SD SandRidge Energy Inc

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

 

 

FORM 8-K

 

 

CURRENT REPORT

Pursuant to Section 13 or 15(d)

of the Securities Exchange Act of 1934

 

Date of report (Date of earliest event reported): August 30, 2024

 

 

SANDRIDGE ENERGY, INC.

(Exact Name of Registrant as Specified in Charter)

 

 

Delaware		1-33784		20-8084793
(State or Other Jurisdiction of Incorporation or Organization)		(Commission File Number)		(I.R.S. Employer Identification No.)

 

1 E. Sheridan Ave., Suite 500

Oklahoma City, OK 73104

(Address of Principal Executive Offices)

 

(405) 429-5500

Registrant’s Telephone Number, Including Area Code

 

Not Applicable.

(Former name or former address, if changed since last report)

 

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

 

☐	Written communication pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

☐	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

☐	Pre-commencement communication pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

☐	Pre-commencement communication pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class		Trading Symbol(s)		Name of each exchange on which registered
Common Stock, $0.001 par value		SD		New York Stock Exchange

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2 of this chapter).

 

Emerging growth company ☐

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

 

 

 

Item 1.01. Entry into a Material Agreement.

 

The information set forth in Item 2.01 of this Current Report on Form 8-K is incorporated herein by reference into this Item 1.01.

 

Item 2.01. Completion of Acquisition or Disposition of Assets.

 

On August 30, 2024, SandRidge Exploration and Production, LLC (the “Purchaser”), a Delaware limited liability company and a wholly owned subsidiary of SandRidge Energy, Inc. (the “Company”), Upland Exploration, LLC, a Texas limited liability company, and Upland Operating, LLC, an Oklahoma limited liability company (together with Upland Exploration, LLC, collectively, the “Seller”) closed the transactions (the “Transactions”) contemplated by the previously announced Purchase and Sale Agreement, dated July 29, 2024 (the “PSA”) and the Purchaser purchased certain of Seller’s interests in oil and gas properties, rights, and related assets in the Cherokee play of the Western Anadarko Basin (the “Assets”) for $144 million, subject to customary purchase price adjustments (the “Closing”) and subject to final post-closing settlement between Purchaser and Seller. The Company funded the closing payment with cash on hand.

 

On August 30, 2024, and in connection with the Closing, the Purchaser and the Seller entered into an Amendment (the “Amendment”) to the PSA, to, among other things, amend the defined term “Assets” to include additional wells and leases, as well as certain definitions in the “Holdback Matters.”

 

The foregoing description of the Amendment and the transactions contemplated thereby does not purport to be complete and is qualified in its entirety by reference to the full text of the Amendment, a copy of which is filed as Exhibit 10.1 to this Current Report on Form 8-K and is incorporated herein by reference.

 

Item 7.01. Regulation FD Disclosure.

 

On September 3, 2024, the Company issued a press release, attached hereto as Exhibit 99.1, announcing the Closing of the Transactions (the “Press Release”). A copy of the Press Release is furnished as Exhibit 99.1 hereto and is incorporated herein by reference.

 

The information and exhibit set forth in this Item 7.01 shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall by expressly set forth by specific reference in such filing.

 

Item 9.01. Financial Statements and Exhibits

 

(d) Exhibits

 

Exhibit Number		Description
10.1		Amendment to Purchase and Sale Agreement, dated August 30, 2024 by and among SandRidge Exploration and Production, LLC, SandRidge Energy, Inc., Upland Exploration LLC and Upland Operating, LLC.*
99.1		Press Release, dated September 3, 2024
104		Cover Page Interactive Data File (embedded within the Inline XBRL document)

 

*	Exhibits and Schedules have been omitted pursuant to Item 601(b)(2) of Regulation S-K. The Company agrees to furnish a supplemental copy of any such omitted Exhibit or Schedules to the Securities and Exchange Commission upon request.

 

 

SIGNATURE

 

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned, hereunto duly authorized.

 

	SandRidge Energy, Inc.
Dated: September 3, 2024	By:	/s/ Brandon Brown
	Name:	Brandon Brown
	Title:	Senior Vice President and Chief Financial Officer

 

 

2

Exhibit 10.1

 

FIRST Amendment

to

Purchase and Sale Agreement

 

This First Amendment to Purchase and Sale Agreement (this “Amendment”) is made and entered into as of August 30, 2024, by and among UPLAND EXPLORATION, LLC, a Texas limited liability company (“Exploration”), Upland Operating, LLC, an Oklahoma limited liability company (“Operating” and together with Exploration, collectively, “Seller”), and SANDRIDGE EXPLORATION AND PRODUCTION, LLC, a Delaware limited liability company (the “Purchaser”). Seller and Purchaser are sometimes hereinafter referred to individually as a “Party” and collectively as the “Parties”.

 

WHEREAS, reference is made to that certain Purchase and Sale Agreement, dated as of July 29, 2024, by and among the Seller and Purchaser (as the same may be amended, amended and restated, modified or supplemented from time to time, the “Purchase and Sale Agreement”). Capitalized terms used but not otherwise defined herein shall have the meanings ascribed to such terms in the Purchase and Sale Agreement.

 

WHEREAS, the Parties desire to amend the Purchase and Sale Agreement in the manner and upon the terms and conditions of this Amendment.

 

NOW, THEREFORE, for good and valuable consideration, the receipt of which is hereby acknowledged, the Parties agree as follows:

 

Section 1. Defined Terms. Capitalized terms used but not defined herein shall have the meanings ascribed to such terms in the Purchase and Sale Agreement.

 

Section 2. Amendments to the Purchase and Sale Agreement. The Purchase and Sale Agreement is amended as follows on the date hereof:

 

(a) The following parenthetical is added to the Preamble of the Purchase and Sale Agreement immediately after “Upland Exploration, LLC, a Texas limited liability company” and immediately before “(“Exploration”)”:

 

“(doing business in the State of Oklahoma as Upland Exploration Oklahoma, LLC)”

 

(b) The following definitions are hereby added to Section 1.1 of the Purchase and Sale Agreement in the appropriate alphabetical order:

 

“Keahey Leases” is defined in clause (c) of the definition of “Assets.”

 

“Keahey Wells” is defined in clause (c) of the definition of “Assets.”

 

“PV-10” is defined on Schedule 7.16(d).

 

 

“Rams Well” means that certain non-producing well known as the RAMS #1H-17R well, PUN: 045-121186-0-000, located in Section 17-T20N-R25W, Ellis County, Oklahoma.

 

“Troubadour Matter” means, with respect to the Troubadour Well, any difference between (a) the PV-10 of Seller’s interest in the Troubadour Well as of the Effective Time determined pursuant to Section 7.16(d) and (b) the Allocated Value of the Troubadour Well set forth on Exhibit A-2, Part A.

 

“Troubadour Release Date” is defined in Section 7.16(d).

 

“Troubadour Well” means that certain Hydrocarbon well set forth on Exhibit A-2, Part A (Troubadour 5/32 2H in Roger Mills, Oklahoma).

 

“Troubadour Well Holdback Amount” is defined in Section 7.16(d).

 

(c) The following clause (r) is hereby added to the definition of Assets in Section 1.1 of the Purchase and Sale Agreement to read as follows:

 

“(r) the wellbore of the Rams Well, together with all Hydrocarbons produced from or allocated to the Rams Well after the Effective Time, if any, and all other rights and interests of Seller of any kind or character (whether legal or equitable, vested or contingent) that relate to, or arise from, the Rams Well, or the ownership or operation thereof (including for the avoidance of doubt, any Plugging and Abandonment obligations with respect to the Rams Well);”

 

(d) The following clauses in the definition of Assets in Section 1.1 of the Purchase and Sale Agreement are hereby amended and restated in their entirety to read as follows:

 

“(c) (i) an undivided seventy percent (70%) of Seller’s right, title and interest (A) in and to the wellbore of the Hydrocarbon well described on Exhibit A-2, Part C (the “Jana M Well”), which seventy percent (70%) interest is set forth in the row identified as “1” on Exhibit A-2, Part C and (B) in, under and derived from the Hydrocarbon leases described on Exhibit A-1, Part C (the “Jana M Leases”), together with an undivided seventy percent (70%) of all other interests of Seller of any kind or character (whether legal or equitable, vested or contingent) in the Jana M Leases that relate to the Jana M Well; (ii) subject to Section 7.19, the right to acquire, when earned, an undivided seventy percent (70%) of Seller’s right, title and interest (A) in and to the Jana M Well expected to be earned by Seller under the Farmout, which seventy percent (70%) interest is set forth in the row identified as “2” on Exhibit A-2, Part C and (B) in, under and derived from the Hydrocarbon leases expected to be earned by Seller under the Farmout with respect to the Jana M Well (such Hydrocarbon leases, the “Additional JM Leases”), together with an undivided seventy percent (70%) of all other interests of Seller of any kind or character (whether legal or equitable, vested or contingent) in the Additional JM Leases, when earned, that relate to the Jana M Well; and (iii) an undivided seventy percent (70%) of Seller’s right, title and interest (A) in and to the wellbore of all Hydrocarbon wells described on Exhibit A-2, Part D (the “Keahey Wells”) and (B) in, under and derived from the Hydrocarbon leases described on Exhibit A-1, Part E (the “Keahey Leases”), together with an undivided seventy percent (70%) of all other interests of Seller of any kind or character (whether legal or equitable, vested or contingent) in the Keahey Leases that relate to the Keahey Wells;”

 

 

“(e) all rights and interests in, under or derived from all unitization and pooling agreements, declarations and orders in effect (collectively, the “Unitizations”) with respect to (i) (A) the Leases, (B) the Wells, (C) the Other Wells and the units created thereby (other than the DSU’s), (D) the DSU Leases and (E) the DSU’s; and (ii) in accordance with clause (c), an undivided seventy percent (70%) of Seller’s right, title and interest in the Unitizations with respect to (A) the Jana M Leases, (B) the Additional JM Leases, (C) the Jana M Well, (D) the Keahey Wells and (E) the Keahey Leases (the oil and gas assets described in clause (a), clause (b), clause (c), clause (d) and clause (e) of “Assets”, collectively, the “Oil and Gas Properties”);”

 

“provided, however, with respect to such items in clause (f), clause (g), clause (i), clause (j), clause (k), clause (n), clause (o), clause (p) and clause (q) to be conveyed to Purchaser shall, in each case, be (x) an undivided seventy percent (70%) of Seller’s right, title and interest INSOFAR AND ONLY INSOFAR as they relate to the Jana M Leases, the Additional JM Leases, the Jana M Well, the Keahey Leases and the Keahey Well conveyed to Purchaser in accordance with clause (c) and (y) with respect to the DSU Leases and DSU’s, INSOFAR AND ONLY INSOFAR as such items relate to the interests conveyed to Purchaser in the DSU Leases and such DSU or are located within the boundaries of a DSU.”

 

(e) Section 7.16(a) of the Purchase and Sale Agreement is hereby amended and restated in its entirety to read as follows:

 

“(a) From the Closing Date until the date that is twelve (12) months after such date, one of the Seller Entities shall remain Solvent in order to support Seller’s indemnification obligations in Article 12, the special warranty of Defensible Title in the Conveyances, the Troubadour Matter (subject to Section 7.16(d)), and any post-Closing payments owing to Purchaser pursuant to Section 2.6, if any (the “Holdback Matters”); provided, however, notwithstanding anything in this Agreement to the contrary, from and after the date on which the final Adjusted Purchase Price pursuant to Section 2.6(b) is fully resolved and paid, the Holdback Matters shall not be deemed to include any post-Closing payments owing to Purchaser pursuant to Section 2.6.”

 

(f) Section 7.16(d) of the Purchase and Sale Agreement is hereby amended and restated in its entirety to read as follows:

 

“(d) Except as set forth on Schedule 7.16(d), on the first Business Day following the ninetieth (90th) day after the Closing (the “Holdback Date”), Purchaser and Seller shall jointly execute and deliver to the Escrow Agent written instructions instructing the Escrow Agent to release and deliver the Troubadour Well Holdback Amount (as defined on Schedule 7.16(d)) in accordance with the terms and on the conditions set forth on Schedule 7.16(d).

 

(g) Schedule 7.16(d) of the Disclosure Schedules is hereby amended and restated in its entirety as set forth on Schedule 7.16(d) attached hereto.

 

(h) Exhibit A-1, Part A (PDP Leases) to the Purchase and Sale Agreement is hereby replaced in its entirety with Exhibit A-1, Part A (PDP Leases) attached hereto.

 

 

(g) Exhibit A-1, Part E (Keahey Leases) attached hereto is hereby added to the Purchase and Sale Agreement as a new Exhibit A-1, Part E (Keahey Leases).

 

(h) Exhibit A-2, Part A (PDP Wells) to the Purchase and Sale Agreement is hereby replaced in its entirety with Exhibit A-2, Part A (PDP Wells) attached hereto.

 

(i) Exhibit A-2, Part B (DUC Wells) to the Purchase and Sale Agreement is hereby replaced in its entirety with Exhibit A-2, Part 2 (DUC Wells) attached hereto.

 

(j) Exhibit A-2, Part D (Keahey Wells) attached hereto is hereby added to the Purchase and Sale Agreement as a new Exhibit A-2, Part D (Keahey Wells).

 

(k) Exhibit A-3 (DSUs) to the Purchase and Sale Agreement is hereby replaced in its entirety with Exhibit A-3 (DSUs) attached hereto.

 

Section 3. Entire Agreement. This Amendment (together with the Purchase and Sale Agreement and the Exhibits and Schedules to the Purchase and Sale Agreement (as amended hereunder)) constitutes the entire agreement among the Parties with respect to the amendments dealt with herein. All previous documents, undertakings and agreements, whether oral, written or otherwise, among the Parties with respect to the amendments herein are hereby cancelled and superseded and shall not affect or modify any of the terms or obligations set forth in this Amendment. Upon the execution of this Amendment by the Parties, this Amendment shall be binding upon and inure to the benefit of the Parties.

 

Section 4. Limited Effect. This Amendment is limited in effect and, except as specifically set forth above, shall apply only as expressly set forth in this Amendment and shall not constitute a consent, waiver, modification, approval, amendment or consent of any other provision of the Purchase and Sale Agreement. Nothing herein shall limit in any way the rights and remedies of the Parties under the Purchase and Sale Agreement. The Purchase and Sale Agreement, as amended by this Amendment, shall continue in full force and effect, and the Purchase and Sale Agreement, as modified by this Amendment, is hereby ratified and confirmed by the Parties in all respects. By executing this Amendment, each Party certifies on its own behalf that this Amendment has been executed and delivered in compliance with Section 13.7 of the Purchase and Sale Agreement.

 

Section 5. Incorporation by Reference. Section 7.7 (Closing Efforts and Further Assurances) and Article 13 (Miscellaneous) of the Purchase and Sale Agreement are hereby incorporated by reference as if fully set forth in this Amendment mutatis mutandis.

 

Section 6. Counterparts and Facsimile or Electronic Mail Execution. This Amendment may be executed in any number of counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument, and any of the Parties hereto may execute this Amendment by signing any such counterpart. Delivery of an executed counterpart of this Amendment by facsimile or by electronic mail or other electronic imaging means shall be equally as effective as delivery of an original executed counterpart of this Amendment.

 

[SIGNATURE PAGES FOLLOW]

 

 

IN WITNESS WHEREOF, the Parties have caused this Amendment to be duly executed and delivered as of the date first above written.

 

	PURCHASER:
	SANDRIDGE EXPLORATION AND PRODUCTION, LLC
	By:	/s/ Grayson R. Pranin
	Name:	Grayson R. Pranin
	Title:	President and CEO

 

[Signature Page to First Amendment to Purchase and Sale Agreement]

 

 

	SELLER:
	UPLAND EXPLORATION, LLC
	By:	/s/ David R. Watts
	Name:	David R. Watts
	Title:	President
	UPLAND OPERATING, LLC
	By:	/s/ David R. Watts
	Name:	David R. Watts
	Title:	President

 

[Signature Page to First Amendment to Purchase and Sale Agreement]

 

Exhibit 99.1

 

NEWS RELEASE

 

SANDRIDGE ENERGY, INC. ANNOUNCES CLOSING OF WESTERN ANADARKO BASIN
ACQUISITION AND UPDATES FULL-YEAR 2024 GUIDANCE

 

Oklahoma City, Oklahoma, September 3, 2024 /PRNewswire/ – SandRidge Energy, Inc. (the “Company” or “SandRidge”) (NYSE: SD) today announced the closing of its previously announced acquisition of certain producing assets and leasehold interests in the Cherokee play of the Western Anadarko Basin for $144 million, before customary purchase price adjustments. The Company funded the transaction with cash on hand. SandRidge also provided updated guidance for the full-year 2024, incorporating contributions from the new producing assets and joint development program, and made available an investor presentation regarding the acquisition on its website at  investors.sandridgeenergy.com.

 

Full-Year 2024 Guidance Update

 

Presented in the table below is the Company’s updated operational and capital expenditure guidance for 2024⁽¹⁾:

 

			Prior 2024E Guidance(2)				Updated 2024E Guidance(3)
Production
Oil (MMBbls)			0.7 - 0.9				0.8 – 1.1
Natural Gas Liquids (MMBbls)			1.3 - 1.7				1.6 – 1.9
Total Liquids (MMBbls)			2.0 - 2.6				2.4 – 3.0
Natural Gas (Bcf)			16.2 - 19.8				17.7 – 20.5
Total Production (MMBoe)			4.7 - 5.9				5.4 – 6.4
Total Capital Expenditures
Drilling & Completions (“D&C”)			-				$17 - $20 million
Production Optimization, Leasehold and other non-D&C			$8 - $11 million				$16 - $19 million
Total Capital Expenditures			$8 - $11 million				$33 - $39 million
Expenses
Lease Operating Expenses (“LOE”)			$35 - $43 million				$36 - $43 million
Adjusted General & Administrative (“G&A”) Expenses(4)			$8 - $11 million				$8.5 – $11 million
Severance and Ad Valorem Taxes (% of Revenue)			6% - 7%				6% - 7%

 

Updated 2024E Guidance Highlights

 

●

LOE and G&A decreasing on a $/Boe basis combined with increased asset base and expanded activity

 

●

Production and Revenue are benefited from the Western Anadarko Basin acquisition for September through December period(3), with additional benefit in 2025 and beyond

 

●

D&C Capex is based on the completion of 4 drilled uncompleted (“DUC”) wells and the initiation of a drilling campaign including up to 3 new wells by year end

 

●

Non-D&C / Production Optimization Capex includes rod pump conversions, NW Stack heel fracs, leasing in focused areas and other projects

 

 

Investor Presentation

 

The Company made available an investor presentation regarding the transaction on its website at  investors.sandridgeenergy.com.

 

Legal Advisor

 

Winston & Strawn LLP is serving as SandRidge’s legal advisor for the transaction.

 

Contact Information

 

Investor Relations

SandRidge Energy, Inc.

1 E. Sheridan Ave. Suite 500

Oklahoma City, OK 73104

investors@sandridgeenergy.com

 

About SandRidge Energy, Inc.

 

SandRidge Energy, Inc. (NYSE: SD) is an independent oil and gas company engaged in the development, acquisition, and production of oil and gas assets. Its primary area of operations is the Mid-Continent and Western Anadarko regions in Oklahoma, Texas, and Kansas. Further information can be found at sandridgeenergy.com.

 

(1)	No change to 2024E guidance for commodity price differentials versus what was provided on March 6, 2024.
(2)	As disclosed on March 6, 2024.
(3)	July and August production and revenue will be reported as a negative adjustment to the gross purchase price as a result of a transaction effective date of July 1, 2024.
(4)	Adjusted G&A excludes stock-based compensation.

 

 

Cautionary Note to Investors - This press release 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 forward-looking statements are neither historical facts nor assurances of future performance and reflect SandRidge’s current beliefs and expectations regarding future events and operating performance. The forward-looking statements include projections and estimates of the Company’s corporate strategies, anticipated financial impacts of the transaction, future operations, development plans and appraisal programs, drilling inventory and locations, estimated oil, natural gas and natural gas liquids production, 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 performance and anticipated benefits of the acquired interests, the volatility of oil and natural gas prices, our success in discovering, estimating, developing and replacing oil and natural gas reserves, actual decline curves and the actual effect of adding compression to natural gas wells, the availability and terms of capital, the ability of counterparties to transact with us to meet their obligations, our timely execution of hedge transactions, credit conditions of global capital markets, changes in economic conditions, the amount and timing of future development costs, the availability and demand for alternative energy sources, regulatory changes, including those related to carbon dioxide and greenhouse gas emissions, 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 and in comparable “Risk Factor” sections of our Quarterly Reports on Form 10-Q filed after such form 10-K. All of the forward-looking statements made in this press release 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, except as required by law.

 

SandRidge Energy, Inc. (NYSE: SD) is an independent oil and gas company engaged in the development, acquisition and production of oil and gas properties. Its primary area of operations is the Mid-Continent and Western Anadarko regions in Oklahoma, Texas, and Kansas. Further information can be found at www.sandridgeenergy.com.

 

 

3

 

v3.24.2.u1

Cover	Aug. 30, 2024
Cover [Abstract]
Document Type	8-K
Amendment Flag	false
Document Period End Date	Aug. 30, 2024
Entity File Number	1-33784
Entity Registrant Name	SANDRIDGE ENERGY, INC.
Entity Central Index Key	0001349436
Entity Tax Identification Number	20-8084793
Entity Incorporation, State or Country Code	DE
Entity Address, Address Line One	1 E. Sheridan Ave.
Entity Address, Address Line Two	Suite 500
Entity Address, City or Town	Oklahoma City
Entity Address, State or Province	OK
Entity Address, Postal Zip Code	73104
City Area Code	405
Local Phone Number	429-5500
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Title of 12(b) Security	Common Stock, $0.001 par value
Trading Symbol	SD
Security Exchange Name	NYSE
Entity Emerging Growth Company	false

---