10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q

(Mark One)

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

For the quarterly period ended June 30, 2019

OR

☐ 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

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, $.001 par value	SD	New York Stock Exchange

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 ☑ No ☐

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	☐	Accelerated filer	☑
Non-accelerated filer	☐	Smaller reporting company	☐
		Emerging growth company	☐

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 ☐ 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 ☑ No o

The number of shares outstanding of the registrant’s common stock, par value $0.001 per share, as of the close of business on August 2, 2019, was 35,737,539.

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 June 30, 2019 and December 31, 2018 and SandRidge Permian Trust for the period ending June 30, 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 June 30, 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	21
ITEM 3.	Quantitative and Qualitative Disclosures About Market Risk	30
ITEM 4.	Controls and Procedures	31
PART II. OTHER INFORMATION
ITEM 1.	Legal Proceedings	32
ITEM 1A.	Risk Factors	33
ITEM 2.	Unregistered Sales of Equity Securities and Use of Proceeds	33
ITEM 3.	Defaults upon Senior Securities	33
ITEM 6.	Exhibits	34
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) 

	June 30, 2019		December 31, 2018
ASSETS
Current assets
Cash and cash equivalents	$	7,808	$	17,660
Restricted cash - other	1,981		1,985
Accounts receivable, net	51,025		45,503
Derivative contracts	—		5,286
Prepaid expenses	2,927		2,628
Other current assets	247		265
Total current assets	63,988		73,327
Oil and natural gas properties, using full cost method of accounting
Proved	1,390,054		1,269,091
Unproved	46,274		60,152
Less: accumulated depreciation, depletion and impairment	(652,709)		(580,132)
	783,619		749,111
Other property, plant and equipment, net	197,706		200,838
Other assets	1,500		1,062
Total assets	$	1,046,813	$	1,024,338

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities
Accounts payable and accrued expenses	$	95,734	$	111,797
Asset retirement obligation	14,820		25,393
Other current liabilities	1,355		—
Total current liabilities	111,909		137,190
Long-term debt	52,000		—
Asset retirement obligation	46,176		34,671
Other long-term obligations	4,587		4,756
Total liabilities	214,672		176,617
Commitments and contingencies (Note 8)
Stockholders’ Equity
Common stock, $0.001 par value; 250,000 shares authorized; 35,762 issued and outstanding at June 30, 2019 and 35,687 issued and outstanding at December 31, 2018	36		36
Warrants	88,518		88,516
Additional paid-in capital	1,058,200		1,055,164
Accumulated deficit	(314,613)		(295,995)
Total stockholders’ equity	832,141		847,721
Total liabilities and stockholders’ equity	$	1,046,813	$	1,024,338

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

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SANDRIDGE ENERGY, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)

(In thousands, except per share data)

	Three Months Ended June 30,				Six Months Ended June 30,
	2019		2018		2019		2018
Revenues
Oil, natural gas and NGL	$	75,196	$	79,304	$	148,244	$	166,270
Other	192		158		380		320
Total revenues	75,388		79,462		148,624		166,590
Expenses
Lease operating expenses	25,076		19,757		47,855		43,276
Production, ad valorem, and other taxes	5,877		5,683		10,957		11,917
Depreciation and depletion — oil and natural gas	39,419		30,961		75,884		58,958
Depreciation and amortization — other	2,986		3,040		5,929		6,193
Impairment	—		—		—		4,170
General and administrative	10,084		10,077		20,023		23,759
Accelerated vesting of employment compensation	—		6,545		—		6,545
Proxy contest	—		7,191		—		7,598
Employee termination benefits	4,465		1,043		4,465		32,630
Loss on derivative contracts	—		30,104		209		48,434
Other operating expense (income)	37		(1,254)		119		(1,238)
Total expenses	87,944		113,147		165,441		242,242
Loss from operations	(12,556)		(33,685)		(16,817)		(75,652)
Other (expense) income
Interest expense, net	(702)		(651)		(1,287)		(1,599)
Gain on extinguishment of debt	—		—		—		1,151
Other (expense) income, net	(26)		217		(457)		1,090
Total other (expense) income	(728)		(434)		(1,744)		642
Loss before income taxes	(13,284)		(34,119)		(18,561)		(75,010)
Income tax benefit	—		(45)		—		(42)
Net loss	$	(13,284)	$	(34,074)	$	(18,561)	$	(74,968)
Loss per share
Basic	$	(0.38)	$	(0.97)	$	(0.53)	$	(2.15)
Diluted	$	(0.38)	$	(0.97)	$	(0.53)	$	(2.15)
Weighted average number of common shares outstanding
Basic	35,356		35,017		35,339		34,800
Diluted	35,356		35,017		35,339		34,800

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
Six Months Ended June 30, 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
Issuance of stock awards, net of cancellations	75			—	—		—		—		—
Stock-based compensation	—	—		—	—		2,170		—		2,170
Cash paid for tax withholdings on vested stock awards							(205)				(205)
Net loss	—	—		—	—		—		(13,284)		(13,284)
Balance at June 30, 2019	35,762	$	36	6,605	$	88,518	$	1,058,200	$	(314,613)	$	832,141

	Common Stock			Warrants			Additional Paid-In Capital		Accumulated Deficit		Total
	Shares	Amount		Shares	Amount
Six Months Ended June 30, 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
Cancellation of stock awards, net of issuances	(254)	(1)		—	—		1		—		—
Common stock issued for general unsecured claims	26	—		—	—		—		—		—
Stock-based compensation	—	—		—	—		6,605		—		6,605
Issuance of warrants for general unsecured claims	—	—		52	14		(14)		—		—
Cash paid for tax withholdings on vested stock awards	—	—		—	—		(5,715)		—		(5,715)
Net loss	—	—		—	—				(34,074)		(34,074)
Balance at June 30, 2018	35,332	$	35	6,622	$	88,514	$	1,053,595	$	(361,888)	$	780,256

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)

	Six Months Ended June 30,
	2019		2018
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss	$	(18,561)	$	(74,968)
Adjustments to reconcile net loss to net cash provided by operating activities
Provision for doubtful accounts	(91)		(6)
Depreciation, depletion, and amortization	81,813		65,151
Impairment	—		4,170
Debt issuance costs amortization	238		235
Amortization of premiums and discounts on debt	—		(47)
Write off of debt issuance costs	142		—
Gain on extinguishment of debt	—		(1,151)
Loss on derivative contracts	209		48,434
Cash received (paid) on settlement of derivative contracts	5,078		(17,393)
Stock-based compensation	3,104		21,909
Other	(57)		(1,563)
Changes in operating assets and liabilities	(9,402)		11,346
Net cash provided by operating activities	62,473		56,117
CASH FLOWS FROM INVESTING ACTIVITIES
Capital expenditures for property, plant and equipment	(123,676)		(95,328)
Acquisition of assets	236		—
Proceeds from sale of assets	852		13,563
Net cash used in investing activities	(122,588)		(81,765)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from borrowings	112,596		—
Repayments of borrowings	(60,596)		(36,304)
Reduction of financing lease liability	(635)		—
Debt issuance costs	(901)		—
Cash paid for tax withholdings on vested stock awards	(205)		(7,376)
Net cash provided by (used in) financing activities	50,259		(43,680)
NET DECREASE IN CASH, CASH EQUIVALENTS and RESTRICTED CASH	(9,856)		(69,328)
CASH, CASH EQUIVALENTS and RESTRICTED CASH, beginning of year	19,645		101,308
CASH, CASH EQUIVALENTS and RESTRICTED CASH, end of period	$	9,789	$	31,980
Supplemental Disclosure of Cash Flow Information
Cash paid for interest, net of amounts capitalized	$	(949)	$	—
Supplemental Disclosure of Noncash Investing and Financing Activities
Purchase of PP&E in accounts payable	$	17,224	$	29,464
Right-of-use assets obtained in exchange for financing lease obligations	$	2,655	$	—

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 a 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 intercompany accounts and transactions have been eliminated in consolidation.

Interim Financial Statements. The accompanying unaudited condensed consolidated financial statements and notes 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; asset retirement obligations; depreciation, depletion and amortization; income taxes; valuation of derivative instruments; contingencies; and accrued revenue and related receivables. In the second quarter of 2019, the Company revised estimated retirement dates for certain Mid-Continent properties. These revisions resulted in the reclassification of $9.7 million in asset retirement obligations from current liabilities to long-term obligations on the accompanying condensed consolidated balance sheet as of June 30, 2019. Although management believes the estimates used in the areas noted above are reasonable, actual results could differ significantly.

Recent Accounting Pronouncements. In February 2016, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2016-02, “Leases (Topic 842),” and subsequently issued other associated ASU's related to Topic 842 which supersede Accounting Standards Codification ("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. 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. See Note 4 for additional discussion of the new leasing standard.

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.

8

SANDRIDGE ENERGY, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

(Unaudited)

2. 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 June 30, 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 June 30, 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 Company had no commodity derivative contracts in place at June 30, 2019. 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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SANDRIDGE ENERGY, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

(Unaudited)

Transfers. The Company did not have any transfers between Level 1, Level 2 or Level 3 fair value measurements during the three and six-month periods ended June 30, 2019 and 2018.

3. 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 June 30, 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 and six-month periods ended June 30, 2019, and 2018 (in thousands):

	Three Months Ended June 30,				Six Months Ended June 30,
	2019		2018		2019		2018
Loss on commodity derivative contracts	$	—	$	30,104	$	209	$	48,434
Cash paid (received) on settlements	$	—	$	11,274	$	(5,078)	$	17,393

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

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SANDRIDGE ENERGY, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

(Unaudited)

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 2 for additional discussion of the fair value measurement of the Company’s derivative contracts.

4. 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 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, other current liabilities and other long-term obligations, and finance leases are included in other property, plant and equipment, other current liabilities and other long-term obligations on the accompanying condensed consolidated balance sheet as of June 30, 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 and six-month periods ended June 30, 2019.

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(Unaudited)

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

	Three Months Ended June 30, 2019		Six Months Ended June 30, 2019
Short-term lease cost (1)	$	3,174	$	8,083
Financing lease cost	348		645
Operating lease cost	43		101
Total lease cost	$	3,565	$	8,829

___________________

1.$1.9 million and $5.1 million of short-term lease cost was capitalized as part of oil and natural gas properties during the three and six-month periods ended June 30, 2019, respectively. Portions of these costs were reimbursed to the Company by other working interest owners.

5. Property, Plant and Equipment

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

	June 30, 2019		December 31, 2018
Oil and natural gas properties
Proved	$	1,390,054	$	1,269,091
Unproved	46,274		60,152
Total oil and natural gas properties	1,436,328		1,329,243
Less accumulated depreciation, depletion and impairment	(652,709)		(580,132)
Net oil and natural gas properties	783,619		749,111
Land	4,400		4,400
Electrical infrastructure	131,176		131,176
Other non-oil and natural gas equipment	13,327		13,458
Buildings and structures	77,148		77,148
Financing leases	2,083		—
Total	228,134		226,182
Less accumulated depreciation and amortization	(30,428)		(25,344)
Other property, plant and equipment, net	197,706		200,838
Total property, plant and equipment, net	$	981,325	$	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 six-month period ended June 30, 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 June 30, 2019 or December 31, 2018.

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(Unaudited)

6. Accounts Payable and Accrued Expenses

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

	June 30, 2019		December 31, 2018
Accounts payable and other accrued expenses	$	65,267	$	78,219
Payroll and benefits	10,943		12,891
Production payable	11,881		12,767
Taxes payable	6,709		5,350
Drilling advances	811		2,031
Accrued interest	123		539
Total accounts payable and accrued expenses	$	95,734	$	111,797

7. Debt

Credit Facility. On June 21, 2019, the Company amended and restated its existing $600.0 million reserve-based revolving credit facility. The initial borrowing base of the restated credit facility is $300.0 million, which was reduced from $350.0 million under the previous credit facility. The next borrowing base redetermination is scheduled for October 1, 2019 with semiannual redeterminations thereafter. The facility is also subject to an initial aggregate elected commitment of $270.0 million, which the Company may reduce or seek to increase in future periods in accordance with the terms of the restated credit facility. The restatement extended the credit facility maturity date to April 1, 2021 from March 31, 2020.

The interest rate on outstanding borrowings was reduced from a pricing grid tied to the borrowing base utilization rate 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 under the previous credit facility to a pricing grid tied to borrowing base utilization of (a) LIBOR plus an applicable margin that varies from 2.00% to 3.00% per annum, or (b) the base rate plus an applicable margin that varies from 1.00% to 2.00% per annum under the restated credit facility. 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 restated credit facility is secured by (i) first-priority mortgages on at least 85% 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). Other than reducing the proportion of the Company’s proved reserves required to be subject to first-priority mortgages to 85% from 95%, these terms are materially similar to those contained in the previously existing credit facility.

The restated facility includes events of default and certain customary affirmative and negative covenants which are materially similar to those under the previous credit facility. The Company must also continue to maintain certain financial covenants including (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. As of June 30, 2019, the Company was in compliance with all applicable covenants and had a consolidated total net leverage ratio of 0.25 and consolidated interest coverage ratio of 63.13.

The Company had $52.0 million outstanding under the credit facility at June 30, 2019, and $7.6 million in outstanding letters of credit, which reduce availability under the restated 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

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(Unaudited)

premium of $1.2 million was recognized as a gain on extinguishment of debt in the unaudited condensed consolidated statement of operations for the six-month period ended June 30, 2018 in connection with the repayment.

8. 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; and

•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

The lead plaintiffs in both In re SandRidge Energy, Inc. Securities Litigation and Lanier Trust assert claims on behalf of themselves and a putative class of (i) in In re SandRidge Energy, Inc. Securities Litigation all purchasers of SandRidge common stock from February 24, 2011 and November 8, 2012 under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, and Rule 10b-5 promulgated thereunder, and (ii) in Lanier Trust purchasers of SandRidge Mississippian Trust I and SandRidge Mississippian Trust II common units between April 7, 2011 and November 8, 2012 under Sections 11, 12(a)(2), and 15 of the Securities Act of 1933 and Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, and Rule 10b-5 promulgated thereunder, both based on allegations that defendants, which include certain former officers of the Company and the SandRidge Mississippian Trust I, made misrepresentations or omissions concerning various topics including the performance of wells operated by the Company in the Mississippian region.

Discovery in each of the Cases closed on June 19, 2019. A hearing on class certification in each of the Cases has been scheduled for September 6, 2019.

In each of the Cases, lead plaintiffs seek to recover unspecified damages, interest, costs and expenses incurred in the litigation on behalf of themselves and class members. Although the claims against the Company in each Case have been discharged pursuant to the Plan, the Company remains a nominal defendant in each of the Cases solely to the extent necessary to allow recovery from applicable insurance policies or proceeds. In addition, the Company owes indemnity obligations and/or the obligation to advance legal fees, to certain former officers who remain as defendants in each action. The Company may also be contractually obligated to indemnify the SandRidge Mississippian Trust I against losses, claims, damages, liabilities and expenses, including reasonable costs of investigation and attorney’s fees and expenses, arising out of the Cases, and such indemnification is not covered by insurance.

In light of the status of the Cases, and the facts, circumstances and legal theories relating thereto, the Company is not able to determine the likelihood of an outcome in either case or provide an estimate of any reasonably possible loss or range of possible loss related thereto. However, considering the erosion of insurance coverage available to the Company, such losses, if incurred, could be material. The Company has not established any liabilities relating to the Cases and believes that the plaintiffs’ claims are without merit. The Company intends to continue to vigorously defend against the Cases in its capacity as a nominal defendant.

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.

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(Unaudited)

9. 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 June 30, 2019. Thus, the Company had no federal income tax expense or benefit for the three and six-month periods ended June 30, 2019 and 2018, and an insignificant amount of state income tax benefit for the three and six-month periods ended June 30, 2018.

Internal Revenue Code (“IRC”) Section 382 addresses company ownership changes and specifically limits the utilization of certain deductions and other tax attributes on an annual basis following an ownership change. As a result of the Chapter 11 reorganization and related transactions, the Company experienced an ownership change within the meaning of IRC Section 382 during 2016 that subjected certain of the Company’s tax attributes, including net operating losses ("NOLs"), to an IRC Section 382 limitation. This limitation has not resulted in cash taxes for any period subsequent to the ownership change. Since the 2016 ownership change, the Company has generated additional NOLs and other tax attributes that are not currently subject to an IRC Section 382 limitation. The Company's ability to use NOLs and other tax attributes to reduce taxable income and income taxes could be materially impacted by a future IRC 382 ownership change. Future transactions involving the Company's stock including those outside of the Company's control could cause an IRC 382 ownership change resulting in a limitation on tax attributes currently not limited and a more restrictive limitation on tax attributes currently subject to the previous IRC 382 limitation.

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 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.

10. Equity

Common Stock, Performance Share Units, and Stock Options. At June 30, 2019, the Company had 35.8 million shares of common stock, par value $0.001 per share, issued and outstanding, including 0.3 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 12 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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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

(Unaudited)

11. Revenues

The following table disaggregates the Company’s revenue by source for the three and six-month periods ended June 30, 2019 and 2018:

	Three Months Ended June 30,				Six Months Ended June 30,
	2019		2018		2019		2018
	(In thousands)
Oil	$	55,615	$	49,219	$	98,774	$	102,554
NGL	9,413		16,946		22,524		33,335
Natural gas	10,168		13,139		26,946		30,381
Other	192		158		380		320
Total revenues	$	75,388	$	79,462	148,624		$	166,590

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. Payment terms are typically within 30 days of control being transferred. 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.

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 June 30, 2019, and December 31, 2018, the Company had revenues receivable of $23.3 million and $31.8 million, respectively, and did not record any bad debt expense on revenues receivable during the three and six-month periods ended June 30, 2019.

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(Unaudited)

12. 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. At June 30, 2019, the Company had restricted stock awards and an immaterial amount of performance share units and stock options outstanding under the Omnibus Incentive Plan. Vesting for certain restricted stock awards and performance share units was accelerated in connection with the departure of certain executives and reductions in force which occurred during the three and six-month periods ended June 30, 2019 and the six-month period ended June 30, 2018. Vesting for certain restricted stock awards, performance share units and performance units was accelerated in the second quarter of 2018 in connection with the change in the composition of the Board after the 2018 annual meeting.

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 June 30, 2019, the Company had approximately 0.3 million unvested restricted shares outstanding at a weighted average grant date fair value of $13.56 per share, and unrecognized compensation cost related to these awards totaled $3.1 million. The remaining weighted average contractual period over which this compensation cost may be recognized is 1.7 years.

The following tables summarize share and incentive-based compensation for the three and six-month periods ended June 30, 2019, and 2018 (in thousands):

	Recurring Compensation Expense(1)		Executive Terminations(2)(3)		Reduction in Force(2)(3)		Accelerated Vesting(4)		Total
Three Months Ended June 30, 2019
Equity-classified awards:
Restricted stock awards	$	829	$	197	$	501	$	—	$	1,527
Performance share units	189		281		—		—		470
Stock options	193		—		—		—		193
Total share-based compensation expense	1,211		478		501		—		2,190
Less: Capitalized compensation expense	(62)		—		—		—		(62)
Share-based compensation expense, net	$	1,149	$	478	$	501	$	—	$	2,128
Three Months Ended June 30, 2018
Equity-classified awards:
Restricted stock awards	$	603	$	—	$	92	$	5,181	$	5,876
Performance share units	31		82		7		610		730
Total share-based compensation expense	634		82		99		5,791		6,606
Liability-classified awards:
Performance units	227		(216)		(31)		1,309		1,289
Total share and incentive-based compensation expense	861		(134)		68		7,100		7,895
Less: Capitalized compensation expense	(124)		—		—		(555)		(679)
Share and incentive-based compensation expense, net	$	737	$	(134)	$	68	$	6,545	$	7,216

____________________

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.

3.Three-month period ended June 30, 2018, includes an adjustment to first quarter 2018 accrued share and incentive-based compensation to reflect actuals paid.

4.Recorded in accelerated vesting of employment compensation in the accompanying consolidated statements of

operations.

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

(Unaudited)

	Recurring Compensation Expense(1)		Executive Terminations(2)(3)		Reduction in Force(2)(3)		Accelerated Vesting(4)		Total
Six Months Ended June 30, 2019
Equity-classified awards:
Restricted stock awards	$	1,574	$	197	$	501	$	—	$	2,272
Performance share units	387		281		—		—		668
Stock options	323		—		—		—		323
Total share-based compensation expense	2,284		478		501		—		3,263
Less: Capitalized compensation expense	(139)		—		—		—		(139)
Share-based compensation expense, net	$	2,145	$	478	$	501	$	—	$	3,124
Six Months Ended June 30, 2018
Equity-classified awards:
Restricted stock awards	$	3,379	$	8,140	$	3,777	$	5,181	$	20,477
Performance share units	359		1,056		158		610		2,183
Total share-based compensation expense	3,738		9,196		3,935		5,791		22,660
Liability-classified awards:
Performance units	756		2,151		558		1,309		4,774
Total share and incentive-based compensation expense	4,494		11,347		4,493		7,100		27,434
Less: Capitalized compensation expense	(334)		—		—		(555)		(889)
Share and incentive-based compensation expense, net	$	4,160	$	11,347	$	4,493	$	6,545	$	26,545

____________________

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.

3.Six-month period ended June 30, 2018, includes an adjustment to first quarter 2018 accrued share and incentive-based

compensation to reflect actuals paid.

4.Recorded in accelerated vesting of employment compensation in the accompanying consolidated statements of

operations.

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(Unaudited)

13. Employee Termination Benefits

The following table presents a summary of employee termination benefits for the three and six-month periods ended June 30, 2019 and 2018 (in thousands):

	Cash		Share-Based Compensation (5)		Number of Shares	Total Employee Termination Benefits
Three Months Ended June 30, 2019
Executive Employee Termination Benefits (1)	$	877	$	478	37	$	1,355
Other Employee Termination Benefits (2)	2,609		501		44	3,110
	$	3,486	$	979	81	$	4,465
Three Months Ended June 30, 2018
Executive Employee Termination Benefits	$	—	$	82	—	$	82
Other Employee Termination Benefits	862		99		—	961
	$	862	$	181	—	$	1,043
Six Months Ended June 30, 2019
Executive Employee Termination Benefits (1)	$	877	$	478	37	$	1,355
Other Employee Termination Benefits (2)	2,609		501		44	3,110
	$	3,486	$	979	81	$	4,465
Six Months Ended June 30, 2018
Executive Employee Termination Benefits (3)	$	11,945	$	9,196	554	$	21,141
Other Employee Termination Benefits (4)	7,554		3,935		209	11,489
	$	19,499	$	13,131	763	$	32,630

____________________

1.On June 14, 2019, the Company’s then current Executive Vice President, General Counsel and Corporate Secretary, Philip Warman, separated employment from the Company. As a result, the Company paid cash severance costs and incurred share-based compensation costs associated with this separation during the second quarter of 2019.

2.As a result of a reduction in workforce in the second quarter of 2019, certain employees received termination benefits including cash severance and accelerated share-based compensation upon separation of service from the Company.

3.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.

4.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.

5.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 reductions in workforce in the first quarter of 2018 and second quarter of 2019 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. Other employee termination benefits for the three and six-month periods ended June 30, 2018, includes an adjustment to first quarter 2018 accrued share-based compensation to reflect actuals paid.

See Note 12 for additional discussion of the Company’s share-based compensation awards.

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(Unaudited)

14. 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 June 30, 2019
Basic loss per share	$	(13,284)	35,356		$	(0.38)
Effect of dilutive securities
Restricted stock awards(1)	—		—
Performance share units(1)	—		—
Warrants(1)	—		—
Stock options(1)	—		—
Diluted loss per share	$	(13,284)	$	35,356	$	(0.38)
Three Months Ended June 30, 2018
Basic loss per share	$	(34,074)	35,017		$	(0.97)
Effect of dilutive securities
Restricted stock awards(2)	—		—
Performance share units(3)	—		—
Warrants(4)	—		—
Diluted loss per share	$	(34,074)	35,017		$	(0.97)
Six Months Ended June 30, 2019
Basic loss per share	$	(18,561)	35,339		$	(0.53)
Effect of dilutive securities
Restricted stock awards(1)	—		—
Performance share units(1)	—		—
Warrants(1)	—		—
Stock options(1)	—		—
Diluted loss per share	$	(18,561)	35,339		$	(0.53)
Six Months Ended June 30, 2018
Basic loss per share	$	(74,968)	34,800		$	(2.15)
Effect of dilutive securities
Restricted stock awards(5)	—		—
Performance share units(3)	—		—
Warrants(4)	—		—
Diluted loss per share	$	(74,968)	34,800		$	(2.15)

____________________

1.No incremental shares of potentially dilutive restricted stock awards, performance share units, warrants or stock options were included for the three and six-month periods ended June 30, 2019, as their effect was antidilutive under the treasury stock method.

2.No incremental shares of potentially dilutive restricted stock awards were included for the three-month period ended June 30, 2018, as their effect was antidilutive under the treasury stock method.

3.Performance share units covering an insignificant amount of shares for the three and six-month periods ended June 30, 2018, were excluded from the computation of loss per share because their effect would have been antidilutive.

4.No incremental shares of potentially dilutive warrants were included for the three or six-month periods ended June 30, 2018, as their effect was antidilutive under the treasury stock method.

5.Restricted stock awards covering an insignificant amount of shares for the six-month period ended June 30, 2018, were excluded from the computation of loss per share because their effect would have been antidilutive.

See Note 12 for discussion of the Company’s share-based compensation awards.

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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 and six-month periods ended June 30, 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 the acquisition, exploration and development of hydrocarbon resources in the United States.

Operational activities for the three and six-month periods ended June 30, 2019, and 2018 include the following:

	Three Months Ended June 30,
	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)	3	0.6	0.7	4	0.6	1.0
North Park Basin	6	6.0	0.7	1	1.0	0.2
Total	9	6.6	1.4	5	1.6	1.2

	Six Months Ended June 30,
	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)	11	3.5	1.2	10	2.0	1.3
North Park Basin	10	10.0	0.8	6	6.0	0.7
Total	21	13.5	2.0	16	8.0	2.0

____________________

1.Three and eight wells, respectively, were drilled under our drilling participation agreement in the NW STACK during the three and six-month periods ended June 30, 2019. Four and nine wells, respectively, were drilled under our drilling participation agreement in the NW STACK during the three and six-month periods ended June 30, 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 last well under this agreement was completed in the second quarter of 2019.

2.Includes wells with a rig release date during the three or six-month periods ended June 30, 2019 or 2018, respectively.

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The chart below shows production by product for the three and six-month periods ended June 30, 2019 and 2018:

Outlook

In the third quarter of 2019, our focus will be on finishing completion operations and initializing production from our latest six well pad in the North Park Basin. These wells were drilled in the second quarter. Most of our budgeted drilling capital allocated between North Park Basin and Mid-Continent properties was spent during the first half of 2019. Any selective drilling projects in the remainder of the year will fall within our public capital expenditure guidance range as we stay focused on capital discipline. We will also pursue accretive acquisitions of strategic assets that provide high quality production and development upside as well as other acquisition opportunities where we can purchase existing production at attractive prices. 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 and six-month periods ended June 30, 2019, and 2018 are shown in the table below:

	Three Months Ended June 30,				Six Months Ended June 30,
	2019		2018		2019		2018
Oil (per Bbl)	$	59.91	$	67.91	$	57.45	$	65.46
Natural gas (per MMBtu)	$	2.51	$	2.83	$	2.69	$	2.84

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

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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. At June 30, 2019, we had no commodity derivative contracts in place.

Revenues

Consolidated revenues for the three and six-month periods ended June 30, 2019, and 2018 are presented in the table below (in thousands):

	Three Months Ended June 30,				Six Months Ended June 30,
	2019		2018		2019		2018
Oil	$	55,615	$	49,219	$	98,774	$	102,554
NGL	9,413		16,946		22,524		33,335
Natural gas	10,168		13,139		26,946		30,381
Other	192		158		380		320
Total revenues	$	75,388	$	79,462	$	148,624	$	166,590

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 and six-month periods ended June 30, 2019, and 2018 are shown in the table below (in thousands):

	Three Months Ended June 30		Six Months Ended June 30
2018 oil, natural gas and NGL revenues	$	79,304	$	166,270
Change due to production volumes	17,343		14,308
Change due to average prices	(21,451)		(32,334)
2019 oil, natural gas and NGL revenues	$	75,196	$	148,244

Revenues from oil, natural gas and NGL sales decreased $4.1 million, or 5.2% and $18.0 million, or 10.8% for the three and six-month periods ended June 30, 2019, respectively, compared to the same periods in 2018, due primarily to a decrease in average prices received for our oil, natural gas and NGL production during the 2019 periods. Production increased in the 2019 periods compared to the 2018 periods largely as a result of successful drilling on our North Park Basin acreage, which was partially offset by the sale of our Permian Basin properties in the fourth quarter of 2018. Additionally, we added production from the purchase of additional interest 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, which is offsetting natural production declines in our existing producing wells in the Mid-Continent.

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Oil, Natural Gas and NGL Production and Pricing

The Company's production and pricing information for the three and six-month periods ended June 30, 2019, and 2018 is shown in the table below:

	Three Months Ended June 30,				Six Months Ended June 30,
	2019		2018		2019		2018
Production data
Oil (MBbls)	984		755		1,833		1,681
NGL (MBbls)	830		700		1,706		1,400
Natural gas (MMcf)	8,476		8,977		17,096		18,464
Total volumes (MBoe)	3,227		2,951		6,388		6,158
Average daily total volumes (MBoe/d)	35.5		32.4		35.3		34.0
Average prices—as reported(1)
Oil (per Bbl)	$	56.52	$	65.19	$	53.89	$	61.01
NGL (per Bbl)	$	11.34	$	24.21	$	13.20	$	23.81
Natural gas (per Mcf)	$	1.20	$	1.46	$	1.58	$	1.65
Total (per Boe)	$	23.30	$	26.87	$	23.21	$	27.00
Average prices—including impact of derivative contract settlements
Oil (per Bbl)	$	56.52	$	48.75	$	53.89	$	49.00
NGL (per Bbl)	$	11.34	$	24.21	$	13.20	$	23.81
Natural gas (per Mcf)	$	1.20	$	1.59	$	1.87	$	1.80
Total (per Boe)	$	23.30	$	23.05	$	24.00	$	24.18

__________________

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 and six-month periods ended June 30, 2019, and 2018:

	Three Months Ended June 30,						Six Months Ended June 30,
	2019			2018			2019			2018
	Production (MBoe)	% of Total		Production (MBoe)	% of Total		Production (MBoe)	% of Total		Production (MBoe)	% of Total
Mississippian Lime	2,468	76.5	%	2,461	83.5	%	5,118	80.2	%	5,068	82.3	%
NW STACK	309	9.6	%	249	8.4	%	545	8.5	%	522	8.5	%
North Park Basin	450	13.9	%	128	4.3	%	725	11.3	%	341	5.5	%
Permian Basin(1)	—	—	%	113	3.8	%	—	—	%	227	3.7	%
Total	3,227	100.0	%	2,951	100.0	%	6,388	100.0	%	6,158	100.0	%

__________________

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

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Operating Expenses

Operating expenses for the three and six-month periods ended June 30, 2019, and 2018 consisted of the following (in thousands): 

	Three Months Ended June 30,						Six Months Ended June 30,
	2019			2018			2019			2018
Lease operating expenses	$	25,076		$	19,757		$	47,855		$	43,276
Production, ad valorem, and other taxes	5,877			5,683			10,957			11,917
Depreciation and depletion—oil and natural gas	39,419			30,961			75,884			58,958
Depreciation and amortization—other	2,986			3,040			5,929			6,193
Total operating expenses	$	73,358		$	59,441		$	140,625		$	120,344
Lease operating expenses ($/Boe)	$	7.77		$	6.70		$	7.49		$	7.03
Production, ad valorem, and other taxes ($/Boe)	$	1.82		$	1.93		$	1.72		$	1.94
Depreciation and depletion—oil and natural gas ($/Boe)	$	12.22		$	10.49		$	11.88		$	9.57
Production, ad valorem, and other taxes (% of oil, natural gas, and NGL revenue)	7.8		%	7.2		%	7.4		%	7.2		%

Lease operating expenses increased by $5.3 million or $1.07/Boe and $4.6 million or $0.46/Boe for the three and six-month periods ended June 30, 2019, compared to the same periods in 2018, respectively. These increases are primarily due to increased production from bringing on several multi-well pads in the North Park Basin during the quarter which resulted in additional expenditures for trucking produced water to disposal wells. Numerous pipeline infrastructure projects as well as increased salt water treatment and disposal capacity within the system are in various stages of development and are expected to minimize these produced water disposal costs in the future.

Production, ad valorem, and other taxes remained relatively consistent for the three and six-month periods ended June 30, 2019, compared to the same 2018 periods.

Depreciation and depletion for our oil and natural gas properties increased by $8.5 million or $1.73/Boe and $16.9 million or $2.31/Boe for the three and six-month periods ended June 30, 2019, compared to the same periods in 2018. This rate increase is a result of development activities in areas 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.

Non-Operating Expenses

Non-operating expenses for the three and six-month periods ended June 30, 2019, and 2018 consisted of the following (in thousands):

	Three Months Ended June 30,				Six Months Ended June 30,
	2019		2018		2019		2018
Impairment	$	—	$	—	$	—	$	4,170
General and administrative	10,084		10,077		20,023		23,759
Accelerated vesting of employment compensation	—		6,545		—		6,545
Proxy contest	—		7,191		—		7,598
Employee termination benefits	4,465		1,043		4,465		32,630
Loss on derivative contracts	—		30,104		209		48,434
Other operating expense (income)	37		(1,254)		119		(1,238)
Total non-operating expenses	$	14,586	$	53,706	$	24,816	$	121,898

Impairment for the six-month period ended June 30, 2018, primarily reflects the write-down of midstream generator assets classified as held for sale to estimated net realizable value.

General and administrative expenses remained relatively consistent for the three-month period ended June 30, 2019, compared to the same period in 2018. This was primarily due to incurring $2.0 million in additional legal expenses in the

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current quarter, which offset a $1.1 million decrease in compensation-related costs and additional decreases of $0.9 million primarily in other employee-related costs resulting largely from reductions in headcount. The additional legal expenses largely resulted from our indemnification obligations discussed in "Part II, Item 1. Legal Proceedings." We expect the majority of these charges will be reimbursed from applicable insurance policies in future periods.

General and administrative expenses decreased $3.7 million, or 15.7% for the six-month period ended June 30, 2019, from the same period in 2018 due primarily to a $3.6 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 a net decrease of $0.1 million in other miscellaneous general and administrative items.

Accelerated vesting of employment compensation costs incurred during the 2018 periods include compensation costs recognized for certain share and incentive-based awards granted to our employees and directors which vested when the composition of the Board changed after the 2018 annual meeting.

Proxy contest costs in the 2018 periods include legal, consulting and advisory fees incurred in the proxy contest and strategic alternatives review which were initiated in response to shareholder actions in 2018.

Employee termination benefits for the three and six-month periods ended June 30, 2019, include cash and share-based severance costs incurred related to a reduction in force in the second quarter of 2019. See "Note 13 - Employee Termination Benefits" in the accompanying unaudited condensed consolidated financial statements for additional discussion of these expenses.

Employee termination benefits for the three and six-month periods ended June 30, 2018, include cash and share-based severance costs incurred for (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 13 - 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 and six-month periods ended June 30, 2019, and 2018 (in thousands):

	Three Months Ended June 30,				Six Months Ended June 30,
	2019		2018		2019		2018
Loss on commodity derivative contracts	$	—	$	30,104	$	209	$	48,434
Cash paid (received) on settlements	$	—	$	11,274	$	(5,078)	$	17,393

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 $10.6 million and $16.4 million for the three and six-month periods ended June 30, 2018, which include net cash payments upon settlement of $2.1 million and $3.3 million, respectively.

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 June 30, 2019.

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Other (Expense) Income

The Company’s other (expense) income for the three and six-month periods ended June 30, 2019, and 2018 are presented in the table below (in thousands):

	Three Months Ended June 30,				Six Months Ended June 30,
	2019		2018		2019		2018
Other (expense) income
Interest expense, net	$	(702)	$	(651)	$	(1,287)	$	(1,599)
Gain on extinguishment of debt	—		—		—		1,151
Other (expense) income, net	(26)		217		(457)		1,090
Total other (expense) income	$	(728)	$	(434)	$	(1,744)	$	642

Gain on extinguishment of debt was recognized for the six-month period ended June 30, 2018, as a result of writing off the unamortized premium associated with the Building Note when it was repaid during the first quarter of 2018.

Liquidity and Capital Resources

As of June 30, 2019, our cash and cash equivalents, excluding restricted cash, were $7.8 million. On June 21, 2019, we amended and restated our credit facility. The elected commitment under the restated credit facility is currently $270.0 million. At June 30, 2019, we had $52.0 million of long term debt outstanding under our restated credit facility and $7.6 million in outstanding letters of credit, which reduce the amount available under the credit facility to $210.4 million.

As of August 2, 2019, we had approximately $19.5 million in cash and cash equivalents, excluding restricted cash, $57.0 million outstanding under our amended credit facility, and $7.6 million in outstanding letters of credit.

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 April 1, 2021, as discussed in “—Credit Facility” below.

Our working capital deficit decreased to $47.9 million at June 30, 2019, compared to $63.9 million at December 31, 2018, largely due to fluctuations in the timing and amount of payments of accounts payable and accrued expenses, the reclassification of certain asset retirement obligations from current liabilities to long-term obligations in the second quarter of 2019 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 joint interest and revenue 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. Cash flows from operations are also affected by timing of cash receipts and disbursements and changes in other working capital assets and liabilities.

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Our cash flows for the six-month periods ended June 30, 2019, and 2018 are presented in the following table and discussed below (in thousands):

	Six Months Ended June 30,
	2019		2018
Cash flows provided by operating activities	$	62,473	$	56,117
Cash flows used in investing activities	(122,588)		(81,765)
Cash flows provided by (used in) financing activities	50,259		(43,680)
Net decrease in cash and cash equivalents	$	(9,856)	$	(69,328)

Cash Flows from Operating Activities

The $6.4 million increase in operating cash flows for the six-month period ended June 30, 2019, compared to the same period in 2018, is primarily due to reductions in employee termination benefits, general and administrative expenses and the changes in working capital discussed above. Additionally, we received $5.1 million in derivative settlements in the six-month period ended June 30, 2019, while we paid $17.4 million in derivative settlements in the same period in 2018. This was partially offset by a decrease in revenues and an increase in lease operating expenses. See “—Consolidated Results of Operations” for further analysis of these changes.

Cash Flows from Investing Activities

During the six-month periods ended June 30, 2019 and 2018, cash flows used in investing activities primarily consisted of capital expenditures for drilling and completion activities. Our capital expenditure program focuses on the development of our highest return projects while maintaining capital discipline and developing additional knowledge of our asset bases.

Capital expenditures for the six-month periods ended June 30, 2019, and 2018 are summarized on an accrual basis below (in thousands):

	Six Months Ended June 30,
	2019		2018
Capital Expenditures (on an accrual basis)
Drilling and completion	$	103,693	$	68,797
Leasehold and geophysical	2,811		5,793
Other - operating	—		107
Other - corporate	162		—
Capital expenditures, excluding acquisitions	106,666		74,697
Acquisitions	(236)		—
Capital expenditures, including acquisitions	106,430		74,697
Change in capital accruals	17,010		20,631
Total	$	123,440	$	95,328

Cash Flows from Financing Activities

Our cash provided by financing activities was approximately $50.3 million for the six-month period ended June 30, 2019, which consisted primarily of net borrowings under the credit facility. Our cash used in financing activities was approximately $43.7 million during the six-month period ended June 30, 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.

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Indebtedness

Credit Facility

As noted above, the Company amended and restated its existing reserve-based revolving credit facility on June 21, 2019. See “Note 7 - Debt” to the accompanying unaudited condensed consolidated financial statements for additional discussion of the Company’s debt and covenant restrictions.

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 long-term debt increased by $52.0 million at June 30, 2019 compared to December 31, 2018, due to net borrowings on the Company's credit facility, which matures in April 2021. Additionally, $9.7 million in asset retirement obligations were reclassified from current liabilities to long-term obligations on the accompanying condensed consolidated balance sheet as of June 30, 2019, due to timing revisions for certain Mid-Continent properties resulting from changes in estimated retirement dates. Other than the borrowings on the credit facility and asset retirement obligation reclassification, there were no other significant changes in total 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 six 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 June 30, 2019, we had no commodity derivative contracts in place. In July 2019, oil swap contracts were executed with two counterparties covering 347 MBbls of second half 2019 oil sales at a weighted average strike price of $60.04/Bbl.

The following table summarizes derivative activity for the three and six-month periods ended June 30, 2019, and 2018 (in thousands):

	Three Months Ended June 30,				Six Months Ended June 30,
	2019		2018		2019		2018
Loss on commodity derivative contracts	$	—	$	30,104	$	209	$	48,434
Cash paid (received) on settlements	$	—	$	11,274	$	(5,078)	$	17,393

See “Note 3 - Derivatives” to the accompanying unaudited condensed consolidated financial statements included in this Quarterly Report for additional information regarding our commodity derivatives.

Credit Risk. We are exposed to credit risk related to counterparties to our derivative financial contracts. 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 had master netting agreements with each of our derivative contract counterparties, which allowed 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 were 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.

We are also exposed to credit risk related to the collection of receivables from our joint interest partners for their proportionate share of expenditures made on projects we operate. Historically, our credit losses on joint interest receivables have been immaterial.

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 based on prevailing market interest rates, primarily LIBOR and the federal funds rate. We had $52.0 million in outstanding variable rate debt as of June 30, 2019.

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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 June 30, 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 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 June 30, 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; and

•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

The lead plaintiffs in both In re SandRidge Energy, Inc. Securities Litigation and Lanier Trust assert claims on behalf of themselves and a putative class of (i) in In re SandRidge Energy, Inc. Securities Litigation all purchasers of SandRidge common stock from February 24, 2011 and November 8, 2012 under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, and Rule 10b-5 promulgated thereunder, and (ii) in Lanier Trust purchasers of SandRidge Mississippian Trust I and SandRidge Mississippian Trust II common units between April 7, 2011 and November 8, 2012 under Sections 11, 12(a)(2), and 15 of the Securities Act of 1933 and Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, and Rule 10b-5 promulgated thereunder, both based on allegations that defendants, which include certain former officers of the Company and the SandRidge Mississippian Trust I, made misrepresentations or omissions concerning various topics including the performance of wells operated by the Company in the Mississippian region.

Discovery in each of the Cases closed on June 19, 2019. A hearing on class certification in each of the Cases has been scheduled for September 6, 2019.

In each of the Cases, lead plaintiffs seek to recover unspecified damages, interest, costs and expenses incurred in the litigation on behalf of themselves and class members. Although the claims against the Company in each Case have been discharged pursuant to the Plan, the Company remains a nominal defendant in each of the Cases solely to the extent necessary to allow recovery from applicable insurance policies or proceeds. In addition, the Company owes indemnity obligations and/or the obligation to advance legal fees, to certain former officers who remain as defendants in each action. The Company may also be contractually obligated to indemnify the SandRidge Mississippian Trust I against losses, claims, damages, liabilities and expenses, including reasonable costs of investigation and attorney’s fees and expenses, arising out of the Cases, and such indemnification is not covered by insurance.

In light of the status of the Cases, and the facts, circumstances and legal theories relating thereto, the Company is not able to determine the likelihood of an outcome in either case or provide an estimate of any reasonably possible loss or range of possible loss related thereto. However, considering the erosion of insurance coverage available to the Company, such losses, if incurred, could be material. The Company has not established any liabilities relating to the Cases and believes that the plaintiffs’ claims are without merit. The Company intends to continue to vigorously defend against the Cases in its capacity as a nominal defendant.

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.

32

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

The following table presents a summary of share repurchases made by the Company during the three-month period ended June 30, 2019.

Period	Total Number of Shares Purchased(1)	Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Program	Maximum Approximate Dollar Value of Shares that May Yet Be Purchased Under the Program (in Millions)
April 1, 2019 - April 30, 2019	—	$	—	N/A	N/A
May 1, 2019 - May 31, 2019	2,572	$	8.31	N/A	N/A
June 1, 2019 - June 30, 2019	29,381	$	6.24	N/A	N/A
Total	31,953			—

___________________

1.Includes shares of common stock tendered by employees in order to satisfy tax withholding requirements upon vesting of their stock awards. Shares withheld are initially recorded as treasury shares, then immediately retired.

ITEM 3. Defaults upon Senior Securities

None.

33

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
10.1	Amended and Restated Credit Agreement, dated as of June 21, 2019, among SandRidge Energy, Inc., Royal Bank of Canada, as Administrative Agent, and the other lenders party thereto filed as Exhibit A to the Refinancing Amendment No. 2 to the Existing Credit Agreement	8-K	001-33784	10.1	6/27/2019
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

34

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: August 8, 2019

35

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: August 8, 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: August 8, 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 June 30, 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

August 8, 2019

/s/ Michael A. Johnson

Michael A. Johnson

Senior Vice President and Chief Financial Officer

August 8, 2019

XML

Cover - shares	6 Months Ended
	Jun. 30, 2019	Aug. 02, 2019
Cover page.
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Jun. 30, 2019
Document Transition Report	false
Entity File Number	001-33784
Entity Registrant Name	SANDRIDGE ENERGY INC
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	20-8084793
Entity Address, Address Line One	123 Robert S. Kerr Avenue
Entity Address, City or Town	Oklahoma City
Entity Address, State or Province	OK
Entity Address, Postal Zip Code	73102
City Area Code	405
Local Phone Number	429-5500
Title of 12(b) Security	Common Stock, $.001 par value
Trading Symbol	SD
Security Exchange Name	NYSE
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Bankruptcy Proceedings, Reporting Current	true
Entity Common Stock, Shares Outstanding		35,737,539
Document Fiscal Year Focus	2019
Document Fiscal Period Focus	Q2
Amendment Flag	false
Entity Central Index Key	0001349436
Current Fiscal Year End Date	--12-31

XML

CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) - USD ($) $ in Thousands	Jun. 30, 2019	Dec. 31, 2018
Current assets
Cash and cash equivalents	$ 7,808	$ 17,660
Restricted cash - other	1,981	1,985
Accounts receivable, net	51,025	45,503
Derivative contracts	0	5,286
Prepaid expenses	2,927	2,628
Other current assets	247	265
Total current assets	63,988	73,327
Oil and natural gas properties, using full cost method of accounting
Proved	1,390,054	1,269,091
Unproved	46,274	60,152
Less: accumulated depreciation, depletion and impairment	(652,709)	(580,132)
Net oil and natural gas properties	783,619	749,111
Other property, plant and equipment, net	197,706	200,838
Other assets	1,500	1,062
Total assets	1,046,813	1,024,338
Current liabilities
Accounts payable and accrued expenses	95,734	111,797
Asset retirement obligation	14,820	25,393
Other current liabilities	1,355	0
Total current liabilities	111,909	137,190
Long-term debt	52,000	0
Asset retirement obligation	46,176	34,671
Other long-term obligations	4,587	4,756
Total liabilities	214,672	176,617
Commitments and contingencies (Note 8)
Stockholders’ Equity
Common stock, $0.001 par value; 250,000 shares authorized; 35,762 issued and outstanding at June 30, 2019 and 35,687 issued and outstanding at December 31, 2018	36	36
Warrants	88,518	88,516
Additional paid-in capital	1,058,200	1,055,164
Accumulated deficit	(314,613)	(295,995)
Total stockholders’ equity	832,141	847,721
Total liabilities and stockholders’ equity	$ 1,046,813	$ 1,024,338

XML

CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares	Jun. 30, 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)	250,000,000.0	250,000,000
Common stock, shares issued (in shares)	35,762,000	35,687,000
Common stock, shares outstanding (in shares)	35,762,000	35,687,000

XML

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
Revenues
Total revenues	$ 75,388	$ 79,462	$ 148,624	$ 166,590
Expenses
Lease operating expenses	25,076	19,757	47,855	43,276
Production, ad valorem, and other taxes	5,877	5,683	10,957	11,917
Depreciation and depletion — oil and natural gas	39,419	30,961	75,884	58,958
Depreciation and amortization — other	2,986	3,040	5,929	6,193
Impairment	0	0	0	4,170
General and administrative	10,084	10,077	20,023	23,759
Accelerated vesting of employment compensation	0	6,545	0	6,545
Proxy contest	0	7,191	0	7,598
Employee termination benefits	4,465	1,043	4,465	32,630
Loss on derivative contracts	0	30,104	209	48,434
Other operating expense (income)	37	(1,254)	119	(1,238)
Total expenses	87,944	113,147	165,441	242,242
Loss from operations	(12,556)	(33,685)	(16,817)	(75,652)
Other (expense) income
Interest expense, net	(702)	(651)	(1,287)	(1,599)
Gain on extinguishment of debt	0	0	0	1,151
Other (expense) income, net	(26)	217	(457)	1,090
Total other (expense) income	(728)	(434)	(1,744)	642
Loss before income taxes	(13,284)	(34,119)	(18,561)	(75,010)
Income tax benefit	0	(45)	0	(42)
Net loss	$ (13,284)	$ (34,074)	$ (18,561)	$ (74,968)
Loss per share
Basic (in dollars per share)	$ (0.38)	$ (0.97)	$ (0.53)	$ (2.15)
Diluted (in dollars per share)	$ (0.38)	$ (0.97)	$ (0.53)	$ (2.15)
Weighted average number of common shares outstanding
Basic (in shares)	35,356,000	35,017,000	35,339,000	34,800,000
Diluted (in shares)	35,356,000	35,017,000	35,339,000	34,800,000
Oil, natural gas and NGL
Revenues
Total revenues	$ 75,196	$ 79,304	$ 148,244	$ 166,270
Other
Revenues
Total revenues	$ 192	$ 158	$ 380	$ 320

XML

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
Issuance of stock awards, net of cancellations (in shares)		(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, 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
Net loss	(74,968)
Ending balance (in shares) at Jun. 30, 2018		35,332,000	6,622,000
Ending balance at Jun. 30, 2018	780,256	$ 35	$ 88,514	1,053,595	(361,888)
Beginning balance (in shares) at Mar. 31, 2018		35,560,000	6,570,000
Beginning balance at Mar. 31, 2018	813,440	$ 36	$ 88,500	1,052,718	(327,814)
Increase (Decrease) in Stockholders' Equity
Issuance of stock awards, net of cancellations (in shares)		(254,000)
Issuance of stock awards, net of cancellations	0	$ (1)		1
Common stock issued for general unsecured claims		26,000
Stock-based compensation	6,605			6,605
Issuance of warrants for general unsecured claims (in shares)			52,000
Issuance of warrants for general unsecured claims	0		$ 14	(14)
Cash paid for tax withholdings on vested stock awards	(5,715)			(5,715)
Net loss	(34,074)				(34,074)
Ending balance (in shares) at Jun. 30, 2018		35,332,000	6,622,000
Ending balance at Jun. 30, 2018	$ 780,256	$ 35	$ 88,514	1,053,595	(361,888)
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	0		$ 2	(2)
Net loss	(5,277)				(5,277)
Ending balance (in shares) at Mar. 31, 2019		35,687,000	6,605,000
Ending balance at Mar. 31, 2019	$ 843,460	$ 36	$ 88,518	1,056,235	(301,329)
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
Net loss	$ (18,561)
Ending balance (in shares) at Jun. 30, 2019	35,762,000	35,762,000	6,605,000
Ending balance at Jun. 30, 2019	$ 832,141	$ 36	$ 88,518	1,058,200	(314,613)
Beginning balance (in shares) at Mar. 31, 2019		35,687,000	6,605,000
Beginning balance at Mar. 31, 2019	843,460	$ 36	$ 88,518	1,056,235	(301,329)
Increase (Decrease) in Stockholders' Equity
Issuance of stock awards, net of cancellations (in shares)		75,000
Stock-based compensation	2,170			2,170
Cash paid for tax withholdings on vested stock awards	(205)			(205)
Net loss	$ (13,284)				(13,284)
Ending balance (in shares) at Jun. 30, 2019	35,762,000	35,762,000	6,605,000
Ending balance at Jun. 30, 2019	$ 832,141	$ 36	$ 88,518	$ 1,058,200	$ (314,613)

XML

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss	$ (18,561)	$ (74,968)
Adjustments to reconcile net loss to net cash provided by operating activities
Provision for doubtful accounts	(91)	(6)
Depreciation, depletion, and amortization	81,813	65,151
Impairment	0	4,170
Debt issuance costs amortization	238	235
Amortization of premiums and discounts on debt	0	(47)
Write off of debt issuance costs	142	0
Gain on extinguishment of debt	0	(1,151)
Loss on derivative contracts	209	48,434
Cash received (paid) on settlement of derivative contracts	5,078	(17,393)
Stock-based compensation	3,104	21,909
Other	(57)	(1,563)
Changes in operating assets and liabilities	(9,402)	11,346
Net cash provided by operating activities	62,473	56,117
CASH FLOWS FROM INVESTING ACTIVITIES
Capital expenditures for property, plant and equipment	(123,676)	(95,328)
Acquisition of assets	236	0
Proceeds from sale of assets	852	13,563
Net cash used in investing activities	(122,588)	(81,765)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from borrowings	112,596	0
Repayments of borrowings	(60,596)	(36,304)
Reduction of financing lease liability	(635)	0
Debt issuance costs	(901)	0
Cash paid for tax withholdings on vested stock awards	(205)	(7,376)
Net cash provided by (used in) financing activities	50,259	(43,680)
NET DECREASE IN CASH, CASH EQUIVALENTS and RESTRICTED CASH	(9,856)	(69,328)
CASH, CASH EQUIVALENTS and RESTRICTED CASH, beginning of year	19,645	101,308
CASH, CASH EQUIVALENTS and RESTRICTED CASH, end of period	9,789	31,980
Supplemental Disclosure of Cash Flow Information
Cash paid for interest, net of amounts capitalized	(949)	0
Supplemental Disclosure of Noncash Investing and Financing Activities
Purchase of PP&E in accounts payable	17,224	29,464
Right-of-use assets obtained in exchange for financing lease obligations	$ 2,655	$ 0

XML

Basis of Presentation

6 Months Ended

Jun. 30, 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 a 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 intercompany accounts and transactions have been eliminated in consolidation.

Interim Financial Statements. The accompanying unaudited condensed consolidated financial statements and notes 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; asset retirement obligations; depreciation, depletion and amortization; income taxes; valuation of derivative instruments; contingencies; and accrued revenue and related receivables. In the second quarter of 2019, the Company revised estimated retirement dates for certain Mid-Continent properties. These revisions resulted in the reclassification of $9.7 million in asset retirement obligations from current liabilities to long-term obligations on the accompanying condensed consolidated balance sheet as of June 30, 2019. Although management believes the estimates used in the areas noted above are reasonable, actual results could differ significantly.

Recent Accounting Pronouncements. In February 2016, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2016-02, “Leases (Topic 842),” and subsequently issued other associated ASU's related to Topic 842 which supersede Accounting Standards Codification ("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. 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. See Note 4 for additional discussion of the new leasing standard.

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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Fair Value Measurements

6 Months Ended

Jun. 30, 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 June 30, 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 June 30, 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 Company had no commodity derivative contracts in place at June 30, 2019. 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

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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 and six-month periods ended June 30, 2019 and 2018.

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Derivatives

6 Months Ended

Jun. 30, 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 June 30, 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 and six-month periods ended June 30, 2019, and 2018 (in thousands):

	Three Months Ended June 30,				Six Months Ended June 30,
	2019		2018		2019		2018
Loss on commodity derivative contracts	$	—	$	30,104	$	209	$	48,434
Cash paid (received) on settlements	$	—	$	11,274	$	(5,078)	$	17,393

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 2 for additional discussion of the fair value measurement of the Company’s derivative contracts.

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Leases

6 Months Ended

Jun. 30, 2019

Leases [Abstract]

Leases

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 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, other current liabilities and other long-term obligations, and finance leases are included in other property, plant and equipment, other current liabilities and other long-term obligations on the accompanying condensed consolidated balance sheet as of June 30, 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 and six-month periods ended June 30, 2019.

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

	Three Months Ended June 30, 2019		Six Months Ended June 30, 2019
Short-term lease cost (1)	$	3,174	$	8,083
Financing lease cost	348		645
Operating lease cost	43		101
Total lease cost	$	3,565	$	8,829

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1.$1.9 million and $5.1 million of short-term lease cost was capitalized as part of oil and natural gas properties during the three and six-month periods ended June 30, 2019, respectively. Portions of these costs were reimbursed to the Company by other working interest owners.

Leases

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 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, other current liabilities and other long-term obligations, and finance leases are included in other property, plant and equipment, other current liabilities and other long-term obligations on the accompanying condensed consolidated balance sheet as of June 30, 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 and six-month periods ended June 30, 2019.

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

	Three Months Ended June 30, 2019		Six Months Ended June 30, 2019
Short-term lease cost (1)	$	3,174	$	8,083
Financing lease cost	348		645
Operating lease cost	43		101
Total lease cost	$	3,565	$	8,829

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1.$1.9 million and $5.1 million of short-term lease cost was capitalized as part of oil and natural gas properties during the three and six-month periods ended June 30, 2019, respectively. Portions of these costs were reimbursed to the Company by other working interest owners.

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Property, Plant and Equipment

6 Months Ended

Jun. 30, 2019

Property, Plant and Equipment [Abstract]

Property, Plant and Equipment

Property, Plant and Equipment

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

	June 30, 2019		December 31, 2018
Oil and natural gas properties
Proved	$	1,390,054	$	1,269,091
Unproved	46,274		60,152
Total oil and natural gas properties	1,436,328		1,329,243
Less accumulated depreciation, depletion and impairment	(652,709)		(580,132)
Net oil and natural gas properties	783,619		749,111
Land	4,400		4,400
Electrical infrastructure	131,176		131,176
Other non-oil and natural gas equipment	13,327		13,458
Buildings and structures	77,148		77,148
Financing leases	2,083		—
Total	228,134		226,182
Less accumulated depreciation and amortization	(30,428)		(25,344)
Other property, plant and equipment, net	197,706		200,838
Total property, plant and equipment, net	$	981,325	$	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 six-month period ended June 30, 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 June 30, 2019 or December 31, 2018.

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Accounts Payable and Accrued Expenses

6 Months Ended

Jun. 30, 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):

	June 30, 2019		December 31, 2018
Accounts payable and other accrued expenses	$	65,267	$	78,219
Payroll and benefits	10,943		12,891
Production payable	11,881		12,767
Taxes payable	6,709		5,350
Drilling advances	811		2,031
Accrued interest	123		539
Total accounts payable and accrued expenses	$	95,734	$	111,797

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Debt

6 Months Ended

Jun. 30, 2019

Debt Disclosure [Abstract]

Debt

Debt

Credit Facility. On June 21, 2019, the Company amended and restated its existing $600.0 million reserve-based revolving credit facility. The initial borrowing base of the restated credit facility is $300.0 million, which was reduced from $350.0 million under the previous credit facility. The next borrowing base redetermination is scheduled for October 1, 2019 with semiannual redeterminations thereafter. The facility is also subject to an initial aggregate elected commitment of $270.0 million, which the Company may reduce or seek to increase in future periods in accordance with the terms of the restated credit facility. The restatement extended the credit facility maturity date to April 1, 2021 from March 31, 2020.

The interest rate on outstanding borrowings was reduced from a pricing grid tied to the borrowing base utilization rate 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 under the previous credit facility to a pricing grid tied to borrowing base utilization of (a) LIBOR plus an applicable margin that varies from 2.00% to 3.00% per annum, or (b) the base rate plus an applicable margin that varies from 1.00% to 2.00% per annum under the restated credit facility. 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 restated credit facility is secured by (i) first-priority mortgages on at least 85% 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). Other than reducing the proportion of the Company’s proved reserves required to be subject to first-priority mortgages to 85% from 95%, these terms are materially similar to those contained in the previously existing credit facility.

The restated facility includes events of default and certain customary affirmative and negative covenants which are materially similar to those under the previous credit facility. The Company must also continue to maintain certain financial covenants including (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. As of June 30, 2019, the Company was in compliance with all applicable covenants and had a consolidated total net leverage ratio of 0.25 and consolidated interest coverage ratio of 63.13.

The Company had $52.0 million outstanding under the credit facility at June 30, 2019, and $7.6 million in outstanding letters of credit, which reduce availability under the restated 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 six-month period ended June 30, 2018 in connection with the repayment.

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Commitments and Contingencies

6 Months Ended

Jun. 30, 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; and

•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

The lead plaintiffs in both In re SandRidge Energy, Inc. Securities Litigation and Lanier Trust assert claims on behalf of themselves and a putative class of (i) in In re SandRidge Energy, Inc. Securities Litigation all purchasers of SandRidge common stock from February 24, 2011 and November 8, 2012 under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, and Rule 10b-5 promulgated thereunder, and (ii) in Lanier Trust purchasers of SandRidge Mississippian Trust I and SandRidge Mississippian Trust II common units between April 7, 2011 and November 8, 2012 under Sections 11, 12(a)(2), and 15 of the Securities Act of 1933 and Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, and Rule 10b-5 promulgated thereunder, both based on allegations that defendants, which include certain former officers of the Company and the SandRidge Mississippian Trust I, made misrepresentations or omissions concerning various topics including the performance of wells operated by the Company in the Mississippian region.

Discovery in each of the Cases closed on June 19, 2019. A hearing on class certification in each of the Cases has been scheduled for September 6, 2019.

In each of the Cases, lead plaintiffs seek to recover unspecified damages, interest, costs and expenses incurred in the litigation on behalf of themselves and class members. Although the claims against the Company in each Case have been discharged pursuant to the Plan, the Company remains a nominal defendant in each of the Cases solely to the extent necessary to allow recovery from applicable insurance policies or proceeds. In addition, the Company owes indemnity obligations and/or the obligation to advance legal fees, to certain former officers who remain as defendants in each action. The Company may also be contractually obligated to indemnify the SandRidge Mississippian Trust I against losses, claims, damages, liabilities and expenses, including reasonable costs of investigation and attorney’s fees and expenses, arising out of the Cases, and such indemnification is not covered by insurance.

In light of the status of the Cases, and the facts, circumstances and legal theories relating thereto, the Company is not able to determine the likelihood of an outcome in either case or provide an estimate of any reasonably possible loss or range of possible loss related thereto. However, considering the erosion of insurance coverage available to the Company, such losses, if incurred, could be material. The Company has not established any liabilities relating to the Cases and believes that the plaintiffs’ claims are without merit. The Company intends to continue to vigorously defend against the Cases in its capacity as a nominal defendant.

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.

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Income Taxes

6 Months Ended

Jun. 30, 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 June 30, 2019. Thus, the Company had no federal income tax expense or benefit for the three and six-month periods ended June 30, 2019 and 2018, and an insignificant amount of state income tax benefit for the three and six-month periods ended June 30, 2018.

Internal Revenue Code (“IRC”) Section 382 addresses company ownership changes and specifically limits the utilization of certain deductions and other tax attributes on an annual basis following an ownership change. As a result of the Chapter 11 reorganization and related transactions, the Company experienced an ownership change within the meaning of IRC Section 382 during 2016 that subjected certain of the Company’s tax attributes, including net operating losses ("NOLs"), to an IRC Section 382 limitation. This limitation has not resulted in cash taxes for any period subsequent to the ownership change. Since the 2016 ownership change, the Company has generated additional NOLs and other tax attributes that are not currently subject to an IRC Section 382 limitation. The Company's ability to use NOLs and other tax attributes to reduce taxable income and income taxes could be materially impacted by a future IRC 382 ownership change. Future transactions involving the Company's stock including those outside of the Company's control could cause an IRC 382 ownership change resulting in a limitation on tax attributes currently not limited and a more restrictive limitation on tax attributes currently subject to the previous IRC 382 limitation.

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 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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Equity	6 Months Ended
	Jun. 30, 2019
Equity [Abstract]
Equity	EquityCommon Stock, Performance Share Units, and Stock Options. At June 30, 2019, the Company had 35.8 million shares of common stock, par value $0.001 per share, issued and outstanding, including 0.3 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 12 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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Revenues

6 Months Ended

Jun. 30, 2019

Revenue from Contract with Customer [Abstract]

Revenues

Revenues

The following table disaggregates the Company’s revenue by source for the three and six-month periods ended June 30, 2019 and 2018:

	Three Months Ended June 30,				Six Months Ended June 30,
	2019		2018		2019		2018
	(In thousands)
Oil	$	55,615	$	49,219	$	98,774	$	102,554
NGL	9,413		16,946		22,524		33,335
Natural gas	10,168		13,139		26,946		30,381
Other	192		158		380		320
Total revenues	$	75,388	$	79,462	148,624		$	166,590

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. Payment terms are typically within 30 days of control being transferred. 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.

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 June 30, 2019, and December 31, 2018, the Company had revenues receivable of $23.3 million and $31.8 million, respectively, and did not record any bad debt expense on revenues receivable during the three and six-month periods ended June 30, 2019.

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Share and Incentive-Based Compensation

6 Months Ended

Jun. 30, 2019

Share-based Payment Arrangement [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. At June 30, 2019, the Company had restricted stock awards and an immaterial amount of performance share units and stock options outstanding under the Omnibus Incentive Plan. Vesting for certain restricted stock awards and performance share units was accelerated in connection with the departure of certain executives and reductions in force which occurred during the three and six-month periods ended June 30, 2019 and the six-month period ended June 30, 2018. Vesting for certain restricted stock awards, performance share units and performance units was accelerated in the second quarter of 2018 in connection with the change in the composition of the Board after the 2018 annual meeting.

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 June 30, 2019, the Company had approximately 0.3 million unvested restricted shares outstanding at a weighted average grant date fair value of $13.56 per share, and unrecognized compensation cost related to these awards totaled $3.1 million. The remaining weighted average contractual period over which this compensation cost may be recognized is 1.7 years.

The following tables summarize share and incentive-based compensation for the three and six-month periods ended June 30, 2019, and 2018 (in thousands):

	Recurring Compensation Expense(1)		Executive Terminations(2)(3)		Reduction in Force(2)(3)		Accelerated Vesting(4)		Total
Three Months Ended June 30, 2019
Equity-classified awards:
Restricted stock awards	$	829	$	197	$	501	$	—	$	1,527
Performance share units	189		281		—		—		470
Stock options	193		—		—		—		193
Total share-based compensation expense	1,211		478		501		—		2,190
Less: Capitalized compensation expense	(62)		—		—		—		(62)
Share-based compensation expense, net	$	1,149	$	478	$	501	$	—	$	2,128
Three Months Ended June 30, 2018
Equity-classified awards:
Restricted stock awards	$	603	$	—	$	92	$	5,181	$	5,876
Performance share units	31		82		7		610		730
Total share-based compensation expense	634		82		99		5,791		6,606
Liability-classified awards:
Performance units	227		(216)		(31)		1,309		1,289
Total share and incentive-based compensation expense	861		(134)		68		7,100		7,895
Less: Capitalized compensation expense	(124)		—		—		(555)		(679)
Share and incentive-based compensation expense, net	$	737	$	(134)	$	68	$	6,545	$	7,216

____________________

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.

3.Three-month period ended June 30, 2018, includes an adjustment to first quarter 2018 accrued share and incentive-based compensation to reflect actuals paid.

4.Recorded in accelerated vesting of employment compensation in the accompanying consolidated statements of

operations.

	Recurring Compensation Expense(1)		Executive Terminations(2)(3)		Reduction in Force(2)(3)		Accelerated Vesting(4)		Total
Six Months Ended June 30, 2019
Equity-classified awards:
Restricted stock awards	$	1,574	$	197	$	501	$	—	$	2,272
Performance share units	387		281		—		—		668
Stock options	323		—		—		—		323
Total share-based compensation expense	2,284		478		501		—		3,263
Less: Capitalized compensation expense	(139)		—		—		—		(139)
Share-based compensation expense, net	$	2,145	$	478	$	501	$	—	$	3,124
Six Months Ended June 30, 2018
Equity-classified awards:
Restricted stock awards	$	3,379	$	8,140	$	3,777	$	5,181	$	20,477
Performance share units	359		1,056		158		610		2,183
Total share-based compensation expense	3,738		9,196		3,935		5,791		22,660
Liability-classified awards:
Performance units	756		2,151		558		1,309		4,774
Total share and incentive-based compensation expense	4,494		11,347		4,493		7,100		27,434
Less: Capitalized compensation expense	(334)		—		—		(555)		(889)
Share and incentive-based compensation expense, net	$	4,160	$	11,347	$	4,493	$	6,545	$	26,545

____________________

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.

3.Six-month period ended June 30, 2018, includes an adjustment to first quarter 2018 accrued share and incentive-based

compensation to reflect actuals paid.

4.Recorded in accelerated vesting of employment compensation in the accompanying consolidated statements of

operations.

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Employee Termination Benefits

6 Months Ended

Jun. 30, 2019

Postemployment Benefits [Abstract]

Employee Termination Benefits

Employee Termination Benefits

The following table presents a summary of employee termination benefits for the three and six-month periods ended June 30, 2019 and 2018 (in thousands):

	Cash		Share-Based Compensation (5)		Number of Shares	Total Employee Termination Benefits
Three Months Ended June 30, 2019
Executive Employee Termination Benefits (1)	$	877	$	478	37	$	1,355
Other Employee Termination Benefits (2)	2,609		501		44	3,110
	$	3,486	$	979	81	$	4,465
Three Months Ended June 30, 2018
Executive Employee Termination Benefits	$	—	$	82	—	$	82
Other Employee Termination Benefits	862		99		—	961
	$	862	$	181	—	$	1,043
Six Months Ended June 30, 2019
Executive Employee Termination Benefits (1)	$	877	$	478	37	$	1,355
Other Employee Termination Benefits (2)	2,609		501		44	3,110
	$	3,486	$	979	81	$	4,465
Six Months Ended June 30, 2018
Executive Employee Termination Benefits (3)	$	11,945	$	9,196	554	$	21,141
Other Employee Termination Benefits (4)	7,554		3,935		209	11,489
	$	19,499	$	13,131	763	$	32,630

____________________

1.On June 14, 2019, the Company’s then current Executive Vice President, General Counsel and Corporate Secretary, Philip Warman, separated employment from the Company. As a result, the Company paid cash severance costs and incurred share-based compensation costs associated with this separation during the second quarter of 2019.

2.As a result of a reduction in workforce in the second quarter of 2019, certain employees received termination benefits including cash severance and accelerated share-based compensation upon separation of service from the Company.

3.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.

4.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.

5.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 reductions in workforce in the first quarter of 2018 and second quarter of 2019 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. Other employee termination benefits for the three and six-month periods ended June 30, 2018, includes an adjustment to first quarter 2018 accrued share-based compensation to reflect actuals paid.

See Note 12 for additional discussion of the Company’s share-based compensation awards.

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Loss per Share

6 Months Ended

Jun. 30, 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 June 30, 2019
Basic loss per share	$	(13,284)	35,356		$	(0.38)
Effect of dilutive securities
Restricted stock awards(1)	—		—
Performance share units(1)	—		—
Warrants(1)	—		—
Stock options(1)	—		—
Diluted loss per share	$	(13,284)	$	35,356	$	(0.38)
Three Months Ended June 30, 2018
Basic loss per share	$	(34,074)	35,017		$	(0.97)
Effect of dilutive securities
Restricted stock awards(2)	—		—
Performance share units(3)	—		—
Warrants(4)	—		—
Diluted loss per share	$	(34,074)	35,017		$	(0.97)
Six Months Ended June 30, 2019
Basic loss per share	$	(18,561)	35,339		$	(0.53)
Effect of dilutive securities
Restricted stock awards(1)	—		—
Performance share units(1)	—		—
Warrants(1)	—		—
Stock options(1)	—		—
Diluted loss per share	$	(18,561)	35,339		$	(0.53)
Six Months Ended June 30, 2018
Basic loss per share	$	(74,968)	34,800		$	(2.15)
Effect of dilutive securities
Restricted stock awards(5)	—		—
Performance share units(3)	—		—
Warrants(4)	—		—
Diluted loss per share	$	(74,968)	34,800		$	(2.15)

____________________

1.No incremental shares of potentially dilutive restricted stock awards, performance share units, warrants or stock options were included for the three and six-month periods ended June 30, 2019, as their effect was antidilutive under the treasury stock method.

2.No incremental shares of potentially dilutive restricted stock awards were included for the three-month period ended June 30, 2018, as their effect was antidilutive under the treasury stock method.

3.Performance share units covering an insignificant amount of shares for the three and six-month periods ended June 30, 2018, were excluded from the computation of loss per share because their effect would have been antidilutive.

4.No incremental shares of potentially dilutive warrants were included for the three or six-month periods ended June 30, 2018, as their effect was antidilutive under the treasury stock method.

5.Restricted stock awards covering an insignificant amount of shares for the six-month period ended June 30, 2018, were excluded from the computation of loss per share because their effect would have been antidilutive.

See Note 12 for discussion of the Company’s share-based compensation awards.

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Basis of Presentation (Policies)

6 Months Ended

Jun. 30, 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 a 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 intercompany accounts and transactions have been eliminated in consolidation.

Interim Financial Statements

Interim Financial Statements. The accompanying unaudited condensed consolidated financial statements and notes 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; asset retirement obligations; depreciation, depletion and amortization; income taxes; valuation of derivative instruments; contingencies; and accrued revenue and related receivables. In the second quarter of 2019, the Company revised estimated retirement dates for certain Mid-Continent properties. These revisions resulted in the reclassification of $9.7 million in asset retirement obligations from current liabilities to long-term obligations on the accompanying condensed consolidated balance sheet as of June 30, 2019. Although management believes the estimates used in the areas noted above are reasonable, actual results could differ significantly.

Recent Accounting Pronouncements

Recent Accounting Pronouncements. In February 2016, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2016-02, “Leases (Topic 842),” and subsequently issued other associated ASU's related to Topic 842 which supersede Accounting Standards Codification ("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. 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. See Note 4 for additional discussion of the new leasing standard.

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 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.

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.

Oil, natural gas and NGL revenues

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. Payment terms are typically within 30 days of control being transferred. 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.

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Fair Value Measurements (Tables)

6 Months Ended

Jun. 30, 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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Derivatives (Tables)

6 Months Ended

Jun. 30, 2019

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivative Instruments, Gain (Loss)

The following table summarizes derivative activity for the three and six-month periods ended June 30, 2019, and 2018 (in thousands):

	Three Months Ended June 30,				Six Months Ended June 30,
	2019		2018		2019		2018
Loss on commodity derivative contracts	$	—	$	30,104	$	209	$	48,434
Cash paid (received) on settlements	$	—	$	11,274	$	(5,078)	$	17,393

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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Leases (Table)

6 Months Ended

Jun. 30, 2019

Leases [Abstract]

Lease, Cost

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

	Three Months Ended June 30, 2019		Six Months Ended June 30, 2019
Short-term lease cost (1)	$	3,174	$	8,083
Financing lease cost	348		645
Operating lease cost	43		101
Total lease cost	$	3,565	$	8,829

___________________

1.$1.9 million and $5.1 million of short-term lease cost was capitalized as part of oil and natural gas properties during the three and six-month periods ended June 30, 2019, respectively. Portions of these costs were reimbursed to the Company by other working interest owners.

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Property, Plant and Equipment (Tables)

6 Months Ended

Jun. 30, 2019

Property, Plant and Equipment [Abstract]

Property, Plant and Equipment

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

	June 30, 2019		December 31, 2018
Oil and natural gas properties
Proved	$	1,390,054	$	1,269,091
Unproved	46,274		60,152
Total oil and natural gas properties	1,436,328		1,329,243
Less accumulated depreciation, depletion and impairment	(652,709)		(580,132)
Net oil and natural gas properties	783,619		749,111
Land	4,400		4,400
Electrical infrastructure	131,176		131,176
Other non-oil and natural gas equipment	13,327		13,458
Buildings and structures	77,148		77,148
Financing leases	2,083		—
Total	228,134		226,182
Less accumulated depreciation and amortization	(30,428)		(25,344)
Other property, plant and equipment, net	197,706		200,838
Total property, plant and equipment, net	$	981,325	$	949,949

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Accounts Payable and Accrued Expenses (Tables)

6 Months Ended

Jun. 30, 2019

Payables and Accruals [Abstract]

Accounts Payable and Accrued Expenses

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

	June 30, 2019		December 31, 2018
Accounts payable and other accrued expenses	$	65,267	$	78,219
Payroll and benefits	10,943		12,891
Production payable	11,881		12,767
Taxes payable	6,709		5,350
Drilling advances	811		2,031
Accrued interest	123		539
Total accounts payable and accrued expenses	$	95,734	$	111,797

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Revenues (Tables)

6 Months Ended

Jun. 30, 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 and six-month periods ended June 30, 2019 and 2018:

	Three Months Ended June 30,				Six Months Ended June 30,
	2019		2018		2019		2018
	(In thousands)
Oil	$	55,615	$	49,219	$	98,774	$	102,554
NGL	9,413		16,946		22,524		33,335
Natural gas	10,168		13,139		26,946		30,381
Other	192		158		380		320
Total revenues	$	75,388	$	79,462	148,624		$	166,590

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Share and Incentive-Based Compensation (Tables)

6 Months Ended

Jun. 30, 2019

Share-based Payment Arrangement [Abstract]

Schedule of Share and Incentive-based Compensation

The following tables summarize share and incentive-based compensation for the three and six-month periods ended June 30, 2019, and 2018 (in thousands):

	Recurring Compensation Expense(1)		Executive Terminations(2)(3)		Reduction in Force(2)(3)		Accelerated Vesting(4)		Total
Three Months Ended June 30, 2019
Equity-classified awards:
Restricted stock awards	$	829	$	197	$	501	$	—	$	1,527
Performance share units	189		281		—		—		470
Stock options	193		—		—		—		193
Total share-based compensation expense	1,211		478		501		—		2,190
Less: Capitalized compensation expense	(62)		—		—		—		(62)
Share-based compensation expense, net	$	1,149	$	478	$	501	$	—	$	2,128
Three Months Ended June 30, 2018
Equity-classified awards:
Restricted stock awards	$	603	$	—	$	92	$	5,181	$	5,876
Performance share units	31		82		7		610		730
Total share-based compensation expense	634		82		99		5,791		6,606
Liability-classified awards:
Performance units	227		(216)		(31)		1,309		1,289
Total share and incentive-based compensation expense	861		(134)		68		7,100		7,895
Less: Capitalized compensation expense	(124)		—		—		(555)		(679)
Share and incentive-based compensation expense, net	$	737	$	(134)	$	68	$	6,545	$	7,216

____________________

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.

3.Three-month period ended June 30, 2018, includes an adjustment to first quarter 2018 accrued share and incentive-based compensation to reflect actuals paid.

4.Recorded in accelerated vesting of employment compensation in the accompanying consolidated statements of

operations.

	Recurring Compensation Expense(1)		Executive Terminations(2)(3)		Reduction in Force(2)(3)		Accelerated Vesting(4)		Total
Six Months Ended June 30, 2019
Equity-classified awards:
Restricted stock awards	$	1,574	$	197	$	501	$	—	$	2,272
Performance share units	387		281		—		—		668
Stock options	323		—		—		—		323
Total share-based compensation expense	2,284		478		501		—		3,263
Less: Capitalized compensation expense	(139)		—		—		—		(139)
Share-based compensation expense, net	$	2,145	$	478	$	501	$	—	$	3,124
Six Months Ended June 30, 2018
Equity-classified awards:
Restricted stock awards	$	3,379	$	8,140	$	3,777	$	5,181	$	20,477
Performance share units	359		1,056		158		610		2,183
Total share-based compensation expense	3,738		9,196		3,935		5,791		22,660
Liability-classified awards:
Performance units	756		2,151		558		1,309		4,774
Total share and incentive-based compensation expense	4,494		11,347		4,493		7,100		27,434
Less: Capitalized compensation expense	(334)		—		—		(555)		(889)
Share and incentive-based compensation expense, net	$	4,160	$	11,347	$	4,493	$	6,545	$	26,545

____________________

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.

3.Six-month period ended June 30, 2018, includes an adjustment to first quarter 2018 accrued share and incentive-based

compensation to reflect actuals paid.

4.Recorded in accelerated vesting of employment compensation in the accompanying consolidated statements of

operations.

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Employee Termination Benefits (Tables)

6 Months Ended

Jun. 30, 2019

Postemployment Benefits [Abstract]

Schedule of Postemployment Benefits

The following table presents a summary of employee termination benefits for the three and six-month periods ended June 30, 2019 and 2018 (in thousands):

	Cash		Share-Based Compensation (5)		Number of Shares	Total Employee Termination Benefits
Three Months Ended June 30, 2019
Executive Employee Termination Benefits (1)	$	877	$	478	37	$	1,355
Other Employee Termination Benefits (2)	2,609		501		44	3,110
	$	3,486	$	979	81	$	4,465
Three Months Ended June 30, 2018
Executive Employee Termination Benefits	$	—	$	82	—	$	82
Other Employee Termination Benefits	862		99		—	961
	$	862	$	181	—	$	1,043
Six Months Ended June 30, 2019
Executive Employee Termination Benefits (1)	$	877	$	478	37	$	1,355
Other Employee Termination Benefits (2)	2,609		501		44	3,110
	$	3,486	$	979	81	$	4,465
Six Months Ended June 30, 2018
Executive Employee Termination Benefits (3)	$	11,945	$	9,196	554	$	21,141
Other Employee Termination Benefits (4)	7,554		3,935		209	11,489
	$	19,499	$	13,131	763	$	32,630

____________________

1.On June 14, 2019, the Company’s then current Executive Vice President, General Counsel and Corporate Secretary, Philip Warman, separated employment from the Company. As a result, the Company paid cash severance costs and incurred share-based compensation costs associated with this separation during the second quarter of 2019.

2.As a result of a reduction in workforce in the second quarter of 2019, certain employees received termination benefits including cash severance and accelerated share-based compensation upon separation of service from the Company.

3.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.

4.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.

5.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 reductions in workforce in the first quarter of 2018 and second quarter of 2019 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. Other employee termination benefits for the three and six-month periods ended June 30, 2018, includes an adjustment to first quarter 2018 accrued share-based compensation to reflect actuals paid.

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Loss per Share (Tables)

6 Months Ended

Jun. 30, 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 June 30, 2019
Basic loss per share	$	(13,284)	35,356		$	(0.38)
Effect of dilutive securities
Restricted stock awards(1)	—		—
Performance share units(1)	—		—
Warrants(1)	—		—
Stock options(1)	—		—
Diluted loss per share	$	(13,284)	$	35,356	$	(0.38)
Three Months Ended June 30, 2018
Basic loss per share	$	(34,074)	35,017		$	(0.97)
Effect of dilutive securities
Restricted stock awards(2)	—		—
Performance share units(3)	—		—
Warrants(4)	—		—
Diluted loss per share	$	(34,074)	35,017		$	(0.97)
Six Months Ended June 30, 2019
Basic loss per share	$	(18,561)	35,339		$	(0.53)
Effect of dilutive securities
Restricted stock awards(1)	—		—
Performance share units(1)	—		—
Warrants(1)	—		—
Stock options(1)	—		—
Diluted loss per share	$	(18,561)	35,339		$	(0.53)
Six Months Ended June 30, 2018
Basic loss per share	$	(74,968)	34,800		$	(2.15)
Effect of dilutive securities
Restricted stock awards(5)	—		—
Performance share units(3)	—		—
Warrants(4)	—		—
Diluted loss per share	$	(74,968)	34,800		$	(2.15)

____________________

1.No incremental shares of potentially dilutive restricted stock awards, performance share units, warrants or stock options were included for the three and six-month periods ended June 30, 2019, as their effect was antidilutive under the treasury stock method.

2.No incremental shares of potentially dilutive restricted stock awards were included for the three-month period ended June 30, 2018, as their effect was antidilutive under the treasury stock method.

3.Performance share units covering an insignificant amount of shares for the three and six-month periods ended June 30, 2018, were excluded from the computation of loss per share because their effect would have been antidilutive.

4.No incremental shares of potentially dilutive warrants were included for the three or six-month periods ended June 30, 2018, as their effect was antidilutive under the treasury stock method.

5.Restricted stock awards covering an insignificant amount of shares for the six-month period ended June 30, 2018, were excluded from the computation of loss per share because their effect would have been antidilutive.

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Basis of Presentation (Details) - USD ($) $ in Thousands	Jun. 30, 2019	Dec. 31, 2018
Change in Accounting Estimate [Line Items]
Asset retirement obligation, current	$ 14,820	$ 25,393
Asset retirement obligations, noncurrent	46,176	$ 34,671
Service Life
Change in Accounting Estimate [Line Items]
Asset retirement obligation, current	(9,700)
Asset retirement obligations, noncurrent	$ 9,700

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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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Derivatives - Derivative Activity (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
Derivative Instruments and Hedging Activities Disclosure
Loss on derivative contracts	$ 0	$ 30,104	$ 209	$ 48,434
Cash paid (received) on settlements			(5,078)	17,393
Commodity derivative contracts
Derivative Instruments and Hedging Activities Disclosure
Loss on derivative contracts	0	30,104	209	48,434
Cash paid (received) on settlements	$ 0	$ 11,274	$ (5,078)	$ 17,393

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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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Leases (Details) - USD ($) $ in Thousands	3 Months Ended	6 Months Ended
	Jun. 30, 2019	Jun. 30, 2019	Jan. 01, 2019
Lessee, Lease, Description [Line Items]
Short-term lease cost	$ 3,174	$ 8,083
Financing lease cost	348	645
Operating lease cost	43	101
Total lease cost	3,565	8,829
Short-term lease, cost, capitalized	$ 1,900	$ 5,100
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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Property, Plant and Equipment - Schedule of Property, Plant and Equipment (Details) - USD ($) $ in Thousands	Jun. 30, 2019	Dec. 31, 2018
Oil and natural gas properties
Proved	$ 1,390,054	$ 1,269,091
Unproved	46,274	60,152
Total oil and natural gas properties	1,436,328	1,329,243
Less: accumulated depreciation, depletion and impairment	(652,709)	(580,132)
Net oil and natural gas properties	783,619	749,111
Property, Plant and Equipment, net
Property, plant and equipment, gross	228,134	226,182
Less accumulated depreciation and amortization	(30,428)	(25,344)
Other property, plant and equipment, net	197,706	200,838
Total property, plant and equipment, net	981,325	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	13,327	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	$ 2,083	$ 0

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Property, Plant and Equipment - Narrative (Details) - Midstream Generator Assets - USD ($)	3 Months Ended	6 Months Ended
	Jun. 30, 2018	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	Jun. 30, 2019	Dec. 31, 2018
Payables and Accruals [Abstract]
Accounts payable and other accrued expenses	$ 65,267	$ 78,219
Payroll and benefits	10,943	12,891
Production payable	11,881	12,767
Taxes payable	6,709	5,350
Drilling advances	811	2,031
Accrued interest	123	539
Total accounts payable and accrued expenses	$ 95,734	$ 111,797

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Debt - Additional Information (Details) - USD ($)			1 Months Ended	3 Months Ended		6 Months Ended
	Jun. 21, 2019	Jun. 20, 2019	Feb. 28, 2018	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
Debt Instrument
Repayments of borrowings						$ 60,596,000	$ 36,304,000
Gain on extinguishment of debt				$ 0	$ 0	0	1,151,000
Credit Facility | Revolving Credit Facility
Debt Instrument
Maximum borrowing capacity	$ 600,000,000.0	$ 350,000,000.0
Borrowing base	$ 300,000,000.0
Lender party commitments				$ 270,000,000.0		$ 270,000,000.0
Commitment fee						0.50%
Percentage of proved reserves pledged as collateral		95.00%		85.00%		85.00%
Total net leverage ratio (no greater than)				3.50		3.50
Interest coverage ratio (no less than)				2.25		2.25
Leverage ratio				0.25		0.25
Coverage ratio				63.13		63.13
Debt outstanding				$ 52,000,000.0		$ 52,000,000.0
Outstanding letters of credit				$ 7,600,000		$ 7,600,000
Credit Facility | Revolving Credit Facility | Minimum | LIBOR
Debt Instrument
Basis spread on variable rate	2.00%	3.00%
Credit Facility | Revolving Credit Facility | Minimum | Base Rate
Debt Instrument
Basis spread on variable rate	1.00%	2.00%
Credit Facility | Revolving Credit Facility | Maximum | LIBOR
Debt Instrument
Basis spread on variable rate	3.00%	4.00%
Credit Facility | Revolving Credit Facility | Maximum | Base Rate
Debt Instrument
Basis spread on variable rate	2.00%	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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Income Taxes - Narrative (Details)	6 Months Ended
	Jun. 30, 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

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Equity - Narrative (Details) - $ / shares	6 Months Ended
	Jun. 30, 2019	Dec. 31, 2018
Class of Stock
Common stock, shares issued (in shares)	35,762,000	35,687,000
Common stock, shares outstanding (in shares)	35,762,000	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)	250,000,000.0	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)	300,000
Performance Share Units
Class of Stock
Unvested awards (in shares)	100,000

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Revenues - Disaggregation of Revenue (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
Disaggregation of Revenue
Total revenues	$ 75,388	$ 79,462	$ 148,624	$ 166,590
Oil
Disaggregation of Revenue
Total revenues	55,615	49,219	98,774	102,554
NGL
Disaggregation of Revenue
Total revenues	9,413	16,946	22,524	33,335
Natural gas
Disaggregation of Revenue
Total revenues	10,168	13,139	26,946	30,381
Other
Disaggregation of Revenue
Total revenues	$ 192	$ 158	$ 380	$ 320

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Revenues - Narrative (Details) - USD ($) $ in Millions	Jun. 30, 2019	Dec. 31, 2018
Revenue Receivable from Contract With Customers
Revenues Receivable from Customer
Revenues receivable	$ 23.3	$ 31.8

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Share and Incentive-Based Compensation - Narrative (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions	6 Months Ended
	Jun. 30, 2019	Oct. 31, 2016
Share and Incentive Based Compensation Arrangement
Shares authorized for issuance (in shares)		4.6
Restricted Stock
Share and Incentive Based Compensation Arrangement
Unvested awards (in shares)	0.3
Weighted average grant date fair value	$ 13.56
Compensation yet not yet recognized	$ 3.1
Compensation yet not yet recognized period	1 year 8 months 12 days
Minimum | Restricted Stock
Share and Incentive Based Compensation Arrangement
Vesting period	1 year
Maximum | Restricted Stock
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		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
Share and Incentive-Based Compensation Arrangement by Award, Compensation Cost
Equity-classified awards compensation expense	$ 2,190	$ 6,606	$ 3,263	$ 22,660
Liability-classified awards compensation expense, Performance units		1,289		4,774
Total share and incentive-based compensation expense		7,895		27,434
Less: Capitalized compensation expense	(62)	(679)	(139)	(889)
Share-based compensation expense, net	2,128	7,216	3,124	26,545
Recurring Compensation Expense
Share and Incentive-Based Compensation Arrangement by Award, Compensation Cost
Equity-classified awards compensation expense	1,211	634	2,284	3,738
Liability-classified awards compensation expense, Performance units		227		756
Total share and incentive-based compensation expense		861		4,494
Less: Capitalized compensation expense	(62)	(124)	(139)	(334)
Share-based compensation expense, net	1,149	737	2,145	4,160
Executive Terminations
Share and Incentive-Based Compensation Arrangement by Award, Compensation Cost
Equity-classified awards compensation expense	478	82	478	9,196
Liability-classified awards compensation expense, Performance units		(216)		2,151
Total share and incentive-based compensation expense		(134)		11,347
Less: Capitalized compensation expense	0	0	0	0
Share-based compensation expense, net	478	(134)	478	11,347
Reduction in Force
Share and Incentive-Based Compensation Arrangement by Award, Compensation Cost
Equity-classified awards compensation expense	501	99	501	3,935
Liability-classified awards compensation expense, Performance units		(31)		558
Total share and incentive-based compensation expense		68		4,493
Less: Capitalized compensation expense	0	0	0	0
Share-based compensation expense, net	501	68	501	4,493
Accelerated Vesting
Share and Incentive-Based Compensation Arrangement by Award, Compensation Cost
Equity-classified awards compensation expense	0	5,791	0	5,791
Liability-classified awards compensation expense, Performance units		1,309		1,309
Total share and incentive-based compensation expense		7,100		7,100
Less: Capitalized compensation expense	0	(555)	0	(555)
Share-based compensation expense, net	0	6,545	0	6,545
Restricted Stock
Share and Incentive-Based Compensation Arrangement by Award, Compensation Cost
Equity-classified awards compensation expense	1,527	5,876	2,272	20,477
Restricted Stock | Recurring Compensation Expense
Share and Incentive-Based Compensation Arrangement by Award, Compensation Cost
Equity-classified awards compensation expense	829	603	1,574	3,379
Restricted Stock | Executive Terminations
Share and Incentive-Based Compensation Arrangement by Award, Compensation Cost
Equity-classified awards compensation expense	197	0	197	8,140
Restricted Stock | Reduction in Force
Share and Incentive-Based Compensation Arrangement by Award, Compensation Cost
Equity-classified awards compensation expense	501	92	501	3,777
Restricted Stock | Accelerated Vesting
Share and Incentive-Based Compensation Arrangement by Award, Compensation Cost
Equity-classified awards compensation expense	0	5,181	0	5,181
Performance Share Units
Share and Incentive-Based Compensation Arrangement by Award, Compensation Cost
Equity-classified awards compensation expense	470	730	668	2,183
Performance Share Units | Recurring Compensation Expense
Share and Incentive-Based Compensation Arrangement by Award, Compensation Cost
Equity-classified awards compensation expense	189	31	387	359
Performance Share Units | Executive Terminations
Share and Incentive-Based Compensation Arrangement by Award, Compensation Cost
Equity-classified awards compensation expense	281	82	281	1,056
Performance Share Units | Reduction in Force
Share and Incentive-Based Compensation Arrangement by Award, Compensation Cost
Equity-classified awards compensation expense	0	7	0	158
Performance Share Units | Accelerated Vesting
Share and Incentive-Based Compensation Arrangement by Award, Compensation Cost
Equity-classified awards compensation expense	0	$ 610	0	$ 610
Stock Option
Share and Incentive-Based Compensation Arrangement by Award, Compensation Cost
Equity-classified awards compensation expense	193		323
Stock Option | Recurring Compensation Expense
Share and Incentive-Based Compensation Arrangement by Award, Compensation Cost
Equity-classified awards compensation expense	193		323
Stock Option | Executive Terminations
Share and Incentive-Based Compensation Arrangement by Award, Compensation Cost
Equity-classified awards compensation expense	0		0
Stock Option | Reduction in Force
Share and Incentive-Based Compensation Arrangement by Award, Compensation Cost
Equity-classified awards compensation expense	0		0
Stock Option | Accelerated Vesting
Share and Incentive-Based Compensation Arrangement by Award, Compensation Cost
Equity-classified awards compensation expense	$ 0		$ 0

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Employee Termination Benefits (Details) - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
Employee Termination Benefits
Cash	$ 3,486	$ 862	$ 3,486	$ 19,499
Share-Based Compensation	$ 979	$ 181	$ 979	$ 13,131
Number of Shares	81	0	81	763
Total Employee Termination Benefits	$ 4,465	$ 1,043	$ 4,465	$ 32,630
Executive Employee Termination Benefits
Employee Termination Benefits
Cash	877	0	877	11,945
Share-Based Compensation	$ 478	$ 82	$ 478	$ 9,196
Number of Shares	37	0	37	554
Total Employee Termination Benefits	$ 1,355	$ 82	$ 1,355	$ 21,141
Other Employee Termination Benefits
Employee Termination Benefits
Cash	2,609	862	2,609	7,554
Share-Based Compensation	$ 501	$ 99	$ 501	$ 3,935
Number of Shares	44	0	44	209
Total Employee Termination Benefits	$ 3,110	$ 961	$ 3,110	$ 11,489

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Loss per Share (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
Earnings (Loss) Per Share, Diluted, by Common Class, Including Two Class Method
Net Loss, basic	$ (13,284)	$ (34,074)	$ (18,561)	$ (74,968)
Weighted Average Shares, Basic (in shares)	35,356,000	35,017,000	35,339,000	34,800,000
Loss per Share, basic (in dollars per share)	$ (0.38)	$ (0.97)	$ (0.53)	$ (2.15)
Effect of dilutive securities
Restricted stock awards	$ 0	$ 0	$ 0	$ 0
Restricted stock awards (in shares)	0	0	0	0
Performance share units	$ 0	$ 0	$ 0	$ 0
Performance share units (in shares)	0	0	0	0
Warrants	$ 0	$ 0	$ 0	$ 0
Warrants (in shares)	0	0	0	0
Stock options	$ 0		$ 0
Stock options (in shares)	0		0
Diluted earnings (loss)	$ (13,284)	$ (34,074)	$ (18,561)	$ (74,968)
Weighted average shares, diluted (in shares)	35,356,000	35,017,000	35,339,000	34,800,000
Loss Per Share, diluted (in dollars per share)	$ (0.38)	$ (0.97)	$ (0.53)	$ (2.15)
Restricted Stock awards
Potentially Dilutive Securities
Antidilutive securities excluded from computation of earnings per share (in shares)	0	0	0
Performance Share Units
Potentially Dilutive Securities
Antidilutive securities excluded from computation of earnings per share (in shares)	0		0
Warrants
Potentially Dilutive Securities
Antidilutive securities excluded from computation of earnings per share (in shares)	0	0	0	0
Stock Option
Potentially Dilutive Securities
Antidilutive securities excluded from computation of earnings per share (in shares)	0		0

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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)