10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q

(Mark One)

þ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2019 

OR

o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from              to             

Commission File Number: 001-33784

SANDRIDGE ENERGY, INC.

(Exact name of registrant as specified in its charter)

Delaware	20-8084793
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
123 Robert S. Kerr Avenue Oklahoma City, Oklahoma	73102
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: (405) 429-5500

Former name, former address and former fiscal year, if changed since last report: Not applicable

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes þ No o

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes þ No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	o	Accelerated filer	þ
Non-accelerated filer	o	Smaller reporting company	o
		Emerging growth company	o

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. o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No þ

Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13, or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court. Yes þ No o

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

Title of Each Class	Trading Symbol	Name of Each Exchange on Which Registered
Common Stock, $0.001 par value	SD	New York Stock Exchange

The number of shares outstanding of the registrant’s common stock, par value $0.001 per share, as of the close of business on May 2, 2019, was 35,686,430.

References in this report to the “Company,” “SandRidge,” “we,” “our,” and “us” mean SandRidge Energy, Inc., including its consolidated subsidiaries and its proportionately consolidated share of each of SandRidge Mississippian Trust I and SandRidge Mississippian Trust II for periods ending March 31, 2019 and December 31, 2018 and SandRidge Permian Trust for the period ending March 31, 2018 (collectively, the “Royalty Trusts”).

DISCLOSURES REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q (“Quarterly Report”) of the Company includes “forward-looking statements” as defined by the SEC. These forward-looking statements may include projections and estimates concerning our capital expenditures, liquidity, capital resources and debt profile, the timing and success of specific projects, outcomes and effects of litigation, claims and disputes, elements of our business strategy, compliance with governmental regulation of the oil and natural gas industry, including environmental regulations, acquisitions and divestitures and the potential effects on our financial condition and other statements concerning our operations, financial performance and financial condition. Forward-looking statements are generally accompanied by words such as “estimate,” “assume,” “target,” “project,” “predict,” “believe,” “expect,” “anticipate,” “potential,” “could,” “may,” “foresee,” “plan,” “goal,” “should,” “intend” or other words that convey the uncertainty of future events or outcomes. These forward-looking statements are based on certain assumptions and analyses based on our experience and perception of historical trends, current conditions and expected future developments as well as other factors we believe are appropriate under the circumstances. Such statements are not guarantees of future performance and actual results or developments may differ materially from those projected. The Company disclaims any obligation to update or revise these forward-looking statements unless required by law, and it cautions readers not to rely on them unduly. While we consider these expectations and assumptions to be reasonable, they are inherently subject to significant business, economic, competitive, regulatory and other risks, contingencies and uncertainties relating to, among other matters, the risks and uncertainties discussed in “Risk Factors” in Item 1A of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2018 (the “2018 Form 10-K”) and in Item 1A of this Quarterly Report.

SANDRIDGE ENERGY, INC. AND SUBSIDIARIES

FORM 10-Q

Quarter Ended March 31, 2019 

INDEX

PART I. FINANCIAL INFORMATION
ITEM 1.	Financial Statements (Unaudited):
	Condensed Consolidated Balance Sheets	4
	Condensed Consolidated Statements of Operations	5
	Condensed Consolidated Statement of Changes in Stockholders’ Equity	6
	Condensed Consolidated Statements of Cash Flows	7
	Notes to Condensed Consolidated Financial Statements	8
ITEM 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	19
ITEM 3.	Quantitative and Qualitative Disclosures About Market Risk	26
ITEM 4.	Controls and Procedures	27
PART II. OTHER INFORMATION
ITEM 1.	Legal Proceedings	29
ITEM 1A.	Risk Factors	29
ITEM 2.	Unregistered Sales of Equity Securities and Use of Proceeds	29
ITEM 3.	Defaults upon Senior Securities	29
ITEM 6.	Exhibits	30
Signature

PART I. Financial Information

ITEM 1. Financial Statements

SANDRIDGE ENERGY, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)

(In thousands, except per share data) 

	March 31, 2019		December 31, 2018
ASSETS
Current assets
Cash and cash equivalents	$	7,354	$	17,660
Restricted cash - other	1,981		1,985
Accounts receivable, net	51,053		45,503
Derivative contracts	—		5,286
Prepaid expenses	3,128		2,628
Other current assets	251		265
Total current assets	63,767		73,327
Oil and natural gas properties, using full cost method of accounting
Proved	1,344,552		1,269,091
Unproved	57,363		60,152
Less: accumulated depreciation, depletion and impairment	(614,972)		(580,132)
	786,943		749,111
Other property, plant and equipment, net	200,014		200,838
Other assets	820		1,062
Total assets	$	1,051,544	$	1,024,338

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities
Accounts payable and accrued expenses	$	119,436	$	111,797
Current maturities of long-term debt	20,000		—
Asset retirement obligation	25,355		25,393
Other current liabilities	29		—
Total current liabilities	164,820		137,190
Asset retirement obligation	35,836		34,671
Other long-term obligations	7,428		4,756
Total liabilities	208,084		176,617
Commitments and contingencies (Note 9)
Stockholders’ Equity
Common stock, $0.001 par value; 250,000 shares authorized; 35,687 issued and outstanding at March 31, 2019 and December 31, 2018	36		36
Warrants	88,518		88,516
Additional paid-in capital	1,056,235		1,055,164
Accumulated deficit	(301,329)		(295,995)
Total stockholders’ equity	843,460		847,721
Total liabilities and stockholders’ equity	$	1,051,544	$	1,024,338

The accompanying notes are an integral part of these condensed consolidated financial statements.

4

SANDRIDGE ENERGY, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)

(In thousands, except per share data)

	Three Months Ended March 31,
	2019		2018
Revenues
Oil, natural gas and NGL	$	73,048	$	86,966
Other	188		162
Total revenues	73,236		87,128
Expenses
Lease operating expenses	22,779		23,519
Production, ad valorem, and other taxes	5,080		6,234
Depreciation and depletion — oil and natural gas	36,465		27,997
Depreciation and amortization — other	2,943		3,153
Impairment	—		4,170
General and administrative	9,939		13,682
Proxy contest	—		407
Employee termination benefits	—		31,587
Loss on derivative contracts	209		18,330
Other operating expense	82		16
Total expenses	77,497		129,095
Loss from operations	(4,261)		(41,967)
Other (expense) income
Interest expense, net	(585)		(948)
Gain on extinguishment of debt	—		1,151
Other (expense) income, net	(431)		873
Total other (expense) income	(1,016)		1,076
Loss before income taxes	(5,277)		(40,891)
Income tax expense	—		3
Net loss	$	(5,277)	$	(40,894)
Loss per share
Basic	$	(0.15)	$	(1.18)
Diluted	$	(0.15)	$	(1.18)
Weighted average number of common shares outstanding
Basic	35,322		34,575
Diluted	35,322		34,575

The accompanying notes are an integral part of these condensed consolidated financial statements.

5

SANDRIDGE ENERGY, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS’ EQUITY (Unaudited)

(In thousands) 

	Common Stock			Warrants			Additional Paid-In Capital		Accumulated Deficit		Total
	Shares	Amount		Shares	Amount
Three Months Ended March 31, 2019
Balance at December 31, 2018	35,687	$	36	6,604	$	88,516	$	1,055,164	$	(295,995)	$	847,721
Stock-based compensation	—	—		—	—		1,073		—		1,073
Issuance of warrants for general unsecured claims	—	—		1	2		(2)		—		—
Cumulative effect of adoption of ASU 2016-02	—	—		—	—		—		(57)		(57)
Net loss	—	—		—	—		—		(5,277)		(5,277)
Balance at March 31, 2019	35,687	$	36	6,605	$	88,518	$	1,056,235	$	(301,329)	$	843,460

	Common Stock			Warrants			Additional Paid-In Capital		Accumulated Deficit		Total
	Shares	Amount		Shares	Amount
Three Months Ended March 31, 2018
Balance at December 31, 2017	35,650	$	36	6,570	$	88,500	$	1,038,324	$	(286,920)	$	839,940
Cancellation of stock awards, net of issuances	(90)	—		—	—		—		—		—
Stock-based compensation	—	—		—	—		16,055		—		16,055
Cash paid for tax withholdings on vested stock awards	—	—		—	—		(1,661)		—		(1,661)
Net loss	—	—		—	—		—		(40,894)		(40,894)
Balance at March 31, 2018	35,560	$	36	6,570	$	88,500	$	1,052,718	$	(327,814)	$	813,440

The accompanying notes are an integral part of these condensed consolidated financial statements.

6

SANDRIDGE ENERGY, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)

(In thousands)

	Three Months Ended March 31,
	2019		2018
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss	$	(5,277)	$	(40,894)
Adjustments to reconcile net loss to net cash provided by operating activities
Provision for doubtful accounts	72		(335)
Depreciation, depletion, and amortization	39,408		31,150
Impairment	—		4,170
Debt issuance costs amortization	117		117
Amortization of premiums and discounts on debt	—		(47)
Gain on extinguishment of debt	—		(1,151)
Loss on derivative contracts	209		18,330
Cash received (paid) on settlement of derivative contracts	5,078		(6,119)
Stock-based compensation	996		15,872
Other	(35)		(235)
Changes in operating assets and liabilities	(8,998)		9,549
Net cash provided by operating activities	31,570		30,407
CASH FLOWS FROM INVESTING ACTIVITIES
Capital expenditures for property, plant and equipment	(62,254)		(65,527)
Acquisition of assets	326		—
Proceeds from sale of assets	341		955
Net cash used in investing activities	(61,587)		(64,572)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from borrowings	39,596		—
Repayments of borrowings	(19,596)		(36,304)
Reduction of financing lease liability	(293)		—
Cash paid for tax withholdings on vested stock awards	—		(1,661)
Net cash provided by (used in) financing activities	19,707		(37,965)
NET DECREASE IN CASH, CASH EQUIVALENTS and RESTRICTED CASH	(10,310)		(72,130)
CASH, CASH EQUIVALENTS and RESTRICTED CASH, beginning of year	19,645		101,308
CASH, CASH EQUIVALENTS and RESTRICTED CASH, end of period	$	9,335	$	29,178
Supplemental Disclosure of Cash Flow Information
Cash paid for interest, net of amounts capitalized	$	(408)	$	—
Supplemental Disclosure of Noncash Investing and Financing Activities
Change in accrued capital expenditures	$	(9,190)	$	28,258
Right-of-use assets obtained in exchange for financing lease obligations	$	1,992	$	—

The accompanying notes are an integral part of these condensed consolidated financial statements.

7

SANDRIDGE ENERGY, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

1. Basis of Presentation

Nature of Business. SandRidge Energy, Inc. is an oil and natural gas exploration and production company headquartered in Oklahoma City, Oklahoma with principal focus on the acquisition, exploration and development of hydrocarbon resources in the United States. 

Principles of Consolidation. The consolidated financial statements include the accounts of the Company and its wholly owned or majority owned subsidiaries, including its proportionate share of the Royalty Trusts. All significant intercompany accounts and transactions have been eliminated in consolidation.

Interim Financial Statements. The accompanying unaudited condensed consolidated financial statements and notes as of December 31, 2018 have been derived from and should be read in conjunction with the audited financial statements and notes contained in the Company’s 2018 Form 10-K. Certain information and disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) have been condensed or omitted, although the Company believes that the disclosures contained herein are adequate to make the information presented not misleading. In the opinion of management, the financial statements include all adjustments, which consist of normal recurring adjustments unless otherwise disclosed, necessary to fairly state the Company’s unaudited condensed consolidated financial statements.  

Significant Accounting Policies. The unaudited condensed consolidated financial statements were prepared in accordance with the accounting policies stated in the 2018 Form 10-K as well as the items noted below.

Reclassifications. Certain reclassifications have been made to the prior period financial statements to conform to the current period presentation. These reclassifications have no effect on the Company’s previously reported results of operations.

Use of Estimates. The preparation of the unaudited condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period.

The more significant areas requiring the use of assumptions, judgments and estimates include: oil, natural gas and natural gas liquids (“NGL”) reserves; impairment tests of long-lived assets; depreciation, depletion and amortization; income taxes; valuation of derivative instruments; contingencies; and accrued revenue and related receivables. Although management believes these estimates are reasonable, actual results could differ significantly.

Recent Accounting Pronouncements Not Yet Adopted. The FASB issued ASU 2016-13, “Financial Instruments —Credit Losses (Topic 326) Measurement of Credit Losses on Financial Instruments,” which changes how entities will measure credit losses for most financial assets and certain other instruments that are not measured at fair value through net income. The standard will replace the currently required incurred loss approach with an expected loss model for instruments measured at amortized cost. The standard is effective for interim and annual periods beginning after December 15, 2019, with early adoption permitted for the interim and annual periods beginning after December 31, 2018, and will be applied using a modified retrospective approach resulting in a cumulative effect adjustment to retained earnings upon adoption. The Company does not plan to early adopt and is currently evaluating the effect the guidance will have on its consolidated financial statements; however, the impact is not expected to be material.

2. Leases

In February 2016, the FASB issued ASU 2016-02, “Leases (Topic 842),” and subsequently issued other associated ASU's related to Topic 842 which supersede ASC 840 and require lessees to recognize right of use ("ROU") lease assets and liabilities on the balance sheet for long-term leases formerly classified as operating leases under ASC 840, and to disclose key information about leasing arrangements. Leases to explore for or produce oil and natural gas were not impacted by this guidance. This ASU became effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. The Company adopted this ASU on January 1, 2019 using a modified retrospective approach for all ROU leases that existed at the period of adoption and did not restate its comparative periods.

8

SANDRIDGE ENERGY, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

(Unaudited)

Topic 842 provides a number of practical expedients to assist with the transition to the new standard. The Company elected the 'package of practical expedients,' and therefore did not have to reassess prior conclusions about lease identification, lease classification and initial indirect costs. The Company also utilized the land easement practical expedient and short-term lease recognition exemption, under which leases with initial terms less than 12 months are not required to be presented on the balance sheet. Certain leases contain both lease and non-lease components. The Company elected the practical expedient to combine lease and non-lease components for asset classes including drilling rigs, compressors and various office equipment.

The Company determines if an arrangement is or contains a lease at inception. A lease is defined as a contract, or part of a contract, that conveys the right to control the use of identified property, plant or equipment for a period of time in exchange for consideration. Lease liabilities are recognized based on the present value of the lease payments not yet paid over the lease term at January 1, 2019 for existing leases and at the commencement date for any new leases entered into subsequent to January 1, 2019. As most of the Company's leases do not provide an implicit rate, the Company's incremental borrowing rate was used as the discount rate when determining the present value of future payments. The ROU assets are recognized based on the lease liability plus any prepaid lease payments and excluding lease incentives and initial direct costs incurred for the same periods.  The Company's lease terms may include options to extend or terminate the lease when it is reasonably certain that option will be exercised. Lease expense for minimum lease payments is recognized on a straight-line basis over the lease term.

Adoption of this standard resulted in additional ROU lease assets and lease liabilities of approximately $2.3 million and $2.4 million, respectively, as of January 1, 2019, which did not materially impact the Company's consolidated financial statements. The difference between the net lease assets and liabilities was recognized as a cumulative-effect adjustment to the opening balance of retained earnings. Operating leases are included in other assets and other long-term obligations, and finance leases are included in other property, plant and equipment, and other long-term obligations on the accompanying condensed consolidated balance sheet as of March 31, 2019. The Company had no significant capital or operating leases with terms longer than 12 months at December 31, 2018. 

The Company has operating and financing leases for vehicles, drilling rigs and equipment, which are not significant to the consolidated financial statements as of and for the three-month period ended March 31, 2019. 

The components of lease costs recognized for the Company's ROU leases are shown below:

	Three Months Ended March 31, 2019
Short-term lease cost (1)	$	4,909
Financing lease cost	297
Operating lease cost	58
Total lease cost	$	5,264

____________________

1.$3.1 million of short-term lease cost was capitalized as part of oil and natural gas properties, and portions of these costs were reimbursed to the Company by other working interest owners.

9

SANDRIDGE ENERGY, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

(Unaudited)

3. Employee Termination Benefits

No employee termination benefits were paid during the three-month period ended March 31, 2019. The following table presents a summary of employee termination benefits for the three-month period ended March 31, 2018 which occurred before the change in composition of the current Board of Directors (in thousands):

	Cash		Share-Based Compensation (3)		Number of Shares	Total Employee Termination Benefits
Three Months Ended March 31, 2018
Executive Employee Termination Benefits (1)	$	11,945	$	9,114	554	$	21,059
Other Employee Termination Benefits (2)	6,692		3,836		209	10,528
	$	18,637	$	12,950	763	$	31,587

____________________

1.On February 8, 2018, the Company’s then current chief executive officer ("CEO"), James Bennett, separated employment from the Company, and on February 22, 2018, the Company’s then current chief financial officer ("CFO"), Julian Bott, also separated employment from the Company. As a result, the Company paid cash severance costs and incurred share-based compensation costs associated with these separations during the first quarter of 2018.

2.As a result of a reduction in workforce in the first quarter of 2018, certain employees received termination benefits including cash severance and accelerated share-based and incentive compensation upon separation of service from the Company.

3.Share-based compensation recognized in connection with the accelerated vesting of restricted stock awards and performance share units upon the departure of certain executives and the reduction in workforce in the first quarter of 2018 reflects the remaining unrecognized compensation expense associated with these awards at the date of termination. The unrecognized compensation expense was calculated using the grant date fair value for restricted stock awards and performance share units. One share of the Company’s common stock was issued per performance share unit.

See Note 13 for additional discussion of the Company’s share-based compensation awards.

4. Fair Value Measurements

The Company measures and reports certain assets and liabilities on a fair value basis and has classified and disclosed its fair value measurements using the levels of the fair value hierarchy noted below. The carrying values of cash, restricted cash, accounts receivable, prepaid expenses, certain other current assets and other assets, accounts payable and accrued expenses, other current liabilities and other long-term obligations included in the unaudited condensed consolidated balance sheets approximated fair value at March 31, 2019, and December 31, 2018. Additionally, the carrying amount of debt associated with borrowings outstanding under the credit facility approximates fair value as borrowings bear interest at variable rates. As a result, these financial assets and liabilities are not discussed below. The fair values of property, plant and equipment classified as assets held for sale and related impairments, which are calculated using Level 3 inputs, are discussed in Note 5.

Level 1	Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities.
Level 2	Quoted prices in markets that are not active, or inputs which are observable, either directly or indirectly, for substantially the full term of the asset or liability.
Level 3	Measurement based on prices or valuation models that require inputs that are both significant to the fair value measurement and less observable from objective sources (i.e., supported by little or no market activity).

Assets and liabilities that are measured at fair value are classified based on the lowest level of input that is significant to the fair value measurement. The Company’s assessment of the significance of a particular input to the fair value measurement requires judgment, which may affect the valuation of the fair value of assets and liabilities and their placement within the fair value hierarchy levels. The determination of the fair values, stated below, considers the market for the Company’s financial assets and liabilities, the associated credit risk and other factors. The Company considers active markets as those in which transactions for the assets or liabilities occur in sufficient frequency and volume to provide pricing information on an ongoing basis. The Company had no financial assets or liabilities where fair value differed from carrying value classified in the fair

10

SANDRIDGE ENERGY, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

(Unaudited)

value hierarchy as of March 31, 2019. The Company had assets classified in Level 2 of the hierarchy as of December 31, 2018, as described below.

Level 2 Fair Value Measurements

Commodity Derivative Contracts. The fair values of the Company’s oil and natural gas fixed price swaps are based upon inputs that are either readily available in the public market, such as oil and natural gas futures prices, volatility factors and discount rates, or can be corroborated from active markets. Fair value is determined through the use of a discounted cash flow model or option pricing model using the applicable inputs discussed above. The Company applies a weighted average credit default risk rating factor for its counterparties or gives effect to its credit default risk rating, as applicable, in determining the fair value of these derivative contracts. Credit default risk ratings are based on current published credit default swap rates.

Fair Value - Recurring Measurement Basis

The following table summarizes the Company’s assets measured at fair value on a recurring basis by the fair value hierarchy as of December 31, 2018 (in thousands):

December 31, 2018

	Fair Value Measurements						Netting(1)		Assets/Liabilities at Fair Value
	Level 1		Level 2		Level 3
Assets
Commodity derivative contracts	$	—	$	5,286	$	—	$	—	$	5,286
	$	—	$	5,286	$	—	$	—	$	5,286

____________________

1.Represents the effect of netting assets and liabilities for counterparties with which the right of offset exists.

Transfers. The Company did not have any transfers between Level 1, Level 2 or Level 3 fair value measurements during the three-month periods ended March 31, 2019 and 2018.

5. Property, Plant and Equipment

Property, plant and equipment consists of the following (in thousands): 

	March 31, 2019		December 31, 2018
Oil and natural gas properties
Proved	$	1,344,552	$	1,269,091
Unproved	57,363		60,152
Total oil and natural gas properties	1,401,915		1,329,243
Less accumulated depreciation, depletion and impairment	(614,972)		(580,132)
Net oil and natural gas properties capitalized costs	786,943		749,111
Land	4,400		4,400
Electrical infrastructure	131,176		131,176
Other non-oil and natural gas equipment	13,410		13,458
Buildings and structures	77,148		77,148
Financing leases	1,727		—
Total	227,861		226,182
Less accumulated depreciation and amortization	(27,847)		(25,344)
Other property, plant and equipment, net	200,014		200,838
Total property, plant and equipment, net	$	986,957	$	949,949

11

SANDRIDGE ENERGY, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

(Unaudited)

During the first quarter of 2018, the Company classified its remaining midstream generator assets as held for sale. These assets had a carrying value of $5.7 million which exceeded the estimated net realizable value of $1.6 million based on expected sales prices obtained from third parties. As a result, the Company recorded an impairment of $4.1 million for the three-month period ended March 31, 2018. The midstream generator assets were sold during the second quarter of 2018 with no gain or loss recognized on the sale. No significant assets were classified as held for sale at March 31, 2019 or December 31, 2018.

6. Accounts Payable and Accrued Expenses

Accounts payable and accrued expenses consist of the following (in thousands):

	March 31, 2019		December 31, 2018
Accounts payable and other accrued expenses	$	89,909	$	78,219
Payroll and benefits	10,712		12,891
Production payable	12,972		12,767
Taxes payable	4,569		5,350
Drilling advances	724		2,031
Accrued interest	550		539
Total accounts payable and accrued expenses	$	119,436	$	111,797

7. Debt

Credit Facility. The Company has a $600.0 million reserve-based revolving credit facility, which is subject to a $350.0 million borrowing base. This borrowing base is currently under evaluation by the Company and its lenders under the credit facility in connection with the scheduled spring redetermination. The next borrowing base redetermination after this is scheduled for October 1, 2019. The credit facility matures on March 31, 2020. Outstanding borrowings under the credit facility bear interest based on a pricing grid tied to borrowing base utilization of (a) LIBOR plus an applicable margin that varies from 3.00% to 4.00% per annum, or (b) the base rate plus an applicable margin that varies from 2.00% to 3.00% per annum. Interest on base rate borrowings is payable quarterly in arrears and interest on LIBOR borrowings is payable every one, two, three or six months, at the election of the Company. Quarterly, the Company pays commitment fees assessed at annual rates of 0.50% on any available portion of the credit facility. The Company has the right to prepay loans under the credit facility at any time without a prepayment penalty, other than customary “breakage” costs with respect to LIBOR loans.

The credit facility is secured by (i) first-priority mortgages on at least 95% of the PV-9 valuation of all proved reserves included in the most recently delivered reserve report of the Company, (ii) a first-priority perfected pledge of substantially all of the capital stock owned by each credit party and equity interests in the Royalty Trusts that are owned by a credit party and (iii) a first-priority perfected security interest in substantially all the cash, cash equivalents, deposits, securities and other similar accounts, and other tangible and intangible assets of the credit parties (including but not limited to as-extracted collateral, accounts receivable, inventory, equipment, general intangibles, investment property, intellectual property, real property and the proceeds of the foregoing).

As of the end of each fiscal quarter, the credit facility requires the Company to maintain (i) a maximum consolidated total net leverage ratio, measured as of the end of any fiscal quarter, of no greater than 3.50 to 1.00 and (ii) a minimum consolidated interest coverage ratio, measured as of the end of any fiscal quarter, of no less than 2.25 to 1.00. These financial covenants are subject to customary cure rights. The Company was in compliance with all applicable financial covenants under the credit facility as of March 31, 2019, as its consolidated total net leverage ratio was 0.06 and its consolidated interest coverage ratio was 80.20.

The credit facility contains customary affirmative and negative covenants, including as to compliance with laws (including environmental laws, ERISA and anti-corruption laws), maintenance of required insurance, delivery of quarterly and annual financial statements, oil and gas engineering reports, maintenance and operation of property (including oil and gas properties), restrictions on the incurrence of liens, indebtedness, asset dispositions, fundamental changes, restricted payments including dividends and other customary covenants. The Company was in compliance with these covenants as of March 31, 2019.

The credit facility includes events of default relating to customary matters, including, among other things, nonpayment of principal, interest or other amounts; violation of covenants; incorrectness of representations and warranties in any material

12

SANDRIDGE ENERGY, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

(Unaudited)

respect; cross-payment default and cross acceleration with respect to indebtedness in an aggregate principal amount of $25.0 million or more; bankruptcy; judgments involving a liability of $25.0 million or more that are not paid; and ERISA events. Many events of default are subject to customary notice and cure periods.

The Company had $20.0 million outstanding under the credit facility at March 31, 2019, and $5.2 million in outstanding letters of credit, which reduce availability under the credit facility on a dollar-for-dollar basis.

Building Note. In February 2018, the Company fully repaid a note secured by a mortgage on the Company's downtown Oklahoma City real estate (the "Building Note") in the amount of $36.3 million, which was comprised of an initial principal amount of $35.0 million and $1.3 million in in-kind interest costs that were previously added to the principal. An unamortized premium of $1.2 million was recognized as a gain on extinguishment of debt in the unaudited condensed consolidated statement of operations for the three-month period ended March 31, 2018 in connection with the repayment.

8. Derivatives

Commodity Derivatives 

The Company is exposed to commodity price risk, which impacts the predictability of its cash flows from the sale of oil and natural gas. The Company, on occasion, has sought to manage this risk through the use of commodity derivative contracts, which allow the Company to limit its exposure to commodity price volatility on a portion of its forecasted oil and natural gas sales. The Company has not designated any of its derivative contracts as hedges for accounting purposes and records all derivative contracts at fair value with changes in derivative contract fair values recognized as gain or loss on derivative contracts in the unaudited condensed consolidated statements of operations. At March 31, 2019, the Company had no commodity derivative contracts in place. Historically, none of the Company’s commodity derivative contracts could be terminated prior to contractual maturity solely as a result of a downgrade in the credit rating of a party to the contract. Commodity derivative contracts are settled on a monthly basis, and the commodity derivative contract valuations are adjusted to the mark-to-market valuation on a quarterly basis. The Board and management of the Company are continuing to evaluate the futures market for oil and natural gas to mitigate exposure to adverse oil and natural gas price changes.

The following table summarizes derivative activity for the three-month periods ended March 31, 2019, and 2018 (in thousands):

	Three Months Ended March 31,
	2019		2018
Loss on commodity derivative contracts	$	209	$	18,330
Cash (received) paid on settlements	$	(5,078)	$	6,119

Master Netting Agreements and the Right of Offset. Historically, the Company has had master netting agreements with all of its commodity derivative counterparties and has presented its derivative assets and liabilities with the same counterparty on a net basis in the unaudited condensed consolidated balance sheets. As a result of the netting provisions, the Company's maximum amount of loss under commodity derivative transactions due to credit risk was limited to the net amounts due from its counterparties. The Company is not required to post additional collateral under its commodity derivative contracts as all of the counterparties to the Company’s commodity derivative contracts shared in the collateral supporting the Company’s credit facility.

13

SANDRIDGE ENERGY, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

(Unaudited)

The following table summarizes (i) the Company's commodity derivative contracts on a gross basis, (ii) the effects of netting assets and liabilities for which the right of offset exists based on master netting arrangements and (iii) for the Company’s net derivative liability positions, the applicable portion of shared collateral under the credit facility as of December 31, 2018 (in thousands):

December 31, 2018

	Gross Amounts		Gross Amounts Offset		Amounts Net of Offset		Financial Collateral		Net Amount
Assets
Derivative contracts - current	$	5,286	$	—	$	5,286	$	—	$	5,286
Total	$	5,286	$	—	$	5,286	$	—	$	5,286

Fair Value of Derivatives 

The following table presents the fair value of the Company’s derivative contracts as of December 31, 2018, on a gross basis without regard to same-counterparty netting (in thousands):

Type of Contract	Balance Sheet Classification	December 31, 2018
Derivative assets
Natural gas price swaps	Derivative contracts-current	$	5,286
Total net derivative contracts		$	5,286

See Note 4 for additional discussion of the fair value measurement of the Company’s derivative contracts. 

9. Commitments and Contingencies

Legal Proceedings. As previously disclosed, on May 16, 2016, the Company and certain of its direct and indirect subsidiaries (collectively, the "Debtors") filed voluntary petitions for reorganization under Chapter 11 of the United States Bankruptcy Code in the United States Bankruptcy Court for the Southern District of Texas (the “Bankruptcy Court”). The Bankruptcy Court confirmed the joint plan of organization (the "Plan") of the Debtors on September 9, 2016, and the Debtors subsequently emerged from bankruptcy on October 4, 2016.

Pursuant to the Plan, claims against the Company were discharged without recovery in each of the following consolidated cases (the “Cases”):

•In re SandRidge Energy, Inc. Securities Litigation, Case No. 5:12-cv-01341-LRW, USDC, Western District of Oklahoma

•Ivan Nibur, Lawrence Ross, Jase Luna, Matthew Willenbucher, and the Duane & Virginia Lanier Trust v. SandRidge Mississippian Trust I, et al., Case No. 5:15-cv-00634-SLP, USDC, Western District of Oklahoma

Although the Cases have not been dismissed against certain former officers and directors who remain defendants in the Cases, the Company remains as a nominal defendant in each of the Cases so that any of the respective plaintiffs may seek to recover proceeds from any applicable insurance policies or proceeds. In each of the Cases, to the extent liability exceeds the amount of available insurance proceeds, the Company may owe indemnity obligations to its former officers and/or directors who remain as defendants in such action. The Company indemnifies the SandRidge Mississippian Trust I and SandRidge Mississippian Trust II against losses, claims, damages, liabilities and expenses, including reasonable costs of investigation and attorney’s fees and expenses arising out of certain legal matters. An estimate of probable losses associated with any of the Cases cannot be made at this time, however the Company believes that any potential liability with respect to the Cases will not be material. The Company has not established any liabilities relating to any of the Cases.

In addition to the matters described above, the Company is involved in various lawsuits, claims and proceedings which are being handled and defended by the Company in the ordinary course of business.

14

SANDRIDGE ENERGY, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

(Unaudited)

Restricted Cash. Restricted cash - other included on the unaudited condensed consolidated balance sheets at March 31, 2019, and December 31, 2018 is the cash portion of consideration set aside for future settlement of general unsecured claims related to the Chapter 11 proceedings in accordance with the Plan. The corresponding liability for future cash settlements of general unsecured claims is included in accounts payable and accrued expenses on the unaudited condensed consolidated balance sheets.

10. Equity

Common Stock, Performance Share Units, and Stock Options. At March 31, 2019, the Company had 35.7 million shares of common stock, par value $0.001 per share, issued and outstanding, including 0.4 million shares of unvested restricted stock awards, 0.3 million unvested stock options, 0.1 million unvested performance share units, and 250.0 million shares of common stock authorized. See Note 13 for further discussion of the Company’s restricted stock awards, performance share units, and stock options.

Warrants. The Company has issued approximately 4.6 million Series A warrants and 2.0 million Series B warrants that are exercisable until October 4, 2022 for one share of common stock per warrant at initial exercise prices of $41.34 and $42.03 per share, respectively, subject to adjustments pursuant to the terms of the warrants, to certain holders of general unsecured claims as defined in the Plan. The warrants contain customary anti-dilution adjustments in the event of any stock split, reverse stock split, reclassification, stock dividend or other distributions. 

11. Income Taxes

For each interim reporting period, the Company estimates the effective tax rate expected for the full fiscal year and uses that estimated rate in providing for income taxes on a current year-to-date basis.

Deferred income taxes are provided to reflect the future tax consequences of temporary differences between the tax basis of assets and liabilities and their reported amounts in the financial statements. The Company’s deferred tax assets have been reduced by a valuation allowance due to a determination that it is more likely than not that some or all of the deferred assets will not be realized based on the weight of all available evidence. The Company continues to closely monitor and weigh all available evidence, including both positive and negative, in making its determination whether to maintain a valuation allowance. As a result of the significant weight placed on the Company's cumulative negative earnings position, the Company continued to maintain a full valuation allowance against its net deferred tax asset at March 31, 2019. Thus, the Company had no federal income tax expense or benefit for the three-month periods ended March 31, 2019 and 2018, and an insignificant amount of state income tax expense for the three-month period ended March 31, 2018.

The Company’s only taxing jurisdiction is the United States (federal and state). The Company’s tax years 2015 to present remain open for federal examination. Additionally, tax years 2005 through 2014 remain subject to examination for the purpose of determining the amount of remaining federal net operating loss and other carryforwards. The number of years open for state tax audits varies, depending on the state, but are generally from three to five years. 

15

SANDRIDGE ENERGY, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

(Unaudited)

12. Loss per Share

The following table summarizes the calculation of weighted average common shares outstanding used in the computation of diluted loss per share:

	Net Loss		Weighted Average Shares	Loss Per Share
	(In thousands, except per share amounts)
Three Months Ended March 31, 2019
Basic loss per share	$	(5,277)	35,322	$	(0.15)
Effect of dilutive securities
Restricted stock awards(1)	—		—
Performance share units(1)	—		—
Warrants(1)	—		—
Stock options(1)	—		—
Diluted loss per share	$	(5,277)	35,322	$	(0.15)
Three Months Ended March 31, 2018
Basic loss per share	$	(40,894)	34,575	$	(1.18)
Effect of dilutive securities
Restricted stock awards(2)	—		—
Performance share units(3)	—		—
Warrants(2)	—		—
Diluted loss per share	$	(40,894)	34,575	$	(1.18)

____________________

1.No incremental shares of potentially dilutive restricted stock awards, performance share units, warrants or stock options were included for the three-month period ended March 31, 2019, as their effect was antidilutive under the treasury stock method.

2.No incremental shares of potentially dilutive restricted stock awards or warrants were included for the three-month period ended March 31, 2018, as their effect was antidilutive under the treasury stock method.

3.Performance share units covering an insignificant amount of shares for the three-month period ended March 31, 2018, were excluded from the computation of loss per share because their effect would have been antidilutive.

See Note 13 for discussion of the Company’s share-based compensation awards.

16

SANDRIDGE ENERGY, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

(Unaudited)

13. Share and Incentive-Based Compensation

Share-Based Compensation

Omnibus Incentive Plan. The Company's Omnibus Incentive Plan became effective in October 2016. The Omnibus Incentive Plan authorizes the issuance of up to 4.6 million shares of SandRidge common stock to eligible persons including non-employee directors of the Company, employees of the Company or any of its affiliates, and certain consultants and advisers to the Company or any of its affiliates. The types of awards that may be granted under the Omnibus Incentive Plan include stock options, restricted stock, performance awards and other forms of awards granted or denominated in shares of the Company’s common stock, as well as certain cash-settled awards. At March 31, 2019, the Company had restricted stock awards and an immaterial amount of performance share units and stock options outstanding under the Omnibus Incentive Plan. At March 31, 2018, the Company also had performance units outstanding which vested in June 2018 with an aggregate intrinsic value of approximately $1.7 million.

Restricted Stock Awards. The Company’s restricted stock awards are equity-classified awards and are valued based upon the market value of the Company’s common stock on the date of grant. Outstanding restricted shares will generally vest over either a one-year period or three-year period. As of March 31, 2019, the Company had approximately 0.4 million unvested restricted shares outstanding at weighted average grant date fair value of $16.07, and unrecognized compensation cost related to these awards totaled $3.9 million. The remaining weighted average contractual period over which this compensation cost may be recognized is 2.1 years.

The following tables summarize share and incentive-based compensation for the three-month periods ended March 31, 2019, and 2018 (in thousands):

	Recurring Compensation Expense(1)		Executive Terminations(2)		Reduction in Force(2)		Total
Three Months Ended March 31, 2019
Equity-classified awards:
Restricted stock awards	$	745	$	—	$	—	$	745
Performance share units	198		—		—		198
Stock options	130		—		—		130
Total share-based compensation expense	1,073		—		—		1,073
Less: Capitalized compensation expense	(77)		—		—		(77)
Share-based compensation expense, net	$	996	$	—	$	—	$	996
Three Months Ended March 31, 2018
Equity-classified awards:
Restricted stock awards	$	2,776	$	8,140	$	3,686	$	14,602
Performance share units	329		974		150		1,453
Total share-based compensation expense	3,105		9,114		3,836		16,055
Liability-classified awards:
Performance units	530		2,367		589		3,486
Total share and incentive-based compensation expense	3,635		11,481		4,425		19,541
Less: Capitalized compensation expense	(210)		—		—		(210)
Share and incentive-based compensation expense, net	$	3,425	$	11,481	$	4,425	$	19,331

____________________

1.Recorded in general and administrative expense in the accompanying consolidated statements of operations.

2.Recorded in employee termination benefits in the accompanying consolidated statements of operations. Vesting for certain stock restricted stock awards, performance share units, and performance units was accelerated in connection with executive terminations and a reduction in force in the first quarter of 2018.

17

SANDRIDGE ENERGY, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

(Unaudited)

14. Revenues

The following table disaggregates the Company’s revenue by source for the three-month periods ended March 31, 2019 and 2018:

	Three Months Ended March 31,
	2019		2018
Oil	$	43,159	$	53,335
NGL	13,111		16,389
Natural gas	16,778		17,242
Other	188		162
Total revenues	$	73,236	$	87,128

Oil, natural gas and NGL revenues. A majority of the Company’s revenues come from sales of oil, natural gas and NGLs and are recorded at a point in time when control of the oil, natural gas and NGL production passes to the customer at the inlet of the processing plant or pipeline, or the delivery point for onloading to a delivery truck. As the Company’s customers obtain control of the production prior to selling it to other end customers, the Company presents its revenues on a net basis, rather than on a gross basis.

Pricing for the Company’s oil, natural gas and NGL contracts is variable and is based on volumes sold multiplied by either an index price, net of deductions, or a percentage of the sales price obtained by the customer, which is also based on index prices. The transaction price is allocated on a pro-rata basis to each unit of oil, natural gas or NGL sold based on the terms of the contract. Oil, natural gas and NGL revenues are also recorded net of royalties, discounts and allowances, and transportation costs, as applicable. Taxes assessed by governmental authorities on oil, natural gas and NGL sales are presented separately from revenues and are included in production tax expense in the consolidated statements of operations.

Revenues Receivable. The Company records an asset in accounts receivable, net on its consolidated balance sheet for revenues receivable from contracts with customers at the end of each period. Pricing for revenues receivable is estimated using current month crude oil, natural gas and NGL prices, net of deductions. Revenues receivable are typically collected the month after the Company delivers the related production to its customers. As of March 31, 2019, and December 31, 2018, the Company had revenues receivable of $28.1 million and $31.8 million, respectively, and did not record any bad debt expense on revenues receivable during the three-month period ended March 31, 2019.

Practical expedients and exemptions. Most of the Company's contracts are short-term in nature with a contract term of one year or less. The Company generally expenses certain insignificant costs when incurred rather than recognizing them as an asset because the amortization period would have been one year or less. Additionally, the Company does not disclose the value of unsatisfied performance obligations for (i) contracts with an original expected length of one year or less, and (ii) contracts for which revenue is recognized at the amount to which the Company has the right to invoice for services performed. Payment terms are typically within 30 days of control being transferred.

Currently, the Company’s existing contracts do not contain financing components, but the Company has elected the practical expedient that allows financing components to be ignored if the difference between the performance and payment is less than one year for any future contracts that may contain financing components.

18

ITEM 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Introduction

The following discussion and analysis is intended to help the reader understand our business, financial condition, results of operations, liquidity and capital resources. This discussion and analysis should be read in conjunction with the accompanying unaudited condensed consolidated financial statements and the accompanying notes included in this Quarterly Report, as well as our audited consolidated financial statements and the accompanying notes included in the 2018 Form 10-K. Our discussion and analysis includes the following subjects:

•Overview;

•Consolidated Results of Operations;

•Liquidity and Capital Resources; and

•Critical Accounting Policies and Estimates

The financial information with respect to the three-month periods ended March 31, 2019, and 2018, discussed below, is unaudited. In the opinion of management, this information contains all adjustments, which consist only of normal recurring adjustments unless otherwise disclosed, necessary to state fairly the accompanying unaudited condensed consolidated financial statements. The results of operations for the interim periods are not necessarily indicative of the results of operations for the full fiscal year.

Overview

We are an oil and natural gas company with a principal focus on exploration and production activities in the U.S. Mid-Continent and North Park Basin of Colorado.

Operational Activities

Operational activities for the three-month periods ended March 31, 2019, and 2018 include the following:

	Three Months Ended March 31,
	2019			2018
	Gross Wells Drilled(2)	Net Wells Drilled(2)	Average Rigs Drilling	Gross Wells Drilled(2)	Net Wells Drilled(2)	Average Rigs Drilling
Area
Mid-Continent (1)	8	2.9	1.7	6	1.4	1.6
North Park Basin	4	4.0	1.0	5	5.0	1.2
Total	12	6.9	2.7	11	6.4	2.8

____________________

1.Five wells were drilled under our drilling participation agreement in the NW STACK during each of the three-month periods ended March 31, 2019 and 2018. Under this agreement, we are receiving a 20% net working interest after funding 10% of the drilling and completion costs related to the subject wells. The counterparty to the drilling participation agreement has been billed costs totaling $81.4 million for drilling and completion activity from inception through March 31, 2019, under the initial $100.0 million tranche of the agreement. This agreement is expected to be fulfilled in the second quarter of 2019. A second $100.0 million tranche is subject to mutual agreement.

2.Includes wells with a rig release date during the three-month period ended March 31, 2019 or 2018, respectively.

19

The chart below shows production by product for the three-month periods ended March 31, 2019 and 2018:

Outlook

Our focus in 2019 is to develop our inventory of NW STACK and North Park Basin drilling opportunities and pursue value enhancing opportunities in the Mid-Continent. We will also pursue accretive acquisitions of strategic assets that provide high quality production and development upside. Focusing on cost reductions, margin improvements and opportunistic divestment of core and non-core properties will also be a part of our plan moving forward. Based on these strategic objectives, we intend to spend between $160.0 million and $180.0 million as part of our 2019 capital budget plan. The substantial majority of these budgeted expenditures is designated for drilling and completion activities. Based on our 2019 capital spending plans, we estimate that our production will experience a 5%-6% decline compared to full year 2018 production. We will continue to monitor the changing market conditions and the results of our operations and will take measures to help achieve our strategic objectives, enhance shareholder value and improve our competitiveness in the marketplace. We will endeavor to keep our capital spending within or very close to our projected cash flows from operations subject to changing industry conditions or events.

Consolidated Results of Operations

The majority of our consolidated revenues and cash flow are generated from the production and sale of oil, natural gas and NGLs. Our revenues, profitability and future growth depend substantially on prevailing prices received for our production, the quantity of oil, natural gas and NGLs we produce, our ability to find and economically develop and produce our reserves, and changes in the fair value of our commodity derivative contracts, if any. Prices for oil, natural gas and NGLs fluctuate widely and are difficult to predict.

To provide information on the general trend in pricing, the average NYMEX prices for oil and natural gas during the three-month periods ended March 31, 2019, and 2018 are shown in the table below: 

	Three Months Ended March 31,
	2019		2018
Oil (per Bbl)	$	54.90	$	62.89
Natural gas (per MMBtu)	$	2.87	$	2.85

In order to reduce our exposure to price fluctuations, we have historically entered into commodity derivative contracts for a portion of our anticipated future oil and natural gas production depending on management's view of opportunities under then-prevailing market conditions as discussed in “Item 3. Quantitative and Qualitative Disclosures About Market Risk.” Reducing our exposure to price volatility helps mitigate the risk that we will not have adequate funds available for our capital expenditure programs. During periods where the strike prices for our commodity derivative contracts are below market prices at the time of settlement, we may not fully benefit from increases in the market price of oil and natural gas. Conversely, during periods of declining market prices of oil and natural gas, our commodity derivative contracts may partially offset declining revenues and cash flow to the extent strike prices for our contracts are above market prices at the time of settlement.

20

Oil, Natural Gas and NGL Production and Pricing

Set forth in the table below is production and pricing information for the Company for the three-month periods ended March 31, 2019, and 2018:

	Three Months Ended March 31,
	2019		2018
Production data
Oil (MBbls)	849		926
NGL (MBbls)	875		700
Natural gas (MMcf)	8,620		9,487
Total volumes (MBoe)	3,161		3,207
Average daily total volumes (MBoe/d)	35.1		35.6
Average prices—as reported(1)
Oil (per Bbl)	$	50.84	$	57.60
NGL (per Bbl)	$	14.98	$	23.41
Natural gas (per Mcf)	$	1.95	$	1.82
Total (per Boe)	$	23.11	$	27.12
Average prices—including impact of derivative contract settlements
Oil (per Bbl)	$	50.84	$	49.20
NGL (per Bbl)	$	14.98	$	23.41
Natural gas (per Mcf)	$	2.54	$	1.99
Total (per Boe)	$	24.72	$	25.21

__________________

1.Prices represent actual average sales prices for the periods presented and do not include effects of derivatives.

The table below presents production by area of operation for the three-month periods ended March 31, 2019, and 2018:

	Three Months Ended March 31,
	2019			2018
	Production (MBoe)	% of Total		Production (MBoe)	% of Total
Mississippian Lime	2,650	83.8	%	2,607	81.3	%
NW STACK	236	7.5	%	273	8.5	%
North Park Basin	275	8.7	%	213	6.6	%
Permian Basin(1)	—	—	%	114	3.6	%
Total	3,161	100.0	%	3,207	100.0	%

__________________

1.The Permian Basin properties were sold in the fourth quarter of 2018.

21

Revenues

Consolidated revenues for the three-month periods ended March 31, 2019, and 2018 are presented in the table below (in thousands):

	Three Months Ended March 31,
	2019		2018
Oil	$	43,159	$	53,335
NGL	13,111		16,389
Natural gas	16,778		17,242
Other	188		162
Total revenues	$	73,236	$	87,128

Variances in oil, natural gas and NGL revenues attributable to changes in the average prices received for our production and total production volumes sold for the three-month periods ended March 31, 2019, and 2018 are shown in the table below (in thousands):

2018 oil, natural gas and NGL revenues	$	86,966
Change due to production volumes	(1,913)
Change due to average prices	(12,005)
2019 oil, natural gas and NGL revenues	$	73,048

Revenues from oil, natural gas and NGL sales decreased $13.9 million, or 16.0% for the three-month period ended March 31, 2019, compared to the same period in 2018, respectively, due primarily to a decrease in average prices received for our oil and NGL production during the 2019 period. Oil and natural gas production also declined in the first quarter of 2019 compared to the first quarter of 2018 largely due to natural declines in existing producing wells in the Mid-Continent and the sale of our Permian properties in the fourth quarter of 2018, which were partially offset by added production from the purchase of additional interests in certain oil and natural gas properties in the Mississippian Lime and NW STACK areas of Oklahoma and Kansas in the fourth quarter of 2018.

Expenses

Expenses for the three-month periods ended March 31, 2019, and 2018 consisted of the following (in thousands): 

	Three Months Ended March 31,
	2019		2018
Lease operating expenses	$	22,779	$	23,519
Production, ad valorem, and other taxes	5,080		6,234
Depreciation and depletion—oil and natural gas	36,465		27,997
Depreciation and amortization—other	2,943		3,153
Impairment	—		4,170
General and administrative	9,939		13,682
Proxy contest	—		407
Employee termination benefits	—		31,587
Loss on derivative contracts	209		18,330
Other operating expense	82		16
Total expenses	$	77,497	$	129,095

22

Financial Metrics

	Three Months Ended March 31,
	2019			2018
Lease operating expenses ($/Boe)	$	7.21		$	7.33
Production, ad valorem, and other taxes ($/Boe)	$	1.61		$	1.94
Depreciation and depletion—oil and natural gas ($/Boe)	$	11.54		$	8.73
Production, ad valorem, and other taxes (% of oil, natural gas, and NGL revenue)	7.0		%	7.2		%

Lease operating expenses and production, ad valorem, and other taxes remained relatively consistent for the three-month period ended March 31, 2019, compared to the same 2018 period. 

Depreciation and depletion for our oil and natural gas properties increased by $8.5 million or $2.81/Boe for the three-month period ended March 31, 2019, compared to the same period in 2018. This rate increase is a result of development activities where our finding and development costs are higher than historical depreciation and depletion rates. As a result, average depletion rates have increased and may continue to increase as we develop these areas.

Impairment for the three-month period ended March 31, 2018, primarily reflects the write-down of midstream generator assets classified as held for sale to estimated net realizable value.

General and administrative expenses decreased $3.7 million, or 27.4% for the three-month period ended March 31, 2019, from the same period in 2018 due primarily to (i) a $2.5 million decrease in compensation-related costs largely resulting from a reduction in force during the first quarter of 2018 as well as additional declines in headcount throughout 2018, and (ii) a decrease of $1.2 million in professional services costs and other miscellaneous general and administrative items.

Employee termination benefits for the three-month period ended March 31, 2018, include cash and share-based severance costs incurred primarily as a result of (i) the reduction in force in the first quarter of 2018 and (ii) severance costs associated with the departure of executive officers and other senior officers. See "Note 3 - Employee Termination Benefits" in the accompanying unaudited condensed consolidated financial statements for additional discussion of these expenses.

The following table summarizes derivative activity for the three-month periods ended March 31, 2019, and 2018 (in thousands):

	Three Months Ended March 31,
	2019		2018
Loss on commodity derivative contracts	$	209	$	18,330
Cash (received) paid on settlements	$	(5,078)	$	6,119

On November 14, 2017, we entered into an Agreement and Plan of Merger (the "merger") with Bonanza Creek Energy, Inc. ("Bonanza Creek") which was subsequently terminated in December 2017. In contemplation of the proposed merger with Bonanza Creek, which would have been partially financed with debt, we entered into several oil derivative contracts in November 2017. We recorded losses on these oil derivatives of $5.8 million for the three-month period ended March 31, 2018, which include net cash payments upon settlement of $1.2 million.

Our derivative contracts are not designated as accounting hedges and, as a result, changes in their fair value are recorded each quarter as a component of operating expenses. Internally, management views the settlement of commodity derivative contracts at contractual maturity as adjustments to the price received for oil and natural gas production to determine “effective prices.” In general, cash is received on settlement of contracts due to lower oil and natural gas prices at the time of settlement compared to the contract price for our commodity derivative contracts, and cash is paid on settlement of contracts due to higher oil and natural gas prices at the time of settlement compared to the contract price for our commodity derivative contracts. We had no commodity derivative contracts outstanding at March 31, 2019.

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Other (Expense) Income

The Company’s other (expense) income for the three-month periods ended March 31, 2019, and 2018 are presented in the table below (in thousands).

	Three Months Ended March 31,
	2019		2018
Other (expense) income
Interest expense, net	$	(585)	$	(948)
Gain on extinguishment of debt	—		1,151
Other (expense) income, net	(431)		873
Total other (expense) income	$	(1,016)	$	1,076

Gain on extinguishment of debt was recognized for the three-month period ended March 31, 2018, as a result of writing off the unamortized premium in conjunction with the repayment of the Building Note during the first quarter of 2018.

Liquidity and Capital Resources

As of March 31, 2019, our cash and cash equivalents, excluding restricted cash, were $7.4 million. Additionally, we had $20.0 million of current debt outstanding under our $350.0 million credit facility and $5.2 million in outstanding letters of credit, which reduce the amount available under the credit facility. As of May 2, 2019, the Company had approximately $10.7 million in cash and cash equivalents, excluding restricted cash, $40.0 million outstanding under our credit facility, and $5.2 million in outstanding letters of credit. The credit facility borrowing base is currently under evaluation by the Company and its lenders under the credit facility in connection with the scheduled spring redetermination.

Working Capital and Sources and Uses of Cash

Our principal sources of liquidity for the next year include cash flow from operations, cash on hand and amounts available under our credit facility, which terminates on March 31, 2020, as discussed in “—Credit Facility” below.

Our working capital deficit increased to $101.1 million at March 31, 2019, compared to $63.9 million at December 31, 2018, largely due to borrowings on the credit facility becoming due in the next 12 months, fluctuations in the timing and amount of payments of accounts payable and accrued expenses, and the settlement of all remaining derivative contracts in the first quarter of 2019. This increase is partially offset by fluctuations in the timing and amount of collections of receivables.

We intend to spend between $160.0 million and $180.0 million in our 2019 capital budget plan, with the majority of those expenditures being allocated to drilling and completion activities. We intend to fund capital expenditures and other commitments for the next 12 months using cash flow from our operations, borrowings under our credit facility and cash on hand. We will endeavor to keep our capital spending within or very close to our projected cash flows from operations subject to changing industry conditions or events.

Cash Flows

Our cash flows from operations, which impact our ability to fund our capital expenditures, are substantially dependent on current and future prices for oil and natural gas, which historically have been, and may continue to be, volatile. For example, during the period from January 2018 through March 2019, the NYMEX settled price for oil fluctuated between a high of $76.41 per Bbl in October 2018 and a low of $42.53 per Bbl in December 2018, and the month-end NYMEX settled price for gas fluctuated between a high of $4.72 per MMBtu in December 2018 and a low of $2.64 per MMBtu in March 2018. 

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Our cash flows for the three-month periods ended March 31, 2019, and 2018 are presented in the following table and discussed below (in thousands):

	Three Months Ended March 31,
	2019		2018
Cash flows provided by operating activities	$	31,570	$	30,407
Cash flows used in investing activities	(61,587)		(64,572)
Cash flows provided by financing activities	19,707		(37,965)
Net decrease in cash and cash equivalents	$	(10,310)	$	(72,130)

Cash Flows from Operating Activities

Operating cash flows remained relatively consistent for the three-month period ended March 31, 2019, compared to the same period in 2018. See “—Consolidated Results of Operations” for further analysis of the changes in operating expenses.

Cash Flows from Investing Activities

We dedicate and expect to continue to dedicate a substantial portion of our capital expenditure program toward the exploration for and development of our oil and natural gas properties. These capital expenditures are necessary to offset inherent declines in production and proved reserves, which is typical in the capital-intensive oil and natural gas industry. During the three-month periods ended March 31, 2019 and 2018, cash flows used in investing activities primarily consisted of capital expenditures for drilling and completion activities. 

Capital expenditures for the three-month periods ended March 31, 2019, and 2018 are summarized on an accrual basis below (in thousands):

	Three Months Ended March 31,
	2019		2018
Capital Expenditures (on an accrual basis)
Drilling and completion	$	70,232	$	35,345
Leasehold and geophysical	1,069		1,977
Other - operating	—		(53)
Other - corporate	143		—
Capital expenditures, excluding acquisitions	71,444		37,269
Acquisitions	(326)		—
Total	$	71,118	$	37,269

Cash Flows from Financing Activities

Our cash provided by financing activities was approximately $19.7 million for the three-month period ended March 31, 2019, which consisted primarily of net borrowings under the credit facility. Our cash used in financing activities was approximately $38.0 million during the three-month period ended March 31, 2018, which consisted of the repayment of the Building Note and cash paid for employee tax obligations in connection with the withholding of common shares upon vesting of employee share-based compensation awards.

Indebtedness

Credit Facility

We had $20.0 million of current debt outstanding under our credit facility at March 31, 2019. The borrowing base under the credit facility is $350.0 million and is currently under evaluation by the Company and its lenders under the credit facility in connection with the scheduled spring redetermination. The next semi-annual borrowing base redetermination after this is scheduled for October 1, 2019. The credit facility matures on March 31, 2020. The credit facility is secured by (i) first-priority mortgages on at least 95% of the PV-9 valuation of all proved reserves included in our most recently delivered reserve report, (ii) a first-priority perfected pledge of substantially all of the capital stock owned by each credit party and equity interests in the Royalty Trusts that are owned by a credit party and (iii) a first-priority perfected security interest in substantially all the cash, cash equivalents, deposits, securities and other similar accounts, and other tangible and intangible assets of the credit parties

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(including but not limited to as-extracted collateral, accounts receivable, inventory, equipment, general intangibles, investment property, intellectual property, real property and the proceeds of the foregoing).

The credit facility requires us to maintain (i) a maximum consolidated total net leverage ratio, measured as of the end of any fiscal quarter, of no greater than 3.50 to 1.00 and (ii) a minimum consolidated interest coverage ratio, measured as of the end of any fiscal quarter, of no less than 2.25 to 1.00. These financial covenants are subject to customary cure rights. We were in compliance with all applicable financial covenants under the credit facility as of March 31, 2019 as our consolidated total net leverage ratio was 0.06 and our consolidated interest coverage ratio was 80.20.

The credit facility contains customary affirmative and negative covenants, including as to compliance with laws (including environmental laws, ERISA and anti-corruption laws), maintenance of required insurance, delivery of quarterly and annual financial statements, oil and gas engineering reports, maintenance and operation of property (including oil and gas properties), restrictions on the incurrence of liens, indebtedness, asset dispositions, fundamental changes, restricted payments and other customary covenants.

The credit facility includes events of default relating to customary matters, including, among other things, nonpayment of principal, interest or other amounts; violation of covenants; incorrectness of representations and warranties in any material respect; cross-payment default and cross acceleration with respect to indebtedness in an aggregate principal amount of $25.0 million or more; bankruptcy; judgments involving liability of $25.0 million or more that are not paid; and ERISA events. Many events of default are subject to customary notice and cure periods.

See “Note 7 - Debt” to the accompanying unaudited condensed consolidated financial statements for additional discussion of the Company’s debt.

Contractual Obligations and Off-Balance Sheet Arrangements

At December 31, 2018, the Company’s contractual obligations included third-party drilling rig agreements, asset retirement obligations, operating leases and other individually insignificant obligations. Additionally, we have certain financial instruments representing potential commitments that were incurred in the normal course of business to support our operations, including standby letters of credit and surety bonds. The underlying liabilities insured by these instruments are reflected in our balance sheets, where applicable. Therefore, no additional liability is reflected for the letters of credit and surety bonds.

The Company's current maturities of long-term debt increased by $20.0 million at March 31, 2019 compared to December 31, 2018, due to net borrowings on the Company's credit facility, which matures in March 2020. Other than the borrowings on the credit facility, there were no other significant changes in contractual obligations and off-balance sheet arrangements from those reported in the 2018 Form 10-K.

Critical Accounting Policies and Estimates

For a description of our critical accounting policies and estimates, refer to Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations included in the 2018 Form 10-K. For a discussion of recent accounting pronouncements, newly adopted and recent accounting pronouncements not yet adopted, see “Note 1 - Basis of Presentation” to the accompanying unaudited condensed consolidated financial statements included in Item 1 of this Quarterly Report. We did not have any material changes in critical accounting policies, estimates, judgments and assumptions during the first three months of 2019.

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ITEM 3. Quantitative and Qualitative Disclosures About Market Risk

General

This discussion provides information about the financial instruments we use to manage commodity prices. All contracts are settled in cash and do not require the actual delivery of a commodity at settlement. Additionally, our exposure to credit risk and interest rate risk is also discussed.

Commodity Price Risk. Our most significant market risk relates to the prices we receive for our oil, natural gas and NGLs. Due to the historical price volatility of these commodities, from time to time, depending upon our view of opportunities under the then-prevailing current market conditions, we enter into commodity price derivative contracts for a portion of our anticipated production volumes for the purpose of reducing variability of oil and natural gas prices we receive. Our credit facility limits our ability to enter into derivative transactions to 90% of expected production volumes from estimated proved reserves over the period covered by the transactions.

Historically, we have used a variety of commodity-based derivative contracts, including fixed price swaps, basis swaps and collars. At March 31, 2019, we had no commodity derivative contracts in place.

The following table summarizes derivative activity for the three-month periods ended March 31, 2019, and 2018 (in thousands):

	Three Months Ended March 31,
	2019		2018
Loss on commodity derivative contracts	$	209	$	18,330
Cash (received) paid on settlements	$	(5,078)	$	6,119

See “Note 8 - Derivatives” to the accompanying unaudited condensed consolidated financial statements included in this Quarterly Report for additional information regarding our commodity derivatives.

Credit Risk. Historically, all of our derivative transactions have been carried out in the over-the-counter market. The use of derivative transactions in over-the-counter markets involves the risk that the counterparties may be unable to meet the financial terms of the transactions. The counterparties to our past derivative transactions have had an “investment grade” credit rating. When derivative contracts are outstanding, we monitor the credit ratings of our derivative counterparties and consider our counterparties’ credit default risk ratings in determining the fair value of our derivative contracts. Historically, our derivative contracts have been with multiple counterparties to minimize exposure to any individual counterparty.

We have not required collateral or other security from counterparties to support derivative instruments. We have historically had master netting agreements with each of our derivative contract counterparties, which allow us to net our derivative assets and liabilities by commodity type with the same counterparty. This limited our maximum amount of loss under derivative transactions due to credit to the net amounts due from the counterparties under any outstanding commodity derivative contracts. Our past losses have been further limited as any amounts due from a defaulting counterparty that was also a lender under the credit facility were offset against amounts owed, if any, to such counterparty.  

Interest Rate Risk. We are exposed to interest rate risk on our credit facility. This variable interest rate on our credit facility fluctuates and exposes us to short-term changes in market interest rates as our interest obligation on this instrument is periodically redetermined based on prevailing market interest rates, primarily LIBOR and the federal funds rate. We had $20 million in outstanding variable rate debt as of March 31, 2019.

ITEM 4. Controls and Procedures

Disclosure Controls and Procedures

Under the supervision and with the participation of the Company’s management, including the Company’s CEO and CFO, the Company performed an evaluation of the effectiveness of the design and operation of its disclosure controls and procedures pursuant to Exchange Act Rules 13a-15 and 15d-15 as of the end of the period covered by this Quarterly Report. Based on that evaluation, the Company’s CEO and CFO concluded that the Company’s disclosure controls and procedures were effective as of March 31, 2019, to provide reasonable assurance that the information required to be disclosed by the Company in its reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in

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the rules and forms of the Securities and Exchange Commission, and such information is accumulated and communicated to management, as appropriate to allow timely decisions regarding required disclosure.

Changes in Internal Control Over Financial Reporting

There was no change in the Company’s internal control over financial reporting during the quarter ended March 31, 2019 that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

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PART II. Other Information

ITEM 1. Legal Proceedings

As previously disclosed, on May 16, 2016, the Debtors filed voluntary petitions for reorganization under Chapter 11 of the United States Bankruptcy Code in the Bankruptcy Court. The Bankruptcy Court confirmed the Plan on September 9, 2016, and the Debtors subsequently emerged from bankruptcy on October 4, 2016.

Pursuant to the Plan, claims against the Company were discharged without recovery in each of the following consolidated Cases:

•In re SandRidge Energy, Inc. Securities Litigation, Case No. 5:12-cv-01341-LRW, USDC, Western District of Oklahoma

•Ivan Nibur, Lawrence Ross, Jase Luna, Matthew Willenbucher, and the Duane & Virginia Lanier Trust v. SandRidge Mississippian Trust I, et al., Case No. 5:15-cv-00634-SLP, USDC, Western District of Oklahoma

Although the Cases have not been dismissed against certain former officers and directors who remain defendants in the Cases, the Company remains as a nominal defendant in each of the Cases so that any of the respective plaintiffs may seek to recover proceeds from any applicable insurance policies or proceeds. In each of the Cases, to the extent liability exceeds the amount of available insurance proceeds, the Company may owe indemnity obligations to its former officers and/or directors who remain as defendants in such action. The Company indemnifies the SandRidge Mississippian Trust I and SandRidge Mississippian Trust II against losses, claims, damages, liabilities and expenses, including reasonable costs of investigation and attorney’s fees and expenses arising out of certain legal matters. An estimate of probable losses associated with any of the Cases cannot be made at this time, however the Company believes that any potential liability with respect to the Cases will not be material. The Company has not established any liabilities relating to any of the Cases.

In addition to the matters described above, the Company is involved in various lawsuits, claims and proceedings which are being handled and defended by the Company in the ordinary course of business.

ITEM 1A. Risk Factors

There have been no material changes to the risk factors previously discussed in Item 1A—Risk Factors in the Company's 2018 Form 10-K.

ITEM 2. Unregistered Sales of Equity Securities and Use of Proceeds

None.

ITEM 3. Defaults upon Senior Securities

None.

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ITEM 6. Exhibits

		Incorporated by Reference
Exhibit No.	Exhibit Description	Form	SEC File No.	Exhibit	Filing Date	Filed Herewith
2.1	Amended Joint Chapter 11 Plan of Reorganization of SandRidge Energy, Inc., et al., dated September 19, 2016	8-A	001-33784	2.1	10/4/2016
3.1	Amended and Restated Certificate of Incorporation of SandRidge Energy, Inc.	8-A	001-33784	3.1	10/4/2016
3.2	Amended and Restated Bylaws of SandRidge Energy, Inc.	8-A	001-33784	3.2	10/4/2016
10.2.3†	Form of Option Award Agreement for Amended and Restated SandRidge Energy, Inc. 2016 Omnibus Incentive Plan	10-K	001-33784	10.2.3	3/4/2019
10.3.6†	Offer Letter to Paul D. McKinney, dated as of January 28, 2019	8-K	001-33784	10.1	1/28/2019
10.3.7†	SandRidge Energy, Inc. Special Severance Plan 2018, effective as of April 1, 2018					*
10.3.8†	First Amendment to SandRidge Energy, Inc. Special Severance Plan 2018, effective as of December 17, 2018					*
31.1	Section 302 Certification—Chief Executive Officer					*
31.2	Section 302 Certification—Chief Financial Officer					*
32.1	Section 906 Certifications of Chief Executive Officer and Chief Financial Officer					*
101.INS	XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.					*
101.SCH	XBRL Taxonomy Extension Schema Document					*
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document					*
101.DEF	XBRL Taxonomy Extension Definition Document					*
101.LAB	XBRL Taxonomy Extension Label Linkbase Document					*
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document					*
† Management contract or compensatory plan or arrangement

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SIGNATURE

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

SandRidge Energy, Inc.
By:	/s/    Michael A. Johnson
	Michael A. Johnson Senior Vice President and Chief Financial Officer

Date: May 9, 2019 

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EX-10.3.7

Exhibit 10.3.7

THE SANDRIDGE ENERGY, INC.

SPECIAL SEVERANCE PLAN

1.Introduction: SandRidge Energy, Inc. (the “Company”) has adopted the SandRidge Energy, Inc. Special Severance Plan (the “Plan”) to be effective April 1, 2018. The Plan is to provide certain benefits to Eligible Employees who are separated from employment following the Effective Date through March 31, 2019 in circumstances that make them eligible for benefits under this Plan.

2.Definitions:

a.Administrator means the Committee.

b.Base Salary means an Eligible Employee’s regular salary or wage calculated on a weekly basis and does not include any bonuses, overtime pay, pay differentials, on-call pay or other types of compensation paid in addition to the base salary or base wage. The Eligible Employee’s Base Salary will be calculated as of the Termination Date.

c.Cause shall include: (i) any act of an Eligible Employee which would constitute a felony or fraud; (ii) failure of an Eligible Employee to adequately perform the job duties and responsibilities as assigned by the Company or any breach of the Company’s policies and procedures; (iii) neglect or dishonesty in performance of an Eligible Employee’s duties, (iv) nonperformance of such job duties, or refusal to abide by or comply with the reasonable directives of his/her superiors; or (v) the commission of any act in direct or indirect competition with or detrimental to the best interests of Company. A determination that an Eligible Employee was separated for Cause shall be within the sole discretion of the Company. In the event an Eligible Employee’s employment is terminated for Cause, an Eligible Employee shall thereafter have no right to receive compensation or otherbenefits under this Plan.

d.Code means the Internal Revenue Code of 1986, as amended.

e.Committee means the Company’s Employee Benefits Committee.

f.Company means SandRidge Energy, Inc. and its subsidiary entities as of the Effective Date.

g.Decisional/Organizational Unit means any of the divisions, facilities, departments, organizational units or other portions of the organizational structure of the Company from which the Company may choose persons who will be terminated.

h.Effective Datemeans April 1, 2018.

i.Election Period. In connection with separations where the Severance Benefit Agreement attached as Exhibit A applies, Election Period means the period: (i) commencing on the date an Eligible Employee first has in his/her possession (a) his/her Special Severance Benefit Agreement, (b) his/her General Release and (c) the OWBPA Materials; and (ii) ending forty-five (45) days after such date.  In connection with separations where the Severance Benefit Agreement attached as Exhibit A-1 applies, Election Period means the period: (i) commencing on the date an Eligible Employee first has in his/her possession the his/her Special Severance Benefit Agreement and his/her General Release; and (ii) ending twenty-one (21) days after such date.

j.Eligible Employee means an individual who, as of his/her Termination Date: (i) is an active employee of the Company; (ii) is not covered by another agreement, plan or program that provides for greater separation payments and/or benefits in connection with a separation from employment (except as relates to the Pro-rated AIP Payment described in Subsection (s) below) or a collective bargaining agreement (unless the collective bargaining agreement or other separation agreement or employment agreement provides for participation in this Plan); (iii) is classified as a regular employee of and working directly for the Company (and not an intern or a “temporary,” “seconded” or “leased” employee); (iv) if part of a group of two or more employees to whom Special Severance Benefits are contemporaneously being offered, works in a

Decisional/Organizational Unit; (v) does not engage in Unauthorized Communication at any time either before or after his/her termination from employment; (vi) has continued to be employed by the Company until released by the Company; and (vii) meets the requirements to be a Participant as defined below. In addition, an individual shall not be an Eligible Employee if he/she is offered and declines a transfer to a position elsewhere within the Company. Also, an individual shall not be an Eligible Employee if the individual receives an offer of employment from the purchaser or lessee of assets or an affiliated or successor entity to such purchaser or lessee and either accepts the offer or refuses the offer without the written consent of the Company to such refusal (which the Company may in its sole and absolute discretion grant or withhold). Lastly, an Eligible Employee does not include an individual who is terminated for Cause as determined by the Company in its sole and absolute discretion prior to the execution of the Special Severance Benefit Agreement and General Release, nor does it include an individual who has notified the Company he/she intends to terminate or resign his/her employment voluntarily at anytime prior to the Termination Date.

k.ERISA means the Employee Retirement Income Security Act of 1974, as amended.

l.Fiduciary/Named Fiduciary means SandRidge Energy, Inc...

m.General Release means the general release attached hereto as Exhibit B or B-1.

n.Healthcare Stipend means the Fifteen Hundred Dollar ($1,500.00) payment an Eligible Employee who is an active participant in the Company’s group health plan as of the Termination Date will receive as part of his/her Special Severance Benefits.

o.Long-Term Incentive Awards means all equity and performance awards, if any, an Eligible Employee has received under the Company’s 2016 Omnibus Incentive Plan.

p.OWBPA Materials means a description of an Eligible Employee’s Decisional/Organizational Unit, the process and criteria used to identify the specific individual in the Decisional/Organization Unit who would and would not be potentially eligible for severance benefits and a list of the positions and ages of the employees in an Eligible Employee’s Decisional/Organizational Unit who were and were not selected for the Plan. These materials will be provided when the Eligible Employee is part of a group of two or more employees to whom Special Severance Benefits are contemporaneously being offered under this Plan.

q.Participant means an Eligible Employee who becomes entitled to Special Severance Benefits under this Plan by signing a Special Severance Benefit Agreement and General Release and who is not subsequently disqualified for the Special Severance Benefits pursuant to the Plan’s terms and/or the terms of the Special Severance Benefit Agreement and General Release.

r.Plan means The SandRidge Energy, Inc. Special Severance Plan.

s.Pro-Rated AIP Payment means the payment an Eligible Employee will receive as part of his/her Special Severance Benefits which shall be equal to the Eligible Earnings (as defined in the Company’s Annual Incentive Plan (the “AIP”)) he/she has been paid year-to-date as of the Termination Date multiplied by the Eligible Employee’s target percentage for the calendar year in which the Termination Date occurs under the AIP; provided that if the Eligible Employee has an individual employment agreement in effect as of the Termination Date that would provide him/her with a larger AIP payment that the Pro-rated AIP Payment under this Plan, the Eligible Employee will be paid the amount provided in his/her employment agreement in lieu of a Pro-Rated AIP Payment under the Plan.

t.Special Severance BenefitAgreement means the agreement attached hereto as Exhibit A or A-1.

u.Special Severance Benefits means the payments and benefits an Eligible Employee who becomes a Participant will receive under this Plan which includes the Special Severance

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Payment, the Pro-Rated AIP Payment and, as applicable, the Healthcare Stipend and/or acceleration of vesting of all the Eligible Employee’s Long-Term Incentive Awards.

v.Special Severance Paymentmeans the lump sum payment an Eligible Employee who becomes a Participant will receive under this Plan. If the Eligible Employee is in a position of Director (or the equivalent) or above as of the Termination Date, the Special Severance Payment will be in an amount equal to twenty-six (26) weeks of Base Salary; if the Eligible Employee is in a position below Director, the Special Severance Payment will be in an amount equal to four (4) weeks of the Eligible Employee’s Base Salary for each Year of Service, subject to a minimum payment equal to thirteen (13) weeks of Base Salary and a maximum payment equal to twenty-six (26) weeks of Base Salary..

w.Termination Date means the date on which the Company releases an Eligible Employee from employment or such later effective date of termination from employment as the Company may designate.

x.Unauthorized Communication means disclosure, dissemination or duplication of the Plan, the Special Severance Benefit Agreement and/or the General Release by an Eligible Employee to any third party, including the media, as well as any disclosure or publication via the internet or social media. Unauthorized Communication specifically does not include discussion by an Eligible Employee of the terms of the Plan, the Special Severance Benefit Agreement and/or the General Release with his/her immediate family, his/her legal counsel or accountant, any governmental agency or entity (including but not limited to the Department of Justice or Equal Employment Opportunity Commission or a similar fair employment practices agency of the Eligible Employee’s State of residence or employment), or other similarly situated employees.

y. Years of Service. For purposes of calculating length of service, Years of Service are determined based on the Eligible Employee’s actual time of continuous employment as of the Termination Date. For example, if the Eligible Employee has been employed by the Company for four years and four months as of the Termination Date, his/her Special Severance Payment would be calculated by multiplying 4 1/3 by 4 and his/her Special Severance Payment would be 17 1/3 weeks of Base Salary. Prior periods of employment in which there has been a break in service (except for authorized leaves of absence) will not be used to calculate Years of Service.

3.Eligibility.

3.1Participation. Each Eligible Employee shall be potentially eligible to be a Participant under the Plan as of the Effective Date or, if applicable, the date of assignment to a Decisional/Organizational Unit, whichever is later.

3.2Duration of Participation. An Eligible Employee shall cease to be potentially eligible to be a Participant under the Plan when the Eligible Employee ceases to be employed by the Company, unless at that time such Eligible Employee is terminated from employment under conditions that entitle him/her to receive the Special Severance Benefits under Section 4.2 below.

4.Separation Benefits.

4.1 Right to Separation Benefits. An Eligible Employee shall be entitled to receive from the Company the Special Severance Benefits provided in Section 4.3 if the Eligible Employee’s employment by the Company terminates as specified in Section 4.2, provided the Eligible Employee: (i) timely signs and delivers to the Company a Special Severance Benefit Agreement; (ii) timely signs and delivers to the Company a General Release and does not thereafter attempt to revoke the General Release; (iii) does not engage in Unauthorized Communication at any time either before or after his/her termination from employment; (iv) returns any Company property within the Eligible Employee’s

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possession or control, continues to cooperate in providing information necessary for transition and maintenance of the Company’s ongoing business and complies with all of his/her obligations under the Special Severance Benefit Agreement and the General Release or any other ongoing obligation to the Company, including any post-employment obligations such as not disclosing the Company’s confidential and proprietary information; (vi) has not previously committed that he/she will accept a transfer offer within the Company and thereafter, without the written consent of the Company (which the Company may in its sole and absolute discretion grant or withhold), refuses to honor such commitment and (vii) who is not terminated for Cause as determined by the Company in its sole and absolute discretion at any time prior to the Eligible Employee’s execution of the Special Severance Benefit Agreement and General Release. Notwithstanding anything in this Section 4.1, an Eligible Employee who is initially eligible for Special Severance Benefits shall become ineligible upon the occurrence of any of the events described in Section 4.1a below or as described elsewhere in the Plan, as applicable.

4.1aSubsequent Disqualifying Events. An Eligible Employee who is initially eligible for Special Severance Benefits under Section 4.1 shall become ineligible for any Special Severance Benefits and the Eligible Employee’s receipt of the Special Severance Benefits shall cease immediately, or as applicable, the Eligible Employee shall become immediately obligated to repay all or reimburse the Company for the total value of (or, in the Company sole discretion, a portion of) the Special Severance Benefits if the Eligible Employee: (i) is rehired by the Company within a time period following the Eligible Employee’s Termination Date that is equal to or less than the number of weeks of Base Salary the Eligible Employee received as his/her Special Severance Payment; (ii) breaches any of his/her obligations under the Special Severance Benefit Agreement or General Release or any other ongoing post-employment obligations to the Company (including ongoing obligations in an Eligible Employee’s individual employment agreement, if any); or (iii) attempts to revoke, repudiate or rescind the General Release at any time in the future (collectively, the “Subsequent Disqualifying Events”).

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4.2Termination of Employment.

(a)Terminations Which Give Rise to Special Severance Benefits Under This Plan. An Eligible Employee will become and remain entitled to the Special Severance Benefits in accordance with Sections 4.1 and 4.1a above and Section 4.3 below if the Eligible Employee is involuntarily terminated by the Company after the Effective Date without Cause.

(b)Terminations Which Do Not Give Rise to Special Severance Benefits Under This Plan. An Eligible Employee shall not be entitled to Special Severance Benefits if: (i) the Eligible Employee terminates his/her employment through voluntary separation or death; or (ii) the Eligible Employee is involuntarily terminated by the Company after the Effective Date for Cause as determined by the Company in its sole and absolute discretion.

4.3Special Severance Benefits.

(a)Special Severance Benefits. Subject to Subsection (b) and Section 5 below, if an Eligible Employee’s employment is terminated under circumstances entitling him/her to separation benefits as provided in Sections 4.1 and 4.2(a) and becomes a Participant and remains eligible for Special Severance Benefits as provided in Section 4.1a above, the Company shall provide the Participant the Special Severance Benefits as described in the Special Severance Benefit Agreement.

(b)WARN Leave/Transition Leave Pay and/or Benefits. If an Eligible Employee is placed on WARN Leave prior to his/her Termination Date as a result of a “mass layoff” or a “plant closing” covered by the Federal Worker Adjustment and Retraining Notification Act (“WARN”), all or a portion of the Special Severance Benefits the Eligible Employee may be entitled to receive shall be considered to be payments provided pursuant to WARN. In that event, any payment of Special Severance Benefits that the Eligible Employee may receive shall be reduced dollar-for-dollar by payments required to be made to the Eligible Employee pursuant to WARN. Under certain circumstances, the Company may in its discretion, place an Eligible Employee on Transition Leave as a courtesy to the Eligible Employee even if not required by WARN and make voluntary and unconditional payments related to salary and/or provide continued benefits to the Eligible Employee for a period following the date the Eligible Employee is released from performing any job duties but prior to the Eligible Employee’s Termination Date (”Transition Leave Pay”). If an Eligible Employee who becomes a Participant receives or has received Transition Leave Pay, the Special Severance Payment he/she may be entitled to receive may, in the Company’s discretion, be reduced by all or a portion of the Transition Leave Pay the Eligible Employee receives.

5.Plan Sponsor. The Plan sponsor is SandRidge Energy, Inc. EIN: 752541245; Plan Number 503, 123 Robert S. Kerr Ave., Oklahoma City, Oklahoma 73102. Participants and beneficiaries may receive from the Administrator, upon written request, information as to whether a particular employer is a sponsor of the Plan, and if the employer is a Plan sponsor, the employer’s address.

6.Administrator and Named Fiduciary. The Administrator has the discretionary authority to interpret the Plan, manage its operation and determine all questions arising in the administration, interpretation and application of the Plan. SandRidge Energy, Inc. is designated the “named fiduciary.” The Administrator shall be contacted at: SandRidge Energy, Inc., Attention: Employee Benefits Committee Chairperson, 123 Robert S. Kerr Ave., Oklahoma City, Oklahoma 73102; telephone (405)429-5500.

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7.Agent for Service of Process. The agent for service of legal process is CT Corporation. Service of legal process may also be made upon the Administrator.

8.Plan Year. The Plan Year for purposes of maintaining the Plan’s fiscal records shall be January 1 through December 31.

9.Plan Amendment and Termination. The Company shall have the right to amend, modify, or terminate the Plan or any benefit provided under this Plan at any time and from time to time to any extent that it may deem advisable and in its sole and absolute discretion. Any such amendment or modification shall be set out in writing executed by the Chief Executive Officer of SandRidge Energy, Inc. or General Counsel or another designee of the Chief Executive Officer and filed with the Administrator. Upon filing with the Administrator, such amendment or modification to the Plan shall be deemed to have been amended or modified in the manner and to the extent and effective as of the date therein set forth, and thereupon any and all Eligible Employees, whether they shall have become such prior to the amendment or modification, shall be bound thereby and no notice is required to be provided to any Eligible Employee. Notwithstanding anything herein to the contrary, the Plan may be amended in such manner as may be required at any time to make it conform to the requirements of the Code, or of ERISA, or of any amendment thereto, or of any regulations or rulings issued pursuant thereto. Unless specifically extended through an amendment as provided in this Section, the Plan will automatically terminate effective at 11:59 p.m. Central Standard/Daylight Time on March 31, 2019.

10.Claims Procedure

10.1How to Submit a Claim. In order to claim benefits under this Plan, the claimant must be an Eligible Employee. A written claim must be filed within ninety (90) days of the date upon which the claimant first knew (or should have known) of the facts upon which the claim is based and shall be sent by certified mail, return receipt requested to c/o General Counsel, SandRidge Energy, Inc., 123 Robert S. Kerr Ave., Oklahoma City, Oklahoma 73102. The procedures in this Section shall apply to all claims that any person has with respect to the Plan, including claims against fiduciaries and former fiduciaries, except to the extent the Committee determines, in its sole discretion, that it does not have the power to grant, in substance, all relief reasonably being sought by the claimant.

10.2Denial of Claims. If a person has made a claim for benefits under this Plan and any portion of the claim is denied, the Committee will furnish the claimant with a written notice stating the reasons for the denial, including reference to any pertinent Plan provisions upon which the denial was based and appropriate information concerning steps to take if the claimant wishes to submit the claim for further review.

The Committee shall approve or deny the claim in writing within ninety (90) days after receipt of the claim. If additional time is required, the Company shall advise the claimant in writing prior to the expiration of the initial ninety (90) days if an extension is necessary, stating the circumstances requiring the extension and the date by which the claimant can expect the Committee’s decision regarding the claim which shall not exceed an additional thirty (30) days. All decisions by the Committee are made in its sole and absolute discretion.

10.3Review Procedures. Within sixty (60) days after the date of written notice denying any claim, a claimant or an authorized representative may write to the Committee requesting a review of that decision.

The request for review may contain such issues and comments as the claimant or an authorized representative may wish considered in the review. The Committee will consider any request for a review and will make a final determination with respect to the claim within sixty (60) days after the request for a review is received. The Committee will advise the claimant of the determination in writing and will set forth the reasons for the determination and references any pertinent Plan provisions upon which the determination is based. The decision rendered upon reconsideration of the claim will be final and binding on all interested parties.

10.4Rules and Decisions. All decisions of the Committee shall be final and conclusive and are made in the Committee’s sole and absolute discretion. When making a determination or calculation,

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the Committee may rely upon information furnished by an Eligible Employee/claimant, the Company or the legal counsel of the Company.

10.5Committee Procedures. The Committee may act at a meeting (either in person or telephonically) or in writing without a meeting. All decisions of the Committee shall be made by the vote of the majority including actions in writing taken without a meeting.

10.6Other Committee Powers and Duties. The Committee shall have such duties and powers as may be necessary to discharge its duties hereunder, including, but not by way of limitation, the following:

(a)to construe and interpret the Plan and resolve any ambiguities with respect to any of the terms and provisions thereof as written and as applied to the operation of the Plan in its sole and absolute discretion; and

(b)to decide all questions of eligibility and determine the amount, manner and time of payment of any benefits hereunder in its sole and absolute discretion.

11.Validity and Severability. The invalidity or unenforceability of any provision of the Plan shall not affect the validity or enforceability of any other provision of the Plan, which shall remain in full force and effect, and any prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.

12.Section Titles and Headings. The titles and headings at the beginning of each Section shall not be considered in construing the meaning of any provision in this Plan.

13.Controlling Law. The Plan shall be interpreted under the laws of the State of Oklahoma, except to the extent that federal law preempts state law.

14.The Plan Document. This document constitutes the Plan document, copies of which are available upon request from the Committee. In the event of any inconsistency between any communication regarding the Plan and the Plan document itself, the Plan document controls.

SANDRIDGE ENERGY, INC.

/s/ William M. Griffin, Jr.

William M. Griffin, Jr.

President and Chief Executive Officer

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ERISA RIGHTS INFORMATION

(Employee Retirement Income Security Act of 1974 (ERISA) Rights)

Participants in The SandRidge Energy Inc. Special Severance Plan have certain rights and protections under the Employee Retirement Income Security Act of 1974 (ERISA).  ERISA provides that all Plan participants shall be entitled to:

1.Examine without charge at the Administrator’s office and at other specified locations such as worksites, all documents governing the Plan and a copy of the latest annual report (Form 5500 Series) filed by the plan with the U.S. Department of Labor and available at the Public Disclosure Room of the Employee Benefits Security Administration.

2.Obtain copies of all documents governing the operation of the Plan and copies of the latest annual report (Form 5500 Series) and updated summary plan description upon written request to the Administrator.  The Administrator may make a reasonable charge for the copies.

In addition to creating rights for Plan participants, ERISA imposes duties upon the people who are responsible for the operation of an employee benefit plan.  The people who operate the Plan, called “fiduciaries” of the Plan, have a duty to do so prudently and in the interest of you and other Plan participants and beneficiaries.  No one, including your employer, your union, or any other person, may fire you or otherwise discriminate against you in any way to prevent you from obtaining a benefit or exercising your rights under ERISA. 

If your claim for a benefit is denied in whole or in part, you must receive a written explanation of the reason for the denial.  You have the right to have the claim reviewed and reconsidered and to obtain copies of documents relating to the decision without charge, all within certain time schedules.

Under ERISA, there are steps you can take to enforce the above rights.  For instance, if you request materials from the Plan and do not receive them within thirty (30) days, you may file suit in a federal court.  In such a case, the court may require the Administrator to provide the materials and pay you up to One Hundred Ten Dollars ($110) a day until you receive the materials, unless the materials were not sent because of reasons beyond the control of the Administrator.  If you have a claim for benefits that is denied or ignored, in whole or in part, you may file suit in a state or federal court.  If it should happen that Plan fiduciaries misuse the Plan’s money, or if you are discriminated against for asserting your rights, you may seek assistance from the U.S. Department of Labor or you may file suit in a federal court.  If you are discriminated against for asserting your rights, you may seek assistance from the U.S. Department of Labor, or you may file suit in a Federal court. The court will decide who should pay court costs and legal fees.  If you are successful, the court may order the person you have sued to pay these costs and fees.  If you lose, the court may order you to pay these costs and fees, for example, if it finds your claim is frivolous.

If you have any questions about your Plan, you should contact the Administrator in Oklahoma City.  If you have any questions about this statement or about your rights under ERISA, or if you need assistance in obtaining documents from the Administrator, you should contact the nearest office of the Employee Benefits Security Administration, U.S. Department of Labor (listed in your telephone directory) or contact the Division of Technical Assistance and Inquiries, Employee Benefits Security Administration, U.S. Department of Labor, 200 Constitution Avenue N.W., Washington, D.C. 20210.  You may also obtain certain publications about your rights and responsibilities under ERISA by calling the publications hotline of the Employee Benefits Security Administration.

The Plan is an employee welfare benefit plan within the meaning of ERISA.  The Document shall be considered as a Summary Plan Description for the Plan as required by ERISA.

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Exhibit A (Group Termination – Separation Agreement)

[Date]

VIA HAND DELIVERY

[Employee Name & Address]

Re: Separation Agreement

Dear _________:

Thank you for your service to SandRidge Energy, Inc., and its affiliates (“SandRidge” or the “Company”). In connection with your separation from employment, SandRidge is offering you severance benefits under The SandRidge Energy, Inc. Special Severance Plan (the “Plan”), a copy of which is enclosed. This letter, when fully executed, will constitute your Special Severance Agreement as referenced in the Plan (the “Severance Agreement”). You must also sign the enclosed General Release to receive severance benefits. Capitalized terms used in this Severance Agreement and the General Release have the same meaning as their definitions in the Plan.

1.Termination of Employment. SandRidge has made the decision to terminate your employment and your service as ___________ [position title], and any other position or status you hold with SandRidge, effective __________, 201_ (the “Termination Date”).

2.Final Payment. You have been paid or will be paid your earned salary through the Termination Date. Your final paycheck will include payment for any accrued and unused paid time off (“PTO”). If you believe the amount of your final paycheck is incorrect, you agree to contact SandRidge immediately.

3.Special Severance Benefits. In consideration of your service to SandRidge and your execution of this Severance Agreement and the General Release, your not revoking the General Release during the seven day period described later in this Paragraph, and your compliance with the other terms of this Severance Agreement and the Plan, you will be entitled to receive the following Special Severance Benefits:

(a) A lump sum payment equal to four weeks of your Base Salary for every Year of Service with SandRidge, subject to a minimum of 13 weeks and a maximum of 26 weeks (or such other Special Severance Payment as is specifically provided in the Plan).

(b) 100% vesting of all equity and performance awards received under the 2016 Omnibus Incentive Plan.

(c)A Pro-Rated AIP payment which is equal to your year-to-date Eligible Earnings (as defined in the Company’s Annual Incentive Plan) multiplied by your target percentage for this calendar year. If you have an individual employment agreement in effect as of the Termination Date that provides for a larger AIP payment, however, you will be paid the larger amount.

(d)If you participate in the Company’s health plan, the Company will issue a $1,500 Healthcare Benefits Stipend to assist you with your health plan transition. Your coverage under the Company’s group health plan will terminate on the last day of the month in which the Termination Date occurs, and you will be potentially eligible for coverage under that plan (per the provisions of the Consolidated Omnibus Budget Reconciliation Act (“COBRA”)) beginning on the first day of the following month.

These payments will be taxable and are generally made within 60 days of your Termination Date.

These severance amounts will not otherwise be “benefit bearing” and will not be considered as compensation for purposes of the Company’s 401(k) plan or for accrual of PTO or other leave. In the event of your death prior to the receipt of any and all of these benefits, the benefits will pass in their entirety to your estate.

You will receive the Special Severance Benefits only if you have returned an executed copy of this Severance Agreement and the accompanying General Release during the 45-day period immediately following the date on which you have in your possession all of the following: a) this Severance Agreement; b) the General Release; and c) the accompanying information provided to you pursuant to the Older Worker Benefits

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Protection Act (the “OWBPA Materials”). The OWBPA Materials may be enclosed with this letter or may be separately provided at a later date. If the OWBPA Materials are provided to you at a later time, that is when your 45-day Election Period will begin.

As the Notice which is part of the General Release indicates, you have a right to revoke the General Release within seven (7) days after you sign it. If you revoke the General Release within that seven-day period, this Severance Agreement and the General Release will be null and void and you will not be eligible for any Special Severance Benefits under the Plan or this Severance Agreement. Any such revocation must be in writing and must be received within the seven-day period following execution of the General Release. Any revocation must be sent or delivered to Amy Scott at SandRidge Energy, Inc., 123 Robert S. Kerr Ave., Oklahoma City, OK 73102. You may also email any revocation to Ms. Scott at ascott@SandRidgeenergy.com.

In order to receive or retain the Special Severance Benefits, you must also return all SandRidge property within 14 days of your Termination Date (as described in paragraph 4, below) and comply with the obligations set forth in paragraphs 5 through 9, below.

4.Return of SandRidge Property. If you have the following Company property in your possession, you agree to return it to the People and Culture Department on or before __________, 201_: physical keys or security items, laptop computer, all originals and any copies of Company records and any other property of the Company. This includes any disks, files, notebooks, etc. that you have personally generated or maintained with respect to the Company’s business, as well as any Company records in your possession.

5.Continued Assistance. You will continue to cooperate with and assist SandRidge and its representatives and attorneys as requested with respect to any investigations, litigation, arbitration or other dispute resolutions by being available for interviews, depositions and/or testimony with regard to any matters in which you are or have been involved or with respect to which you have relevant information. SandRidge will reimburse you for reasonable expenses you may incur for travel in connection with this obligation to assist SandRidge. In addition, SandRidge will compensate you at a reasonable hourly rate for all time spent providing such assistance.

6. Confidential Information. During the course of your employment with SandRidge, you have had access to and gained knowledge of confidential and proprietary information; therefore, except as provided in paragraph 10, you agree not to make any independent use of or disclose to any other person or organization any of the Company’s confidential, proprietary information unless you obtain the Company’s prior written consent. Confidential Information includes data or material (regardless of form) that is: (a) a trade secret; (b) provided, disclosed or delivered to you by the Company, any officer, director, employee, agent, attorney, accountant, consultant, or other person or entity employed by the Company in any capacity, any customer, borrower or business associate of the Company or any public authority having jurisdiction over the Company of any business activity conducted by the Company; or (c) produced, developed, obtained or prepared by you or on your behalf or the Company with respect to the Company or any assets, oil and gas prospects, business activities, officers, directors, employees, borrowers or customers of the foregoing. However, Confidential Information does not include any information, data or material that at the time of disclosure or use was generally available to the public other than by a breach of this covenant, was available to the party to whom disclosed on a non-confidential basis by disclosure or access provided by the Company or a third party, or was otherwise developed or obtained independently by the person to whom disclosed without a breach of this covenant. On request by the Company, the Company is entitled to a copy of any Confidential Information in your possession regardless of how you obtained it.

You also agree that all such Confidential Information together with all copies in any format thereof and notes and other summaries thereof are and will remain the sole property of SandRidge. You agree to return to SandRidge any such Confidential Information and all copies, notes or other summaries thereof which you may have in your possession no later than the end of business on the Termination Date. These obligations described in this Paragraph apply whether you accept the Special Severance Benefits or not. Except as provided in Paragraph 10, this commitment of confidentiality also applies to the terms of this Severance Agreement, except for discussions with your spouse, your personal attorney and/or accountants or other similarly situated

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employees; in connection with an application for unemployment insurance benefits; or as needed to enforce the Severance Agreement. Any disclosure by such individuals will be deemed a disclosure by you and will have the same consequences as a breach of our agreements with you.

If you are asked to testify, receive a subpoena, or provide information pertaining to the Company, you will notify J. Matthew Thompson, SandRidge Energy, Inc., 123 Robert S. Kerr Ave., Oklahoma City, OK 73102 by regular mail or email at mthompson@SandRidgeenergy.com within five (5) days of receipt. If the subpoena or court order requires compliance in less than five (5) days, you will call Matt Thompson at (405) 429-6008 and send an email to mthompson@SandRidgeenergy.com within twenty-four (24) hours of receipt. You will provide a copy of the legal process documents so that, if appropriate, the Company may seek to have the legal process quashed or a protective order granted.

7.No Influence or Solicitation of Employees or Established Customers. You agree that, for the one-year period immediately following your Termination Date, you will not, (i) either personally or by or through an agent, on behalf of yourself or on behalf of any other individual, association, or entity use any of the Confidential Information for the purposes of calling on any customer of the Company or soliciting or inducing any such customers to acquire, or providing to any of such customers, any product or service provided by the Company or any affiliate or subsidiary of the Company; (ii) directly solicit, influence or encourage any established customer of the Company to divert or direct such customer’s business to you or any person or entity by which or with which you become employed, associated, affiliated or otherwise related; (iii) solicit, divert or attempt to solicit or divert any entity which has been identified and contacted by the Company, either directly or through such entity’s agent(s), with respect to a possible acquisition by, or transaction with, the Company; (iv) hire, solicit or seek to hire any employee of the Company; or (v) in any other manner attempt, directly or indirectly, to persuade any such employee to discontinue his or her status of employment with the Company or to become employed in a business or activities likely to be competitive with the business of the Company.

8.Future Activities. Except as provided in paragraph 10, you will not be employed or otherwise act as an expert witness or consultant or in any similar paid capacity in any litigation, arbitration, regulatory or agency hearing or other adversarial or investigatory proceeding involving the Company.

9.Limitations on Communications and Preserving Name and Reputation. Except as provided in paragraph 10, you will not at any time in the future engage in Unauthorized Communications or defame, disparage or make or post statements or disparaging remarks which could embarrass or cause harm to SandRidge’s name and reputation or the names and reputation of any of its officers, directors, representatives, agents, employees to SandRidge’s current, former or prospective vendors, professional colleagues, professional organizations, associates or contractors, or to the press or media or on the internet or social media. Unauthorized Communication means disclosure, dissemination or duplication of the Plan, this Severance Agreement and/or the General Release to any third party, including the media, as well as any disclosure or publication via the internet or social media. Disparagement means the form and substance of any communication, regardless of whether or not you believe it to be true, that tends to degrade or belittle SandRidge or subject it to ridicule or embarrassment. You agree this Paragraph is a material provision of this Severance Agreement and that in the event of breach, you will be liable for the return of the value of all consideration received as well as any other damages sustained by SandRidge. This Paragraph does not apply to statements made under penalty of perjury; however, you agree to give advance notice to SandRidge of such an event, to the extent practicable.

10.Exceptions to Unauthorized Communication and Restrictions on Communications, Confidentiality and Future Activities. Unauthorized Communication does not include and nothing in Paragraph 9, this Paragraph or elsewhere in this Severance Agreement is intended to prohibit you from reporting possible violations of federal law or regulation to any governmental agency or entity, including but not limited to the Department of Justice, the Securities and Exchange Commission, Congress, and any agency Inspector General, or making other disclosures that are protected under the whistleblower provisions of federal law or regulation. You do not need the prior authorization of the Company to make any such reports or disclosures, and you are not required to notify the Company that you have made such reports or disclosures. Further, Unauthorized Communication does not include and nothing in Paragraph 9, this Paragraph or elsewhere in this Severance Agreement prevents or prohibits you from communicating with the Equal Employment Opportunity Commission (or a similar fair

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employment practices agency of your State of residence or employment) or with other similarly situated employees. Unauthorized Communication also does not include and nothing in Paragraph 9, this Paragraph or elsewhere in this Severance Agreement is intended to prohibit your discussion of the terms of the Plan, the Severance Agreement and/or the General Release with your immediate family or your legal counsel or accountant.

11.Forfeiture. If you breach any of your obligations under this Severance Agreement, SandRidge will be entitled to stop payment of any benefit otherwise due under this Severance Agreement, has no further obligation to pay any benefit otherwise due under this Severance Agreement, and will be entitled to recover any money and, to the extent permitted by applicable law, the value of any other benefits paid or provided under this Severance Agreement and to obtain all other relief provided by law or equity, including, but not limited to, injunctive relief.

12.Additional Warranties. You represent and warrant that as of the date you sign this Severance Agreement, you have suffered no work related injury during your employment with SandRidge and that you have no intention of filing a claim for worker’s compensation benefits arising from any incident occurring during your employment with the Company. You further represent that you have accounted to the Company for any and all hours worked through your Termination Date, and that you have been paid for such hours worked at the appropriate rate. You also represent and warrant that you are not due any unpaid vacation or sick pay, except as provided in paragraph 2 with respect to PTO.

13.Governing Law and Venue. To the extent not preempted by federal law, the provisions of this Severance Agreement and the General Release will be construed and enforced in accordance with the laws of the State of Oklahoma, excluding any conflicts or choice of law rule or principle that might otherwise refer construction or interpretation of this provision to the substantive law of another jurisdiction. You and the Company hereby each agree that Oklahoma City, Oklahoma, is the proper venue for any litigation seeking to enforce or challenge the effectiveness of any provision of this Severance Agreement or the General Release, and you and the Company each hereby waive any right you or it otherwise might have to defend, oppose, or object to, on the basis of jurisdiction, venue, or forum non-conveniens, a suit filed by the other in any federal or state court in Oklahoma City, Oklahoma, to enforce or challenge the effectiveness of any provision of this Severance Agreement.

14.Severability. If any portion, provision or part of this Severance Agreement or the General Release is held, determined or adjudicated to be invalid, unenforceable or void for any reason whatsoever, each such portion, provision or part shall be severed from the remaining portions, provisions or parts of this Severance Agreement or the General Release, as applicable, and shall not affect the validity or enforceability of such remaining portions, provisions or parts.

15.Entire Agreement. This Severance Agreement between you and SandRidge, if you execute it, will be in consideration of the mutual promises described above. The Plan, this Separation Agreement and the General Release will constitute the entire agreement and understanding between you and SandRidge with respect to your separation from employment. You agree that you have no additional rights under any other plans, programs, employment agreement or arrangement which address benefits in connection with separation from employment and the other topics covered by this Severance Agreement. There are no other agreements, written or oral, expressed or implied, between the parties concerning the subject matter of the Plan, this Severance Agreement and the General Release. Alternatively, if you have an individual employment agreement in effect as of your Termination Date, by signing this Severance Agreement, you are waiving any right to severance or separation benefits provided under that individual agreement other than, if applicable, as provided in Paragraph 3 (c).

To accept this Severance Agreement, please sign on the separate signature page and return to the People and Culture Department within the 45-day Election Period. You must also sign the General Release and return it within that same time.

We wish you the best of luck and every success in your future endeavors.

Sincerely,

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SANDRIDGE ENERGY, INC.

Agreed to on behalf of SandRidge Energy, Inc.

_____________________ ________, 201_

Philip T. Warman Date

EVP and General Counsel

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By signing below, I acknowledgeand representthe following:

I received this Severance Agreement, the General Release, the Plan and the OWBPA Materials (as defined in the Plan and the General Release) at least forty-five (45) days before the deadline for acceptance of this Severance Agreement and the Special Severance Benefits provided hereunder in exchange for the General Release and my other promises in this Severance Agreement. I represent that I have carefully reviewed this Severance Agreement, the General Release, the Plan and the OWBPA Materials and understand them.

I have had sufficient time and opportunity to consider this Severance Agreement, the General Release, and the OWBPA Materials and represent that I am signing this Severance Agreement and the General Release voluntarily and with full understanding and knowledge of their effects and consequences. I represent that I have had sufficient opportunity to consult with legal counsel regarding this Severance Agreement and the General Release and their effects and consequences before signing this Severance Agreement and the General Release.

I understand that I have a right to revoke the General Release within seven (7) days after I sign it and that if I revoke the General Release within that seven-day period, this Severance Agreement and the General Release will be null and void and I will not be eligible for any Special Severance Benefits under the Plan or this Severance Agreement. I understand that Paragraph 3 of this Severance Agreement describes the proper and only procedure for making any such revocation.

ACCEPTED AND AGREED TO BY:

_________________________________________________________

Employee SignatureDate

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Exhibit A-1 (Individual Termination – Separation Agreement)

[Date]

VIA HAND DELIVERY

[Employee Name & Address]

Re: Separation Agreement

Dear _________:

Thank you for your service to SandRidge Energy, Inc., and its affiliates (“SandRidge” or the “Company”). In connection with your separation from employment, SandRidge is offering you severance benefits under The SandRidge Energy, Inc. Special Severance Plan (the “Plan”), a copy of which is enclosed. This letter, when fully executed, will constitute your Special Severance Agreement as referenced in the Plan (the “Severance Agreement”). You must also sign the enclosed General Release to receive severance benefits. Capitalized terms used in this Severance Agreement and the General Release have the same meaning as their definitions in the Plan.

1.Termination of Employment. SandRidge has made the decision to terminate your employment and your service as ___________ [position title], and any other position or status you hold with SandRidge, effective __________, 201_ (the “Termination Date”).

2.Final Payment. You have been paid or will be paid your earned salary through the Termination Date. Your final paycheck will include payment for any accrued and unused paid time off (“PTO”). If you believe the amount of your final paycheck is incorrect, you agree to contact SandRidge immediately.

3.Special Severance Benefits. In consideration of your service to SandRidge and your execution of this Severance Agreement and the General Release, your not revoking the General Release during the seven day period described later in this Paragraph, and your compliance with the other terms of this Severance Agreement and the Plan, you will be entitled to receive the following Special Severance Benefits:

(a) A lump sum payment equal to four weeks of your Base Salary for every Year of Service with SandRidge, subject to a minimum of 13 weeks and a maximum of 26 weeks (or such other Special Severance Payment as is specifically provided in the Plan).

(b) 100% vesting of all equity and performance awards received under the 2016 Omnibus Incentive Plan.

(c)A Pro-Rated AIP payment which is equal to your year-to-date Eligible Earnings (as defined in the Company’s Annual Incentive Plan) multiplied by your target percentage for this calendar year. If you have an individual employment agreement in effect as of the Termination Date that provides for a larger AIP payment, however, you will be paid the larger amount.

(d)If you participate in the Company’s health plan, the Company will issue a $1,500 Healthcare Benefits Stipend to assist you with your health plan transition. Your coverage under the Company’s group health plan will terminate on the last day of the month in which the Termination Date occurs, and you will be potentially eligible for coverage under that plan (per the provisions of the Consolidated Omnibus Budget Reconciliation Act (“COBRA”)) beginning on the first day of the following month.

These payments will be taxable and are generally made within 60 days of your Termination Date.

These severance amounts will not otherwise be “benefit bearing” and will not be considered as compensation for purposes of the Company’s 401(k) plan or for accrual of PTO or other leave. In the event of your death prior to the receipt of any and all of these benefits, the benefits will pass in their entirety to your estate.

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You will receive the Special Severance Benefits only if you have returned an executed copy of this Severance Agreement and the accompanying General Release during the 21-day period immediately following the date on which you received this Severance Agreement and the General Release.

As the Notice which is part of the General Release indicates, you have a right to revoke the General Release within seven (7) days after you sign it. If you revoke the General Release within that seven-day period, this Severance Agreement and the General Release will be null and void and you will not be eligible for any Special Severance Benefits under the Plan or this Severance Agreement. Any such revocation must be in writing and must be received within the seven-day period following execution of the General Release. Any revocation must be sent or delivered to Amy Scott at SandRidge Energy, Inc., 123 Robert S. Kerr Ave., Oklahoma City, OK 73102. You may also email any revocation to Ms. Scott at ascott@SandRidgeenergy.com.

In order to receive or retain the Special Severance Benefits, you must also return all SandRidge property within 14 days of your Termination Date (as described in paragraph 4, below) and comply with the obligations set forth in paragraphs 5 through 9, below.

4.Return of SandRidge Property. If you have the following Company property in your possession, you agree to return it to the People and Culture Department on or before __________, 201_: physical keys or security items, laptop computer, all originals and any copies of Company records and any other property of the Company. This includes any disks, files, notebooks, etc. that you have personally generated or maintained with respect to the Company’s business, as well as any Company records in your possession.

5.Continued Assistance. You will continue to cooperate with and assist SandRidge and its representatives and attorneys as requested with respect to any investigations, litigation, arbitration or other dispute resolutions by being available for interviews, depositions and/or testimony with regard to any matters in which you are or have been involved or with respect to which you have relevant information. SandRidge will reimburse you for reasonable expenses you may incur for travel in connection with this obligation to assist SandRidge. In addition, SandRidge will compensate you at a reasonable hourly rate for all time spent providing such assistance.

6. Confidential Information. During the course of your employment with SandRidge, you have had access to and gained knowledge of confidential and proprietary information; therefore, except as provided in paragraph 10, you agree not to make any independent use of or disclose to any other person or organization any of the Company’s confidential, proprietary information unless you obtain the Company’s prior written consent. Confidential Information includes data or material (regardless of form) that is: (a) a trade secret; (b) provided, disclosed or delivered to you by the Company, any officer, director, employee, agent, attorney, accountant, consultant, or other person or entity employed by the Company in any capacity, any customer, borrower or business associate of the Company or any public authority having jurisdiction over the Company of any business activity conducted by the Company; or (c) produced, developed, obtained or prepared by you or on your behalf or the Company with respect to the Company or any assets, oil and gas prospects, business activities, officers, directors, employees, borrowers or customers of the foregoing. However, Confidential Information does not include any information, data or material that at the time of disclosure or use was generally available to the public other than by a breach of this covenant, was available to the party to whom disclosed on a non-confidential basis by disclosure or access provided by the Company or a third party, or was otherwise developed or obtained independently by the person to whom disclosed without a breach of this covenant. On request by the Company, the Company is entitled to a copy of any Confidential Information in your possession regardless of how you obtained it.

You also agree that all such Confidential Information together with all copies in any format thereof and notes and other summaries thereof are and will remain the sole property of SandRidge. You agree to return to SandRidge any such Confidential Information and all copies, notes or other summaries thereof which you may have in your possession no later than the end of business on the Termination Date. These obligations described in this Paragraph apply whether you accept the Special Severance Benefits or not. Except as provided in Paragraph 10, this commitment of confidentiality also applies to the terms of this Severance Agreement, except for discussions with your spouse, your personal attorney and/or accountants or other similarly situated

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employees; in connection with an application for unemployment insurance benefits; or as needed to enforce the Severance Agreement. Any disclosure by such individuals will be deemed a disclosure by you and will have the same consequences as a breach of our agreements with you.

If you are asked to testify, receive a subpoena, or provide information pertaining to the Company, you will notify J. Matthew Thompson, SandRidge Energy, Inc., 123 Robert S. Kerr Ave., Oklahoma City, OK 73102 by regular mail or email at mthompson@SandRidgeenergy.com within five (5) days of receipt. If the subpoena or court order requires compliance in less than five (5) days, you will call Matt Thompson at (405) 429-6008 and send an email to mthompson@SandRidgeenergy.com within twenty-four (24) hours of receipt. You will provide a copy of the legal process documents so that, if appropriate, the Company may seek to have the legal process quashed or a protective order granted.

7.No Influence or Solicitation of Employees or Established Customers. You agree that, for the one-year period immediately following your Termination Date, you will not, (i) either personally or by or through an agent, on behalf of yourself or on behalf of any other individual, association, or entity use any of the Confidential Information for the purposes of calling on any customer of the Company or soliciting or inducing any such customers to acquire, or providing to any of such customers, any product or service provided by the Company or any affiliate or subsidiary of the Company; (ii) directly solicit, influence or encourage any established customer of the Company to divert or direct such customer’s business to you or any person or entity by which or with which you become employed, associated, affiliated or otherwise related; (iii) solicit, divert or attempt to solicit or divert any entity which has been identified and contacted by the Company, either directly or through such entity’s agent(s), with respect to a possible acquisition by, or transaction with, the Company; (iv) hire, solicit or seek to hire any employee of the Company; or (v) in any other manner attempt, directly or indirectly, to persuade any such employee to discontinue his or her status of employment with the Company or to become employed in a business or activities likely to be competitive with the business of the Company.

8.Future Activities. Except as provided in paragraph 10, you will not be employed or otherwise act as an expert witness or consultant or in any similar paid capacity in any litigation, arbitration, regulatory or agency hearing or other adversarial or investigatory proceeding involving the Company.

9.Limitations on Communications and Preserving Name and Reputation. Except as provided in paragraph 10, you will not at any time in the future engage in Unauthorized Communications or defame, disparage or make or post statements or disparaging remarks which could embarrass or cause harm to SandRidge’s name and reputation or the names and reputation of any of its officers, directors, representatives, agents, employees to SandRidge’s current, former or prospective vendors, professional colleagues, professional organizations, associates or contractors, or to the press or media or on the internet or social media. Unauthorized Communication means disclosure, dissemination or duplication of the Plan, this Severance Agreement and/or the General Release to any third party, including the media, as well as any disclosure or publication via the internet or social media. Disparagement means the form and substance of any communication, regardless of whether or not you believe it to be true, that tends to degrade or belittle SandRidge or subject it to ridicule or embarrassment. You agree this Paragraph is a material provision of this Severance Agreement and that in the event of breach, you will be liable for the return of the value of all consideration received as well as any other damages sustained by SandRidge. This Paragraph does not apply to statements made under penalty of perjury; however, you agree to give advance notice to SandRidge of such an event, to the extent practicable.

10.Exceptions to Unauthorized Communication and Restrictions on Communications, Confidentiality and Future Activities. Unauthorized Communication does not include and nothing in Paragraph 9, this Paragraph or elsewhere in this Severance Agreement is intended to prohibit you from reporting possible violations of federal law or regulation to any governmental agency or entity, including but not limited to the Department of Justice, the Securities and Exchange Commission, Congress, and any agency Inspector General, or making other disclosures that are protected under the whistleblower provisions of federal law or regulation. You do not need the prior authorization of the Company to make any such reports or disclosures, and you are not required to notify the Company that you have made such reports or disclosures. Further, Unauthorized Communication does not include and nothing in Paragraph 9, this Paragraph or elsewhere in this Severance Agreement prevents or prohibits you from communicating with the Equal Employment Opportunity Commission (or a similar fair

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employment practices agency of your State of residence or employment) or with other similarly situated employees. Unauthorized Communication also does not include and nothing in Paragraph 9, this Paragraph or elsewhere in this Severance Agreement is intended to prohibit your discussion of the terms of the Plan, the Severance Agreement and/or the General Release with your immediate family or your legal counsel or accountant.

11.Forfeiture. If you breach any of your obligations under this Severance Agreement, SandRidge will be entitled to stop payment of any benefit otherwise due under this Severance Agreement, has no further obligation to pay any benefit otherwise due under this Severance Agreement, and will be entitled to recover any money and, to the extent permitted by applicable law, the value of any other benefits paid or provided under this Severance Agreement and to obtain all other relief provided by law or equity, including, but not limited to, injunctive relief.

12.Additional Warranties. You represent and warrant that as of the date you sign this Severance Agreement, you have suffered no work related injury during your employment with SandRidge and that you have no intention of filing a claim for worker’s compensation benefits arising from any incident occurring during your employment with the Company. You further represent that you have accounted to the Company for any and all hours worked through your Termination Date, and that you have been paid for such hours worked at the appropriate rate. You also represent and warrant that you are not due any unpaid vacation or sick pay, except as provided in paragraph 2 with respect to PTO.

13.Governing Law and Venue. To the extent not preempted by federal law, the provisions of this Severance Agreement and the General Release will be construed and enforced in accordance with the laws of the State of Oklahoma, excluding any conflicts or choice of law rule or principle that might otherwise refer construction or interpretation of this provision to the substantive law of another jurisdiction. You and the Company hereby each agree that Oklahoma City, Oklahoma, is the proper venue for any litigation seeking to enforce or challenge the effectiveness of any provision of this Severance Agreement or the General Release, and you and the Company each hereby waive any right you or it otherwise might have to defend, oppose, or object to, on the basis of jurisdiction, venue, or forum non-conveniens, a suit filed by the other in any federal or state court in Oklahoma City, Oklahoma, to enforce or challenge the effectiveness of any provision of this Severance Agreement.

14.Severability. If any portion, provision or part of this Severance Agreement or the General Release is held, determined or adjudicated to be invalid, unenforceable or void for any reason whatsoever, each such portion, provision or part shall be severed from the remaining portions, provisions or parts of this Severance Agreement or the General Release, as applicable, and shall not affect the validity or enforceability of such remaining portions, provisions or parts.

15.Entire Agreement. This Severance Agreement between you and SandRidge, if you execute it, will be in consideration of the mutual promises described above. The Plan, this Separation Agreement and the General Release will constitute the entire agreement and understanding between you and SandRidge with respect to your separation from employment. You agree that you have no additional rights under any other plans, programs, employment agreement or arrangement which address benefits in connection with separation from employment and the other topics covered by this Severance Agreement. There are no other agreements, written or oral, expressed or implied, between the parties concerning the subject matter of the Plan, this Severance Agreement and the General Release. Alternatively, if you have an individual employment agreement in effect as of your Termination Date, by signing this Severance Agreement, you are waiving any right to severance or separation benefits provided under that individual agreement other than, if applicable, as provided in Paragraph 3 (c).

To accept this Severance Agreement, please sign on the separate signature page and return to the People and Culture Department within the 21-day Election Period. You must also sign the General Release and return it within that same time.

We wish you the best of luck and every success in your future endeavors.

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Sincerely,

SANDRIDGE ENERGY, INC.

Agreed to on behalf of SandRidge Energy, Inc.

_____________________ ________, 201_

Philip T. Warman Date

EVP and General Counsel

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By signing below, I acknowledge and represent the following:

I received this Severance Agreement, the General Release and the Plan at least twenty-one (21) days before the deadline for acceptance of this Severance Agreement and the Special Severance Benefits provided hereunder in exchange for the General Release and my other promises in this Severance Agreement. I represent that I have carefully reviewed this Severance Agreement, the General Release and the Plan and understand them.

I have had sufficient time and opportunity to consider this Severance Agreement and the General Release and represent that I am signing this Severance Agreement and the General Release voluntarily and with full understanding and knowledge of their effects and consequences. I represent that I have had sufficient opportunity to consult with legal counsel regarding this Severance Agreement and the General Release and their effects and consequences before signing this Severance Agreement and the General Release.

I understand that I have a right to revoke the General Release within seven (7) days after I sign it and that if I revoke the General Release within that seven-day period, this Severance Agreement and the General Release will be null and void and I will not be eligible for any Special Severance Benefits under the Plan or this Severance Agreement. I understand that Paragraph 3 of this Severance Agreement describes the proper and only procedure for making any such revocation.

ACCEPTED AND AGREED TO BY:

_________________________________________________________

Employee SignatureDate

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Exhibit B (Group Termination – Notice & General Release)

NOTICE

Various laws, including Title VII of the Civil Rights Act of 1964, the Civil Rights Act of 1866, as amended, the Pregnancy Discrimination Act of 1978, the Equal Pay Act, the Civil Rights Act of 1991, the Age Discrimination in Employment Act, the Rehabilitation Act of 1973, the Americans with Disabilities Act Amendments Act , the Employee Retirement Income Security Act of 1974 and the Uniformed Services Employment and Reemployment Rights Act (all as amended from time to time), prohibit employment discrimination based on sex, race, color, national origin, religion, age, disability, eligibility for covered employee benefits and military service status. You may also have rights under laws such as the Older Worker Benefit Protection Act of 1990, the Worker Adjustment and Retraining Notification Act of 1988, the Fair Labor Standards Act, the Family and Medical Leave Act, the Occupational Safety and Health Act and other federal, state and/or municipal statutes, orders or regulations pertaining to labor, employment and/or employee benefits. These laws are enforced through federal departments and agencies such as the United States Department of Labor and the Equal Employment Opportunity Commission, and various state and municipal labor departments, fair employment boards, human rights commissions and similar agencies.

This General Release is being provided to you in connection with the Special Severance Agreement (the “Severance Agreement”) you have been provided and the Special Severance Benefits you are being offered under The SandRidge Energy, Inc. Special Severance Plan (the “Plan”). Contemporaneously with receiving this General Release and the Severance Agreement and a copy of the Plan, you have also been given an explanation of the separation selection process and the criteria used for selecting employees in your Decisional Unit for separation and potential eligibility for Special Severance Benefits under the Plan. In addition, you have been given information showing the job positions and ages of the employees in your Decisional Unit who are being separated as part of the same group as you and who are potentially eligible for Special Severance Benefits as described in the Severance Agreement and the Plan. You have also been given the same information for employees in your Decisional Unit who are not being separated from employment and who are not eligible to receive Special Severance Benefits. This information is being provided to you pursuant to the federal Older Workers Benefit Protection Act (the “OWBPA Materials”).

You have until the close of business 45 days from the date you received the Severance Agreement, this General Release and the OWBPA Materials (the “Election Period”) to make your decision to agree to the Severance Agreement and receive Special Severance Benefits. The OWBPA Materials may have been included with the Severance Agreement and this General Release or may be provided separately at a later date. The 45-day Election Period begins when you have all three of those documents in your possession. You may sign the Severance Agreement at any time during that period. If you do not sign and return the Severance Agreement and this General Release within the 45-day Election Period, you will not be eligible for Special Severance Benefits under the Severance Agreement and the Plan.

BEFORE EXECUTING EITHER THE PROPOSED SEVERANCE AGREEMENT OR THIS GENERAL RELEASE YOU SHOULD REVIEW THOSE DOCUMENTS AND THE OWBPA MATERIALS CAREFULLY AND, IF YOU THINK NECESSARY, CONSULT AN ATTORNEY IN ORDER TO UNDERSTAND THE LEGAL EFFECTS OF THE SEVERANCE AGREEMENT AND THE GENERAL RELEASE BEFORE SIGNING THEM.

You may revoke this General Release within seven days after you sign it, and it will not become effective or enforceable until that revocation period has expired. If you revoke the General Release within that seven-day period, this Severance Agreement and the General Release will be null and void and you will not be eligible for any Special Severance Benefits under the Severance Agreement or the Plan. Any such revocation must be in writing and must be received within the seven-day period following execution of the General Release. Any revocation must be sent or delivered to Amy Scott, SandRidge Energy, Inc., 123 Robert S. Kerr Ave., Oklahoma City, OK 73102. You may also email any revocation to Ms. Scott at ascott@SandRidgeenergy.com.

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GENERAL RELEASE

My employment with SandRidge Energy, Inc. or one of its affiliates (collectively “SandRidge” or the “Company”) is terminated effective on the Termination Date. In consideration of the Special Severance Benefits offered to me by SandRidge under The SandRidge Energy, Inc. Special Severance Plan and the benefits that I will receive as reflected in the Severance Agreement, I, ____________, on behalf of myself and my heirs, assigns, executors, and administrators (collectively referred to as the “Releasing Parties”), hereby release and discharge SandRidge and its subsidiaries, partners, and affiliates, including each of those entities’ predecessors, successors, affiliates, and partners and each of those entities’ employees, officers, directors and agents (collectively referred to as the “Released Parties”) from all claims, liabilities, demands, and causes of action, known or unknown, fixed or contingent, that I or the Releasing Parties may have or claim to have against the Company or the other Released Parties either as a result of my past employment with the Company and/or the severance of that relationship and/or otherwise, and hereby waive any and all rights I may have with respect to any such claims.

This General Release includes, but is not limited to, claims arising under Title VII of the Civil Rights Act of 1964, the Civil Rights Act of 1866, as amended, the Pregnancy Discrimination Act of 1978, the Equal Pay Act, the Civil Rights Act of 1991, the Age Discrimination in Employment Act, the Rehabilitation Act of 1973, the Americans With Disabilities Act Amendment Act, the Employee Retirement Income Security Act of 1974 and the Uniformed Services Employment and Reemployment Rights Act (all as amended from time to time). This General Release also includes, but is not limited to, any rights I may have under the Older Workers Benefit Protection Act of 1990, the Worker Adjustment and Retraining Notification Act of 1988, the Fair Labor Standards Act, the Family and Medical Leave Act, the Occupational Safety and Health Act and any other federal, state and/or municipal statutes, orders or regulations pertaining to labor, employment and/or employee benefits. This General Release also applies to any claims or rights I or the Releasing Parties may have growing out of any legal or equitable restrictions on the Company’s rights not to continue an employment relationship with its employees, including any expressed or implied employment contracts, and to any claims I or the Releasing Parties may have against the Company or the other Released Parties for fraudulent inducement or misrepresentation, defamation, wrongful termination or other retaliation claims in connection with workers’ compensation or alleged “whistleblower” status or on any other basis whatsoever. I also release the Company and the other Released Parties from any obligations and waive any rights to benefits I might otherwise have to benefits in connection with my separation from employment under my individual employment agreement, if any, except as specifically stated otherwise in the Severance Agreement and the Plan.

It is specifically agreed, however, that this General Release does not have any effect on any rights or claims that I may have against the Company or the other Released Parties that arise after the date I execute this General Release or on any of the Company’s obligations under the Severance Agreement. This General Release also does not have any effect on any claims that cannot be released as a matter of law. I understand that this General Release will not prevent me from filing a charge, giving testimony or participating in any investigation conducted by the Equal Employment Opportunity Commission or any other government agency. However, to the fullest extent permitted by law, I am hereby waiving the right to receive any personal monetary recovery or other personal relief should the Equal Employment Opportunity Commission (or other government agency) pursue any class or individual charges in part or entirely on my behalf.

I have received copies of the Severance Agreement, the General Release, the Plan and the OWBPA Materials and carefully reviewed those documents. I have not relied on any representation or statement, oral or written, by the Company or any of its representatives, which is not set forth in those documents. I fully understand all the provisions and legal effects of the Severance Agreement and the General Release (including the foregoing NOTICE).

The Severance Agreement, this General Release (including the foregoing NOTICE) and the Plan set forth the entire agreement between me and the Company with respect to this subject. I understand that my receipt and retention of the Special Severance Benefits covered by the Severance Agreement are contingent not only on my execution of this General Release, but also on my continued compliance with my other obligations under the Severance Agreement and the Plan.

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I acknowledge that the Company gave me at least 45 days after I received the Severance Agreement, this General Release, a copy of the Plan and the OWBPA Materials to consider whether I wish to accept or reject the Special Severance Benefits I am eligible to receive under the Severance Agreement and the Plan in exchange for this General Release. I also acknowledge that the Company advised me to seek independent legal advice as to these matters, if I chose to do so. I hereby represent and state that I have taken such actions and obtained such information and independent legal or other advice, if any, that I believed were necessary for me to fully understand the effects and consequences of the Severance Agreement and this General Release prior to signing those documents.

I acknowledge that I have been informed of my right to revoke this General Release within seven days after I sign it. I represent and state that I fully understand how any such revocation is to be made and the consequences of any such revocation.

Signature:_________________

Date:________________, 201_

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Exhibit B-1 (Individual Termination – Notice & General Release)

NOTICE

Various laws, including Title VII of the Civil Rights Act of 1964, the Civil Rights Act of 1866, as amended, the Pregnancy Discrimination Act of 1978, the Equal Pay Act, the Civil Rights Act of 1991, the Age Discrimination in Employment Act, the Rehabilitation Act of 1973, the Americans with Disabilities Act Amendments Act , the Employee Retirement Income Security Act of 1974 and the Uniformed Services Employment and Reemployment Rights Act (all as amended from time to time), prohibit employment discrimination based on sex, race, color, national origin, religion, age, disability, eligibility for covered employee benefits and military service status. You may also have rights under laws such as the Older Worker Benefit Protection Act of 1990, the Worker Adjustment and Retraining Notification Act of 1988, the Fair Labor Standards Act, the Family and Medical Leave Act, the Occupational Safety and Health Act and other federal, state and/or municipal statutes, orders or regulations pertaining to labor, employment and/or employee benefits. These laws are enforced through federal departments and agencies such as the United States Department of Labor and the Equal Employment Opportunity Commission, and various state and municipal labor departments, fair employment boards, human rights commissions and similar agencies.

This General Release is being provided to you in connection with the Special Severance Agreement (the “Severance Agreement”) you have been provided and the Special Severance Benefits you are being offered under The SandRidge Energy, Inc. Special Severance Plan (the “Plan”). Contemporaneously with receiving this General Release and the Severance Agreement, you have been provided a copy of the Plan.

You have until the close of business 21 days from the date you received the Severance Agreement and this General Release (the “Election Period”) to make your decision to agree to the Severance Agreement and receive Special Severance Benefits. You may sign the Severance Agreement at any time during that period. If you do not sign and return the Severance Agreement and this General Release within the 21-day Election Period, you will not be eligible for Special Severance Benefits under the Severance Agreement and the Plan.

BEFORE EXECUTING EITHER THE PROPOSED SEVERANCE AGREEMENT OR THIS GENERAL RELEASE YOU SHOULD REVIEW THOSE DOCUMENTS CAREFULLY AND, IF YOU THINK NECESSARY, CONSULT AN ATTORNEY IN ORDER TO UNDERSTAND THE LEGAL EFFECTS OF THE SEVERANCE AGREEMENT AND THE GENERAL RELEASE BEFORE SIGNING THEM.

You may revoke this General Release within seven days after you sign it, and it will not become effective or enforceable until that revocation period has expired. If you revoke the General Release within that seven-day period, this Severance Agreement and the General Release will be null and void and you will not be eligible for any Special Severance Benefits under the Severance Agreement or the Plan. Any such revocation must be in writing and must be received within the seven-day period following execution of the General Release. Any revocation must be sent or delivered to Amy Scott, SandRidge Energy, Inc., 123 Robert S. Kerr Ave., Oklahoma City, OK 73102. You may also email any revocation to Ms. Scott at ascott@SandRidgeenergy.com.

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GENERAL RELEASE

My employment with SandRidge Energy, Inc. or one of its affiliates (collectively “SandRidge” or the “Company”) is terminated effective on the Termination Date. In consideration of the Special Severance Benefits offered to me by SandRidge under The SandRidge Energy, Inc. Special Severance Plan and the benefits that I will receive as reflected in the Severance Agreement, I, ____________, on behalf of myself and my heirs, assigns, executors, and administrators (collectively referred to as the “Releasing Parties”), hereby release and discharge SandRidge and its subsidiaries, partners, and affiliates, including each of those entities’ predecessors, successors, affiliates, and partners and each of those entities’ employees, officers, directors and agents (collectively referred to as the “Released Parties”) from all claims, liabilities, demands, and causes of action, known or unknown, fixed or contingent, that I or the Releasing Parties may have or claim to have against the Company or the other Released Parties either as a result of my past employment with the Company and/or the severance of that relationship and/or otherwise, and hereby waive any and all rights I may have with respect to any such claims.

This General Release includes, but is not limited to, claims arising under Title VII of the Civil Rights Act of 1964, the Civil Rights Act of 1866, as amended, the Pregnancy Discrimination Act of 1978, the Equal Pay Act, the Civil Rights Act of 1991, the Age Discrimination in Employment Act, the Rehabilitation Act of 1973, the Americans With Disabilities Act Amendment Act, the Employee Retirement Income Security Act of 1974 and the Uniformed Services Employment and Reemployment Rights Act (all as amended from time to time). This General Release also includes, but is not limited to, any rights I may have under the Older Workers Benefit Protection Act of 1990, the Worker Adjustment and Retraining Notification Act of 1988, the Fair Labor Standards Act, the Family and Medical Leave Act, the Occupational Safety and Health Act and any other federal, state and/or municipal statutes, orders or regulations pertaining to labor, employment and/or employee benefits. This General Release also applies to any claims or rights I or the Releasing Parties may have growing out of any legal or equitable restrictions on the Company’s rights not to continue an employment relationship with its employees, including any expressed or implied employment contracts, and to any claims I or the Releasing Parties may have against the Company or the other Released Parties for fraudulent inducement or misrepresentation, defamation, wrongful termination or other retaliation claims in connection with workers’ compensation or alleged “whistleblower” status or on any other basis whatsoever. I also release the Company and the other Released Parties from any obligations and waive any rights to benefits I might otherwise have to benefits in connection with my separation from employment under my individual employment agreement, if any, except as specifically stated otherwise in the Severance Agreement and the Plan.

It is specifically agreed, however, that this General Release does not have any effect on any rights or claims that I may have against the Company or the other Released Parties that arise after the date I execute this General Release or on any of the Company’s obligations under the Severance Agreement. This General Release also does not have any effect on any claims that cannot be released as a matter of law. I understand that this General Release will not prevent me from filing a charge, giving testimony or participating in any investigation conducted by the Equal Employment Opportunity Commission or any other government agency. However, to the fullest extent permitted by law, I am hereby waiving the right to receive any personal monetary recovery or other personal relief should the Equal Employment Opportunity Commission (or other government agency) pursue any class or individual charges in part or entirely on my behalf.

I have received copies of the Severance Agreement, the General Release and the Plan and carefully reviewed those documents. I have not relied on any representation or statement, oral or written, by the Company or any of its representatives, which is not set forth in those documents. I fully understand all the provisions and legal effects of the Severance Agreement and the General Release (including the foregoing NOTICE).

The Severance Agreement, this General Release (including the foregoing NOTICE) and the Plan set forth the entire agreement between me and the Company with respect to this subject. I understand that my receipt and retention of the Special Severance Benefits covered by the Severance Agreement are contingent not only on my execution of this General Release, but also on my continued compliance with my other obligations under the Severance Agreement and the Plan.

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I acknowledge that the Company gave me at least 21 days after I received the Severance Agreement, this General Release and a copy of the Plan to consider whether I wish to accept or reject the Special Severance Benefits I am eligible to receive under the Severance Agreement and the Plan in exchange for this General Release. I also acknowledge that the Company advised me to seek independent legal advice as to these matters, if I chose to do so. I hereby represent and state that I have taken such actions and obtained such information and independent legal or other advice, if any, that I believed were necessary for me to fully understand the effects and consequences of the Severance Agreement and this General Release prior to signing those documents.

I acknowledge that I have been informed of my right to revoke this General Release within seven days after I sign it. I represent and state that I fully understand how any such revocation is to be made and the consequences of any such revocation.

Signature:_________________

Date:________________, 201_

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EX-10.3.8

Exhibit 10.3.8

FIRST AMENDMENT TO THE

SANDRIDGE ENERGY, INC. SPECIAL SEVERANCE PLAN

THISFIRST AMENDMENT TO THE SANDRIDGE ENERGY, INC. SPECIAL SEVERANCE PLAN (this “First Amendment”), is effective as of December 17, 2018.

WHEREAS, SandRidge Energy, Inc. (the “Company”) has adopted the SandRidge Energy, Inc. Special Severance Plan (the “Plan”), effective April 1, 2018 (the “Plan Effective Date”), to provide certain benefits to Eligible Employees, as defined therein, who are separated from employment following the Plan Effective Date through March 31, 2019 in circumstances that make them eligible for benefits under the Plan.

WHEREAS, the Company intends to extend the Plan to be effective through March 31, 2020 and therefore desires to amend the Plan;

NOW, THEREFORE, the Plan is hereby amended as follows:

1.Each of Paragraphs 1 and 9 of the Plan is hereby amended by replacing “March 31, 2019” with “March 31, 2020”.

SANDRIDGE ENERGY, INC.

/s/ William M. Griffin, Jr.

William M. Griffin, Jr.

President and Chief Executive Officer

EX-31.1

Exhibit 31.1

Certification of the Company’s Chief Executive Officer Pursuant to

Section 302 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. Section 7241)

I, Paul D. McKinney, certify that:

1.I have reviewed this quarterly report on Form 10-Q of SandRidge Energy, Inc.;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a.Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b.Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c.Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d.Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a.All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b.Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

/s/ Paul D. McKinney

Paul D. McKinney

President and Chief Executive Officer

Date: May 9, 2019

EX-31.2

Exhibit 31.2

Certification of the Company’s Chief Financial Officer Pursuant to

Section 302 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. Section 7241)

I, Michael A. Johnson, certify that:

1.I have reviewed this quarterly report on Form 10-Q of SandRidge Energy, Inc.;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a.Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b.Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c.Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d.Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a.All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b.Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

/s/ Michael A. Johnson

Michael A. Johnson

Senior Vice President and Chief Financial Officer

Date: May 9, 2019

EX-32.1

Exhibit 32.1

Certification of the Company’s Chief Executive Officer and Chief Financial Officer Pursuant to

Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. Section 1350)

Pursuant to 18 U.S.C. § 1350, the undersigned officers of SandRidge Energy, Inc. (the “Company”), hereby certify that the Company’s Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2019 (the “Report”), fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934 and that the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ Paul D. McKinney

Paul D. McKinney

President and Chief Executive Officer

May 9, 2019

/s/ Michael A. Johnson

Michael A. Johnson

Senior Vice President and Chief Financial Officer

May 9, 2019

XML

Document and Entity Information - shares	3 Months Ended
	Mar. 31, 2019	May 02, 2019
Document and Entity Information [Abstract]
Entity Registrant Name	SANDRIDGE ENERGY INC
Trading Symbol	SD
Entity Central Index Key	0001349436
Current Fiscal Year End Date	--12-31
Entity Filer Category	Accelerated Filer
Document Type	10-Q
Document Period End Date	Mar. 31, 2019
Document Fiscal Year Focus	2019
Document Fiscal Period Focus	Q1
Amendment Flag	false
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Common Stock, Shares Outstanding		35,686,430

XML

CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) - USD ($) $ in Thousands	Mar. 31, 2019	Dec. 31, 2018
Current assets
Cash and cash equivalents	$ 7,354	$ 17,660
Restricted cash - other	1,981	1,985
Accounts receivable, net	51,053	45,503
Derivative contracts	0	5,286
Prepaid expenses	3,128	2,628
Other current assets	251	265
Total current assets	63,767	73,327
Oil and natural gas properties, using full cost method of accounting
Proved	1,344,552	1,269,091
Unproved	57,363	60,152
Less: accumulated depreciation, depletion and impairment	(614,972)	(580,132)
Net oil and natural gas properties capitalized costs	786,943	749,111
Other property, plant and equipment, net	200,014	200,838
Other assets	820	1,062
Total assets	1,051,544	1,024,338
Current liabilities
Accounts payable and accrued expenses	119,436	111,797
Current maturities of long-term debt	20,000	0
Asset retirement obligation	25,355	25,393
Other current liabilities	29	0
Total current liabilities	164,820	137,190
Asset retirement obligation	35,836	34,671
Other long-term obligations	7,428	4,756
Total liabilities	208,084	176,617
Commitments and contingencies (Note 9)
Stockholders’ Equity
Common stock, $0.001 par value; 250,000 shares authorized; 35,687 issued and outstanding at March 31, 2019 and December 31, 2018	36	36
Warrants	88,518	88,516
Additional paid-in capital	1,056,235	1,055,164
Accumulated deficit	(301,329)	(295,995)
Total stockholders’ equity	843,460	847,721
Total liabilities and stockholders’ equity	$ 1,051,544	$ 1,024,338

XML

CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares	Mar. 31, 2019	Dec. 31, 2018
Statement of Financial Position [Abstract]
Common stock, par value (in dollars per share)	$ 0.001	$ 0.001
Common stock, shares authorized (in shares)	250,000,000	250,000,000
Common stock, shares issued (in shares)	35,687,000	35,687,000
Common stock, shares outstanding (in shares)	35,687,000	35,687,000

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CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) - USD ($)	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Revenues
Total revenues	$ 73,236,000	$ 87,128,000
Expenses
Lease operating expenses	22,779,000	23,519,000
Production, ad valorem, and other taxes	5,080,000	6,234,000
Depreciation and depletion — oil and natural gas	36,465,000	27,997,000
Depreciation and amortization — other	2,943,000	3,153,000
Impairment	0	4,170,000
General and administrative	9,939,000	13,682,000
Proxy contest	0	407,000
Employee termination benefits	0	31,587,000
Loss on derivative contracts	209,000	18,330,000
Other operating expense	82,000	16,000
Total expenses	77,497,000	129,095,000
Loss from operations	(4,261,000)	(41,967,000)
Other (expense) income
Interest expense, net	(585,000)	(948,000)
Gain on extinguishment of debt	0	1,151,000
Other (expense) income, net	(431,000)	873,000
Total other (expense) income	(1,016,000)	1,076,000
Loss before income taxes	(5,277,000)	(40,891,000)
Income tax expense	0	3,000
Net loss	$ (5,277,000)	$ (40,894,000)
Loss per share
Basic (in dollars per share)	$ (0.15)	$ (1.18)
Diluted (in dollars per share)	$ (0.15)	$ (1.18)
Weighted average number of common shares outstanding
Basic (in shares)	35,322,000	34,575,000
Diluted (in shares)	35,322,000	34,575,000
Oil, natural gas and NGL
Revenues
Total revenues	$ 73,048,000	$ 86,966,000
Other
Revenues
Total revenues	$ 188,000	$ 162,000

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CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY (Unaudited) - USD ($) $ in Thousands	Total	Common Stock	Warrants	Additional Paid-In Capital	Accumulated Deficit
Beginning balance (in shares) at Dec. 31, 2017		35,650,000	6,570,000
Beginning balance at Dec. 31, 2017	$ 839,940	$ 36	$ 88,500	$ 1,038,324	$ (286,920)
Increase (Decrease) in Stockholders' Equity
Cancellation of stock awards, net of issuances		(90,000)
Stock-based compensation	16,055			16,055
Cash paid for tax withholdings on vested stock awards	(1,661)			(1,661)
Net loss	(40,894)				(40,894)
Ending balance (in shares) at Mar. 31, 2018		35,560,000	6,570,000
Ending balance at Mar. 31, 2018	$ 813,440	$ 36	$ 88,500	1,052,718	(327,814)
Beginning balance (in shares) at Dec. 31, 2018	35,687,000	35,687,000	6,604,000
Beginning balance at Dec. 31, 2018	$ 847,721	$ 36	$ 88,516	1,055,164	(295,995)
Increase (Decrease) in Stockholders' Equity
Stock-based compensation	1,073			1,073
Issuance of warrants for general unsecured claims (in shares)			1,000
Issuance of warrants for general unsecured claims			$ 2	(2)
Net loss	$ (5,277)				(5,277)
Ending balance (in shares) at Mar. 31, 2019	35,687,000	35,687,000	6,605,000
Ending balance at Mar. 31, 2019	$ 843,460	$ 36	$ 88,518	$ 1,056,235	$ (301,329)

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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss	$ (5,277)	$ (40,894)
Adjustments to reconcile net loss to net cash provided by operating activities
Provision for doubtful accounts	72	(335)
Depreciation, depletion, and amortization	39,408	31,150
Impairment	0	4,170
Debt issuance costs amortization	117	117
Amortization of premiums and discounts on debt	0	(47)
Gain on extinguishment of debt	0	(1,151)
Loss on derivative contracts	209	18,330
Cash received (paid) on settlement of derivative contracts	5,078	(6,119)
Stock-based compensation	996	15,872
Other	(35)	(235)
Changes in operating assets and liabilities	(8,998)	9,549
Net cash provided by operating activities	31,570	30,407
CASH FLOWS FROM INVESTING ACTIVITIES
Capital expenditures for property, plant and equipment	(62,254)	(65,527)
Acquisition of assets	326	0
Proceeds from sale of assets	341	955
Net cash used in investing activities	(61,587)	(64,572)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from borrowings	39,596	0
Repayments of borrowings	(19,596)	(36,304)
Reduction of financing lease liability	(293)	0
Cash paid for tax withholdings on vested stock awards	0	(1,661)
Net cash provided by (used in) financing activities	19,707	(37,965)
NET DECREASE IN CASH, CASH EQUIVALENTS and RESTRICTED CASH	(10,310)	(72,130)
CASH, CASH EQUIVALENTS and RESTRICTED CASH, beginning of year	19,645	101,308
CASH, CASH EQUIVALENTS and RESTRICTED CASH, end of period	9,335	29,178
Supplemental Disclosure of Cash Flow Information
Cash paid for interest, net of amounts capitalized	(408)	0
Supplemental Disclosure of Noncash Investing and Financing Activities
Change in accrued capital expenditures	(9,190)	28,258
Right-of-use assets obtained in exchange for financing lease obligations	$ 1,992	$ 0

XML

Basis of Presentation

3 Months Ended

Mar. 31, 2019

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Basis of Presentation

Basis of Presentation

Nature of Business. SandRidge Energy, Inc. is an oil and natural gas exploration and production company headquartered in Oklahoma City, Oklahoma with principal focus on the acquisition, exploration and development of hydrocarbon resources in the United States. 

Principles of Consolidation. The consolidated financial statements include the accounts of the Company and its wholly owned or majority owned subsidiaries, including its proportionate share of the Royalty Trusts. All significant intercompany accounts and transactions have been eliminated in consolidation.

Interim Financial Statements. The accompanying unaudited condensed consolidated financial statements and notes as of December 31, 2018 have been derived from and should be read in conjunction with the audited financial statements and notes contained in the Company’s 2018 Form 10-K. Certain information and disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) have been condensed or omitted, although the Company believes that the disclosures contained herein are adequate to make the information presented not misleading. In the opinion of management, the financial statements include all adjustments, which consist of normal recurring adjustments unless otherwise disclosed, necessary to fairly state the Company’s unaudited condensed consolidated financial statements.  

Significant Accounting Policies. The unaudited condensed consolidated financial statements were prepared in accordance with the accounting policies stated in the 2018 Form 10-K as well as the items noted below.

Reclassifications. Certain reclassifications have been made to the prior period financial statements to conform to the current period presentation. These reclassifications have no effect on the Company’s previously reported results of operations.

Use of Estimates. The preparation of the unaudited condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period.

The more significant areas requiring the use of assumptions, judgments and estimates include: oil, natural gas and natural gas liquids (“NGL”) reserves; impairment tests of long-lived assets; depreciation, depletion and amortization; income taxes; valuation of derivative instruments; contingencies; and accrued revenue and related receivables. Although management believes these estimates are reasonable, actual results could differ significantly.

Recent Accounting Pronouncements Not Yet Adopted. The FASB issued ASU 2016-13, “Financial Instruments —Credit Losses (Topic 326) Measurement of Credit Losses on Financial Instruments,” which changes how entities will measure credit losses for most financial assets and certain other instruments that are not measured at fair value through net income. The standard will replace the currently required incurred loss approach with an expected loss model for instruments measured at amortized cost. The standard is effective for interim and annual periods beginning after December 15, 2019, with early adoption permitted for the interim and annual periods beginning after December 31, 2018, and will be applied using a modified retrospective approach resulting in a cumulative effect adjustment to retained earnings upon adoption. The Company does not plan to early adopt and is currently evaluating the effect the guidance will have on its consolidated financial statements; however, the impact is not expected to be material.

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Leases

3 Months Ended

Mar. 31, 2019

Leases [Abstract]

Leases

LeasesIn February 2016, the FASB issued ASU 2016-02, “Leases (Topic 842),” and subsequently issued other associated ASU's related to Topic 842 which supersede ASC 840 and require lessees to recognize right of use ("ROU") lease assets and liabilities on the balance sheet for long-term leases formerly classified as operating leases under ASC 840, and to disclose key information about leasing arrangements. Leases to explore for or produce oil and natural gas were not impacted by this guidance. This ASU became effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. The Company adopted this ASU on January 1, 2019 using a modified retrospective approach for all ROU leases that existed at the period of adoption and did not restate its comparative periods.

Topic 842 provides a number of practical expedients to assist with the transition to the new standard. The Company elected the 'package of practical expedients,' and therefore did not have to reassess prior conclusions about lease identification, lease classification and initial indirect costs. The Company also utilized the land easement practical expedient and short-term lease recognition exemption, under which leases with initial terms less than 12 months are not required to be presented on the balance sheet. Certain leases contain both lease and non-lease components. The Company elected the practical expedient to combine lease and non-lease components for asset classes including drilling rigs, compressors and various office equipment.

The Company determines if an arrangement is or contains a lease at inception. A lease is defined as a contract, or part of a contract, that conveys the right to control the use of identified property, plant or equipment for a period of time in exchange for consideration. Lease liabilities are recognized based on the present value of the lease payments not yet paid over the lease term at January 1, 2019 for existing leases and at the commencement date for any new leases entered into subsequent to January 1, 2019. As most of the Company's leases do not provide an implicit rate, the Company's incremental borrowing rate was used as the discount rate when determining the present value of future payments. The ROU assets are recognized based on the lease liability plus any prepaid lease payments and excluding lease incentives and initial direct costs incurred for the same periods.  The Company's lease terms may include options to extend or terminate the lease when it is reasonably certain that option will be exercised. Lease expense for minimum lease payments is recognized on a straight-line basis over the lease term.

Adoption of this standard resulted in additional ROU lease assets and lease liabilities of approximately $2.3 million and $2.4 million, respectively, as of January 1, 2019, which did not materially impact the Company's consolidated financial statements. The difference between the net lease assets and liabilities was recognized as a cumulative-effect adjustment to the opening balance of retained earnings. Operating leases are included in other assets and other long-term obligations, and finance leases are included in other property, plant and equipment, and other long-term obligations on the accompanying condensed consolidated balance sheet as of March 31, 2019. The Company had no significant capital or operating leases with terms longer than 12 months at December 31, 2018. 

The Company has operating and financing leases for vehicles, drilling rigs and equipment, which are not significant to the consolidated financial statements as of and for the three-month period ended March 31, 2019. 

The components of lease costs recognized for the Company's ROU leases are shown below:

	Three Months Ended March 31, 2019
Short-term lease cost (1)	$	4,909
Financing lease cost	297
Operating lease cost	58
Total lease cost	$	5,264

____________________

1.$3.1 million of short-term lease cost was capitalized as part of oil and natural gas properties, and portions of these costs were reimbursed to the Company by other working interest owners.

Leases

LeasesIn February 2016, the FASB issued ASU 2016-02, “Leases (Topic 842),” and subsequently issued other associated ASU's related to Topic 842 which supersede ASC 840 and require lessees to recognize right of use ("ROU") lease assets and liabilities on the balance sheet for long-term leases formerly classified as operating leases under ASC 840, and to disclose key information about leasing arrangements. Leases to explore for or produce oil and natural gas were not impacted by this guidance. This ASU became effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. The Company adopted this ASU on January 1, 2019 using a modified retrospective approach for all ROU leases that existed at the period of adoption and did not restate its comparative periods.

Topic 842 provides a number of practical expedients to assist with the transition to the new standard. The Company elected the 'package of practical expedients,' and therefore did not have to reassess prior conclusions about lease identification, lease classification and initial indirect costs. The Company also utilized the land easement practical expedient and short-term lease recognition exemption, under which leases with initial terms less than 12 months are not required to be presented on the balance sheet. Certain leases contain both lease and non-lease components. The Company elected the practical expedient to combine lease and non-lease components for asset classes including drilling rigs, compressors and various office equipment.

The Company determines if an arrangement is or contains a lease at inception. A lease is defined as a contract, or part of a contract, that conveys the right to control the use of identified property, plant or equipment for a period of time in exchange for consideration. Lease liabilities are recognized based on the present value of the lease payments not yet paid over the lease term at January 1, 2019 for existing leases and at the commencement date for any new leases entered into subsequent to January 1, 2019. As most of the Company's leases do not provide an implicit rate, the Company's incremental borrowing rate was used as the discount rate when determining the present value of future payments. The ROU assets are recognized based on the lease liability plus any prepaid lease payments and excluding lease incentives and initial direct costs incurred for the same periods.  The Company's lease terms may include options to extend or terminate the lease when it is reasonably certain that option will be exercised. Lease expense for minimum lease payments is recognized on a straight-line basis over the lease term.

Adoption of this standard resulted in additional ROU lease assets and lease liabilities of approximately $2.3 million and $2.4 million, respectively, as of January 1, 2019, which did not materially impact the Company's consolidated financial statements. The difference between the net lease assets and liabilities was recognized as a cumulative-effect adjustment to the opening balance of retained earnings. Operating leases are included in other assets and other long-term obligations, and finance leases are included in other property, plant and equipment, and other long-term obligations on the accompanying condensed consolidated balance sheet as of March 31, 2019. The Company had no significant capital or operating leases with terms longer than 12 months at December 31, 2018. 

The Company has operating and financing leases for vehicles, drilling rigs and equipment, which are not significant to the consolidated financial statements as of and for the three-month period ended March 31, 2019. 

The components of lease costs recognized for the Company's ROU leases are shown below:

	Three Months Ended March 31, 2019
Short-term lease cost (1)	$	4,909
Financing lease cost	297
Operating lease cost	58
Total lease cost	$	5,264

____________________

1.$3.1 million of short-term lease cost was capitalized as part of oil and natural gas properties, and portions of these costs were reimbursed to the Company by other working interest owners.

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Employee Termination Benefits

3 Months Ended

Mar. 31, 2019

Postemployment Benefits [Abstract]

Employee Termination Benefits

Employee Termination Benefits

No employee termination benefits were paid during the three-month period ended March 31, 2019. The following table presents a summary of employee termination benefits for the three-month period ended March 31, 2018 which occurred before the change in composition of the current Board of Directors (in thousands):

	Cash		Share-Based Compensation (3)		Number of Shares	Total Employee Termination Benefits
Three Months Ended March 31, 2018
Executive Employee Termination Benefits (1)	$	11,945	$	9,114	554	$	21,059
Other Employee Termination Benefits (2)	6,692		3,836		209	10,528
	$	18,637	$	12,950	763	$	31,587

____________________

1.On February 8, 2018, the Company’s then current chief executive officer ("CEO"), James Bennett, separated employment from the Company, and on February 22, 2018, the Company’s then current chief financial officer ("CFO"), Julian Bott, also separated employment from the Company. As a result, the Company paid cash severance costs and incurred share-based compensation costs associated with these separations during the first quarter of 2018.

2.As a result of a reduction in workforce in the first quarter of 2018, certain employees received termination benefits including cash severance and accelerated share-based and incentive compensation upon separation of service from the Company.

3.Share-based compensation recognized in connection with the accelerated vesting of restricted stock awards and performance share units upon the departure of certain executives and the reduction in workforce in the first quarter of 2018 reflects the remaining unrecognized compensation expense associated with these awards at the date of termination. The unrecognized compensation expense was calculated using the grant date fair value for restricted stock awards and performance share units. One share of the Company’s common stock was issued per performance share unit.

See Note 13 for additional discussion of the Company’s share-based compensation awards.

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Fair Value Measurements

3 Months Ended

Mar. 31, 2019

Fair Value Disclosures [Abstract]

Fair Value Measurements

Fair Value Measurements

The Company measures and reports certain assets and liabilities on a fair value basis and has classified and disclosed its fair value measurements using the levels of the fair value hierarchy noted below. The carrying values of cash, restricted cash, accounts receivable, prepaid expenses, certain other current assets and other assets, accounts payable and accrued expenses, other current liabilities and other long-term obligations included in the unaudited condensed consolidated balance sheets approximated fair value at March 31, 2019, and December 31, 2018. Additionally, the carrying amount of debt associated with borrowings outstanding under the credit facility approximates fair value as borrowings bear interest at variable rates. As a result, these financial assets and liabilities are not discussed below. The fair values of property, plant and equipment classified as assets held for sale and related impairments, which are calculated using Level 3 inputs, are discussed in Note 5.

Level 1	Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities.
Level 2	Quoted prices in markets that are not active, or inputs which are observable, either directly or indirectly, for substantially the full term of the asset or liability.
Level 3	Measurement based on prices or valuation models that require inputs that are both significant to the fair value measurement and less observable from objective sources (i.e., supported by little or no market activity).

Assets and liabilities that are measured at fair value are classified based on the lowest level of input that is significant to the fair value measurement. The Company’s assessment of the significance of a particular input to the fair value measurement requires judgment, which may affect the valuation of the fair value of assets and liabilities and their placement within the fair value hierarchy levels. The determination of the fair values, stated below, considers the market for the Company’s financial assets and liabilities, the associated credit risk and other factors. The Company considers active markets as those in which transactions for the assets or liabilities occur in sufficient frequency and volume to provide pricing information on an ongoing basis. The Company had no financial assets or liabilities where fair value differed from carrying value classified in the fair

value hierarchy as of March 31, 2019. The Company had assets classified in Level 2 of the hierarchy as of December 31, 2018, as described below.

Level 2 Fair Value Measurements

Commodity Derivative Contracts. The fair values of the Company’s oil and natural gas fixed price swaps are based upon inputs that are either readily available in the public market, such as oil and natural gas futures prices, volatility factors and discount rates, or can be corroborated from active markets. Fair value is determined through the use of a discounted cash flow model or option pricing model using the applicable inputs discussed above. The Company applies a weighted average credit default risk rating factor for its counterparties or gives effect to its credit default risk rating, as applicable, in determining the fair value of these derivative contracts. Credit default risk ratings are based on current published credit default swap rates.

Fair Value - Recurring Measurement Basis

The following table summarizes the Company’s assets measured at fair value on a recurring basis by the fair value hierarchy as of December 31, 2018 (in thousands):

December 31, 2018

	Fair Value Measurements						Netting(1)		Assets/Liabilities at Fair Value
	Level 1		Level 2		Level 3
Assets
Commodity derivative contracts	$	—	$	5,286	$	—	$	—	$	5,286
	$	—	$	5,286	$	—	$	—	$	5,286

____________________

1.Represents the effect of netting assets and liabilities for counterparties with which the right of offset exists.

Transfers. The Company did not have any transfers between Level 1, Level 2 or Level 3 fair value measurements during the three-month periods ended March 31, 2019 and 2018.

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Property, Plant and Equipment

3 Months Ended

Mar. 31, 2019

Property, Plant and Equipment [Abstract]

Property, Plant and Equipment

Property, Plant and Equipment

Property, plant and equipment consists of the following (in thousands): 

	March 31, 2019		December 31, 2018
Oil and natural gas properties
Proved	$	1,344,552	$	1,269,091
Unproved	57,363		60,152
Total oil and natural gas properties	1,401,915		1,329,243
Less accumulated depreciation, depletion and impairment	(614,972)		(580,132)
Net oil and natural gas properties capitalized costs	786,943		749,111
Land	4,400		4,400
Electrical infrastructure	131,176		131,176
Other non-oil and natural gas equipment	13,410		13,458
Buildings and structures	77,148		77,148
Financing leases	1,727		—
Total	227,861		226,182
Less accumulated depreciation and amortization	(27,847)		(25,344)
Other property, plant and equipment, net	200,014		200,838
Total property, plant and equipment, net	$	986,957	$	949,949

During the first quarter of 2018, the Company classified its remaining midstream generator assets as held for sale. These assets had a carrying value of $5.7 million which exceeded the estimated net realizable value of $1.6 million based on expected sales prices obtained from third parties. As a result, the Company recorded an impairment of $4.1 million for the three-month period ended March 31, 2018. The midstream generator assets were sold during the second quarter of 2018 with no gain or loss recognized on the sale. No significant assets were classified as held for sale at March 31, 2019 or December 31, 2018.

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Accounts Payable and Accrued Expenses

3 Months Ended

Mar. 31, 2019

Payables and Accruals [Abstract]

Accounts Payable and Accrued Expenses

Accounts Payable and Accrued Expenses

Accounts payable and accrued expenses consist of the following (in thousands):

	March 31, 2019		December 31, 2018
Accounts payable and other accrued expenses	$	89,909	$	78,219
Payroll and benefits	10,712		12,891
Production payable	12,972		12,767
Taxes payable	4,569		5,350
Drilling advances	724		2,031
Accrued interest	550		539
Total accounts payable and accrued expenses	$	119,436	$	111,797

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Debt

3 Months Ended

Mar. 31, 2019

Debt Disclosure [Abstract]

Debt

Debt

Credit Facility. The Company has a $600.0 million reserve-based revolving credit facility, which is subject to a $350.0 million borrowing base. This borrowing base is currently under evaluation by the Company and its lenders under the credit facility in connection with the scheduled spring redetermination. The next borrowing base redetermination after this is scheduled for October 1, 2019. The credit facility matures on March 31, 2020. Outstanding borrowings under the credit facility bear interest based on a pricing grid tied to borrowing base utilization of (a) LIBOR plus an applicable margin that varies from 3.00% to 4.00% per annum, or (b) the base rate plus an applicable margin that varies from 2.00% to 3.00% per annum. Interest on base rate borrowings is payable quarterly in arrears and interest on LIBOR borrowings is payable every one, two, three or six months, at the election of the Company. Quarterly, the Company pays commitment fees assessed at annual rates of 0.50% on any available portion of the credit facility. The Company has the right to prepay loans under the credit facility at any time without a prepayment penalty, other than customary “breakage” costs with respect to LIBOR loans.

The credit facility is secured by (i) first-priority mortgages on at least 95% of the PV-9 valuation of all proved reserves included in the most recently delivered reserve report of the Company, (ii) a first-priority perfected pledge of substantially all of the capital stock owned by each credit party and equity interests in the Royalty Trusts that are owned by a credit party and (iii) a first-priority perfected security interest in substantially all the cash, cash equivalents, deposits, securities and other similar accounts, and other tangible and intangible assets of the credit parties (including but not limited to as-extracted collateral, accounts receivable, inventory, equipment, general intangibles, investment property, intellectual property, real property and the proceeds of the foregoing).

As of the end of each fiscal quarter, the credit facility requires the Company to maintain (i) a maximum consolidated total net leverage ratio, measured as of the end of any fiscal quarter, of no greater than 3.50 to 1.00 and (ii) a minimum consolidated interest coverage ratio, measured as of the end of any fiscal quarter, of no less than 2.25 to 1.00. These financial covenants are subject to customary cure rights. The Company was in compliance with all applicable financial covenants under the credit facility as of March 31, 2019, as its consolidated total net leverage ratio was 0.06 and its consolidated interest coverage ratio was 80.20.

The credit facility contains customary affirmative and negative covenants, including as to compliance with laws (including environmental laws, ERISA and anti-corruption laws), maintenance of required insurance, delivery of quarterly and annual financial statements, oil and gas engineering reports, maintenance and operation of property (including oil and gas properties), restrictions on the incurrence of liens, indebtedness, asset dispositions, fundamental changes, restricted payments including dividends and other customary covenants. The Company was in compliance with these covenants as of March 31, 2019.

The credit facility includes events of default relating to customary matters, including, among other things, nonpayment of principal, interest or other amounts; violation of covenants; incorrectness of representations and warranties in any material

respect; cross-payment default and cross acceleration with respect to indebtedness in an aggregate principal amount of $25.0 million or more; bankruptcy; judgments involving a liability of $25.0 million or more that are not paid; and ERISA events. Many events of default are subject to customary notice and cure periods.

The Company had $20.0 million outstanding under the credit facility at March 31, 2019, and $5.2 million in outstanding letters of credit, which reduce availability under the credit facility on a dollar-for-dollar basis.

Building Note. In February 2018, the Company fully repaid a note secured by a mortgage on the Company's downtown Oklahoma City real estate (the "Building Note") in the amount of $36.3 million, which was comprised of an initial principal amount of $35.0 million and $1.3 million in in-kind interest costs that were previously added to the principal. An unamortized premium of $1.2 million was recognized as a gain on extinguishment of debt in the unaudited condensed consolidated statement of operations for the three-month period ended March 31, 2018 in connection with the repayment.

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Derivatives

3 Months Ended

Mar. 31, 2019

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivatives

Derivatives

Commodity Derivatives 

The Company is exposed to commodity price risk, which impacts the predictability of its cash flows from the sale of oil and natural gas. The Company, on occasion, has sought to manage this risk through the use of commodity derivative contracts, which allow the Company to limit its exposure to commodity price volatility on a portion of its forecasted oil and natural gas sales. The Company has not designated any of its derivative contracts as hedges for accounting purposes and records all derivative contracts at fair value with changes in derivative contract fair values recognized as gain or loss on derivative contracts in the unaudited condensed consolidated statements of operations. At March 31, 2019, the Company had no commodity derivative contracts in place. Historically, none of the Company’s commodity derivative contracts could be terminated prior to contractual maturity solely as a result of a downgrade in the credit rating of a party to the contract. Commodity derivative contracts are settled on a monthly basis, and the commodity derivative contract valuations are adjusted to the mark-to-market valuation on a quarterly basis. The Board and management of the Company are continuing to evaluate the futures market for oil and natural gas to mitigate exposure to adverse oil and natural gas price changes.

The following table summarizes derivative activity for the three-month periods ended March 31, 2019, and 2018 (in thousands):

	Three Months Ended March 31,
	2019		2018
Loss on commodity derivative contracts	$	209	$	18,330
Cash (received) paid on settlements	$	(5,078)	$	6,119

Master Netting Agreements and the Right of Offset. Historically, the Company has had master netting agreements with all of its commodity derivative counterparties and has presented its derivative assets and liabilities with the same counterparty on a net basis in the unaudited condensed consolidated balance sheets. As a result of the netting provisions, the Company's maximum amount of loss under commodity derivative transactions due to credit risk was limited to the net amounts due from its counterparties. The Company is not required to post additional collateral under its commodity derivative contracts as all of the counterparties to the Company’s commodity derivative contracts shared in the collateral supporting the Company’s credit facility.

The following table summarizes (i) the Company's commodity derivative contracts on a gross basis, (ii) the effects of netting assets and liabilities for which the right of offset exists based on master netting arrangements and (iii) for the Company’s net derivative liability positions, the applicable portion of shared collateral under the credit facility as of December 31, 2018 (in thousands):

December 31, 2018

	Gross Amounts		Gross Amounts Offset		Amounts Net of Offset		Financial Collateral		Net Amount
Assets
Derivative contracts - current	$	5,286	$	—	$	5,286	$	—	$	5,286
Total	$	5,286	$	—	$	5,286	$	—	$	5,286

Fair Value of Derivatives 

The following table presents the fair value of the Company’s derivative contracts as of December 31, 2018, on a gross basis without regard to same-counterparty netting (in thousands):

Type of Contract	Balance Sheet Classification	December 31, 2018
Derivative assets
Natural gas price swaps	Derivative contracts-current	$	5,286
Total net derivative contracts		$	5,286

See Note 4 for additional discussion of the fair value measurement of the Company’s derivative contracts.

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Commitments and Contingencies

3 Months Ended

Mar. 31, 2019

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

Commitments and Contingencies

Legal Proceedings. As previously disclosed, on May 16, 2016, the Company and certain of its direct and indirect subsidiaries (collectively, the "Debtors") filed voluntary petitions for reorganization under Chapter 11 of the United States Bankruptcy Code in the United States Bankruptcy Court for the Southern District of Texas (the “Bankruptcy Court”). The Bankruptcy Court confirmed the joint plan of organization (the "Plan") of the Debtors on September 9, 2016, and the Debtors subsequently emerged from bankruptcy on October 4, 2016.

Pursuant to the Plan, claims against the Company were discharged without recovery in each of the following consolidated cases (the “Cases”):

•In re SandRidge Energy, Inc. Securities Litigation, Case No. 5:12-cv-01341-LRW, USDC, Western District of Oklahoma

•Ivan Nibur, Lawrence Ross, Jase Luna, Matthew Willenbucher, and the Duane & Virginia Lanier Trust v. SandRidge Mississippian Trust I, et al., Case No. 5:15-cv-00634-SLP, USDC, Western District of Oklahoma

Although the Cases have not been dismissed against certain former officers and directors who remain defendants in the Cases, the Company remains as a nominal defendant in each of the Cases so that any of the respective plaintiffs may seek to recover proceeds from any applicable insurance policies or proceeds. In each of the Cases, to the extent liability exceeds the amount of available insurance proceeds, the Company may owe indemnity obligations to its former officers and/or directors who remain as defendants in such action. The Company indemnifies the SandRidge Mississippian Trust I and SandRidge Mississippian Trust II against losses, claims, damages, liabilities and expenses, including reasonable costs of investigation and attorney’s fees and expenses arising out of certain legal matters. An estimate of probable losses associated with any of the Cases cannot be made at this time, however the Company believes that any potential liability with respect to the Cases will not be material. The Company has not established any liabilities relating to any of the Cases.

In addition to the matters described above, the Company is involved in various lawsuits, claims and proceedings which are being handled and defended by the Company in the ordinary course of business.

Restricted Cash. Restricted cash - other included on the unaudited condensed consolidated balance sheets at March 31, 2019, and December 31, 2018 is the cash portion of consideration set aside for future settlement of general unsecured claims related to the Chapter 11 proceedings in accordance with the Plan. The corresponding liability for future cash settlements of general unsecured claims is included in accounts payable and accrued expenses on the unaudited condensed consolidated balance sheets.

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Equity	3 Months Ended
	Mar. 31, 2019
Equity [Abstract]
Equity	EquityCommon Stock, Performance Share Units, and Stock Options. At March 31, 2019, the Company had 35.7 million shares of common stock, par value $0.001 per share, issued and outstanding, including 0.4 million shares of unvested restricted stock awards, 0.3 million unvested stock options, 0.1 million unvested performance share units, and 250.0 million shares of common stock authorized. See Note 13 for further discussion of the Company’s restricted stock awards, performance share units, and stock options.Warrants. The Company has issued approximately 4.6 million Series A warrants and 2.0 million Series B warrants that are exercisable until October 4, 2022 for one share of common stock per warrant at initial exercise prices of $41.34 and $42.03 per share, respectively, subject to adjustments pursuant to the terms of the warrants, to certain holders of general unsecured claims as defined in the Plan. The warrants contain customary anti-dilution adjustments in the event of any stock split, reverse stock split, reclassification, stock dividend or other distributions.

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Income Taxes

3 Months Ended

Mar. 31, 2019

Income Tax Disclosure [Abstract]

Income Taxes

Income Taxes

For each interim reporting period, the Company estimates the effective tax rate expected for the full fiscal year and uses that estimated rate in providing for income taxes on a current year-to-date basis.

Deferred income taxes are provided to reflect the future tax consequences of temporary differences between the tax basis of assets and liabilities and their reported amounts in the financial statements. The Company’s deferred tax assets have been reduced by a valuation allowance due to a determination that it is more likely than not that some or all of the deferred assets will not be realized based on the weight of all available evidence. The Company continues to closely monitor and weigh all available evidence, including both positive and negative, in making its determination whether to maintain a valuation allowance. As a result of the significant weight placed on the Company's cumulative negative earnings position, the Company continued to maintain a full valuation allowance against its net deferred tax asset at March 31, 2019. Thus, the Company had no federal income tax expense or benefit for the three-month periods ended March 31, 2019 and 2018, and an insignificant amount of state income tax expense for the three-month period ended March 31, 2018.

The Company’s only taxing jurisdiction is the United States (federal and state). The Company’s tax years 2015 to present remain open for federal examination. Additionally, tax years 2005 through 2014 remain subject to examination for the purpose of determining the amount of remaining federal net operating loss and other carryforwards. The number of years open for state tax audits varies, depending on the state, but are generally from three to five years.

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Loss per Share

3 Months Ended

Mar. 31, 2019

Earnings Per Share [Abstract]

Loss per Share

Loss per Share

The following table summarizes the calculation of weighted average common shares outstanding used in the computation of diluted loss per share:

	Net Loss		Weighted Average Shares	Loss Per Share
	(In thousands, except per share amounts)
Three Months Ended March 31, 2019
Basic loss per share	$	(5,277)	35,322	$	(0.15)
Effect of dilutive securities
Restricted stock awards(1)	—		—
Performance share units(1)	—		—
Warrants(1)	—		—
Stock options(1)	—		—
Diluted loss per share	$	(5,277)	35,322	$	(0.15)
Three Months Ended March 31, 2018
Basic loss per share	$	(40,894)	34,575	$	(1.18)
Effect of dilutive securities
Restricted stock awards(2)	—		—
Performance share units(3)	—		—
Warrants(2)	—		—
Diluted loss per share	$	(40,894)	34,575	$	(1.18)

____________________

1.No incremental shares of potentially dilutive restricted stock awards, performance share units, warrants or stock options were included for the three-month period ended March 31, 2019, as their effect was antidilutive under the treasury stock method.

2.No incremental shares of potentially dilutive restricted stock awards or warrants were included for the three-month period ended March 31, 2018, as their effect was antidilutive under the treasury stock method.

3.Performance share units covering an insignificant amount of shares for the three-month period ended March 31, 2018, were excluded from the computation of loss per share because their effect would have been antidilutive.

See Note 13 for discussion of the Company’s share-based compensation awards.

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Share and Incentive-Based Compensation

3 Months Ended

Mar. 31, 2019

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Share and Incentive-Based Compensation

Share and Incentive-Based Compensation

Share-Based Compensation

Omnibus Incentive Plan. The Company's Omnibus Incentive Plan became effective in October 2016. The Omnibus Incentive Plan authorizes the issuance of up to 4.6 million shares of SandRidge common stock to eligible persons including non-employee directors of the Company, employees of the Company or any of its affiliates, and certain consultants and advisers to the Company or any of its affiliates. The types of awards that may be granted under the Omnibus Incentive Plan include stock options, restricted stock, performance awards and other forms of awards granted or denominated in shares of the Company’s common stock, as well as certain cash-settled awards. At March 31, 2019, the Company had restricted stock awards and an immaterial amount of performance share units and stock options outstanding under the Omnibus Incentive Plan. At March 31, 2018, the Company also had performance units outstanding which vested in June 2018 with an aggregate intrinsic value of approximately $1.7 million.

Restricted Stock Awards. The Company’s restricted stock awards are equity-classified awards and are valued based upon the market value of the Company’s common stock on the date of grant. Outstanding restricted shares will generally vest over either a one-year period or three-year period. As of March 31, 2019, the Company had approximately 0.4 million unvested restricted shares outstanding at weighted average grant date fair value of $16.07, and unrecognized compensation cost related to these awards totaled $3.9 million. The remaining weighted average contractual period over which this compensation cost may be recognized is 2.1 years.

The following tables summarize share and incentive-based compensation for the three-month periods ended March 31, 2019, and 2018 (in thousands):

	Recurring Compensation Expense(1)		Executive Terminations(2)		Reduction in Force(2)		Total
Three Months Ended March 31, 2019
Equity-classified awards:
Restricted stock awards	$	745	$	—	$	—	$	745
Performance share units	198		—		—		198
Stock options	130		—		—		130
Total share-based compensation expense	1,073		—		—		1,073
Less: Capitalized compensation expense	(77)		—		—		(77)
Share-based compensation expense, net	$	996	$	—	$	—	$	996
Three Months Ended March 31, 2018
Equity-classified awards:
Restricted stock awards	$	2,776	$	8,140	$	3,686	$	14,602
Performance share units	329		974		150		1,453
Total share-based compensation expense	3,105		9,114		3,836		16,055
Liability-classified awards:
Performance units	530		2,367		589		3,486
Total share and incentive-based compensation expense	3,635		11,481		4,425		19,541
Less: Capitalized compensation expense	(210)		—		—		(210)
Share and incentive-based compensation expense, net	$	3,425	$	11,481	$	4,425	$	19,331

____________________

1.Recorded in general and administrative expense in the accompanying consolidated statements of operations.

2.Recorded in employee termination benefits in the accompanying consolidated statements of operations. Vesting for certain stock restricted stock awards, performance share units, and performance units was accelerated in connection with executive terminations and a reduction in force in the first quarter of 2018.

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Revenues

3 Months Ended

Mar. 31, 2019

Revenue from Contract with Customer [Abstract]

Revenues

Revenues

The following table disaggregates the Company’s revenue by source for the three-month periods ended March 31, 2019 and 2018:

	Three Months Ended March 31,
	2019		2018
Oil	$	43,159	$	53,335
NGL	13,111		16,389
Natural gas	16,778		17,242
Other	188		162
Total revenues	$	73,236	$	87,128

Oil, natural gas and NGL revenues. A majority of the Company’s revenues come from sales of oil, natural gas and NGLs and are recorded at a point in time when control of the oil, natural gas and NGL production passes to the customer at the inlet of the processing plant or pipeline, or the delivery point for onloading to a delivery truck. As the Company’s customers obtain control of the production prior to selling it to other end customers, the Company presents its revenues on a net basis, rather than on a gross basis.

Pricing for the Company’s oil, natural gas and NGL contracts is variable and is based on volumes sold multiplied by either an index price, net of deductions, or a percentage of the sales price obtained by the customer, which is also based on index prices. The transaction price is allocated on a pro-rata basis to each unit of oil, natural gas or NGL sold based on the terms of the contract. Oil, natural gas and NGL revenues are also recorded net of royalties, discounts and allowances, and transportation costs, as applicable. Taxes assessed by governmental authorities on oil, natural gas and NGL sales are presented separately from revenues and are included in production tax expense in the consolidated statements of operations.

Revenues Receivable. The Company records an asset in accounts receivable, net on its consolidated balance sheet for revenues receivable from contracts with customers at the end of each period. Pricing for revenues receivable is estimated using current month crude oil, natural gas and NGL prices, net of deductions. Revenues receivable are typically collected the month after the Company delivers the related production to its customers. As of March 31, 2019, and December 31, 2018, the Company had revenues receivable of $28.1 million and $31.8 million, respectively, and did not record any bad debt expense on revenues receivable during the three-month period ended March 31, 2019.

Practical expedients and exemptions. Most of the Company's contracts are short-term in nature with a contract term of one year or less. The Company generally expenses certain insignificant costs when incurred rather than recognizing them as an asset because the amortization period would have been one year or less. Additionally, the Company does not disclose the value of unsatisfied performance obligations for (i) contracts with an original expected length of one year or less, and (ii) contracts for which revenue is recognized at the amount to which the Company has the right to invoice for services performed. Payment terms are typically within 30 days of control being transferred.

Currently, the Company’s existing contracts do not contain financing components, but the Company has elected the practical expedient that allows financing components to be ignored if the difference between the performance and payment is less than one year for any future contracts that may contain financing components.

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Basis of Presentation (Policies)

3 Months Ended

Mar. 31, 2019

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Nature of Business

Nature of Business. SandRidge Energy, Inc. is an oil and natural gas exploration and production company headquartered in Oklahoma City, Oklahoma with principal focus on the acquisition, exploration and development of hydrocarbon resources in the United States.

Principles of Consolidation

Principles of Consolidation. The consolidated financial statements include the accounts of the Company and its wholly owned or majority owned subsidiaries, including its proportionate share of the Royalty Trusts. All significant intercompany accounts and transactions have been eliminated in consolidation.

Interim Financial Statements

Interim Financial Statements. The accompanying unaudited condensed consolidated financial statements and notes as of December 31, 2018 have been derived from and should be read in conjunction with the audited financial statements and notes contained in the Company’s 2018 Form 10-K. Certain information and disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) have been condensed or omitted, although the Company believes that the disclosures contained herein are adequate to make the information presented not misleading. In the opinion of management, the financial statements include all adjustments, which consist of normal recurring adjustments unless otherwise disclosed, necessary to fairly state the Company’s unaudited condensed consolidated financial statements.

Significant Accounting Policies

Significant Accounting Policies. The unaudited condensed consolidated financial statements were prepared in accordance with the accounting policies stated in the 2018 Form 10-K as well as the items noted below.

Reclassifications

Reclassifications. Certain reclassifications have been made to the prior period financial statements to conform to the current period presentation. These reclassifications have no effect on the Company’s previously reported results of operations.

Use of Estimates

Use of Estimates. The preparation of the unaudited condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period.

The more significant areas requiring the use of assumptions, judgments and estimates include: oil, natural gas and natural gas liquids (“NGL”) reserves; impairment tests of long-lived assets; depreciation, depletion and amortization; income taxes; valuation of derivative instruments; contingencies; and accrued revenue and related receivables. Although management believes these estimates are reasonable, actual results could differ significantly.

Recent Accounting Pronouncements

Recent Accounting Pronouncements Not Yet Adopted. The FASB issued ASU 2016-13, “Financial Instruments —Credit Losses (Topic 326) Measurement of Credit Losses on Financial Instruments,” which changes how entities will measure credit losses for most financial assets and certain other instruments that are not measured at fair value through net income. The standard will replace the currently required incurred loss approach with an expected loss model for instruments measured at amortized cost. The standard is effective for interim and annual periods beginning after December 15, 2019, with early adoption permitted for the interim and annual periods beginning after December 31, 2018, and will be applied using a modified retrospective approach resulting in a cumulative effect adjustment to retained earnings upon adoption. The Company does not plan to early adopt and is currently evaluating the effect the guidance will have on its consolidated financial statements; however, the impact is not expected to be material.

Leases

In February 2016, the FASB issued ASU 2016-02, “Leases (Topic 842),” and subsequently issued other associated ASU's related to Topic 842 which supersede ASC 840 and require lessees to recognize right of use ("ROU") lease assets and liabilities on the balance sheet for long-term leases formerly classified as operating leases under ASC 840, and to disclose key information about leasing arrangements. Leases to explore for or produce oil and natural gas were not impacted by this guidance. This ASU became effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. The Company adopted this ASU on January 1, 2019 using a modified retrospective approach for all ROU leases that existed at the period of adoption and did not restate its comparative periods.

Topic 842 provides a number of practical expedients to assist with the transition to the new standard. The Company elected the 'package of practical expedients,' and therefore did not have to reassess prior conclusions about lease identification, lease classification and initial indirect costs. The Company also utilized the land easement practical expedient and short-term lease recognition exemption, under which leases with initial terms less than 12 months are not required to be presented on the balance sheet. Certain leases contain both lease and non-lease components. The Company elected the practical expedient to combine lease and non-lease components for asset classes including drilling rigs, compressors and various office equipment.

The Company determines if an arrangement is or contains a lease at inception. A lease is defined as a contract, or part of a contract, that conveys the right to control the use of identified property, plant or equipment for a period of time in exchange for consideration. Lease liabilities are recognized based on the present value of the lease payments not yet paid over the lease term at January 1, 2019 for existing leases and at the commencement date for any new leases entered into subsequent to January 1, 2019. As most of the Company's leases do not provide an implicit rate, the Company's incremental borrowing rate was used as the discount rate when determining the present value of future payments. The ROU assets are recognized based on the lease liability plus any prepaid lease payments and excluding lease incentives and initial direct costs incurred for the same periods.  The Company's lease terms may include options to extend or terminate the lease when it is reasonably certain that option will be exercised. Lease expense for minimum lease payments is recognized on a straight-line basis over the lease term.

Adoption of this standard resulted in additional ROU lease assets and lease liabilities of approximately $2.3 million and $2.4 million, respectively, as of January 1, 2019, which did not materially impact the Company's consolidated financial statements. The difference between the net lease assets and liabilities was recognized as a cumulative-effect adjustment to the opening balance of retained earnings. Operating leases are included in other assets and other long-term obligations, and finance leases are included in other property, plant and equipment, and other long-term obligations on the accompanying condensed consolidated balance sheet as of March 31, 2019. The Company had no significant capital or operating leases with terms longer than 12 months at December 31, 2018.

Short-term Leases

The Company also utilized the land easement practical expedient and short-term lease recognition exemption, under which leases with initial terms less than 12 months are not required to be presented on the balance sheet.

Separation of Lease and Nonlease Components

The Company elected the practical expedient to combine lease and non-lease components for asset classes including drilling rigs, compressors and various office equipment.

Revenue from Contract with Customer

Oil, natural gas and NGL revenues. A majority of the Company’s revenues come from sales of oil, natural gas and NGLs and are recorded at a point in time when control of the oil, natural gas and NGL production passes to the customer at the inlet of the processing plant or pipeline, or the delivery point for onloading to a delivery truck. As the Company’s customers obtain control of the production prior to selling it to other end customers, the Company presents its revenues on a net basis, rather than on a gross basis. Pricing for the Company’s oil, natural gas and NGL contracts is variable and is based on volumes sold multiplied by either an index price, net of deductions, or a percentage of the sales price obtained by the customer, which is also based on index prices. The transaction price is allocated on a pro-rata basis to each unit of oil, natural gas or NGL sold based on the terms of the contract. Oil, natural gas and NGL revenues are also recorded net of royalties, discounts and allowances, and transportation costs, as applicable. Taxes assessed by governmental authorities on oil, natural gas and NGL sales are presented separately from revenues and are included in production tax expense in the consolidated statements of operations.

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Leases (Table)

3 Months Ended

Mar. 31, 2019

Leases [Abstract]

Lease, Cost

The components of lease costs recognized for the Company's ROU leases are shown below:

	Three Months Ended March 31, 2019
Short-term lease cost (1)	$	4,909
Financing lease cost	297
Operating lease cost	58
Total lease cost	$	5,264

____________________

1.$3.1 million of short-term lease cost was capitalized as part of oil and natural gas properties, and portions of these costs were reimbursed to the Company by other working interest owners.

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Employee Termination Benefits (Tables)

3 Months Ended

Mar. 31, 2019

Postemployment Benefits [Abstract]

Schedule of Postemployment Benefits

The following table presents a summary of employee termination benefits for the three-month period ended March 31, 2018 which occurred before the change in composition of the current Board of Directors (in thousands):

	Cash		Share-Based Compensation (3)		Number of Shares	Total Employee Termination Benefits
Three Months Ended March 31, 2018
Executive Employee Termination Benefits (1)	$	11,945	$	9,114	554	$	21,059
Other Employee Termination Benefits (2)	6,692		3,836		209	10,528
	$	18,637	$	12,950	763	$	31,587

____________________

1.On February 8, 2018, the Company’s then current chief executive officer ("CEO"), James Bennett, separated employment from the Company, and on February 22, 2018, the Company’s then current chief financial officer ("CFO"), Julian Bott, also separated employment from the Company. As a result, the Company paid cash severance costs and incurred share-based compensation costs associated with these separations during the first quarter of 2018.

2.As a result of a reduction in workforce in the first quarter of 2018, certain employees received termination benefits including cash severance and accelerated share-based and incentive compensation upon separation of service from the Company.

3.Share-based compensation recognized in connection with the accelerated vesting of restricted stock awards and performance share units upon the departure of certain executives and the reduction in workforce in the first quarter of 2018 reflects the remaining unrecognized compensation expense associated with these awards at the date of termination. The unrecognized compensation expense was calculated using the grant date fair value for restricted stock awards and performance share units. One share of the Company’s common stock was issued per performance share unit.

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Fair Value Measurements (Tables)

3 Months Ended

Mar. 31, 2019

Fair Value Disclosures [Abstract]

Assets and Liabilities Measured on Recurring Basis

The following table summarizes the Company’s assets measured at fair value on a recurring basis by the fair value hierarchy as of December 31, 2018 (in thousands):

December 31, 2018

	Fair Value Measurements						Netting(1)		Assets/Liabilities at Fair Value
	Level 1		Level 2		Level 3
Assets
Commodity derivative contracts	$	—	$	5,286	$	—	$	—	$	5,286
	$	—	$	5,286	$	—	$	—	$	5,286

____________________

1.Represents the effect of netting assets and liabilities for counterparties with which the right of offset exists.

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Property, Plant and Equipment (Tables)

3 Months Ended

Mar. 31, 2019

Property, Plant and Equipment [Abstract]

Property, Plant and Equipment

Property, plant and equipment consists of the following (in thousands): 

	March 31, 2019		December 31, 2018
Oil and natural gas properties
Proved	$	1,344,552	$	1,269,091
Unproved	57,363		60,152
Total oil and natural gas properties	1,401,915		1,329,243
Less accumulated depreciation, depletion and impairment	(614,972)		(580,132)
Net oil and natural gas properties capitalized costs	786,943		749,111
Land	4,400		4,400
Electrical infrastructure	131,176		131,176
Other non-oil and natural gas equipment	13,410		13,458
Buildings and structures	77,148		77,148
Financing leases	1,727		—
Total	227,861		226,182
Less accumulated depreciation and amortization	(27,847)		(25,344)
Other property, plant and equipment, net	200,014		200,838
Total property, plant and equipment, net	$	986,957	$	949,949

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Accounts Payable and Accrued Expenses (Tables)

3 Months Ended

Mar. 31, 2019

Payables and Accruals [Abstract]

Accounts Payable and Accrued Expenses

Accounts payable and accrued expenses consist of the following (in thousands):

	March 31, 2019		December 31, 2018
Accounts payable and other accrued expenses	$	89,909	$	78,219
Payroll and benefits	10,712		12,891
Production payable	12,972		12,767
Taxes payable	4,569		5,350
Drilling advances	724		2,031
Accrued interest	550		539
Total accounts payable and accrued expenses	$	119,436	$	111,797

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Derivatives (Tables)

3 Months Ended

Mar. 31, 2019

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivative Instruments, Gain (Loss)

The following table summarizes derivative activity for the three-month periods ended March 31, 2019, and 2018 (in thousands):

	Three Months Ended March 31,
	2019		2018
Loss on commodity derivative contracts	$	209	$	18,330
Cash (received) paid on settlements	$	(5,078)	$	6,119

Offsetting Assets and Liabilities

The following table summarizes (i) the Company's commodity derivative contracts on a gross basis, (ii) the effects of netting assets and liabilities for which the right of offset exists based on master netting arrangements and (iii) for the Company’s net derivative liability positions, the applicable portion of shared collateral under the credit facility as of December 31, 2018 (in thousands):

December 31, 2018

	Gross Amounts		Gross Amounts Offset		Amounts Net of Offset		Financial Collateral		Net Amount
Assets
Derivative contracts - current	$	5,286	$	—	$	5,286	$	—	$	5,286
Total	$	5,286	$	—	$	5,286	$	—	$	5,286

Fair Value of Derivatives

The following table presents the fair value of the Company’s derivative contracts as of December 31, 2018, on a gross basis without regard to same-counterparty netting (in thousands):

Type of Contract	Balance Sheet Classification	December 31, 2018
Derivative assets
Natural gas price swaps	Derivative contracts-current	$	5,286
Total net derivative contracts		$	5,286

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Loss per Share (Tables)

3 Months Ended

Mar. 31, 2019

Earnings Per Share [Abstract]

Calculation of Weighted Average Common Shares Outstanding Used in Computation of Diluted (Loss) Earnings Per Share

The following table summarizes the calculation of weighted average common shares outstanding used in the computation of diluted loss per share:

	Net Loss		Weighted Average Shares	Loss Per Share
	(In thousands, except per share amounts)
Three Months Ended March 31, 2019
Basic loss per share	$	(5,277)	35,322	$	(0.15)
Effect of dilutive securities
Restricted stock awards(1)	—		—
Performance share units(1)	—		—
Warrants(1)	—		—
Stock options(1)	—		—
Diluted loss per share	$	(5,277)	35,322	$	(0.15)
Three Months Ended March 31, 2018
Basic loss per share	$	(40,894)	34,575	$	(1.18)
Effect of dilutive securities
Restricted stock awards(2)	—		—
Performance share units(3)	—		—
Warrants(2)	—		—
Diluted loss per share	$	(40,894)	34,575	$	(1.18)

____________________

1.No incremental shares of potentially dilutive restricted stock awards, performance share units, warrants or stock options were included for the three-month period ended March 31, 2019, as their effect was antidilutive under the treasury stock method.

2.No incremental shares of potentially dilutive restricted stock awards or warrants were included for the three-month period ended March 31, 2018, as their effect was antidilutive under the treasury stock method.

3.Performance share units covering an insignificant amount of shares for the three-month period ended March 31, 2018, were excluded from the computation of loss per share because their effect would have been antidilutive.

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Share and Incentive-Based Compensation (Tables)

3 Months Ended

Mar. 31, 2019

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Schedule of Share and Incentive-based Compensation

The following tables summarize share and incentive-based compensation for the three-month periods ended March 31, 2019, and 2018 (in thousands):

	Recurring Compensation Expense(1)		Executive Terminations(2)		Reduction in Force(2)		Total
Three Months Ended March 31, 2019
Equity-classified awards:
Restricted stock awards	$	745	$	—	$	—	$	745
Performance share units	198		—		—		198
Stock options	130		—		—		130
Total share-based compensation expense	1,073		—		—		1,073
Less: Capitalized compensation expense	(77)		—		—		(77)
Share-based compensation expense, net	$	996	$	—	$	—	$	996
Three Months Ended March 31, 2018
Equity-classified awards:
Restricted stock awards	$	2,776	$	8,140	$	3,686	$	14,602
Performance share units	329		974		150		1,453
Total share-based compensation expense	3,105		9,114		3,836		16,055
Liability-classified awards:
Performance units	530		2,367		589		3,486
Total share and incentive-based compensation expense	3,635		11,481		4,425		19,541
Less: Capitalized compensation expense	(210)		—		—		(210)
Share and incentive-based compensation expense, net	$	3,425	$	11,481	$	4,425	$	19,331

____________________

1.Recorded in general and administrative expense in the accompanying consolidated statements of operations.

2.Recorded in employee termination benefits in the accompanying consolidated statements of operations. Vesting for certain stock restricted stock awards, performance share units, and performance units was accelerated in connection with executive terminations and a reduction in force in the first quarter of 2018.

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Revenues (Tables)

3 Months Ended

Mar. 31, 2019

Revenue from Contract with Customer [Abstract]

Schedule of Disaggregation of Revenue

The following table disaggregates the Company’s revenue by source for the three-month periods ended March 31, 2019 and 2018:

	Three Months Ended March 31,
	2019		2018
Oil	$	43,159	$	53,335
NGL	13,111		16,389
Natural gas	16,778		17,242
Other	188		162
Total revenues	$	73,236	$	87,128

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Leases (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2019	Jan. 01, 2019
Lessee, Lease, Description [Line Items]
Short-term lease cost	$ 4,909
Financing lease cost	297
Operating lease cost	58
Total lease cost	5,264
Short-term lease, cost, capitalized	$ 3,100
Accounting Standards Update 2016-02
Lessee, Lease, Description [Line Items]
Right-of-use asset		$ 2,300
Finance lease, liability		$ 2,400

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Employee Termination Benefits (Details) - USD ($) shares in Thousands	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Employee Termination Benefits
Cash		$ 18,637,000
Share-Based Compensation		$ 12,950,000
Number of Shares		763
Total Employee Termination Benefits	$ 0	$ 31,587,000
Executive Employee Termination Benefits
Employee Termination Benefits
Cash		11,945,000
Share-Based Compensation		$ 9,114,000
Number of Shares		554
Total Employee Termination Benefits		$ 21,059,000
Other Employee Termination Benefits
Employee Termination Benefits
Cash		6,692,000
Share-Based Compensation		$ 3,836,000
Number of Shares		209
Total Employee Termination Benefits		$ 10,528,000

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Fair Value Measurements - Assets and Liabilities Measured at Fair Value on Recurring Basis (Details) $ in Thousands	Dec. 31, 2018 USD ($)
Fair Value, Assets and Liabilities Measured on Recurring Basis
Derivative assets	$ 5,286
Fair Value, Measurements, Recurring
Fair Value, Assets and Liabilities Measured on Recurring Basis
Netting adjustments, assets	0
Assets at fair value	5,286
Fair Value, Measurements, Recurring | Commodity derivative contracts
Fair Value, Assets and Liabilities Measured on Recurring Basis
Netting adjustments, assets	0
Assets at fair value	5,286
Fair Value, Measurements, Recurring | Fair Value Measurements Level 1
Fair Value, Assets and Liabilities Measured on Recurring Basis
Derivative assets	0
Fair Value, Measurements, Recurring | Fair Value Measurements Level 1 | Commodity derivative contracts
Fair Value, Assets and Liabilities Measured on Recurring Basis
Derivative assets	0
Fair Value, Measurements, Recurring | Fair Value Measurements Level 2
Fair Value, Assets and Liabilities Measured on Recurring Basis
Derivative assets	5,286
Fair Value, Measurements, Recurring | Fair Value Measurements Level 2 | Commodity derivative contracts
Fair Value, Assets and Liabilities Measured on Recurring Basis
Derivative assets	5,286
Fair Value, Measurements, Recurring | Fair Value Measurements Level 3
Fair Value, Assets and Liabilities Measured on Recurring Basis
Derivative assets	0
Fair Value, Measurements, Recurring | Fair Value Measurements Level 3 | Commodity derivative contracts
Fair Value, Assets and Liabilities Measured on Recurring Basis
Derivative assets	$ 0

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Property, Plant and Equipment - Schedule of Property, Plant and Equipment (Details) - USD ($) $ in Thousands	Mar. 31, 2019	Dec. 31, 2018
Oil and natural gas properties
Proved	$ 1,344,552	$ 1,269,091
Unproved	57,363	60,152
Total oil and natural gas properties	1,401,915	1,329,243
Less: accumulated depreciation, depletion and impairment	(614,972)	(580,132)
Net oil and natural gas properties capitalized costs	786,943	749,111
Property, Plant and Equipment, net
Property, plant and equipment, gross	227,861	226,182
Less accumulated depreciation and amortization	(27,847)	(25,344)
Other property, plant and equipment, net	200,014	200,838
Total property, plant and equipment, net	986,957	949,949
Land
Property, Plant and Equipment, net
Property, plant and equipment, gross	4,400	4,400
Electrical infrastructure
Property, Plant and Equipment, net
Property, plant and equipment, gross	131,176	131,176
Other non-oil and natural gas equipment
Property, Plant and Equipment, net
Property, plant and equipment, gross	13,410	13,458
Buildings and structures
Property, Plant and Equipment, net
Property, plant and equipment, gross	77,148	77,148
Financing leases
Property, Plant and Equipment, net
Property, plant and equipment, gross	$ 1,727	$ 0

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Property, Plant and Equipment - Narrative (Details) - Midstream Generator Assets - USD ($)	3 Months Ended
	Jun. 30, 2018	Mar. 31, 2018
Property, Plant and Equipment
Assets held-for-sale		$ 5,700,000
Net realizable value of assets held for sale		1,600,000
Impairment of assets to be disposed of		$ 4,100,000
Gain (loss) on sale of assets and asset impairment charges	$ 0

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Accounts Payable and Accrued Expenses (Details) - USD ($) $ in Thousands	Mar. 31, 2019	Dec. 31, 2018
Payables and Accruals [Abstract]
Accounts payable and other accrued expenses	$ 89,909	$ 78,219
Payroll and benefits	10,712	12,891
Production payable	12,972	12,767
Taxes payable	4,569	5,350
Drilling advances	724	2,031
Accrued interest	550	539
Total accounts payable and accrued expenses	$ 119,436	$ 111,797

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Debt - Additional Information (Details) - USD ($)	1 Months Ended	3 Months Ended		7 Months Ended
	Feb. 28, 2018	Mar. 31, 2019	Mar. 31, 2018	May 11, 2017	Oct. 04, 2016
Debt Instrument
Repayments of borrowings		$ 19,596,000	$ 36,304,000
Gain on extinguishment of debt		0	1,151,000
Credit Facility | Revolving Credit Facility
Debt Instrument
Maximum borrowing capacity		600,000,000.0
Borrowing base		$ 350,000,000.0
Commitment fee		0.50%
Percentage of proved reserves pledged as collateral		95.00%
Total net leverage ratio (no greater than)		3.50
Interest coverage ratio (no less than)		2.25
Leverage ratio		0.06
Coverage ratio		80.20
Aggregate principal amount of default trigger		$ 25,000,000.0
Default trigger related to judgment liability		25,000,000.0
Debt outstanding		20,000,000.0
Outstanding letters of credit		$ 5,200,000
Credit Facility | Revolving Credit Facility | Minimum | LIBOR
Debt Instrument
Basis spread on variable rate		3.00%
Credit Facility | Revolving Credit Facility | Minimum | Base Rate
Debt Instrument
Basis spread on variable rate		2.00%
Credit Facility | Revolving Credit Facility | Maximum | LIBOR
Debt Instrument
Basis spread on variable rate		4.00%
Credit Facility | Revolving Credit Facility | Maximum | Base Rate
Debt Instrument
Basis spread on variable rate		3.00%
New Building Note | Secured Notes
Debt Instrument
Repayments of borrowings	$ 36,300,000
Face amount of debt instrument					$ 35,000,000.0
Interest costs paid-in-kind				$ 1,300,000
Gain on extinguishment of debt			$ 1,200,000

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Derivatives - Derivative Activity (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Derivative Instruments and Hedging Activities Disclosure
Loss on derivative contracts	$ 209	$ 18,330
Cash (received) paid on settlements	(5,078)	6,119
Commodity derivative contracts
Derivative Instruments and Hedging Activities Disclosure
Loss on derivative contracts	209	18,330
Cash (received) paid on settlements	$ (5,078)	$ 6,119

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Derivatives - Offsetting Assets and Liabilities (Details) $ in Thousands	Dec. 31, 2018 USD ($)
Assets
Derivative assets, gross amounts	$ 5,286
Derivative assets, gross amounts offset	0
Derivative assets, amounts net of offset	5,286
Financial collateral (obligation to return cash)	0
Derivative assets, net amount	5,286
Current assets
Assets
Derivative assets, gross amounts	5,286
Derivative assets, gross amounts offset	0
Derivative assets, amounts net of offset	5,286
Financial collateral (obligation to return cash)	0
Derivative assets, net amount	$ 5,286

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Derivatives - Fair Value of Derivative Contracts (Details) $ in Thousands	Dec. 31, 2018 USD ($)
Derivatives, Fair Value
Derivative assets	$ 5,286
Total net derivative contracts	(5,286)
Current assets
Derivatives, Fair Value
Derivative assets	5,286
Natural gas price swaps | Current assets
Derivatives, Fair Value
Derivative assets	$ 5,286

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Equity - Narrative (Details) - $ / shares	3 Months Ended
	Mar. 31, 2019	Dec. 31, 2018
Class of Stock
Common stock, shares issued (in shares)	35,687,000	35,687,000
Common stock, shares outstanding (in shares)	35,687,000	35,687,000
Common stock, par value (in dollars per share)	$ 0.001	$ 0.001
Unvested options (in shares)	300,000
Common stock, shares authorized (in shares)	250,000,000	250,000,000
Series A Warrants
Class of Stock
Plan of reorganization, equity interest issuable (in shares)	4,600,000
Number of common shares exercised for each warrant (in shares)	1
Exercise price (in usd per share)	$ 41.34
Series B Warrants
Class of Stock
Plan of reorganization, equity interest issuable (in shares)	2,000,000.0
Number of common shares exercised for each warrant (in shares)	1
Exercise price (in usd per share)	$ 42.03
Restricted Stock
Class of Stock
Unvested awards (in shares)	400,000
Performance Share Units
Class of Stock
Unvested awards (in shares)	100,000

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Income Taxes - Narrative (Details)	3 Months Ended
	Mar. 31, 2019
Minimum
Income Taxes
Number of tax years open for state tax audit (in years)	3 years
Maximum
Income Taxes
Number of tax years open for state tax audit (in years)	5 years
Earliest Tax Year
Income Taxes
Open tax year	2005
Latest Tax Year
Income Taxes
Open tax year	2014
Domestic Tax Authority | Earliest Tax Year
Income Taxes
Open tax year	2015

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Loss per Share (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Earnings (Loss) Per Share, Diluted, by Common Class, Including Two Class Method
Net Loss, basic	$ (5,277)	$ (40,894)
Weighted Average Shares, Basic (in shares)	35,322,000	34,575,000
Loss per Share, basic (in dollars per share)	$ (0.15)	$ (1.18)
Effect of dilutive securities
Restricted stock awards	$ 0	$ 0
Restricted stock awards (in shares)	0	0
Performance share units	$ 0	$ 0
Performance share units (in shares)	0	0
Warrants	$ 0	$ 0
Warrants (in shares)	0	0
Stock options	$ 0
Stock options (in shares)	0
Diluted earnings (loss)	$ (5,277)	$ (40,894)
Weighted average shares, diluted (in shares)	35,322,000	34,575,000
Loss Per Share, diluted (in dollars per share)	$ (0.15)	$ (1.18)
Restricted Stock awards
Potentially Dilutive Securities
Antidilutive securities excluded from computation of earnings per share (in shares)	0	0
Performance Share Units
Potentially Dilutive Securities
Antidilutive securities excluded from computation of earnings per share (in shares)	0
Warrants
Potentially Dilutive Securities
Antidilutive securities excluded from computation of earnings per share (in shares)	0	0
Stock Option
Potentially Dilutive Securities
Antidilutive securities excluded from computation of earnings per share (in shares)	0

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Share and Incentive-Based Compensation - Narrative (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018	Oct. 31, 2016
Share and Incentive Based Compensation Arrangement
Shares authorized for issuance			4.6
Performance Share Units
Share and Incentive Based Compensation Arrangement
Aggregate intrinsic value of awards		$ 1.7
Unvested awards (in shares)	0.1
Restricted Stock
Share and Incentive Based Compensation Arrangement
Unvested awards (in shares)	0.4
Weighted average grant date fair value	$ 16.07
Compensation yet not yet recognized	$ 3.9
Compensation yet not yet recognized period	2 years 1 month 6 days
Restricted Stock | Minimum
Share and Incentive Based Compensation Arrangement
Vesting period	1 year
Restricted Stock | Maximum
Share and Incentive Based Compensation Arrangement
Vesting period	3 years

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Share and Incentive-Based Compensation - Compensation Expense (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Share and Incentive-Based Compensation Arrangement by Award, Compensation Cost
Equity-classified awards compensation expense	$ 1,073	$ 16,055
Liability-classified awards compensation expense, Performance units		3,486
Total share and incentive-based compensation expense		19,541
Less: Capitalized compensation expense	(77)	(210)
Share-based compensation expense, net	996	19,331
Recurring Compensation Expense
Share and Incentive-Based Compensation Arrangement by Award, Compensation Cost
Equity-classified awards compensation expense	1,073	3,105
Liability-classified awards compensation expense, Performance units		530
Total share and incentive-based compensation expense		3,635
Less: Capitalized compensation expense	(77)	(210)
Share-based compensation expense, net	996	3,425
Executive Terminations
Share and Incentive-Based Compensation Arrangement by Award, Compensation Cost
Equity-classified awards compensation expense	0	9,114
Liability-classified awards compensation expense, Performance units		2,367
Total share and incentive-based compensation expense		11,481
Less: Capitalized compensation expense	0	0
Share-based compensation expense, net	0	11,481
Reduction in Force
Share and Incentive-Based Compensation Arrangement by Award, Compensation Cost
Equity-classified awards compensation expense	0	3,836
Liability-classified awards compensation expense, Performance units		589
Total share and incentive-based compensation expense		4,425
Less: Capitalized compensation expense	0	0
Share-based compensation expense, net	0	4,425
Restricted Stock
Share and Incentive-Based Compensation Arrangement by Award, Compensation Cost
Equity-classified awards compensation expense	745	14,602
Restricted Stock | Recurring Compensation Expense
Share and Incentive-Based Compensation Arrangement by Award, Compensation Cost
Equity-classified awards compensation expense	745	2,776
Restricted Stock | Executive Terminations
Share and Incentive-Based Compensation Arrangement by Award, Compensation Cost
Equity-classified awards compensation expense	0	8,140
Restricted Stock | Reduction in Force
Share and Incentive-Based Compensation Arrangement by Award, Compensation Cost
Equity-classified awards compensation expense	0	3,686
Performance Share Units
Share and Incentive-Based Compensation Arrangement by Award, Compensation Cost
Equity-classified awards compensation expense	198	1,453
Performance Share Units | Recurring Compensation Expense
Share and Incentive-Based Compensation Arrangement by Award, Compensation Cost
Equity-classified awards compensation expense	198	329
Performance Share Units | Executive Terminations
Share and Incentive-Based Compensation Arrangement by Award, Compensation Cost
Equity-classified awards compensation expense	0	974
Performance Share Units | Reduction in Force
Share and Incentive-Based Compensation Arrangement by Award, Compensation Cost
Equity-classified awards compensation expense	0	$ 150
Stock Option
Share and Incentive-Based Compensation Arrangement by Award, Compensation Cost
Equity-classified awards compensation expense	130
Stock Option | Recurring Compensation Expense
Share and Incentive-Based Compensation Arrangement by Award, Compensation Cost
Equity-classified awards compensation expense	130
Stock Option | Executive Terminations
Share and Incentive-Based Compensation Arrangement by Award, Compensation Cost
Equity-classified awards compensation expense	0
Stock Option | Reduction in Force
Share and Incentive-Based Compensation Arrangement by Award, Compensation Cost
Equity-classified awards compensation expense	$ 0

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Revenues - Disaggregation of Revenue (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Disaggregation of Revenue
Total revenues	$ 73,236	$ 87,128
Oil
Disaggregation of Revenue
Total revenues	43,159	53,335
NGL
Disaggregation of Revenue
Total revenues	13,111	16,389
Natural gas
Disaggregation of Revenue
Total revenues	16,778	17,242
Other
Disaggregation of Revenue
Total revenues	$ 188	$ 162

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Revenues - Narrative (Details) - USD ($) $ in Millions	Mar. 31, 2019	Dec. 31, 2018
Revenue Receivable from Contract With Customers
Revenues Receivable from Customer
Revenues receivable	$ 28.1	$ 31.8

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Label	Element	Value
Cumulative Effect of New Accounting Principle in Period of Adoption	us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption	$ (57,000)
Retained Earnings [Member]
Cumulative Effect of New Accounting Principle in Period of Adoption	us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption	$ (57,000)