What SandRidge Energy (SD) Said on Its Q3 Earnings Call

Key Points

• Third-quarter results improved significantly: Production rose 10% year over year to 20.9 thousand barrels of oil equivalent per day, revenue increased 37% to $54 million, and adjusted EBITDA climbed 44% to $39 million.
• SandRidge ended the quarter with about $70 million in cash and no debt; operating cash flow rose to $32 million, and the board declared a $0.13-per-share dividend.
• The nearly $48 million Cherokee acquisition added 21 producing wells and 7,000 acres, while drilling and operating costs face pressure from higher diesel prices and early inflation in services and materials.

SandRidge Energy NYSE: SD reported higher third-quarter production and revenue, as its Cherokee drilling program and a recently completed acquisition helped lift output from a year earlier.

Production averaged 20.9 thousand barrels of oil equivalent per day, up 10% year over year, while oil production increased 8%, Chief Financial Officer Jonathan Frates said on the company’s third-quarter 2026 earnings call. Revenue rose 37% to $54 million, and adjusted EBITDA increased 44% to $39 million.

Chief Executive Officer Grayson Pranin attributed the growth primarily to new operated production, higher oil prices and the Cherokee acquisition, which closed during the quarter. He said production, revenue and adjusted EBITDA were the highest they had been in five years.

Profit, cash flow and dividends

Net income was approximately $31 million, or $0.83 per share, compared with $16 million, or $0.44 per share, a year earlier. The latest quarter included a roughly $14 million tax benefit from revaluing deferred tax assets. Adjusted net income was $23.8 million, or $0.64 per share, up from $15.5 million, or $0.42 per share.

Cash flow from operations rose to $32 million from $25 million a year earlier. SandRidge ended the quarter with approximately $70 million in cash, including restricted cash, and had no debt. Frates said the company expects to fund all 2026 capital expenditures and capital returns with operating cash flow.

The board declared a $0.13-per-share dividend on November 3, payable November 30 to shareholders of record on November 19. SandRidge paid $4.8 million in dividends during the quarter, including $0.4 million paid in shares through its dividend reinvestment plan. Including special dividends, the company has paid $5.18 per share since the beginning of 2023, Frates said.

Adjusted general and administrative expenses fell to approximately $1.8 million, or $0.94 per barrel of oil equivalent, from $2.1 million, or $1.23 per barrel, a year earlier. The company maintained its full-year adjusted G&A expectation of $10 million to $12 million.

Cherokee acquisition adds production and acreage

SandRidge paid just under $48 million after customary adjustments for the Cherokee assets, Pranin said. The acquisition includes interests in 21 producing wells and 7,000 acres of leasehold, bringing the company’s Cherokee footprint to roughly 37,000 acres.

The acquired acreage contains eight to 10 high-confidence proven locations, depending on well configuration, according to Pranin. SandRidge plans to incorporate those locations into future development next year. Because the deal closed during the quarter, the acquired production contributed for only part of the period.

In response to a question from Third Avenue Management Senior Research Analyst Christopher Dowd, Pranin said production from the acquired assets was just over 2,000 barrels of oil equivalent per day, down from 3,000 barrels per day as of the May 1 effective date. He estimated the assets would add about 10% incrementally to production and roughly 5% to annual volumes, given the timing of the close.

Drilling plans and cost pressures

SandRidge brought three wells online during the third quarter and another in October, Chief Operating Officer Dean Parrish said. The company was completing one well and drilling the ninth of 10 planned Cherokee wells for the year. It expects to complete eight of the wells drilled in 2026, with the other two completions carrying into 2027.

Gross Cherokee well costs are estimated at $9 million to $11 million, depending on depth. SandRidge also plans to drill one operated horizontal well on its legacy acreage at an estimated gross cost of just under $3 million. Parrish said success could open additional development locations.

Quarterly capital spending, excluding acquisitions and divestitures, was $24.5 million. Parrish said higher diesel prices were putting pressure on costs and that the company was seeing early signs of inflation in some areas, including rig rates, tubulars and pressure pumping. He said SandRidge would use bidding, alternatives and efficiency measures to address those pressures.

Pranin said the company plans to focus its one-rig program on oil-weighted infill locations as it looks toward year-end and 2027, while retaining flexibility to adjust its drilling schedule. SandRidge recently added oil collars covering 475 barrels per day through the first half of 2027, with an $80 floor and $100 ceiling, Frates said.

About SandRidge Energy (NYSE:SD)

SandRidge Energy, Inc is an independent oil and natural gas exploration and production company headquartered in Oklahoma City, Oklahoma. The company focuses on acquiring, developing and operating oil and gas properties in the Mid-Continent region of the United States.

SandRidge's operations have historically centered on the Mississippian Lime formation, which extends across northern Oklahoma and southern Kansas. Its production portfolio includes crude oil, natural gas and natural gas liquids, supported by operated drilling, production and field-development activities.

Founded in 2006 by Tom Ward, SandRidge Energy became a publicly traded company and later completed a financial restructuring under Chapter 11 bankruptcy protection in 2016.

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