Attached files

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EX-99.2 - EX-99.2 - SANDRIDGE ENERGY INCex-992reportofryderscottco.htm
EX-32.1 - EX-32.1 - SANDRIDGE ENERGY INCex321section906certificati.htm
EX-31.2 - EX-31.2 - SANDRIDGE ENERGY INCex312cfo302certification12.htm
EX-31.1 - EX-31.1 - SANDRIDGE ENERGY INCex311ceo302certification12.htm
EX-23.3 - EX-23.3 - SANDRIDGE ENERGY INCex233consentofryderscott12.htm
EX-23.2 - EX-23.2 - SANDRIDGE ENERGY INCex232consentofcawleygilles.htm
EX-23.1 - EX-23.1 - SANDRIDGE ENERGY INCex231consentofdeloittetouc.htm
EX-22.1 - EX-22.1 - SANDRIDGE ENERGY INCex221subsidiaryguarantorsa.htm
EX-21.1 - EX-21.1 - SANDRIDGE ENERGY INCex211subsidiarieslisting12.htm
EX-4.6 - EX-4.6 - SANDRIDGE ENERGY INCex46descriptionofsecuritie.htm
10-K - 10-K - SANDRIDGE ENERGY INCsd-20201231.htm
Exhibit 99.1

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January 21, 2021

Mr. Grayson R. Pranin
SandRidge Energy, Inc.
1 East Sheridan Avenue
Oklahoma City, Oklahoma 73104

        Re:    Evaluation Summary
                SandRidge Energy, Inc. Interests
                Proved Reserves
         As of January 1, 2021    
Dear Mr. Pranin:

As requested, we are submitting our estimates of proved reserves and our forecasts of the resulting economics attributable to the SandRidge Energy, Inc. (“SandRidge”) interests in certain oil and gas properties located in Kansas and Oklahoma. The net reserves and future net revenue for SandRidge have been estimated using the proportional consolidation method with respect to the SandRidge Mississippian Trust I. Under the proportional consolidation method and for the properties in which the Trust has an interest, SandRidge’s interest share of revenues, expenses, investments and liabilities includes both Sandridge’s direct interest in the properties and SandRidge’s revenue interest share of the Trust. It is our understanding that the proved reserves estimated in this report constitute approximately 74 percent of all proved reserves owned by SandRidge. This report, completed on January 25, 2021, has been prepared for use in filings with the U.S. Securities and Exchange Commission by SandRidge.

    Composite reserve estimates and economic forecasts for the proved reserves to the SandRidge proportional consolidation interests are summarized below:



Evaluation Summary
SandRidge Energy, Inc.    
Page 2

Proved
ProvedDeveloped
DevelopedNon-
ProducingProducingProved
Net Reserves
Oil/Condensate- Mbbl3,361933,454
Gas- MMcf82,2382,71684,953
NGL- Mbbl9,2582749,532
Revenue
Oil/Condensate- M$127,9353,523131,457
Gas- M$70,9552,34373,298
NGL- Mbbl58,6121,73560,347
Operating Income (BFIT)- M$29,19245829,651
Discounted @ 10%- M$49,26117349,433

    
    In accordance with the Securities and Exchange Commission guidelines, the operating income (BFIT) has been discounted at an annual rate of 10% to determine its “present worth”. The discounted value, “present worth”, shown above should not be construed to represent an estimate of the fair market value by Cawley, Gillespie & Associates, Inc. For the properties in which the Trust has an interest, SandRidge is obligated to act as a reasonably prudent operator by disregarding the existence of the Trust royalty interests as burdens affecting the properties. Therefore, the economic viability of these properties has been evaluated based on economic limits when combining the SandRidge direct interest and the Trust total royalty interest.

    The annual average Henry Hub spot market gas price of $1.99 per MMBtu and the annual average WTI Cushing spot oil price of $39.57 per barrel were used in this report. In accordance with the Securities and Exchange Commission guidelines, these prices are determined as an unweighted arithmetic average of the first-day-of-the-month price for each month of 2020. The oil and gas prices were held constant and were adjusted for gravity, heating value, quality, transportation and regional price differentials. The adjusted volume-weighted average product prices over the life of the properties are $38.06 per barrel of oil, $6.33 per barrel of NGL and $0.86 per Mcf of gas.

    Operating costs were based on operating expense records of SandRidge. For non-operated properties, these costs include the overhead expenses allowed under existing joint operating agreements. Abandonment costs used in the report are estimates prepared by SandRidge to abandon the wells and production facilities, net of salvage value. As per the Securities and Exchange Commission guidelines, neither expenses nor investments were escalated.

    The proved reserve classifications conform to criteria of the Securities and Exchange Commission as defined in pages 3-4 of the Appendix. The estimates of reserves in this report have been prepared in accordance with the definitions and disclosure guidelines set forth in the Securities and Exchange Commission Title 17, Code of Federal Regulations, Modernization of Oil and Gas Reporting, Final Rule released January 14, 2009 in the Federal Register (SEC regulations). The reserves and economics are predicated on the regulatory agency classifications, rules, policies, laws,


Evaluation Summary
SandRidge Energy, Inc.    
Page 3

taxes and royalties in effect on the date of this report as noted herein. In evaluating the information at our disposal concerning this report, we have excluded from our consideration all matters as to which the controlling interpretation may be legal or accounting, rather than engineering and geoscience. Therefore, the possible effects of changes in legislation or other Federal or State restrictive actions have not been considered. An on-site field inspection of the properties has not been performed. The mechanical operation or conditions of the wells and their related facilities have not been examined nor have the wells been tested by Cawley, Gillespie & Associates, Inc. Possible environmental liability related to the properties has not been investigated nor considered.

    The reserves were estimated using a combination of the production performance, volumetric and analogy methods, in each case as we considered to be appropriate and necessary to establish the conclusions set forth herein. All reserve estimates represent our best judgment based on data available at the time of preparation and assumptions as to future economic and regulatory conditions. It should be realized that the reserves actually recovered, the revenue derived therefrom and the actual cost incurred could be more or less than the estimated amounts.

    The reserve estimates were based on interpretations of factual data furnished by SandRidge. Ownership interests were supplied by SandRidge and were accepted as furnished. To some extent, information from public records has been used to check and/or supplement these data. The basic engineering and geological data were utilized subject to third party reservations and qualifications. Nothing has come to our attention, however, that would cause us to believe that we are not justified in relying on such data.

    Cawley, Gillespie & Associates, Inc. is independent with respect to SandRidge as provided in the Standards Pertaining to the Estimating and Auditing of Oil and Gas Reserve Information promulgated by the Society of Petroleum Engineers (“SPE Standards”). Neither Cawley, Gillespie & Associates, Inc. nor any of its employees has any interest in the subject properties. Neither the employment to make this study nor the compensation is contingent on the results of our work or the future production rates for the subject properties.

    Our work-papers and related data are available for inspection and review by authorized parties. The technical person responsible for the preparation of this report meets or exceeds the education, training, and experience requirements set forth in the SPE Standards.

    Respectfully submitted,
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    CAWLEY, GILLESPIE & ASSOCIATES, INC.
    Texas Registered Engineering Firm F-693

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