SandRidge Energy Inc. easily beat analysts' estimates in the first full quarter since a shareholder revolt led to a reshuffling of the company's leadership.
The Oklahoma City-based oil and natural gas producer logged adjusted net income of $40.4 million, or 7 cents a share, the company reported Tuesday. Analysts had predicted earnings of only 3 cents a share. SandRidge earned $29.6 million, or 5 cents a share, in the same period of last year.
Before adjustments, SandRidge posted a loss of $87 million, or 18 cents a share, for the third quarter.
CEO James Bennett, who replaced SandRidge founder Tom Ward in June, said the company is focused on reducing costs and being more efficient with its capital.
“We have implemented a rigorous process that is transforming our business to generate cash flow growth and returns,” Bennett said.
He said SandRidge was able to increase production in the Mississippian formation to nearly 48,000 barrels of oil equivalent a day, despite reducing its rig count by 15 percent.
That led SandRidge to increase its production guidance in its featured play for the second consecutive quarter without increasing its capital budget.
“As our Mississippian rig count ramps back up over the next few quarters, we are confident that we will be able to grow production there by approximately 35 percent in 2014, which will contribute to 12 percent year-over-year organic growth for the company and tangible organic cash flow growth,” Bennett said.
He said SandRidge has set an industry standard in its efforts to reduce drilling costs.
“Through innovation and continuous improvement efforts, “we have achieved the lowest well costs in the industry at an average of under $3 million per well, and our lease operating expenses have improved 22 percent year-over-year,” Bennett said.
The company also has identified additional drilling opportunities.
“The inventory of new opportunities within our Mid-Continent asset base continues to expand as we identify new formations and stacked pays and see encouraging results in our appraisal areas,” Bennett said.