Sandridge: production surge fails to offset hedging losses
Sandridge sees deep red on hedging
Sandridge Energy, the subject of a high-profile listing last year, plunged deeper into the red in the first quarter on hedging losses, despite sharply higher production numbers.
Oklahoma City-based Sandridge reported a first-quarter net loss of $66.2 million, or a loss of 47 cents per share, compared with a net loss of $28.5 million, or 31 cents per share, in the first quarter of last year.
Adjusted earnings stripping out the effects of losses on derivates however showed a net income of $26.9 million, or 19 cents per share, compared with an adjusted loss of $14.4 million, or a loss of 16 cents per share, previously.
Revenues rose 80% to $269.1 million in the period as quarterly production surged 78% year-on-year to 22.8 billion cubic feet of natural gas equivalent.
Sandridge however saw revenues from its drilling and services operations fall 56% to $12.3 million over the period as it brought more of its rigs to work on its own oilfields. The company now operates 40 rigs on its assets in Texas and in the Mid-Continent basin in Oklahoma.
It was also hit by higher operating costs and expenses.
The company said its estimated proved reserves rose 12% in the period to 1.699 trillion cubic feet equivalent.
Sandridge boosted its production guidance for the full 2008 fiscal year to 100 Bcfe from 90 Bcfe previously. It also increased its capital expenditure for the year to $1.5 billion from 41.25 billion previously.