Boston, MA 05/22/2014 (wallstreetpr) – SandRidge Energy Inc. (NYSE:SD) reported the results of the first quarter of 2014 with positive growth in adjusted EBITDA and adjusted net income despite decreased production.
Operational results
During the first quarter 2014 (1Q2014), Oil and natural gas revenue decreased by15% to $405 million (1Q2013: $478 million) due to 21% YoY decrease in total production as a result of Permian divestitures (2013) and the closer of Gulf of Mexico (2014).
However, the improvement in average realized price of oil and gas partly offset the decreased production for the period. During 1Q2014, the reported prices were $4.53 per Mcf of natural gas and $97.03 per barrel of oil, excluding the effect of derivative settlements (1Q2013: $3.21 per Mcf of natural gas & $94.38 per barrel of oil).
The production expenses also decreased to $13.83 per Boe (1Q2013: $14.73 per Boe) due to the sale of high costs producing assets (Gulf of Mexico properties) and lower cost per unit production (down by 4%) in the Mid-Continent operations.
As a result, SandRidge reported an improvement in adjusted EBITDA to $230 million in 1Q2014 compared to $270 million in 1Q2013. Excluding the Gulf transaction, SandRidge Energy Inc. (NYSE:SD)’s adjusted EBITDA increased by 58% YoY to $177 million (1Q2013: $112 million).
Therefore, it improved the adjusted net income significantly to $37.9 million with adjusted EPS of $0.07 (1Q2013: $2.0 million or $0.00 per diluted share).
Financial results
During the period, SandRidge reported lower adjusted operating cash flow of $136 million (1Q2013: $182 million) due to the payment of $70 million to reduce the hedges related to the divested properties. The Company continues to invest in drilling programs to enhance its production capacity and expects capital expenditures of $1.5 billion in 2014.
SandRidge is flexible in its capital structure with a proper mix of debt and equity to fund its drilling programs. As of March 31, 2014, SandRidge Energy Inc. (NYSE:SD) has shareholder’s equity of $1.7 billion and a net debt of $1.9 billion including cash balances of $1.2 billion. So, the leverage ratio as of March 31, 2014 was 3.0x.
