SandRidge Energy, Inc. (SD): Business Model Canvas [11-2024 Updated]
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SandRidge Energy, Inc. (SD) Bundle
SandRidge Energy, Inc. (SD) operates within the dynamic landscape of the oil and gas industry, leveraging a robust business model canvas to navigate challenges and seize opportunities. This model is built on key elements such as strategic partnerships, advanced technology, and a commitment to sustainable practices. As we delve deeper into SandRidge's operational structure, you will discover how it effectively balances costs, optimizes production, and maintains strong relationships with its diverse customer segments. Read on to explore the intricacies of SandRidge's business model and how it positions itself for success in a competitive market.
SandRidge Energy, Inc. (SD) - Business Model: Key Partnerships
Collaborations with oil and gas service providers
SandRidge Energy collaborates with various oil and gas service providers to enhance its operational efficiency and reduce costs. These partnerships include contracts with major service companies for drilling, completion, and production services.
As of September 30, 2024, the company reported capital expenditures totaling $139.4 million, which included significant investments in drilling and completion services. The partnerships are vital for accessing advanced technologies and expertise that support efficient resource extraction and operational management.
Joint ventures in exploration and production
Joint ventures play a critical role in SandRidge's strategy for expanding its exploration and production capabilities. In August 2024, the company completed an acquisition of oil and natural gas properties in the Cherokee Play of the Western Anadarko Basin for $123.8 million. This acquisition included a joint development agreement allowing for collaborative drilling and completion operations, enhancing the company’s production potential.
SandRidge’s joint ventures have historically allowed it to share risks associated with exploration and production, while also leveraging the financial and technical resources of its partners. For example, the company has engaged in multiple joint ventures that have enabled it to access new drilling locations and technologies, which are crucial for maintaining competitive production levels in a volatile market.
Strategic alliances for technology and innovation
SandRidge Energy has formed strategic alliances aimed at advancing technology and innovation within its operations. These alliances focus on enhancing operational efficiencies, improving environmental performance, and reducing costs through innovative technology solutions.
The company has invested in various technologies related to hydraulic fracturing and enhanced oil recovery, which are essential for optimizing production from its existing wells. For instance, in the nine months ended September 30, 2024, SandRidge reported an average daily production of 15.7 MBoe/d, reflecting the effectiveness of these strategic initiatives.
Additionally, the company’s commitment to innovation is reflected in its ongoing efforts to adopt new technologies that improve safety and environmental sustainability, ensuring compliance with evolving regulatory standards while maximizing production output.
| Partnership Type | Description | Financial Impact |
|---|---|---|
| Oil and Gas Service Providers | Collaborations for drilling, completion, and production services | $139.4 million in capital expenditures (2024) |
| Joint Ventures | Joint development agreements to share risks and enhance production | $123.8 million acquisition in Cherokee Play (2024) |
| Technology Alliances | Strategic partnerships focused on innovation and efficiency | Average daily production of 15.7 MBoe/d (2024) |
SandRidge Energy, Inc. (SD) - Business Model: Key Activities
Exploration and drilling of oil and natural gas
SandRidge Energy, Inc. focuses on the exploration and drilling of oil and natural gas, primarily in the Cherokee Play of the Western Anadarko Basin. In the nine months ended September 30, 2024, the company incurred capital expenditures of approximately $139.4 million, with $125.9 million allocated for acquisitions of oil and gas properties. As of September 30, 2024, the company reported proved oil and natural gas properties valued at $1.7 billion.
| Metric | Value (2024) |
|---|---|
| Capital Expenditures | $139.4 million |
| Acquisition Costs | $125.9 million |
| Proved Oil and Gas Properties | $1.7 billion |
Production optimization and resource extraction
Production optimization is critical for SandRidge, with the company reporting total oil production of 624 MBbls and natural gas production of 13.98 MMcf for the nine months ended September 30, 2024. The average daily total production volume was 15.7 MBoe/d. The average sales prices for oil and natural gas were $75.66 per barrel and $0.95 per Mcf, respectively.
| Production Metrics | Value (2024) |
|---|---|
| Total Oil Production | 624 MBbls |
| Total Natural Gas Production | 13.98 MMcf |
| Average Daily Production | 15.7 MBoe/d |
| Average Oil Price | $75.66 per Bbl |
| Average Natural Gas Price | $0.95 per Mcf |
Risk management through commodity derivatives
SandRidge employs risk management strategies through commodity derivatives to mitigate the impact of price volatility. The company reported a loss of $1.87 million on derivative contracts for the nine months ended September 30, 2024. The average NYMEX prices for oil and natural gas during the same period were $76.43 per Bbl and $2.19 per Mcf, respectively.
| Risk Management Metrics | Value (2024) |
|---|---|
| Loss on Derivative Contracts | $1.87 million |
| Average NYMEX Oil Price | $76.43 per Bbl |
| Average NYMEX Natural Gas Price | $2.19 per Mcf |
SandRidge Energy, Inc. (SD) - Business Model: Key Resources
Extensive oil and gas reserves
As of September 30, 2024, SandRidge Energy reported proved oil and natural gas properties valued at $1,677,882 thousand for proved reserves and $17,487 thousand for unproved reserves. The total oil and natural gas properties amounted to $1,695,369 thousand, with accumulated depreciation, depletion, and impairment of $1,406,957 thousand, resulting in net oil and natural gas properties capitalized costs of $288,412 thousand.
Advanced drilling technology and equipment
SandRidge has invested significantly in advanced drilling technology and equipment to enhance its operational efficiency. For the nine months ended September 30, 2024, the company reported capital expenditures for drilling and completion activities totaling $6,562 thousand, with additional investments in leasehold and geophysical activities amounting to $6,893 thousand. Furthermore, the company completed its acquisition of producing oil and natural gas properties in the Cherokee Play of the Western Anadarko Basin for $123.8 million.
Skilled workforce in engineering and operations
SandRidge Energy maintains a skilled workforce essential for its engineering and operational capabilities. The company reported general and administrative expenses of $2,304 thousand for the three-month period ending September 30, 2024, which reflects the costs associated with maintaining its workforce and professional expertise. Additionally, the net income for the nine months ended September 30, 2024, was $45,403 thousand, indicating the contribution of its skilled workforce to the company's operational success.
| Key Resource | Details | Financial Data |
|---|---|---|
| Oil and Gas Reserves | Proved and unproved reserves | Proved: $1,677,882 thousand Unproved: $17,487 thousand |
| Drilling Technology | Capital expenditures for drilling and completion | $6,562 thousand |
| Workforce | General and administrative expenses reflecting workforce costs | $2,304 thousand |
| Net Income | Operational success | $45,403 thousand |
SandRidge Energy, Inc. (SD) - Business Model: Value Propositions
Reliable energy supply from diverse resources
SandRidge Energy, Inc. focuses on the production and sale of oil, natural gas, and natural gas liquids (NGL), ensuring a reliable energy supply through its diverse resource base. For the three months ended September 30, 2024, the company's total production was approximately 1,563 MBoe, composed of 231 MBbls of oil, 4,729 MMcf of natural gas, and 544 MBbls of NGL. The average prices realized during this period were $73.07 per barrel for oil, $0.92 per Mcf for natural gas, and $16.25 per barrel for NGL.
Commitment to sustainable and responsible practices
SandRidge emphasizes sustainable and responsible operational practices. In the nine months ended September 30, 2024, the company reported lease operating expenses of $28.73 million, which reflects a focus on efficiency and cost management. The company also reported a decrease in lease operating expenses per barrel of oil equivalent (Boe) to $6.68 from $6.83 in the previous year, indicating improved operational efficiency. Additionally, SandRidge's recent acquisition of producing properties in the Cherokee Play of the Western Anadarko Basin demonstrates its strategy of enhancing resource management while maintaining a commitment to responsible environmental practices.
Competitive pricing compared to industry peers
SandRidge maintains competitive pricing in the market, which is crucial for attracting and retaining customers. For the three months ended September 30, 2024, the company's total revenues were $30.06 million, a decrease from $38.15 million in the same period of the previous year. This decrease was primarily due to lower commodity prices and production volumes. The average realized prices for oil and natural gas were significantly influenced by market trends; for example, the average NYMEX price for oil was $76.43 per barrel for the same period. Furthermore, the company’s dividend payment of $68.2 million for the nine-month period reflects its strong financial standing and commitment to returning value to shareholders, which can be an attractive proposition for investors.
| Metric | Q3 2024 | Q3 2023 | Change |
|---|---|---|---|
| Total Production (MBoe) | 1,563 | 1,586 | -23 |
| Oil Production (MBbls) | 231 | 267 | -36 |
| Natural Gas Production (MMcf) | 4,729 | 5,276 | -547 |
| NGL Production (MBbls) | 544 | 440 | 104 |
| Total Revenues ($ millions) | 30.06 | 38.15 | -8.09 |
| Average Oil Price ($/Bbl) | 73.07 | 79.83 | -6.76 |
| Average Gas Price ($/Mcf) | 0.92 | 1.36 | -0.44 |
| Dividends Paid ($ millions) | 68.2 | 77.8 | -9.6 |
SandRidge Energy, Inc. (SD) - Business Model: Customer Relationships
Long-term contracts with buyers
SandRidge Energy, Inc. has established long-term contracts with buyers to ensure stable revenue streams. These contracts help mitigate the risks associated with price volatility in the oil and natural gas markets. The company reported total revenues of $86.3 million for the nine-month period ended September 30, 2024, which reflects a decrease from $114.7 million in the same period of 2023. This decline was primarily due to lower commodity prices and production volumes.
Focus on customer service and satisfaction
Customer service remains a cornerstone of SandRidge's operational strategy. The company prioritizes customer satisfaction by actively engaging with clients to address their needs and expectations. This focus on service is reflected in the company's ability to maintain strong relationships with its purchasers, as evidenced by an absence of recorded credit losses on revenues receivable during the three and nine-month periods ended September 30, 2024.
Engagement through regular communication and updates
SandRidge engages its customers through regular communication and updates regarding production and market trends. This proactive approach ensures that clients are well-informed about the company's operations and any changes that may affect them. As of September 30, 2024, the company reported revenues receivable of $15.2 million, indicating effective management of accounts receivable.
| Financial Metrics | Q3 2024 | Q3 2023 | Change |
|---|---|---|---|
| Total Revenues | $30.1 million | $38.1 million | $(8.0 million) |
| Net Income | $25.5 million | $18.7 million | $6.8 million |
| Average Daily Production (MBoe/d) | 17.0 | 17.2 | $(0.2) |
| Revenues Receivable | $15.2 million | $14.5 million | $0.7 million |
Overall, SandRidge Energy's business model emphasizes building strong customer relationships through long-term contracts, exceptional customer service, and ongoing communication. These strategies are designed to enhance customer retention and ensure a reliable revenue stream amidst fluctuating market conditions.
SandRidge Energy, Inc. (SD) - Business Model: Channels
Direct sales to refineries and distributors
SandRidge Energy engages in direct sales of its oil, natural gas, and NGL (natural gas liquids) products to refineries and distributors. For the nine months ended September 30, 2024, the company reported total revenues of $86.3 million, which included:
| Product | Revenue (in thousands) | Percentage of Total Revenue |
|---|---|---|
| Oil | $47,202 | 54.6% |
| Natural Gas | $13,302 | 15.4% |
| NGL | $25,813 | 30.0% |
These direct sales are crucial for SandRidge as they account for the majority of its revenue. The company ensures timely delivery and competitive pricing to maintain strong relationships with its customers in the refining and distribution sectors.
Online platforms for investor relations and updates
SandRidge Energy utilizes its official website and online investor relations platforms to communicate vital information to investors and stakeholders. Key features of these platforms include:
- Quarterly earnings reports and press releases
- Annual reports and SEC filings
- Live webcasts of earnings calls and presentations
- Real-time stock performance updates
As of September 30, 2024, SandRidge had cash and cash equivalents of $94.1 million, which reflects its financial health and operational performance. This information is readily available through their online channels, enhancing transparency and investor engagement.
Participation in industry conferences and trade shows
Active participation in industry conferences and trade shows is a key channel for SandRidge Energy to showcase its operations, network, and discuss trends with industry peers. In 2024, the company attended several notable events including:
- Annual Oil & Gas Conference
- Energy Producers and Consumers Summit
- North American Natural Gas Industry Forum
These events provide SandRidge with opportunities to present its business strategies, promote its assets, and engage with potential investors and partners. Such participation reinforces its market presence and allows for direct communication with stakeholders.
SandRidge Energy, Inc. (SD) - Business Model: Customer Segments
Refineries and Petrochemical Companies
SandRidge Energy, Inc. primarily serves refineries and petrochemical companies by supplying crude oil and natural gas. The average prices realized per barrel of oil as of September 30, 2024, were $73.07, while natural gas prices stood at $0.92 per Mcf. The company's revenue from oil for the three months ended September 30, 2024, was $16,871,000, down from $21,333,000 in the same period of 2023.
Industrial Users of Natural Gas
Industrial users of natural gas represent a significant customer segment for SandRidge. The company reported natural gas revenues of $4,349,000 for the third quarter of 2024, a decrease from $7,183,000 in the same quarter of 2023. This segment benefits from the competitive pricing of natural gas, with a reported average price of $0.92 per Mcf for the quarter ending September 30, 2024. Additionally, total natural gas production for the same period was 4,729 MMcf.
Investors Seeking Energy Sector Opportunities
Investors are a crucial segment for SandRidge, particularly those seeking opportunities in the energy sector. The company reported a net income of $25,484,000 for the three months ended September 30, 2024, reflecting a robust financial performance. As of September 30, 2024, SandRidge had cash and cash equivalents totaling $94.1 million, which supports its investment strategies and shareholder returns. The company paid dividends of $68.2 million during the nine-month period ending September 30, 2024.
| Customer Segment | Key Metrics | Revenue (Q3 2024) | Average Price (Q3 2024) |
|---|---|---|---|
| Refineries and Petrochemical Companies | Oil Revenue: $16,871,000 | $16,871,000 | $73.07 per barrel |
| Industrial Users of Natural Gas | Natural Gas Revenue: $4,349,000 | $4,349,000 | $0.92 per Mcf |
| Investors Seeking Energy Sector Opportunities | Net Income: $25,484,000 | N/A | N/A |
SandRidge Energy, Inc. (SD) - Business Model: Cost Structure
High capital expenditure for exploration and drilling
SandRidge Energy, Inc. has made significant capital investments in exploration and drilling activities. In the nine months ended September 30, 2024, the company reported capital expenditures totaling $139.4 million, which included:
| Expenditure Type | Amount (in thousands) |
|---|---|
| Drilling, completion, and capital workovers | $6,562 |
| Leasehold and geophysical | $6,893 |
| Acquisitions | $125,950 |
| Total Capital Expenditures | $139,405 |
These expenditures reflect the company's strategy to acquire and develop oil and gas properties, particularly in the Cherokee Play of the Western Anadarko Basin, which was acquired in August 2024 for $123.8 million.
Operational costs for production and maintenance
Operational costs for SandRidge primarily include lease operating expenses, production taxes, and depreciation. For the three months ended September 30, 2024, the operational costs were as follows:
| Cost Type | Amount (in thousands) |
|---|---|
| Lease operating expenses | $9,104 |
| Production, ad valorem, and other taxes | $1,813 |
| Depreciation and depletion—oil and natural gas | $8,345 |
| Depreciation and amortization—other | $1,605 |
| Total Operating Expenses | $20,867 |
For the nine months ended September 30, 2024, total operating expenses were reported at $56 million, representing a slight decrease from $56.8 million in the same period of 2023.
Administrative and marketing expenses
Administrative expenses for SandRidge also contribute to the overall cost structure. For the three months ended September 30, 2024, these expenses were recorded as follows:
| Expense Type | Amount (in thousands) |
|---|---|
| General and administrative | $2,304 |
| Restructuring expenses | $260 |
| Employee termination benefits | $0 |
| Total Administrative Expenses | $2,564 |
For the nine months ended September 30, 2024, the company reported total general and administrative expenses of $8.7 million, which is an increase from $8 million in 2023.
SandRidge Energy, Inc. (SD) - Business Model: Revenue Streams
Sales of Oil, Natural Gas, and NGLs
SandRidge Energy generates significant revenue through the sale of oil, natural gas, and natural gas liquids (NGLs). For the nine months ended September 30, 2024, total revenue from these sources was $86.3 million, a decrease from $114.7 million in the same period in 2023. The breakdown of revenue is as follows:
| Revenue Source | Q3 2024 Revenue (in thousands) | Q3 2023 Revenue (in thousands) | 9M 2024 Revenue (in thousands) | 9M 2023 Revenue (in thousands) |
|---|---|---|---|---|
| Oil | $16,871 | $21,333 | $47,202 | $60,327 |
| Natural Gas | $4,349 | $7,183 | $13,302 | $27,378 |
| NGL | $8,837 | $9,633 | $25,813 | $27,010 |
| Total Revenue | $30,057 | $38,149 | $86,317 | $114,715 |
In Q3 2024, the average price received per barrel of oil was $73.07, down from $79.83 in Q3 2023. For natural gas, the average price was $0.92 per Mcf, compared to $1.36 per Mcf in the previous year.
Revenue from Commodity Derivative Contracts
SandRidge utilizes commodity derivative contracts to manage price volatility associated with oil and natural gas sales. These contracts can impact revenue through gains or losses depending on market conditions. For the nine months ended September 30, 2024, there was a net loss of $1.87 million on derivative contracts. The company had the following derivative positions:
| Contract Type | Volume (Bbl) | Weighted Average Price | Period |
|---|---|---|---|
| NYMEX WTI Swaps | 900 | $74.85 | October 2024 - December 2024 |
| Mont Belvieu OPIS Swaps | 400 | $42.76 | October 2024 - December 2024 |
| NYMEX WTI Swaps | 500 | $71.60 | January 2025 - December 2025 |
| Mont Belvieu OPIS Swaps | 300 | $39.69 | January 2025 - December 2025 |
The effectiveness of these contracts is contingent on market prices at the time of settlement, which influences the overall revenue received from oil and gas sales.
Potential Income from Joint Venture Agreements and Partnerships
SandRidge actively seeks to enhance its revenue through joint ventures and partnerships. In August 2024, the company acquired oil and natural gas properties in the Cherokee Play of the Western Anadarko Basin for $123.8 million, which is expected to contribute to future revenues. Joint ventures not only provide immediate cash inflow but also allow for shared operational costs and risks associated with exploration and production activities.
As of September 30, 2024, the company reported cash and cash equivalents of $94.1 million, with a significant portion attributed to operational cash flow. These strategic partnerships are integral to SandRidge's business model, as they enhance production capabilities and optimize resource allocation, thereby potentially increasing revenue streams over time.
Updated on 16 Nov 2024
Resources:
- SandRidge Energy, Inc. (SD) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of SandRidge Energy, Inc. (SD)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View SandRidge Energy, Inc. (SD)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.