Q4 2012 Earnings Call Transcript

Transcript Call Date 03/01/2013

Operator: Good day, ladies and gentlemen, and welcome to the Quarter Four 2012 SandRidge Energy Earnings Conference Call. My name is Lisa, and I'll be your operator for today. At this time, all participants are in a listen-only mode. We will conduct a question-and-answer session towards the end of this conference. As a reminder, this call is being recorded for replay purposes.

I would like to turn the call over to Mr. James Bennett, Chief Financial Officer. Please proceed, sir.

James D. Bennett - EVP and CFO: Thank you, Lisa. Welcome everyone and thank you for joining us on our fourth quarter and full year 2012 earnings call. This is James Bennett, Chief Financial Officer and with me today are Tom Ward, Chairman and Chief Executive Officer; Matt Grubb, President and Chief Operating Officer, and Kevin White, Senior Vice President of Business Development.

Keep in mind that today's call will contain forward-looking statements and assumptions, which are subject to risks and uncertainties and actual results, may differ materially from those projected in these forward-looking statements. Additionally, we will make reference to adjusted net income, adjusted EBITDA, and other non-GAAP financial measures. A reconciliation of any non-GAAP measures we discuss can be found in our earnings release and on our website.

Please note that today's call is intended to discuss SandRidge Energy and not our public royalty trust. Finally, earlier this morning, we filed our Form 10-K where you could find additional disclosures and information.

Now, let me turn the call over to Tom Ward.

Tom L. Ward - Chairman and CEO: Thank you, James. Welcome to our fourth quarter earnings and operational update. We have now surpassed consensus estimates for earnings per share in each of our last four quarters and EBITDA and production in three of the last four quarters, including the fourth quarter of 2012.

The Mississippian play continues to have strong production growth coupled with lower costs which is driving the better than anticipated results. We grew our Mississippian production to 35,900 Boe per day in the fourth quarter, which is a 19% quarter-over-quarter increase and up from 15,500 Boe per day a year ago. We drilled 10 wells in the fourth quarter with 30-day production average above 800 barrels oil equivalent per day. These wells were located in Alfalfa, Grant, and Woods counties, Oklahoma. Of these 10, five were above 1,000 barrels of oil equivalent per day and our best well was above 1,500 barrels of oil equivalents per day for the 30-day average. These 10 wells produced an average of 68% oil. We did not break out the liquids stream until after the start of 2013.

We've also announced the closing of our Permian sale, which has us in the strongest financial position in the Company's history, plus the Gulf of Mexico continues to perform above our projections.

As we enter 2013, SandRidge has two key goals, spending at or below our CapEx guidance and beating our production guidance. These goals are aligned with our core focus to drive rates of return higher in Mississippian, which we will achieve through improving the average production of new wells, leveraging our infrastructure and continuing to reduce both operating and capital costs.

Read our Earnings Call Transcript disclaimer.
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