SandRidge Energy, Inc. Q4 FY2025 earnings call

Grayson Prannon noted a strong quarter with production growth. Jonathan Freitas discussed financial results including revenue, adjusted EBITDA, cash position, dividends, share repurchases, commodity price realization, cost discipline, and net income. Dean Parrish provided an update on operations, including 2025 production, capital spend, lease operating expenses, well completions, and 2026 capital program plans. Grayson Prannon highlighted the company's advantages like asset base, balance sheet, ESG commitments, and strategy points including maximizing incumbent asset value, capital stewardship, M&A optionality, shareholder value maximization, and ESG responsibilities. Brandon discussed administrative expenses and the company's efficiency.

Production averaged 18.5 MBOE per day in 2025, an increase of 12% on a BOE basis and 32% on oil versus 2024. Fourth quarter production averaged 19.5 MBOE per day. Revenues for the year were approximately $156 million, a 25% increase compared to 2024. Adjusted EBITDA was roughly $25 million in the quarter and $101 million for the year. Commodity price realization for the quarter, before considering the impact of hedges, was $57.56 per barrel of oil, $2.20 for NCF of gas, and $14.92 for barrel of NGLs. Adjusted G&A for the quarter was approximately $2.7 million or $1.53 per BOE and $10.2 million or $1.50 per BOE for the full year. Net income was $21.6 million for the quarter or $0.59 for diluted share and adjusted net income was $12.5 million or $0.34 for diluted share. Net income for the full year was $70.2 million, or $1.90 per diluted share, and adjusted net income was $54.7 million, or $1.48 per share. Adjusted operating cash flow for the year was approximately $108 million. Free cash flow before acquisitions was roughly $44 million. Production is hedged with a combination of swaps and collars representing approximately 23% of the midpoint of 2026 guidance, including approximately 37% of natural gas production and 27% of oil production.

2026 production guidance is 6.4 to 7.7 million BOE. CapEx guidance is 76 to 97 million. Timing, working interest, and pooling processes can affect the range. Prices have increased, and the company is opportunistic with hedging, layering in additional contracts while maintaining some upside potential. For NGLs, the guidance range is affected by gas environments, with 50% to 70% to accommodate different gas scenarios, averaging near 60% over the year.

Q: Your 2026 production guidance of 6.4 to 7.7 million BOE and CapEx of 76 to 97 million has got a bit of a range to it. For the benefit of everyone on the call, could you just give a little more context on what scenarios might lead to the higher and lower ends of that guidance? And then I've got a follow-up.

A: Sure. Yes. Good afternoon. Thank you for the interest in the question. Things that we're watching for that range is timing is a big part of it. So right now we're planning on drilling 10 wells and completing eight if the timing is to shift due to the availability of crews or weather or anything like that that could shift wells later in the year or into next year potentially. that could affect the range, as well as working interest. A lot of the wells that we're developing this year, their pooling hasn't been finalized in Oklahoma. You pool the wells and sometimes you can achieve higher working interest through that pooling process. And so while we budgeted for some potential net increases, additional could add additional capital, but it also adds additional production with that as well. And so we tend to like to make sure that we're budgeting at appropriate achievable levels and so we're not accounting for all of that potential upside that could occur through the normal planning and development process throughout the year. Very helpful. Thank you. And then just as my follow-up question, can you comment on how you're viewing what seems to be a fairly supportive spot market today relative to how that might influence your hedging positions going forward. I know you mentioned I think about 23% hedge today. But, you know, how should we think about the opportunity to kind of lock in more certainty on the cash flows going forward?

A: Sure. No, it's a great question. We're watching literally by the minute here, even as we're on the call now. I'm going to say a few words and then hand this off to our CSO, Jonathan Frady, to say more. But I think a big piece of this is, one, we do not have any debt, so we don't have any bank mandated hedging requirements, meaning we're not required to hedge in the downside and could be more opportunistic in nature. Prices have increased this year. We've done that and taken in additional options. You can probably see a lot of speculation in the marketplace of where oil prices could go to. So we're mindful to layer in additional contracts. We want to do so that we also have some opportunity for the potential of upside. And with that, I'll hand things over to John. Yeah, I think你说得很对，格雷森。我们在这个项目上非常机会主义。我要指出的是，这些石油对冲大部分是最近才做的。所以如果你看今年剩下的时间，我在评论中提到我们在石油方面有大约27%的指导性生产对冲。但由于我们最近做了很多这些对冲，而且我们已经进入一年中的两个月，所以平衡看起来会比那更高一点，你可以根据自己的估计计算TAB，但是的，随着这些价格继续上涨，我们非常乐观，每天都在关注，并且会随着一年的进行而增加更多的对冲，假设事情继续朝这个方向发展。Q: uh hi everyone and thank you for taking my question um i think everyone had this question on guidance 26 with the production and capex and so actually i want to ask about the guidance too i i see that you have this higher range of price differentials guidance for NGLs. And actually in Q4, we were a bit surprised because of actually higher differentials than we expected for Q4. Yes, so do you see some temporary I think here was like something structural, and we also had differentials from here.

A: Sergey. Appreciate your question. As we, you know, obviously there are different differentials depending on the commodity. I think if you look at oil, that's been relatively tight. I think你可能在参考GAF。正如我们与GAF交谈的，我们也从方向上谈到了这一点，随着我们从更高的商品价格中受益，并且我们将其与亨利枢纽基准进行比较，我们GAF流中的固定扣除额减少了。所以你有点有一个扩大的实现。所以如果你进入一个我们有4美元GAF的环境，你会看到我们处于指导范围的高端。如果你看的是2美元的天然气，它会接近那个低端。这就是为什么我们提供了50%到70%的范围来尝试适应不同的天然气环境。我认为如果你看全年，我们真的接近那个60%的中心。而且我们正在平均这个。我认为从基准角度来看，这平均略高于3美元。相对于第四季度特别是，你有区域基差的扩大。我们的很多天然气通过潘handle东部和NGLPL市场出售。我认为这是本地化和暂时的。我认为从结构上看，我们想要确保我们在更高的商品价格下出售尽可能多的天然气，因为那是我们看到最高实现的时候。