SandRidge Energy(US:SD)2023-05-05 20:08Financial Performance - Total revenues for the three-month period ended March 31, 2023, were $43.147 million, a decrease of $14.340 million (approximately 24.9%) compared to $57.487 million in 2022[73]. - Total revenues for the three-month period ended March 31, 2023, were $43.1 million, a decrease of $14.3 million (approximately 25%) compared to $57.5 million in the same period of 2022[73]. - Cash flows provided by operating activities increased to $39.8 million for the three-month period ended March 31, 2023, compared to $32.2 million in 2022, reflecting a $7.7 million increase[89][90]. - Cash flows from operating activities increased to $39.847 million in Q1 2023 from $32.193 million in Q1 2022, a 24% increase[89]. - Total other income for the three-month period ended March 31, 2023, was $2.6 million, compared to a loss of $76,000 in the same period of 2022[86]. Production and Sales - Oil production increased to 261 MBbls in Q1 2023 from 214 MBbls in Q1 2022, while total production volumes decreased to 1,500 MBoe from 1,606 MBoe, reflecting a decline of 106 MBoe (approximately 6.6%) year-over-year[74]. - Oil production increased to 261 MBbls in Q1 2023 from 214 MBbls in Q1 2022, a 22% increase[74]. - NGL production decreased to 420 MBbls in Q1 2023 from 526 MBbls in Q1 2022, a 20% decrease[74]. - Natural gas production decreased to 4,912 MMcf in Q1 2023 from 5,195 MMcf in Q1 2022, a 5.4% decrease[74]. - Average oil price per barrel decreased to $74.26 in Q1 2023 from $92.35 in Q1 2022, a decline of $18.09 (approximately 19.6%)[74]. - The average NYMEX oil price for Q1 2023 was $75.93 per barrel, down from $95.02 per barrel in Q1 2022, reflecting a decrease of $19.09 (approximately 20.1%) year-over-year[71]. - The average NYMEX natural gas price for the three-month period ended March 31, 2023, was $2.74 per Mcf, a decrease from $4.84 per Mcf in the same period of 2022[71]. Expenses - Operating expenses increased to $20.517 million in Q1 2023, up by $1.569 million (approximately 8.3%) from $18.948 million in Q1 2022[77]. - General and administrative expenses increased to $2.909 million in Q1 2023, up by $0.379 million (approximately 15.0%) from $2.530 million in Q1 2022[84]. - Lease operating expenses per Boe rose to $7.79 in Q1 2023, an increase of $1.03 (approximately 15.2%) compared to $6.76 in Q1 2022[77]. - Total operating expenses increased to $20.517 million in Q1 2023 from $18.948 million in Q1 2022, an increase of 8.3%[77]. Capital Expenditures and Investments - Capital expenditures for the three-month period ended March 31, 2023, were $9.4 million, up from $5.6 million in the same period of 2022, primarily for drilling and well reactivations[91][92]. - Capital expenditures for Q1 2023 were $9.4 million, up from $5.6 million in Q1 2022, a 67% increase[91]. Liquidity and Financial Position - Working capital increased to $257.7 million as of March 31, 2023, up from $241.6 million at December 31, 2022, primarily due to increased cash and cash equivalents[88]. - As of March 31, 2023, cash and cash equivalents, including restricted cash, totaled $287.6 million, with no outstanding term or revolving debt obligations[87]. - The company expects to maintain ample liquidity over the next twelve months, supported by cash on hand and cash from operations[87]. Strategic Plans - The company drilled and completed two wells during the quarter ended March 31, 2023, as part of its 2023 capital development program[69]. - The company plans to continue its well reactivation program and focus on high-graded drilling areas while maintaining optionality for potential mergers and acquisitions[70]. Derivative Contracts and Risk Management - The company had no open commodity derivative contracts as of March 31, 2023, and has historically not designated any derivative contracts as hedges for accounting purposes[100][101]. - The company reported a gain on derivative contracts of $(1,447) thousand for the three months ended March 31, 2023, compared to a gain of $1,064 thousand for the same period in 2022[102]. - Realized settlement gains on derivative contracts were $5,876 thousand for the three months ended March 31, 2023, compared to a loss of $(1,085) thousand in the same period of 2022[102]. - The company has utilized various commodity-based derivative contracts to manage price volatility in oil and natural gas[99]. Internal Controls and Accounting Policies - The company's disclosure controls and procedures were deemed effective as of March 31, 2023, ensuring timely and accurate reporting[106]. - There were no material changes in critical accounting policies or estimates during the first three months of 2023[97]. - There were no changes in the company's internal control over financial reporting that materially affected its effectiveness during the quarter ended March 31, 2023[107]. - Credit losses on joint interest receivables have been immaterial historically, indicating low credit risk exposure[105]. - The company did not require collateral from counterparties for derivative instruments, limiting credit risk exposure[104]. - The company has historically monitored the credit ratings of its derivative counterparties, which have maintained an "investment grade" credit rating[103].