Sandridge Energy, Inc. has recently closed its acquisition of certain producing assets and leasehold interests in the Cherokee play of the western Anadarko Basin for $144 million and has provided an update on its full-year 2024 guidance. The company's updated operational and capital expenditure guidance reflects several changes from its prior guidance.
In terms of production, the company's updated 2024 guidance indicates an increase in the expected range for oil production from 0.7 * 0.9 million barrels to 0.8 * 1.1 million barrels. Similarly, the expected range for natural gas liquids production has been revised from 1.3 * 1.7 million barrels to 1.6 * 1.9 million barrels. The total liquids production is now projected to be within the range of 2.4 * 3.0 million barrels, up from the previous estimate of 2.0 * 2.6 million barrels. Additionally, the updated guidance shows an increase in the expected range for natural gas production from 16.2 * 19.8 billion cubic feet to 17.7 * 20.5 billion cubic feet. The total production is now anticipated to be within the range of 5.4 * 6.4 million barrels of oil equivalent, compared to the prior estimate of 4.7 * 5.9 million barrels of oil equivalent.
The company's total capital expenditures have also been adjusted. The updated guidance now includes drilling and completions (D&C) capital expenditures of $17 * $20 million, whereas the prior guidance did not specify a range for D&C expenditures. Furthermore, the non-D&C/production optimization capital expenditures have increased from the previous range of $8 * $11 million to $16 * $19 million, resulting in a higher total capital expenditure range of $33 * $39 million, compared to the prior range of $8 * $11 million.
In terms of expenses, the updated guidance shows a slight increase in the range of adjusted general and administrative (G&A) expenses from $8 * $11 million to $8.5 * $11 million. However, the range for lease operating expenses (LOE) has remained the same at $36 * $43 million. The severance and ad valorem taxes as a percentage of revenue are expected to remain within the range of 6% * 7%.
Sandridge Energy highlights that the updated 2024 guidance reflects decreases in LOE and G&A on a $/boe basis, along with increased asset base and expanded activity. The company also expects production and revenue to benefit from the western Anadarko Basin acquisition for the period from September through December, with additional benefits in 2025 and beyond.
These changes in guidance come after the completion of the acquisition, which is expected to contribute to the company's production and revenue for the specified period.
The company has made available an investor presentation regarding the transaction on its website.
Winston & Strawn LLP is serving as Sandridge's legal advisor for the transaction. Today the company's shares have moved -1.9% to a price of $13.03. For the full picture, make sure to review SandRidge Energy's 8-K report.
