JANUARY 2017 INVESTOR PRESENTATION
CAUTIONARY STATEMENTS Forward Looking Statement This presentation includes "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These statements express a belief, expectation or intention and are generally accompanied by words that convey projected future events or outcomes. The forward-looking statements include statements about the company’s corporate strategies, future operations, development plans and appraisal programs, our drilling inventory and locations, estimated production, rates of return, reserves, projected capital expenditures, projected operating, general and administrative and other costs, anticipated efficiency and cost reduction initiative outcomes, the acquisition of seismic data, infrastructure utilization and investment, liquidity, capital structure, hedging position and strategies, and price realizations and differentials. We have based these forward-looking statements on our current expectations and assumptions and analyses made by us in light of our experience and our perception of historical trends, current conditions and expected future developments, as well as other factors we believe are appropriate under the circumstances. However, whether actual results and developments will conform with our expectations and predictions is subject to a number of risks and uncertainties, including the volatility of oil and natural gas prices, our success in discovering, estimating, and developing oil and natural gas reserves, the availability and terms of capital, our timely execution of hedge transactions, credit conditions of global capital markets, changes in economic conditions, regulatory changes and other factors, many of which are beyond our control. We refer you to the discussion of risk factors in Part I, Item 1A – “Risk Factors” of our Annual Report on Form 10-K for the year ended December 31, 2015 and in comparable “Risk Factors” sections of our Quarterly Reports on Form 10-Q filed after such Form 10-K. All of the forward-looking statements made in this presentation are qualified by these cautionary statements. The actual results or developments anticipated may not be realized or, even if substantially realized, they may not have the expected consequences to or effects on our company or our business or operations. Such statements are not guarantees of future performance and actual results or developments may differ materially from those projected in the forward-looking statements. We undertake no obligation to update or revise any forward-looking statements. The SEC permits oil and natural gas companies, in their filings with the SEC, to disclose only proved, probable and possible reserves, as each is defined by the SEC. At times we use the terms "EUR" (estimated ultimate recovery) and “recoverable reserves” that the SEC’s guidelines prohibit us from including in filings with the SEC. These estimates are by their nature more speculative than estimates of proved, probable or possible reserves and, accordingly, are subject to substantially greater risk of being actually realized by the company. For a discussion of the company’s proved reserves, as calculated under current SEC rules, we refer you to the company’s amended Annual Report on Form 10-K referenced above, which is available on our website at www.sandridgeenergy.com and at the SEC’s website at www.sec.gov. www.sandridgeenergy.com 2
SANDRIDGE ENERGY With a strong balance sheet, we have competitive project IRRs from the high-graded harvest of our Mid-Continent position, plus we’re adding portfolio diversification and long term growth from our North Park Niobrara project, with capacity to do more. - Over $500MM of Liquidity - High-Graded Harvest - Dominant North Park - Additional Zones Position - Moderate Level of - Competitive Project IRRs - Extended Reach Laterals Outspend - Long Term Oil Growth (“XRL”) & Multilaterals - Adjacent Zone Drilling (“Multi”) - Protect the Balance Sheet (Meramec/Osage) - Expands Drilling Inventory - New Areas - Long Runway - Continue to Drive Down Costs - 1,300 2P Locations - Pioneering Technologies - Produce Consistent Well Results - Innovate on Well Designs www.sandridgeenergy.com 3
SANDRIDGE ENERGY OVERVIEW UNLEVERED OIL PRODUCER FOCUSED ON RESOURCE VALUE CREATION KEY INFORMATION FULLY DILUTED MARKET EQUITY VALUE @ $24 / SHARE 20.6 MM Common shares + $494 Million + 14.8 MM Conversion shares $ 355 Million = Estimated Market Cap = $850 Million PRIMARY ASSETS 458k ~300 2P 1 Mid-Continent Locations Net Acres Focus Area (includes prospective (excludes prospective Meramec/Osage) Meramec/Osage) North Park Basin ~1,300 2P 1 133k Niobrara Oil Net Acres Locations PRODUCTION & RESERVES 49.6 MBoepd 2 Q3’16 Production (28% oil) 281 MMBoe at YE’15 3 SEC Proved (25% oil) Reserves 138 MMBoe at Q3’16 (1) 2P locations: Undeveloped Proved and Probable ~20% higher at recent strip pricing (2) Excludes production related to noncontrolling interests (3) SandRidge reserves and PV-10 pro forma for WTO divestiture and net of noncontrolling interests as of 12.31.15, based on SEC pricing at that time ($46.79 / $2.59) 4
CREATING RESOURCE VALUE IN TWO BASINS • High-graded harvest and expansion of our Mid-Continent asset HARVEST & • Q4’16 Miss XRLs reduce 2016 average D&C from $1.9MM to $1.7MM per lateral, APPRAISE supporting competitive IRRs at Dec 2016 strip • ~1,300 producing horizontal wells, 3D seismic and improved reservoir characterization MID-CONTINENT • One rig active most of 2016 and 2017, with Miss and Meramec/Osage focus HIGH-GRADE – Production decline moderating as 2014-15 producers mature PLUS ADJACENT • MERAMEC/OSAGE Industry leading well costs and innovative multi and XRL development DRILLING IN THREE • Drilling adjacent plays including Meramec/Osage focused counties: Garfield, Major, and Woodward COUNTIES • Industry activity moving north and west surrounding our position • Growth in oil reserves and anticipated value per barrel via North Park Niobrara development DIVERSIFY • Achievable well costs (sub-$3MM per lateral D&C in 2017) support competitive IRRs • 1,300 proved and probable locations with significant near term PUD potential GROW OIL RATE AND • 100% XRL program in 2017 RESERVES IN NIOBRARA • Upside through more Niobrara benches, completion and spacing optimization, and lower well costs Net unlevered balance sheet 1 and strong liquidity provides financial flexibility UN-LEVERED • ~$536MM liquidity, ~$111MM of unrestricted cash, & undrawn $425MM revolver 2 – • Sub-$200MM 2017 CAPEX plan: 1 rig for part of year in each of Mid-Continent and Niobrara STRONG FINANCIAL • POSITION ~55% reduction in workforce since beginning of 2016 (1) Excluding mandatorily convertible notes (2) Pro Forma for debt pay down following emergence on 10.4.16 and excludes approximately $10MM of LOCs 5
SUB-$200MM 2017 CAPEX TARGETS ATTRACTIVE IRRS PLUS 2017 PUD ADDITIONS IN BOTH MID-CONTINENT AND NIOBRARA • Finish 2016’s successful high-graded Miss program – Late 2016 Miss XRLs (4 laterals total) at <$1.5MM D&C per lateral – Drilling technology and well cost reduction focus transfer to both Meramec /Osage and Niobrara • Appraise and confirm Meramec/Osage potential in three counties – Major, Garfield, and Woodward Counties – Potential for material PUD additions in 2017 • Develop and delineate North Park Niobrara Oil resource – Sub-$3MM D&C per lateral targeted in 2017 program (100% XRLs) – Potential for material PUD additions in 2017 6
2017 MERAMEC/OSAGE PROGRAM IN 3 OKLAHOMA COUNTIES POTENTIAL TO ADD MATERIAL LOCATIONS THROUGH MERAMEC/OSAGE DEVELOPMENT INDUSTRY ACTIVITY IS CONVERGING INDUSTRY ACTIVITY ON EXISTING SANDRIDGE ACREAGE ADJACENT TO SD ACREAGE SD Meramec/Osage activity in 3 counties: • Garfield Co: 1 Meramec well and 3 Osage wells producing in Garfield to be followed up by 1 Meramec XRL in 2017 • Major Co: 2 drilled wells confirmed Meramec and Osage production, to be followed up by 4 Meramec XRLs in 2017 • Woodward Co: Test Meramec/Osage in 2017 with 1 XRL adjacent to peer 2017 activity supports production appraisal of three counties 7
MID-CONTINENT OVERVIEW 458K NET ACRES IN OKLAHOMA, WITH MISSISSIPPIAN, CHESTER, AND MERAMEC/OSAGE PRODUCTION • SandRidge is a leading producer in the Mid-Continent KS • Stacked reservoirs on large acreage base OK – Mississippian – Chester/Manning – Meramec/Osage gaining industry attention • Miss Lime has been primary target – +/- 300’ thick carbonate at ~6,000’ TVD – Over 1,600 horizontal wells drilled in OK & KS since 2010 • Salt water disposal infrastructure – 1,095 miles of pipeline, connected to 136 active disposal wells • Electrical infrastructure – 1,250 miles of power lines, six substations and two micro grids 8
DURABLE IMPROVEMENT IN ECONOMICS MULTIS AND XRLS ARE A BREAKTHROUGH IN MISSISSIPPIAN D&C CAPEX, $MM PER LATERAL 90-DAY CUMULATIVE MBOE PER LATERAL Lower costs per lateral Results shown by groups of 50 wells -43% vs 2014 9
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