipment, Net | $182,297 | $209,340 | [5. Impairment](index=11&type=section&id=5.%20Impairment) The company recorded no full cost pool ceiling impairment charges for the three and six months ended June 30, 2021, a stark contrast to Q2 2020, which saw **$201.8 million** in total impairment, including **$163.8 million** for the full cost pool and **$38.0 million** for the corporate headquarters - No full cost pool ceiling impairment charges were recorded for the three and six months ended June 30, 2021[40](index=40&type=chunk) Impairment Charges (Units: $ million) | Impairment Type | Three Months Ended June 30, 2020 | Six Months Ended June 30, 2020 | | :--- | :--- | :--- | | Full Cost Pool Ceiling Impairment | $163.8 | $171.8 | | Corporate Headquarters Impairment | $38.0 | $38.0 | | Total Impairment Charges | $201.8 | $209.8 | - The **$38.0 million** corporate headquarters impairment on June 30, 2020, resulted from an agreement to sell the headquarters in May 2020, reducing its carrying value to estimated fair value less costs to sell[42](index=42&type=chunk) [6. Acquisitions and Divestitures](index=11&type=section&id=6.%20Acquisitions%20and%20Divestitures) On April 22, 2021, the company acquired all excess royalty assets of SandRidge Mississippian Trust I for **$4.9 million** (net **$3.6 million**), and on February 5, 2021, sold its North Park Basin (NPB) oil and gas assets for **$39.7 million** net proceeds, recognizing a **$19.7 million** gain, significantly reducing NPB's revenue and operating expenses - On April 22, 2021, the company acquired all excess royalty assets of SandRidge Mississippian Trust I for **$4.9 million** (net **$3.6 million**)[43](index=43&type=chunk) - On February 5, 2021, the company sold all its North Park Basin (NPB) oil and natural gas assets for **$39.7 million** net proceeds, recognizing a **$19.7 million** gain[44](index=44&type=chunk) North Park Basin (NPB) Contribution to Consolidated Financial Statements | Metric | Six Months Ended June 30, 2021 | Six Months Ended June 30, 2020 | | :--- | :--- | :--- | | Revenues | $3.2 million (4.7% of total) | $17.4 million (30.5% of total) | | Lease Operating Expenses | $0.9 million (5.4% of total) | $5.8 million (23.7% of total) | | Production, Ad Valorem, and Other Taxes | $0.2 million (5.3% of total) | $1.1 million (21.4% of total) | | Production | 0.1 MMBoe (2.0% of total) | 0.6 MMBoe (11.7% of total) | [7. Accounts Payable and Accrued Expenses](index=12&type=section&id=7.%20Accounts%20Payable%20and%20Accrued%20Expenses) Accounts payable and accrued expenses decreased from **$51.4 million** to **$42.9 million** as of June 30, 2021, primarily due to reductions in accounts payable and other accrued expenses, payroll and benefits, and taxes payable Accounts Payable and Accrued Expenses (Units: $ thousand) | Category | June 30, 2021 | December 31, 2020 | | :--- | :--- | :--- | | Accounts Payable and Other Accrued Expenses | $19,555 | $23,017 | | Production Payables | $15,645 | $15,367 | | Payroll and Benefits | $2,775 | $5,640 | | Taxes Payable | $4,645 | $6,864 | | Total Accounts Payable and Accrued Expenses | $42,896 | $51,426 | [8. Long-Term Debt](index=12&type=section&id=8.%20Long-Term%20Debt) As of June 30, 2021, the company had **$20.0 million** outstanding on a term loan under a new **$30.0 million** credit facility maturing November 30, 2023, with **$10.0 million** available on its revolving loan, a Q2 2021 weighted average interest rate of **2.60%**, and compliance with all financial covenants - As of June 30, 2021, the company had **$20.0 million** outstanding on a term loan under a new credit facility, with **$10.0 million** available on its revolving loan, maturing November 30, 2023[50](index=50&type=chunk) - The weighted average interest rate on outstanding borrowings under the new credit facility was approximately **2.60%** and **2.62%** for the three and six months ended June 30, 2021, respectively[52](index=52&type=chunk) - As of June 30, 2021, the company was in compliance with all applicable covenants, with a consolidated net total leverage ratio of **(0.15)** and a consolidated interest coverage ratio of **59.73**[55](index=55&type=chunk) [9. Commitments and Contingencies](index=13&type=section&id=9.%20Commitments%20and%20Contingencies) The company is involved in various legal proceedings and claims, and while some claims have been discharged, it remains a nominal defendant in ongoing cases and may be contractually obligated to indemnify former executives and SandRidge Mississippian Trust I; due to uncertainties and exhausted insurance coverage, potential losses cannot be estimated but could be material - The company is subject to various legal proceedings and claims arising in the ordinary course of business, accruing contingent liabilities when probable and reasonably estimable[57](index=57&type=chunk) - Although claims were discharged under the plan, the company remains a nominal defendant in certain ongoing cases and may be contractually obligated to indemnify two former executives and SandRidge Mississippian Trust I[58](index=58&type=chunk)[59](index=59&type=chunk) - Given the status of the cases and exhausted insurance coverage, the company cannot determine the likelihood of any outcome or provide an estimate of any reasonably possible loss, but such losses could be material if incurred[60](index=60&type=chunk) [10. Income Taxes](index=14&type=section&id=10.%20Income%20Taxes) Due to cumulative negative earnings, the company maintains a full valuation allowance against its net deferred tax assets, resulting in no federal or state income tax expense or benefit for the three and six months ended June 30, 2021, and possesses approximately **$1.6 billion** in federal net operating loss (NOL) carryforwards and over **$33.5 million** in federal tax credits - The company maintains a full valuation allowance against its net deferred tax assets due to cumulative negative earnings, resulting in no income tax expense or benefit for the current period[63](index=63&type=chunk) - The company possesses approximately **$1.6 billion** in federal NOL carryforwards (with **$0.8 billion** expiring between 2025-2037 and **$0.8 billion** with no expiration) and over **$33.5 million** in federal tax credits[65](index=65&type=chunk) - A 2016 IRC Section 382 ownership change limited the utilization of certain tax attributes, and future ownership changes could further impact NOL and other tax attribute utilization[64](index=64&type=chunk) [11. Equity](index=14&type=section&id=11.%20Equity) As of June 30, 2021, the company had **36.6 million** shares of common stock issued (out of **250 million** authorized), approximately **0.1 million** unvested restricted stock awards, **1.1 million** unvested restricted stock units, and **0.1 million** unexercised stock options, plus Series A and B warrants convertible into **4.9 million** and **2.1 million** common shares, respectively, exercisable until October 4, 2022; the company adopted a Tax Benefits Preservation Plan to protect NOLs by preventing any person or group from acquiring **4.9%** or more beneficial ownership - As of June 30, 2021, the company had **36.6 million** shares of common stock issued (out of **250 million** authorized) and held various unvested equity awards[68](index=68&type=chunk) - Approximately **4.9 million** Series A warrants and **2.1 million** Series B warrants are exercisable until October 4, 2022, with initial exercise prices of **$41.34** and **$42.03** per share, respectively[69](index=69&type=chunk) - The company adopted a Tax Benefits Preservation Plan to prevent an "ownership change" under IRC Section 382, which would limit its ability to utilize valuable net operating losses (NOLs), by deterring any person or group from acquiring **4.9%** or more beneficial ownership[70](index=70&type=chunk)[71](index=71&type=chunk) [12. Revenues](index=16&type=section&id=12.%20Revenues) Total revenues for the three months ended June 30, 2021, increased to **$34.2 million** from **$16.7 million** in the prior year, and for the six months, increased to **$67.8 million** from **$57.0 million**, primarily driven by higher realized prices for oil, NGLs, and natural gas, despite a decrease in total production Revenue Sources (Units: $ thousand) | Revenue Source | Three Months Ended June 30, 2021 | Three Months Ended June 30, 2020 | Six Months Ended June 30, 2021 | Six Months Ended June 30, 2020 | | :--- | :--- | :--- | :--- | :--- | | Oil | $14,666 | $11,554 | $30,214 | $40,208 | | NGL | $10,625 | $1,591 | $19,481 | $7,525 | | Natural Gas | $8,905 | $3,303 | $18,124 | $8,854 | | Total Revenues | $34,196 | $16,655 | $67,819 | $56,984 | - The majority of the company's revenue is derived from the sale of oil, natural gas, and NGLs, recorded net of royalties, discounts, and transportation costs when control transfers to the customer[77](index=77&type=chunk)[78](index=78&type=chunk) - Revenue receivables as of June 30, 2021, were **$14.5 million**, up from **$12.8 million** as of December 31, 2020, estimated at current month prices[79](index=79&type=chunk) [13. Employee Termination Benefits](index=17&type=section&id=13.%20Employee%20Termination%20Benefits) No employee termination benefits occurred during the three months ended June 30, 2021; for the six months, total benefits were **$49 thousand**, significantly lower than **$5.2 million** in the prior year, which included cash severance and accelerated equity incentives due to workforce reductions and the North Park asset sale - No employee termination benefits occurred in Q2 2021; total benefits for the six months ended June 30, 2021, were **$49 thousand**[80](index=80&type=chunk)[81](index=81&type=chunk) Employee Termination Benefits (Units: $ thousand) | Category | Six Months Ended June 30, 2021 | Six Months Ended June 30, 2020 | | :--- | :--- | :--- | | Cash | $32 | $5,207 | | Equity Incentives | $17 | $40 | | Total Employee Termination Benefits | $49 | $5,247 | - Prior period benefits (Q2 2020: **$1.99 million**; H1 2020: **$5.25 million**) resulted from workforce reductions and the North Park asset sale, including accelerated equity incentives[80](index=80&type=chunk)[81](index=81&type=chunk) [14. Earnings (Loss) per Share](index=18&type=section&id=14.%20Earnings%20(Loss)%20per%20Share) Basic EPS for Q2 2021 was **$0.45** and diluted EPS was **$0.44**, a significant improvement from basic and diluted losses of **($6.06)** per share in Q2 2020; for the six months ended June 30, 2021, basic EPS was **$1.42** and diluted EPS was **$1.38**, compared to **($6.42)** per share loss in the prior year, with dilutive securities included in 2021 due to their dilutive effect, unlike their anti-dilutive effect in 2020 Earnings (Loss) per Share (Units: $ thousand, except per share data) | Metric | Three Months Ended June 30, 2021 | Three Months Ended June 30, 2020 | Six Months Ended June 30, 2021 | Six Months Ended June 30, 2020 | | :--- | :--- | :--- | :--- | :--- | | Net Income (Loss) | $16,252 | $(215,779) | $51,295 | $(228,449) | | Basic Earnings Per Share | $0.45 | $(6.06) | $1.42 | $(6.42) | | Diluted Earnings Per Share | $0.44 | $(6.06) | $1.38 | $(6.42) | | Basic Weighted Average Shares Outstanding | 36,416 | 35,611 | 36,187 | 35,581 | | Diluted Weighted Average Shares Outstanding | 37,345 | 35,611 | 37,283 | 35,581 | - Incremental shares from restricted stock units, restricted stock awards, and stock options were included in the 2021 diluted EPS calculation due to their dilutive effect, unlike their anti-dilutive effect in 2020[82](index=82&type=chunk)[83](index=83&type=chunk) [15. Subsequent Events](index=19&type=section&id=15.%20Subsequent%20Events) Post-June 30, 2021, the board approved a **$25.0 million** stock repurchase program starting August 16, 2021; a July 26, 2021, amendment to the new credit facility allowed liens for swap contracts; and Carl F. Giesler, Jr. resigned as CEO and President on July 16, 2021, with Grayson Pranin appointed as the new President and CEO, while retaining COO duties - The Board of Directors approved a **$25.0 million** stock repurchase program, commencing August 16, 2021[84](index=84&type=chunk) - On July 26, 2021, the first amendment to the new credit facility became effective, allowing for liens on certain swap contracts[85](index=85&type=chunk) - Carl F. Giesler, Jr. resigned as Chief Executive Officer and President on July 16, 2021; Grayson Pranin was appointed as the new President and Chief Executive Officer, continuing his role as Chief Operating Officer[86](index=86&type=chunk)[87](index=87&type=chunk) [ITEM 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=20&type=section&id=ITEM%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's discussion and analysis of the company's financial condition, results of operations, liquidity, and capital resources for the three and six months ended June 30, 2021, focusing on strategies to maximize free cash flow, recent operational improvements, and commodity price impacts - The discussion covers the company's business, financial condition, results of operations, liquidity, and capital resources, emphasizing the unaudited nature of the interim financial information[89](index=89&type=chunk) - The company is an independent oil and natural gas company primarily focused on acquisition, development, and production activities in the Mid-Continent region of the United States, having divested its North Park Basin assets in February 2021[90](index=90&type=chunk) [Introduction](index=20&type=section&id=Introduction) This introduction outlines the scope of management's discussion and analysis, aiming to help readers understand the company's business, financial condition, operating results, liquidity, and capital resources, with a focus on unaudited interim financial information for the periods ended June 30, 2021, and 2020 - The discussion and analysis aim to help readers understand the company's business, financial condition, results of operations, liquidity, and capital resources, and should be read in conjunction with the unaudited condensed consolidated financial statements[89](index=89&type=chunk) - Financial information for the three and six months ended June 30, 2021, and 2020, is unaudited, includes normal recurring adjustments, and interim operating results are not necessarily indicative of full-year operating results[89](index=89&type=chunk) [Overview](index=20&type=section&id=Overview) SandRidge Energy, Inc., an independent oil and gas company focused on US Mid-Continent acquisition, development, and production, divested its North Park Basin assets in February 2021; Q2 2021 total production was **1.73 MMBoe**, with a product mix shifting towards natural gas and NGLs compared to Q2 2020 - SandRidge Energy, Inc. is an independent oil and natural gas company focused on acquisition, development, and production activities in the Mid-Continent region of the United States, having sold its North Park Basin assets[90](index=90&type=chunk) Product Production Mix | Product | Q2 2021 | Q2 2020 | H1 2021 | H1 2020 | | :--- | :--- | :--- | :--- | :--- | | Oil | 13.1% | 24.2% | 15.3% | 25.5% | | Natural Gas | 51.5% | 44.1% | 51.1% | 43.7% | | NGLs | 35.4% | 31.7% | 33.6% | 30.8% | | Total Production (MMBoe) | 1,733 | 2,151 | 3,374 | 4,718 | - Total Mid-Continent production for Q2 2021 was **1.73 MMBoe**, representing **100%** of total production, compared to **1.93 MMBoe** (**89.7%** of total) in Q2 2020, reflecting the NPB divestiture[104](index=104&type=chunk) [Recent Events](index=21&type=section&id=Recent%20Events) Recent events include a **$25.0 million** stock repurchase program, an amendment to the new credit facility allowing liens for swap contracts, and leadership changes with Grayson Pranin appointed President and CEO after Carl F. Giesler, Jr.'s resignation; operationally, the company restarted **49 wells** in Q2 2021, adding **0.8 MBoed**, and ceased routine natural gas flaring post-North Park Basin sale - The Board of Directors approved a **$25.0 million** stock repurchase program, commencing August 16, 2021[96](index=96&type=chunk) - The new credit facility was amended on July 26, 2021, to allow for liens on certain swap contracts[96](index=96&type=chunk) - Grayson Pranin was appointed President and Chief Executive Officer on July 16, 2021, following Carl F. Giesler, Jr.'s resignation, and continues as Chief Operating Officer[96](index=96&type=chunk) - In Q2 2021, the company restarted **49 wells**, adding an average of **0.8 MBoed**, and ceased routine natural gas flaring[96](index=96&type=chunk)[101](index=101&type=chunk) [Outlook](index=22&type=section&id=Outlook) The 2021 outlook focuses on maximizing free cash flow through cost control, financial discipline, and prudent capital allocation, with capital expenditures expected to be flat or slightly up from 2020; production is anticipated to decline due to natural decline, partially offset by well restarts, while the company continues to seek high-return acquisition opportunities and monitors COVID-19 variant impacts on energy demand - The 2021 focus is on maximizing free cash flow through cost control, financial discipline, and prudent capital allocation, with capital expenditures expected to be flat or slightly increased from 2020[98](index=98&type=chunk) - Oil, natural gas, and NGL production may decline in 2021, but well restarts could partially offset natural decline, and the company may expand its capital program further based on commodity prices[98](index=98&type=chunk) - The company continues to seek high-return acquisitions and business combinations and closely monitors the spread of COVID-19 variants and vaccine effectiveness for risks to a full and sustained recovery in energy demand[99](index=99&type=chunk)[100](index=100&type=chunk) [Consolidated Results of Operations](index=22&type=section&id=Consolidated%20Results%20of%20Operations) The company's revenue and profitability are highly dependent on volatile oil, natural gas, and NGL prices and production; Q2 2021 saw significantly higher average NYMEX oil and gas prices compared to Q2 2020, and as of June 30, 2021, the company had no open commodity derivative contracts - The company's revenue, profitability, and future growth are highly dependent on prevailing prices for oil, natural gas, and NGLs, which are volatile and difficult to predict[101](index=101&type=chunk) NYMEX Average Prices | Commodity | June 30, 2021 (Q2) | March 31, 2021 (Q1) | December 31, 2020 (Q4) | September 30, 2020 (Q3) | | :--- | :--- | :--- | :--- | :--- | | NYMEX Oil (per barrel) | $66.18 | $58.09 | $42.58 | $40.92 | | NYMEX Natural Gas (per MMBtu) | $2.98 | $2.72 | $2.76 | $2.12 | - As of June 30, 2021, the company had no open commodity derivative contracts and no commodity derivative activity for the three and six months ended June 30, 2021[101](index=101&type=chunk) [Revenues](index=23&type=section&id=Revenues) Consolidated revenues for the three months ended June 30, 2021, increased **107.9%** to **$34.2 million** (Q2 2020: **$16.4 million**), and for the six months, increased **19.8%** to **$67.8 million** (H1 2020: **$56.6 million**), primarily due to higher realized prices for oil, natural gas, and NGLs, despite lower total production from the North Park Basin divestiture and natural decline Consolidated Revenues (Units: $ thousand) | Revenue Source | Three Months Ended June 30, 2021 | Three Months Ended June 30, 2020 | Six Months Ended June 30, 2021 | Six Months Ended June 30, 2020 | | :--- | :--- | :--- | :--- | :--- | | Oil | $14,666 | $11,554 | $30,214 | $40,208 | | NGL | $10,625 | $1,591 | $19,481 | $7,525 | | Natural Gas | $8,905 | $3,303 | $18,124 | $8,854 | | Total Revenues | $34,196 | $16,655 | $67,819 | $56,984 | - Revenue growth is primarily attributed to higher realized prices for oil, natural gas, and NGLs, benefiting from increased economic activity and demand recovery post-COVID-19, along with narrowing differentials[105](index=105&type=chunk) Production and Average Prices | Metric | Three Months Ended June 30, 2021 | Three Months Ended June 30, 2020 | Six Months Ended June 30, 2021 | Six Months Ended June 30, 2020 | | :--- | :--- | :--- | :--- | :--- | | Oil (thousand barrels) | 227 | 520 | 515 | 1,202 | | NGL (thousand barrels) | 613 | 681 | 1,134 | 1,451 | | Natural Gas (million cubic feet) | 5,356 | 5,697 | 10,349 | 12,391 | | Total Production (thousand Boe) | 1,733 | 2,151 | 3,374 | 4,718 | | Average Daily Total Production (thousand Boe/day) | 19.0 | 23.6 | 18.6 | 25.9 | | Average Oil Price (per barrel) | $64.73 | $22.22 | $58.70 | $33.45 | | Average NGL Price (per barrel) | $17.33 | $2.34 | $17.18 | $5.19 | | Average Natural Gas Price (per thousand cubic feet) | $1.66 | $0.58 | $1.75 | $0.71 | | Total Average Price (per Boe) | $19.74 | $7.65 | $20.10 | $11.99 | [Operating Expenses](index=24&type=section&id=Operating%20Expenses) Total operating expenses decreased from **$25.6 million** to **$15.4 million** for the three months ended June 30, 2021, and from **$72.0 million** to **$29.6 million** for the six months, primarily due to reduced depreciation and depletion from asset sales and prior impairments, along with lower lease operating expenses from cost reductions and the NPB divestiture Operating Expenses (Units: $ thousand) | Expense Category | Three Months Ended June 30, 2021 | Three Months Ended June 30, 2020 | Six Months Ended June 30, 2021 | Six Months Ended June 30, 2020 | | :--- | :--- | :--- | :--- | :--- | | Lease Operating Expenses | $9,232 | $8,698 | $17,186 | $24,340 | | Production, Ad Valorem, and Other Taxes | $2,534 | $1,854 | $4,710 | $5,053 | | Depreciation and Depletion—Oil and Natural Gas | $2,193 | $13,348 | $4,698 | $38,203 | | Depreciation and Amortization—Other | $1,475 | $1,739 | $2,969 | $4,373 | | Total Operating Expenses | $15,434 | $25,639 | $29,563 | $71,969 | - Lease operating expenses in Q2 2021 increased by **$0.5 million** due to well restarts but decreased by **$7.2 million** for the six-month period, benefiting from field personnel reductions, the NPB sale, and other cost-cutting measures[108](index=108&type=chunk) - The average depreciation and depletion rate for oil and natural gas properties significantly decreased, primarily due to the North Park Basin sale and the full cost pool ceiling impairment recorded in 2020, which substantially lowered the net cost basis of oil and natural gas properties[110](index=110&type=chunk) [Impairment](index=25&type=section&id=Impairment) No full cost pool ceiling impairment charges were recorded for the three and six months ended June 30, 2021, contrasting with Q2 2020's **$201.8 million** in total impairment, including **$163.8 million** for the full cost pool and **$38.0 million** for the corporate headquarters; based on estimated SEC prices, no impairment is anticipated for Q3 2021 - No full cost pool ceiling impairment charges were recorded for the three and six months ended June 30, 2021[111](index=111&type=chunk) - In Q2 2020, total impairment charges of **$201.8 million** were recorded, including **$163.8 million** for the full cost pool ceiling and **$38.0 million** for the corporate headquarters[111](index=111&type=chunk) - Based on estimated Q3 SEC prices as of August 5, 2021 (oil at **$57.70 per barrel**, natural gas at **$2.93 per Mcf**), no full cost pool ceiling impairment is anticipated for Q3 2021, though future impairments could be material[113](index=113&type=chunk)[114](index=114&type=chunk) [Other Operating Expenses](index=26&type=section&id=Other%20Operating%20Expenses) Other non-operating expenses decreased in Q2 2021 but resulted in a gain for the six-month period, primarily due to a **$19.7 million** gain on asset sales; General and Administrative (G&A) expenses significantly declined due to workforce reductions, lower IT and software costs, and reduced professional services fees; restructuring expenses included **$1.3 million** to resolve bankruptcy claims, and no employee termination benefits occurred in Q2 2021 Other Operating Expenses (Units: $ thousand) | Expense Category | Three Months Ended June 30, 2021 | Three Months Ended June 30, 2020 | Six Months Ended June 30, 2021 | Six Months Ended June 30, 2020 | | :--- | :--- | :--- | :--- | :--- | | General and Administrative | $2,522 | $4,314 | $4,612 | $9,797 | | Reorganization Expenses | $256 | $444 | $2,310 | $444 | | Employee Termination Benefits | $— | $1,993 | $49 | $5,247 | | Gain (Loss) on Derivative Contracts | $— | $(2,241) | $— | $(12,467) | | Gain (Loss) on Asset Sales | $— | $(42) | $(19,713) | $78 | | Other Operating (Income) Expense | $(65) | $150 | $(113) | $307 | | Total Non-Operating Expenses | $2,713 | $4,618 | $(12,855) | $3,406 | - General and administrative expenses decreased by **$1.8 million** in Q2 and **$5.2 million** for the six-month period, driven by workforce reductions, lower IT and software costs, and reduced professional services fees, including a **$0.4 million** legal retainer refund[116](index=116&type=chunk) - Reorganization expenses for H1 2021 included **$1.3 million** to resolve unsecured claims related to the 2016 bankruptcy; no employee termination benefits occurred in Q2 2021[117](index=117&type=chunk)[118](index=118&type=chunk) [Other Income (Expense)](index=27&type=section&id=Other%20Income%20(Expense)) Total other income (expense) for Q2 2021 was a net gain of **$0.203 million**, a significant improvement from a net expense of **($0.389 million)** in Q2 2020; for the six months ended June 30, 2021, it was a net gain of **$0.184 million** compared to a net expense of **($0.950 million)** in the prior year, with interest expense reduced due to the new credit facility Other Income (Expense) (Units: $ thousand) | Category | Three Months Ended June 30, 2021 | Three Months Ended June 30, 2020 | Six Months Ended June 30, 2021 | Six Months Ended June 30, 2020 | | :--- | :--- | :--- | :--- | :--- | | Net Interest Expense | $(84) | $(447) | $(131) | $(1,084) | | Net Other Income (Expense) | $287 | $58 | $315 | $134 | | Total Other Income (Expense) | $203 | $(389) | $184 | $(950) | - Interest expense decreased due to the new credit facility, whereas the prior period was primarily generated by the previous credit facility[120](index=120&type=chunk) [Liquidity and Capital Resources](index=27&type=section&id=Liquidity%20and%20Capital%20Resources) As of June 30, 2021, the company held **$88.3 million** in cash and cash equivalents with **$10.0 million** available on its revolving credit facility; working capital significantly improved to **$54.3 million** from a **$18.1 million** deficit at December 31, 2020, driven by cash from operations and asset sales, with sufficient liquidity projected for the next twelve months - As of June 30, 2021, the company had **$88.3 million** in cash and cash equivalents and **$10.0 million** available under its **$30.0 million** new credit facility[121](index=121&type=chunk) - Working capital increased from an **$18.1 million** deficit at December 31, 2020, to **$54.3 million** at June 30, 2021, primarily due to NPB sale proceeds and cash from operations[125](index=125&type=chunk) - The company anticipates sufficient liquidity for the next twelve months, primarily from cash flow from operations, cash on hand, and available amounts under the new credit facility[121](index=121&type=chunk)[124](index=124&type=chunk) [Working Capital and Sources and Uses of Cash](index=27&type=section&id=Working%20Capital%20and%20Sources%20and%20Uses%20of%20Cash) The company's primary liquidity sources include operating cash flow, cash on hand, and the new credit facility; working capital significantly improved to **$54.3 million** as of June 30, 2021, from an **$18.1 million** deficit at December 31, 2020, driven by North Park Basin sale proceeds, increased operating cash, and reduced accounts payable and accrued liabilities - Primary liquidity sources include cash flow from operations, cash on hand, and available amounts under the new credit facility[124](index=124&type=chunk) - Working capital increased from an **$18.1 million** deficit at December 31, 2020, to **$54.3 million** at June 30, 2021, due to NPB sale proceeds, increased cash from operations, and reduced accounts payable and accrued liabilities[125](index=125&type=chunk) [Cash Flows](index=27&type=section&id=Cash%20Flows) For the six months ended June 30, 2021, net cash from operating activities increased by **$19.8 million** to **$33.2 million**, driven by improved commodity prices and cost reductions; investing activities generated **$29.9 million**, primarily from **$37.9 million** in asset sales, while financing activities used **$0.8 million** Cash Flow Summary (Units: $ thousand) | Cash Flow Activity | Six Months Ended June 30, 2021 | Six Months Ended June 30, 2020 | | :--- | :--- | :--- | | Operating Activities | $33,231 | $13,462 | | Investing Activities | $29,907 | $(5,308) | | Financing Activities | $(795) | $805 | | Net Increase (Decrease) in Cash | $62,343 | $8,959 | - Operating cash flow increased by **$19.8 million**, primarily attributed to improved commodity prices and cost reduction measures[128](index=128&type=chunk) - Investing activities provided **$29.9 million**, mainly from **$37.9 million** net cash proceeds from asset sales, partially offset by **$4.4 million** in capital expenditures[129](index=129&type=chunk) Capital Expenditures (Units: $ thousand) | Category | Six Months Ended June 30, 2021 | Six Months Ended June 30, 2020 | | :--- | :--- | :--- | | Drilling, Completions, and Capital Workovers | $3,242 | $2,430 | | Acquisitions | $3,604 | $— | | Total Cash Paid for Capital Expenditures | $7,993 | $6,814 | [Indebtedness](index=28&type=section&id=Indebtedness) As of June 30, 2021, the company's long-term debt primarily consisted of a **$20.0 million** outstanding term loan under the new credit facility, with further details available in Note 8 - As of June 30, 2021, long-term debt primarily included a **$20.0 million** outstanding term loan under the new credit facility[50](index=50&type=chunk)[133](index=133&type=chunk) [Contractual Obligations and Off-Balance Sheet Arrangements](index=29&type=section&id=Contractual%20Obligations%20and%20Off-Balance%20Sheet%20Arrangements) As of June 30, 2021, the company's contractual obligations included asset retirement obligations, long-term debt, and short-term leases, with no significant changes from the 2020 10-K report, and related liabilities for surety bonds supporting operations are reflected on the balance sheet - As of June 30, 2021, contractual obligations included asset retirement obligations, long-term debt, and short-term leases[134](index=134&type=chunk) - There were no material changes to contractual obligations and off-balance sheet arrangements compared to the 2020 10-K report[135](index=135&type=chunk) - The company uses surety bonds to support operations, and related liabilities are reflected on the balance sheet[134](index=134&type=chunk) [Critical Accounting Policies and Estimates](index=29&type=section&id=Critical%20Accounting%20Policies%20and%20Estimates) The company refers to its 2020 10-K report for descriptions of critical accounting policies and estimates, noting no significant changes to these policies, estimates, judgments, and assumptions during the first half of 2021 - Critical accounting policies and estimates are consistent with those discussed in the 2020 10-K report[136](index=136&type=chunk) - No significant changes occurred in critical accounting policies, estimates, judgments, and assumptions during the first half of 2021[136](index=136&type=chunk) [ITEM 3. Quantitative and Qualitative Disclosures About Market Risk](index=30&type=section&id=ITEM%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This section discusses the company's market risks, primarily commodity price, credit, and interest rate risks; while derivatives were historically used for commodity price volatility, no open contracts existed as of June 30, 2021; credit risk is managed through multiple investment-grade counterparties and netting agreements, and interest rate risk stems from floating-rate debt under the new credit facility - The company's most significant market risk is the price risk of oil, natural gas, and NGLs, historically mitigated through commodity derivative contracts[139](index=139&type=chunk) - As of June 30, 2021, the company had no open commodity derivative contracts; historically, derivative contracts were not designated as hedging instruments, with fair value changes recognized in current period profit or loss[140](index=140&type=chunk)[141](index=141&type=chunk) - Credit risk is managed using multiple investment-grade counterparties and master netting agreements, while interest rate risk arises from **$20.0 million** in floating-rate debt under the new credit facility[143](index=143&type=chunk)[144](index=144&type=chunk)[146](index=146&type=chunk) [General](index=30&type=section&id=General) This section introduces the company's historical financial instruments used for commodity price management and discusses its credit and interest rate risks, noting all historical contracts were cash settled - This discussion provides information on the company's historical financial instruments used to manage commodity prices, with all contracts settled in cash[138](index=138&type=chunk) - The discussion also covers the credit and interest rate risks faced by the company[138](index=138&type=chunk) [Commodity Price Risk](index=30&type=section&id=Commodity%20Price%20Risk) The company primarily faces market risk from volatile oil, natural gas, and NGL prices; historically, commodity derivative contracts like fixed-price swaps, basis swaps, and collars were used to mitigate this, but as of June 30, 2021, no open contracts existed, and fair value changes for undesignated hedges were recognized in profit or loss - The company's most significant market risk is the volatility of oil, natural gas, and NGL prices[139](index=139&type=chunk) - Historically, the company used commodity derivative contracts, including fixed-price swaps, basis swaps, and collars, to reduce oil and natural gas price volatility, but as of June 30, 2021, there were no open commodity derivative contracts[139](index=139&type=chunk)[140](index=140&type=chunk) - Since the company did not designate any derivative contracts as accounting hedges, changes in their fair value were recognized as gains and losses in current period profit or loss[141](index=141&type=chunk) [Credit Risk](index=30&type=section&id=Credit%20Risk) The company faced credit risk from derivative counterparties, all with "investment grade" ratings, minimized by using multiple counterparties and master netting agreements, limiting maximum loss to net receivables; credit risk from joint venture partner receivables was also present, but historical losses were negligible - Credit risk associated with derivative counterparties is managed through the use of multiple investment-grade financial institutions and master netting agreements, limiting maximum loss to net receivables[143](index=143&type=chunk)[144](index=144&type=chunk) - The company does not require collateral or other security from derivative counterparties[144](index=144&type=chunk) - The company also faces credit risk from joint venture partner receivables, but historical credit losses have been insignificant[145](index=145&type=chunk) [Interest Rate Risk](index=30&type=section&id=Interest%20Rate%20Risk) The company faces interest rate risk from its new credit facility, which has floating rates primarily tied to LIBOR, impacting **$20.0 million** of outstanding floating-rate debt as of June 30, 2021 - The company is exposed to interest rate risk from its new credit facility, which has floating interest rates primarily tied to LIBOR[146](index=146&type=chunk) - As of June 30, 2021, **$20.0 million** of outstanding floating-rate debt is subject to short-term changes in market interest rates[146](index=146&type=chunk) [ITEM 4. Controls and Procedures](index=31&type=section&id=ITEM%204.%20Controls%20and%20Procedures) Management, including the CEO and CFO, assessed the effectiveness of disclosure controls and procedures as of June 30, 2021, concluding they are effective in reasonably assuring timely recording, processing, summarizing, and reporting of required information, with no significant changes in internal control over financial reporting this quarter - The CEO and CFO concluded that as of June 30, 2021, the disclosure controls and procedures were effective in ensuring information required for SEC reports is timely recorded, processed, summarized, and reported[147](index=147&type=chunk) - No material changes occurred in internal control over financial reporting during the quarter ended June 30, 2021[148](index=148&type=chunk) [Disclosure Controls and Procedures](index=31&type=section&id=Disclosure%20Controls%20and%20Procedures) Under CEO and CFO supervision, the company assessed its disclosure controls and procedures, determining their effectiveness as of June 30, 2021, to ensure proper recording, processing, summarizing, and timely reporting of SEC-required information - The company's Chief Executive Officer and Chief Financial Officer concluded that, as of June 30, 2021, the disclosure controls and procedures were effective in ensuring information required for disclosure under the Exchange Act rules and forms is timely recorded, processed, summarized, and reported[147](index=147&type=chunk) [Changes in Internal Control Over Financial Reporting](index=31&type=section&id=Changes%20in%20Internal%20Control%20Over%20Financial%20Reporting) No material changes occurred in the company's internal control over financial reporting during the quarter ended June 30, 2021, nor were any reasonably likely to materially affect it - No material changes occurred in the company's internal control over financial reporting during the quarter ended June 30, 2021[148](index=148&type=chunk) [PART II. OTHER INFORMATION](index=32&type=section&id=PART%20II.%20OTHER%20INFORMATION) [ITEM 1. Legal Proceedings](index=32&type=section&id=ITEM%201.%20Legal%20Proceedings) This section refers to Note 9, "Commitments and Contingencies," in Part I of the financial statements for detailed information on legal proceedings - Detailed information regarding legal proceedings is incorporated by reference from Note 9, "Commitments and Contingencies," in Part I of this quarterly report's financial statements[151](index=151&type=chunk) [ITEM 1A. Risk Factors](index=33&type=section&id=ITEM%201A.%20Risk%20Factors) No material changes have occurred in the risk factors discussed in the company's 2020 10-K report - No material changes have occurred in the risk factors discussed in Item 1A, "Risk Factors," of the company's 2020 10-K report[153](index=153&type=chunk) [ITEM 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=33&type=section&id=ITEM%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) In April 2021, the company repurchased **152,101 shares** of common stock at an average price of **$3.90 per share**, including shares surrendered by employees for tax withholding on vested equity awards, with no repurchases in May or June 2021 Stock Repurchases (April 2021) | Period | Total Number of Shares Repurchased | Average Price Paid Per Share | | :--- | :--- | :--- | | April 1 - April 30, 2021 | 152,101 | $3.90 | | May 1 - May 31, 2021 | — | $— | | June 1 - June 30, 2021 | — | $— | - Repurchased shares included common stock surrendered by employees to satisfy tax withholding requirements on vested equity awards[155](index=155&type=chunk) [ITEM 3. Defaults Upon Senior Securities](index=33&type=section&id=ITEM%203.%20Defaults%20Upon%20Senior%20Securities) No defaults upon senior securities were reported during the period - No defaults upon senior securities were reported[156](index=156&type=chunk) [ITEM 4. Mine Safety Disclosures](index=33&type=section&id=ITEM%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company - Mine safety disclosures are not applicable to the company[157](index=157&type=chunk) [ITEM 5. Other Information](index=33&type=section&id=ITEM%205.%20Other%20Information) No other information is reported under this item - No other information is reported under this item[158](index=158&type=chunk) [ITEM 6. Exhibits](index=34&type=section&id=ITEM%206.%20Exhibits) This section lists exhibits filed with the 10-Q form, including organizational documents, an amendment to the Tax Benefits Preservation Plan, Section 302 and 906 certifications, and XBRL interactive data files - Exhibits include the Amended Joint Plan of Reorganization under Chapter 11, Amended and Restated Certificate of Incorporation and Bylaws, First Amendment to the Tax Benefits Preservation Plan, Section 302 and 906 certifications, and XBRL instance document, taxonomy extension schema document, calculation linkbase document, definition document, label linkbase document, and presentation linkbase document[160](index=160&type=chunk)

SandRidge Energy, Inc. (NYSE:SD) Q1 2021 Earnings Conference Call May 12, 2021 11:00 AM ET Company Participants Carl Giesler - Chief Executive Officer Salah Gamoudi - Chief Financial Officer Grayson Pranin - Chief Operating Officer Conference Call Participants Josh Young - Bison Michael Melby - Gate City Operator Good day and thank you for standing by. Welcome to the SandRidge Energy First Quarter 2021 Earnings Call. At this time, all participants are in a listen-only mode. After the speaker's presentation, ...

[PART I. FINANCIAL INFORMATION](index=3&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) This section encompasses the company's unaudited financial statements, management's analysis of operations, and disclosures regarding market risks and internal controls [Financial Statements (Unaudited)](index=4&type=section&id=ITEM%201.%20Financial%20Statements%20(Unaudited)) SandRidge Energy reported a **net income of $35.0 million** in Q1 2021, a turnaround from a **$12.7 million net loss** in Q1 2020, driven by an asset sale gain and lower expenses Condensed Consolidated Statements of Operations (Q1 2021 vs Q1 2020) | Metric | Q1 2021 (in thousands) | Q1 2020 (in thousands) | | :--- | :--- | :--- | | **Total Revenues** | $33,623 | $40,329 | | **Total Expenses** | $(1,439) | $53,088 | | **Income (Loss) from Operations** | $35,062 | $(12,759) | | **Net Income (Loss)** | $35,043 | $(12,670) | | **Diluted EPS** | $0.94 | $(0.36) | Condensed Consolidated Balance Sheet Highlights | Metric | March 31, 2021 (in thousands) | December 31, 2020 (in thousands) | | :--- | :--- | :--- | | **Cash and cash equivalents** | $73,876 | $22,130 | | **Total Current Assets** | $98,399 | $50,812 | | **Total Assets** | $280,254 | $260,832 | | **Total Liabilities** | $116,928 | $132,766 | | **Total Stockholders' Equity** | $163,326 | $128,066 | Condensed Consolidated Statements of Cash Flows (Q1 2021 vs Q1 2020) | Metric | Q1 2021 (in thousands) | Q1 2020 (in thousands) | | :--- | :--- | :--- | | **Net cash provided by operating activities** | $14,331 | $18,103 | | **Net cash provided by (used in) investing activities** | $34,085 | $(4,463) | | **Net cash provided by (used in) financing activities** | $(167) | $(11,867) | | **Net increase in cash** | $48,249 | $1,773 | [Note 5. Impairment](index=10&type=section&id=Note%205.%20Impairment) No full cost ceiling impairment was recorded in Q1 2021, contrasting with an **$8.0 million impairment** in Q1 2020 due to lower natural gas prices - No full cost ceiling impairment was recorded in Q1 2021, compared to an **$8.0 million impairment** in Q1 2020[41](index=41&type=chunk) - The SEC prices used for the March 31, 2021 ceiling test were **$40.01/Bbl** for oil and **$2.16/Mcf** for natural gas[42](index=42&type=chunk) [Note 6. Acquisitions and Divestitures](index=11&type=section&id=Note%206.%20Acquisitions%20and%20Divestitures) The company sold its North Park Basin assets for **$47 million** on February 5, 2021, recognizing a **$19.7 million gain** from the divestiture - The company sold its North Park Basin (NPB) assets on February 5, 2021, for a purchase price of **$47 million**, receiving net cash proceeds of **$39.7 million**[43](index=43&type=chunk) - A gain of **$19.7 million** was recognized on the sale of the NPB assets[43](index=43&type=chunk) [Note 8. Long-Term Debt](index=12&type=section&id=Note%208.%20Long-Term%20Debt) As of March 31, 2021, the company had a **$20.0 million term loan** outstanding under its **$30.0 million credit facility** and was in compliance with all financial covenants - The company has a **$30.0 million credit facility**, consisting of a **$20.0 million term loan** (fully drawn) and a **$10.0 million revolving loan** (undrawn) as of March 31, 2021[47](index=47&type=chunk) - The weighted average interest rate on the outstanding borrowings was approximately **2.6%** during Q1 2021[48](index=48&type=chunk) - The company was in compliance with all financial covenants as of March 31, 2021, with a consolidated total net leverage ratio of **(0.18)** and an interest coverage ratio of **42.86**[51](index=51&type=chunk) [Note 9. Commitments and Contingencies](index=12&type=section&id=Note%209.%20Commitments%20and%20Contingencies) The company is a nominal defendant in pre-bankruptcy securities litigation, has exhausted insurance coverage, and cannot estimate potential material losses - The company is a nominal defendant in two securities litigation cases where claims against it were discharged in the 2016 bankruptcy[54](index=54&type=chunk)[55](index=55&type=chunk)[57](index=57&type=chunk) - As of October 2020, all remaining insurance coverage for the costs of indemnification has been exhausted[57](index=57&type=chunk) - The company cannot determine the likelihood of an outcome or estimate a range of possible loss, but notes that such losses, if incurred, could be material[58](index=58&type=chunk) [Note 15. Subsequent Events](index=18&type=section&id=Note%2015.%20Subsequent%20Events) Post-quarter, on April 22, 2021, the company acquired overriding royalty interest assets of SandRidge Mississippian Trust I for **$4.9 million** gross - On April 22, 2021, the company acquired the overriding royalty interest assets of SandRidge Mississippian Trust I for **$4.9 million gross** (**$3.6 million net**)[86](index=86&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=19&type=section&id=ITEM%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management attributes Q1 2021 performance to the NPB asset sale and a focus on maximizing free cash flow, leading to reduced expenses and improved liquidity despite lower revenues - The company's strategy for 2021 is to maximize free cash flow through cost control, disciplined capital allocation, and limiting capital projects to high-return opportunities[94](index=94&type=chunk) - Following the sale of its North Park Basin assets on February 5, 2021, the company's principal focus is on its U.S. Mid-Continent assets[89](index=89&type=chunk)[96](index=96&type=chunk) - On April 22, 2021, the company acquired the overriding royalty interest assets of SandRidge Mississippian Trust I for a net cost of **$3.6 million**[96](index=96&type=chunk) [Consolidated Results of Operations](index=20&type=section&id=Consolidated%20Results%20of%20Operations) Q1 2021 total revenues decreased to **$33.6 million** due to lower production volumes, partially offset by higher commodity prices, while operating expenses significantly declined Production and Pricing (Q1 2021 vs Q1 2020) | Metric | Q1 2021 | Q1 2020 | | :--- | :--- | :--- | | **Total Production (MBoe)** | 1,641 | 2,567 | | **Average Daily Production (MBoe/d)** | 18.2 | 28.2 | | **Average Oil Price ($/Bbl)** | $53.99 | $42.01 | | **Average NGL Price ($/Bbl)** | $17.00 | $7.72 | | **Average Natural Gas Price ($/Mcf)** | $1.85 | $0.83 | | **Average Total Price ($/Boe)** | $20.49 | $15.64 | Operating Expenses per Boe (Q1 2021 vs Q1 2020) | Metric | Q1 2021 ($/Boe) | Q1 2020 ($/Boe) | | :--- | :--- | :--- | | **Lease operating expenses** | $4.85 | $6.09 | | **Production, ad valorem, and other taxes** | $1.33 | $1.25 | | **Depreciation and depletion—oil and natural gas** | $1.53 | $9.68 | - General and administrative expenses decreased by **$3.4 million** year-over-year due to reductions in force, lower IT costs, and reduced overhead from the sale of the corporate headquarters[109](index=109&type=chunk) [Liquidity and Capital Resources](index=24&type=section&id=Liquidity%20and%20Capital%20Resources) The company's liquidity significantly improved, with cash and cash equivalents reaching **$73.9 million** and working capital turning to a **$39.8 million surplus** due to asset sale proceeds - As of March 31, 2021, the company had **$73.9 million** in cash and cash equivalents and **$10.0 million** available under its revolving credit facility[114](index=114&type=chunk) - Working capital improved to a surplus of **$39.8 million** at March 31, 2021, from a deficit of **$18.1 million** at December 31, 2020[116](index=116&type=chunk) Capital Expenditures (Q1 2021 vs Q1 2020) | Category (in thousands) | Q1 2021 (in thousands) | Q1 2020 (in thousands) | | :--- | :--- | :--- | | **Drilling, completion and capital workovers** | $2,037 | $1,425 | | **Leasehold and geophysical** | $111 | $503 | | **Total cash paid for capital expenditures** | $3,153 | $5,452 | [Quantitative and Qualitative Disclosures About Market Risk](index=27&type=section&id=ITEM%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company's primary market risks are commodity price volatility and interest rate risk on its **$20.0 million** variable-rate debt, with no open commodity derivative contracts - The most significant market risk is commodity price volatility. The company had no open commodity derivative contracts as of March 31, 2021[130](index=130&type=chunk)[131](index=131&type=chunk) - The company is exposed to interest rate risk on its **$20.0 million** in outstanding variable-rate debt[137](index=137&type=chunk) [Controls and Procedures](index=28&type=section&id=ITEM%204.%20Controls%20and%20Procedures) The CEO and CFO concluded that disclosure controls and procedures were effective as of March 31, 2021, with no material changes to internal control over financial reporting - The CEO and CFO concluded that the company's disclosure controls and procedures were effective as of March 31, 2021[138](index=138&type=chunk) - No material changes to internal control over financial reporting occurred during the quarter ended March 31, 2021[139](index=139&type=chunk) [PART II. OTHER INFORMATION](index=29&type=section&id=PART%20II.%20OTHER%20INFORMATION) This section covers legal proceedings, risk factors, unregistered equity sales, and a list of exhibits filed with the report [Legal Proceedings](index=29&type=section&id=ITEM%201.%20Legal%20Proceedings) This section refers to Note 9 for details on the company's status as a nominal defendant in ongoing securities litigation with unestimable potential losses - The company directs readers to Note 9 for details on legal proceedings, where it is a nominal defendant in securities litigation[142](index=142&type=chunk)[57](index=57&type=chunk) [Risk Factors](index=30&type=section&id=ITEM%201A.%20Risk%20Factors) No material changes were reported to the risk factors previously disclosed in the company's 2020 Annual Report on Form 10-K - There have been no material changes to the risk factors previously discussed in the Company's 2020 Form 10-K[144](index=144&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=30&type=section&id=ITEM%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) During Q1 2021, the company repurchased **4,121 shares** of common stock from employees to satisfy tax withholding on vested stock awards - A total of **4,121 shares** were repurchased in February 2021 at an average price of **$4.73 per share**. These were shares tendered by employees to satisfy tax withholding on vested stock awards[146](index=146&type=chunk) [Exhibits](index=31&type=section&id=ITEM%206.%20Exhibits) This section lists the exhibits filed with the Form 10-Q, including CEO and CFO certifications and XBRL data files - Key exhibits filed include CEO and CFO certifications (Exhibits 31.1, 31.2, 32.1) and XBRL interactive data files[151](index=151&type=chunk)