SandRidge Energy Q2 Earnings Call Highlights

Key Points

• Strong second-quarter performance: Production rose 11% year over year to 19.7 MBOE per day, while revenue increased 48% to more than $51 million and adjusted EBITDA climbed 49% to $34 million. Operating cash flow nearly doubled to $42.4 million.
• Debt-free with shareholder returns: SandRidge ended the quarter with about $115 million in cash and no debt, paid $10.6 million in dividends, and declared another $0.13-per-share dividend. The company expects operating cash flow to fund 2026 capital spending and distributions.
• Cherokee expansion remains central to growth: SandRidge plans to drill 10 operated Cherokee wells in 2026 and expects its pending acquisition to add 7,000 net leasehold acres and interests in 21 wells. Recent Cherokee wells delivered strong production, including a step-out well averaging about 11,000 Mcfe per day over 90 days.

SandRidge Energy NYSE: SD reported higher second-quarter production, revenue and cash flow, supported by its operated Cherokee development program and stronger oil prices, while outlining plans to expand its position in the Mid-Continent through a bolt-on acquisition.

Chief Executive Officer Grayson Pranin said the company delivered a “strong quarter and first half,” with year-over-year growth in production and revenue. He also highlighted the announced Cherokee Play transaction, which is expected to add oil-weighted production and additional development inventory.

Production and Financial Results

Executive Vice President and Chief Financial Officer Jonathan Frates said total production reached 19.7 MBOE per day during the quarter, up 11% year over year on a barrel-of-oil-equivalent basis. Oil production increased 22% from the comparable period a year earlier.

Revenue totaled just over $51 million, up 48% year over year, while adjusted EBITDA rose 49% to $34 million. Net income was approximately $27 million, or $0.72 per common share, compared with $19.6 million, or $0.53 per share, in the prior-year period. Adjusted net income was about $21 million, or $0.57 per share, versus $12.2 million, or $0.33 per share, a year earlier.

Cash flow from operations increased to $42.4 million from $22.9 million in the year-earlier quarter. Adjusted operating cash flow was $34.6 million, compared with $25.6 million in the second quarter of 2025.

Oil averaged roughly $95 per barrel during the period, Frates said, while natural gas prices fell to just above $3. Before hedges, SandRidge realized $95.35 per barrel of oil, $1.36 per Mcfe of natural gas and $21.68 per barrel of natural gas liquids. The company said its gas realization declined meaningfully from the first quarter, primarily due to widening regional price differentials.

SandRidge ended the quarter with approximately $115 million in cash, including restricted cash, or about $3.09 per common share outstanding. The company reported no debt and said it expects to fund its 2026 capital expenditures and shareholder returns from operating cash flow.

Dividends and Hedging

The company paid $10.6 million in dividends during the quarter, including its regular quarterly dividend of $0.13 per share and a previously announced one-time special dividend of $0.20 per share. Including special dividends, SandRidge said it has paid $5.05 per share in dividends since the beginning of 2023.

On Aug. 4, 2026, the board declared another $0.13-per-share dividend, payable Aug. 31 to shareholders of record as of Aug. 19. Shareholders may elect cash or additional common shares through the company’s dividend reinvestment plan.

Frates said the company has hedged just under 30% of the midpoint of its 2026 production guidance using swaps and collars. That includes 37% of expected natural gas production and 43% of oil production.

Cherokee Operations and Capital Program

Chief Operating Officer Dean Parrish said second-quarter capital spending, excluding acquisitions and divestitures, was $16.3 million, below expectations largely because of activity timing. The company attributed lower costs in part to a competitive bidding process for drilling and completion work in the Cherokee Play, as well as improved artificial-lift run times.

Lease operating expense was $10.3 million, or $5.73 per BOE, in line with expectations. Adjusted general and administrative expense was $2.7 million, or $1.52 per BOE, compared with $2.4 million, or $1.48 per BOE, in the second quarter of 2025.

SandRidge brought two wells online during the quarter and two additional wells online in July. It was drilling the sixth of 10 planned Cherokee wells for 2026 at the time of the call. Parrish said the fourth well drilled in the program was the company’s fastest and lowest-cost well to date.

The company also recompleted a shut-in legacy well in an uphole zone, which produced initially at 1,400 Mcfe per day and 4 barrels of oil per day, exceeding expectations, according to Parrish.

• SandRidge plans to drill 10 operated Cherokee wells and complete nine during 2026.
• One completion is expected to carry into 2027.
• Estimated gross well costs range from approximately $9 million to $11 million, depending on depth.
• The 2026 capital program is projected at $76 million to $97 million, including $62 million to $80 million for drilling and completions.

Cherokee Acquisition and Development Results

Pranin said SandRidge signed an agreement on June 29 to acquire producing assets and leasehold interests in the Cherokee Play. The transaction would add 7,000 net leasehold acres and interests in 21 wells, including interests in four SandRidge-operated wells.

The acquired undeveloped leasehold includes four two-and-a-half-mile wells and four two-mile wells that offset SandRidge’s core position in Roger Mills County. The operated producing wells being acquired had an average 30-day initial production rate of more than 2,100 BOE per day, with oil representing 58% of production, according to Pranin.

The company expects the acquisition to close in the third quarter and does not currently plan to add employees as a result of the transaction.

One Cherokee Shale well brought online during the quarter reached a peak 30-day average rate of about 2,000 BOE per day, consistent with nearby wells, Pranin said. A separate step-out well targeting a sub-member below the Cherokee Shale produced more than 10,000 Mcfe per day and more than 100 barrels of oil per day over its initial 30 days. Its 90-day average was approximately 11,000 Mcfe per day, with cumulative production exceeding 1 billion cubic feet after 100 days.

SandRidge said it is still assessing long-term recoveries and whether the new target could support stacked-pay development opportunities, but plans to remain deliberate as it gathers additional production history.

About SandRidge Energy (NYSE:SD)

SandRidge Energy, Inc NYSE: SD is an independent exploration and production company focused on the development of onshore oil and natural gas resources in the United States. The company concentrates its operations primarily in the Anadarko Basin, applying horizontal drilling and multi-stage hydraulic fracturing techniques to exploit unconventional reservoirs. SandRidge's asset portfolio includes both crude oil and natural gas liquids, complemented by associated gas production, with infrastructure investments designed to optimize midstream availability and enhance capital efficiency.

Founded in 2006 by industry veteran Tom L.

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