With new CEO, SandRidge cuts costs, withdraws 2020 guidance

With the appointment of Carl F. Giesler, Jr. as its new president and chief executive officer, SandRidge Energy Inc., Oklahoma City, will begin to implement initiatives to reduce costs and preserve capital given recent oil and gas market dynamics, the company said in a statement Apr. 7. Geisler succeeds John Suter, who will remain as chief operating offer (OGJ Online, Dec. 13, 2019). Prior to joining SandRidge, Giesler served as chief executive officer and a director of Jones Energy Inc. from summer 2018 through its cash sale earlier this year.

Planned actions including salary and additional personnel reductions, as well as an additional cut to 2020 capital expenditures. Spending will be limited to “that needed for safety or mechanical integrity and to low capex, quick payback, cash flow enhancing "small ball" workovers and other projects to extend the company's production profile,” it said. Any material drilling and completion activity will be deferred until commodity prices and the corresponding economics for new wells improve, it continued.

The company will continue to evaluate the sale of non-cash flowing assets as well as other sale opportunities and will consider strategic combinations.

The company has withdrawn its previous 2020 guidance. On Feb. 26, the company noted plans to spend $25-30 million in total capital expenditures allocated between the North Park basin and Mid-Continent. Total production for 2020 was previously projected to be 7.7-8.6 MMboe. As of Feb. 21, the company's total liquidity was $176 million, based on $3 million of cash and $173 million available under its credit facility, net of outstanding letters of credit. The company had $49 million drawn on the facility at that time.