SandRidge Energy(US:SD)2021-03-04 19:05Financial Data and Key Metrics Changes - The company streamlined its organization, reducing personnel from 270 at the end of 2019 to just over 100, resulting in a significant decrease in adjusted G&A and BOE costs by over 50% year-over-year [5] - Capital expenditures were slashed to approximately $5 million in 2020, down from over $160 million in the previous year [5] - The company flipped its net debt from over $50 million at year-end 2019 to a net cash position of roughly the same magnitude [5] Business Line Data and Key Metrics Changes - The company increased its net operating working interest by acquiring overriding royalty interests at attractive discounts [6] - Operational guidance metrics were met or exceeded, maintaining a record of no HSE incidents for 31 months [6] Market Data and Key Metrics Changes - The company experienced a significant discount in pricing, with NGL prices at 20% of WTI and substantial discounts to NYMEX gas prices [21] - The pricing structure is influenced by the primary marketer Targa, with 85% of gas pricing based on flat front month pricing [24] Company Strategy and Development Direction - The company plans to focus on external strategic attention, believing that the oil and gas industry will benefit from consolidation [7] - Key strategies include capturing scale economies, highgrading investment inventory, and accessing expanded sources of capital [8] - The company aims to grow its PDP asset base or combine assets with other companies in a value-enhancing manner [10] Management Comments on Operating Environment and Future Outlook - Management emphasized the importance of maintaining a strong balance sheet and cash position to enhance attractiveness for potential M&A opportunities [18] - The company is committed to disciplined cash stewardship and will return cash to shareholders if no economically attractive opportunities arise [10] Other Important Information - The company is investigating the impact of recent market chaos on pricing and will provide further details in the first quarter [25][26] Q&A Session Summary Question: Did the company have any outstanding debt as of March 1? - The company had a $30 million credit facility, consisting of a $20 million term loan and a $10 million undrawn revolving portion [15] Question: Is the company continuing to evaluate M&A opportunities? - The company is actively evaluating M&A opportunities and believes a strong cash position makes it an attractive partner [17][18] Question: What is the driver of the large discount from pricing benchmarks? - The discount is primarily due to the primary marketer Targa's asset recovery strategy, which dilutes the per barrel price [22] Question: How did the company maintain production during the recent storm? - The company managed to keep more than half of its production online during the storm, while many peers faced significant shut-ins [23]