SandRidge Energy Inc (SD) 2023 Q4 法說會逐字稿

Ladies and gentlemen, thank you for standing by. My name is Desiree, and I will be your conference operator today. At this time, I would like to welcome everyone to the SandRidge fourth-quarter 2023 conference call. (Operator Instructions)

女士們先生們，謝謝你們的支持。我叫 Desiree，今天我將擔任你們的會議操作員。此時此刻，我歡迎大家參加 SandRidge 2023 年第四季電話會議。（操作員說明）

I would now like to turn the conference over to Scott Prestridge, SVP, Finance and Strategy. Please go ahead.

我現在想將會議交給財務和策略高級副總裁 Scott Prestridge。請繼續。

Thank you, and welcome, everyone. With me today are Grayson Pranin, our CEO; Brandon Brown, our CFO; as well as Dean Parrish, our SVP of Operations. We would like to remind you that today's call contains forward-looking statements and assumptions which are subject to risks and uncertainties, and actual results may differ materially from those projected in these forward-looking statements. We may also refer to adjusted EBITDA and adjusted G&A and other non-GAAP financial measures. Reconciliations of these measures can be found on our website.

謝謝大家，也歡迎大家。今天與我在一起的是我們的執行長 Grayson Pranin；布蘭登‧布朗，我們的財務長；以及我們的營運資深副總裁 Dean Parrish。我們想提醒您，今天的電話會議包含前瞻性陳述和假設，這些陳述和假設存在風險和不確定性，實際結果可能與這些前瞻性陳述中的預測有重大差異。我們也可能參考調整後的 EBITDA 和調整後的 G&A 以及其他非 GAAP 財務指標。這些措施的調節可以在我們的網站上找到。

With that, I'll turn the call over to Grayson.

這樣，我就把電話轉給格雷森。

Thank you and good morning. I'm pleased to report on another consistent quarter of results and year. The company's activity continues to translate to meaningful free cash flow from our producing assets. Before expanding on this, Brandon will touch on a few highlights.

謝謝你，早安。我很高興地報告另一個季度和全年業績保持一致的情況。公司的活動繼續轉化為來自我們生產資產的有意義的自由現金流。在對此進行擴展之前，布蘭登將介紹一些亮點。

Thank you, Grayson. Production averaged approximately 17 MBoe per day for the year with oil production up approximately 10% compared to the prior year, driven by the higher oil content from our Northwest Stack wells. The company generated adjusted EBITDA of nearly $20 million for the quarter and approximately $93 million for the year. As we have pointed out in the past, our adjusted EBITDA is a unique metric for SandRidge due to us having no I and very T given that we have no debt and a substantial NOL position that shields our cash flows from federal income taxes. On the I portion, we in fact generated approximately $2.8 million of interest income during the quarter and $10.6 million for the year for cash out and diversity of high-yield deposit accounts.

謝謝你，格雷森。由於 Northwest Stack 油井含油量較高，全年平均產量約 17 MBoe/天，石油產量比上年增長約 10%。該公司本季調整後 EBITDA 接近 2,000 萬美元，全年調整後 EBITDA 約 9,300 萬美元。正如我們過去指出的那樣，我們的調整後 EBITDA 是 SandRidge 的一個獨特指標，因為我們沒有 I 和 T，因為我們沒有債務，而且大量的 NOL 頭寸可以保護我們的現金流免受聯邦所得稅的影響。事實上，在 I 部分，我們在本季產生了約 280 萬美元的利息收入，全年產生了 1,060 萬美元的現金支出和高收益存款帳戶的多樣性。

The company initiated a return of capital program last year with a total cumulative dividends paid to date of approximately $137 million or $3.70 per share, including the one-time dividend of $1.50 per share paid on February 20 of this year. In addition, our Board recently approved an $0.11 per share dividend which is a 10% increase over the previous quarter's regular-way dividend. This will be paid on March 29, 2024 to shareholders of record on March 15, 2024.

該公司去年啟動了資本返還計劃，迄今為止累計支付的股息總額約為1.37億美元，即每股3.70美元，其中包括今年2月20日支付的每股1.50美元的一次性股息。此外，我們的董事會最近批准了每股 0.11 美元的股息，比上一季的常規股息增加了 10%。該款項將於2024年3月29日支付給2024年3月15日登記在冊的股東。

Net cash including restricted cash at year end 2023 was $254 million and adjusted for the $1.50 per share dividend paid on February 20, 2024, approximately $200 million which represents over $5.30 per share of our common stock issued and outstanding.

截至2023 年底，包括限制性現金在內的淨現金為2.54 億美元，並根據2024 年2 月20 日支付的每股1.50 美元股息進行調整，約為2 億美元，相當於我們已發行和流通的普通股每股超過5.30 美元。

The company has no term debt or revolving debt obligations as of December 31, 2023 and continues to live within cash flow, funding all its capital expenditures and cash flow from operations and cash held on the balance sheet. Commodity price realizations for the year before considering the impact of hedges were $74.69 per barrel of oil, $1.71 per Mcf of gas, and $20.83 per barrel NGLs.

截至 2023 年 12 月 31 日，該公司沒有定期債務或循環債務，並繼續維持在現金流範圍內，為其所有資本支出和來自營運的現金流量以及資產負債表上持有的現金提供資金。在考慮對沖影響之前，當年的大宗商品價格實現為每桶 74.69 美元，每桶天然氣 1.71 美元，每桶天然氣液體 20.83 美元。

As alluded to earlier, we have maintained our large federal NOL position which is estimated to be $1.6 billion at quarter end. Our NOL position has and will continue to allow us to shield our cash flows from federal income taxes.

正如之前提到的，我們維持了龐大的聯邦 NOL 頭寸，預計季度末為 16 億美元。我們的 NOL 地位已經並將繼續使我們能夠保護我們的現金流免受聯邦所得稅的影響。

Our commitment to cost discipline has continued to be impactful with adjusted G&A for the quarter of $2.2 million and $8.8 million or $1.42 per BOE for the year. We continue to generate net income for our shareholders. During the year, we earned adjusted net income of approximately $69 million or $1.87 per basic share and net cash provided by operating activities of approximately $116 million. This has all culminated in the company producing approximately $89 million in free cash flow for the year, which represents a conversion rate of approximately 96% relative to adjusted EBITDA or approximately $2.40 per share of common stock outstanding.

我們對成本控制的承諾持續產生影響，調整後的一般管理費用為季度 220 萬美元和 880 萬美元，即全年每桶油當量 1.42 美元。我們繼續為股東創造淨利。這一年，我們獲得調整後淨利潤約 6,900 萬美元或每股基本股 1.87 美元，經營活動提供的淨現金約 1.16 億美元。這一切最終使該公司今年產生了約 8,900 萬美元的自由現金流，這意味著相對於調整後的 EBITDA 或每股已發行普通股約 2.40 美元的轉換率約為 96%。

Before shifting to our outlook, we should note that our earnings release and 10-K provide further detail on our financial and operational performance during the year.

在轉向我們的展望之前，我們應該注意到我們的收益發布和 10-K 提供了有關我們今年財務和營運業績的更多詳細資訊。

Thank you, Brandon. We thought it would be helpful to walk through some of the company's highlights, business strategy, and other business details.

謝謝你，布蘭登。我們認為了解該公司的一些亮點、業務策略和其他業務細節會有所幫助。

As I mentioned previously, we had positive results this past year with the Northwest Stack wells adding oilier production while converting over 96% of EBITDA to free cash flow. Production for the year from our Mid-Con assets averaged approximately 17 MBoe per day, roughly 4% over the midpoint of 2023 guidance with oil volumes increasing 10% from the prior year, aided by the oilier content from our Northwest Stack area.

正如我之前提到的，去年我們取得了積極的成果，Northwest Stack 油井增加了石油產量，同時將 96% 以上的 EBITDA 轉化為自由現金流。今年，我們的中型資產的產量平均約為每天17MBoe，比2023 年指引的中位數增長約4%，石油產量比前一年增加了10%，這得益於我們西北煙囪區域的含油量較高。

The company's largest natural gas purchaser remained in ethane rejection, and we anticipate that a majority of our natural gas stream could remain in ethane rejection this year. While this impacts the total volume of NGLs, the remaining volume will be composed of more profitable C3-plus components like propane, butane, and gasoline on a percentage basis. Likewise, the ethane remaining in the natural gas stream will improve its BTU quality.

該公司最大的天然氣採購商仍處於乙烷廢棄狀態，我們預計今年我們的大部分天然氣流量可能仍處於乙烷廢棄狀態。雖然這會影響 NGL 的總量，但剩餘量將由利潤更高的 C3+ 成分組成，如丙烷、丁烷和汽油（按百分比計算）。同樣，天然氣流中殘留的乙烷將提高其 BTU 品質。

Let us pause for a moment to revisit the key highlights of SandRidge. Our asset base is focused in the Mid-Continent region with a primarily PDP well set, which do not require any routine flaring of produced gas. These well unlisted assets are most fully held by production with a long history, shallowing and diversified production profile and double-digit reserve life. These assets include more than 1,000 miles each of owned and operated SWD and electric infrastructure over our footprint.

讓我們暫停一下，回顧一下 SandRidge 的主要亮點。我們的資產基礎集中在中大陸地區，主要擁有 PDP 井組，不需要對產出的天然氣進行任何常規燃燒。這些良好的非上市資產大部分由歷史悠久、生產結構淺且多樣化且儲量壽命為兩位數的生產所持有。這些資產包括我們擁有和經營的超過 1,000 英里的 SWD 和電力基礎設施。

This substantial owned and integrated infrastructure provides the company both cost and strategic advantages, bolstering asset operating margin, reduce lifting as well as water handling and disposal costs, and combined with other advantages help derisk individual well profitability for majority of our producing well down to $40 WTI and $2 Henry Hub. While we have recently seen spot prices below $2 Henry Hub, WTI has been in the mid to high 70s, which has and will buoy our revenue and cash flow this year.

這種擁有大量的綜合基礎設施為公司提供了成本和戰略優勢，提高了資產運營利潤，減少了提升以及水處理和處置成本，並與其他優勢相結合，有助於將我們大多數生產井的單井獲利風險降至40 美元WTI 和亨利中心 2 美元。雖然我們最近發現 Henry Hub 現貨價格低於 2 美元，但 WTI 價格一直處於 70 多美元的中高位，這已經並將提振我們今年的收入和現金流。

Our assets continue to yield meaningful free cash flow with total net cash as of year end and adjusted for recent dividends tolling approximately $200 million. This cash generation potential provides several paths to increase shareholder value realization and is benefited by low G&A burden. In fact, interest income earned from our cash assets offset our cash G&A last year. As we realize value from our producing assets and generate cash, our Board is committed to utilizing our assets including our cash to maximize shareholder value.

我們的資產持續產生有意義的自由現金流，截至年底淨現金總額並根據近期股息調整後約為 2 億美元。這種現金產生潛力提供了多種增加股東價值實現的途徑，並受益於較低的一般行政費用負擔。事實上，我們的現金資產所賺取的利息收入抵銷了去年我們的現金管理費用。當我們從生產資產中實現價值並產生現金時，我們的董事會致力於利用我們的資產（包括現金）來最大化股東價值。

SandRidge's value proposition is materially derisked from a financial perspective by a strengthened balance sheet, robust net cash position, no debt, financial flexibility, and approximately $1.6 billion in NOLs. Further, the company is not subject to MVCs or other significant off-balance sheet financial commitments.

從財務角度來看，SandRidge 的價值主張透過強化的資產負債表、強勁的淨現金狀況、無債務、財務靈活性以及約 16 億美元的 NOL 大大降低了風險。此外，該公司不受 MVC 或其他重大表外財務承諾的約束。

Finally, it's worth highlighting that we take our ESG commitments seriously and have implemented disciplined processes around them. We remain committed to our strategy to focus on growing the cash value generation capability of our business in a safe, responsible, efficient manner while prudently allocating capital to high-return, organic growth projects and remain open to value-accretive opportunities. This strategy has five points. The first is to maximize the cash value and generation capacity of our incumbent Mid-Con PDP assets by extending and flattening our production profile with high rate of return workover and artificial lift conversions as well as continuously pressing on operating and administrative costs.

最後，值得強調的是，我們認真對待 ESG 承諾，並圍繞這些承諾實施了嚴格的流程。我們仍然致力於我們的策略，即專注於以安全、負責任、高效的方式提高我們業務的現金價值生成能力，同時審慎地將資本分配給高回報、有機增長的項目，並對增值機會保持開放態度。這個策略有五點。首先是透過高返修率和人工舉升轉換以及不斷壓縮營運和管理成本來擴展和扁平化我們的生產概況，從而最大限度地提高我們現有中型 PDP 資產的現金價值和發電能力。

The second is to ensure we convert as much EBITDA to free cash flow as possible by exercising capital stewardship and investing in projects and opportunities that have high risk-adjusted fully burdened rate of return that economically add production. The third is to maintain optionality to execute on value-accretive merger and acquisition opportunity that could bring synergies, leverage the company's core competencies, complement its portfolio of assets, further utilize its approximately $1.6 billion of net operating losses, or otherwise yield attractive returns for its shareholders.

第二是確保我們透過實行資本管理並投資於具有高風險調整完全負擔回報率的項目和機會，從而在經濟上增加產量，從而將盡可能多的 EBITDA 轉化為自由現金流。第三是維持執行增值併購機會的選擇性，這些機會可以帶來綜效，利用公司的核心競爭力，補充其資產組合，進一步利用其約16 億美元的淨營運虧損，或以其他方式為公司帶來有吸引力的回報它的股東。

I'd like to pause here for a moment to touch on the Northwest Stack acquisition that closed last year, which increased our interest in 26 operated wells. We like these types of small ball bolt-ons where we can efficiently add production for accretive returns. We will continue to look for opportunities like this as well as larger ones that meet the characteristics I described earlier.

我想在此暫停一下，談談去年完成的 Northwest Stack 收購，該收購增加了我們對 26 口營運井的興趣。我們喜歡這些類型的小球螺栓固定裝置，我們可以有效地增加產量以獲得增值回報。我們將繼續尋找這樣的機會以及符合我之前描述的特徵的更大機會。

Fourth, as we generate cash, we will continue to work with our Board to assess path that maximizes shareholder value to include investment and strategic opportunities, return of capital, and other uses. To this end, the company expanded its return of capital program that consisted of, one, a $3.70 per share of cumulative dividends paid to date; two, $0.11 per share regular-way cash dividend, an increase of 10% from the prior quarters; and finally, an opportunistic share repurchase program of up to $75 million.

第四，當我們產生現金時，我們將繼續與董事會合作，評估股東價值最大化的路徑，包括投資和策略機會、資本回報和其他用途。為此，該公司擴大了資本回報計劃，其中包括：一、迄今為止支付的累積股息每股 3.70 美元；二、定期派發現金股利每股0.11美元，較上季增加10%；最後，高達 7,500 萬美元的機會主義股票回購計畫。

Please note that the company's cash position is also a strategic advantage and provides competitive leverage in evaluating M&A, especially given the outlook on interest rates, capital market, and impacts of the optionality on the number and type of opportunities that could become available at certain levels. Know that there is a high bar, both at the management and Board levels, for mergers and acquisitions. Management will continue to assess and promote regular-way return of capital discussions, advanced M&A valuations, meet with shareholders and investors, and work with our Board to further enhance path to maximize shareholder value. These topics remain paramount.

請注意，公司的現金狀況也是一種策略優勢，並在評估併購時提供競爭優勢，特別是考慮到利率、資本市場的前景以及選擇性對某些水平上可能提供的機會數量和類型的影響。要知道，在管理階層和董事會層面，併購都有很高的門檻。管理層將繼續評估和促進定期資本回報討論、先進的併購估值、與股東和投資者會面，並與董事會合作，進一步加強股東價值最大化的道路。這些主題仍然至關重要。

In the interim, we have secured favorable banking terms and keep our cash position diversified across interest-bearing accounts at multiple significant, well-capitalized financial institutions. As Brandon mentioned before, the company earned $10.6 million in interest income this past year. Final staple is to uphold our ESG responsibilities.

在此期間，我們獲得了有利的銀行條款，並在多個資本充足的重要金融機構的計息帳戶中保持現金頭寸多元化。正如布蘭登之前提到的，該公司去年的利息收入為 1,060 萬美元。最後一點是履行我們的 ESG 責任。

Now circling back to our capital program. During the past year, we completed 16 artificial lift conversion as the company continues to focus on high-return, value-adding projects that provide benefits such as lowering forward-looking costs, enhancing production on existing wells, and further moderating its already modest decline profile. The systems we have and will be installing our tailored for the wells current fluid production and will reduce the electrical demand from the current artificial lift system and is key to decreasing future utility costs.

現在回到我們的資本計畫。去年，我們完成了 16 個人工舉升改造，公司繼續專注於高回報、增值項目，這些項目帶來的好處包括降低前瞻性成本、提高現有油井的產量以及進一步減緩本已不大的產量下降輪廓。我們擁有並將安裝的系統是為目前的油井流體生產量身定制的，將減少當前人工舉升系統的電力需求，是降低未來公用事業成本的關鍵。

This year, our production optimization campaign includes 14 artificial lift conversions as well as heel completions, accessing previously unstimulated intervals, recompletions that would add new uphole zones and proven productive formations, and refracs that would restimulate quality reservoir. We plan to spend between $8 million to $11 million in CapEx on production optimization and limited opportunistic leasing this year.

今年，我們的生產優化活動包括14 次人工舉升轉換以及跟部完井，進入以前未增產的層段、增加新井上區域和已探明的生產地層的重新完井，以及重新增產優質儲層的重複壓裂。我們計劃今年在生產優化和有限機會租賃方面花費 800 萬至 1,100 萬美元的資本支出。

In addition to our production optimization projects last year, we completed four operated wells in the Northwest Stack, which increased overall oil content on a BOE basis as well as our prior well reactivation program which has returned over 180 wells to production over the past few years. However, given the commodity price dynamics this year in that our Mid-Con assets are 99% held by production which preserves the tenor of our development option, we will not be operating a drilling rig this year and will do for more meaningful level of well reactivation.

除了去年的生產優化項目外，我們還完成了Northwest Stack 的四口運營井，這增加了以BOE 為基礎的整體含油量，以及我們之前的油井重新激活計劃，該計劃在過去幾年中使180多口井恢復生產。然而，考慮到今年的大宗商品價格動態，我們的中型資產 99% 由生產持有，這保留了我們開發選擇的期限，我們今年不會運營鑽機，而是會爭取更有意義的油井水平重新激活。

We will continue to monitor commodity price dynamics and maintain flexibility to adjust as may be warranted and factor in these considerations. Commodity prices firmly over $80 WTI and $4 Henry Hub of our confident tenor and/or reduction in well costs are needed before we can return to exercise the option value of further development or reactivations. The focused efforts over the past several quarters in optimizing our well's production profile and cost focus have contributed to flattening the expected base asset level decline of our already producing assets to single-digit average over the next 10 years before the impact of further production optimizations, development, or acquisitions.

我們將繼續監控大宗商品價格動態，並在必要時保持調整的靈活性並考慮這些因素。商品價格穩穩超過 80 美元的 WTI 和 4 美元的亨利中心，我們有信心，並且/或需要降低油井成本，然後我們才能返回行使進一步開發或重新啟動的期權價值。過去幾季我們在優化油井生產狀況和成本重點方面的集中努力，有助於在未來10 年內將我們已生產資產的預期基礎資產水準下降壓平至個位數平均水平，然後再進一步優化生產。開發或收購。

Company continues to ensure that all projects meet high rate of return threshold and remains capitally disciplined as commodity price landscape changes. While we have prudently reduced activity near term, a tempered commodity price environment could be constructive for M&A. Our producing Mid-Con assets will continue to generate cash flow near term. With the recent strip, natural gas prices projected to increase over the next year plus.

公司繼續確保所有項目滿足高回報率門檻，並隨著大宗商品價格格局的變化保持資本紀律。雖然我們近期謹慎地減少了活動，但溫和的大宗商品價格環境可能對併購有利。我們的中型生產資產短期內將持續產生現金流。隨著最近的剝離，天然氣價格預計將在未來一年內上漲。

In the interim, the lower natural gas and NGL price environment could present more cost-effective opportunities for acquisitions, which would then be positioned to benefit from future price improvement. In addition, to further leverage the temporal low natural gas price environment as well as activity around this, we have allocated capital for targeted high-graded leasing near our footprint this year, which could further bolster our drilling inventory in the future.

在此期間，較低的天然氣和液化天然氣價格環境可能會帶來更具成本效益的收購機會，從而受益於未來價格的上漲。此外，為了進一步利用暫時較低的天然氣價格環境以及與之相關的活動，我們今年已分配資金用於靠近我們足跡的有針對性的高等級租賃，這可能會進一步增強我們未來的鑽探庫存。

Now shifting to expenses. We're able to keep adjusted G&A at $2.2 million for the quarter and $8.8 million or $1.42 per BOE for the year, which compares favorably with our peers. It was 7% below the midpoint of 2023 guidance. The efficiency of our organization stems from our core values to remain cost disciplined as well as prior initiatives, which have tailored our organization to be fit for purpose. We continue to balance the weighting of field versus corporate personnel to reflect where we actually create value and outsource necessary but more perfunctory and less core functions such as operations accounting, land administration, IT, tax, and HR.

現在轉向支出。我們能夠將本季調整後的一般管理費用保持在 220 萬美元，全年調整後的 G&A 保持在 880 萬美元，即每桶油當量 1.42 美元，這與我們的同行相比是有利的。比 2023 年指引的中點低 7%。我們組織的效率源自於我們維持成本紀律的核心價值以及先前的舉措，這些舉措使我們的組織適合目標。我們持續平衡現場人員與企業人員的權重，以反映我們實際創造價值的領域，並外包必要但較為敷衍且不太核心的職能，例如營運會計、土地管理、IT、稅務和人力資源。

Given our efficient structure and ability to flex with both activity and commodity prices, our total personnel has remained consistent at just over 100 people while retaining key technical skill sets at both the experience and institutional knowledge of our area of operations. We believe that this efficiency and structure are favorable advantages that could be effectively applied over a broader asset base and a benefit as the company evaluates potential for M&A.

鑑於我們高效的結構以及靈活調整活動和商品價格的能力，我們的人員總數始終保持在 100 多人，同時保留了我們業務領域的經驗和機構知識方面的關鍵技術技能。我們相信，這種效率和結構是有利的優勢，可以有效地應用於更廣泛的資產基礎，並在公司評估併購潛力時帶來好處。

Despite inflationary pressures and an increased well count from our prior well reactivation and development programs, as well as the increased interest associated with our recent Northwest Stack acquisition, LOE and expense workovers for the quarter were $9.9 million or $6.73 per BOE for the quarter and $41.9 million or $6.80 per BOE for the year, which was 3% below the midpoint of 2023 guidance. We are projecting a decrease in expense workovers this year, as well as softening in utility costs and reduced water handling costs. We will continue to actively press on operating costs through rigorous bidding processes, leveraging our significant infrastructure, operation center, and other company advantages.

儘管存在通貨膨脹壓力，並且我們先前的油井重新啟動和開發計劃增加了油井數量，並且與我們最近收購Northwest Stack 相關的利息增加，但本季度的LOE 和修井費用為990 萬美元，即每桶油當量6.73 美元，每桶油當量41.9 美元。今年每桶油當量為 6.80 美元，比 2023 年指引的中點低 3%。我們預計今年修井費用將減少，公用事業成本將有所下降，水處理成本也會降低。我們將繼續利用我們重要的基礎設施、營運中心和其他公司優勢，透過嚴格的招標流程積極降低營運成本。

While I have previously addressed commodity price dynamics, I wanted to reinforce a few salient points here. The first being that the majority of our producing properties are economic down to $40 WTI and $2 Henry Hub. While oil made up 17% of total production last year, it contributed over 50% of revenue on a BOE basis. Despite current sub $2 natural gas prices, the forward-looking future curve remains in Contango and at recent strip projected to nearly double spot price by this winter. Also, WTI remains constructive in the mid to high 70s this year.

雖然我之前已經討論過大宗商品價格動態，但我想在這裡強調幾個要點。首先，我們的大部分生產地產的經濟性分別為 40 美元的 WTI 和 2 美元的亨利中心。雖然石油佔去年總產量的 17%，但以 BOE 計算，它貢獻了超過 50% 的收入。儘管目前天然氣價格低於 2 美元，但前瞻性的未來曲線仍處於期貨溢價，並且預計到今年冬天現貨價格將幾乎翻倍。此外，WTI 今年仍維持在 70 年代中期至高位的建設性水準。

While we have judiciously decreased capital spending in light of natural gas prices, more significant reductions in oil prices and a structural change in natural gas futures would be needed before we implemented more severe steps like material proactive well curtailment that would impact our production levels near term. However, we will continue to monitor commodity prices and have the financial and operational flexibility to make further adjustments in response to positive or negative commodity prices in the future to prudently steward the business and optimize cash flows.

儘管我們根據天然氣價格明智地減少了資本支出，但在我們實施更嚴厲的措施之前，例如主動削減油井，這將影響我們的近期生產水平，還需要更大幅度地降低油價和對天然氣期貨進行結構性改變。 。然而，我們將繼續監控大宗商品價格，並擁有財務和營運靈活性，以應對未來大宗商品價格的正或負進行進一步調整，以審慎管理業務並優化現金流。

Please note that our guidance for 2024 includes price realizations between 50% and 70% of Henry Hub for natural gas to capture the potential range of realizations of the year with the high-end more representative of winter pricing and no low in torque sub $2 Henry Hub. That said, and to reinforce my earlier comment, SandRidge's value proposition is materially derisked from a financial perspective by our strong balance sheet, robust net cash position, no debt, financial flexibility, approximately $1.6 billion in NOLs. Long and short, the company is well positioned to navigate, if not leverage, i.e., M&A, the current landscape.

請注意，我們對 2024 年的指導包括亨利中心天然氣價格的 50% 至 70% 之間的價格實現，以捕捉今年的潛在實現範圍，高端價格更能代表冬季定價，並且扭矩不低於 2 美元亨利中心。也就是說，為了強化我先前的評論，SandRidge 的價值主張從財務角度來看，由於我們強大的資產負債表、強勁的淨現金狀況、無債務、財務靈活性以及約16 億美元的NOL，而大大降低了風險。無論長短，該公司都處於有利地位，即使無法利用（即併購）當前形勢，也能駕馭當前局勢。

In summary, the company has approximately $200 million of net cash and cash equivalent at year end after adjusting for recent dividends, which represents approximately $5.30 per share for common stock issued and outstanding. Average production for the year of approximately 17 MBoe per day, which is a 10% increase in oil from the prior year. Mid-Con position that is 99% held by production, which preserves the option value of future development potential in a cost-effective manner.

總之，在調整近期股息後，公司年末擁有約 2 億美元的淨現金和現金等價物，相當於已發行和流通的普通股每股約 5.30 美元。全年平均產量約為每天 17 MBoe，比前一年增加 10%。中型企業的地位 99% 由生產佔據，這以具有成本效益的方式保留了未來發展潛力的選擇權價值。

Low overhead, top-tier adjusted G&A of $1.42 per BOE. No debt, in fact negative leverage. Impactful free cash flow and a growing net cash position supported by a diverse production profile, flattening expected annual base PDP declines at single-digit average over the next 10 years, and a multi-digit reserve life asset base. $1.6 billion in NOLs, which will shield future free cash flow from federal income taxes, and a large owned and operated SWD and electrical infrastructure which provide cost and strategic advantages requiring little to no future capital to maintain.

低管理費用，頂級調整後的 G&A 為每 BOE 1.42 美元。沒有債務，實際上是負槓桿。有影響力的自由現金流和不斷增長的淨現金頭寸受到多元化生產狀況的支持，預計未來 10 年 PDP 年基數下降將趨於個位數平均，以及多位數的儲備壽命資產基礎。 16億美元的NOL將保護未來的自由現金流免受聯邦所得稅的影響，而大型擁有和營運的SWD和電力基礎設施將提供成本和戰略優勢，幾乎不需要未來的資本來維持。

This concludes our prepared remarks. Thank you for your time. We'll now open the call to questions.

我們準備好的演講到此結束。感謝您的時間。我們現在開始提問。

(Operator Instructions) Josh Young, Bison Interests.

（操作員說明）Josh Young，野牛興趣。

So first of all, you guys results are great considering how little you're reinvesting, so I wanted to commend you on that very low decline rate, and you're also not reinvesting into gas production at low prices. So I wanted to I commend you for that.

首先，考慮到你們的再投資很少，你們的業績非常好，所以我想讚揚你們的下降率非常低，而且你們也沒有以低價再投資於天然氣生產。所以我想為此讚揚你。

I wanted to ask on the cash balance. So you guys have done some special dividends which are fun to receive as a shareholder but don't really compound value over time, and you are sitting on a very large cash balance. How do you think about the maximum return approach towards deploying that and what the opportunity cost is of sitting on such a large cash balance considering the free cash flow profile?

我想問一下現金餘額。所以你們已經發放了一些特別股息，作為股東收到這些股息很有趣，但隨著時間的推移並沒有真正實現複合價值，而且你們坐擁大量現金餘額。您如何看待部署該技術的最大回報方法以及考慮到自由現金流狀況而擁有如此大的現金餘額的機會成本是多少？

Know this is something that we consistently spend a lot of time on and have meaningful conversations with our Board and are constantly evaluating. We're trying to balance our growing cash position with maintaining the optionality of M&A, especially given the reduced natural gas price environment today that we think that we can take advantage of, as well as the other things that I mentioned on the call, as well as returning capital to shareholders. And we're looking at that as a three-pronged approach, right, on making sure that we have a good regular-way dividend that we can consistently approve quarter after quarter and balance that out over time.

我們知道這是我們一直花費大量時間並與董事會進行有意義的對話並不斷評估的事情。我們正在努力平衡不斷增長的現金狀況與保持併購的選擇性，特別是考慮到今天我們認為我們可以利用的天然氣價格下降的環境，以及我在電話會議中提到的其他事情，以及向股東返還資本。我們將其視為一種三管齊下的方法，對吧，確保我們擁有良好的定期股息，我們可以逐季一致批准並隨著時間的推移平衡股息。

Second is, to top off the special dividends, again, just balancing the time that we're taking to review M&A versus being capitally disciplined in the current environment, as well as opportunistic share repurchases. So I don't think that we're sticking to any one option and know that as dynamics change this year going forward, we'll re-evaluate. So if something's not working. We'll have additional discussions and try to account for all the facts at the time.

其次，再次強調特別股息，平衡我們審查併購的時間與當前環境下的資本紀律以及機會主義的股票回購。因此，我認為我們不會堅持任何一種選擇，並且知道隨著今年動態的變化，我們將重新評估。所以如果有東西不起作用。我們將進行更多討論並嘗試解釋當時的所有事實。

Okay. But I guess two quick follow-ups on that. One, have you guys actually repurchased a single share since you went net cash positive at, I think, it was $5 a share three years ago? There has been discussion of getting approval of it. Have you guys actually bought a single share back?

好的。但我想對此有兩個快速跟進。第一，自從三年前你們的淨現金為正（我認為每股 5 美元）後，你們是否真的回購了一股股票？已經就獲得批准進行了討論。你們真的回購了一股嗎？

We have not, but we continue to maintain the program. And since there's opportunistically repurchased during market dislocations compared to our NAV, the program is not intended to buy back certain amounts at certain times or do it under any circumstances. So we're not trying to make a goal of repurchasing all $75 million this year. But for example, if there's a dislocation between our share price and we still have strong support commodity, a high NAV, those are perfect opportunities to buoy our share price and repurchase shares. Fortunately or unfortunately, the share prices have performed relatively well since the announcement of the return of capital program with the recent changes that we made last year and then again this year with less instances of market dislocation.

我們沒有，但我們繼續維持該計劃。由於與我們的資產淨值相比，在市場混亂期間會機會性地回購，因此該計劃無意在特定時間或在任何情況下回購特定金額。因此，我們並沒有試圖設定今年回購全部 7,500 萬美元的目標。但舉例來說，如果我們的股價之間存在錯位，而我們仍然擁有強大的支援商品、高資產淨值，那麼這些都是提振我們的股價和回購股票的絕佳機會。幸運的是，或者不幸的是，自從宣布資本返還計劃以來，隨著我們去年和今年的最新變化，股價表現相對較好，市場混亂的情況也減少了。

Okay, great. And then just last follow-up. Aren't you better off buying much smaller assets of this sort? You did buy one last year of this sort at a very high discount rate with a lot of cash flow versus the purchase cost. Aren't you better off focusing on that rather than on sort of this M&A where you'd be advantaged with having a large cash balance, and aren't you better off going on hiring more land, men, and doing many million dollar to $10 million sorts of deals rather than trying to preserve this optionality?

好的，太好了。然後就是最後一次跟進。購買此類較小的資產不是更好嗎？去年你確實以非常高的折扣率購買了這類產品，與購買成本相比，現金流量很大。你是否應該專注於這一點，而不是專注於這種併購，因為擁有大量現金餘額會帶來優勢，並且繼續僱用更多土地、人員並投入數百萬美元來進行併購不是更好嗎？1000萬美元的交易而不是試圖保留這種選擇權？

No, it's a great question. The answer is we are looking at those things. We try to take advantage of them when they come. We're constantly doing [BD] to drum up new opportunities. However, there's not always perfect timing with buyer and seller, right? And we have to have that -- to get things done on the small ball acquisition front, and we'd like to maintain the optionality for something that's more significant than that.

不，這是一個很好的問題。答案是我們正在研究這些事情。當它們到來時，我們試圖利用它們。我們不斷地做[BD]來尋找新的機會。然而，買家和賣家之間並不總是有完美的時機，對吧？我們必須做到這一點——在小球收購方面完成工作，並且我們希望保持比這更重要的事情的選擇性。

So we're evaluating evaluating a range of opportunities that range from a couple of million up to a couple of hundred million and know that we have a high bar, and anything that we do is going to be accretive to our shareholders. But we are promoting those small ball on acquisitions right, alongside the larger ones.

因此，我們正在評估一系列機會，從幾百萬到幾億不等，我們知道我們的門檻很高，我們所做的任何事情都會為我們的股東帶來增值。但我們正在將這些小球與大球一起進行收購。

Great. Okay.

偉大的。好的。

David [Cardell] BluePond Capital.

大衛[卡德爾]藍池資本。

Yes. I'm interested in exploring more the M&A environment, and I'm curious if deal prices are better on smaller deals or for larger deals. I'm curious how big a deal you feel you could do. And I'm also curious about -- right now, you would think that the price environment is very good that there being a lot of opportunities. The Mid-Con, in a sense, is kind of an undervalued basin and the pricing, Henry Hub gas prices are so low. So I would think that there would be deals to be had.

是的。我有興趣更多地探索併購環境，我很好奇較小交易或較大交易的交易價格是否更好。我很好奇你覺得你能做多大的事。我也很好奇——現在，你會認為價格環境非常好，有很多機會。從某種意義上說，中部地區是一個被低估的盆地，亨利中心的天然氣價格非常低。所以我認為會有交易。

And I appreciate the fact that you are very careful. I totally am on board with that. But I'm just trying to get a realistic understanding about what we can expect over the course of the year. How you're seeing the deal flow? What there there is out there, if it's looking better? So I realized I've asked a lot of questions on an M&A, but if you can opine on any of those, that would be helpful.

我很欣賞你非常小心。我完全同意這一點。但我只是想對我們在這一年中的預期有一個現實的了解。您如何看待交易流程？如果看起來更好的話，那裡有什麼？所以我意識到我已經問了很多關於併購的問題，但如果你能對其中任何一個問題發表意見，那將會很有幫助。

I'll try to hit as many of them as I can. If I miss anything, please follow back up. I think we're seeing a constructive M&A market within the Mid-Con. We agree with you that Mid-Con is a place we are able to generate meaningful cash flow just like we have in our incumbent assets. We think we can further leverage that by expanding our asset base and taking our cost focus efforts, both to the expense and the back office side leverage, and we know the area well.

我會盡力擊中盡可能多的人。如果我錯過了什麼，請跟進。我認為我們正在中期看到一個建設性的併購市場。我們同意您的觀點，即中控中心是我們能夠產生有意義的現金流的地方，就像我們現有資產一樣。我們認為，我們可以透過擴大我們的資產基礎並集中成本來進一步利用這一點，無論是費用還是後台槓桿，我們都很了解這個領域。

So we continue to see things -- like I mentioned to Josh, the challenge is you have to have alignment between the buyer and seller. We're committed as a Board and management team to make this a top priority. With return of capital, M&A is right behind it, making sure that we are actively looking at and evaluating opportunities that make sense and trying to do something that's really accretive to shareholders, trying to take advantage of the currently lower natural gas prices.

所以我們繼續看到一些事情——就像我向喬許提到的那樣，挑戰是買家和賣家之間必須保持一致。作為董事會和管理團隊，我們致力於將此作為首要任務。隨著資本回報，併購緊隨其後，確保我們積極尋找和評估有意義的機會，並嘗試做一些真正對股東有利的事情，嘗試利用當前較低的天然氣價格。

But again, we can't opine on success right there, only that we're going to roll up our sleeves, look at things that are small but make sense, look at things that are a little bit larger, and it still makes sense. And relative to how does one look to the other, it depends on the asset type. Obviously where we bought back interest in the wells that we operate, we have an operating advantage there. So those things are really intuitive, make lot of sense, and you have a really strong margin there.

但同樣，我們不能就在那裡評論成功，只是我們要捲起袖子，看看那些小但有意義的事情，看看更大一點的事情，它仍然有意義。相對於一個人如何看待另一個人，這取決於資產類型。顯然，如果我們回購了我們營運的油井的權益，我們就在那裡擁有營運優勢。所以這些東西非常直觀，很有意義，而且你在那裡有很大的優勢。

As we look at opportunities where we don't currently operate, there are things where you can get a better discount rate on things, both smaller and larger, depending on the asset quality. Are those things well historied? Are they relatively newer where there's more subjective interpretation of the performance? Is there upside? Those are all things that we look at and value differently, depending on the assets.

當我們尋找目前尚未運營的機會時，您可以在某些事情上獲得更好的折扣率，無論大小，具體取決於資產品質。這些事情歷史悠久嗎？它們是否相對較新，對錶演有更多的主觀解釋？有上升空間嗎？這些都是我們根據資產的不同來看待和評價的東西。

So hopefully I covered all your questions, David, please let me know if I haven't.

所以希望我已經回答了你所有的問題，大衛，如果我沒有回答，請告訴我。

There is one more. I'm just curious, are you more likely to find good deals on small-sized acquisitions or maybe big deals, they are better deals because there are fewer bidders. And I'm also curious, how big a deal could you do?

還有一個。我只是很好奇，您是否更有可能在小型收購或大型交易中找到好的交易，它們是更好的交易，因為競標者較少。我也很好奇，你能做多大的事？

Sure. Again, go back to my previous comment, I think there are great small ball deals. I think there are really good larger deals. We would have to have a string of pearls on the smaller deals where they may have a better cash-on-cash return. They're harder to string together to be as impactful. It's like the differences for our organic opportunities with our capital workover program that have really high rates of return versus our prior drilling campaign that still had high rates of return, a little bit less but contributes more meaningfully on a value basis. So we think there's justification for looking at both because there's different drivers between each of those options and know that we're going to do something that makes sense.

當然。再次回到我之前的評論，我認為有很棒的小球交易。我認為確實有一些更大的交易。我們必須在較小的交易上擁有一串珍珠，這些交易可能會獲得更好的現金回報。它們更難組合在一起產生相同的影響力。這就像我們的資本修井計劃的有機機會的差異，它具有非常高的回報率，而我們之前的鑽探活動仍然具有高回報率，雖然少了一點，但在價值基礎上貢獻更有意義。因此，我們認為同時考慮這兩個選項是有道理的，因為每個選項之間都有不同的驅動因素，並且知道我們將做一些有意義的事情。

Okay. I'll just say that personally I think there is dislocation in your share price given your net cash balance, your asset, your low-cost operations. Personally, I think that the stock is dislocated from the value that it offers shareholders.

好的。我只想說，就我個人而言，考慮到你的淨現金餘額、你的資產和你的低成本運營，我認為你的股價有錯位。就我個人而言，我認為該股票與其為股東提供的價值脫節。

Well, appreciate your comment, David. I think that's something that we look at consistently from day to day, make sure we're making good long-term decisions. And we want to ensure that when we do repurchase shares, we're doing it at a level that also have good returns. So we're valuing that option right alongside all the other options, so it's not an either or answer. But know that will continue to (technical difficulty) as we move forward through the year.

好吧，謝謝你的評論，大衛。我認為這是我們每天持續關注的事情，確保我們做出良好的長期決策。我們希望確保當我們回購股票時，我們的回購水準也能帶來良好的回報。因此，我們將該選項與所有其他選項一起評估，因此這不是一個非此即彼的答案。但要知道，隨著我們今年的前進，這種情況將繼續存在（技術困難）。

(Operator Instructions) There are no further questions at this time. Ladies and gentlemen, this concludes today's conference call. You may now disconnect.

（操作員說明） 目前沒有其他問題。女士們、先生們，今天的電話會議到此結束。您現在可以斷開連線。