SandRidge’s Reversal of Fortunes

SandRidge Energy not only reported a more than $23 million second-quarter profit this week but immediately boosted its capital expenditure budget by $40 million. It constitutes a reversal of fortunes for the company that lost nearly half a billion dollars a year ago.

The increase will result in the company’s cap-ex of about $260 million to allow more exploration opportunities in Oklahoma’s STACK play and Colorado’s Niobrara field.

Second quarter financial results showed a profit of $23.5 million and executives used the announcement to reveal a $200 million drilling production agreement in northwest Oklahoma’s Major and Woodward counties. However, the company did not reveal the identity of the privae investment fund that will provide $100 million with an option of a second $100 million for investment.

“The drilling agreement announced today highlights the value of our NW STACK position and enables us to further delineate and develop our substantial acreage in this area,” stated James Bennett, CEO at SandRidge.

He explained the agreement will allow the company to drill 34 Mid-Continent laterals in the remainder of the year. That’s an increase from 22.

The Colorado move means the company could gain another 13,000 acres after the formation of two federal units were approved.

The $23.5 million in profit translated into 69 cents a share. It was also a far different story from one year ago when SandRidge suffered a loss of $521 million or 73 cents a share.

IAdam Wilmoth