SandRidge Q4 Earnings Decline Y/Y, Strong Production Boosts Outlook

Zacks Equity Research

Thu, Mar 13, 2025, 11:02 AM 4 min read

Financial Performance

SandRidge reported fourth-quarter 2024 adjusted earnings per share of 34 cents, down 3% from 35 cents in the prior-year quarter.

For the fourth quarter of 2024, SD registered revenues of $38.97 million, up 14.6% from $34 million in the same period last year

For the year, revenues totaled $125.3 million, marking a 15.7% decline from $148.6 million in 2023. Net income rose slightly to $63 million ($1.70 per basic share) from $60.9 million ($1.65 per basic share) in 2023, aided by lower taxes. Adjusted EBITDA for 2024 stood at $69.5 million, down from $93.2 million in the prior year.

SandRidge Energy, Inc. Price, Consensus and EPS Surprise

SandRidge Energy, Inc. price-consensus-eps-surprise-chart | SandRidge Energy, Inc. Quote

Production & Pricing Trends

SandRidge produced 19.1 MBoe/d in the fourth quarter of 2024, representing a 19% increase over the same period in 2023. Oil production saw a more significant 28% year-over-year increase, reflecting the company’s focus on higher-margin liquids production.

However, commodity price realizations were mixed. The company realized an average oil price of $71.44 per barrel in the fourth quarter of 2024, down from $77.53 a year ago. Natural gas prices averaged $1.47 per Mcf, slightly lower than $1.50 in the fourth quarter of 2023. NGL prices were also weaker at $18.19 per barrel, down from $21.05 in the prior-year quarter.

Operational Efficiency & Cost Control

SandRidge continues to maintain a low-cost operating structure. Lease operating expenses (LOE) for fourth-quarter 2024 were $6.43 per Boe compared to $6.73 in the fourth quarter of 2023. For the year, LOE totaled $40 million ($6.61 per Boe), marking a nearly 3% reduction from 2023.

General and administrative expenses (G&A) came in at $3 million for the quarter and $11.7 million for the year. Adjusted G&A, which excludes stock-based compensation, was $2.4 million ($1.39 per Boe) for the quarter and $9.3 million ($1.54 per Boe) for the year, reflecting continued cost discipline.

Management Commentary & Strategic Priorities

SandRidge executives emphasized their focus on capital efficiency and strategic asset development. CEO Grayson Pranin highlighted the company’s expanding activity in the Cherokee Shale play, wherein initial results from three drilled but uncompleted wells came in below the historical industry cost averages. The company plans to drill eight Cherokee wells and complete six in 2025.

Management also noted that despite headwinds from weak natural gas prices in 2024, the company generated $7.9 million in interest income from its cash reserves. This helped offset corporate G&A expenses and reinforced SandRidge’s ability to fund capital expenditure without taking on debt.

Capital Allocation & Shareholder Returns

SandRidge remains committed to shareholder returns through dividends and disciplined capital reinvestment. In 2024, the company paid out $16.4 million in regular dividends and $55.9 million in special dividends, bringing total distributions for the year to $72 million. On March 7, 2025, the board of directors declared a cash dividend of 11 cents per share, payable March 31, to shareholders of record as of March 20.

The company ended 2024 with $99.5 million in cash and cash equivalents, and no outstanding debt. With a strong balance sheet, management reiterated its flexibility to fund organic growth, pursue opportunistic acquisitions and sustain shareholder distributions.

2025 Outlook & Guidance

For 2025, SandRidge projects total production between 5.9 MMBOE and 7.1 MMBOE, with oil volumes expected to grow as the company advances its Cherokee Shale drilling program. Capital expenditure is forecast between $66 million and $85 million, with $47-$63 million allocated for drilling and completions, and $19-$22 million for workovers, production optimization and lease acquisitions.

The company expects lease operating expenses between $42 million and $50 million, and adjusted G&A expenses of $10-$12 million. Price realizations are anticipated to be 97-98% of WTI for oil, 25-30% of WTI for NGLs and 50-70% of Henry Hub for natural gas.

Other Developments

In December 2024, SandRidge completed a second acquisition in the Cherokee Shale play, increasing its ownership interest in certain proved and unproved properties for $5.7 million and terminating a previously announced joint development agreement. This move allows the company to optimize its development program and maintain greater control over its assets.

Conclusion

SandRidge’s fourth-quarter results reflected a solid operational performance despite commodity price volatility. While revenues and earnings fell short of expectations, the company demonstrated strong production growth, effective cost control and a disciplined capital allocation strategy. With a debt-free balance sheet, ample cash reserves and a focus on high-return projects, SD remains well-positioned for long-term shareholder value creation.

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