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SANDRIDGE ENERGY INC (SD)·Q3 2025 Earnings Summary

Executive Summary

  • Q3 revenue rose 32% year over year to $39.8M on 12% higher Boe volumes and 49% higher oil volumes, driven by Cherokee acquisition/development; adjusted EBITDA increased to $27.3M (+54% YoY) .
  • EPS normalized beat: $0.42 vs $0.32 consensus; revenue beat: $39.8M vs $38.8M consensus; GAAP diluted EPS was $0.43 (normalized = adjusted) [GetEstimates Q3 2025: Primary EPS/Revenue Consensus Mean]*.
  • Cost discipline remained solid (Adjusted G&A $2.1M, $1.23/Boe), but LOE rose to $6.25/Boe on higher labor/utility/operational activity tied to Cherokee program .
  • Balance sheet strength continues (no debt; $102.6M cash including restricted cash) supporting a $0.12 dividend declared for Nov 28 and ongoing buybacks ($68.3M authorization remaining) .
  • Call tone constructive: robust Cherokee returns (break-evens ~$35 WTI), two more wells to sales in 2025 with additional completions slipping to early 2026; M&A optionality in Mid-Continent remains under evaluation .

What Went Well and What Went Wrong

  • What Went Well

    • Cherokee development is delivering: first four wells averaged ~2,000 Boe/d 30‑day IP (~43% oil); oil volumes +49% YoY; CEO highlighted four years without a recordable safety incident .
    • Strong financial execution: adjusted EBITDA $27.3M; adjusted net income $15.5M ($0.42/sh); adjusted operating cash flow $27.9M .
    • Capital returns and balance sheet: $102.6M cash and no debt; $0.12 dividend declared; authorization for repurchases still $68.3M remaining .

  • What Went Wrong

    • LOE increased to $10.9M ($6.25/Boe) vs $5.82/Boe in Q3’24 on labor/utility costs and increased activity from Cherokee program .
    • Oil realizations fell YoY ($65.23/bbl vs $73.07) despite volume gains; CFO noted WTI headwinds offset by improved gas prices .
    • Free cash flow down QoQ ($5.9M vs $9.8M) amid ramped capital program and timing, though still positive before acquisitions .

Financial Results

Headline P&L vs prior periods

MetricQ3 2024Q2 2025Q3 2025
Revenue ($USD Millions)$30.06 $34.53 $39.82
Net Income ($USD Millions)$25.48 $19.56 $15.95
Diluted EPS ($)$0.69 $0.53 $0.43
Adjusted EBITDA ($USD Millions)$17.74 $22.82 $27.29
Adjusted EPS (Diluted) ($)$0.19 $0.33 $0.42

Commodity revenue mix

Mix of RevenueQ3 2024Q2 2025Q3 2025
Oil (% of revenue)56% 49% 56%
Natural Gas (% of revenue)15% 25% 22%
NGLs (% of revenue)29% 26% 22%

Key operating KPIs

KPIQ3 2024Q2 2025Q3 2025
Production (MBoe)1,563 1,619 1,745
MBoed17.0 17.8 19.0
Oil as % of production15% 17% 20%
Realized price per Boe ($/Boe)$19.23 $21.33 $22.82
LOE ($/Boe)$5.82 $4.05 $6.25
Adjusted G&A ($USD Millions)$1.60 $2.38 $2.13
Adjusted G&A ($/Boe)$1.02 $1.48 $1.23

Vs. consensus (SPGI)

MetricQ3 2025 ConsensusQ3 2025 Actual
Normalized EPS ($)0.32*0.42
Revenue ($USD Millions)38.80*39.82

Notes: Asterisks (*) denote values retrieved from S&P Global.

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
2025 Total Capex ($M)FY 2025Not specifically quantified$66–$85 (D&C $47–$63; $19–$22 for workovers/optimization/leasing) Initiated detail
Operated Cherokee program (2025)FY 2025n/aDrill 8 wells, complete 6; 2 completions slip to next year Operational update
Q4 2025 Hedging CoverageQ4 2025n/a~35% total production; ~55% gas, ~30% oil hedged Disclosed
Quarterly DividendQ3 2025 pay date$0.12 declared in Aug (Q2) $0.12 payable Nov 28; DRIP optional Maintained
Leverage/LiquidityOngoingNo debt; >$100M cash No debt; $102.6M cash at 9/30 Maintained

No formal numerical guidance on production, revenue, margin, or tax rate was issued in Q3 materials. Management emphasized flexibility to pace activity based on commodity prices, costs, tariffs and returns .

Earnings Call Themes & Trends

TopicPrevious Mentions (Q1 & Q2 2025)Current Period (Q3 2025)Trend
Cherokee developmentQ1: Drilled first operated well; first production mid‑May . Q2: First well to sales; 2Q volumes only partial from first well .Three more wells to sales; four wells to date averaging ~2,000 Boe/d 30‑day IP (~43% oil); two more to sales in 2025; two completions slip to next year .Accelerating execution
Capital allocation & dividendsQ1: $0.11 dividend; $5M buybacks . Q2: Dividend raised to $0.12; continued buybacks .$0.12 dividend maintained and payable Nov 28; $68.3M repurchase authorization remaining .Stable/return-focused
HedgingQ1/Q2: Active hedges across oil, gas, NGLs .~35% of Q4 production hedged (55% gas, 30% oil); supports cash flows amid volatility .Prudent risk mgmt
Cost structure/LOEQ1: LOE $6.79/Boe . Q2: LOE $4.05/Boe aided by one‑time accrual benefit .LOE up to $6.25/Boe on labor/utility/operational activity; committed to cost discipline .Mixed: rising QoQ
M&A optionalityQ1/Q2: Ongoing evaluation with strong balance sheet .CEO: Active Mid‑Continent landscape; focus on accretive, synergistic deals; Cherokee leasehold adds runway .Ongoing

Management Commentary

  • “SandRidge delivered another strong quarter of results… our team recently achieved four years without a recordable safety incident.” – Grayson Pranin, CEO .
  • “Adjusted EBITDA was $27.3 million… cash… approximately $103 million (~$2.80 per share).… Our production remains meaningfully hedged through the fourth quarter… ~35% of fourth‑quarter production.” – Jonathan Frates, CFO .
  • “First four operated [Cherokee] wells… average peak 30‑day ~2,000 BOE/d (~43% oil)… plan to drill eight operated Cherokee wells in 2025 and complete six; two completions to carry over into next year.” – Dean Parrish, COO .
  • “At current commodity prices, our operated Cherokee wells have robust returns, and break‑evens… down to $35 WTI.” – CEO .

Q&A Highlights

  • M&A outlook and Cherokee assessment: CEO sees a competitive landscape with opportunities predominantly leasehold/acreage‑focused today; Mid‑Continent deal flow healthy; last year’s Cherokee acquisition viewed favorably with accretive cash flow and cost reductions lifting margins .
  • Development cadence and optionality: Management reiterated flexibility to adjust pace based on prices/costs and highlighted multi‑year runway (~24k net acres) in Cherokee .
  • Capital returns: Emphasis on prioritizing the regular dividend alongside opportunistic buybacks within cash flow .

Estimates Context

How results compared to Wall Street consensus (SPGI):

MetricQ1 2025Q2 2025Q3 2025
EPS Consensus Mean ($)0.43*0.29*0.32*
EPS Actual (Normalized) ($)0.39 0.33 0.42
Revenue Consensus Mean ($M)43.32*37.30*38.80*
Revenue Actual ($M)42.60 34.53 39.82

Notes: Asterisks (*) denote values retrieved from S&P Global.

Implications: Q3 delivered a clear headline beat on normalized EPS and a modest top‑line beat; prior quarters were mixed with a Q2 EPS beat but revenue shortfall, and Q1 revenue modestly below consensus while EPS trailed normalized expectations *.

Key Takeaways for Investors

  • Cherokee execution is the central driver: high IP rates, rising oil mix (20% of volumes in Q3 vs 17% in Q2), and robust returns (break‑even ~$35 WTI) support continued development into 2026 .
  • Quality beat: normalized EPS $0.42 vs $0.32* and revenue $39.8M vs $38.8M*, with YoY EBITDA up 54% on higher volumes despite lower oil realizations [GetEstimates Q3 2025]*.
  • Cost watch: LOE rose to $6.25/Boe (from $4.05/Boe in Q2 due to one‑time accrual then, and $5.82/Boe in Q3’24); continued procurement discipline and infrastructure leverage are priorities .
  • Balance sheet and returns: >$100M cash, no debt, $0.12 dividend declared, and significant buyback capacity provide downside support and optionality for M&A or pacing capex .
  • Hedge protection into 4Q: ~35% of Q4 volumes hedged (55% gas, 30% oil), stabilizing cash flows during price volatility and underpinning drilling cadence .
  • Trajectory: Production and realized price per Boe improved sequentially; two additional 2025 well turn‑ins raise 4Q exit rate potential, with two completions sliding into next year smoothing 2026 volumes .
  • Trading setup: Positive operational momentum and capital returns against a clean balance sheet; key sensitivities are LOE trend, commodity prices (WTI/HH), and execution on Cherokee timing.

S&P Global disclaimer: Values marked with an asterisk (*) are retrieved from S&P Global (Capital IQ).