NOVEMBER 2016 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. www.sandridgeenergy.com 3
SANDRIDGE ENERGY OVERVIEW DE-LEVERED OIL PRODUCER FOCUSED ON VALUE CREATION KEY INFORMATION PRIMARY ASSETS 458k Mid-Continent Focus Net Acres Area ~300 2P 2 Locations 133k North Park Basin Net Acres Niobrara Oil ~1,300 2P 2 Locations PRODUCTION & RESERVES 49.6 MBoepd 3 Q3’16 Production (28% oil) 281 MMBoe 1 Proved Reserves (25% oil) (1) 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) (2) 2P locations: Undeveloped Proved and Probable (3) Excludes production related to noncontrolling interests 4
THE REORGANIZED SANDRIDGE ENERGY AS OF OCT. 31 ST COMMON • 20.6 MM common shares outstanding EQUITY • 14.8 MM issuable upon conversion of mandatorily convertible debt • 4.9 MM warrants at $41.34 strike price net share settled • 2.1 MM warrants at $42.03 strike price MANDATORILY $278MM 1 face value • CONVERTIBLE • Unsecured and mandatorily convertible into 14.8 MM shares DEBT • No interest 2 $425MM $536MM Liquidity • Undrawn 3 REVOLVING • Minimal covenants or borrowing base redeterminations for two years CREDIT • LIBOR (100 bps floor) + 475 bps rate FACILITY $111MM CASH • $111MM in unrestricted cash (1) $3.7 million par value converted as of October 31 st (2) Make-Whole applicable if note accelerated following an event of default (3) Pro Forma for debt pay down following emergence and excludes approximately $10MM of LOCs Note: In addition to the items above there will be a $35MM note secured by the Company’s non-oil and gas real property 5
OPERATIONAL HIGHLIGHTS & FULL YEAR CAPEX PLAN (1) A "lateral" is defined as a single one-mile section lateral whereas an “extended lateral” is defined as a two-mile lateral drilled across two sections, and a “multilateral” defined as two or more one-mile laterals drilled within a one-mile section (2) Calculated as the highest consecutive 30-Day average production rate during the early life of a well 6
DURABLE IMPROVEMENT IN ECONOMICS MULTI AND EXTENDED LATERALS ARE A BREAKTHROUGH IN MISSISSIPPIAN D&C CAPEX, $MM PER LATERAL 90-DAY CUMULATIVE MBOE PER LATERAL Results shown by groups of 50 wells Lower costs per lateral -37% vs 2014 7
MID-CONTINENT OVERVIEW DIVERSE ASSET WITH FOCUS EXPANDING BEYOND MISSISSIPPIAN INTERVAL IN OKLAHOMA • Stacked reservoirs combined with large acreage base • Appraising adjacent plays and additional zones • Miss Lime has been primary target – +/- 300’ thick carbonate at ~6,000’ TVD • Focus area concentrated within 458k net acres in OK • 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, injecting ~660 MBwpd • Electrical infrastructure – 1,250 miles of power lines, six substations and two micro grids • Field office is located in Alva, OK 8
MISSISSIPPIAN VALUE CREATION MULTI AND EXTENDED LATERALS PRESERVE COMPETITIVE RETURNS AT LOWER COMMODITY PRICES • Nine Mississippian laterals drilled in 2016 with 36% IRR 1 , all multi or extended laterals • Projected average 2016 D&C Capex per lateral of $1.9MM • 1 dual extended lateral: ( equivalent to 4 single laterals) • 1 full section development: ( equivalent to 3 single laterals) • 1 coplanar: ( equivalent to 2 single laterals) (1) Historical realized pricing + 11.2.16 NYMEX Strip and actual production + forecasted production 9
NORTH PARK NIOBRARA ASSET OVERVIEW DOMINANT ACREAGE POSITION WITH HIGH OIL CUT • Single lateral $4.0MM D&C Capex for 315 MBoe EUR • Extended lateral projected $7.0MM D&C Capex ($3.5MM per lateral) for 600 MBoe EUR • Eleven laterals drilled in 2016; five laterals with over 90 days of production; three laterals in early evaluation phase and three brought online in Q4’16 • Successfully drilled first extended lateral (two mile lateral) • Averaged 3.3 MBopd the second half of October • 60 drilling permits approved 28 MMBoe of proved reserves 1 (81% oil); 108 PUDs • • Stacked pay potential with over 1,300 2P locations • Large contiguous acreage position • Federal units largely eliminate near term HBP drilling requirements, ~75k net acres currently held by production or unit (56%) • Additional 33k net acres expected to be held by unit by year end 2017, for a total of ~108k net acres held by unit or production (81%) (1) SandRidge reserves as of 12.31.15, based on SEC pricing ($46.79 / $2.59) 10
INITIALLY TARGETING LOWER NIOBRARA SIMILAR GEOLOGIC CHARACTERISTICS TO THE DJ BASIN NIOBRARA BUT HIGHER OIL CUT NORTH PARK DJ BASIN BASIN Oil EUR % 81% 35% - 40% Depth 5,500 – 9,000 ft. 6,000 – 8,000 ft. Reservoir Storage Capacity Gross Thickness 450 – 480 ft. 150 – 300 ft. Porosity 6 – 9% 6 – 10% OOIP per Section 63.8 MMBo 41.3 MMBo Thermal Maturity (Ro) 0.75 – 1.0% 0.5 – 1.4+% Reservoir Production Potential > 0.55 psi/ft 0.41 - 0.60 psi/ft Reservoir Pressure 600 – 700 scf/stb Up to 10,000+ scf/stb Gas-oil Ratio (GOR) 3% 3% Total Organic Content 11
2016 SANDRIDGE NIOBRARA RESULTS 478 BOEPD (90% OIL) AVERAGE 30-DAY IP ON FIRST FIVE SANDRIDGE LATERALS FIRST FIVE SANDRIDGE LATERALS SIX LATERALS ONLINE IN LATE 2016 DESIGNED TO TEST • Cycle time reduction • Extended lateral • Additional bench • Spacing • Stimulation methods • Artificial lift methods 12
FIRST SANDRIDGE NIOBRARA LATERAL THE GREGORY 1-9H CONTINUES TO OUTPERFORM TYPE CURVE GREGORY 1-9H, 550 BOEPD (89% OIL) 30-DAY IP CUMULATIVE PRODUCTION OF 75 MBO AT 217 DAYS 13
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