Sandridge Energy Inc 10-Q for FY2026 Q3
Sandridge Energy Inc (SD)
10-Q
2026-11-05
For: 2026-09-30
View Original
Added on
November 05, 2026
About this 10-Q
Sandridge Energy Inc filed this 10-Q on November 5, 2026, covering the quarter ended September 30, 2026 (FY2026 Q3).
SandRidge Energy, Inc. reported nine-month total revenues of 155,310 (in thousands) and production of 5,390 MBoe. At September 30, 2026, cash and cash equivalents, including restricted cash, was $70.0 million, and no term or revolving debt was outstanding. AI summary
Headline figures
Quarter ended September 30, 2026, as reported in this filing, compared with the same period a year earlier where the filing states it.
- Revenue
- $54.42M
- up 36.6% from $39.82M a year earlier
- Net income
- $30.62M
- up 91.9% from net income of $15.95M a year earlier
- Diluted EPS
- $0.82
- up 90.7% from $0.43 a year earlier
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form | ||
(Mark One)
| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |||||
For the quarterly period ended September 30, 2026
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |||||
For the transition period from to
Commission File Number: 001-33784
| (Exact name of registrant as specified in its charter) | ||||||||
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | |||||||
(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 | ||||||||||||
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 | ☐ | ☑ | ||||||||||||
| 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
The number of shares outstanding of the registrant’s common stock, par value $0.001 per share, as of the close of business on October 29, 2026, was 37,107,240 .
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 (“Royalty Trust”). All monetary values are stated in U.S. dollars.
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 U.S. Securities and Exchange Commission (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 potential impact of international negotiations on the supply and demand of oil, natural gas and natural gas liquids (“NGL”), outcomes and effects of litigation, claims and disputes, elements of our business strategy, compliance with governmental regulation of the oil, natural gas and NGL 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, 2025 (the “2025 Form 10-K”) filed with the SEC on March 5, 2026 and in Item 1A of this Quarterly Report.
SANDRIDGE ENERGY, INC. AND SUBSIDIARIES
FORM 10-Q
Quarter Ended September 30, 2026
INDEX
ITEM 1. | ||||||||
ITEM 2. | ||||||||
ITEM 3. | ||||||||
ITEM 4. | ||||||||
ITEM 1. | ||||||||
ITEM 1A. | ||||||||
ITEM 2. | ||||||||
ITEM 3. | ||||||||
| ITEM 4. | ||||||||
| ITEM 5. | ||||||||
ITEM 6. | ||||||||
PART I. Financial Information
ITEM 1. Financial Statements
SANDRIDGE ENERGY, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)
(In thousands, except share data)
| September 30, 2026 | December 31, 2025 | ||||||||||
ASSETS | |||||||||||
| Current assets | |||||||||||
| Cash and cash equivalents | $ | $ | |||||||||
| Restricted cash | |||||||||||
| Accounts receivable, net | |||||||||||
| Derivative contracts | |||||||||||
| Prepaid expenses | |||||||||||
| Other current assets | |||||||||||
| Total current assets | |||||||||||
| Oil and natural gas properties, using full cost method of accounting | |||||||||||
| Proved | |||||||||||
| Unproved | |||||||||||
| Less: accumulated depreciation, depletion and impairment | ( | ( | |||||||||
| Net oil and natural gas properties | |||||||||||
| Other property, plant and equipment, net | |||||||||||
| Other assets | |||||||||||
| Deferred tax assets, net of valuation allowance | |||||||||||
| Total assets | $ | $ | |||||||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||||||
| Current liabilities | |||||||||||
| Accounts payable and accrued expenses | $ | $ | |||||||||
| Derivative contracts | |||||||||||
| Asset retirement obligations | |||||||||||
| Other current liabilities | |||||||||||
| Total current liabilities | |||||||||||
| Derivative contracts | |||||||||||
| Asset retirement obligations | |||||||||||
| Other long-term obligations | |||||||||||
| Total liabilities | |||||||||||
Commitments and contingencies (Note 7) | |||||||||||
| Stockholders’ Equity | |||||||||||
Common stock, $ | |||||||||||
| Additional paid-in capital | |||||||||||
| Accumulated deficit | ( | ( | |||||||||
| Total stockholders’ equity | |||||||||||
| Total liabilities and stockholders’ equity | $ | $ | |||||||||
The accompanying notes are an integral part of these condensed consolidated financial statements.
4
SANDRIDGE ENERGY, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED INCOME STATEMENTS (Unaudited)
(In thousands, except per share data)
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
| Revenues | |||||||||||||||||||||||
| Oil, natural gas and NGL | $ | $ | $ | $ | |||||||||||||||||||
| Total revenues | |||||||||||||||||||||||
| Expenses | |||||||||||||||||||||||
| Lease operating expenses | |||||||||||||||||||||||
| Production, ad valorem, and other taxes | |||||||||||||||||||||||
| Depreciation and depletion — oil and natural gas | |||||||||||||||||||||||
| Depreciation and amortization — other | |||||||||||||||||||||||
| General and administrative | |||||||||||||||||||||||
| Restructuring expenses | |||||||||||||||||||||||
| (Gain) loss on derivative contracts | ( | ( | |||||||||||||||||||||
| Other operating (income) expense, net | |||||||||||||||||||||||
| Total expenses | |||||||||||||||||||||||
| Income from operations | |||||||||||||||||||||||
| Other income (expense) | |||||||||||||||||||||||
| Interest income (expense), net | |||||||||||||||||||||||
| Other income (expense), net | ( | ( | |||||||||||||||||||||
| Total other income (expense) | |||||||||||||||||||||||
| Income (loss) before income taxes | |||||||||||||||||||||||
| Income tax (benefit) expense | ( | ( | |||||||||||||||||||||
| Net income (loss) | $ | $ | $ | $ | |||||||||||||||||||
| Net income (loss) per share | |||||||||||||||||||||||
| Basic | $ | $ | $ | $ | |||||||||||||||||||
| Diluted | $ | $ | $ | $ | |||||||||||||||||||
| Weighted average number of common shares outstanding | |||||||||||||||||||||||
| Basic | |||||||||||||||||||||||
| Diluted | |||||||||||||||||||||||
The accompanying notes are an integral part of these condensed consolidated financial statements.
5
SANDRIDGE ENERGY, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY (Unaudited)
(In thousands)
| Common Stock | Additional Paid-In Capital | Accumulated Deficit | Total | |||||||||||||||||||||||||||||||||||
| Shares | Amount | |||||||||||||||||||||||||||||||||||||
| Nine Months Ended September 30, 2026 | ||||||||||||||||||||||||||||||||||||||
| Balance at January 1, 2026 | $ | $ | $ | ( | $ | |||||||||||||||||||||||||||||||||
| Issuance of stock awards, net of cancellations | — | — | — | — | ||||||||||||||||||||||||||||||||||
| Tax withholdings paid in exchange for shares withheld on employee vested stock awards | — | — | ( | — | ( | |||||||||||||||||||||||||||||||||
| Stock-based compensation | — | — | — | |||||||||||||||||||||||||||||||||||
| Dividends paid to stockholders | — | — | ( | — | ( | |||||||||||||||||||||||||||||||||
Net income | — | — | — | |||||||||||||||||||||||||||||||||||
| Balance at March 31, 2026 | ( | |||||||||||||||||||||||||||||||||||||
| Issuance of stock awards, net of cancellations | — | — | — | — | ||||||||||||||||||||||||||||||||||
| Tax withholdings paid in exchange for shares withheld on employee vested stock awards | — | — | ( | — | ( | |||||||||||||||||||||||||||||||||
| Stock-based compensation | — | — | — | |||||||||||||||||||||||||||||||||||
| Dividends paid to stockholders | — | — | ( | — | ( | |||||||||||||||||||||||||||||||||
| Dividend reinvestments | — | — | — | — | ||||||||||||||||||||||||||||||||||
| Repurchases of common stock, including excise tax | — | — | — | |||||||||||||||||||||||||||||||||||
Net income | — | — | — | |||||||||||||||||||||||||||||||||||
| Balance at June 30, 2026 | ( | |||||||||||||||||||||||||||||||||||||
| Issuance of stock awards, net of cancellations | — | — | — | — | ||||||||||||||||||||||||||||||||||
| Tax withholdings paid in exchange for shares withheld on employee vested stock awards | — | — | ( | — | ( | |||||||||||||||||||||||||||||||||
| Stock-based compensation | — | — | — | |||||||||||||||||||||||||||||||||||
| Dividends paid to stockholders | — | — | ( | — | ( | |||||||||||||||||||||||||||||||||
| Dividend reinvestments | — | — | — | — | ||||||||||||||||||||||||||||||||||
| Net income | — | — | — | |||||||||||||||||||||||||||||||||||
| Balance at September 30, 2026 | $ | $ | $ | ( | $ | |||||||||||||||||||||||||||||||||
| Nine Months Ended September 30, 2025 | ||||||||||||||||||||||||||||||||||||||
| Balance at January 1, 2025 | $ | $ | $ | ( | $ | |||||||||||||||||||||||||||||||||
| Issuance of stock awards, net of cancellations | — | — | — | — | ||||||||||||||||||||||||||||||||||
| Tax withholdings paid in exchange for shares withheld on employee vested stock awards | — | — | ( | — | ( | |||||||||||||||||||||||||||||||||
| Stock-based compensation | — | — | — | |||||||||||||||||||||||||||||||||||
| Dividends paid to stockholders | — | — | ( | — | ( | |||||||||||||||||||||||||||||||||
| Repurchases of common stock, including excise tax | ( | — | ( | — | ( | |||||||||||||||||||||||||||||||||
Net income | — | — | — | |||||||||||||||||||||||||||||||||||
| Balance at March 31, 2025 | ( | |||||||||||||||||||||||||||||||||||||
| Issuance of stock awards, net of cancellations | — | — | — | — | ||||||||||||||||||||||||||||||||||
| Tax withholdings paid in exchange for shares withheld on employee vested stock awards | — | — | ( | — | ( | |||||||||||||||||||||||||||||||||
| Stock-based compensation | — | — | — | |||||||||||||||||||||||||||||||||||
| Dividends paid to stockholders | — | — | ( | — | ( | |||||||||||||||||||||||||||||||||
| Repurchases of common stock, including excise tax | ( | — | ( | — | ( | |||||||||||||||||||||||||||||||||
Net income | — | — | — | |||||||||||||||||||||||||||||||||||
| Balance at June 30, 2025 | ( | |||||||||||||||||||||||||||||||||||||
| Issuance of stock awards, net of cancellations | — | — | — | — | ||||||||||||||||||||||||||||||||||
| Tax withholdings paid in exchange for shares withheld on employee vested stock awards | — | — | ( | — | ( | |||||||||||||||||||||||||||||||||
| Stock-based compensation | — | — | — | |||||||||||||||||||||||||||||||||||
| Dividends paid to stockholders | — | — | ( | — | ( | |||||||||||||||||||||||||||||||||
| Dividend reinvestments | — | — | — | — | ||||||||||||||||||||||||||||||||||
| Repurchases of common stock, including excise tax | ( | — | ( | — | ( | |||||||||||||||||||||||||||||||||
| Net income | — | — | — | |||||||||||||||||||||||||||||||||||
| Balance at September 30, 2025 | $ | $ | $ | ( | $ | |||||||||||||||||||||||||||||||||
The accompanying notes are an integral part of these condensed consolidated financial statements.
6
SANDRIDGE ENERGY, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
(In thousands)
| Nine Months Ended September 30, | |||||||||||
| 2026 | 2025 | ||||||||||
| CASH FLOWS FROM OPERATING ACTIVITIES | |||||||||||
| Net income | $ | $ | |||||||||
| Adjustments to reconcile net income to net cash provided by operating activities | |||||||||||
| Depreciation, depletion, and amortization | |||||||||||
| Deferred income taxes | ( | ||||||||||
| (Gain) loss on derivative contracts | ( | ||||||||||
| Settlement gains (losses) on derivative contracts | |||||||||||
| Stock-based compensation | |||||||||||
| Other | |||||||||||
| Changes in operating assets and liabilities | ( | ( | |||||||||
| Net cash provided by operating activities | |||||||||||
| CASH FLOWS FROM INVESTING ACTIVITIES | |||||||||||
| Capital expenditures for property, plant and equipment | ( | ( | |||||||||
| Acquisition of oil and natural gas assets | ( | ( | |||||||||
| Purchase of other property and equipment | ( | ||||||||||
| Sales tax refund on completion costs | |||||||||||
| Proceeds from sale of assets | |||||||||||
| Net cash used in investing activities | ( | ( | |||||||||
| CASH FLOWS FROM FINANCING ACTIVITIES | |||||||||||
| Dividends paid to stockholders | ( | ( | |||||||||
| Reduction of financing lease liability | ( | ( | |||||||||
| Repurchases of common stock, including excise tax | ( | ( | |||||||||
| Tax withholdings paid in exchange for shares withheld on employee vested stock awards | ( | ( | |||||||||
| Net cash used in financing activities | ( | ( | |||||||||
| NET INCREASE (DECREASE) IN CASH, CASH EQUIVALENTS and RESTRICTED CASH | ( | ||||||||||
| CASH, CASH EQUIVALENTS and RESTRICTED CASH, beginning of year | |||||||||||
| CASH, CASH EQUIVALENTS and RESTRICTED CASH, end of period | $ | $ | |||||||||
| Supplemental Disclosure of Cash Flow Information | |||||||||||
| Cash paid for interest, net of amounts capitalized | $ | ( | $ | ( | |||||||
| Supplemental Disclosure of Noncash Investing and Financing Activities | |||||||||||
| Capital expenditures for property, plant and equipment in accounts payable and accrued expenses | $ | $ | |||||||||
| Non-cash acquisition purchase price adjustments | $ | $ | |||||||||
| Right-of-use assets obtained in exchange for financing lease obligations | $ | $ | |||||||||
| Inventory material transfers to oil and natural gas properties | $ | $ | |||||||||
| Asset retirement obligation capitalized | $ | $ | |||||||||
| Asset retirement obligation removed due to divestiture | $ | $ | ( | ||||||||
| Decrease (increase) in excise tax payable on repurchases of common stock | $ | $ | ( | ||||||||
| Decrease (increase) in dividends payable | $ | ( | $ | ||||||||
The accompanying notes are an integral part of these condensed consolidated financial statements.
7
SANDRIDGE ENERGY, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
1. Basis of Presentation
Nature of Business. SandRidge Energy, Inc. is an oil and natural gas acquisition, development and production company headquartered in Oklahoma City, Oklahoma, and organized in 2006 with a principal focus on developing and producing hydrocarbon resources in the United States.
Principles of Consolidation. The condensed consolidated financial statements include the accounts of the Company and its wholly owned or majority-owned subsidiaries, including its proportionate share of the Royalty Trust. All intercompany accounts and transactions have been eliminated in consolidation.
Significant Accounting Policies. The condensed consolidated financial statements were prepared in accordance with the accounting policies stated in the Company’s 2025 Form 10-K, as well as the items noted below.
Out of Period Correction. The Company’s December 31, 2025 accounts payable and other accrued expenses balance reflects $5.1 million of non-recurring, non-cash adjustments of operating accruals dating as far back as the Company’s emergence from bankruptcy, of which $2.1 million was recorded in the second quarter of 2025. The $2.1 million adjustment reduced our lease operating expenses for the nine months ended September 30, 2025 and is not material to the current period or prior periods.
Use of Estimates. The preparation of the 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 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.
8
SANDRIDGE ENERGY, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
(Unaudited)
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
| Revenues | |||||||||||||||||||||||
| Oil | $ | $ | $ | $ | |||||||||||||||||||
| Natural gas | |||||||||||||||||||||||
| NGL | |||||||||||||||||||||||
| Total revenues | |||||||||||||||||||||||
| Expenses | |||||||||||||||||||||||
| Lease operating expenses | |||||||||||||||||||||||
| Production, ad valorem, and other taxes | |||||||||||||||||||||||
| Depreciation and depletion—oil and natural gas | |||||||||||||||||||||||
| Depreciation and amortization—other | |||||||||||||||||||||||
| General and administrative | |||||||||||||||||||||||
| Restructuring expenses | |||||||||||||||||||||||
| (Gain) loss on derivative contracts | ( | ( | |||||||||||||||||||||
| Other operating (income) expense | |||||||||||||||||||||||
| Total expenses | |||||||||||||||||||||||
| Income (loss) from operations | |||||||||||||||||||||||
| Other income (expense) | |||||||||||||||||||||||
| Interest income (expense), net | |||||||||||||||||||||||
| Other income (expense), net | ( | ( | |||||||||||||||||||||
| Total other income (expense) | |||||||||||||||||||||||
| Income (loss) before income taxes | |||||||||||||||||||||||
| Income tax (benefit) | ( | ( | |||||||||||||||||||||
| Net income (loss) | $ | $ | $ | $ | |||||||||||||||||||
Recent Accounting Pronouncements Not Yet Adopted. The FASB issued Accounting Standards Update 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40) (“ASU 2024-03”). The objective of ASU 2024-03 is to improve disclosures about a public entity's expenses, primarily through additional disaggregation of income statement expenses. The new standard is effective for annual periods beginning after December 15, 2026, and interim periods within annual reporting periods beginning after December 15, 2027. Early adoption is permitted and may be applied either on a prospective or retrospective basis. The Company is currently evaluating the impact ASU 2024-03 will have on its consolidated financial statement disclosures and does not expect an impact to our consolidated financial statements.
9
SANDRIDGE ENERGY, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
(Unaudited)
2. Fair Value Measurements
The Company measures and reports certain assets and liabilities on a fair value basis and has classified and disclosed its fair value measurements using the levels of the fair value hierarchy noted below. The carrying values of cash, restricted cash, accounts receivable, prepaid expenses, accounts payable and accrued expenses and other current liabilities included in the condensed consolidated balance sheets approximated fair value at September 30, 2026 and December 31, 2025.
| 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 and liabilities occur in sufficient frequency and volume to provide pricing information on an ongoing basis. The Company had assets classified in Level 2 and 3 of the hierarchy as of September 30, 2026, and December 31, 2025.
Level 2 Fair Value Measurements
Commodity Derivative Contracts. As applicable, the fair values of the Company’s oil, natural gas and NGL fixed price swaps are based upon inputs that are either readily available in the public market, such as oil, natural gas and NGL futures prices, volatility factors and discount rates, or can be corroborated from active markets. Historically, if the Company has a commodity derivative contract in place, the 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.
Contingent Consideration. The Company is required to make up to three contingent earn-out payments of $2.0 three contingent earn-out payments are for the periods from July 1, 2026 to December 31, 2026, January 1, 2027 to June 30, 2027 and July 1, 2027 to December 31, 2027 with strike prices of $85.00 per Bbl, $80.00 per Bbl and $75.00 per Bbl, respectively. The Company bifurcated the Contingent Consideration from the host contract and accounted for it separately at fair value. The fair value of the Contingent Consideration is determined using a Monte Carlo simulation model using significant inputs such as historical and futures prices for crude oil, volatility factors, and discount rates. The Company determined these were Level 2 fair value inputs that are either readily available in the public market or can be corroborated from active markets. See “Note 3—Derivatives” for additional information.
10
SANDRIDGE ENERGY, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
(Unaudited)
Level 3 Fair Value Measurements
Acquisition. The Company applies the provisions of the fair value measurement standard on a non-recurring basis to its oil and natural gas properties acquired. The Company recognized the assets acquired in its acquisition at cost on a relative fair value basis (see “Note 5 — Acquisitions” for additional information). Fair value was determined using a discounted cash flow model. The underlying future commodity prices included in the Company’s estimated future cash flows of its oil and natural gas properties were determined using NYMEX forward strip prices as of the closing date of the acquisition. The estimated future cash flows also included assumptions including estimates of production from the oil and natural gas properties, future operating expenses, development costs and income taxes of the acquired properties and risk adjusted discount rates.
Fair Value - Recurring Measurement Basis
The following table summarizes the Company’s liabilities measured at fair value on a recurring basis by the fair value hierarchy as of September 30, 2026 (in thousands):
| Fair Value Measurements | Netting (1) | Assets (Liabilities) at Fair Value | |||||||||||||||||||||||||||
| Level 1 | Level 2 | Level 3 | |||||||||||||||||||||||||||
| Commodity derivative contracts | $ | $ | ( | $ | $ | ( | $ | ( | |||||||||||||||||||||
| Contingent Consideration | ( | ( | |||||||||||||||||||||||||||
| Total | $ | $ | ( | $ | $ | ( | $ | ( | |||||||||||||||||||||
(1) Represents the effect of netting assets and liabilities for counterparties with which the right of offset exists.
The following table summarizes the Company’s assets measured at fair value on a recurring basis by the fair value hierarchy as of December 31, 2025 (in thousands):
| Fair Value Measurements | Netting (1) | Assets (Liabilities) at Fair Value | |||||||||||||||||||||||||||
| Level 1 | Level 2 | Level 3 | |||||||||||||||||||||||||||
| Commodity derivative contracts | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
| Total | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
(1) Represents the effect of netting assets and liabilities for counterparties with which the right of offset exists.
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, natural gas and NGL. On occasion, the Company has attempted to manage this risk on a portion of its forecasted oil, natural gas or NGL production sales through the use of commodity derivative contracts.
Historically, the Company has not designated any of its derivative contracts as hedges for accounting purposes. As applicable, if the Company has open derivative contracts, the Company has recorded such contracts at fair value with changes in derivative contract fair values recognized as a gain or loss on derivative contracts in the condensed consolidated income statements. Commodity derivative contracts were settled on a monthly basis, and the commodity derivative contract valuations were adjusted on a mark-to-market valuation basis quarterly.
11
SANDRIDGE ENERGY, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
(Unaudited)
Embedded Derivative
The Company determined that the Contingent Consideration associated with the August 2026 acquisition of certain producing assets and leasehold interests in the Cherokee Play of the Mid-Continent region meets the criteria for an embedded derivative. Therefore, the Company bifurcated the Contingent Consideration from the host contract and recognized it separately at fair value. The Contingent Consideration is marked-to-market each reporting period, with changes in fair value recognized in the (Gain) loss on derivative contracts line item in the condensed consolidated income statements. See “Note 5—Acquisitions” for additional information.
The following table summarizes derivative activity (in thousands):
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
| (Gain) loss on commodity derivatives | $ | $ | ( | $ | $ | ( | |||||||||||||||||
| (Gain) loss on Contingent Consideration | |||||||||||||||||||||||
| (Gain) loss on derivative contracts | $ | $ | ( | $ | $ | ( | |||||||||||||||||
| Settlement gains (losses) on derivative contracts | $ | $ | $ | $ | |||||||||||||||||||
Master Netting Agreements and the Right of Offset. As applicable, the Company historically has had master netting agreements with all of its commodity derivative counterparties and has presented its derivative assets and liabilities with the same counterparty on a net basis in the condensed consolidated balance sheets. As a result of the netting provisions, the Company's maximum amount of loss under commodity derivative transactions due to credit risk was limited to the net amounts due from its counterparties.
Because the Company did not designate any of its commodity derivative contracts as hedges for accounting purposes, changes in the fair value of the derivative contracts were recognized as gains and losses in the earnings of the relevant period. Changes in fair value were principally measured based on a comparison of future prices to the contract price at the end of the period and through the Black-Scholes or other similar valuation method in the case of options.
12
SANDRIDGE ENERGY, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
(Unaudited)
The following tables summarize (i) the Company's derivative contracts on a gross basis, (ii) the effects of netting assets and liabilities for which the right of offset exists based on master netting arrangements, (iii) the financial collateral, if any, associated with the Company’s commodity contracts, and (iv) the Company’s net derivative asset and liability positions as of September 30, 2026 and December 31, 2025 (in thousands):
| September 30, 2026 | ||||||||||||||||||||||||||||||||
| Gross Amounts | Gross Amounts Offset | Amounts Net of Offset | Financial Collateral | Net Amount | ||||||||||||||||||||||||||||
| Assets (Liabilities) | ||||||||||||||||||||||||||||||||
| Derivative contracts - current | $ | ( | $ | ( | $ | ( | $ | $ | ( | |||||||||||||||||||||||
| Contingent Consideration - current | ( | ( | ( | |||||||||||||||||||||||||||||
| Total current derivatives | ( | ( | ( | ( | ||||||||||||||||||||||||||||
| Derivative contracts - non-current | ( | ( | ( | |||||||||||||||||||||||||||||
| Contingent Consideration - non-current | ( | ( | ( | |||||||||||||||||||||||||||||
| Total non-current derivatives | ( | ( | ( | |||||||||||||||||||||||||||||
| Total | $ | ( | $ | ( | $ | ( | $ | $ | ( | |||||||||||||||||||||||
| December 31, 2025 | ||||||||||||||||||||||||||||||||
| Gross Amounts | Gross Amounts Offset | Amounts Net of Offset | Financial Collateral | Net Amount | ||||||||||||||||||||||||||||
| Assets | ||||||||||||||||||||||||||||||||
Derivative contracts - current | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||
| Total | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||
13
SANDRIDGE ENERGY, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
(Unaudited)
As of September 30, 2026, the Company's open commodity derivative contracts consisted of oil, natural gas, and NGL commodity derivative contracts as follows:
| Period | Index | Daily Volume | Weighted Average Price | |||||||||||||||||||||||
| Oil (Bbl) | ||||||||||||||||||||||||||
| Fixed Price Swaps | ||||||||||||||||||||||||||
| October 2026 - December 2026 | NYMEX WTI | $ | ||||||||||||||||||||||||
| January 2027 - December 2027 | NYMEX WTI | $ | ||||||||||||||||||||||||
| Producer Costless Collars | ||||||||||||||||||||||||||
| October 2026 - December 2026 | NYMEX WTI | $ $ | ||||||||||||||||||||||||
| Natural Gas (MMBtu) | ||||||||||||||||||||||||||
| Fixed Price Swaps | ||||||||||||||||||||||||||
| October 2026 - December 2026 | NYMEX Henry Hub | $ | ||||||||||||||||||||||||
| Producer Costless Collars | ||||||||||||||||||||||||||
| October 2026 - December 2026 | NYMEX Henry Hub | $ $ | ||||||||||||||||||||||||
| NGL (Bbl) | ||||||||||||||||||||||||||
| Fixed Price Swaps | ||||||||||||||||||||||||||
| October 2026 - December 2026 | Mont Belvieu OPIS | $ | ||||||||||||||||||||||||
As of December 31, 2025, the Company's open commodity derivative contracts consisted of oil and natural gas commodity derivative contracts under which it will receive a fixed price for the contract and pay a floating market price to the counterparty over a specified period for a contracted volume. These commodity derivative contracts consisted of the following:
| Period | Index | Daily Volume | Weighted Average Price | |||||||||||||||||||||||
| Oil (Bbl) | ||||||||||||||||||||||||||
| Fixed Price Swaps | January 2026 - June 2026 | NYMEX WTI | $ | |||||||||||||||||||||||
| Natural Gas (MMBtu) | ||||||||||||||||||||||||||
| Fixed Price Swaps | January 2026 - December 2026 | NYMEX Henry Hub | $ | |||||||||||||||||||||||
| Producer Costless Collars | January 2026 - December 2026 | NYMEX Henry Hub | $ $ | |||||||||||||||||||||||
14
SANDRIDGE ENERGY, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
(Unaudited)
4. Property, Plant and Equipment
Property, plant and equipment consists of the following (in thousands):
| September 30, 2026 | December 31, 2025 | ||||||||||
Oil and natural gas properties | |||||||||||
Proved | $ | $ | |||||||||
Unproved | |||||||||||
Total oil and natural gas properties | |||||||||||
| Less: accumulated depreciation, depletion and impairment | ( | ( | |||||||||
| Net oil and natural gas properties capitalized costs | |||||||||||
| Land | |||||||||||
| Electrical infrastructure | |||||||||||
| Non-oil and natural gas equipment | |||||||||||
| Building and structures | |||||||||||
| Financing leases | |||||||||||
| Total | |||||||||||
| Less: accumulated depreciation and amortization | ( | ( | |||||||||
Other property, plant and equipment, net | |||||||||||
Total property, plant and equipment, net | $ | $ | |||||||||
5. Acquisitions
In August 2026, the Company closed the previously announced acquisition of certain producing assets and leasehold interests in the Cherokee Play of the Mid-Continent region for $65.0 million, before customary purchase price adjustments, and three contingent earn-out payments of $2.0
15
SANDRIDGE ENERGY, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
(Unaudited)
The following table represents the allocation of the total cost of the acquisition to the assets acquired and liabilities assumed before customary post-closing adjustments (in thousands):
| Total Consideration | |||||
| Cash paid | $ | ||||
| Allocation of Total Consideration | |||||
| Assets | |||||
| Oil and natural gas properties | $ | ||||
| Total assets acquired | $ | ||||
Liabilities(1) | |||||
| Accounts payable and accrued expenses | $ | ||||
| Contingent Consideration | |||||
| Total liabilities assumed | |||||
| Net Assets acquired and liabilities assumed | $ | ||||
(1)Asset retirement obligations assumed were de minimis.
6. Accounts Payable and Accrued Expenses
Accounts payable and accrued expenses consist of the following (in thousands):
| September 30, 2026 | December 31, 2025 | |||||||||||||
| Accounts payable and other accrued expenses | $ | $ | ||||||||||||
| Production payable | ||||||||||||||
| Payroll and benefits | ||||||||||||||
| Taxes payable | ||||||||||||||
| Total accounts payable and accrued expenses | $ | $ | ||||||||||||
7. Commitments and Contingencies
Included below is a discussion of the Company's various future commitments and contingencies as of September 30, 2026. The Company has provided accruals where necessary for contingent liabilities, based on 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 currently expenses all legal costs as they are incurred.
Legal Proceedings. As previously disclosed on May 16, 2016, the Company and certain of its direct and indirect subsidiaries (collectively, the “Debtors”) filed voluntary petitions for reorganization under Chapter 11 of the United States Bankruptcy Code in the United States Bankruptcy Court for the Southern District of Texas (the “Bankruptcy Court”). The Bankruptcy Court confirmed the joint plan of reorganization (the “Plan”) of the Debtors on September 9, 2016, and the Debtors subsequently emerged from bankruptcy on October 4, 2016.
Pursuant to the Plan, certain securities claims against the Company were discharged without recovery. With respect to certain other securities claims relating to the Company and an affiliate, the Federal District Court (Western District of Oklahoma) in the second half of 2025 either dismissed, with prejudice, such actions or ruled favorably on the Company’s motion for summary judgment.
16
SANDRIDGE ENERGY, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
(Unaudited)
Separately, the Company had received a demand by two of the settling individual defendants to fund a proposed settlement of $17.0 million with those defendants. Certain insurance carriers funded the $17.0 million settlement and subsequently requested reimbursement from the Company. The Company refused and filed an action in Oklahoma state court (SandRidge Energy, Inc. v. James D. Bennett, Matthew K. Grubb, Beasley Insurance Company, Inc., Old Republic Insurance Company, and Allied World National Assurance Company) seeking a declaratory judgment that the insurers were not entitled to indemnification; the insurers counterclaimed. Subsequently, the Company voluntarily dismissed its action. In line with the Company's position regarding the insurers’ claims, the Company filed motions in the United States Bankruptcy Court for the Southern District of Texas seeking to reopen the bankruptcy case and to obtain a declaration that the insurers’ claims were discharged under the Plan. The motions were denied and the Company appealed the bankruptcy court’s decision to the Southern District of the United States District Court of Texas (SandRidge Energy, Inc. Appellant v. Beasley Insurance Company Inc. and Old Republic Insurance Company, Appellees); the appeal was denied in December of 2025 and the Company has appealed the District Court's decision to the United States Court of Appeals for the Fifth Circuit. Independent of the Company’s appeal to reopen the bankruptcy case, the insurers’ Oklahoma counterclaim is stayed, with no further development. The Company disputes any liability, as it believes it has meritorious defenses, and intends to continue to vigorously defend against this claim. Considering the status of this matter, and the facts, circumstances and legal theories thereto, the Company is not able to determine the likelihood of an outcome. The Company has not established any contingencies relating to this matter.
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.
8. 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. In assessing the realizability of the deferred tax assets, the Company considers whether it is more likely than not that some or all of the deferred tax assets will not be realized. The ultimate realization of the deferred tax assets is dependent upon the generation of future income in periods in which the deferred tax assets can be utilized. In prior years, the Company determined that the deferred tax assets did not meet the more likely than not threshold of being utilized and thus recorded a valuation allowance. As of December 31, 2025, the Company had partially released its valuation allowance on its deferred tax assets by $78.3 million. As of September 30, 2026, the Company anticipates being able to utilize additional deferred tax assets based on the generation of future income, and therefore the Company released an additional valuation allowance of $14.2 million on its deferred tax assets. The Company anticipates being able to utilize these deferred tax assets based on the generation of future income. A change in the estimate of future income could cause the valuation allowance to be adjusted in subsequent periods. The Company recorded federal and state income tax benefits of $12.0 million and $2.2 million, respectively, for the three and nine months ended September 30, 2026. The Company did not
Internal Revenue Code (“IRC”) Section 382 addresses company ownership changes and specifically limits the utilization of certain deductions and other tax attributes on an annual basis following an ownership change. As a result of the Chapter 11 reorganization and related transactions, the Company experienced an ownership change within the meaning of IRC Section 382 during 2016 that subjected certain of the Company’s tax attributes, including net operating losses ("NOLs"), to an IRC Section 382 limitation. This limitation has not resulted in cash taxes for any period subsequent to the ownership change. Since the 2016 ownership change, the Company has generated additional NOLs and other tax attributes that are not currently subject to an IRC Section 382 limitation. The Company's ability to use NOLs and other tax attributes to reduce taxable income and income taxes could be materially impacted by a future IRC 382 ownership change. Future transactions involving the Company's stock including those outside of the Company's control could cause an IRC 382 ownership change resulting in a limitation on tax attributes currently not limited and a more restrictive limitation on tax attributes currently subject to the previous IRC 382 limitation. The Company adopted the Tax Benefits Preservation Plan, as amended on March 16, 2021, June 20, 2023 and June 15, 2026, in order to protect the Company’s ability to use its tax NOLs and certain other tax benefits.
17
SANDRIDGE ENERGY, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
(Unaudited)
As of September 30, 2026, the Company had approximately $1.5 billion of federal NOL carryforwards, net of NOLs expected to expire unused due to the 2016 IRC Section 382 limitation. Of the $1.5 billion of federal NOL carryforwards, $0.6 billion expire during the years 2028 through 2037, while the remaining $0.9 billion do not have an expiration date. In addition, the Company had approximately $0.9 billion of state NOL carryforwards, net of NOLs expected to expire unused due to the 2016 IRC Section 382 limitation. Of the $0.9 billion in state NOL carryforwards, $198.1 million are derived from states the Company currently does not operate in. Of the remaining state NOL carryforwards, $644.8 million do not have an expiration date, and $90.9 million expire during the years 2028 through 2037. 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 September 30, 2026 or December 31, 2025.
The Company’s only taxing jurisdiction is the United States (federal and state). As of September 30, 2026, the Company’s tax years 2022 to present remain open for federal examination. Additionally, tax years 2005 through 2021 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 to five years .
9. Equity
Capital Stock and Equity Awards. Our authorized capital stock consists of 300.0 million shares, which include 250.0 million shares of common stock, $0.001 par value per share (“common stock”), and 50.0 million shares of preferred stock, par value $0.001 per share. At September 30, 2026, the Company had 37.1 0.2 million shares of unvested restricted stock units outstanding and an immaterial
Omnibus Incentive Plan. On June 10, 2026, at the 2026 Annual Meeting of Stockholders (the “2026 Annual Meeting”) of the Company, the Company’s stockholders approved the adoption of an amendment (the “Incentive Plan Amendment”) to the Company’s 2016 Omnibus Incentive Plan (as amended and restated, the “Omnibus Incentive Plan”), pursuant to which the expiration date of the Omnibus Incentive Plan was extended until June 10, 2036, the tenth anniversary of the date of stockholder approval of the Incentive Plan Amendment. The Company’s Board of Directors (the “Board”) previously approved the Incentive Plan Amendment, subject to stockholder approval at the 2026 Annual Meeting. The Incentive Plan Amendment became effective at the time of stockholder approval.
Share Repurchase Program. In May 2023, the Board approved a share repurchase program (the “Program”) authorizing the Company to repurchase up to an aggregate of $75.0 million of the Company’s outstanding common stock with the Company’s cash on hand. Purchases under the Program are intended to meet the requirements of Rule 10b5-1 of the Exchange Act. 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. The Company did not repurchase any shares during the nine months ended September 30, 2026, compared to 0.6 million shares repurchased for $6.4 million, at an average price of $10.72 per share, during the nine months ended September 30, 2025.
Dividends. On August 5, 2025, the Board approved a dividend reinvestment plan (the “Dividend Reinvestment Plan”), pursuant to which the stockholders of the Company may, at their election, reinvest any dividends declared by the Board.
In connection with the Dividend Reinvestment Plan, the Board approved a general waiver under the Company’s Tax Benefits Preservation Plan (the “Tax Benefits Preservation Plan”), by and between the Company and Equiniti (formerly known as American Stock Transfer & Trust Company, LLC). This waiver applies to any stockholders who as of the date immediately prior to the adoption of the Dividend Reinvestment Plan beneficially owned 4.9 % or more of the Company’s outstanding common stock and who would otherwise trigger the rights plan, but only as the result of shares of stock they receive under the Dividend Reinvestment Plan, and not otherwise.
18
SANDRIDGE ENERGY, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
(Unaudited)
The following table summarizes the Company’s dividends for the periods presented (in thousands except share and per share data):
| Quarterly Dividend per Share | Special Dividend per Share | Total per Share | Aggregate Cash Dividend Payments | Common Stock Issued in lieu of Cash Dividends | ||||||||||||||||||||||||||||
| Q3 2026 | $ | $ | $ | $ | ||||||||||||||||||||||||||||
| Q2 2026 | ||||||||||||||||||||||||||||||||
| Q1 2026 | ||||||||||||||||||||||||||||||||
| Total | $ | $ | $ | $ | ||||||||||||||||||||||||||||
| Q3 2025 | $ | $ | $ | $ | ||||||||||||||||||||||||||||
| Q2 2025 | ||||||||||||||||||||||||||||||||
| Q1 2025 | ||||||||||||||||||||||||||||||||
| Total | $ | $ | $ | $ | ||||||||||||||||||||||||||||
The Tax Benefits Preservation Plan. On July 1, 2020, the Board declared a dividend distribution of one right (a “Right”) for each outstanding share of the Company’s common stock to stockholders of record at the close of business on July 13, 2020. On June 15, 2026, the Company entered into an amendment to the Tax Benefits Preservation Plan to extend the expiration time of the Tax Benefits Preservation Plan from July 1, 2026 to July 1, 2029. 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, as amended, 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 will expire on the earliest of: (i) the time at which the Rights are redeemed pursuant to the Tax Benefits Preservation Plan, (ii) the time at which the Rights are exchanged pursuant to the Tax Benefits Preservation Plan, (iii) 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, (iv) 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 (v) the close of business on July 1, 2029. The Board plans to request stockholder approval for the third amendment to the Tax Benefits Preservation plan at the 2027 Annual Meeting of Stockholders.
The Company adopted the Tax Benefits Preservation Plan, as amended on March 16, 2021, June 20, 2023 and June 15, 2026, in order to protect stockholder value against a possible limitation on the Company’s ability to use its tax NOLs and certain other tax benefits to reduce potential future U.S. federal income tax obligations. The NOLs are a valuable asset 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 stockholders” (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.
19
SANDRIDGE ENERGY, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
(Unaudited)
10. Revenues
The following table disaggregates the Company’s revenue by source:
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
| (In thousands) | |||||||||||||||||||||||
| Oil | $ | $ | $ | $ | |||||||||||||||||||
| Natural gas | |||||||||||||||||||||||
| NGL | |||||||||||||||||||||||
| Total revenues | $ | $ | $ | $ | |||||||||||||||||||
Oil, Natural Gas and NGL revenues. All of the Company’s revenues come from sales of oil, natural gas and NGLs. In accordance with the contracts governing these sales, revenues are recorded at a point in time when control of the oil, natural gas and NGL production passes to the purchaser at the inlet of the processing plant or pipeline, or the delivery point for onloading to a delivery truck. As the Company’s purchaser obtains control of the production prior to selling it to other end customers, the Company presents its revenues on a net basis, rather than on a gross basis.
Pricing for the Company’s oil, natural gas and NGL contracts is variable and is based on volumes sold multiplied by either an index price, net of deductions, or a percentage of the sales price obtained by the purchaser, 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 taxes expense in the condensed consolidated income statements.
Revenues Receivable. The Company records an asset in accounts receivable, net on its condensed consolidated balance sheets for revenues receivable from contracts with purchasers 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 on operated properties are typically collected the month after the Company delivers the related production to its purchaser. As of September 30, 2026, and December 31, 2025 and 2024, the Company had revenues receivable of $24.7 million, $16.7 million and $15.3 million, respectively. The Company did no
20
SANDRIDGE ENERGY, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
(Unaudited)
11. Earnings per Share
The following table summarizes the calculation of weighted average shares of common stock outstanding used in the computation of diluted earnings per share:
Net Income (Loss) | Weighted Average Shares | Earnings per Share | |||||||||||||||
| (In thousands, except per share amounts) | |||||||||||||||||
| Three Months Ended September 30, 2026 | |||||||||||||||||
Basic earnings per share | $ | $ | |||||||||||||||
| Effect of dilutive securities | |||||||||||||||||
| Restricted stock units | |||||||||||||||||
| Restricted stock awards | |||||||||||||||||
Performance share units(1) | |||||||||||||||||
| Stock options | |||||||||||||||||
| Deferred stock units | |||||||||||||||||
Diluted earnings per share(2) | $ | $ | |||||||||||||||
| Three Months Ended September 30, 2025 | |||||||||||||||||
Basic earnings per share | $ | $ | |||||||||||||||
| Effect of dilutive securities | |||||||||||||||||
| Restricted stock units | |||||||||||||||||
| Restricted stock awards | |||||||||||||||||
Performance share units(1) | |||||||||||||||||
| Stock options | |||||||||||||||||
Diluted earnings per share(2) | $ | $ | |||||||||||||||
| Nine Months Ended September 30, 2026 | |||||||||||||||||
Basic earnings per share | $ | $ | |||||||||||||||
| Effect of dilutive securities | |||||||||||||||||
| Restricted stock units | |||||||||||||||||
| Restricted stock awards | |||||||||||||||||
Performance share units(1) | |||||||||||||||||
| Stock options | |||||||||||||||||
| Deferred stock units | |||||||||||||||||
Diluted earnings per share(2) | $ | $ | |||||||||||||||
| Nine Months Ended September 30, 2025 | |||||||||||||||||
Basic earnings per share | $ | $ | |||||||||||||||
| Effect of dilutive securities | |||||||||||||||||
| Restricted stock units | |||||||||||||||||
| Restricted stock awards | |||||||||||||||||
Performance share units(1) | |||||||||||||||||
| Stock options | |||||||||||||||||
Diluted earnings per share(2) | $ | $ | |||||||||||||||
____________________
(1)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.
21
SANDRIDGE ENERGY, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
(Unaudited)
12. Subsequent Events
On November 3, 2026, the Board declared a dividend of $0.13 per share of the Company’s common stock, which stockholders can elect to receive in cash or additional shares of common stock by enrolling in the Company’s previously announced Dividend Reinvestment Plan, payable on November 30, 2026 to stockholders of record on November 19, 2026.
Subsequent to September 30, 2026, the Company entered into the following oil derivative contracts:
| Period | Type of Derivative Instrument | Index | Daily Volume (Bbl) | Weighted Average Price Per Barrel | ||||||||||||||||||||||
| January 2027 - June 2027 | Producer Costless Collars | NYMEX WTI | $ $ | |||||||||||||||||||||||
22
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 2025 Form 10-K. Our discussion and analysis includes the following subjects:
•Overview;
•Consolidated Results of Operations;
•Liquidity and Capital Resources; and
•Critical Accounting Policies and Estimates.
The financial information with respect to the three and nine months ended September 30, 2026 and 2025, 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 region (“Mid-Con”).
The charts below show production by product and percent revenues for the three and nine months ended September 30, 2026 and 2025:
23
Total MBoe production for the three months ended September 30, 2026 was comprised of approximately 19.3% oil, 49.6% natural gas and 31.1% NGL compared to 19.7% oil, 47.7% natural gas and 32.6% NGL in the third quarter of 2025. Total MBoe production for the nine months ended September 30, 2026 was comprised of approximately 19.5% oil, 49.6% natural gas and 30.9% NGL compared to 17.8% oil, 48.6% natural gas and 33.6% NGL in the same period of 2025.
Recent Events
•In August 2026, we closed the previously announced acquisition of certain producing assets and leasehold interests in the Cherokee Play of the Mid-Continent region for $47.9 million in cash consideration, before customary post-closing adjustments, and three contingent earn-out payments of $2.0 million each, based on the average daily spot price for West Texas Intermediate crude oil exceeding certain price thresholds beginning July 1, 2026 and ending December 31, 2027.
Outlook
We remain committed to growing the value of our asset base in a safe, responsible and efficient manner, while prudently allocating capital to high-return, growth projects. Currently, these projects include: (1) one-rig development in the Cherokee Play; (2) evaluation of accretive merger and acquisition opportunities, with consideration of our strong balance sheet and commitment to our capital return program; (3) production optimization program through artificial lift conversions to more efficient and cost-effective systems; and (4) a leasing program that will bolster future development and extend development in our Cherokee assets. We are developing our term acreage in the Cherokee Play, and our total leasehold position, inclusive of the Cherokee, NW Stack and legacy assets, is approximately 95% held by production, which cost-effectively maintains our development option over a reasonable tenor. We will continue to monitor forward-looking commodity prices, project results, costs, impacts of tariffs and other factors that could influence returns and cash flows, and will adjust our program accordingly, to include curtailment of capital activity and wells, if needed, or conversely, well reactivations in higher commodity price environments. These and other factors, including reasonable reinvestment rates, maintaining our cash flows and prioritizing our regular-way dividend, will continue to shape our development decisions for the remainder of the year and beyond.
24
Consolidated Results of Operations
Our consolidated revenues and cash flows are generated from the production and sale of oil, natural gas and NGL. Our revenues, profitability and future growth depend substantially on prevailing prices received for our production, the quantity of oil, natural gas and NGL we produce, and our ability to find and economically develop and produce our reserves. Prices for oil, natural gas and NGL 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 tables below:
| Three-month periods ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| September 30, 2026 | June 30, 2026 | March 31, 2026 | December 31, 2025 | September 30, 2025 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| NYMEX Oil (per Bbl) | $ | 87.12 | $ | 95.65 | $ | 72.74 | $ | 59.62 | $ | 65.78 | ||||||||||||||||||||||||||||||||||||||||||||||
| NYMEX Natural gas (per Mcf) | $ | 2.98 | $ | 3.06 | $ | 4.89 | $ | 3.87 | $ | 3.15 | ||||||||||||||||||||||||||||||||||||||||||||||
In order to reduce our exposure to price fluctuations, from time to time we may enter into commodity derivative contracts for a portion of our anticipated future oil, natural gas and NGL production as discussed in “Item 3. Quantitative and Qualitative Disclosures About Market Risk.” During periods where the strike prices for our commodity derivative contracts are below market prices at the time of settlement, we may not fully benefit from increases in the market price of oil, natural gas and NGL. Conversely, during periods of declining oil, natural gas and NGL market prices, our commodity derivative contracts may partially offset declining revenues and cash flows to the extent strike prices for our contracts are above market prices at the time of settlement. See “Note 3 — Derivatives” to the accompanying unaudited condensed consolidated financial statements included in this Quarterly Report for additional information regarding our commodity derivatives.
Revenues
Consolidated revenues are presented in the table below (in thousands):
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||||||||||||||
| 2026 | 2025 | Change | 2026 | 2025 | Change | ||||||||||||||||||||||||||||||
| Oil | $ | 31,561 | $ | 22,415 | $ | 9,146 | $ | 87,959 | $ | 58,251 | $ | 29,708 | |||||||||||||||||||||||
| Natural gas | 9,275 | 8,517 | 758 | 32,174 | 29,938 | 2,236 | |||||||||||||||||||||||||||||
| NGL | 13,580 | 8,890 | 4,690 | 35,177 | 28,768 | 6,409 | |||||||||||||||||||||||||||||
| Total revenues | $ | 54,416 | $ | 39,822 | $ | 14,594 | $ | 155,310 | $ | 116,957 | $ | 38,353 | |||||||||||||||||||||||
25
Oil, Natural Gas and NGL Production and Pricing
Our production and pricing information is shown in the table below:
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||||||||||||||
| 2026 | 2025 | Change | 2026 | 2025 | Change | ||||||||||||||||||||||||||||||
| Production data | |||||||||||||||||||||||||||||||||||
| Oil (MBbls) | 370 | 344 | 26 | 1,051 | 884 | 167 | |||||||||||||||||||||||||||||
| Natural gas (MMcf) | 5,714 | 4,993 | 721 | 16,051 | 14,513 | 1,538 | |||||||||||||||||||||||||||||
| NGL (MBbls) | 599 | 569 | 30 | 1,663 | 1,668 | (5) | |||||||||||||||||||||||||||||
| Total volumes (MBoe) | 1,922 | 1,745 | 177 | 5,390 | 4,971 | 419 | |||||||||||||||||||||||||||||
| Average daily total volumes (MBoe/d) | 20.9 | 19.0 | 1.9 | 19.7 | 18.2 | 1.5 | |||||||||||||||||||||||||||||
Average prices—as reported(1) | |||||||||||||||||||||||||||||||||||
| Oil (per Bbl) | $ | 85.27 | $ | 65.23 | $ | 20.04 | $ | 83.67 | $ | 65.91 | $ | 17.76 | |||||||||||||||||||||||
| Natural gas (per Mcf) | $ | 1.62 | $ | 1.71 | $ | (0.09) | $ | 2.00 | $ | 2.06 | $ | (0.06) | |||||||||||||||||||||||
| NGL (per Bbl) | $ | 22.68 | $ | 15.61 | $ | 7.07 | $ | 21.15 | $ | 17.24 | $ | 3.91 | |||||||||||||||||||||||
| Total (per Boe) | $ | 28.32 | $ | 22.82 | $ | 5.50 | $ | 28.82 | $ | 23.53 | $ | 5.29 | |||||||||||||||||||||||
| Average prices—including impact of derivative contract settlements | |||||||||||||||||||||||||||||||||||
| Oil (per Bbl) | $ | 81.93 | $ | 66.15 | $ | 15.78 | $ | 78.98 | $ | 66.68 | $ | 12.30 | |||||||||||||||||||||||
| Natural gas (per Mcf) | $ | 2.02 | $ | 2.15 | $ | (0.13) | $ | 2.33 | $ | 2.29 | $ | 0.04 | |||||||||||||||||||||||
| NGL (per Bbl) | $ | 22.74 | $ | 15.82 | $ | 6.92 | $ | 21.18 | $ | 17.24 | $ | 3.94 | |||||||||||||||||||||||
| Total (per Boe) | $ | 28.87 | $ | 24.34 | $ | 4.53 | $ | 28.88 | $ | 24.33 | $ | 4.55 | |||||||||||||||||||||||
__________________
(1) Prices represent actual average sales prices for the periods presented and do not include effects of derivative settlements.
Variances in oil, natural gas and NGL revenues attributable to changes in the average prices received for our production and total production volumes sold are shown in the table below (in thousands):
| Three Months Ended September 30, 2026 | Nine Months Ended September 30, 2026 | ||||||||||
| 2025 oil, natural gas and NGL revenues | $ | 39,822 | $ | 116,957 | |||||||
| Change due to production volumes | 4,095 | 16,983 | |||||||||
| Change due to average prices | 10,499 | 21,370 | |||||||||
| 2026 oil, natural gas and NGL revenues | $ | 54,416 | $ | 155,310 | |||||||
26
Operating Expenses
Operating expenses consisted of the following (in thousands):
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||||||||||||||
| 2026 | 2025 | Change | 2026 | 2025 | Change | ||||||||||||||||||||||||||||||
| Lease operating expenses | $ | 11,049 | $ | 10,911 | $ | 138 | $ | 32,138 | $ | 28,384 | $ | 3,754 | |||||||||||||||||||||||
| Production, ad valorem, and other taxes | 3,297 | 2,155 | 1,142 | 9,528 | 7,412 | 2,116 | |||||||||||||||||||||||||||||
| Depreciation and depletion—oil and natural gas | 13,032 | 9,400 | 3,632 | 33,346 | 26,106 | 7,240 | |||||||||||||||||||||||||||||
| Depreciation and amortization—other | 1,600 | 1,638 | (38) | 4,847 | 4,853 | (6) | |||||||||||||||||||||||||||||
| Total operating expenses | $ | 28,978 | $ | 24,104 | $ | 4,874 | $ | 79,859 | $ | 66,755 | $ | 13,104 | |||||||||||||||||||||||
| Lease operating expenses ($/Boe) | $ | 5.75 | $ | 6.25 | $ | (0.50) | $ | 5.96 | $ | 5.71 | $ | 0.25 | |||||||||||||||||||||||
| Production, ad valorem, and other taxes ($/Boe) | $ | 1.72 | $ | 1.23 | $ | 0.49 | $ | 1.77 | $ | 1.49 | $ | 0.28 | |||||||||||||||||||||||
| Depreciation and depletion—oil and natural gas ($/Boe) | $ | 6.78 | $ | 5.39 | $ | 1.39 | $ | 6.19 | $ | 5.25 | $ | 0.94 | |||||||||||||||||||||||
| Production, ad valorem, and other taxes (% of oil, natural gas and NGL revenue) | 6.1 | % | 5.4 | % | 0.7 | % | 6.1 | % | 6.3 | % | (0.2) | % | |||||||||||||||||||||||
Lease operating expenses for the three months ended September 30, 2026 were comparable to the three months ended September 30, 2025 and decreased on a Boe basis due to an increase in production volumes as a result of our drilling program and acquisition in the Cherokee Play of the Mid-Continent region. Lease operating expenses for the nine months ended September 30, 2026 increased in total and per Boe compared to the nine months ended September 30, 2025 primarily due to a $2.1 million one-time non-cash adjustment during the nine months ended September 30, 2025 of an operating accrual dating back to our emergence from bankruptcy (see “Note 1—Basis of Presentation” to the accompanying unaudited condensed consolidated financial statements included in Item 1 of this Quarterly Report for further information). This increase was partially offset by a decrease in workover costs.
Production, ad valorem, and other taxes for the three and nine months ended September 30, 2026 increased in total compared with the three and nine months ended September 30, 2025 primarily due to higher average crude oil and NGL commodity prices, sales volumes, and related revenues. Production, ad valorem, and other taxes per Boe increased for the three and nine months ended September 30, 2026 compared with the three and nine months ended September 30, 2025 primarily due to higher average crude oil and NGL commodity prices.
The increase in depreciation and depletion for oil and natural gas properties for the three and nine months ended September 30, 2026 versus the same periods in 2025 was primarily the result of increases in sales volumes and our depletion rate which was due in part to our 2026 development activity and acquisition in the Cherokee Play which increased production and the capitalized cost of our proved properties.
Impairment
A ceiling limitation calculation is performed at the end of each quarter. If the full cost pool balance exceeds the ceiling limitation, an impairment of the full cost pool is required. Calculation of the full cost ceiling test is based on, among other factors, trailing twelve-month first-day-of-the-month index prices (“SEC prices”) as adjusted for price differentials and other contractual arrangements. The SEC prices utilized in the calculation of proved reserves included in the full cost ceiling test at September 30, 2026 were $75.79 per barrel of oil and $3.62 per MMBtu of natural gas, before price differential adjustments.
The ceiling limitation was not exceeded; therefore, no full cost ceiling limitation impairments were recorded during the three or nine months ended September 30, 2026 or 2025. Full cost pool ceiling limitation impairments have no impact to our cash flow or liquidity.
27
Based on the SEC prices over the trailing ten months ended October 31, 2026, as well as two months of NYMEX strip pricing for November and December of 2026 as of October 29, 2026, we estimate the SEC prices utilized in the December 31, 2026 full cost ceiling test may be $85.33 per barrel of oil and $3.41 per MMBtu of natural gas (the "estimated fourth quarter prices"). Applying these estimated fourth quarter prices, and holding all other inputs constant to those used in the calculation of our September 30, 2026 ceiling test, we expect that no full cost ceiling limitation impairment is indicated for the fourth quarter of 2026.
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 declines in the actual trailing twelve-month SEC prices, lower NGL pricing, changes in estimated future development costs and operating expenses, and other adjustments to our levels of proved reserves.
Other Operating Expenses
Other operating expenses consisted of the following (in thousands):
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||||||||||||||
| 2026 | 2025 | Change | 2026 | 2025 | Change | ||||||||||||||||||||||||||||||
| General and administrative | $ | 3,139 | $ | 2,737 | $ | 402 | $ | 9,896 | $ | 9,618 | $ | 278 | |||||||||||||||||||||||
| Restructuring expenses | 176 | 305 | (129) | 308 | 757 | (449) | |||||||||||||||||||||||||||||
| (Gain) loss on derivative contracts | 6,392 | (2,364) | 8,756 | 5,696 | (5,936) | 11,632 | |||||||||||||||||||||||||||||
| Other operating (income) expense | 1 | — | 1 | 8 | — | 8 | |||||||||||||||||||||||||||||
| Total other operating expenses | $ | 9,708 | $ | 678 | $ | 9,030 | $ | 15,908 | $ | 4,439 | $ | 11,469 | |||||||||||||||||||||||
General and administrative expenses increased for the three months ended September 30, 2026 versus the same period in 2025 primarily as a result of increased professional fees and other costs. General and administrative expenses for the nine months ended September 30, 2026 were consistent with the same period in 2025.
The following table summarizes derivative activity (in thousands):
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
| (Gain) loss on commodity derivatives | $ | 4,914 | $ | (2,364) | $ | 4,218 | $ | (5,936) | |||||||||||||||
| (Gain) loss on Contingent Consideration | 1,478 | — | 1,478 | — | |||||||||||||||||||
| (Gain) loss on derivative contracts | $ | 6,392 | $ | (2,364) | $ | 5,696 | $ | (5,936) | |||||||||||||||
| Settlement gains (losses) on derivative contracts | $ | 1,055 | $ | 2,661 | $ | 338 | $ | 3,980 | |||||||||||||||
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 has historically viewed the settlement of commodity derivative contracts at contractual maturity as adjustments to the price received for oil, natural gas and NGL production to determine “effective prices.” In general, cash is received on settlement of contracts due to lower oil, natural gas and NGL 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, natural gas and NGL 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.
28
Other Income (Expense)
Our other income (expense) is presented in the table below (in thousands):
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
Other income (expense) | |||||||||||||||||||||||
| Interest income (expense), net | $ | 666 | $ | 916 | $ | 2,215 | $ | 2,803 | |||||||||||||||
| Other income (expense), net | 1 | (3) | 2 | (6) | |||||||||||||||||||
| Total other income | $ | 667 | $ | 913 | $ | 2,217 | $ | 2,797 | |||||||||||||||
Interest income, net during the three and nine month periods ended September 30, 2026 and 2025 is primarily comprised of interest income on cash deposits.
Income Tax (Benefit) Expense
We recorded a deferred federal and state income tax benefit totaling $14.2 million for the three and nine months ended September 30, 2026, which directly relates to our partial valuation allowance release. We anticipate being able to utilize additional deferred tax assets based on the generation of future income, and therefore we released an additional valuation allowance of $14.2 million on our deferred tax assets.
Liquidity and Capital Resources
As of September 30, 2026, our cash and cash equivalents, including restricted cash, was $70.0 million. We expect our cash on hand and cash from operations to be adequate to meet our short and long-term liquidity needs. We had no outstanding term or revolving debt obligations as of September 30, 2026.
Working Capital and Sources and Uses of Cash
Our principal sources of liquidity for the next year include cash flows from operations and cash on hand.
A decrease in cash and cash equivalents due primarily to capital expenditures, acquisitions of oil and natural gas assets, and cash dividends was the primary driver of the decrease in working capital to $38.3 million at September 30, 2026 compared to $79.8 million at December 31, 2025.
Cash Flows
Our cash flows from operations are substantially dependent on current and future prices for oil, natural gas and NGL, 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.
Our cash flows are presented in the following table and discussed below (in thousands):
| Nine Months Ended September 30, | |||||||||||
| 2026 | 2025 | ||||||||||
| Cash flows provided by operating activities | $ | 94,326 | $ | 68,450 | |||||||
| Cash flows used in investing activities | (116,525) | (46,128) | |||||||||
| Cash flows used in financing activities | (20,134) | (19,246) | |||||||||
| Net increase (decrease) in cash and cash equivalents and restricted cash | $ | (42,333) | $ | 3,076 | |||||||
29
Cash Flows from Operating Activities
The increase in cash flows from operations for the nine months ended September 30, 2026 compared to the same period in 2025 is primarily due to an increase in revenues from higher average oil and NGL prices and higher sales volumes from our development program and the August 2026 acquisition in the Cherokee Play of the Mid-Continent region.
Cash Flows from Investing Activities
Capital expenditures, acquisitions of oil and natural gas properties, and proceeds from sale of assets are summarized below (in thousands):
| Nine Months Ended September 30, | |||||||||||
| 2026 | 2025 | ||||||||||
| Drilling, completion, and capital workovers | $ | 57,292 | $ | 46,246 | |||||||
| Leasehold and geophysical | 3,435 | 4,392 | |||||||||
| Capital expenditures (on an accrual basis) | 60,727 | 50,638 | |||||||||
| Acquisition of oil and natural gas assets | 56,775 | 7,790 | |||||||||
| Capital expenditures, including acquisitions | 117,502 | 58,428 | |||||||||
| Changes in accounts payable and accrued expenses | 988 | (9,274) | |||||||||
| Inventory material transfers to oil and natural gas properties | — | (3) | |||||||||
| Total cash paid for capital expenditures | 118,490 | 49,151 | |||||||||
| Proceeds from sale of assets | (1,965) | (785) | |||||||||
| Total | $ | 116,525 | $ | 48,366 | |||||||
Cash Flows from Financing Activities
Cash used in financing activities for the nine months ended September 30, 2026 consisted of $18.9 million in cash dividends, $0.6 million of cash used for tax withholdings paid in exchange for shares withheld on employee vested stock awards that were settled by net exercise, and finance lease payments of $0.6 million. Since 2023, the Company has paid cash dividends totaling $188.7 million and issued 0.3 million shares in lieu of cash dividends under the Dividend Reinvestment Plan, which represents $3.70 per share in special dividends and $1.48 per share in quarterly dividends for a total of $5.18 per share in total dividends. Cash used in financing activities for the nine months ended September 30, 2025 consisted primarily of $12.0 million in cash dividends and $6.4 million in repurchases of common stock. Net exercises of stock awards allows the holder of a stock award to tender back to us a number of shares at fair value upon the vesting of such stock award that equals the employee payroll tax obligation due. We then remit a cash payment to the relevant taxing authority on behalf of the employee for their payroll tax obligations resulting from the vesting of their stock award.
Contractual Obligations and Off-Balance Sheet Arrangements
At September 30, 2026, our contractual obligations included asset retirement obligations, 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 2025 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 2025 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 nine months of 2026.
30
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 is 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 we have historically entered into, depending upon our view of opportunities under the then-prevailing current market conditions, commodity derivative contracts for a portion of our anticipated production volumes for the purpose of reducing the impact of the variability of oil and natural gas prices.
We have used, and may use, a variety of commodity-based derivative contracts, including fixed price swaps, basis swaps and collars. As of September 30, 2026, the Company's open derivative contracts consisted of oil, natural gas, and NGL commodity derivative contracts as follows:
| Period | Index | Daily Volume | Weighted Average Price | |||||||||||||||||||||||
| Oil (Bbl) | ||||||||||||||||||||||||||
| Fixed Price Swaps | ||||||||||||||||||||||||||
| October 2026 - December 2026 | NYMEX WTI | 700 | $75.18 | |||||||||||||||||||||||
| January 2027 - December 2027 | NYMEX WTI | 200 | $65.00 | |||||||||||||||||||||||
| Producer Costless Collars | ||||||||||||||||||||||||||
| October 2026 - December 2026 | NYMEX WTI | 1,255 | $62.57 Put / $84.41 Call | |||||||||||||||||||||||
| Natural Gas (MMBtu) | ||||||||||||||||||||||||||
| Fixed Price Swaps | ||||||||||||||||||||||||||
| October 2026 - December 2026 | NYMEX Henry Hub | 14,400 | $4.18 | |||||||||||||||||||||||
| Producer Costless Collars | ||||||||||||||||||||||||||
| October 2026 - December 2026 | NYMEX Henry Hub | 4,500 | $3.35 Put / $5.35 Call | |||||||||||||||||||||||
| NGL (Bbl) | ||||||||||||||||||||||||||
| Fixed Price Swaps | ||||||||||||||||||||||||||
| October 2026 - December 2026 | Mont Belvieu OPIS | 490 | $54.34 | |||||||||||||||||||||||
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 are 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 were principally measured based on a comparison of future prices to the contract price at the end of the period and through the Black-Scholes or other similar valuation method in the case of options.
See “Note 3 — Derivatives” to the accompanying unaudited condensed consolidated financial statements included in this Quarterly Report for additional information regarding our commodity derivatives.
In addition, in connection with the August 2026 acquisition of certain producing assets and leasehold interests in the Cherokee Play of the Mid-Continent region, we are required to pay up to three contingent earn-out payments of $2.0 million each based on the average daily spot price for WTI crude oil exceeding certain price thresholds beginning July 1, 2026 and ending December 31, 2027. As of September 30, 2026, the fair value of this Contingent Consideration was a $3.6 million liability. Changes in fair value are measured based on a Monte Carlo simulation model at the end of each period, and such changes are recognized as gains or losses in current period earnings.
31
The following table summarizes derivative activity (in thousands):
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
| (Gain) loss on commodity derivatives | $ | 4,914 | $ | (2,364) | $ | 4,218 | $ | (5,936) | |||||||||||||||
| (Gain) loss on Contingent Consideration | 1,478 | — | 1,478 | — | |||||||||||||||||||
| (Gain) loss on derivative contracts | $ | 6,392 | $ | (2,364) | $ | 5,696 | $ | (5,936) | |||||||||||||||
| Settlement gains (losses) on derivative contracts | $ | 1,055 | $ | 2,661 | $ | 338 | $ | 3,980 | |||||||||||||||
Credit Risk. As applicable, we are exposed to credit risk related to counterparties to our derivative financial contracts. All of our derivative transactions are 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 current derivative transactions have had and continue to have an “investment grade” credit rating. We monitor 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 do not require collateral or other security from counterparties to support derivative instruments. We have master netting agreements with our derivative contract counterparties, which allows 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 is limited to the net amounts due from the counterparties under the commodity derivative contracts. Therefore, we are 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 on wells and properties we operate. Historically, our credit losses on joint interest receivables have been immaterial.
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ITEM 4. Controls and Procedures
Disclosure Controls and Procedures
Under the supervision and with the participation of the Company’s management, including the Company’s CEO and CFO, the Company performed an evaluation of the effectiveness of the design and operation of its disclosure controls and procedures pursuant to Exchange Act Rules 13a-15 and 15d-15 as of the end of the period covered by this Quarterly Report. Based on that evaluation, the Company’s CEO and CFO concluded that the Company’s disclosure controls and procedures were effective as of September 30, 2026, 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 SEC, 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 September 30, 2026 that has materially affected or is reasonably likely to materially affect the Company’s internal control over financial reporting.
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PART II. Other Information
ITEM 1. Legal Proceedings
See "Note 7—Commitments and Contingencies” to the accompanying condensed consolidated financial statements in Part I, Item 1 of this Quarterly Report.
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ITEM 1A. Risk Factors
Information regarding our risk factors appears in Item 1A. of our 2025 Form 10-K for the year ended December 31, 2025. These risk factors describe some of the assumptions, risks, uncertainties and other factors that could adversely affect our business or that could otherwise result in changes that differ materially from our expectations.
ITEM 2. Unregistered Sales of Equity Securities and Use of Proceeds
Our current equity-based compensation plans include provisions that allow for the “net exercise” of share-settled vested awards by all plan participants. In a net exercise, any required payroll taxes, federal withholding taxes and exercise price of the shares due from the share-based award holders are settled by having the holder tender back to us a number of shares at fair value equal to the amounts due. Net exercises are treated as purchases and retirements of shares.
The following table presents a summary of share repurchases made by the Company during the three months ended September 30, 2026.
| Period | Total Number of Shares Purchased(1) | Average Price Paid per Share | Total Number of Shares Purchased as Part of Publicly Announced Program(2) | Maximum Approximate Dollar Value of Shares that May Yet Be Purchased Under the Program (in Millions)(2) | |||||||||||||||||||
| July 1, 2026 - July 31, 2026 | — | $ | — | — | $ | 68.3 | |||||||||||||||||
| August 1, 2026 - August 31, 2026 | — | $ | — | — | $ | 68.3 | |||||||||||||||||
| September 1, 2026 - September 30, 2026 | 1,578 | $ | 14.37 | — | $ | 68.3 | |||||||||||||||||
| 1,578 | — | ||||||||||||||||||||||
| (1) Includes 1,578 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. | |||||||||||||||||||||||
(2) In May 2023, the Company's Board of Directors approved the initiation of a share repurchase program authorizing the Company to purchase up to an aggregate of $75.0 million of the Company’s common stock. | |||||||||||||||||||||||
ITEM 3. Defaults Upon Senior Securities
None.
ITEM 4. Mine Safety Disclosures
Not applicable.
ITEM 5. Other Information
During the three months ended September 30, 2026, no director or officer of the Company adopted terminated
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ITEM 6. Exhibits
| Incorporated by Reference | ||||||||||||||||||||||||||||||||
Exhibit No. | Exhibit Description | Form | SEC File No. | Exhibit | Filing Date | Filed Herewith | ||||||||||||||||||||||||||
| 2.1 | 8-A | 001-33784 | 2.1 | 10/4/2016 | ||||||||||||||||||||||||||||
| 2.2 | 8-K | 001-33784 | 2.1 | 6/29/2026 | ||||||||||||||||||||||||||||
| 3.1 | 8-A | 001-33784 | 3.1 | 10/4/2016 | ||||||||||||||||||||||||||||
| 3.2 | 8-A | 001-33784 | 3.2 | 10/4/2016 | ||||||||||||||||||||||||||||
| 4.1 | 8-K | 001-33784 | 4.1 | 6/16/2026 | ||||||||||||||||||||||||||||
| 10.1 | 8-K | 001-33784 | 10.1 | 6/16/2026 | ||||||||||||||||||||||||||||
| 31.1 | * | |||||||||||||||||||||||||||||||
| 31.2 | * | |||||||||||||||||||||||||||||||
| 32.1 | * | |||||||||||||||||||||||||||||||
| 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) | * | ||||||||||||||||||||||||||||||
36
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: November 5, 2026 | By: | /s/ Jonathan Frates | ||||||
Jonathan Frates Executive Vice President and Chief Financial Officer (Principal Financial Officer) | ||||||||
37
Exhibit 31.1
Certification of the Company’s Chief Executive Officer Pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. Section 7241)
I, Grayson Pranin, certify that:
1.I have reviewed this quarterly report on Form 10-Q of SandRidge Energy, Inc.;
2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
a.Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b.Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c.Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d.Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
a.All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
b.Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
| /s/ Grayson Pranin | ||
Grayson Pranin | ||
President and Chief Executive Officer | ||
Date: November 5, 2026
Exhibit 31.2
Certification of the Company’s Chief Financial Officer Pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. Section 7241)
I, Jonathan Frates, certify that:
1.I have reviewed this quarterly report on Form 10-Q of SandRidge Energy, Inc.;
2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
a.Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b.Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c.Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d.Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
a.All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
b.Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
| /s/ Jonathan Frates | ||
| Jonathan Frates | ||
| Executive Vice President and Chief Financial Officer | ||
Date: November 5, 2026
Exhibit 32.1
Certification of the Company’s Chief Executive Officer and Chief Financial Officer Pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. Section 1350)
Pursuant to 18 U.S.C. § 1350, the undersigned officers of SandRidge Energy, Inc. (the “Company”), hereby certify that the Company’s Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2026 (the “Report”), fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934 and that the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
| /s/ Grayson Pranin | ||
Grayson Pranin | ||
President and Chief Executive Officer | ||
November 5, 2026
| /s/ Jonathan Frates | ||
| Jonathan Frates | ||
| Executive Vice President and Chief Financial Officer | ||
November 5, 2026