SandRidge Energy signals continued Cherokee play expansion with 8-well 2025 drilling plan amid robust oil production growth

Earnings Call Insights: SandRidge Energy (SD) Q3 2025

MANAGEMENT VIEW

* Grayson Pranin, President, CEO & Director, opened by reporting "a positive quarter for the company," highlighting that third quarter production averaged approximately 19 MBoe per day, a 12% increase on a Boe basis and 49% on oil, which translated to a 32% increase in revenue and a 54% increase in adjusted EBITDA relative to the same period last year. These gains were attributed to increased volumes from the prior Cherokee acquisition and development program.
* Jonathan Frates, Executive VP & CFO, stated, "The company continued to grow production, generating revenues of approximately $40 million, which represents a 32% increase compared to the same period last year. Adjusted EBITDA was $27.3 million in the quarter compared to $17.7 million in the prior year period." He also noted, "At the end of the quarter, cash, including restricted cash, was approximately $103 million, which represents approximately $2.80 per common share outstanding." Frates also highlighted the company’s ongoing share repurchase program with $68.3 million remaining authorized and no debt outstanding.
* Dean Parrish, Senior VP & COO, reported, "During the third quarter, the company successfully completed and brought online 3 wells from our operated 1-rig Cherokee drilling program... The first well in the program has now produced approximately 275,000 Boe in its first 170 days of production, demonstrating strong rates beyond the initial 30 days, which indicates attractive recovery trends."

OUTLOOK

* Management plans to drill 8 operated Cherokee wells with 1 rig this year and complete 6 wells, with 2 completions carrying over into next year. Capital expenditures for 2025 are projected between $66 million and $85 million, including $47 million to $63 million in drilling and completions activity.
* Pranin indicated, "We anticipate growing oilier production volumes further. From a timing perspective, we expect to deliver 2 more wells to sales this year with another 2 completions carrying over into next year. This, combined with further drilling, could see production volumes, specifically oil volumes increasing meaningfully above 2025 exit rate levels."
* Planned drilling locations this year are primarily proved undeveloped, directly offsetting producing wells, which increases confidence in performance.
* The company maintains flexibility to defer projects if commodity prices or costs change, and is "hopeful that our nearly 24,000 net acres in the Cherokee play will translate to a meaningful multiyear runway as we look beyond 2025."

FINANCIAL RESULTS

* Revenue reached $40 million for the quarter, up 32% from the same period last year. Adjusted EBITDA was $27.3 million, and net income totaled $16 million, or $0.44 per basic share. Adjusted net income was $15.5 million, or $0.42 per basic share.
* Adjusted operating cash flow was $28 million. Free cash flow before acquisitions was approximately $6 million for the quarter and $29 million year-to-date.
* The company paid $4.4 million in dividends, including $0.6 million in shares under the dividend reinvestment plan, and has now paid $4.48 per share in dividends since the beginning of 2023.
* Capital expenditures during the period were roughly $23 million. The company continues to live within cash flow, funding all capital expenditures and capital returns from operations.
* Commodity price realizations for the quarter were $65.23 per barrel of oil, $1.71 per Mcf of gas, and $15.61 per barrel of NGLs.

Q&A

* David Terdell (analyst) asked about M&A activity in Cherokee and how the company evaluates the success of last year's acquisition. Pranin responded, "M&A opportunities in the Cherokee exist, although it's a very competitive landscape... As we look towards last year's acquisition, I think we continue to see that as very favorable. Not only did it add accretive cash flow, but the operations side of the house has been able to add meaningful margin by reducing costs and on some of the PDP wells, finding opportunities that make that production curve up and to the right through low-cost workovers and other activity there."

SENTIMENT ANALYSIS

* Analyst tone was positive and congratulatory, with focus on the success of the Cherokee acquisition and M&A opportunities.
* Management’s tone during prepared remarks was confident and constructive, using phrases such as "pleased to report on a positive quarter" and "strong balance sheet and a versatile kitbag." The Q&A reflected continued confidence in Cherokee asset performance and M&A strategy.
* Compared to the previous quarter, both management and analyst sentiment has remained positive, with management maintaining a confident outlook and analysts expressing optimism about asset performance and growth opportunities.

QUARTER-OVER-QUARTER COMPARISON

* Guidance language and strategic focus remain consistent, emphasizing Cherokee development and disciplined capital allocation. The company continues to project oil production growth and maintain capital flexibility.
* Revenue and adjusted EBITDA increased quarter over quarter, while net income was lower compared to Q2’s $19.6 million, reflecting a shift in income mix despite higher production. The company continues to prioritize its dividend and share repurchase programs.
* Management’s confidence in the Cherokee play and its multiyear runway is reiterated, while analysts maintain a focus on M&A and asset performance.
* No significant change in management or analyst tone, with both quarters demonstrating a constructive view on operational and financial performance.

RISKS AND CONCERNS

* Management cited inflation impacts and the potential for further changes to tariffs or other factors influencing well costs.
* Price volatility remains a concern, especially for resuming development of higher gas-content legacy assets. The company indicated, "Commodity prices firmly over $80 WTI and $4 Henry Hub over a constant tenor and/or reduction in well costs are needed before we would return to exercise the option value of further development or well reactivations."
* The company’s hedging strategy covers approximately 35% of fourth quarter production, including 55% of natural gas and 30% of oil.
* No new significant operational or financial risks were introduced compared to the prior quarter.

FINAL TAKEAWAY

SandRidge Energy’s third quarter results showcased notable production and revenue growth driven by its Cherokee asset development, with management emphasizing continued oil-weighted expansion and disciplined capital allocation. The company plans to maintain pace with its one-rig Cherokee drilling program into next year, leveraging a strong balance sheet, robust cash flows, and significant operational flexibility to navigate commodity cycles while prioritizing shareholder returns through dividends and buybacks.

Read the full Earnings Call Transcript [https://seekingalpha.com/symbol/sd/earnings/transcripts]

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* SandRidge Energy, Inc. (SD) Q3 2025 Earnings Call Transcript [https://seekingalpha.com/article/4839597-sandridge-energy-inc-sd-q3-2025-earnings-call-transcript]
* SandRidge Energy: Promising Early Results From Its Operated Cherokee Development [https://seekingalpha.com/article/4814188-sandridge-energy-promising-early-results-from-its-operated-cherokee-development]
* SandRidge Energy, Inc. (SD) Q2 2025 Earnings Call Transcript [https://seekingalpha.com/article/4811682-sandridge-energy-inc-sd-q2-2025-earnings-call-transcript]
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* Historical earnings data for SandRidge Energy [https://seekingalpha.com/symbol/SD/earnings]