SandRidge Energy Reports Mixed Q4 Earnings Results and Future Plans
Shares of SandRidge Energy, Inc. (SD) have increased by 4.4% following the announcement of 2024’s fourth-quarter earnings. This performance contrasts with the S&P 500 index, which saw a 3.5% decline during the same period. However, over the last month, the stock has dropped 4.6%, while the S&P 500 has decreased by 9.1%.
Financial Performance Overview
For the fourth quarter of 2024, SandRidge reported adjusted earnings per share of 34 cents, a decrease of 3% from 35 cents in the same quarter last year.
Total revenues for the fourth quarter were $38.97 million, reflecting a 14.6% increase from $34 million during the same period in the previous year. However, for the entire year, revenues totaled $125.3 million, a decline of 15.7% from $148.6 million in 2023. Net income saw a slight rise to $63 million ($1.70 per basic share) from $60.9 million ($1.65 per basic share) in 2023, benefiting from lower taxes. Adjusted EBITDA for 2024 stood at $69.5 million, down from $93.2 million in the prior year.
Production and Pricing Trends
In the fourth quarter of 2024, SandRidge produced 19.1 MBoe/d, marking a 19% increase year-over-year. Notably, oil production surged by 28%, driven by the company’s emphasis on higher-margin liquids.
On the pricing front, results were mixed. The average oil price realized was $71.44 per barrel, down from $77.53 a year earlier. For natural gas, prices averaged $1.47 per Mcf, just below the $1.50 recorded in Q4 2023. Meanwhile, NGL prices dipped to $18.19 per barrel from $21.05 in the same quarter last year.
Cost Management and Operational Efficiency
SandRidge maintains a strong focus on cost efficiency. For the fourth quarter of 2024, lease operating expenses (LOE) were $6.43 per Boe, a reduction from $6.73 in the fourth quarter of 2023. For the year, LOE totaled $40 million ($6.61 per Boe), indicating a nearly 3% decrease from the previous year.
General and administrative expenses (G&A) amounted to $3 million for the quarter and $11.7 million for the year. Adjusted G&A, excluding stock-based compensation, reached $2.4 million ($1.39 per Boe) for the quarter and $9.3 million ($1.54 per Boe) for the year, showcasing ongoing cost discipline.
Management Commentary and Strategic Focus
Executives from SandRidge emphasized a commitment to capital efficiency and strategic asset development. CEO Grayson Pranin cited the company’s growing activity in the Cherokee Shale play, noting that early results from three drilled but uncompleted wells fell below historical cost averages. Plans are in place to drill eight Cherokee wells and complete six in 2025.
Despite challenges from weak natural gas prices in 2024, management reported a solid $7.9 million in interest income from cash reserves, assisting in offsetting corporate G&A expenses and enhancing SandRidge’s capacity to fund capital expenditures without incurring debt.
Return on Investment and Capital Allocation
SandRidge is dedicated to returning value to shareholders via dividends and focused capital reinvestment. In 2024, the company distributed $16.4 million in regular dividends and $55.9 million in special dividends, totaling $72 million for the year. On March 7, 2025, the board of directors declared a cash dividend of 11 cents per share, set to be paid on March 31 to shareholders of record as of March 20.
The company concluded 2024 with $99.5 million in cash and equivalents, reporting no outstanding debt. This robust financial position provides management with flexibility to support organic growth, pursue acquisitions, and continue shareholder distributions.
Looking Ahead: 2025 Projections
For 2025, SandRidge forecasts total production between 5.9 MMBOE and 7.1 MMBOE, with expectations for oil volumes to grow as the company advances its Cherokee Shale drilling initiatives. Capital expenditure is projected to range between $66 million and $85 million, with $47-$63 million earmarked for drilling and completions, and $19-$22 million for workovers and lease acquisitions.
Anticipated lease operating expenses sit between $42 million and $50 million, while adjusted G&A expenses are expected to be $10-$12 million. Price realizations are projected to reach 97-98% of WTI for oil, 25-30% of WTI for NGLs, and 50-70% of Henry Hub for natural gas.
Recent Strategic Moves
In December 2024, SandRidge completed a second acquisition in the Cherokee Shale, increasing its interest in certain proved and unproved properties for $5.7 million while terminating a previously planned joint development agreement. This strategic maneuver enables the company to optimize its development efforts and gain greater control over its assets.
Conclusion
SandRidge’s fourth-quarter report illustrates a commendable operational performance amid commodity price fluctuations. Although revenues and earnings did not meet expectations, the company achieved strong production growth, maintained effective cost control, and adhered to a disciplined capital allocation strategy. With a debt-free balance sheet and healthy cash reserves, SandRidge is on track for long-term value creation for its shareholders.
Research Chief Picks Top Stock with High Potential
Among thousands of stocks, five Zacks experts have identified their favorites, predicting a potential rise of +100% or more in the coming months. From these, Director of Research Sheraz Mian has selected one as having the greatest upside.
This company targets the millennial and Gen Z markets, generating nearly $1 billion in revenue last quarter alone. A recent pullback presents an excellent buying opportunity. While not every pick guarantees success, this one may exceed others like Nano-X Imaging, which surged +129.6% in just over nine months.
Free: See Our Top Stock And 4 Runners Up
Download Zacks’ latest recommendations including 7 Best Stocks for the Next 30 Days.
SandRidge Energy, Inc. (SD): Free Stock Analysis Report
Originally published on Zacks Investment Research.
The views and opinions expressed herein are those of the author and do not necessarily reflect those of Nasdaq, Inc.
