SandRidge Energy, Inc. Stock

Ladies and gentlemen, thank you for joining us and welcome to SandRidge Energy's second quarter 2026 conference call. [Operator Instructions] I will now hand the conference over to Scott Prestridge, Senior Vice President of Finance and Strategy. Scott, please go ahead.

Thank you and welcome everyone. With me today are Grayson Prather, our CEO; Jonathan Frates, our Chairman; Brandon Brown, our CAO; and Dean Parrish, our COO. We'd like to remind you that today's call contains forward-looking statements and assumptions that are subject to risk and uncertainty, and actual results may differ materially from those projected in these forward-looking statements.

These statements are not guarantees of future performance, and our actual results may differ materially due to known and unknown risks and uncertainties as discussed in greater detail in our earnings release and our SEC filings. We may also refer to adjusted EBITDA and adjusted G&A and other non-GAAP financial measures. Reconciliations of these measures can be found on our website. With that, I'll turn the call over to Grayson.

Thank you, and good afternoon. I'm pleased to report on a strong quarter and first half for the company. We continue to grow year-over-year production and revenue, driven primarily by our operating development program and higher commodity prices. We also announced a bolt-on acquisition that expands our footprint in the Cherokee play. Before getting into this and other highlights, I will turn things over to Jonathan for details on financial results.

Thanks, Grayson. During the quarter, the price of oil averaged roughly $95 per barrel, while the price of natural gas fell to just above $3. The company grew production to 19.7 Mboe per day, representing an increase of 11% year over year on a BOE basis. Oil increased 22% over the same period. We generated revenues of just over $51 million, a 48% increase year over year, and adjusted EBITDA of $34 million, a 49% increase over the same period.

As always, we continue to manage the business with the goal of maximizing long-term cash flow while growing production and utilizing our NOLs to shield us from income taxes. At the end of the quarter, cash, including restricted cash, was approximately $115 million, which represents roughly $3.09 per common share outstanding. The company paid $10.6 million in dividends during the quarter, which included our regular way dividend of 13 cents per share and the previously announced one-time special dividend of 20 cents per share. Including special dividends, SandRidge has now paid $5.05 per share in dividends since the beginning of 2023.

On August 4, 2026, the Board of Directors declared a 13 cents per share dividend payable on August 31 to shareholders of record on August 19, 2026. Shareholders may receive cash or additional shares of common stock through the company's dividend reinvestment plan. The unhedged price realization for the quarter, before considering the impact of hedges, was $95.35 per barrel of oil, $1.36 per Mcf of gas, and $21.68 per barrel of NGL. This compares to first quarter realizations of $71.11 per barrel of oil, $3.13 per Mcf of gas, and $18.64 per barrel of NGL.

While oil prices rose during the quarter, the realized price of natural gas fell meaningfully, primarily due to widening regional price differentials. Our commitment to cost discipline continues to yield results with adjusted G&A for the quarter of approximately $2.7 million or $1.52 per BOE , compared to $2.4 million or $1.48 per BOE in the second quarter of 2025. Net income was approximately $27 million for the quarter, or $0.72 per common share, and adjusted net income was approximately $21 million, or $0.57 per share. This compares to $19.6 million or 53 cents per common share and $12.2 million or 33 cents per share respectively during the same period last year.

The company generated cash flow from operations of $42.4 million during the quarter, compared to $22.9 million during the same period last year. With adjusted operating cash flow of $34.6 million during the quarter compared to $25.6 million in the same period of 2025. The company continues to have no debt and expects to fund all 2026 capital expenditures and capital returns with cash flows from operations during the year.

Lastly, our production is hedged with a combination of swaps and collars representing just under 30% of the midpoint of our 2026 guidance. This includes 37% of natural gas production and 43% of oil. These hedges will help secure a portion of our cash flows and support our drilling program through the year. We continue to monitor prices to take advantage of favorable opportunities, but plan to maintain meaningful upside throughout the remainder of the year. Before shifting to our outlook, we should note that our earnings release and 10-Q will provide further details on our financial and operational performance during the year. I will turn it over to Dean for an update on operations.

Thank you, Jonathan. Let's start with a review of the second quarter, then discuss recent drilling and completion results. Total capital spend for the quarter excluding A&D was $16.3 million, which is better than expected for the quarter, mostly due to activity timing. The rigorous bidding process focused on driving drilling and completion costs down in the Cherokee play, and longer artificial lift run times from previous years of improvements also contributed. Additionally, we have been securing critical well components needed for the remainder of the year to minimize any supply or inflationary pressures that may affect our capital program.

Lease operating expenses for the quarter were $10.3 million, or $5.73 per BOE , which falls right in line with expectations. We are also securing the equipment and services that will be critical for production operations in 2026, similar to the capital program. We expect to continue to see pressure on diesel through fuel surcharges passed on through service providers that have strict internal protocol to reduce surcharges when diesel prices begin to decrease.

During the quarter, the company successfully brought two wells online from our operated 1-rig Cherokee drilling program. We recently brought online two additional wells in July and are drilling the sixth out of 10 wells for the year. Our operations team continues to execute, with the fourth well that was drilled being the fastest, lowest well cost to date. In addition to Cherokee development, the operations team successfully recompleted a shut-in legacy well to an up-hole zone with initial production rates of 1,400 Mcf per day and 4 barrels of oil per day, exceeding expectations. We will continue to focus on lower drilling and completion costs while looking for opportunities to extract additional value from legacy assets.

Moving to our 2026 capital program, we plan to drill 10 operated Cherokee wells with 1 rig this year and complete nine wells. The remaining completion is anticipated to carry over to next year. A majority of the remaining wells in our development program this year directly offset producing or in-progress wells in the area, and we continue to monitor offsetting results. Gross well costs vary by depth, but are estimated to be between approximately $9 million and $11 million.

We intend to spend between $76 million and $97 million in our 2026 capital program, which is made up of $62 million to $80 million in drilling and completions activity, and between $14 million and $17 million in capital workovers, production optimization, and selective leasing in the Cherokee play. Our high-graded leasing is focused on further bolstering our interest, consolidating our position, and extending development into future years. With that, I will turn things back over to Grayson.

Thank you, Dean. Let's begin with the recently announced Cherokee acquisition. On June 29, we signed an agreement to acquire certain producing assets and leasehold interests in the Cherokee play, expanding our efficient operations in the area with the addition of 7,000 net leasehold acres and interest in 21 wells, including interest in four SandRidge operated wells. The proved undeveloped leasehold includes four 2.5-mile wells and four 2-mile wells, which immediately offset our core position in Roger Mills County.

The average 30-day IP for the operated producing wells we're acquiring is more than 2,100 BOE per day with 58% oil. We view this as a very complementary bolt-on that expands our footprint in the Mid-Continent by adding quality oil-weighted production and bolstering our Cherokee inventory with acreage that immediately offsets our current drilling and leasing programs. We anticipate closing this acquisition in the third quarter and will then focus on integrating the new assets, applying our low-cost know-how to operations. We currently do not plan to add people as a result of the acquisition.

Now, let's pivot over to the development program. As Dean discussed, we had first production on two wells this past quarter. One well targeted the Cherokee Shale in our core area, which had a peak 30-day average production rate of approximately 2,000 BOE per day, consistent with the surrounding wells in the area. The other well turned in line this quarter was a step out from our core area and tested a sub-member of the larger Cherokee formation immediately below the Cherokee Shale. This well had an initial 30-day average rate of more than 10,000 Mcf per day and more than 100 barrels of oil per day on a two-stream basis. The 90-day average rate is approximately 11,000 Mcfe per day and cumulative production after 100 days is over 1 billion cubic feet.

We are seeing exceptionally flat production from this well. While we are still assessing long-term recoveries, initial estimates are very promising. This well result allows us to better establish performance expectations in a new target and area that will help us evaluate the economics and potential development opportunity in the future. To that end, we are assessing whether this new target and the Cherokee Shale are truly unique reservoirs and the potential for stacked pay, which, if confirmed, could provide further development options for gas. However, we plan to be deliberate and patient as we observe more production history and gather more information to aid in analysis and future decision making.

Given the tailwind of WTI prices and the enhancement to returns, we plan to continue our Cherokee development with 1 rig and further grow oil production. The program is attractive in a range of commodity environments. Our team will continue to be diligent in monitoring results, prioritizing full-cycle returns and reasonable reinvestment rates, and, when needed, exercise drill schedule flexibility to make prudent adjustments to our development plans.

I'm very pleased with our team for their continued focus on safety, execution, and cost focus in the development and production optimization program. They are truly championing safety, resulting in the continuation of our record of more than four and a half years without a recordable safety incident. We continue to operate at a high level with a lean, but very engaged and experienced staff, with peer-leading operating and administrative cost efficiencies.

I'd like to pause here to highlight the optionality we have across our asset base, coupled with the strength of our balance sheet that sets us up to leverage commodity price cycles. The combination of our oil-weighted Cherokee and gas-weighted legacy assets, as well as a robust net cash position, give us multi-faceted options to maneuver and take advantage of different commodity cycles. Put simply, we have a strong balance sheet and a versatile kit bag, which makes the company more resilient and better poised to maneuver and adjust no matter the commodity cycle.

We'll now revisit the company's advantages. Our asset base is focused in the Mid-Continent region with a PDP well set that provides meaningful cash flow, which has a shallowing and diversified production profile, a double-digit reserve life, and does not require any routine flaring of produced gas. Our incumbent assets include more than 1,000 miles each of owned and operated SWD and electrical infrastructure over our footprint, which among other factors helps de-risk individual well profitability for a majority of our legacy producing wells down to roughly $40 WTI and $2 Henry Hub.

Our assets continue to yield free cash flow. This cash generation potential provides several paths to increase shareholder value realization and is benefited by a low G&A burden. SandRidge's value proposition is materially de-risked from a financial perspective by our strength and balance sheet, including negative net leverage, financial flexibility, and advantaged tax position.

We have bolstered our inventory to provide further organic growth opportunities and incremental oil diversification with low break-evens in high-graded areas. Finally, it is worth highlighting that we take our ESG commitment seriously and we have implemented disciplined processes around them. Not only do we continue to operate our existing asset base extremely efficiently and execute on our Cherokee development in an effective manner, but we do so safely.

Shifting to strategy, we remain committed to growing the value of our business in a safe, responsible, and efficient manner while prudently allocating capital to high-return growth projects. We also evaluate merger and acquisition opportunities while maintaining financial discipline, consideration of our balance sheet, and commitment to our capital return program. This strategy has five points.

One, maximize the value of our incumbent Mid-Con PDP assets by extending and flattening our production profile with high-return production optimization projects, as well as continuously pressing on operating and administrative costs. Two, capital stewardship in investment projects and opportunities that have attractive returns and target reasonable reinvestment rates that sustain free cash flow while prioritizing a regular way dividend.

Three, maintain optionality to execute on value-accretive merger and acquisition opportunities that could bring synergies, leverage the company's core competencies, complement our portfolio of assets, further utilize approximately $1.5 billion of federal NOLs, or otherwise yield attractive returns.

Four, as we generate cash, we will continue to work with our Board to assess paths to maximize shareholder value, including investment in strategic opportunities, advancement of our return of capital program, and other uses. To this end, the Board continues to focus on the company's return of capital to stockholders, and as a result, expanded our ongoing dividend program last quarter by 8%. And the final staple is to uphold our ESG responsibilities.

Now, shifting to administrative expenses, I will turn things over to Brandon.

Thank you, Grayson. As we wind up our prepared remarks, I will point out our second quarter adjusted G&A of $2.7 million or $1.52 per BOE continues to lead among our peers. The consistent efficiency of our organization reflects our core values to remain cost disciplined and to be fit for purpose. We will maintain our efficient and low-cost operation mindset and continue to focus on the proper weighting of field versus corporate personnel to reflect where we create the most value.

The outsourcing of our more perfunctory activities, such as operations accounting, land administration, IT, tax, and HR, has allowed us to operate with a total personnel of just over 100 people for the past several years, while retaining key technical skill sets that have both experience and institutional knowledge of our business.

In summary, at the end of the second quarter, the company had approximately $115 million in cash and cash equivalents, which represents approximately $3.09 per share of our common stock outstanding. We have an inventory of high rate of return, low break-even projects, low overhead, top-tier adjusted G&A, no debt, negative net leverage, a flattening production profile, double-digit reserve life, and approximately $1.5 billion of federal NOLs. This concludes our prepared remarks. Thank you for joining us today. We will now open the call to questions.

[Operator Instructions] There are no questions at this time. This concludes today's call. Thank you for attending. You may now disconnect.

Hello, everyone. Thank you for joining us, and welcome to the SandRidge Energy First Quarter 2026 Conference Call. [Operator Instructions]

I will now hand the conference over to Scott Prestridge, Senior Vice President of Finance and Strategy. Scott, please go ahead.

Thank you, and welcome, everyone. With me today are Grayson Pranin, our CEO; Jonathan Frates, our CFO; Brandon Brown, our CAO; as well as Dean Parrish, our COO. We would like to remind you that today's call contains forward-looking statements and assumptions, which are subject to risk and uncertainty, and actual results may differ materially from those projected in these forward-looking statements.

These statements are not guarantees of future performance, and our actual results may differ materially due to known and unknown risks and uncertainties as discussed in greater detail in our earnings release and our SEC filings. We may also refer to adjusted EBITDA and adjusted G&A and other non-GAAP financial measures. Reconciliations of these measures can be found on our website.

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

Thank you, and good afternoon. I'm pleased to report on a strong quarter for the company. Production averaged 18.6 MBoe per day during the first quarter, an increase of 4% on a Boe basis versus the same period in 2025. Oil production increased 31% and total revenues increased 17% during the quarter versus the same period in 2025, driven primarily by new production from our operated development program.

Before getting into this and other highlights, I'll turn things over to Jonathan for details on financial results.

Compared to the fourth quarter of 2025, the company saw increases in the market price of both oil and natural gas. We grew production by 4% year-over-year and generated revenues of approximately $50 million, which represents an increase of 26% compared to last quarter and 17% compared to the same period last year. Adjusted EBITDA was $33.7 million in the quarter compared to $25.5 million in the first quarter of 2025. We continue to manage the business with a focus on maximizing long-term cash flow while growing production and utilizing our NOLs to shield us from federal income taxes.

At the end of the quarter, cash, including restricted cash, was approximately $104 million (sic) [ $104.1 million ], which represents over $2.80 per common share outstanding. Cash was down compared to the prior quarter due to an increase in noncash working capital, primarily related to the timing of payables versus receivables from our 1-rig drilling program. Working capital, as represented by current assets less current liabilities, was up by $3.7 million compared to the prior quarter. The company paid $4.4 million in dividends during the quarter, which includes both $0.6 million worth of dividends to be paid in shares under our dividend reinvestment plan.

On May 5, 2026, the Board of Directors increased the regular way dividend by 8%, declaring a $0.13 dividend as well as a one-time special dividend of $0.20 per share, both of which are payable on June 1 to shareholders of record on May 20, 2026. Shareholders may elect to receive cash or additional shares of common stock through the company's dividend reinvestment plan. Following these dividends, SandRidge will have paid $5.05 per share in regular and special dividends since the beginning of 2023.

Commodity price realizations for the quarter before considering the impact of hedges were $71.11 per barrel of oil, $3.13 per Mcf of gas and $18.64 per barrel of NGLs. This compares to fourth quarter 2025 realizations of $57.56 per barrel of oil, $2.20 per Mcf of gas and $14.92 per barrel of NGLs. Our commitment to cost discipline continues to yield results with adjusted G&A for the quarter of approximately $2.4 million or $1.42 per Boe compared to $2.9 million or $1.83 per Boe in the first quarter of 2025.

Net income was $18.7 million for the quarter or $0.50 per diluted share. Adjusted net income was $21.6 million or $0.58 (sic) [ $0.59 ] per diluted share. This compares to $13 million or $0.35 per diluted share and $14.5 million or $0.39 per diluted share, respectively, during the same period last year. The company generated cash flow from operations of $19.8 million during the quarter compared to $20.3 million during the same period last year and adjusted operating cash flow of $34.4 million during the quarter compared to $26.3 million in the same period of 2025.

Lastly, our production is hedged with a combination of swaps and collars, representing just under 30% of the midpoint of our 2026 guidance. This includes approximately 37% of natural gas production and 43% of oil. These hedges will help secure a portion of our cash flows and support our drilling program through the year. We continue to monitor prices to take advantage of favorable opportunities but plan to maintain meaningful upside throughout the remainder of the year. Before shifting to our outlook, you should note that our earnings release and 10-Q will provide further details on our financial and operational performance during the quarter.

Now I will turn it over to Dean for an update on operations.

Thank you, Jonathan. Let's start with a review of the first quarter and discuss recent drilling and completion results. Total capital spend for the quarter, excluding A&D, was $19.9 million, which is better than expectations for the quarter, mostly due to drill schedule adjustments. A rigorous bidding process focused on driving drilling and completion costs down in the Cherokee Play and longer artificial lift run times from previous years of improvements kept us on budget. Additionally, we have been securing critical well components needed for the remainder of the year to minimize any supply or inflationary pressures that may affect our capital program.

Lease operating expenses for the quarter were $10.8 million or $6.45 per Boe, which falls right in line with expectations. We are also securing the needed equipment and services that will be critical for production operations in 2026, similar to the capital program. We expect to continue to see pressure on diesel fuel through fuel surcharges passed on through service providers that have strict internal protocol to reduce surcharges when diesel prices begin to decrease.

During the quarter, the company successfully completed 3 and brought 2 wells online from our operated 1-rig Cherokee drilling program. We recently brought online the ninth well in our program and are drilling the 11th while the 10th well awaits final completion. Our operations team continues to execute with the 10th well that was just drilled being the fastest, lowest-cost to date, driven by the team's focus and ingenuity to reduce costs. It's early, but we are seeing some incremental efficiencies on our 11th well drilling now, and we'll have more to share next quarter.

Moving to our 2026 capital program, we plan to drill 10 operated Cherokee wells with 1 rig this year and complete 8 wells. The remaining 2 completions are anticipated to carry over to next year. A majority of the remaining wells in our development program this year directly offset proven or in-progress wells in the area, and we continue to monitor offsetting results. Gross well costs vary by depth, but are estimated to be between approximately $9 million and $11 million. We intend to spend between $76 million and $97 million in our 2026 capital program, which is made up of $62 million to $80 million in drilling and completions activity and between $14 million and $17 million in capital workovers, production optimization and selective leasing in the Cherokee Play. Our high-graded leasing is focused on further bolstering our interest, consolidating our position and extending development into future years.

With that, I will turn things back over to Grayson.

Thank you, Dean. Let us start with commodity prices. We started the year with strong natural gas prices, which benefited January and February revenues. During this period, our largest natural gas purchaser elected to move to ethane rejection. This means that more ethane is sold as natural gas and less is separated as NGLs. This typically results in less barrels of equivalent in volume, which impacted both our NGL and overall Boe volumes for the quarter, but it benefited natural gas volumes and revenue as the gas is sold at relatively higher prices with increases in the BTU factor.

This had a positive effect on revenue with the dynamics of high natural gas and lower relative ethane prices during the period. However, natural gas prices have since declined and with it, the spread between natural gas prices and ethane. Our largest natural gas purchaser returned to ethane recovery in March and plans to maintain recovery until there is further benefit otherwise. Also, while natural gas prices increased during January, we did experience increased production deferment during Winter Storm Fern, which negatively impacted volumes. Despite this challenge, our team did an amazing job operating through the extreme cold weather and minimizing downtime as much as possible and most importantly, doing so safely.

Now shifting to oil. The year began with oil prices in the mid- to upper $50 range, which changed dramatically over the quarter. Despite seeing spot rates reach up to the triple-digit levels recently, WTI averaged $72.74 per barrel in Q1 because the shift occurred in late February and early March. For the same reason, the increase in WTI prices only partially benefited our revenues during the quarter since higher oil prices occurred in the back half of the quarter. Thus far, oil prices have remained high in the second quarter and could benefit revenues further.

Our commodity prices are driven by market dynamics outside of our control. We have used our favorable position and come into the year with minimal hedges to take advantage of the increases year-to-date, the details of which can be found in our earnings release and 10-Q to be filed later today. Combined with our prior hedges, we have hedged a meaningful portion of our PDP volumes for the remainder of the year, which allows us to secure a portion of our cash flows at prices that are materially above where we started the year and where we budgeted.

The remainder of our PDP oil volumes and all of the volumes from our current drilling program will participate at the market with exposure to current high prices. We have endeavored to balance securing cash flows while maintaining an appropriate level of exposure to commodity upside. That said, there's been a lot of volatility in WTI pricing over the last few weeks and much speculation over futures with the forward curve remaining in steep backwardation. While we are content with the current level of hedging this year, we will continue to monitor geopolitical events and future pricing for further adjustments with specific focus on longer-term periods.

Now let's pivot over to our development program. As Dean discussed, we had first production on 2 wells this past quarter. One well targeted the Cherokee Shale in our core area, consistent with wells last year. These wells had an average peak 30-day production of approximately 2,000 Boe per day, made up of 45% oil, including the newest seventh well. The other well turned in line this quarter tested the Red Fork formation, a sandstone in the Lower Cherokee Group. This was an initial well in a new area for us that offset and delineated a very productive well drilled by a reputable operator. This well allows us to better establish performance expectations in a new target and a new area, and leasing costs have been very attractive.

Currently, we do not have any Red Fork wells planned for the rest of the year. However, we plan to monitor the performance of this well, industry and offsetting activity, which has increased over the past year as well as commodity prices and other factors while evaluating the go-forward plan in the new area. Given the tailwind of WTI prices and the enhancement to returns, we plan to continue our Cherokee development with 1 rig and further grow oily production. While the program is attractive in a range of commodity environments, our team will continue to be diligent about prioritizing full cycle returns, monitoring reasonable reinvestment rates and when needed, exercise drill schedule flexibility to make prudent adjustments to our development plans in different economic environments. Also, we do not have any significant near-term leasehold expirations and have the flexibility to defer these projects if needed, for a period of time.

I'm very pleased with our team for their continued focus on safety, execution and cost focus in the development and production optimization programs. They have truly championed safety, resulting in the continuation of a record of more than 4 years without a recordable safety incident. In addition, we continue to operate at a high level with a lean but very engaged and experienced staff with peer-leading operating and administrative cost efficiencies.

I would like to pause here to highlight the optionality we have across our asset base, coupled with the strength of our balance sheet, which sets us up to leverage commodity price cycles. The combination of our oil-weighted Cherokee and gas-weighted legacy assets as well as robust net cash position give us multifaceted options to maneuver and take advantage of different commodity cycles. Put simply, we have a strong balance sheet and a versatile kit bag, which makes the company more resilient and better poised to maneuver and adjust no matter the commodity environment.

I will now revisit the company's advantages. Our asset base is focused in the Mid-Continent region with a PDP well set that provides meaningful cash flow, which does not require any routine flaring of produced gas. These well-understood assets are almost fully held by production with a long history, shallowing and diversified production profile and double-digit reserve life. Our incumbent assets include more than 1,000 miles each of owned and operated SWD and electric infrastructure over our footprint. This substantial owned and integrated infrastructure helps derisk individual well profitability for majority of our legacy producing wells down to roughly $40 WTI and $2 Henry Hub.

Our assets continue to yield free cash flow. This cash generation potential provides several paths to increase shareholder value realization and is benefited by a low G&A burden. SandRidge's value proposition is materially derisked from a financial perspective by our strengthened balance sheet, including negative net leverage, financial flexibility and advantaged tax position. Further, the company is not subject to MVCs or other significant off-balance sheet financial commitments. We have bolstered our inventory to provide further organic growth opportunities and incremental oil diversification with low breakevens in high-graded areas. Finally, it is worth highlighting that we take our ESG commitment seriously and have implemented disciplined processes around them. Not only do we continue to operate our existing assets extremely efficiently and execute on our Cherokee development in an effective manner, but we do so safely.

Shifting to strategy. We remain committed to growing the value of our business in a safe, responsible, efficient manner while prudently allocating capital to high-return growth projects. We will also evaluate merger and acquisition opportunities while maintaining financial discipline, consideration of our balance sheet and commitment to our capital return program. This strategy has 5 points. One, maximize the value of our incumbent Mid-Con PDP assets by extending and flattening our production profile with high rate of return production optimization projects as well as continuously pressing on operating and administrative costs.

Two, exercise capital stewardship and invest in projects and opportunities that have high risk-adjusted fully burdened rates of return while being mindful and prudently targeting reasonable reinvestment rates that sustain our cash flows and prioritize a regular way dividend. Three, maintain optionality to execute on value-accretive merger and acquisition opportunities that could bring synergies, leverage the company's core competencies, complement its portfolio of assets, further utilize its approximately $1.5 billion of federal net operating losses or otherwise yield attractive returns to its shareholders.

Four, as we generate cash, we'll continue to work with our Board to assess path to maximize shareholder value to include investment in strategic opportunities, advancement of our return of capital program and other uses. To this end, the Board continues to focus on the company's return of capital to stockholders as a priority in capital allocation. And as a result, expanded its ongoing dividend program by 8% and declared a one-time dividend. The final staple is to uphold our ESG responsibility.

Now shifting to administrative expenses. I will turn things over to Brandon.

Thank you, Grayson. As we close out our prepared remarks, I will point out our first quarter adjusted G&A of $2.4 million or $1.42 per Boe continues to lead among our peers. The consistent efficiency of our organization reflects our core values to remain cost disciplined and to be fit for purpose.

We'll maintain our efficient and low-cost operation mindset and continue to balance the weighting of field versus corporate personnel to reflect where we create the most value. The outsourcing of necessary but more perfunctory functions such as operations accounting, land administration, IT, tax and HR has allowed us to operate with total personnel of just over 100 people for the past several years while retaining key technical skill sets that have both the experience and institutional knowledge of our business.

In summary, at the end of the first quarter, the company had approximately $104 million (sic) [ $104.1 million ] in cash and cash equivalents, which represents over $2.80 per share of our common stock outstanding, an inventory of high-rate-of-return, low-breakeven projects, low overhead, top-tier adjusted G&A, no debt, negative leverage, a flattening production profile, double-digit reserve life and approximately $1.5 billion of federal NOLs.

This concludes our prepared remarks. Thank you for joining us today. We will now open the call to questions.

[Operator Instructions] This concludes today's call. Thank you for attending. You may now disconnect.

Hello, everyone. Thank you for joining us, and welcome to the Q4 2025 SandRidge Energy Conference Call. [Operator Instructions] I will now hand the call over to Scott Prestridge, Senior Vice President of Finance and Strategy. Please go ahead.

Thank you, and welcome, everyone. With me today are Grayson Pranin, our CEO; Jonathan Frates, our CFO; Brandon Brown, our CAO; as well as Dean Parrish, our COO.

We would like to remind you that today's call contains forward-looking statements and assumptions, which are subject to risks and uncertainties, and actual results may differ materially from those projected in these forward-looking statements. These statements are not guarantees of future performance, and our actual results may differ materially due to known and unknown risks and uncertainties as discussed in greater detail in our earnings release in our SEC filings.

We may also refer to adjusted EBITDA and adjusted G&A and other non-GAAP financial measures. Reconciliations of these measures can be found on our website.

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

Thank you, and good afternoon. I'm pleased to report on a strong quarter and the year for the company. Production averaged 18.5 MBoe per day during the full year, an increase of 12% on a Boe basis and 32% on oil versus 2024, benefited by our operated development program in the Cherokee Play and production for the fourth quarter averaged 19.5 MBoe per day. Before getting into this and other highlights, I will turn things over to Jonathan for details on financial results.

Thank you, Grayson. Compared to the third quarter of 2025, the company continued to see higher natural gas prices, partially offset by lower WTI. We continue to grow production, generating revenues of approximately $156 million for the year, which represents a 25% increase compared to 2024. Adjusted EBITDA was roughly $25 million in the quarter and $101 million (sic) [ $101.1 million ] for the year compared to $24 million and $69 million in the prior year period.

As always, we continue to manage the business within cash flow while growing production and utilizing our NOLs to shield us from federal income taxes. At the end of the quarter, cash, including restricted cash, was approximately $112 million (sic) [ $112.3 million ], which represents over $3 per common share outstanding.

The company paid $4.4 million in dividends during the quarter, which includes $0.6 million of dividends paid in shares under our Dividend Reinvestment Plan, including special dividends, SandRidge has now paid $4.60 per share in dividends since the beginning of 2023. On March 3, 2026, the Board of Directors declared a $0.12 per share dividend payable on March 31 to shareholders of record on March 20, 2026.

Shareholders may elect to receive cash or additional shares of common stock through the company's noted Dividend Reinvestment Plan. During the year, the company repurchased approximately 600,000 or $6.4 million worth of common shares at a weighted average price of $10.72 per share. Our share repurchase program remains in place with $68.3 million remaining authorized.

Capital expenditures during the quarter were approximately $18 million, including drilling and completions and new leasehold acquisitions. The company has no debt outstanding and continues to fund all capital expenditures and capital returns with cash flows from operations. Commodity price realization for the quarter before considering the impact of hedges were $57.56 per barrel of oil, $2.20 per Mcf of gas, and $14.92 per barrel of NGL. This compares to third quarter realizations of $65.23 per barrel of oil, $1.71 per Mcf of gas, and $15.61 per barrel of NGL.

Our commitment to cost discipline continues to result with adjusted G&A for the quarter of approximately $2.7 million or $1.53 per Boe and $10.2 million or $1.50 per Boe for the full year. This compares to $2.4 million or $1.39 per Boe and $9.3 million or $1.54 per Boe in the same period last year.

Net income was $21.6 million for the quarter or $0.59 per diluted share, and adjusted net income was $12.5 million or $0.34 per diluted share. This compares to $17.6 million or $0.47 per share and $12.7 million or $0.34 per share, respectively, during the same period last year.

Net income for the full year was $70.2 million or $1.90 per diluted share and adjusted net income was $54.7 million or $1.48 per share. The company generated adjusted operating cash flow of approximately $108 million for the year compared to $77 million in 2024 and despite the ramp-up in our capital program, free cash flow before acquisitions of roughly $44 million compared to $48 million last year.

Lastly, our production is hedged with a combination of swaps and collars representing approximately 23% of the midpoint of our 2026 guidance. This includes approximately 37% of natural gas production and 27% of oil production. These hedges will help secure a portion of our cash flows and support our drilling program through the rest of the year. We continue to monitor the market and we'll take advantage of further opportunities to lock in favorable prices as volatility continues.

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

Now I will turn it over to Dean for an update on operations.

Thank you, Jonathan. Let's start with a brief review of a very successful year in 2025, then discuss recent results in 2026 drilling and completions. Average production in 2025 was 18.5 MBoe per day, which was 4% above the midpoint of guidance. This was driven by strong well results on new wells in the Cherokee Play as well as continued focus of our operations team on optimizing base production.

Total capital spend for the year, including leasehold, was $76.2 million, which falls in line with midpoint of guidance A rigorous bidding process focused on driving drilling and completion costs down in the Cherokee Play and low artificial lift failure rates from previous years of improvements kept us on budget.

Lease operating expenses for the year were $36.2 million or 14% below the low point of guidance. That includes $4.3 million but nonrecurring, noncash adjustments of operating accruals that benefited LOE. Excluding those, LOE still came in below the low point, driven by the team's focus on reducing expense mark overs, LOE efficiencies implemented on recent acquisitions and utility costs.

During the year, the company successfully completed and brought 6 wells online from our operated one-rig Cherokee drilling program. We recently brought online well 7 and 8 in the program and are drilling the 9. We are pleased with the results of the first 6 operated wells which had a per well average peak 30-day production rate of approximately 2,000 Boe per day, made up of 44% oil.

Moving to our 2026 capital program. We plan to drill 10 operated Cherokee wells with one-rig this year and complete 8 wells. The remaining 2 completions are anticipated to carry over to next year. A majority of the remaining wells in our development program this year directly offset proven or in progress wells in the area. These new wells and the results in the area give further confidence in reservoir quality and expectations in the area.

Gross well costs vary by depth, but are estimated to be between approximately $9 million to $11 million. We intend to spend between $76 million and $97 million in our 2026 capital program, which is made up of $62 million to $80 million in drilling and completions activity and between $14 million and $17 million in capital markovers, production optimization and selective leasing in the Cherokee Play. Our high-grade leasing is focused to further bolster our interest, consolidate our position, and extend development into future years.

With that, I will turn things back over to Grayson.

Thank you, Dean. I'd like to look back at 2025 for a moment. 12 months ago, we initiated our operated development program in the Cherokee, which, among other factors, has contributed to reaching a multiyear high with production averaging 19.5 BOE per day in the fourth quarter.

In addition, something for which we are very proud, we set a new record of over 4 years without a recordable safety incident. I'm very proud of our team for these accomplishments and other value-adding contributions this year. They stood up the Cherokee development program from scratch, have implemented several cost efficiency initiatives, and have done all this while championing safety, resulting in 0 incidents.

In addition, these achievements were done with a lean, but very engaged and experienced staff which have proven to be capable operators with peer-leading operating and administrative cost efficiencies.

Given the promising initial results achieved in 2025 and the attractive returns for these Cherokee wells, we plan to continue our Cherokee development with one-rig throughout 2026. As we look forward to developing these high-return assets, we anticipate growing oil production volumes another approximately 20% this year. In addition, we plan to sustain our ground game by opportunistically securing new leases at attractive metrics to further increase our interest in wells that we plan to operate or that will further extend our development option.

We're hopeful that our approximately 24,000 net acres in the Cherokee Play as well as our continued leasing efforts will translate to a meaningful multiyear runway as we look beyond 2026. Our operated Cherokee wells have a robust return with breakevens for our planned wells down at $35 WTI. Our baseline economics were set earlier this year and recent increases in commodity price would only enhance these returns.

In addition, while these returns are durable and the program is attractive in a range of commodity environments. Our team will continue to be diligent about prioritizing full-cycle returns, monitoring reasonable reinvestment rates and when needed, exercise drill schedule flexibility to make prudent adjustments to our development plans in different economic environments.

Also, we do not have significant near-term leasehold expirations and have the flexibility to defer these projects if needed for a period of time. I'd like to pause here to highlight the optionality we have across our asset base, coupled with the strength of our balance sheet, which sets us up to leverage commodity price cycles. The combination of our oil-weighted and Cherokee gas-weighted legacy assets as well as a robust net cash position give us a multifaceted options to maneuver and take advantage of different commodity cycles.

Put simply, we have a strong balance sheet and a versatile kit bag, which makes the company more resilient, better poised to maneuver and adjust to matter the commodity environment.

I will now revisit the company's advantages. Our asset base is focused in the Mid-Continent region with a PDP well set that provides meaningful cash flow, which does not require any routine flaring of produced gas. These well-understood assets are almost fully held by production along history, shallowing and diversified production profile and double-digit reserve life.

Our incumbent assets include more than 1,000 miles each of owned and operated SWD and electric infrastructure over our footprint. This substantial owned and integrated infrastructure helps de-risk individual well profitability for a majority of our legacy producing wells down to roughly $40 WTI and $2 Henry Hub.

Our assets continue to yield free cash flow. This cash generation potential provides several paths to increase shareholder value realization and is benefited by a low G&A burden. Sandridge's value proposition is materially derisked from a financial perspective by our strengthened balance sheet, including negative net leverage, financial flexibility, and an advantaged tax position.

Further, the company is not subject to MVCs or other significant off-balance sheet financial commitment.

We have bolstered our inventory to provide further organic growth opportunities in incremental oil diversification with low breakevens in the high-graded areas.

Finally, it is worth highlighting that we take our ESG commitment seriously and have implemented disciplined processes around this. Not only do we continue to operate our existing assets extremely efficiently and execute on our Cherokee development in an efficient manner but we do so in a prudent and safe manner.

Shifting to strategy. We remain committed to growing the value of our business in a safe, responsible, efficient manner while prudently allocating capital to high-return growth projects. We will also evaluate merger and acquisition opportunities in a disciplined manner, consideration of our balance sheet and commitment to our capital return program.

This strategy has 5 points: one, maximize the value of our incumbent Mid-Con PDP assets by extending and flattening our production profile with high rate of return production optimization projects as well as continuously pressing on operating and administrative costs.

Two, exercise capital stewardship and invest in projects and opportunities that have high risk-adjusted fully burdened rate of return while being mindful and prudently targeting reasonable reinvestment rates that sustain our cash flow and prioritize a regular way dividend. An important part of this organic growth strategy is further progressing our Cherokee development and economically growing our production levels while providing further oil diversification. However, we will continue to exercise capital stewardship and maintain flexibility to respond to changes in commodity prices, costs, macroeconomic and other factors.

Three, maintain optionality to execute on value-accretive merger and acquisition opportunities that could bring synergies, leverage the company's core competencies, complements its portfolio's assets further utilized approximately $1.6 billion of federal net operating losses or otherwise yield attractive returns for its shareholders.

Fourth, as we generate cash, we will continue to work with our Board to assess path to maximize shareholder value to include investment and strategic opportunities, advancement of our return of capital program and other uses. Our regular way quarterly dividend is an important aspect of our capital return program, which we plan to prioritize in capital allocation along with opportunistic share repurchases. The final staple is to uphold our ESG responsibilities.

Now shifting to administrative expenses, I will turn things over to Brandon.

Thank you, Grayson. As we approach the conclusion of our prepared remarks, I will point out our fourth quarter adjusted G&A of $2.7 million or $1.53 per Boe continues to compare favorably to our peers. The continued efficiency of our organization reflects our core value to remain cost disciplined as well as prior initiatives, which have tailored our organization be fit for purpose.

We will maintain our efficiency and low-cost operation mindset and continue to balance the weighting of field versus corporate personnel to reflect where we create value. Outsourcing necessary but for [indiscernible] and less core functions such as operations accounting, land administration, IT, tax and HR has allowed us to operate with total personnel of just over 100 people while retaining key technical skill sets that have both the experience and institutional knowledge of our business.

In summary, at the end of the fourth quarter, the company had approximately $112 million in cash and cash equivalents, which represents over $3 per share of our common stock outstanding and inventory of high rate of return, low breakeven projects, low overhead, top-tier adjusted G&A, no debt, negative leverage, a flattening production profile, double-digit reserve life and approximately $1.6 billion of federal NOLs.

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

[Operator Instructions] Your first question comes from Christopher Dowd of Third Avenue Management.

Your 2026 production guidance of 6.4 million to 7.7 million Boe and CapEx of $76 million to $97 million. has got a bit of a range to it, for the benefit of everyone on the call, could you just give a little more context on what scenarios might lead to the higher and lower end of that guidance? And then I've got a follow-up.

Sure. Yes. Thank you for the interest and the questions. Things that we're watching for that range is timing is a big part of it. So right now, we're planning on drilling 10 wells and completing 8, if the timing of the shift due to the availability of crews or weather or anything like that, that could shift wells later in the year or into next year potentially that could affect the range as well as working interest.

A lot of the wells that we're developing this year, their pooling hasn't been finalized in Oklahoma, as you pool the well and sometimes you can achieve higher working interest through that pooling process. And so while we budgeted for some potential net increases, additional could -- add additional capital, but it also adds additional production with that as well. And so we tend to like to make sure that we're budgeting at appropriate achievable levels. And so we're not accounting for all of that potential upside that could occur through the normal planning and development process throughout the year.

Very helpful. And then just as my follow-up question, can you comment on how you're viewing what seems to be a fairly supportive spot market today relative to how that might influence your hedging positions going forward? I know you mentioned, I think, about 23% hedged today. But how should we think about the opportunity to kind of lock in more certainty on the cash flows going forward?

Sure. No, it's a great question, one that we're watching literally by the mid year even as we're on the call now, I'm going to say a few words and then hand this off to our CFO, Jonathan Frates, to say more. But I think a big piece of this is, one, we do not have the debt, so we don't have any bank-mandated hedging requirements. Maybe we're not required to hedge in the down side and could be more opportunistic in nature.

It has -- prices have increased this year. We've just -- we've done that and taken in additional options. You can probably see a lot of speculation in the marketplace on where oil prices could go to. So we're mindful to layer in additional contracts. We want to do so that we also have some opportunities for the potential upside. And with that, I'll hand things over to Jonathan.

Yes. I think you said it well, Grayson. We're very opportunistic with this program. I'll point out that majority of these oil hedges came very recently. So if you look at the balance of the year, I know I mentioned in the commentary that we had up 27% of guided production hedged on the oil side, but that -- due to the fact that we put a lot of these very recently, and we're 2 months into the year.

The balance is going to look a little higher than that, which you can calculate based on your own estimates. But we're very optimistic as these prices continue to rise up. We're watching it every day, and we'll layer on more as the year goes on, assuming things continue in this direction.

[Operator Instructions] Your next question comes from the line of Sergey Pigarev of Freedom Broker.

I think everyone had this question on guidance, '26 with production and CapEx. And so actually, I want to ask about the guidance too, I say that you have this higher range of price differentials guidance for NGLs. And actually in Q4, we were a bit surprised because of actually higher differentials that we expected for Q4 yes, so do you see some temporary things here or it's like something structural, and we will see higher differentials from here.

Sure, Sergey. I appreciate your question. As we obviously, there's different differential depending on the commodity. I think if you look at oil, that's been relatively tight, I think you may be referencing gas. As we talk to gas and we've talked about this directionally, as we benefit from higher commodity prices and when compared to the Henry Hub benchmark, the fixed deducts within our gas stream are reduced, so you kind of have an expanded realization.

So if you look into an environment where we have $4 gas, you'll see us towards the higher end of our guidance range. If you're looking at $2 gas, it's going to be near that lower range, and that's why we provided that range of 50% to 70% to try to accommodate different gas environment. I think if you look at the whole year, we're really close to that center of 60%, and we're averaging that -- I think that average just over $3 for a benchmark perspective.

Relative to Q4, in particular, you had a widening of a regional basis, a lot of our gas is sold through Panhandle Eastern and [ NGL PL ] markets. I think that is localized and temporal. I think as we look in structurally, we're wanting to make sure that we're selling as much gas as we can at higher commodity prices because that's when we see the highest realization.

There are no further questions at this time. This concludes today's call. Thank you for attending. You may now disconnect.

Thank you for standing by. My name is Eric, and I will be your conference operator today. At this time, I would like to welcome everyone to the Q3 2025 SandRidge Energy conference call. [Operator Instructions]

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

Thank you, and welcome, everyone. With me today are Grayson Pranin, our CEO; Jonathan Frates, our CFO; Brandon Brown, our CAO; as well as Dean Parrish, our COO. We would like to remind you that today's call contains forward-looking statements and assumptions, which are subject to risk and uncertainty, and actual results may differ materially from those projected in these forward-looking statements. These statements are not guarantees of future performance, and our actual results may differ materially due to known and unknown risks and uncertainties as discussed in greater detail in our earnings release and our SEC filings. We may also refer to adjusted EBITDA and adjusted G&A and other non-GAAP financial measures. Reconciliations of these measures can be found on our website.

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

Thank you, and good afternoon. I'm pleased to report on a positive quarter for the company. Third quarter production averaged approximately 19 MBoe per day, an increase of approximately 12% on a Boe basis and 49% on oil, translating to a roughly 32% increase in revenue and a 54% increase in adjusted EBITDA relative to the same period last year, benefiting from increased volumes from our prior Cherokee acquisition and development program this year.

I'll turn things over to Jonathan for some more details on financial results for the quarter.

Thank you, Grayson. Compared to the third quarter of 2024, the company continued to benefit from higher natural gas prices, partially offset by headwinds in WTI. The company continued to grow production, generating revenues of approximately $40 million, which represents a 32% increase compared to the same period last year. Adjusted EBITDA was $27.3 million in the quarter compared to $17.7 million in the prior year period. We continue to manage the business within cash flow while growing production and utilizing our substantial NOL, which shields us from federal income taxes.

At the end of the quarter, cash, including restricted cash, was approximately $103 million, which represents approximately $2.80 per common share outstanding. The company paid $4.4 million in dividends during the quarter, which includes $0.6 million of dividends paid in shares under our dividend reinvestment plan. Including special dividends, SandRidge has now paid $4.48 per share in dividends since the beginning of 2023. On November 4, 2025, the Board of Directors declared a $0.12 per share dividend payable on November 28 to shareholders of record on November 14, 2025. Shareholders may elect to receive cash or additional shares of common stock through the company's dividend reinvestment plan. Year-to-date through the end of the quarter, the company repurchased approximately $600,000 or $6.4 million worth of common shares. Our share repurchase program remains in place with $68.3 million remaining authorized.

Capital expenditures during the period were roughly $23 million, including drilling and completions and new leasehold acquisitions. The company has no debt outstanding and continues to live within cash flow, funding all capital expenditures and capital returns with cash flows from operations. Commodity price realizations for the quarter before considering the impact of hedges were $65.23 per barrel of oil, $1.71 per Mcf of gas and $15.61 per barrel of NGLs. This compares to second quarter realizations of $62.80 per barrel of oil, $1.82 per Mcf of gas and $16.10 per barrel of NGLs. Our production remains meaningfully hedged through the fourth quarter of the year with a combination of swaps and collars representing approximately 35% of fourth quarter production based on guidance. This includes approximately 55% of natural gas production and 30% of oil. These hedges will help secure a portion of our cash flows and support our drilling program through recent commodity price volatility.

Despite growing production, our commitment to cost discipline continues to yield results with adjusted G&A for the quarter of approximately $2.1 million or $1.23 per Boe compared to $1.6 million or $1.02 per Boe in the third quarter last year. Net income was approximately $16 million during the quarter or $0.44 per basic share and adjusted net income was $15.5 million or $0.42 per basic share. This compares to $25.5 million or $0.69 per basic share and $7.1 million or $0.19 per basic share, respectively, during the same period last year. Adjusted operating cash flow was $28 million during the quarter. Finally, despite the ramp-up of our capital program, the company generated free cash flow before acquisitions of roughly $6 million during the quarter and $29 million year-to-date.

Before shifting to our outlook, we should note that our earnings release and 10-Q will provide further details on our financial and operational performance during the quarter.

Now I'll turn it over to Dean for an update on operations.

Thank you, Jonathan. Let's start with recent results. During the third quarter, the company successfully completed and brought online 3 wells from our operated 1-rig Cherokee drilling program. We are currently completing the fifth and sixth wells in the program in our drilling the [indiscernible]. We are pleased with the results of the first 4 operated wells, which had a per well average peak 30-day production rate of approximately 2,000 Boe per day, made up of 43% oil.

The first well in the program has now produced approximately 275,000 Boe in its first 170 days of production, demonstrating strong rates beyond the initial 30 days, which indicates attractive recovery trends. A majority of the remaining wells in our development program this year directly offset these and other proven wells in the area, which have had similar performance. These wells and the results in the area give further confidence in reservoir quality and expectations in the area.

Moving to our capital program. We plan to drill 8 operated Cherokee wells with 1 rig this year and complete 6 wells. The remaining 2 completions are anticipated to carry over into next year. Currently, all but one of our planned wells are proved undeveloped or PUDs, meaning that our planned drilling locations this year will offset producing wells, which translates to higher relative confidence in well performance. Gross wells costs vary by depth, but are estimated to be between $9 million and $12 million. While we have taken proactive steps to help mitigate the effects of inflation, further changes to tariffs or other factors could influence these costs in the future.

We intend to spend between $66 million and $85 million in our 2025 capital program, which is made up of $47 million to $63 million in drilling and completions activity and between $19 million and $22 million in capital workovers, production optimization and selective leasing in the Cherokee play. Our high-graded leasing is focused to further bolster our interest, consolidate our position and extend development into future years. We intend to fund capital expenditures and other commitments using cash flows from our operations and cash on hand.

Our legacy assets remain approximately 99% held by production, which cost effectively maintains our development option over a reasonable tenor. These non-Cherokee assets have higher relative gas content, but commodity price futures are not yet at preferred levels to resume further developments or more well reactivations at this time. Commodity prices firmly over $80 WTI and $4 Henry Hub over a constant tenor and/or reduction in well costs are needed before we would return to exercise the option value of further development or well reactivations.

Now shifting to lease operating expenses. LOE and expense workovers for the quarter were approximately $10.9 million or $6.25 per Boe compared to $5.82 per Boe in the third quarter last year. We will continue to actively press on operating costs through rigorous bidding processes, leveraging our significant infrastructure, operation center and other company advantages.

With that, I'll turn things back over to Grayson.

Thank you, Dean. As we look forward to developing our high-return Cherokee assets this year and into next, we anticipate growing oilier production volumes further. From a timing perspective, we expect to deliver 2 more wells to sales this year with another 2 completions carrying over into next year. This, combined with further drilling, could see production volumes, specifically oil volumes increasing meaningfully above 2025 exit rate levels.

At current commodity prices, our operated Cherokee wells have robust returns and breakevens for our planned wells are down to $35 WTI. Given these returns and durability, we plan to continue our 1-rig development plan into next year with a watchful eye to adjust if needed. Please keep in mind that we do not have any significant leasehold expirations in the near term and have the flexibility to defer these projects if needed for a period of time. We are hopeful that our nearly 24,000 net acres in the Cherokee play will translate to a meaningful multiyear runway as we look beyond 2025. And we plan to continue to invest in new leasing and other opportunities that will further bolster our operating position and extend that runway.

I would like to pause here to highlight the optionality we have across our asset base, coupled with the strength of our balance sheet, which sets us up to leverage commodity price cycles. The combination of our oil-weighted Cherokee and gas-weighted legacy assets as well as robust net cash position give us multifaceted options to maneuver and take advantage of different commodity cycles. Put simply, we have a strong balance sheet and a versatile kitbag, which makes the company more resilient and better poised to maneuver and adjust no matter the commodity environment.

I will now revisit the company's advantages. Our asset base is focused in the Mid-Continent region with a PDP well set that provides meaningful cash flow, which does not require any routine flaring of produced gas. These well-understood assets are almost fully held by production with a long history, shallowing and diversified production profile and double-digit reserve life. Our incumbent assets include more than 1,000 miles each of owned and operated SWD and electrical infrastructure over our footprint. This substantial owned and integrated infrastructure helps derisk individual well profitability for a majority of our legacy producing wells down to roughly $40 WTI and $2 Henry Hub.

Our assets continue to yield free cash flow. This cash generation potential provides several paths to increase shareholder value realization and is benefited by low G&A burden. SandRidge's value proposition is materially derisked from a financial perspective by our strengthened balance sheet, including net negative leverage, financial flexibility and advantaged tax position. Further, the company is not subject to MVCs or other significant off-balance sheet financial commitments. We have bolstered our inventory to provide further organic growth opportunities and incremental oil diversification with low breakeven in high-graded areas.

Finally, it is worth highlighting that we take our ESG commitment seriously and have implemented disciplined processes around them. We are particularly proud to announce that our team recently achieved 4 years without a reportable safety incident. This incredible achievement demonstrates our continued commitment to putting the health and safety of our employees and contractors at the forefront of our business. Not only do we continue to operate our existing assets extremely efficiently and execute on our Cherokee development in an effective manner, but we do so in a prudent and safe manner.

Shifting to strategy. We remain committed to growing the value of our business in a safe, responsible, efficient manner while prudently allocating capital to high-return growth projects. We will also evaluate merger and acquisition opportunities in a disciplined manner with consideration of our balance sheet and commitment to our capital return program.

This strategy has 5 points: one, maximize the value of our incumbent Mid-Con PDP assets by extending and flattening our production profile with high rate of return production optimization projects as well as continuously pressing on operating and administrative costs. Two, exercise capital stewardship and invest in projects and opportunities that have high risk-adjusted fully burdened rates of return while being mindful and prudently targeting reasonable reinvestment rates that sustain our cash flows and prioritize a regular way dividend. An important part of this organic growth strategy is further progressing our Cherokee development and economically growing our production levels while providing further oil diversification. However, we will continue to exercise capital stewardship and maintain flexibility to respond to changes in commodity prices, costs, macroeconomic and other factors.

Three, maintain optionality to execute on value-accretive merger and acquisition opportunities that could bring synergies, leverage the company's core competencies, complement its portfolio of assets, further utilize its approximately $1.6 billion of federal net operating losses or otherwise yield attractive returns for its shareholders. Fourth, as we generate cash, we will continue to work with our Board to assess path to maximize shareholder value to include investment in strategic opportunities, advancement of our return of capital program and other uses.

Our regular way quarterly dividend is an important aspect of our capital return program, which we plan to prioritize in capital allocation along with opportunistic share repurchases. The final staple is to uphold our ESG responsibilities.

Now shifting over to administrative expenses. I will turn things over to Brandon.

Thank you, Grayson. As we approach the conclusion of our prepared remarks, I will point out our third quarter adjusted G&A of $2.1 million or $1.23 per Boe continues to compare favorably to our peers. The continued efficiency of our organization reflects our core value to remain cost disciplined as well as prior initiatives, which have tailored our organization to be fit for purpose. We will maintain our efficiency and low-cost operation mindset and continue to balance the weighting of field versus corporate personnel to reflect where we create value. Outsourcing necessary but perfunctory and less core functions such as operations accounting, land administration, IT, tax and HR has allowed us to operate with total personnel of just over 100 people while retaining key technical skill sets that have both the experience and institutional knowledge of our business.

In summary, at the end of the third quarter, the company had over $100 million in cash and cash equivalents, which represents approximately $2.80 per share of our common stock outstanding, an inventory of high rate of return, low breakeven projects, low overhead, top-tier adjusted G&A, no debt, negative leverage. A flattening base PDP production profile, double-digit reserve life and approximately $1.6 billion of federal NOLs.

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

[Operator Instructions] Your first question comes from the line of [ David Terdell ] with [indiscernible].

Congratulations on a great quarter and what looks like a fantastic purchase in Cherokee. Can you talk a little bit more about M&A activity in the Cherokee opportunities for you guys, M&A opportunities overall? And maybe discuss a little bit more about how a year later after having bought these assets, how you can evaluate the success of that purchase?

Sure, David, it's great to hear from you and a great series of questions. I'm going to try to tackle from the top if I missed something, please let me know. I think M&A opportunities in the Cherokee exist, although it's a very competitive landscape. So we continue to keep our eyes wide open. I think those opportunities are right now predominantly leasehold or acreage related because a lot of the PDP is new and building, so there's not that sustained level of PDP-based cash flow like you'll get in more aged assets. And that could change over time as further development occurs in the play.

I think within the overall Mid-Con, the M&A landscape is healthy. There's been a number of deals announced within Mid-Con overall within the last several weeks. We continue to look at a lot of these and look for opportunities that could have synergies, whether that's in the Cherokee play or within our legacy assets or areas that we could apply our low-cost know-how where there's incremental margin that can be added through our own skill sets and through our structure, right? Because we have this 24-hour, 7-day a week man operations center that allows us to operate very cost effectively. And from a back-office perspective, we can add assets very efficiently without really increasing G&A materially.

As we look towards last year's acquisition, I think we continue to see that as very favorable. Not only did it add accretive cash flow, but the operations side of the house has been able to add meaningful margin by reducing costs and on some of the PDP wells, finding opportunities that make that production curve up and to the right through low-cost workovers and other activity there. I think you can see the results of that. And David, you pointed out for themselves, just look at the growth, not only from the acquisition, but what we've been able to do from a development perspective year-over-year with EBITDA near 54% increase -- so I think we're very pleased. And hopefully, that answers your questions. I'm happy to follow on as needed.

[Operator Instructions] There are no further questions at this time. Ladies and gentlemen, this concludes today's call. Thank you all for joining, and you may now disconnect.