SandRidge cuts debt by $279 million in Q2, increases capex guidance

By Lisa Kerner

Charlotte, N.C., Aug. 5 - SandRidge Energy Inc. increased its 2011 guidance for projected capital expenditures by $500 million to $1.8 billion based on increased leasing activity, well count and well costs in its Mississippian play.

The company is making significant progress toward its goal of a self-funding capital program, chairman and chief executive officer Tom L. Ward said during the company's second-quarter earnings call on Friday.

SandRidge posted double-digit annual production growth and a debt-to-EBITDA ratio of less than 2 times.

At June 30, SandRidge had debt of $2.9 billion, a decrease of about $279 million from the quarter ended March 31. SandRidge raised $535 million from the sale of a portion of its interest in SandRidge Mississippian Trust I and the divestiture of its non-core New Mexico properties. Proceeds were used to repay borrowings under the company's senior credit facility.

SandRidge had $195 million drawn under its $790 million senior credit facility and about $2.2 million of cash for available liquidity of about $573 million at Aug. 1, said chief financial officer James Bennett.

Second-quarter results

For the second quarter of 2011, SandRidge reported adjusted EBITDA of $156 million, compared with $132 million for the prior-year period. The figures are $182 million and $195 million, respectively, when realized gains on out-of-period derivative contract settlements are included.

Operating cash flow for the period was $134 million, compared with $135 million in the second quarter of 2010.

Second-quarter 2011 net income available to common stockholders was $196 million, or $0.42 per diluted share, compared with $45 million, or $0.21 per diluted share, for the same period in 2010.

SandRidge reported adjusted EBITDA of $305 million for the first six months of 2011, compared with $274 million in the first six months of 2010. The figures are $341 million and $336 million, respectively, when realized gains on out-of-period derivative contract settlements are included.

Operating cash flow for the first half was $234 million, compared with $222 million in the first six months of 2010.

SandRidge reported net loss applicable to common stockholders of $120 million, or $0.30 per diluted share, for the first six months of 2011, compared with $63 million, or $0.31 per diluted share, for the prior-year period.

SandRidge is an Oklahoma City-based oil and natural gas company.

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