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    SD
    Earnings call· Jun 2026(Q2 FY26)

    SANDRIDGE ENERGY Q2 FY26 earnings call SD

    Aug 6, 2026 Source

    Executive summary

    SandRidge Energy Q2 FY26 — Strong Production Growth and Strategic Cherokee Acquisition

    SandRidge Energy delivered a strong second quarter, marked by double-digit production and revenue growth, driven by its operating development program and higher commodity prices. The company also announced a strategic bolt-on acquisition in the Cherokee play, expanding its footprint and inventory. A new target reservoir discovery shows promising initial results, offering future development optionality, while the company maintains a strong balance sheet with no debt and a commitment to shareholder returns.

    Highlights

    6

    • Production grew to 19.7 BOE per day, an 11% YoY increase, with oil production up 22%.

    • Revenue increased 48% YoY to $51 million.

    • Adjusted EBITDA rose 49% YoY to $34 million.

    • Successfully brought two wells online in Q2, with two more in July, and the fourth well drilled was the fastest and lowest cost to date.

    • Announced a bolt-on acquisition in the Cherokee play, adding 7,000 net acres and interest in 21 wells, with 30-day IP of >2100 BOE/day (58% oil) for acquired operated wells.

    • Discovered a promising new target in the Cherokee formation with initial 30-day average rate >10,000 MCF per day and >100 bbl/day oil, showing exceptionally flat production.

    Concerns

    2

    • Realized natural gas price fell meaningfully to $1.36 per MCF, primarily due to widening regional price differentials.

    • Anticipate continued pressure on diesel through fuel surcharges passed on through service providers.

    Guidance & targets

    3
    CategoryTargetConfidence
    2026 Capital Program
    $76 million to $97 million
    high materiality
    High
    Cherokee Wells Drilled
    10 wells
    medium materiality
    High
    Cherokee Wells Completed
    9 wells
    medium materiality
    High

    Operational metrics

    22
    Production volume
    19.711% year over year increase
    Q2 FY26
    Oil production growth
    22%year over year
    Q2 FY26
    Adjusted EBITDA
    $34 million49% increase year over year
    Q2 FY26
    Cash and restricted cash
    $115 million
    Q2 FY26
    Dividends paid
    $10.6 million
    Q2 FY26
    Cumulative dividends paid
    $5.05
    Since beginning of 2023
    Adjusted G&A
    $2.7 million
    Q2 FY26
    Adjusted net income
    $21 million
    Q2 FY26
    Total capital spend (excluding A&D)
    $16.3 million
    Q2 FY26

    Better than expected for the quarter, mostly due to activity timing.

    Lease operating expenses
    $10.3 million
    Q2 FY26
    Cherokee wells brought online
    2
    Q2 FY26
    Cherokee wells brought online
    2
    July 2026
    Cherokee wells drilled
    6
    YTD FY26
    Recompleted legacy well initial production rate
    1,400 MCF per day and 4 bbl per day
    Initial

    Exceeding expectations.

    Cherokee core area well peak 30-day average production rate
    2,000
    30-day average

    Consistent with surrounding wells.

    New target well initial 30-day average rate
    >10,000 MCF per day and >100 bbl per day
    30-day average
    New target well 90-day average rate
    11,000
    90-day average
    New target well cumulative production
    >1 billion
    After 100 days
    Federal net operating losses
    $1.5 billion
    Current

    Available to shield from income taxes.

    Production hedge coverage
    <30%
    2026 guidance midpoint
    Recordable safety incidents
    0
    >4.5 years

    Continuous record.

    Total personnel
    >100
    Past several years

    Industry KPIs

    5
    MetricValueDetails
    D c efficiency rig activityFourth well drilled was the fastest, lowest well cost to date
    Realized price differentialOil: $95.35 per barrel; Gas: $1.36 per MCF; NGL: $21.68 per barrelUSD
    Basin level production volume19.7BOE per day
    Cost of supply unit cash cost$5.73USD per BOE
    FCF shareholder distributions$10.6 millionUSD

    Deals & partnerships

    1
    UnknownAcquisition of certain producing assets and leasehold interests in the Cherokee Play.Not stated

    Includes proven undeveloped leasehold with four 2.5-mile wells and four 2-mile wells offsetting core position in Roger Mills County. Expands footprint and bolsters inventory. No plans to add personnel as a result.

    Capital programs

    1
    2026 Capital Programunderway$76 million to $97 million
    Period spend: $16.3 million
    Funding: Cash flows from operations
    Start: FY26

    Benefit: Drilling 10 and completing 9 Cherokee wells; capital workovers, production optimization, selective leasing.

    Comprised of $62 million to $80 million in drilling and completions activity and $14 million to $17 million in capital workovers, production optimization, and selective leasing in the Cherokee play. Q2 spend was better than expected due to activity timing.

    Risks & headwinds

    2
    Widening regional price differentials for natural gasQ2 FY26

    Realized natural gas price fell to $1.36 per MCF

    Mitigation: Hedged 37% of natural gas production; monitoring prices to take advantage of favorable opportunities.

    Pressure on diesel prices through fuel surchargesOngoing

    Not quantified

    Mitigation: Securing equipment and services; service providers have protocols to reduce surcharges when diesel prices decrease.

    What to watch in Q3 FY26

    3

    Cherokee acquisition closing

    Q3 FY26
    CurrentSigned agreement on June 29th
    TargetClosed

    Why it matters

    This acquisition expands the company's footprint, adds quality oil-weighted production, and bolsters inventory, impacting future growth and operational efficiency.

    We anticipate closing this acquisition in the third quarter and will then focus on integrating the new assets, applying our low-cost know-how to operations.

    2 min read6 chapters

    Detailed Narrative

    01

    Q2 Financial and Operational Highlights

    SandRidge reported strong Q2 FY26 results with revenue of $51 million, up 48% YoY, and adjusted EBITDA of $34 million, up 49% YoY. Production increased 11% YoY to 19.7 BOE per day, driven by the operating development program and higher commodity prices, with oil production specifically up 22%. The company maintains a strong balance sheet with $115 million in cash and no debt, and generated $42.4 million in cash flow from operations.

    02

    Cherokee Play Development

    The company successfully brought two wells online in Q2 from its one-rig Cherokee drilling program and two additional wells in July. The operations team continues to improve efficiency, with the fourth well drilled being the fastest and lowest cost to date. The 2026 capital program targets drilling 10 and completing 9 Cherokee wells, with estimated gross well costs between $9 million and $11 million, focusing on consolidating its position and extending development.

    03

    Strategic Bolt-on Acquisition

    SandRidge signed an agreement on June 29th to acquire producing assets and leasehold interests in the Cherokee Play, adding 7,000 net acres and interest in 21 wells, including four SandRidge-operated wells. The acquired operated wells have an average 30-day IP of over 2,100 BOE per day, 58% oil. This acquisition is expected to close in Q3 and will bolster the company's inventory and expand its mid-continent footprint, with no plans to add personnel.

    04

    New Target Reservoir Discovery

    A step-out well in the Cherokee formation tested a sub-member, yielding an initial 30-day average rate of over 10,000 MCF per day and over 100 barrels of oil per day. The 90-day average rate is approximately 11,000 MCFE per day, with cumulative production over 1 billion cubic feet after 100 days, showing exceptionally flat production. The company is assessing the long-term potential and stack pay opportunities, planning to be deliberate and patient in its evaluation.

    05

    Capital Allocation and Shareholder Returns

    The company continues to fund all 2026 capital expenditures and capital returns from operations. It paid $10.6 million in dividends in Q2, including a regular dividend of $0.13 per share and a special dividend of $0.20 per share. Since the beginning of 2023, SandRidge has paid $5.05 per share in dividends. The Board declared another $0.13 per share dividend payable on August 31st, 2026, reflecting its commitment to return of capital.

    06

    Cost Discipline and Efficiency

    SandRidge maintains its commitment to cost discipline, with adjusted G&A for the quarter at $2.7 million, or $1.52 per BOE, noted as peer-leading. Lease operating expenses were $10.3 million, or $5.73 per BOE, in line with expectations. The company is securing critical well components and equipment for the remainder of the year to minimize supply and inflationary pressures, particularly regarding diesel fuel surcharges.

    AI-generated summary of the company’s earnings call. Not investment advice.