SandRidge Energy Inc. has focused its drilling efforts and slashed spending after discussions between its management team and newly expanded board, the Oklahoma City-based oil and natural gas company said Tuesday.
“This effort has resulted in notable changes to the 2013 business plan, including an increasing focus on capital discipline, creating sustainable returns and lowering risk levels,” the company said in a statement Tuesday.
As a result, SandRidge lowered its planned 2013 capital expenditure budget to $1.45 billion, which is a $700 million decrease from 2012.
“With a continued focus on developing our proven assets in the Mississippian Play, we increased production while maintaining our industry-leading drilling and production costs in the area,” SandRidge Chairman and CEO Tom Ward said.
“In addition, the sale of the Permian assets allowed us to increase cash and redeem $1.1 billion of debt in the first quarter. Most notably, as of May 1, our cash totaled approximately $1.26 billion, with available liquidity of approximately $2 billion and no amount drawn on our senior credit facility. This is a direct result of our employees' ongoing commitment to increasing shareholder value through efficient and cost-effective operations.”
Also Tuesday, SandRidge reported a first-quarter net loss of $493 million, or $1.03 a share, down from a loss of $232 million, or 58 cents a share, in the first quarter of 2012. Revenue increased 34 percent to nearly $512 million, up from almost $382 million one year ago.
Adjusting for one-time expenses — including a $399 million write-down for a loss on the sale of the company's Permian Basin assets — SandRidge reported earnings before interest, taxes, depreciation and amortization of $270 million, up from $185 million one year ago.
Total production increased 49 percent to nearly 9 million barrels of oil equivalent, up from just more than 6 million barrels in the first quarter of 2012. Crude oil production added almost 30 percent to 4.4 million barrels, up from 3.4 million. Natural gas production jumped almost 74 percent to 27 billion cubic feet, up from almost 16 billion cubic feet a year ago.
The company said it ended the first quarter with $2.1 billion of liquidity after buying back about $1.1 billion in senior notes. The buyback effort cut the company's annual interest expense by about $100 million.
SandRidge also said it has locked in about 86 percent of its estimated 2013 oil production at $99 a barrel and 56 percent of its estimated natural gas production at an average price of $4.10 per million British thermal units, which is roughly the heat energy produced from burning 1,000 cubic feet of natural gas.