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 ~~March 31,~~June 30, 2021


☐			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.)

1 E. Sheridan Ave, Suite 500 Oklahoma City, Oklahoma						73104
(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

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 ~~May 6,~~August 5, 2021, was ~~36,506,907.~~36,588,775.

Table of Contents

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 SandRidge Mississippian Trust I and SandRidge Mississippian Trust II, (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, the impact of the COVID-19 pandemic, the potential impact of international negotiations on the supply and demand of oil and gas, 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, 2020 (the “2020 Form 10-K”) and in Item 1A of this Quarterly Report.

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SANDRIDGE ENERGY, INC. AND SUBSIDIARIES

FORM 10-Q

Quarter Ended ~~March 31,~~June 30, 2021

INDEX

Table of Contents

PART I. Financial Information

ITEM 1. Financial Statements

SANDRIDGE ENERGY, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)

(In thousands)


		March 31, 2021		December 31, 2020			June 30, 2021		December 31, 2020
ASSETS	ASSETS					ASSETS
Current assets	Current assets					Current assets
Cash and cash equivalents	Cash and cash equivalents	$	73,876	$	22,130	Cash and cash equivalents	$	88,338	$	22,130
Restricted cash - other	Restricted cash - other	2,639		6,136		Restricted cash - other	2,271		6,136
Accounts receivable, net	Accounts receivable, net	18,963		19,576		Accounts receivable, net	20,681		19,576
Prepaid expenses	Prepaid expenses	2,841		2,890		Prepaid expenses	2,186		2,890
Other current assets	Other current assets	80		80		Other current assets	80		80
Total current assets	Total current assets	98,399		50,812		Total current assets	113,556		50,812
Oil and natural gas properties, using full cost method of accounting	Oil and natural gas properties, using full cost method of accounting					Oil and natural gas properties, using full cost method of accounting
Proved	Proved	1,443,508		1,463,950		Proved	1,439,904		1,463,950
Unproved	Unproved	13,341		17,964		Unproved	13,365		17,964
Less: accumulated depreciation, depletion and impairment	Less: accumulated depreciation, depletion and impairment	(1,376,754)		(1,375,692)		Less: accumulated depreciation, depletion and impairment	(1,370,544)		(1,375,692)
		80,095		106,222			82,725		106,222
Other property, plant and equipment, net	Other property, plant and equipment, net	101,057		103,118		Other property, plant and equipment, net	99,572		103,118
Other assets	Other assets	703		680		Other assets	594		680
Total assets	Total assets	$	280,254	$	260,832	Total assets	$	296,447	$	260,832


LIABILITIES AND STOCKHOLDERS’ EQUITY	LIABILITIES AND STOCKHOLDERS’ EQUITY					LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities	Current liabilities					Current liabilities
Accounts payable and accrued expenses	Accounts payable and accrued expenses	$	42,280	$	51,426	Accounts payable and accrued expenses	$	42,896	$	51,426
Asset retirement obligation	Asset retirement obligation	15,937		16,467		Asset retirement obligation	15,939		16,467
Other current liabilities	Other current liabilities	364		984		Other current liabilities	408		984
Total current liabilities	Total current liabilities	58,581		68,877		Total current liabilities	59,243		68,877
Long-term debt	Long-term debt	20,000		20,000		Long-term debt	20,000		20,000
Asset retirement obligation	Asset retirement obligation	35,934		40,701		Asset retirement obligation	36,197		40,701
Other long-term obligations	Other long-term obligations	2,413		3,188		Other long-term obligations	1,439		3,188
Total liabilities	Total liabilities	116,928		132,766		Total liabilities	116,879		132,766
Commitments and contingencies (Note 9)	Commitments and contingencies (Note 9)	0		0		Commitments and contingencies (Note 9)	0		0
Stockholders’ Equity	Stockholders’ Equity					Stockholders’ Equity
Common stock, $0.001 par value; 250,000 shares authorized; 36,135 issued and outstanding at March 31, 2021 and 35,928 issued and outstanding at December 31, 2020		36		36
Common stock, $0.001 par value; 250,000 shares authorized; 36,560 issued and outstanding at June 30, 2021 and 35,928 issued and outstanding at December 31, 2020						Common stock, $0.001 par value; 250,000 shares authorized; 36,560 issued and outstanding at June 30, 2021 and 35,928 issued and outstanding at December 31, 2020	37		36
Warrants	Warrants	88,520		88,520		Warrants	88,520		88,520
Additional paid-in capital	Additional paid-in capital	1,062,437		1,062,220		Additional paid-in capital	1,062,426		1,062,220
Accumulated deficit	Accumulated deficit	(987,667)		(1,022,710)		Accumulated deficit	(971,415)		(1,022,710)
Total stockholders’ equity	Total stockholders’ equity	163,326		128,066		Total stockholders’ equity	179,568		128,066
Total liabilities and stockholders’ equity	Total liabilities and stockholders’ equity	$	280,254	$	260,832	Total liabilities and stockholders’ equity	$	296,447	$	260,832

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 March 31,	Three Months Ended June 30,			Six Months Ended June 30,
				2021			2020			2021		2020		2021		2020
Revenues	Revenues								Revenues
Oil, natural gas and NGL	Oil, natural gas and NGL			$	33,623		$	40,139	Oil, natural gas and NGL	$	34,196	$	16,448	$	67,819	$	56,587
Other	Other			0			190		Other	0		207		0		397
Total revenues	Total revenues			33,623			40,329		Total revenues	34,196		16,655		67,819		56,984
Expenses	Expenses								Expenses
Lease operating expenses	Lease operating expenses			7,954			15,642		Lease operating expenses	9,232		8,698		17,186		24,340
Production, ad valorem, and other taxes	Production, ad valorem, and other taxes			2,176			3,199		Production, ad valorem, and other taxes	2,534		1,854		4,710		5,053
Depreciation and depletion — oil and natural gas	Depreciation and depletion — oil and natural gas			2,505			24,855		Depreciation and depletion — oil and natural gas	2,193		13,348		4,698		38,203
Depreciation and amortization — other	Depreciation and amortization — other			1,494			2,634		Depreciation and amortization — other	1,475		1,739		2,969		4,373
Impairment	Impairment			0			7,970		Impairment	0		201,784		0		209,754
General and administrative	General and administrative			2,090			5,483		General and administrative	2,522		4,314		4,612		9,797
Restructuring expenses	Restructuring expenses			2,054			0		Restructuring expenses	256		444		2,310		444
Employee termination benefits	Employee termination benefits			49			3,254		Employee termination benefits	0		1,993		49		5,247
(Gain) loss on derivative contracts	(Gain) loss on derivative contracts			0			(10,226)		(Gain) loss on derivative contracts	0		(2,241)		0		(12,467)
(Gain) loss on sale of assets	(Gain) loss on sale of assets			(19,713)			0		(Gain) loss on sale of assets	0		(42)		(19,713)		78
Other operating (income) expense, net	Other operating (income) expense, net			(48)			277		Other operating (income) expense, net	(65)		150		(113)		307
Total expenses	Total expenses			(1,439)			53,088		Total expenses	18,147		232,041		16,708		285,129
Income (loss) from operations	Income (loss) from operations			35,062			(12,759)		Income (loss) from operations	16,049		(215,386)		51,111		(228,145)
Other income (expense)	Other income (expense)								Other income (expense)
Interest expense, net	Interest expense, net			(47)			(637)		Interest expense, net	(84)		(447)		(131)		(1,084)
Other income (expense), net	Other income (expense), net			28			76		Other income (expense), net	287		58		315		134
Total other income (expense)	Total other income (expense)			(19)			(561)		Total other income (expense)	203		(389)		184		(950)
Income (loss) before income taxes	Income (loss) before income taxes			35,043			(13,320)		Income (loss) before income taxes	16,252		(215,775)		51,295		(229,095)
Income tax expense (benefit)	Income tax expense (benefit)			0			(650)		Income tax expense (benefit)	0		4		0		(646)
Net income (loss)	Net income (loss)			$	35,043		$	(12,670)	Net income (loss)	$	16,252	$	(215,779)	$	51,295	$	(228,449)
Net income (loss) per share	Net income (loss) per share								Net income (loss) per share
Basic	Basic			$	0.97		$	(0.36)	Basic	$	0.45	$	(6.06)	$	1.42	$	(6.42)
Diluted	Diluted			$	0.94		$	(0.36)	Diluted	$	0.44	$	(6.06)	$	1.38	$	(6.42)
Weighted average number of common shares outstanding	Weighted average number of common shares outstanding								Weighted average number of common shares outstanding
Basic	Basic			36,156			35,551		Basic	36,416		35,611		36,187		35,581
Diluted	Diluted			37,439			35,551		Diluted	37,345		35,611		37,283		35,581

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

Table of Contents

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				Common Stock					Warrants				Additional Paid-In Capital				Accumulated Deficit				Total
		Shares	Amount		Shares	Amount				Total			Shares				Amount		Shares			Amount		Additional Paid-In Capital						Accumulated Deficit
Three Months Ended March 31, 2021
Six Months Ended June 30, 2021																Six Months Ended June 30, 2021
Balance at December 31, 2020	Balance at December 31, 2020	35,928	$	36	6,734	$	88,520	$	1,062,220		$	(1,022,710)		$	128,066	Balance at December 31, 2020		35,928		$	36		6,734		$	88,520		$	1,062,220				$	(1,022,710)			$	128,066
Issuance of stock awards, net of cancellations	Issuance of stock awards, net of cancellations	6	—		—	—		—			—			—		Issuance of stock awards, net of cancellations		6		—			—		—		—				—				—

Stock-based compensation	Stock-based compensation	—	—		—	—		236			—			236		Stock-based compensation		—		—			—		—		236				—				236
Issuance of common stock for general unsecured claims	Issuance of common stock for general unsecured claims	201	—		—	—		—			—			—		Issuance of common stock for general unsecured claims		201		—			—		—		—				—				—
Issuance of warrants for general unsecured claims	Issuance of warrants for general unsecured claims	—	—		247	0		—			—			0		Issuance of warrants for general unsecured claims		—		—			247		0		—				—				0
Cash paid for tax obligations on vested stock awards	Cash paid for tax obligations on vested stock awards	—	—		—	—		(19)			—			(19)		Cash paid for tax obligations on vested stock awards		—		—			—		—		(19)				—				(19)

Net Income	Net Income	—	—		—	—		—			35,043			35,043		Net Income		—		—			—		—		—				35,043				35,043
Balance at March 31, 2021	Balance at March 31, 2021	36,135	$	36	6,981	$	88,520	$	1,062,437		$	(987,667)		$	163,326	Balance at March 31, 2021		36,135		$	36		6,981		$	88,520	$	1,062,437			$	(987,667)			$	163,326
Issuance of stock awards, net of cancellations																Issuance of stock awards, net of cancellations		425		1			—		—		(1)				—				0
Stock options exercised and Stock-based compensation																Stock options exercised and Stock-based compensation		—		—			—		—		584				—				584
Issuance of common stock for general unsecured claims																Issuance of common stock for general unsecured claims		—		—			—		—		—				—				—
Issuance of warrants for general unsecured claims																Issuance of warrants for general unsecured claims		—		—			—		—		—				—				—
Cash paid for tax obligations on vested stock awards																Cash paid for tax obligations on vested stock awards		—		—			—		—		(594)				—				(594)
Net Income																Net Income		—		—			—		—						16,252				16,252
Balance at June 30, 2021																Balance at June 30, 2021		36,560		$	37		6,981		$	88,520	$	1,062,426			$	(971,415)			$	179,568


		Common Stock			Warrants			Additional Paid-In Capital			Accumulated Deficit			Total				Common Stock					Warrants				Additional Paid-In Capital				Accumulated Deficit				Total
		Shares	Amount		Shares	Amount				Total			Shares				Amount		Shares			Amount		Additional Paid-In Capital						Accumulated Deficit
Three Months Ended March 31, 2020
Six Months Ended June 30, 2020																Six Months Ended June 30, 2020
Balance at December 31, 2019	Balance at December 31, 2019	35,772	$	36	6,659	$	88,520	$	1,059,253		$	(745,357)		$	402,452	Balance at December 31, 2019		35,772		$	36		6,659		$	88,520		$	1,059,253				$	(745,357)			$	402,452

Common stock issued for general unsecured claims	Common stock issued for general unsecured claims	38	—		—	—		—			—			—		Common stock issued for general unsecured claims		38		—			—		—		—				—				—
Stock-based compensation	Stock-based compensation	—	—		—	—		185			—			185		Stock-based compensation		—		—			—		—		185				—				185
Issuance of warrants for general unsecured claims	Issuance of warrants for general unsecured claims	—	—		47	—		—			—			—		Issuance of warrants for general unsecured claims		—		—			47		—		—				—				—

Cash paid for tax obligations on vested stock awards	Cash paid for tax obligations on vested stock awards	—	—		—	—		(1)			—			(1)		Cash paid for tax obligations on vested stock awards		—		—			—		—		(1)				—				(1)
Net loss	Net loss	—	—		—	—		—			(12,670)			(12,670)		Net loss		—		—			—		—		—				(12,670)				(12,670)
Balance at March 31, 2020																Balance at March 31, 2020		35,810		$	36		6,706		$	88,520	$	1,059,437			$	(758,027)			$	389,966
Issuance of stock awards, net of cancellations																Issuance of stock awards, net of cancellations		55		—			—		—		—				—				—
Stock-based compensation																Stock-based compensation		—		—			—		—		583				—				583
Cash paid for tax obligations on vested stock awards																Cash paid for tax obligations on vested stock awards		—		—			—		—		(1)				—				(1)
Net loss																Net loss		—		—			—		—		—				(215,779)				(215,779)
Balance at June 30, 2020																Balance at June 30, 2020		35,865		$	36		6,706		$	88,520	$	1,060,019			$	(973,806)			$	174,769

Balance at March 31, 2020		35,810	$	36	6,706	$	88,520	$	1,059,437		$	(758,027)		$	389,966

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

Table of Contents

SANDRIDGE ENERGY, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)

(In thousands)


		Three Months Ended March 31,					Six Months Ended June 30,
		2021		2020			2021		2020
CASH FLOWS FROM OPERATING ACTIVITIES	CASH FLOWS FROM OPERATING ACTIVITIES					CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss)	Net income (loss)	$	35,043	$	(12,670)	Net income (loss)	$	51,295	$	(228,449)
Adjustments to reconcile net loss to net cash provided by operating activities	Adjustments to reconcile net loss to net cash provided by operating activities					Adjustments to reconcile net loss to net cash provided by operating activities
Provision for doubtful accounts	Provision for doubtful accounts	21		283		Provision for doubtful accounts	21		283
Depreciation, depletion, and amortization	Depreciation, depletion, and amortization	3,999		27,489		Depreciation, depletion, and amortization	7,667		42,576
Impairment	Impairment	0		7,970		Impairment	0		209,754
Debt issuance costs amortization	Debt issuance costs amortization	16		159		Debt issuance costs amortization	36		318

(Gain) loss on derivative contracts	(Gain) loss on derivative contracts	0		(10,226)		(Gain) loss on derivative contracts	0		(12,467)
Cash received on settlement of derivative contracts	Cash received on settlement of derivative contracts	0		4,087		Cash received on settlement of derivative contracts	0		10,577

Gain on sale of assets		(19,713)		0
(Gain) loss on sale of assets						(Gain) loss on sale of assets	(19,713)		78
Stock-based compensation	Stock-based compensation	235		169		Stock-based compensation	799		749
Other	Other	35		156		Other	71		68
Changes in operating assets and liabilities	Changes in operating assets and liabilities	(5,305)		686		Changes in operating assets and liabilities	(6,945)		(10,025)
Net cash provided by (used in) operating activities	Net cash provided by (used in) operating activities	14,331		18,103		Net cash provided by (used in) operating activities	33,231		13,462
CASH FLOWS FROM INVESTING ACTIVITIES	CASH FLOWS FROM INVESTING ACTIVITIES					CASH FLOWS FROM INVESTING ACTIVITIES
Capital expenditures for property, plant and equipment	Capital expenditures for property, plant and equipment	(3,094)		(5,452)		Capital expenditures for property, plant and equipment	(4,389)		(6,814)
Acquisition of Assets						Acquisition of Assets	(3,545)		0
Purchase of other property and equipment	Purchase of other property and equipment	(59)		0		Purchase of other property and equipment	(59)		0
Proceeds from sale of assets	Proceeds from sale of assets	37,238		989		Proceeds from sale of assets	37,900		1,506
Net cash provided by (used in) investing activities	Net cash provided by (used in) investing activities	34,085		(4,463)		Net cash provided by (used in) investing activities	29,907		(5,308)
CASH FLOWS FROM FINANCING ACTIVITIES	CASH FLOWS FROM FINANCING ACTIVITIES					CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from borrowings	Proceeds from borrowings	0		21,000		Proceeds from borrowings	0		39,000
Repayments of borrowings	Repayments of borrowings	0		(32,500)		Repayments of borrowings	0		(37,500)
Reduction of financing lease liability	Reduction of financing lease liability	(74)		(366)		Reduction of financing lease liability	(122)		(694)
Debt issuance costs	Debt issuance costs	(74)		0		Debt issuance costs	(81)		0
Proceeds from exercise of stock options						Proceeds from exercise of stock options	21		0
Cash paid for tax obligations on vested stock awards	Cash paid for tax obligations on vested stock awards	(19)		(1)		Cash paid for tax obligations on vested stock awards	(613)		(1)
Net cash provided by (used in) financing activities	Net cash provided by (used in) financing activities	(167)		(11,867)		Net cash provided by (used in) financing activities	(795)		805
NET INCREASE (DECREASE) IN CASH, CASH EQUIVALENTS and RESTRICTED CASH	NET INCREASE (DECREASE) IN CASH, CASH EQUIVALENTS and RESTRICTED CASH	48,249		1,773		NET INCREASE (DECREASE) IN CASH, CASH EQUIVALENTS and RESTRICTED CASH	62,343		8,959
CASH, CASH EQUIVALENTS and RESTRICTED CASH, beginning of year	CASH, CASH EQUIVALENTS and RESTRICTED CASH, beginning of year	28,266		5,968		CASH, CASH EQUIVALENTS and RESTRICTED CASH, beginning of year	28,266		5,968
CASH, CASH EQUIVALENTS and RESTRICTED CASH, end of period	CASH, CASH EQUIVALENTS and RESTRICTED CASH, end of period	$	76,515	$	7,741	CASH, CASH EQUIVALENTS and RESTRICTED CASH, end of period	$	90,609	$	14,927
Supplemental Disclosure of Cash Flow Information	Supplemental Disclosure of Cash Flow Information					Supplemental Disclosure of Cash Flow Information
Cash paid for interest, net of amounts capitalized	Cash paid for interest, net of amounts capitalized	$	(92)	$	(540)	Cash paid for interest, net of amounts capitalized	$	(106)	$	(812)
Cash received for income taxes	Cash received for income taxes	$	0	$	616	Cash received for income taxes	$	0	$	616
Supplemental Disclosure of Noncash Investing and Financing Activities	Supplemental Disclosure of Noncash Investing and Financing Activities					Supplemental Disclosure of Noncash Investing and Financing Activities
Purchase of PP&E in accounts payable	Purchase of PP&E in accounts payable	$	1,342	$	1,066	Purchase of PP&E in accounts payable	$	1,260	$	704
Right-of-use assets obtained in exchange for financing lease obligations	Right-of-use assets obtained in exchange for financing lease obligations	$	363	$	67	Right-of-use assets obtained in exchange for financing lease obligations	$	363	$	67
Carrying value of properties exchanged	Carrying value of properties exchanged	$	0	$	3,890	Carrying value of properties exchanged	$	0	$	3,890

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

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1. Basis of Presentation

Nature of Business. SandRidge Energy, Inc. is an oil and natural gas acquisition, development and production company headquartered in Oklahoma City, Oklahoma with a principal focus on developing and producing 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 2020 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 2020 Form 10-K as well as the items noted below.

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; the carrying value of unproved oil and natural gas properties; depreciation, depletion and amortization; asset retirement obligations; determinations of significant alterations to the full cost pool and related estimates of fair value used to allocate the full cost pool net book value to divested properties, as necessary; valuation allowances for deferred tax assets; income taxes; valuation of derivative instruments; contingencies; and accrued revenue and related receivables. Although management believes the estimates used in the areas noted above are reasonable, actual results could differ significantly from those estimates.

Going Concern Consideration. The accompanying condensed consolidated financial statements are prepared in accordance with GAAP generally accepted accounting principles applicable to a going concern, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business.

Recently Adopted Accounting ~~Pronouncements.~~ Pronouncements ASU 2019-12.~~ASU 2019-12 -~~ In December 2019, the FASB issued ASU 2019-12, “Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes,” which simplifies various aspects of accounting for income taxes, including requirements related to hybrid tax regimes, the tax basis step-up in goodwill obtained in a transaction that is not a business combination, separate financial statements of entities not subject to tax, the intraperiod tax allocation exception to the incremental approach, ownership changes in investments, interim-period accounting for enacted changes in tax laws, and year-to-date loss limitation in interim-period tax accounting. The Company adopted this ASU on January 1, 2021 using an applied prospective basis; however, the impact was not material upon adoption.

Recent Accounting Pronouncements Not Yet ~~Adopted.~~ Adopted ASU 2020-04 -. In March 2020, FASB issued ASU No. 2020-04, Reference Rate Reform (Topic 848), to facilitate the effects of reference rate reform on financial reporting. This ASU provides optional practical expedients and exceptions for applying GAAP provisions to contracts, hedging relationships, and other transactions that reference London Inter-Bank Offered Rate ("LIBOR"), or other reference rates expected to be discontinued because of reference rate reform, if certain criteria are met. The provisions of this ASU do not apply to contract modifications made and hedging transactions entered into or evaluated after December 31, 2022, except for hedging relationships existing as of December 31, 2022, that an entity has elected certain optional expedients for and that are retained through the end of the hedging relationship. The amendments in ASU 2020-04 are effective, for all entities, as of March 12, 2020 through December 31, 2022. The Company is currently reviewing the potential impact of the upcoming LIBOR reference rate change on its current contracts and will determine the applicable provisions of ASU 2020-04.

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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 and non-current assets, accounts payable and accrued expenses, and other current liabilities and other long-term obligations included in the unaudited condensed consolidated balance sheets approximated fair value at ~~March 31,~~June 30, 2021 and December 31, 2020. Additionally, the carrying amount of debt associated with borrowings outstanding under the credit facility dated November 30, 2020 ("New Credit Facility") approximates fair value as borrowings bear interest at variable rates. As a result, these financial assets and liabilities are not discussed below.


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.

Level 2 Fair Value Measurements

Commodity Derivative Contracts. As applicable, 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

There were 0 open commodity derivative contracts as of ~~March 31,~~June 30, 2021 and December 31, 2020.

Transfers. The Company did not have any transfers between Level 1, Level 2 or Level 3 fair value measurements during the ~~three-month~~three and six-month periods ended ~~March 31,~~June 30, 2021 and 2020.

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. On occasion, the Company has attempted to manage this risk on a portion of its forecasted oil or natural gas production sales through the use of commodity derivative contracts. There were 0 open commodity derivative contracts as of ~~March 31,~~June 30, 2021 and December 31, 2020.

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Historically, the Company has not designated any of its derivative contracts as hedges for accounting purposes. All derivative contracts have historically been recorded at fair value with changes in derivative contract fair values recognized as a gain or loss on derivative contracts in the condensed consolidated statements of operations. None of the Company’s previous 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 were settled on a monthly basis, and the commodity derivative contract valuations were adjusted to the mark-to-market valuation on a quarterly basis.

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The following table summarizes derivative activity for the ~~three-month~~three and six-month periods ended ~~March 31,~~June 30, 2021, and 2020 (in thousands):


		Three Months Ended March 31,				Three Months Ended June 30,		Six Months Ended June 30,
		2021		2020				2021		2020		2021		2020
(Gain) loss on commodity derivative contracts	(Gain) loss on commodity derivative contracts	$	0	$	(10,226)		(Gain) loss on commodity derivative contracts	$	0	$	(2,241)	$	0	$	(12,467)
Cash received on settlements	Cash received on settlements	$	0	$	(4,087)		Cash received on settlements	$	0	$	6,490	$	0	$	10,577

Master Netting Agreements and the Right of Offset. As applicable, The Company historically 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 is limited to the net amounts due from its counterparties. There were 0 open commodity derivatives contracts as of ~~March 31,~~June 30, 2021 and December 31, 2020.

Because we did not designate any of our derivative contracts as hedges for accounting purposes, changes in the fair value of our derivative contracts were recognized as gains and losses in current period earnings. As a result, and as applicable, our current period earnings could have been significantly affected by changes in the fair value of our commodity derivative contracts. Changes in fair value were principally measured based on a comparison of future prices to the contract price at the end of the period.

4. Property, Plant and Equipment

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


		March 31, 2021		December 31, 2020			June 30, 2021		December 31, 2020
Oil and natural gas properties	Oil and natural gas properties					Oil and natural gas properties
Proved	Proved	$	1,443,508	$	1,463,950	Proved	$	1,439,904	$	1,463,950
Unproved	Unproved	13,341		17,964		Unproved	13,365		17,964
Total oil and natural gas properties	Total oil and natural gas properties	1,456,849		1,481,914		Total oil and natural gas properties	1,453,269		1,481,914
Less accumulated depreciation, depletion and impairment		(1,376,754)		(1,375,692)
Less: accumulated depreciation, depletion and impairment						Less: accumulated depreciation, depletion and impairment	(1,370,544)		(1,375,692)
Net oil and natural gas properties	Net oil and natural gas properties	80,095		106,222		Net oil and natural gas properties	82,725		106,222

Land	Land	200		200		Land	200		200
Electrical infrastructure	Electrical infrastructure	121,819		121,819		Electrical infrastructure	121,819		121,819
Other non-oil and natural gas equipment	Other non-oil and natural gas equipment	1,630		1,563		Other non-oil and natural gas equipment	1,603		1,563
Buildings and structures	Buildings and structures	3,603		3,603		Buildings and structures	3,603		3,603
Financing leases	Financing leases	363		1,051		Financing leases	319		1,051
Total	Total	127,615		128,236		Total	127,544		128,236
Less accumulated depreciation and amortization	Less accumulated depreciation and amortization	(26,558)		(25,118)		Less accumulated depreciation and amortization	(27,972)		(25,118)
Other property, plant and equipment, net	Other property, plant and equipment, net	101,057		103,118		Other property, plant and equipment, net	99,572		103,118
Total property, plant and equipment, net	Total property, plant and equipment, net	$	181,152	$	209,340	Total property, plant and equipment, net	$	182,297	$	209,340

See Note 5 for discussion of impairment of property, plant and equipment.

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5. Impairment

The Company assesses the need to impair its oil and gas properties during its quarterly full cost pool ceiling limitation calculation. The Company analyzes various property, plant and equipment for impairment when certain triggering events occur

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by comparing the carrying values of the assets to their estimated fair values. The full cost pool ceiling limitation and estimated fair values of midstream and other assets were determined in accordance with the policies discussed in Note 1, as applicable.

~~In the three~~-~~month period ended March 31, 2021, we did not record a full cost ceiling limitation impairment charge. The Company~~ recorded a full cost ceiling limitation impairment of $8.0 million for the three-month period ended March 31, 2020, which resulted from various factors including a decrease in the trailing twelve-month weighted average natural gas price in the first quarter of 2020.

Calculation of the full cost ceiling test is based on, among other factors, average prices for the trailing twelve-month period determined by reference to the first-day-of-the-month index prices ("SEC ~~prices"~~Prices") as adjusted for price differentials and other contractual arrangements. The SEC ~~prices~~Prices utilized in the calculation of proved reserves included in the full cost ceiling test at ~~March 31,~~June 30, 2021 were ~~$40.01~~$49.78 per barrel of oil and ~~$2.16~~$2.43 per Mcf of natural gas, before price differential adjustments.

In the three and six-month periods ended June 30, 2021, we did 0t record a full cost ceiling limitation impairment charge.

The Company recorded a total impairment charge of $201.8 million for the three-month period ended June 30, 2020, which included a full cost ceiling limitation impairment charge of $163.8 million, and an impairment charge of $38.0 million to write down the value of the Company's office headquarters. The Company recorded a total impairment charge of $209.8 million for the six-month period ended June 30, 2020, which included a full cost ceiling limitation impairment charge of $171.8 million, and an impairment charge of $38.0 million to write down the value of the Company's office headquarters.

The June 30, 2020, asset impairment charge of $38.0 million resulted from the write down of the net carrying amount of the office headquarters building assets to their estimated fair value less estimated costs to sell the building. In May 2020, the Company entered into an agreement for the sale of its corporate headquarters building located in Oklahoma City, OK. The building sale closed on August 31, 2020. Prior to the sale of the corporate headquarters building, the Company was required to report the building at its carrying amount, as a result the building was assessed for recoverability and impairment using undiscounted cash flow measures of the consolidated Company as prescribed under ASC 360-10-35, rather than fair value as prescribed under ASC 360-10-45-9.

6. Acquisitions and Divestitures

Overriding Royalty Interest Assets

On April 22, 2021, we acquired all of the overriding royalty interest assets of SandRidge Mississippian Trust I (the “Trust”). The gross purchase price was $4.9 million (net $3.6 million, given our 26.9% ownership of the Trust).

North Park Basin Sale

On February 5, 2021, the Company sold all of its oil and natural gas properties and related assets of the North Park Basin ~~("NPB"~~(“NPB”or “North Park”), in Colorado, for a purchase price of $47 million. The sale closed for net proceeds of $39.7 million in cash, which amounts to the purchase price of $47 million net of effective date to close date adjustments. Consequently, the Company allocated a portion of the full cost pool net book value, using the income approach, to the divested oil and gas properties and recognized a reduction of full cost pool assets of $22.0 million and a reduction of $4.6 million to its non-full cost pool assets. As the sale significantly altered the relationship between capitalized costs and proved reserves, the Company recognized a $19.7 million gain related to the assets sold. The gain represents net proceeds of $39.7 million coupled with the release of revenues in suspense of $0.5 million and the relief of asset retirement obligations of $6.1 million offset by the reduction of $26.6 million in oil and gas properties related to NPB.

For the three-months ended ~~March 31,~~June 30, 2021, NPB did not have an impact on our financials due to the sale of the NPB assets.

For the six-months ended June 30, 2021, NPB represented $3.2 million, or ~~9.4%~~4.7% of the Company's ~~$33.6~~$67.8 million total consolidated Revenues, NPB represented $0.9 million, or ~~11.6%~~5.4% of the Company's ~~$8.0~~$17.2 million consolidated Lease operating expense, it represented $0.2 million, or ~~11.4%~~5.3% of the Company's ~~$2.2~~$4.7 million consolidated Production, ad valorem and other taxes and NPB represented 0.1 MMBoe, or ~~4.1%~~2.0% of the Company's consolidated total production volumes of ~~1.6~~3.4 MMBoe.

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For the three-months ended ~~March 31,~~June 30, 2020, NPB represented ~~$12.8~~$4.6 million, or ~~31.6%~~27.8% of the Company's ~~$40.3~~$16.7 million total consolidated Revenues, NPB represented ~~$3.5~~$2.2 million or ~~22.7%~~25.6% of the Company's ~~$15.6~~$8.7 million consolidated Lease operating expense, it represented ~~$0.8~~$0.3 million, or ~~24.1%~~16.7% of the Company's ~~$3.2~~$1.9 million consolidated Production, ad valorem and other taxes and NPB represented ~~0.3~~0.2 MMBoe, or ~~12.8%~~10.3% of the Company's consolidated total production volumes of ~~2.6~~2.2 MMBoe.

For the six-months ended June 30, 2020, NPB represented $17.4 million, or 30.5% of the Company's $57.0 million total consolidated Revenues, NPB represented $5.8 million or 23.7% of the Company's $24.3 million consolidated Lease operating expense, it represented $1.1 million, or 21.4% of the Company's $5.1 million consolidated Production, ad valorem and other taxes and NPB represented 0.6 MMBoe, or 11.7% of the Company's consolidated total production volumes of 4.7 MMBoe.

7. Accounts Payable and Accrued Expenses

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


		March 31, 2021		December 31, 2020			June 30, 2021		December 31, 2020
Accounts payable and other accrued expenses	Accounts payable and other accrued expenses	$	19,828	$	23,017	Accounts payable and other accrued expenses	$	19,555	$	23,017
Production payable	Production payable	15,073		15,367		Production payable	15,645		15,367
Payroll and benefits	Payroll and benefits	1,770		5,640		Payroll and benefits	2,775		5,640
Taxes payable	Taxes payable	5,375		6,864		Taxes payable	4,645		6,864
Drilling advances	Drilling advances	234		477		Drilling advances	234		477
Accrued interest	Accrued interest	0		61		Accrued interest	42		61
Total accounts payable and accrued expenses	Total accounts payable and accrued expenses	$	42,280	$	51,426	Total accounts payable and accrued expenses	$	42,896	$	51,426

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8. Long-Term Debt

Credit Facility.

Credit Facility. On November 30, 2020 the Company entered into athe New Credit Facility of $30.0 million credit facility with a related party and affiliate of Icahn Enterprises and Icahn Agency Services LLC, as administrative agent. As of ~~March 31,~~June 30, 2021 and December 31, 2020, the Company had a $20.0 million term loan outstanding under the New Credit Facility. The New Credit Facility consists of a $10.0 million revolving loan facility and a $20 million term loan facility. There are no scheduled borrowing base redeterminations under the New Credit Facility. At ~~March 31,~~June 30, 2021, the Company had $10.0 million available to be drawn under the revolving loan facility. The New Credit Facility matures on November 30, 2023.

On July 26, 2021, the Company entered into an amendment (the “First Amendment”) to the New Credit Facility. Pursuant to the First Amendment, the Company will be permitted to grant liens securing its obligations under swap contracts with certain counterparties to the extent such swap contracts are permitted under the Credit Agreement and approved by the Company’s board of directors.

The outstanding borrowings under the New Credit Facility bear interest at a rate tied to a utilization ratio of (a) LIBOR plus an applicable margin that varies from 200 to 300 basis points or (b) the base rate plus an applicable margin that varies from 100 basis points to 200 basis points. During the ~~three-months~~three and six-months ended ~~March 31,~~June 30, 2021, the weighted average interest rate paid for borrowings outstanding under the New Credit Facility was approximately ~~2.6%.~~2.60% and 2.62%, respectively.

The Company has the right to prepay loans under the New Credit Facility at any time without a prepayment penalty, other than customary “breakage” costs with respect to LIBOR loans.

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The New Credit Facility is secured by (i) first-priority mortgages on at least 95% of the PV-9 pricing of all the ~~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~~ (iii) a first-priority security interest in the cash, cash equivalents, deposit, securities and other similar accounts, and (iv) a first-priority perfected security interest in substantially all 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).

The New Credit Facility includes events of default and certain customary affirmative and negative covenants. The Company is required maintain certain financial covenants, commencing with the first full quarter ending after the effective date thereof, to maintain (i) a maximum consolidated total net leverage ratio, measured as of the end of any fiscal quarter, of no greater than 3.50 to 1.00 and (ii) a minimum consolidated interest coverage ratio, measured as of the end of any fiscal quarter, of no less than 2.25 to 1.00. As of ~~March 31,~~June 30, 2021, the Company was in compliance with all applicable covenants and had a consolidated total net leverage ratio of ~~(0.18)~~(0.15) and consolidated interest coverage ratio of ~~42.86.~~59.73.

During the ~~three-months~~three and six-months ended ~~March 31,~~June 30, 2021, the Company paid a related party, an affiliate of Icahn Enterprises, ~~$0.2~~$0.1 million and $0.3 million, respectively of interest expense which is included on the Interest expense, net line item on the Condensed Consolidated Statement of Operations. The total outstanding balance of the New Credit facility is recorded in long-term debt on the Condensed Consolidated Balance Sheet as of ~~March 31,~~June 30, 2021.

9. Commitments and Contingencies

Legal Proceedings. ~~As previously disclosed,~~The Company is subject to various legal proceedings and claims arising in the ordinary course of its business. The Company has provided accruals where necessary for contingent liabilities, based on ~~May 16, 2016,~~ASC 450, Contingencies, when it has determined that a liability is probable and reasonably estimable. The Company continuously assesses the potential liability related to the Company's pending litigation and revises its estimates when additional information becomes available. Additionally, 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.currently expenses all legal costs as they are incurred.

~~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~~

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The lead plaintiffs in both In re SandRidge Energy, Inc. Securities Litigation and Lanier Trust assert claims on behalf of themselves and (i) in In re SandRidge Energy, Inc. Securities Litigation, a class of 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, a putative class of 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 CompanyAs previously disclosed in the ~~Mississippian region.~~

~~Discovery in each of the~~Company's 2020 Form 10-K, there are certain ongoing Cases closed on June 19, 2019. Following a hearing on class certification in each of the Cases on September 6, 2019, the court granted class certification in In re SandRidge Energy, Inc. Securities Litigation on September 30, 2019. The motion for class certification in Lanier Trust remains pending. On April 2, 2020, the individual defendants and SandRidge Mississippian Trust I filed motions for summary judgment seeking the dismissal of all claims asserted against them(as that term is defined in the Lanier Trust matter. On the same date, the individual defendants filed motions for summary judgment seeking the dismissal of all claims asserted against them In re SandRidge Energy, Inc. Securities Litigation. The motions remain pending.Company's 2020 Form 10-K).

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.~~defendant because of a technical connection with the Cases, and is necessary for the court to decide all issues and make a proper judgement. The Company may also be contractually obligated to indemnify two former officers who are defendants and the SandRidge Mississippian Trust I against losses, claims, damages, liabilities and expenses, including reasonable costs of investigation and attorney’s fees and expenses, which it is required to advance, arising out of the Cases, although the Company disputes any such obligations. Such indemnification is not covered by insurance with respect to the Trust. As of October 2020, we have exhausted all remaining insurance coverage for the costs of indemnification and expect no further reimbursements.

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. Accordingly, the Company has not established or accrued any liabilities relating to the Cases and believes that the plaintiffs' claims are without merit. However, considering the exhaustion 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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10. Income Taxes

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

Deferred income taxes are provided to reflect the future tax consequences of temporary differences between the tax basis of assets and liabilities and their reported amounts in the financial statements. The Company’s deferred tax assets have been reduced by a valuation allowance due to a determination that it is more likely than not that some or all of the deferred assets will not be realized based on the weight of all available evidence. The Company continues to closely monitor and weigh all available evidence, including both positive and negative, in making its determination whether to maintain a valuation allowance. As a result of the significant weight placed on the Company's cumulative negative earnings position, the Company continued to maintain a full valuation allowance against its net deferred tax asset at ~~March 31,~~June 30, 2021 and December 31, 2020. As a result, the Company had no federal or state income tax expense or benefit for the ~~three-month period~~three and six-month periods ended ~~March 31, 2021and~~June 30, 2021 and recorded an insignificant income tax benefit for the year ended December 21, 2020. The benefit is related to previously sequestered alternative minimum tax (AMT) refund amounts released to the Company during 2020. The Company has no remaining AMT credits to be refunded.

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.

As of ~~March 31,~~June 30, 2021, the Company had approximately ~~$1.7~~$1.6 billion of federal NOL carryforwards, net of NOLs expected to expire unused due to the 2016 IRC Section 382 limitation. Of the ~~$1.7~~$1.6 billion of federal NOL carryforwards, $0.8 billion expire during the years 2025 through 2037, while ~~$0.9~~$0.8 billion do not have an expiration date. Additionally, the Company had federal tax credits in excess of $33.5 million which begin expiring in 2029.

The Company did not have unrecognized tax benefits at ~~March 31,~~June 30, 2021 and December 31, 2020.

The Company’s only taxing jurisdiction is the United States (federal and state). The Company’s tax years 2017 to present remain open for federal examination. Additionally, tax years 2005 through ~~2017~~2016 remain subject to examination for the purpose of determining the amount of federal NOL 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.

In July 2020, the U.S. Treasury Department released final and proposed regulations on IRC Section 163(j) which limits business interest expense deductions. These regulations apply to tax years beginning January 1, 2021. However, taxpayers may choose to apply these regulations to tax years beginning after December 31, 2017. The Company adopted the final regulations for the year ended December 31, 2020. This does not result in any material impact to the provision.

11. Equity

Common Stock, Performance Share Units, and Stock Options. At ~~March 31,~~June 30, 2021, the Company had approximately 250.0 million shares of common stock authorized, ~~36.1~~36.6 million shares of common stock, par value $0.001 per share, issued and outstanding. Further, at ~~March 31,~~June 30, 2021, the Company had approximately 0.1 million shares of unvested restricted stock awards, ~~1.5~~1.1 million shares of unvested restricted stock units, 0.1 million stock options outstanding, and ~~0.2 million~~an immaterial number of unvested performance share units.

Warrants. The Company has issued approximately 4.9 million Series A warrants and 2.1 million Series B warrants that are exercisable until October 4, 2022 for 1 share of common stock per warrant at initial prices of $41.34 and $42.03 per share,

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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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The Tax Benefits Preservation Plan. On July 1, 2020, the Board declared a dividend distribution of 1 right (a “Right”) for each outstanding share of Company common stock, par value $0.001 per share to stockholders of record at the close of business on July 13, 2020. Each Right entitles its holder, under certain circumstances, to purchase from the Company one one-thousandth of a share of Series A Junior Participating Preferred Stock of the Company, par value $0.001 per share, at an exercise price of $5.00 per Right, subject to adjustment. The description and terms of the Rights are set forth in the tax benefits preservation plan, dated as of July 1, 2020, between the Company and American Stock Transfer & Trust Company, LLC, as rights agent ~~(and any successor rights agent, the “Rights Agent”~~(the “Tax Benefits Preservation Plan”).

The Company adopted the Tax Benefits Preservation Plan, as amended on March 16, 2021, in order to protect shareholder value against a possible limitation on the Company’s ability to use its tax net operating losses (the “NOLs”) and certain other tax benefits to reduce potential future U.S. federal income tax obligations. The NOLs are a valuable to the Company, which may inure to the benefit of the Company and its stockholders. However, if the Company experiences an “ownership change,” as defined in Section 382 of the Internal Revenue Code of 1986, as amended, ~~(the “Code”),~~ its ability to fully utilize the NOLs and certain other tax benefits will be substantially limited and the timing of the usage of the NOLs and such other benefits could be substantially delayed, which could significantly impair the value of those assets. Generally, an “ownership change” occurs if the percentage of the Company’s stock owned by one or more of its “five-percent shareholders” (as such term is defined in Section 382 of the Code) increases by more than 50 percentage points over the lowest percentage of stock owned by such stockholder or stockholders at any time over a three-year period. The Tax Benefits Preservation Plan is intended to prevent against such an “ownership change” by deterring any person or group from acquiring beneficial ownership of 4.9% or more of the Company’s securities.

Subject to certain exceptions, the Rights become exercisable and trade separately from Common Stock only upon the “Distribution Time,” which occurs upon the earlier of:

•the close of business on the tenth (10th) day after the “Stock Acquisition Date,” which is (a) the first date of public announcement that a person or group of affiliated or associated persons (with certain exceptions, an “Acquiring Person”) has acquired, or obtained the right or obligation to acquire, beneficial ownership of 4.9% or more of the outstanding shares of Common Stock (with certain exceptions) or (b) such other date, as determined by the Board, on which a person or group has become an Acquiring Person, or

•the close of business on the tenth (10th) business day (or later date as may be determined by the Board prior to such time as any person or group becomes an Acquiring Person) following the commencement of a tender offer or exchange offer which, if consummated, would result in a person or group becoming an Acquiring Person.

Any existing stockholder or group that beneficially owns 4.9% or more of Common Stock has been grandfathered at its current ownership level, but the Rights will not be exercisable if, at any time after the announcement of the Tax Benefits Preservation Plan, such stockholder or group increases its ownership of Common Stock by 1 share of Common Stock. Certain synthetic interests in securities created by derivative positions, whether or not such interests are considered to be ownership of the underlying Common Stock or are reportable for purposes of Regulation 13D of the Securities Exchange Act of 1934, as amended, are treated as beneficial ownership of the number of shares of Common Stock equivalent to the economic exposure created by the derivative position, to the extent actual shares of Common Stock are directly or indirectly held by counterparties to the derivatives contracts.

Until the earlier of the Distribution Time and the Expiration Time (as defined herein), the surrender for transfer of any shares of Common Stock will also constitute the transfer of the Rights associated with those shares. As soon as practicable after the Distribution Time, separate rights certificates will be mailed to holders of record of Common Stock as of the close of business on the Distribution Time. From and after the Distribution Time, the separate rights certificates alone will represent the Rights. Except as otherwise provided in the Tax Benefits Preservation Plan, only shares of Common Stock issued prior to the Distribution Time will be issued with Rights. The Rights are not exercisable until the Distribution Time.

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The Tax Benefits Preservation Plan will expire on the earliest of: (i) the close of business on the day following the certification of the voting results of the Company’s 2021 annual meeting of stockholders or any prior special meeting of

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stockholders, if at such stockholder meeting a proposal to approve this Agreement has not been passed by the affirmative vote of the holders of at least majority of the shares of Common Stock entitled to vote at the 2021 annual meeting of stockholders or any other meeting of the stockholders of the Company duly held prior to such meeting, (ii) the time at which the Rights are redeemed pursuant to the Tax Benefits Preservation Plan, (iii) the time at which the Rights are exchanged pursuant to the Tax Benefits Preservation Plan, (iv) the closing of any merger or other acquisition transaction involving the Company pursuant to an agreement of the type described in Section 13(f) of the Tax Benefits Preservation Plan, at which time, the Rights are terminated, (v) the time at which the Board determines that the NOLs are utilized in all material respects or that an ownership change under Section 382 would not adversely impact in any material respect the time period in which the Company could use the NOLs, or materially impair the amount of the NOLs that could be used by the Company in any particular time period, for applicable tax purposes and (vi) the Close of Business on July 1, 2023 (the earliest of (i), (ii), (iii), (iv), (v), and (vi) being herein referred to as the “Expiration Time”).

In the event that any person or group (other than certain exempt persons) becomes an Acquiring Person, ~~(a “Flip-in Event”),~~ each holder of a Right (other than any Acquiring Person and certain related parties, whose Rights automatically become null and void) will have the right to receive, upon exercise, shares of Common Stock having a value equal to 2 times the exercise price of the Right.

In the event that, at any time following the Stock Acquisition Date, any of the following ~~occurs (each, a “Flip-over Event”):~~occurs:

•the Company consolidates with, or merges with and into, any other entity, and the Company is not the continuing or surviving ~~entity~~entity;

•any entity engages in a share exchange with or consolidates with, or merges with or into, the Company, and the Company is the continuing or surviving entity and, in connection with such share exchange, consolidation or merger, all or part of the outstanding shares of Common Stock are changed into or exchanged for stock or other securities of any other entity or cash or any other property; or

•the Company sells or otherwise transfers, in one transaction or a series of related transactions, 50 percent (50%) or more of the Company’s assets, cash flow or earning power,

•each holder of a Right (except Rights which previously have been voided as described above) will have the right to receive, upon exercise, common stock of the acquiring company having a value equal to two times the exercise price of the Right.

12. Revenues

The following table disaggregates the Company’s revenue by source for the ~~three-month~~three and six-month periods ended ~~March 31,~~June 30, 2021 and 2020:


		Three Months Ended March 31,					Three Months Ended June 30,		Six Months Ended June 30,
			2021		2020						2021		2020		2021		2020

			(In thousands)					(In thousands)
Oil	Oil		$	15,548	$	28,654				Oil	$	14,666	$	11,554	$	30,214	$	40,208
NGL	NGL		8,856		5,934					NGL	10,625		1,591		19,481		7,525
Natural gas	Natural gas		9,219		5,551					Natural gas	8,905		3,303		18,124		8,854
Other	Other		0		190					Other	0		207		0		397
Total revenues	Total revenues		$	33,623	$	40,329				Total revenues	$	34,196	$	16,655	$	67,819	$	56,984

Oil, natural gas and NGL revenues. A majority of the Company’s revenues come from sales of oil, natural gas and NGLs 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.

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Pricing for the Company’s oil, natural gas and NGL contracts is variable and is based on 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, ad valorem, and other tax expense in the consolidated statements of operations.

Revenues Receivable. The Company records an asset in accounts receivable, net on its consolidated balance sheet for revenues receivable from contracts with customers at the end of each period. Pricing for revenues receivable is estimated using current month crude oil, natural gas and NGL prices, net of deductions. Revenues receivable are typically collected the month after the Company delivers the related production to its customers. As of ~~March 31,~~June 30, 2021, and December 31, 2020, the Company had revenues receivable of ~~$14.2~~$14.5 million and $12.8 million, respectively, and did 0t record any bad debt expense on revenues receivable during the ~~three-month~~three and six-month periods ended ~~March 31,~~June 30, 2021 and 2020.

13. Employee Termination Benefits

During the three month period ended June 30, 2021, no employees received termination benefits. Certain employees received termination benefits including cash severance and accelerated share-based compensation upon separation of service from the Company as a result of the sale of North Park assets and other employee terminations during the ~~three-month~~six-month period ended ~~March 31,~~June 30, 2021 and as a result of a reduction in workforce during the ~~three-month period~~three and six-month periods ended ~~March 31,~~June 30, 2020. The following tables presents a summary of employee termination benefits for the ~~three-month~~three and six-month periods ended ~~March 31,~~June 30, 2021 and 2020 (in thousands):


		Cash		Share-Based Compensation (1)		Number of Shares	Total Employee Termination Benefits			Cash		Share-Based Compensation (1)		Number of Shares	Total Employee Termination Benefits

Three Months Ended March 31, 2021
Three Months Ended June 30, 2021									Three Months Ended June 30, 2021
Executive Employee Termination Benefits	Executive Employee Termination Benefits	$	0	$	0	0	$	0	Executive Employee Termination Benefits	$	0	$	0	0	$	0
Other Employee Termination Benefits	Other Employee Termination Benefits	32		17		0	49		Other Employee Termination Benefits	0		0		0	0
		$	32	$	17	0	$	49		$	0	$	0	0	$	0
Three Months Ended March 31, 2020
Three Months Ended June 30, 2020									Three Months Ended June 30, 2020
Executive Employee Termination Benefits	Executive Employee Termination Benefits	$	3	$	0	0	$	3	Executive Employee Termination Benefits	$	1	$	0	0	$	1
Other Employee Termination Benefits	Other Employee Termination Benefits	3,211		40		4	3,251		Other Employee Termination Benefits	1,992		0		0	1,992
		$	3,214	$	40	4	$	3,254		$	1,993	$	0	0	$	1,993
Six Months Ended June 30, 2021									Six Months Ended June 30, 2021
Executive Employee Termination Benefits									Executive Employee Termination Benefits	$	0	$	0	0	$	0
Other Employee Termination Benefits									Other Employee Termination Benefits	32		17		0	49
										$	32	$	17	0	$	49
Six Months Ended June 30, 2020									Six Months Ended June 30, 2020
Executive Employee Termination Benefits									Executive Employee Termination Benefits	$	4	$	0	0	$	4
Other Employee Termination Benefits									Other Employee Termination Benefits	5,203		40		4	5,243
										$	5,207	$	40	4	$	5,247

____________________

(1) Share-based compensation recognized in connection with the accelerated vesting of restricted stock awards due to the sale of the North Park assets for the ~~three-month~~six-month period ended ~~March 31,~~June 30, 2021 and as a result of the reduction in workforce for the ~~three-month period~~three and six-month periods ended ~~March 31,~~June 30, 2020. The remaining unrecognized compensation expense associated with these awards at the date of termination was recorded as employee termination benefits. The unrecognized compensation expense was calculated using the grant date fair value for restricted stock awards. ~~One~~NaN share of the Company’s common stock was issued per restricted stock award.

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14. Earnings (Loss) per Share

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


		Earnings (Loss)		Weighted Average Shares		Earnings (Loss) Per Share			Earnings (Loss)		Weighted Average Shares	Earnings (Loss) Per Share

		(In thousands, except per share amounts)							(In thousands, except per share amounts)

Three Months Ended March 31, 2021
Three Months Ended June 30, 2021								Three Months Ended June 30, 2021
Basic earnings per share	Basic earnings per share	$	35,043	36,156	(1)	$	0.97	Basic earnings per share	$	16,252	36,416	$	0.45
Effect of dilutive securities	Effect of dilutive securities							Effect of dilutive securities
Restricted stock units	Restricted stock units	0		1,166				Restricted stock units	0		855
Restricted stock awards	Restricted stock awards	0		88				Restricted stock awards	0		36
Performance share units (2)		0		0
Performance share units (1)								Performance share units (1)	0		0
Warrants	Warrants	0		0				Warrants	0		0
Stock options	Stock options	0		29				Stock options	0		38
Diluted earnings per share (3)		$	35,043	37,439		$	0.94
Three Months Ended March 31, 2020
Diluted earnings share (2)								Diluted earnings share (2)	$	16,252	37,345	$	0.44
Three Months Ended June 30, 2020								Three Months Ended June 30, 2020
Basic loss per share	Basic loss per share	$	(12,670)	35,551		$	(0.36)	Basic loss per share	$	(215,779)	35,611	$	(6.06)
Effect of dilutive securities	Effect of dilutive securities							Effect of dilutive securities
Restricted stock awards	Restricted stock awards	0		0				Restricted stock awards	0		0
Performance share units	Performance share units	0		0				Performance share units	0		0
Warrants	Warrants	0		0				Warrants	0		0
Diluted loss per share (4)		$	(12,670)	35,551		$	(0.36)
Stock options								Stock options	0		0
Diluted loss per share (3)								Diluted loss per share (3)	$	(215,779)	35,611	$	(6.06)
Six Months Ended June 30, 2021								Six Months Ended June 30, 2021
Basic earnings per share								Basic earnings per share	$	51,295	36,187	$	1.42
Effect of dilutive securities								Effect of dilutive securities
Restricted stock units								Restricted stock units	0		1,019
Restricted stock awards								Restricted stock awards	0		39
Performance share units (1)								Performance share units (1)	0		0
Warrants								Warrants	0		0
Stock options								Stock options	0		38
Diluted earnings per share (2)								Diluted earnings per share (2)	$	51,295	37,283	$	1.38
Six Months Ended June 30, 2020								Six Months Ended June 30, 2020
Basic loss per share								Basic loss per share	$	(228,449)	35,581	$	(6.42)
Effect of dilutive securities								Effect of dilutive securities
Restricted stock awards								Restricted stock awards	0		0
Performance share units								Performance share units	0		0
Warrants								Warrants	0		0
Stock options								Stock options	0		0
Diluted loss per share (3)								Diluted loss per share (3)	$	(228,449)	35,581	$	(6.42)

____________________

(1)~~Includes 0.2 million of performance share units that are no longer contingently issuable.~~

~~(2)~~The performance share unit awards are contingently issuable and are considered in the calculation of diluted earnings per share. The Company assesses the number of awards that would be issuable, if any, under the terms of the agreement if the end of the reporting period were the end of the contingency period.

~~(3)~~(2)The incremental shares of potentially dilutive restricted stock units, restricted stock awards and stock options were included for the ~~three-month~~three and six-month periods ended ~~March 31,~~June 30, 2021 as their effect was dilutive under the treasury stock method.

~~(4)~~(3)NaN incremental shares of potentially dilutive restricted stock awards, performance share units, warrants or stock options were included for the ~~three-month~~three and six-month periods ended ~~March 31,~~June 30, 2020, as their effect was antidilutive under the treasury stock method.

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15. Subsequent Events

~~Overriding Royalty Interest Acquisition~~Share Repurchase Program

In August 2021, the Company's Board of Directors (the “Board”) approved the initiation of a share repurchase program (the "Program") authorizing the Company to purchase up to an aggregate of $25.0 million of the Company’s common stock beginning as early as August 16, 2021. The Program is in accordance with Rule 10b-18 of the Exchange Act. Subject to applicable rules and regulations, repurchases under the Program can be made from time to time in open markets at the Company's discretion and in compliance with safe harbor provisions, or in privately negotiated transactions. The Program does not require any specific number of shares to be acquired, and can be modified or discontinued by the Board at any time.

First Amendment to Credit Agreement

On ~~April 22,~~July 26, 2021, the Company ~~announced~~entered into an amendment (the “First Amendment”) to the ~~acquisition~~New Credit Facility. Pursuant to the First Amendment, the Company will be permitted to grant liens securing its obligations under swap contracts with certain counterparties to the extent such swap contracts are permitted under the Credit Agreement and approved by our board of ~~all~~directors.

Appointment of Chief Executive Officer

In connection with the ~~overriding royalty interest assets~~resignation of ~~SandRidge Mississippian Trust I (the “Trust”). The gross purchase price is $4.9 million (net $3.6 million, given~~ the Company's ~~26.9% ownership~~previous Chief Executive Officer ("CEO"), the Board appointed Grayson Pranin as President and CEO effective July 16, 2021 and in addition will maintain his role as Chief Operating Officer. Mr. Pranin’s compensation will be determined at a later time. Mr. Pranin, age 41, has held the role of Senior Vice President and Chief Operating Officer since March 3, 2021. Prior to that Mr. Pranin most recently served as the Company’s Vice President of Engineering and Reservoir beginning June 1, 2020, and has served in various engineering, operational and leadership roles with the Company since December 2011. Prior to joining the Company, Mr. Pranin served in various engineering and operational roles for Pioneer Natural Resources from June 2010 to November 2011. Mr. Pranin has served his country as a non-commissioned and commissioned officer in the U.S. Army Engineering Corps. Mr. Pranin received his Bachelor of Science from the University of Nevada at Reno.

Resignation of Chief Executive Officer and Director

On July 9, 2021, Carl F. Giesler, Jr. submitted his resignation from his positions as CEO, President and as a member of the ~~Trust).~~Board of the Company, effective July 16, 2021 in order to pursue another career opportunity. Mr. Giesler did not resign as a result of any disagreement with the Company on any matter relating to the Company’s operations, policies or practices.

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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 2020 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~~Estimates.

The financial information with respect to the ~~three-month~~three and six-month periods ended ~~March 31,~~June 30, 2021, and 2020, 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 independent oil and natural gas company with a principal focus on acquisition, development and production activities in the U.S. Mid-Continent. Prior to February 5, 2021, we held assets in the North Park Basin of Colorado, which have been sold in their entirety.

The ~~charts~~chart below shows production by product for the ~~three-month~~three and six-month periods ended ~~March 31,~~June 30, 2021 and 2020:

(1)For the ~~year~~ three-months ended ~~March 31,~~June 30, 2021, ~~Mid-Continent~~there was no NPB oil production ~~was 832 MBoe~~as a result of ~~natural gas, 521 MBoe of NGLs and 221 MBoe of oil totaling 1,574 MBoe.~~the sale. For the six-months ended June 30, 2021, North Park Basin had 67 MBoe of oil production.

Tabl e of Contents

(2)For the ~~year three-months~~three and six-months ended ~~March 31,~~June 30, 2020, ~~Mid-Continent production was 1,116 MBoe of natural gas, 769 MBoe of NGLs and 354 MBoe of oil totaling 2,239 MBoe.~~ North Park Basin had ~~328~~222 MBoe and 550 MBoe, respectively of oil production.

Total production for the three-month periods ended ~~March 31,~~June 30, 2021 ~~was~~and June 30, 2020 were comprised of approximately ~~17.6%~~13.1% oil, ~~50.7%~~51.5% natural gas and 35.4% NGLs compared to 24.2% oil, 44.1% natural gas and 31.7% NGLs, ~~compared to 26.6%~~respectively.

Total production for the six-month periods ended June 30, 2021 and June 30, 2020 were comprised of approximately 15.3% oil, ~~43.4%~~51.1% natural gas and ~~30.0%~~33.6% NGLs ~~in 2020.~~compared to 25.5% oil, 43.7% natural gas and 30.8% NGLs, respectively.

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~~Mid-continent~~Mid-Continent total production for the ~~three-months~~three and six-month periods ended ~~March 31,~~June 30, 2021 and 2020 was comprised of approximately 14.0% oil, 52.9% natural gas and 33.1% NGLs compared to 15.8% oil, 49.9% natural gas and 34.3% NGLs in 2020. The decline in Mid-Continent production was primarily due to pro-active well shut-ins in response to a drop in commodity prices in the ~~second quarter of 2020, as well as regular production declines.~~following:


	Three Months Ended June 30,				Six Months Ended June 30,
	2021		2020		2021		2020
Oil	13.1	%	15.4	%	13.5	%	15.6	%
NGL	35.4	%	35.3	%	34.3	%	34.8	%
Natural gas	51.5	%	49.3	%	52.2	%	49.6	%
Total	100.0	%	100.0	%	100.0	%	100.0	%

Recent Events

•In August 2021, our Board of Directors (the “Board”) approved the initiation of a share repurchase program (the "Program") authorizing us to purchase up to an aggregate of $25.0 million of our common stock beginning as early as August 16, 2021. The Program is in accordance with Rule 10b-18 of the Exchange Act. Subject to applicable rules and regulations, repurchases under the Program can be made from time to time in open markets at our discretion and in compliance with safe harbor provisions, or in privately negotiated transactions. The Program does not require any specific number of shares to be acquired, and can be modified or discontinued by the Board at any time.

•On July 26, 2021, we entered into an amendment (the “First Amendment”) to the New Credit Facility. Pursuant to the First Amendment, we will be permitted to grant liens securing its obligations under swap contracts with certain counterparties to the extent such swap contracts are permitted under the Credit Agreement and approved by our board of directors.

•In connection with the resignation of our previous Chief Executive Officer ("CEO"), the Board appointed Grayson Pranin as President and CEO effective July 16, 2021 and in addition will maintain his role as Chief Operating Officer. Mr. Pranin’s compensation will be determined at a later time. Mr. Pranin, age 41, has held the role of Senior Vice President and Chief Operating Officer since March 3, 2021.

•On July 9, 2021, Carl F. Giesler, Jr. submitted his resignation from his positions as CEO, President and as a member of the Board of the Company, effective July 16, 2021 in order to pursue another career opportunity. Mr. Giesler did not resign as a result of any disagreement with the Company on any matter relating to the Company’s operations, policies or practices.

•On April 22, 2021, we announced the acquisition of all the overriding royalty interest assets of SandRidge Mississippian Trust I (the “Trust”). The gross purchase price is $4.9 million (net $3.6 million, given our 26.9% ownership of the Trust).

Tabl e of Contents

•~~On March 3,~~During the second quarter of 2021, we ~~named Mr. Grayson Pranin, formerly its Vice President~~began returning wells to production that were previously curtailed due to the commodity price downturn in the first half of 2020 and, in many cases, improving their production potential through modest capital improvements. Focused efforts to improve operating costs, along with commodity prices rebounding from their 2020 lows, have bolstered the economics of these well reactivation projects. High rates of return and low execution risk support our belief that these projects represent an efficient use of capital. As of June 30, 2021, we returned 49 wells to production, resulting in average incremental production of 0.8 MBoed in the first half of 2021. Approximately 30 of these wells required workovers to return to service and accounted for ~~Reserves~~capital expenditures of $0.6 million and Engineering, as Senior Vice President and Chief Operating Officer. We also named Mr. Salah Gamoudi, our Chief Financial Officer and Chief Accounting Officer, as a Senior Vice President. We also named Mr. Dean Parrish, formerly our Director$0.8 million of ~~Operations, as our Vice President~~expense workovers. The balance of ~~Operations.~~the wells required little to no expenditures to reactivate.

•~~On February 5,~~Subsequent to the sale of NPB assets in the first quarter of 2021, we ~~sold all~~are no longer engaged in the routine flaring of ~~our oil and~~produced natural ~~gas properties and related assets of the North Park Basin ("NPB") in Colorado for a purchase price of $47 million in cash.~~gas.

Outlook

WeThroughout 2021, we have focused and will continue to focus on maximizing free cash flow in 2021 through a combination of cost control measures and the continued exercise of financial discipline and prudent capital allocation, which includes limiting our capital projects to projects we believe will provide high rates of return in the current commodity price environment. As a result, our planned capital expenditures for 2021 will likely be of similar magnitude, but potentially an increase to ~~our~~ 2020 levels. Given this expected level of capital expenditures, our oil, natural gas and NGL production will likely decline in 2021. However, wells brought back online during the period, as well as potential future well reactivations may partially stem the natural decline of our base production. We ~~will~~may consider further expanding our capital program after assessing all factors, including commodity prices. We will also continue our pursuit of acquisitions and business combinations which provide high margin properties with attractive returns at current commodity prices.

The COVID-19 pandemic reduced global economic activity and negatively impacted energy demand during the previous twelve months. Demand for oil and natural gas is slowly returning to pre-pandemic levels as COVID-19 vaccination rates and economic activity have increased. However, the spread of COVID-19 variants and the effectiveness of the vaccines against these variants are significant risk factors to a full and sustained recovery. If the vaccines currently available are not effective against COVID-19 or its other variants, we will have to continue to rely on mobility and activity restrictions to mitigate the spread, which will lead to a longer, more drawn-out return in demand for certain products.

Additionally, we have implemented several additional initiatives to maximize free cash flow, ~~reduce our debt level, maximize~~ our liquidity position and, ultimately realize greater shareholder value. These initiatives included personnel and non-personnel cost reductions, along with the sale of ~~the Company's~~our headquarters during 2020. Prior to February 5, 2021, we held assets in the North Park Basin, which have been sold in their entirety.

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, and our ability to find and economically develop and produce our reserves. 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 New York Mercantile Exchange "NYMEX" prices for oil and natural gas are shown in the table below:


			Three month periods ended											Three month periods ended
		March 31, 2021	December 31, 2020		September 30, 2020		June 30, 2020					June 30, 2021	March 31, 2021	December 31, 2020		September 30, 2020
NYMEX Oil (per Bbl)	NYMEX Oil (per Bbl)		$	58.09	$	42.58	$	40.92	$	28.00	NYMEX Oil (per Bbl)			$	66.18	$	58.09	$	42.58	$	40.92
NYMEX Natural gas (per MMBtu)	NYMEX Natural gas (per MMBtu)		$	2.72	$	2.76	$	2.12	$	1.75	NYMEX Natural gas (per MMBtu)			$	2.98	$	2.72	$	2.76	$	2.12

In order to reduce our exposure to price fluctuations, we have historically entered into commodity derivative contracts for a portion of our anticipated future oil and natural gas production as discussed in “Item 3. Quantitative and Qualitative Disclosures About Market Risk.” As of ~~March 31,~~June 30, 2021, we had no open commodity derivative contracts and there was no commodity derivative activity during the ~~quarter~~three and six-month periods ended ~~March 31,~~June 30, 2021.

2022

Tabl e of Contents

Revenues

Consolidated revenues for the ~~three-month~~three and six-month periods ended ~~March 31,~~June 30, 2021, and 2020 are presented in the table below (in thousands):


		Three Months Ended March 31,			Three Months Ended June 30,						Six Months Ended June 30,
			2021			2020			2021		2020		2021		2020
Oil	Oil		$	15,548		$	28,654	Oil	$	14,666	$	11,554	$	30,214	$	40,208
NGL	NGL		8,856			5,934		NGL	10,625		1,591		19,481		7,525
Natural gas	Natural gas		9,219			5,551		Natural gas	8,905		3,303		18,124		8,854
Other	Other		—			190		Other	—		207		—		397
Total revenues (1)	Total revenues (1)		$	33,623		$	40,329	Total revenues (1)	$	34,196	$	16,655	$	67,819	$	56,984

~~(1)~~Mid-Continent represented $30.4 million, or 90.6% and $27.5 million, or 68.4% of total consolidated revenues for the three-months ended March 31, 2021 and 2020, respectively. NPB represented $3.2 million, or 9.4% and $12.8 million, or 31.6% of total consolidated revenues for the three-months ended March 31, 2021 and 2020, respectively.

Oil, Natural Gas and NGL Production and Pricing

~~The Company's~~Our production and pricing information for the ~~three-month~~three and six-month periods ended ~~March 31,~~June 30, 2021, and 2020 is shown in the table below:


		Three Months Ended March 31,			Three Months Ended June 30,						Six Months Ended June 30,

			2021			2020			2021		2020		2021		2020

Production data	Production data							Production data
Oil (MBbls)	Oil (MBbls)		288			682		Oil (MBbls)	227		520		515		1,202
NGL (MBbls)	NGL (MBbls)		521			769		NGL (MBbls)	613		681		1,134		1,451
Natural gas (MMcf)	Natural gas (MMcf)		4,993			6,695		Natural gas (MMcf)	5,356		5,697		10,349		12,391
Total volumes (MBoe)	Total volumes (MBoe)		1,641			2,567		Total volumes (MBoe)	1,733		2,151		3,374		4,718
Average daily total volumes (MBoe/d)	Average daily total volumes (MBoe/d)		18.2			28.2		Average daily total volumes (MBoe/d)	19.0		23.6		18.6		25.9
Average prices—as reported (1)	Average prices—as reported (1)							Average prices—as reported (1)
Oil (per Bbl)	Oil (per Bbl)		$	53.99		$	42.01	Oil (per Bbl)	$	64.73	$	22.22	$	58.70	$	33.45
NGL (per Bbl)	NGL (per Bbl)		$	17.00		$	7.72	NGL (per Bbl)	$	17.33	$	2.34	$	17.18	$	5.19
Natural gas (per Mcf)	Natural gas (per Mcf)		$	1.85		$	0.83	Natural gas (per Mcf)	$	1.66	$	0.58	$	1.75	$	0.71
Total (per Boe)	Total (per Boe)		$	20.49		$	15.64	Total (per Boe)	$	19.74	$	7.65	$	20.10	$	11.99
Average prices—including impact of derivative contract settlements	Average prices—including impact of derivative contract settlements							Average prices—including impact of derivative contract settlements
Oil (per Bbl)	Oil (per Bbl)		$	53.99		$	48.01	Oil (per Bbl)	$	64.73	$	33.47	$	58.70	$	41.72
NGL (per Bbl)	NGL (per Bbl)		$	17.00		$	7.72	NGL (per Bbl)	$	17.33	$	2.34	$	17.18	$	5.19
Natural gas (per Mcf)	Natural gas (per Mcf)		$	1.85		$	0.83	Natural gas (per Mcf)	$	1.66	$	0.69	$	1.75	$	0.77
Total (per Boe)	Total (per Boe)		$	20.49		$	17.23	Total (per Boe)	$	19.74	$	10.67	$	20.10	$	14.24

__________________

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

~~Table of~~ ~~Contents~~

The table below presents production by area of operation for the ~~three-month~~three and six-month periods ended ~~March 31,~~June 30, 2021, and 2020:


		Three Months Ended March 31,			Three Months Ended June 30,									Six Months Ended June 30,

			2021	2020				2021					2020			2021			2020
				Production (MBoe)		% of Total			Production (MBoe)	% of Total			Production (MBoe)	% of Total		Production (MBoe)	% of Total		Production (MBoe)	% of Total		Production (MBoe)	% of Total

Mid-Continent	Mid-Continent			1,574		95.9	%		2,239	87.2	%	Mid-Continent	1,733	100.0	%	1,929	89.7	%	3,307	98.0	%	4,168	88.3	%
North Park Basin	North Park Basin			67		4.1	%		328	12.8	%	North Park Basin	—	—	%	222	10.3	%	67	2.0	%	550	11.7	%
Total	Total			1,641		100.0	%		2,567	100.0	%	Total	1,733	100.0	%	2,151	100.0	%	3,374	100.0	%	4,718	100.0	%

Tabl e of Contents

Variances in oil, natural gas and NGL revenues attributable to changes in the average prices received for our production and total production volumes sold for the ~~three-month~~three and six-month periods ended ~~March 31,~~June 30, 2021, and 2020 are shown in the table below (in thousands):


	~~Three Months Ended March 31, 2021~~
~~2020 oil, natural gas and NGL revenues~~	$	~~40,139~~
~~Change due to production volumes~~	$	~~(18,972)~~
~~Change due to average prices~~	$	~~12,456~~
~~2021 oil, natural gas and NGL revenues~~	$	~~33,623~~


	Three Months Ended June 30, 2021		Six Months Ended June 30, 2021
2020 oil, natural gas and NGL revenues	$	16,448	$	56,587
Change due to production volumes	(8,271)		(27,015)
Change due to average prices	26,019		38,247
2021 oil, natural gas and NGL revenues	$	34,196	$	67,819

Revenues from oil, natural gas and NGL sales ~~decreased $6.5~~increased $17.7 million or ~~16.2%~~107.9% for ~~the three months~~three-months ended ~~March 31,~~June 30, 2021 as compared to the ~~three~~three-months ended June 30, 2020. Revenues from oil, natural gas and NGL sales increased $11.2 million or 19.8% for the six months ended ~~March 31,~~June 30, 2021 as compared to the six months ended June 30, 2020. Revenue for the three and six months ended has ~~declined~~increased primarily due to increased oil, natural gas and NGL realized prices primarily as a result of increased economic activity and recovery from the ~~divestiture~~COVID-19 pandemic and related increase in energy demand, in addition to a contraction of differentials on realized commodity prices. Further, natural gas revenue increased due to higher realized prices as a result of growth in demand outpacing supply. These increases were partially offset by an overall decline in production due to the ~~North Park Basin properties and~~ natural ~~production~~ declines in our existing producing wells inand divestiture of the NPB properties, partially stemmed by the reactivation of wells.

Mid-Continent ~~partially offset by increased realized commodity prices. Mid-Continent represented $30.4 million, or 90.6%~~ and ~~$27.5 million, or 68.4% of total consolidated~~North Park revenues for the ~~three-months~~three and six-month periods ended ~~March 31,~~June 30, 2021, and 2020 ~~respectively. NPB represented $3.2 million, or 9.4% and $12.8 million, or 31.6%~~consisted of ~~total consolidated revenues for~~ the ~~three-months ended March 31, 2021 and 2020, respectively.~~ following (in thousands):


	Three Months Ended June 30,								Six Months Ended June 30,
	2021				2020				2021				2020
	$		% of Total		$		% of Total		$		% of Total		$		% of Total
Mid-Continent	$	34,196	100.0	%	$	11,821	71.9	%	$	64,649	95.3	%	$	39,201	69.3	%
North Park	$	—	—	%	$	4,627	28.1	%	$	3,170	4.7	%	$	17,386	30.7	%

See "Item 1A—Risk Factors" included in ~~the Company's~~our 2020 Form 10-K for additional discussion of the potential impact these events may have on our future revenues.

Operating Expenses

Operating expenses for the ~~three-month~~three and six-month periods ended ~~March 31,~~June 30, 2021, and 2020 consisted of the following (in thousands):


		Three Months Ended March 31,				Three Months Ended June 30,								Six Months Ended June 30,

			2021				2020				2021			2020			2021			2020

Lease operating expenses	Lease operating expenses		$	7,954			$	15,642		Lease operating expenses	$	9,232		$	8,698		$	17,186		$	24,340
Production, ad valorem, and other taxes	Production, ad valorem, and other taxes		2,176				3,199			Production, ad valorem, and other taxes	2,534			1,854			4,710			5,053
Depreciation and depletion—oil and natural gas	Depreciation and depletion—oil and natural gas		2,505				24,855			Depreciation and depletion—oil and natural gas	2,193			13,348			4,698			38,203
Depreciation and amortization—other	Depreciation and amortization—other		1,494				2,634			Depreciation and amortization—other	1,475			1,739			2,969			4,373
Total operating expenses	Total operating expenses		$	14,129			$	46,330		Total operating expenses	$	15,434		$	25,639		$	29,563		$	71,969

Lease operating expenses ($/Boe)	Lease operating expenses ($/Boe)		$	4.85			$	6.09		Lease operating expenses ($/Boe)	$	5.33		$	4.04		$	5.09		$	5.16
Production, ad valorem, and other taxes ($/Boe)	Production, ad valorem, and other taxes ($/Boe)		$	1.33			$	1.25		Production, ad valorem, and other taxes ($/Boe)	$	1.46		$	0.86		$	1.40		$	1.07
Depreciation and depletion—oil and natural gas ($/Boe)	Depreciation and depletion—oil and natural gas ($/Boe)		$	1.53			$	9.68		Depreciation and depletion—oil and natural gas ($/Boe)	$	1.27		$	6.21		$	1.39		$	8.10
Production, ad valorem, and other taxes (% of oil, natural gas, and NGL revenue)	Production, ad valorem, and other taxes (% of oil, natural gas, and NGL revenue)		6.5		%		8.0		%	Production, ad valorem, and other taxes (% of oil, natural gas, and NGL revenue)	7.4		%	11.3		%	6.9		%	8.9		%

Tabl e of Contents

North Park Lease operating expenses and Production, ad valorem, and other taxes for the three and six-month periods ended June 30, 2021, and 2020 consisted of the following (in thousands):


	Three Months Ended June 30,								Six Months Ended June 30,
	2021				2020				2021				2020
	$		% of Total		$		% of Total		$		% of Total		$		% of Total
Lease operating expense	$	—	—	%	$	2,225	25.6	%	$	921	5.4	%	$	5,774	23.7	%
Production, ad valorem and other taxes	$	—	—	%	$	309	16.7	%	$	249	5.3	%	$	1,080	21.4	%

Lease operating expenses ~~decreased~~increased by ~~$7.7~~$0.5 million or ~~$1.24/~~$1.28/Boe for the ~~threemonths~~three-months ended ~~March 31,~~June 30, 2021, as compared to the three months ended ~~March 31,~~June 30, 2020. The increase was the result of reactivating wells that are now considered economic due to increased commodity prices. Lease operating expenses decreased by $7.2 million or $0.06/Boe for the sixmonths ended June 30, 2021, as compared to the six months ended June 30, 2020. These decreases primarily resulted from field personnel reductions in force, the sale of NPB and the shut-in of wells that had become uneconomic due to natural production declines. NPB represented $0.9 million, or 11.6% and $3.5 million, or 22.7% of consolidated Lease operating expense for the three months ended March 31, 2021 and 2020, respectively.other cost reduction efforts.

~~Table of~~ ~~Contents~~

Production, ad valorem, and other taxes for the three months ended June 30, 2021 have ~~continued to decrease~~increased primarily due to ~~declining production and revenues as discussed above.~~increases in revenues. Further, they have decreased as a percentage of oil, natural gas, and NGL revenue for the three months ended ~~March 31,~~June 30, 2021 as compared to the same period in 2020, primarily due to ad valorem taxes remaining flat and increased revenue. Production, ad valorem, and other taxes for the six months ended June 30, 2021 have decreased primarily due to declining production as discussed above, partially offset by higher commodity prices. Further, they have decreased as a percentage of oil, natural gas, and NGL revenue for the six months ended June 30, 2021 as compared to the same period in 2020, primarily due to decreases in ~~ad valorem~~production taxes as a result of tax credits and deductions earned on production taxes. NPB represented $0.2 million, or 11.4% and $0.8 million, or 24.1% of consolidated Production, ad valorem and other taxes for the three months ended March 31, 2021 and 2020, respectively.deductions.

The average depreciation and depletion rate for our oil and natural gas properties for the three months ended ~~March 31,~~June 30, 2021 decreased by ~~$8.15/~~$4.94/Boe from the three months ended ~~March 31,~~June 30, 2020. ~~This decrease is~~The average depreciation and depletion rate for our oil and natural gas properties for the six months ended June 30, 2021 decreased by $6.71/Boe from the six months ended June 30, 2020. These decreases are primarily due to the sale of the North Park Basin properties and full cost ceiling test impairments recorded during 2020, which lowered the net cost basis of our oil and gas properties significantly.

Impairment

We did not record a full cost ceiling limitation impairment during the three ~~months~~and six-months ended ~~March 31,~~June 30, 2021. WeIn the three-month period ended June 30, 2020, we recorded a total impairment charge of $201.8 million, which included a full cost ceiling limitation impairment charge of ~~$8.0~~$163.8 million, ~~during~~and an impairment charge of $38.0 million to write down the value of our office headquarters to its estimated fair value less estimated costs to sell the building. The ceiling limitation impairment charges recorded in the three ~~months~~and six-month periods ended ~~March 31,~~June 30, 2020 ~~which~~ resulted from various factors including a decrease in the trailing twelve-month weighted average natural gas price in ~~the first quarter of~~ 2020.

Calculation of the full cost ceiling test is based on, among other factors, trailing twelve-month (“SEC ~~prices”)~~Prices as adjusted for price differentials and other contractual arrangements. The SEC ~~prices~~Prices utilized in the calculation of proved reserves included in the full cost ceiling test at ~~March 31,~~June 30, 2021 were ~~$40.01~~$49.78 per barrel of oil and ~~$2.16~~$2.43 per Mcf of natural gas, before price differential adjustments.

Based on the SEC ~~prices~~Prices over the eleven months ended ~~May~~August 1, 2021, as well as one month of NYMEX strip pricing for ~~June~~September of 2021 as of ~~May 7,~~August 5 2021 we anticipate the SEC ~~prices~~Prices utilized in the June 30, 2021 full cost ceiling test may be ~~$49.54~~$57.70 per barrel of oil and ~~$2.44~~$2.93 per Mcf of natural gas, (the "estimated ~~second~~third quarter prices"). Applying these estimated ~~second~~third quarter prices, and holding all other inputs constant to those used in the calculation of our ~~March 31,~~June 30, 2021 ceiling test, we expect that no full cost ceiling limitation impairment is indicated for the ~~second~~third quarter of 2021.

Any actual full cost ceiling limitation impairment recognized in future quarters may fluctuate significantly from projected amounts based on the outcome of numerous other factors such as ~~additional~~ declines in the actual trailing twelve-month SEC ~~prices,~~Prices, lower NGL pricing, changes in estimated future development costs and operating expenses, and other adjustments to our levels of proved reserves. Any such ceiling test impairments in 2021 could be material to our net earnings.

Full cost pool impairments have no impact to our cash flow or liquidity.

Tabl e of Contents

Other Operating Expenses

Other operating expenses for the ~~three-month~~three and six-month periods ended ~~March 31,~~June 30, 2021, and 2020 consisted of the following (in thousands):


		Three Months Ended March 31,			Three Months Ended June 30,						Six Months Ended June 30,

			2021			2020			2021		2020		2021		2020
General and administrative	General and administrative		$	2,090		$	5,483	General and administrative	$	2,522	$	4,314	$	4,612	$	9,797
Restructuring expenses	Restructuring expenses		2,054			—		Restructuring expenses	256		444		2,310		444
Employee termination benefits	Employee termination benefits		49			3,254		Employee termination benefits	—		1,993		49		5,247
(Gain) loss on derivative contracts	(Gain) loss on derivative contracts		—			(10,226)		(Gain) loss on derivative contracts	—		(2,241)		—		(12,467)
(Gain) loss on sale of assets	(Gain) loss on sale of assets		(19,713)			—		(Gain) loss on sale of assets	—		(42)		(19,713)		78
Other operating (income) expense	Other operating (income) expense		(48)			277		Other operating (income) expense	(65)		150		(113)		307
Total non-operating expenses	Total non-operating expenses		$	(15,568)		$	(1,212)	Total non-operating expenses	$	2,713	$	4,618	$	(12,855)	$	3,406

General and administrative expenses decreased by ~~$3.4~~$1.8 million for the three months ended ~~March 31,~~June 30, 2021, compared to the same period in 2020. General and administrative expenses decreased by $5.2 million for the six months ended June 30, 2021, compared to the same period in 2020. These decreases resulted primarily from a reduction in compensation related costs after completing reductions in force during 2020, significant reductions in information technology and software costs and overhead related to ~~the Company's~~our previously held corporate headquarters ~~building.~~building and other cost cutting efforts. Part of the decrease is also due to reductions in professional costs such as legal expenses, audit fees and consulting services. General and administrative expenses for the first ~~three~~six months of 2021 were impacted by a refund of a $0.4 million legal retainer related to prior periods.

~~Table of~~ ~~Contents~~

Restructuring expenses represent fees and costs associated with the 2016 bankruptcy and exit from North Park Basin in Colorado. Restructuring expenses included payments of $1.3 million to settle general unsecured claims related to our 2016 bankruptcy during the ~~quarter~~six-month period ended ~~March 31,~~June 30, 2021.

Employee termination benefits for the ~~three-month~~three and six-month periods ended ~~March 31,~~June 30, 2021 and 2020 include cash and share-based severance costs incurred for the reduction in force, sale of NPB and other employee terminations in the relevant periods. See “Note 121 3 - Employee Termination Benefits ” in the accompanying unaudited condensed consolidated financial statements for additional discussion of these expenses.

The following table summarizes derivative activity for the ~~three-month~~three and six-month periods ended ~~March 31,~~June 30, 2021, and 2020 (in thousands):


		Three Months Ended March 31,			Three Months Ended June 30,						Six Months Ended June 30,
			2021			2020			2021		2020		2021		2020
(Gain) loss on commodity derivative contracts	(Gain) loss on commodity derivative contracts		$	—		$	(10,226)	(Gain) loss on commodity derivative contracts	$	—	$	(2,241)	$	—	$	(12,467)
Cash (received) paid on settlements			$	—		$	(4,087)
Cash received on settlements								Cash received on settlements	$	—	$	6,490	$	—	$	10,577

There were no open commodity derivative contracts during the three ~~months~~and six-months periods ended ~~March 31,~~June 30, 2021. As applicable, our derivative contracts were not designated as accounting hedges and, as a result, changes in their fair values were recorded each quarter as a component of operating expenses. ~~Internally, management~~Management has historically viewed 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. See further discussion of derivative contracts in “Item 3. Quantitative and Qualitative Disclosures about Market Risk” included in Part I of this Quarterly Report.

Tabl e of Contents

Other Income (Expense)

~~The Company’s~~Our other income (expense) for the ~~three-month~~three and six-month periods ended ~~March 31,~~June 30, 2021, and 2020 are presented in the table below (in thousands):


		Three Months Ended March 31,			Three Months Ended June 30,						Six Months Ended June 30,
			2021			2020			2021		2020		2021		2020
Other income (expense)	Other income (expense)							Other income (expense)
Interest expense, net	Interest expense, net		$	(47)		$	(637)	Interest expense, net	$	(84)	$	(447)	$	(131)	$	(1,084)

Other income (expense), net	Other income (expense), net		28			76		Other income (expense), net	287		58		315		134
Total other expense			$	(19)		$	(561)
Total other income (expense)								Total other income (expense)	$	203	$	(389)	$	184	$	(950)

Interest expense incurred during the ~~three-month period~~three and six-month periods ended ~~March 31,~~June 30, 2021 is primarily comprised of interest paid on the New Credit Facility. Interest expense incurred during the ~~three-month period~~three and six-month periods ended ~~March 31,~~June 30, 2020 is primarily comprised of interest and fees paid on the prior credit facility that was terminated on November 30, 2020. Interest expense is net of amounts capitalized.

Liquidity and Capital Resources

As of ~~March 31,~~June 30, 2021, we had cash and cash equivalents, excluding restricted cash, of ~~$73.9~~$88.3 million. Additionally, we had a $20.0 million term loan outstanding and $10.0 million available under our $30.0 million New Credit Facility, which matures on November 30, 2023. See ~~"Note—8~~ "Note 8—Long-Term Debt" to the accompanying condensed consolidated financial statements in Item 1 of this ~~report.~~Quarterly Report. As of ~~May 7,~~August 6, 2021, we had approximately ~~$81.2~~$104.9 million of cash on hand, ~~excluding~~including restricted cash, $20.0 million outstanding under ~~its~~our term loan facility and no balance outstanding under the $10.0 million revolving loan facility. For the next twelve months, we expect to have ample liquidity with amounts available to be drawn on our New Credit Facility, cash on hand, and cash from operations.

24On July 26, 2021, we entered into the First Amendment to the New Credit Facility. Pursuant to the First Amendment, we will be permitted to grant liens securing our obligations under swap contracts with certain counterparties to the extent such swap contracts are permitted under the Credit Agreement and approved by our board of directors.

~~Tabl~~e

In August, 2021, our Board approved the initiation of ~~Contents~~a share repurchase program authorizing us to purchase up to an aggregate of $25.0 million of our Company’s common stock beginning as early as August 16, 2021.

Working Capital and Sources and Uses of Cash

Our principal sources of liquidity for the next year include cash flows from operations, cash on hand and amounts available under our New Credit Facility, as discussed in “Note 8—Long-Term Debt” to the accompanying unaudited condensed consolidated financial statements and “Item 1A. Risk Factors” included in Part I of ~~the Company's~~our Form 10-K Report, we expect market volatility factors to have a material, adverse impact on future revenue growth and overall profitability for the foreseeable future.

Our working capital increased to ~~$39.8~~$54.3 million at ~~March 31,~~June 30, 2021, compared to a deficit of $18.1 million at December 31, 2020, the positive impact on working capital resulted primarily from an increase in cash and cash equivalents at ~~March 31,~~June 30, 2021 as a result of proceeds from the sale of NPB and cash from operations. In addition, accounts payable and accrued liabilities decreased due to our continuous cost reduction efforts, the sale of NPB and the timing of payments.

Cash Flows

Our cash flows from operations 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.

Tabl e of Contents

Our cash flows for the ~~three-month~~six-month periods ended ~~March 31,~~June 30, 2021, and 2020 are presented in the following table and discussed below (in thousands):


		Three Months Ended March 31,					Six Months Ended June 30,
		2021		2020			2021		2020
Cash flows provided by (used in ) operating activities	Cash flows provided by (used in ) operating activities	$	14,331	$	18,103	Cash flows provided by (used in ) operating activities	$	33,231	$	13,462
Cash flows provided by (used in) investing activities	Cash flows provided by (used in) investing activities	34,085		(4,463)		Cash flows provided by (used in) investing activities	29,907		(5,308)
Cash flows provided by (used in) financing activities	Cash flows provided by (used in) financing activities	(167)		(11,867)		Cash flows provided by (used in) financing activities	(795)		805
Net increase (decrease) in cash and cash equivalents	Net increase (decrease) in cash and cash equivalents	$	48,249	$	1,773	Net increase (decrease) in cash and cash equivalents	$	62,343	$	8,959

Cash Flows from Operating Activities

The ~~$3.8~~$19.8 million ~~decrease~~increase in operating cash flows for the ~~three-month~~six-month period ended ~~March 31,~~June 30, 2021 compared to the same period in 2020, is primarily due to the ~~declines~~increases in revenues ~~partially offset by reduction in accounts payable and accrued expenses~~as a result of improved commodity prices as discussed above and reductions in expenses due to our cost reduction efforts.

See “—Condensed Consolidated Results of Operations” for further analysis of the changes in revenues and operating expenses, and see “Note 13—Employee Termination Benefits” to the accompanying unaudited condensed consolidated financial statements included in Item 1 of this report for additional detail on cash paid for employee termination benefits.

Cash Flows from Investing Activities

Our cash flows provided in investing activities during the ~~three-month~~six-month period ended ~~March 31,~~June 30, 2021 primarily reflects ~~$37.2~~$37.9 million of net cash proceeds from the sale of assets offset by capital expenditures of ~~$3.1~~$4.4 million. See "Note 6—Acquisitions and Divestitures" to the accompanying unaudited condensed consolidated financial statements included in Item 1 of this ~~report~~Quarterly Report for additional information.

During the ~~three-month~~six-month period ended ~~March 31,~~June 30, 2020, cash flows used in investing activities primarily reflects cash payments made for capital expenditures accrued at December 31, 2019.

~~Table of~~ ~~Contents~~

Capital expenditures for the ~~three-month~~six-month periods ended ~~March 31,~~June 30, 2021, and 2020 are summarized below (in thousands):


		Three Months Ended March 31,					Six Months Ended June 30,
		2021		2020			2021		2020
Capital Expenditures	Capital Expenditures					Capital Expenditures
Drilling, completion and capital workovers	Drilling, completion and capital workovers	$	2,037	$	1,425	Drilling, completion and capital workovers	$	3,242	$	2,430
Leasehold and geophysical	Leasehold and geophysical	111		503		Leasehold and geophysical	283		497

Capital expenditures, excluding acquisitions (on an accrual basis)	Capital expenditures, excluding acquisitions (on an accrual basis)	2,148		1,928		Capital expenditures, excluding acquisitions (on an accrual basis)	3,525		2,927
Acquisitions	Acquisitions	59		—		Acquisitions	3,604		—
Capital expenditures, including acquisitions	Capital expenditures, including acquisitions	2,207		1,928		Capital expenditures, including acquisitions	7,129		2,927
Change in capital accruals (1)	Change in capital accruals (1)	946		3,524		Change in capital accruals (1)	864		3,887
Total cash paid for capital expenditures	Total cash paid for capital expenditures	$	3,153	$	5,452	Total cash paid for capital expenditures	$	7,993	$	6,814

__________________

1.Reflects cash paid or adjustments to accruals during the period presented for expenditures related to prior period capital expenditures program.

Cash Flows from Financing Activities

Cash used in financing activities for the ~~three-month~~six-month period ended ~~March 31,~~June 30, 2021 consisted primarily of finance lease payments and cash paid for tax obligations on vested awards.

Indebtedness

See “Note 8—Long-Term Debt” to the accompanying unaudited condensed consolidated financial statements for additional discussion of ~~the Company's~~our debt at ~~March 31,~~June 30, 2021 and December 31, 2020.

Tabl e of Contents

Contractual Obligations and Off-Balance Sheet Arrangements

At ~~March 31,~~June 30, 2021, our contractual obligations included asset retirement obligations, long-term debt obligations and short-term 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 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 surety bonds or other instruments.

There were no other significant changes in total contractual obligations and off-balance sheet arrangements from those reported in the 2020 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 2020 Form 10-K. For a discussion of recent accounting pronouncements, newly adopted and recent accounting pronouncements not yet adopted, see “Note 1 - Basis of Presentation” to the accompanying unaudited condensed consolidated financial statements included in Item 1 of this Quarterly Report. We did not have any material changes in critical accounting policies, estimates, judgments and assumptions during the first ~~three~~six months of 2021.

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ITEM 3. Quantitative and Qualitative Disclosures About Market Risk

General

This discussion provides information about the financial instruments we have historically used to manage commodity prices. All contracts were settled in cash and did 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 have historically entered into commodity ~~pricing~~ derivative contracts for a portion of our anticipated production volumes for the purpose of reducing variability of oil and natural gas prices we receive.

We have used, and may use, a variety of commodity-based derivative contracts, including fixed price swaps, basis swaps and collars. At ~~March 31,~~June 30, 2021, we had no open commodity derivative contracts.

Because we historically have not designated any of our derivative contracts as hedges for accounting purposes, changes in the fair value of our derivative contracts were recognized as gains and losses in current period earnings. As a result, and when applicable, current period earnings could have been significantly affected by changes in the fair value of our commodity derivative contracts. Changes in fair value ~~was~~were principally measured based on a comparison of future prices to the contract price at the end of the period.

The following table summarizes derivative activity for the ~~three-month~~three and six-month periods ended ~~March 31,~~June 30, 2021, and 2020 (in thousands):


		Three Months Ended March 31,				Three Months Ended June 30,				Six Months Ended June 30,
		2021		2020				2021		2020		2021		2020
(Gain) loss on commodity derivative contracts	(Gain) loss on commodity derivative contracts	$	—	$	(10,226)		(Gain) loss on commodity derivative contracts	$	—	$	(2,241)	$	—	$	(12,467)
Cash (received) paid on settlements		$	—	$	(4,087)
Cash received on settlements							Cash received on settlements	$	—	$	6,490	$	—	$	10,577

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. As applicable, we were 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 for all of our derivative transactions have had an “investment grade” credit rating. We have monitored the credit ratings of our derivative counterparties and considered our counterparties’ credit default risk ratings in determining the fair value of our derivative contracts. Our derivative contracts have historically been with multiple counterparties to minimize exposure to any individual counterparty, and in addition our counterparties have been large financial institutions.

We did not require collateral or other security from counterparties to support derivative instruments. We historically 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. As a result of the netting provisions, our maximum amount of loss under derivative transactions due to credit risk was limited to the net amounts due from the counterparties under the commodity derivative contracts. Therefore, we were not required to post additional collateral under our commodity derivative contracts.

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 New Credit Facility. This variable interest rate on our New Credit Facility fluctuates, and exposes us to short-term changes in market interest rates as our interest obligations on this instrument is periodically redetermined based on prevailing market interest rates, primarily LIBOR. We had $20.0 million in outstanding variable rate debt as of ~~March 31,~~June 30, 2021.

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Tabl e of Contents

ITEM 4. Controls and Procedures

Disclosure Controls and Procedures

Under the supervision and with the participation of the Company’s management, including the Company’s CEO and CFO, the Company performed an evaluation of the effectiveness of the design and operation of its disclosure controls and procedures pursuant to Exchange Act Rules 13a-15 and 15d-15 as of the end of the period covered by this Quarterly Report. Based on that evaluation, the Company’s CEO and CFO concluded that the Company’s disclosure controls and procedures were effective as of ~~March 31,~~June 30, 2021, 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 ~~March 31,~~June 30, 2021 that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

2831

Tabl e of Contents

PART II. Other Information

ITEM 1. Legal Proceedings

See "Note 9—Commitments and Contingencies” to the accompanying condensed consolidated financial statements in Item 1 of this ~~report.~~Quarterly Report.

2932

Tabl e of Contents

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 2020 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 ~~March 31,~~June 30, 2021.
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)
January 1, 2021 - January 31, 2021 — $ — N/A N/A
February 1, 2021 - February 28, 2021 4,121 $ 4.73 N/A N/A
March 1, 2021 - March 31, 2021 — $ — N/A N/A
Total 4,121 —


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, 2021 - April 30, 2021	152,101	$	3.90	N/A	N/A
May 1, 2021 - May 31, 2021	—	$	—	N/A	N/A
June 1, 2021 - June 30, 2021	—	$	—	N/A	N/A
Total	152,101			—

___________________

(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~~Upon Senior Securities

None.

ITEM 4. Mine Safety Disclosures

Not applicable.

ITEM 5. Other Information

None.

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Tabl e of Contents

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

4.7

First Amendment to Tax Benefits Preservation Plan, dated July 1, 2020, between SandRidge Energy, Inc. and American Stock Transfer & Trust Company, LLC as Rights Agent

8-K

001-33784

4.1

3/16/2021

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

104

Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

3134

Tabl e of Contents

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.

Date: ~~May 12,~~August 11, 2021	By:	/s/ Salah Gamoudi
		Salah Gamoudi Senior Vice President, Chief Financial Officer and Chief Accounting Officer (Principal Financial and Accounting Officer)

3235


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	1920
ITEM 3.	Quantitative and Qualitative Disclosures About Market Risk	2730
ITEM 4.	Controls and Procedures	2831

PART II. OTHER INFORMATION

ITEM 1.	Legal Proceedings	2932
ITEM 1A.	Risk Factors	3033
ITEM 2.	Unregistered Sales of Equity Securities and Use of Proceeds	3033
ITEM 3.	Defaults ~~upon~~Upon Senior Securities	3033
ITEM 4.	Mine Safety Disclosures	3033
ITEM 5.	Other Information	3033
ITEM 6.	Exhibits	3134
Signature