SandRidge Energy : Reports Financial and Operational Results for Fourth Quarter and the Full Year of 2016

SandRidge Energy, Inc. Reports Financial and Operational Results for Fourth Quarter and the Full Year of 2016

Oklahoma City, Oklahoma, February 22, 2017 - SandRidge Energy, Inc. (the "Company" or "SandRidge") (NYSE:SD) today announced financial and operational results for the quarter and fiscal year ended December 31, 2016. The Company will host a conference call to discuss these results on February 23rd at 8:00 a.m. CT (877- 201-0168, International: 647-788-4901 - passcode: 53513467). Presentation slides will be available on the Company's website, www.sandridgeenergy.com, under Investor Relations/Events.

Production in the quarter ending December 31, 2016 was 4.3 MMBoe (47.2 MBoepd, 28% oil, 23% NGLs, 49% natural gas), and

19.4 MMBoe for the full year, at the high end of guidance (19.0-

19.4 MMBoe). During the quarter, one drilling rig was active in Oklahoma targeting the Meramec and Osage formations, with the Company also completing wells in the Niobrara North Park Basin

HIGHLIGHTS DURING AND SUBSEQUENT TO THE FOURTH QUARTER INCLUDE:

SEC Reserves of 164 MMBoe at December 31, 2016 with PV-10 of $438 Million (equal to Standardized Measure);UpdatedProvedReservesof184MMBoe with $946 Million PV-10 at Recent Strip Pricing

Acquisition of ~13,100 Net Acres (Including ~700 Boepd of Production) in Woodward County, Oklahoma with Meramec and Osage Focus for $48 Million in Cash, Increasing NW STACK Position to 60,000 Net Acres

of Colorado. Capital expenditures were $41 million during the

quarter, bringing the total for the year to $202 million (excluding acquisitions) compared to prior 2016 guidance of $220-$240 million. In February 2017, the Company closed an approximately 13,100 acre acquisition (including 700 Boepd of production) in Woodward County, Oklahoma for $48 million cash, increasing its position in the northwest portion of the Sooner Trend Anadarko Basin Canadian and Kingfisher Counties play (NW STACK) to 60,000 net acres. Capital expenditures and operational guidance for 2017 is included in this release.

The Company reported a net loss of $334 million, which included a non-cash ceiling test impairment charge of $319 million. Net cash from operating activities were $66 million for the fourth quarter of 2016. When adjusting these reported amounts for items that are typically excluded by the investment community on the basis that such items affect the comparability of results, the Company's

901 Boepd (91% Oil) 30-Day IP on First Niobrara XRL and 539 Boepd (92% Oil) on First Niobrara "C" Bench Well

925 Boepd (77% Oil) 30-Day IP Major County Meramec Well in NW STACK

One Rig Active and Second Rig Starting Late Q1'17 in NW STACK Drilling in Major, Woodward, and Garfield Counties, One Rig Active in North Park at Mid Year

New $600 Million Reserve-based Credit Facility with $425 Million Conforming Borrowing Base

"adjusted net income" amounted to $29 million and "adjusted

operating cash flow" totaled $52 million. Earnings before interest, income taxes, depreciation, depletion, and amortization, adjusted for certain other items, otherwise referred to as "adjusted EBITDA", for the fourth quarter was $71 million, and for the full year of 2016 was $238 million.

All Outstanding Mandatorily Convertible Notes Converted, 35.9 Million Shares Outstanding as of February 20, 2017

The Company has defined and reconciled certain Non-GAAP financial measures including adjusted net income, adjusted operating cash flow, adjusted EBITDA, PV-10 and current net debt, to the most directly comparable GAAP financial measures in supporting tables at the conclusion of this press release under the "Non-GAAP Financial Measures" beginning on page 17.

Current Capital Structure

• 35.9 million shares outstanding

• New $600 million reserve-based credit facility with $425 million conforming borrowing base

• Liquidity of $537 million including ~$120 million of cash and $417 million capacity under the credit facility, net of outstanding letters of credit

• Outstanding debt consists of a $36 million par value note secured by the Company's real estate in Oklahoma City, resulting in zero current net debt

  Entering into the new credit facility in February 2017 triggered the release of $50 million of cash held in escrow to the Company and the conversion of all of the $264 million outstanding mandatorily convertible notes into approximately 14.1 million shares of the Company's common stock.

  2017 Capital Budget and Operational Guidance

  The Company currently has one drilling rig running in Oklahoma, with plans to add a second rig late in the first quarter. Drilling operations will commence mid year in the North Park Basin with one rig. 2017 capital expenditure guidance range is for $210-

  $220 million. Production and other operational guidance detail for the full year of 2017 can be found below.

  Mid-Continent Assets in Oklahoma

• Fourth quarter production of 4.0 MMBoe, (43.7 MBoepd, 23% oil, 24% NGLs, 53% natural gas)

• Drilled six laterals in the fourth quarter, bringing six laterals online

• Two Mississippian extended reach lateral wells (four total laterals), the Cherokee 1-2H/11 H and Cherokee 2-2H/11 H produced a combined 30-Day IP of 2,226 Boepd (49% oil), drilled and completed for $5.3 million ($1.3 million per lateral)

  - a new low cost record for the Company

• 2016 Mississippian drilling and completion costs averaged $1.7 million per lateral, a ~23% reduction versus 2015

  The Company drilled the following three NW STACK laterals in 2016:

• In the fourth quarter, SandRidge's first Major County Meramec lateral, the Medill 1-27H, produced a 30-Day IP of 925 Boepd (77% oil), drilled and completed for $3.9 million

• In the third quarter, SandRidge's first Major County lower Osage lateral, the Keeton 1-24H, produced a 30-Day IP of 540 Boepd (46% oil), drilled and completed for $4.2 million

• In the second quarter, the first Meramec horizontal lateral in Garfield County, the Charlene 1-29H, produced a 30-Day IP of 328 Boepd (54% oil), drilled and completed for $3.1 million

  In 2016, SandRidge drilled 28 laterals, including 13 Mississippian laterals to sales, in the Mid-Continent with one rig. The Mississippian program consisted of 100% extended and multilaterals, providing a program IRR of 51% and achieving an average drilling and completion cost of $1.7 million per lateral, with the most recent two extended reach laterals averaging

  $1.3 million per lateral. Also in 2016, SandRidge continued development activities in the Oklahoma NW STACK play in Garfield and Major Counties.

  Oklahoma NW STACK: Meramec and Osage

  The STACK encompasses a geographic area initially developed in Oklahoma's Canadian and Kingfisher Counties. Recently, industry activity expanded northwest into what is considered the NW STACK where SandRidge operates in Major, Woodward, and Garfield Counties with approximately 60,000 net acres prospective for the Meramec and Osage.

  The STACK and NW STACK plays, while in different parts of the Anadarko Basin, share the same depositional history. As in the STACK, the NW STACK consists of Mississippian age rock with primary targets in the Meramec and Osage formations. The structure deepens from northeast to southwest, and in SandRidge's Major, Woodward, and Garfield County areas, depth ranges from 5,800 to 12,500 feet true vertical depth (TVD), with the majority of acreage in the 6,000 to 9,000 feet TVD range. The Woodford Shale is the primary hydrocarbon source, while the organic content in the Meramec Shale provides a self-sourcing component as well. Similar to the STACK, there is an over-pressured area and normally pressured area in the NW STACK.

  Since 2014, multiple operators (including SandRidge) have demonstrated encouraging initial well results in the NW STACK. The Company's primary target in the NW STACK is the Meramec Shale, which consists of interbedded shales, sands and carbonates

  with thickness ranging from 50 to 160 feet. The Meramec production to date shows high oil content (greater than 40%), low water rates and total productivity consistent with an over-pressured reservoir. The Company's secondary target, the Osage, is comprised of limestones and cherts, ranging from 450 to 1,300 feet in thickness. The Osage production is typically gassier than the Meramec with oil content greater than 20%. Significant industry activity in the NW STACK has established both the Meramec and Osage as productive reservoirs with successful wells throughout.

  Subsequent to the fourth quarter, SandRidge acquired approximately 13,100 net acres (including approximately 700 Boepd of production) in Woodward County for $48 million in cash, expanding the Company's three county (Major, Woodward, and Garfield) NW STACK acreage position to approximately 60,000 net acres. Approximately 27% of that position is currently held by production. Industry activity includes thirteen drilling rigs recently operating across the NW STACK with over 50 wells producing in the areas of interest. The Company's recent success in the play, combined with competitor activity near SandRidge's acreage supports focused Mid-Continent drilling activity, weighted towards Meramec and Osage targets in the NW STACK.

  Niobrara Asset in North Park Basin, Jackson County, Colorado

• Fourth quarter production of 181 MBo (2.0 MBopd), and full year production of 500 MBo

• Completed and brought online three laterals during the fourth quarter including first extended reach lateral and first Niobrara "C" bench well

• First Niobrara "C" bench well, the Hebron 4-18H, produced a 30-Day IP of 539 Boepd (92% oil)

• First Niobrara two-mile extended reach lateral, the Castle 1-17H 20, produced a 30-Day IP of 901 Boepd (91% oil), drilled and completed for $6.8 million ($3.4 million per lateral - lowest cost per lateral to date)

• North Park 3D seismic acquisition ongoing in Q1'17

• Planned core to include the Niobrara Shale, Carlile Shale and Frontier Sand in 2017. The associated pilot hole will log the entire stratigraphic section to investigate additional shallow zones such as the Sussex and Shannon formations.

  During 2016, the Company drilled 11 laterals and tested various concepts, including Niobrara bench productivity, extended reach drilling, and the use of slickwater (versus crosslinked) frac fluid designs. The first five laterals (all one-mile laterals with crosslinked gel fracs) produced an average 30-Day IP of 478 Boepd (90% oil). The next three one-mile laterals (the Mutual 2-8H, Mutual 3-8H and Mutual 4-8H), tested various frac fluid designs including slickwater. The resulting well performance was

  Niobrara Asset in North Park Basin, Jackson County, Colorado (continued)

  influenced by higher than anticipated water cut (greater than 70%), although total fluid production (oil plus water) showed similar to the five previous wells, stimulated with crosslink gel. The higher water cut was a result of pumping 30% more water than in the crosslinked gel jobs. The 30-Day IPs were below type curve expectations averaging 210 Boepd (91% oil) due to the high water cut. These wells are all responding favorably to artificial lift and are expected to achieve type curve EURs as the reservoir is dewatered.

  In the fourth quarter, the Hebron 4-18H, the Company's first Niobrara "C" bench well produced a 30-Day IP of 539 Boepd (92% oil), confirming development potential for multiple benches in the play. Also in the quarter, the Castle 1-17H 20 extended lateral well produced a 30-Day IP of 901 Boepd (91% oil). Both wells were completed with crosslinked stimulation.

  The North Park Basin wells exhibit a relatively flat oil rate in the first several months of production due to the over-pressured nature of the Niobrara reservoir. The wells will free flow for two to three months at which point artificial lift is installed to further extend the plateau. In several instances, artificial lift was not installed early enough to maintain the plateau and production rates were temporarily reduced. The installation of artificial lift within the first few months of production will be the standard practice going forward.

  Other Operational Activities

  During the fourth quarter, Permian Central Basin Platform properties produced 143 MBoe (1.6 MBoepd, 82% oil, 11% NGLs, 7% natural gas). SandRidge continues to operate the Permian CBP assets and administrate the filing and distribution affairs on behalf of the Permian Royalty Trust.

  Year End 2016 Estimated Proved Reserves

  • SEC proved reserves of 164 MMBoe with a PV-10 of $438 million (equal to the standardized measure)

  • NYMEX strip-based proved reserves of 184 MMBoe with a PV-10 of $946 million

  • 74% of total proved reserves are proved developed

  • 53% liquids (32% oil, an increase from 24% at year end 2015)

  • 9 MMBoe (45% oil) reserve additions (extensions) from 2016 drilling program

  • Negative performance revisions were approximately 85% gas and associated NGLs and 15% oil

The Company's total estimated SEC proved reserves as of December 31, 2016 were 164 MMBoe, comprised of 53% liquids (32% oil and 21% natural gas liquids) and 47% natural gas. Approximately 74% of the Company's 2016 estimated proved reserves were classified as proved developed and 26% as proved undeveloped. The Company's year end reserves reflect approximately 94.7 MMBoe of negative performance revisions for the year, which is approximately 85% or 79.9 MMBoe from changes to gas and NGL reserves and 15% or 14.8 MMBoe from changes to oil reserves. All of the Company's estimated proved undeveloped reserves at December 31, 2016 are expected to be developed within the next five years. Utilizing SEC price guidelines, the PV-10 was $438.4 million (equal to the standardized measure due to the Company's current tax position).

For comparative purposes, utilizing NYMEX forward closing prices for oil and natural gas on December 30, 2016 (the last trading day of 2016), total NYMEX strip-based proved reserves at December 31, 2016 were 184 MMBoe, with a PV-10 of $946 million, an increase of $508 million over the standardized measure and SEC PV-10. NYMEX strip-based proved reserves are calculated based on the SEC proved reserves estimation methodology, but applying NYMEX strip prices rather than SEC pricing. NYMEX strip-based PV-10 uses annual average prices for oil and natural gas shown in the NYMEX Strip Pricing table below.

Independent reserve engineering firms, Cawley, Gillespie & Associates, Inc. (Mid-Continent - Mississippian Lime), Ryder Scott Company, L.P. (North Park Basin - Niobrara) and Netherland, Sewell & Associates, Inc. (Permian Basin Trust properties - Grayburg/San Andres) engineered 94% of the Company's year end 2016 proved reserves in accordance with SEC guidelines. SEC pricing used in the preparation of the December 31, 2016 reserves was $42.75 per Bbl for oil and $2.48 per MMBtu for natural gas, before adjustments.