Investor Presentaiton
Endnotes
1)
Cash and cash equivalents of $254MM as of December 31, 2023 includes restricted cash of $1.5MM. Adjusting for $1.50 per share dividend paid on February 20, 2024 results
in December 31, 2023 pro forma net cash of $198MM. No debt outstanding as of December 31, 2023.
2)
As of December 31, 2023.
3)
4)
See slide 18 for Adjusted EBITDA and Free Cash Flow ("FCF") reconciliations. Free cash flow defined as net cash provided by (used in) operating activities plus net cash
provided by (used in) investing activities less the cash flow impact of acquisitions and divestitures.
See slide 12 for more details.
5) Majority of operated PDP well set as of December 31, 2023 has positive cash flow at $40.00 per Bbl oil, $2.00 per Mcf and NGLS of 25% of WTI; Based on YE23 SEC reserves
(see endnote 12).
6) Reserves-to-production ratio calculated using YE23 SEC net reserves (see endnote 12) at $75 WTI and $3.00 HH pricing, divided by production for the period January 1, 2023
through December 31, 2023. Weighted average well life represents the remaining economic well life, weighted by net reserves, as calculated from YE23 SEC reserves (see
endnote 12) at $75 WTI and $3.50 HH pricing.
7) References previous "sunk cost" capital investment in Midcon SWD and electrical infrastructure prior to current period; Does not reflect the current value of said infrastructure
as of December 31, 2023, nor future value.
8) See slide 9 for more details.
9) Guidance provided to market on March 15, 2023.
10) Adjusted G&A excludes stock-based compensation.
11) After customary post-closing adjustments.
12) Represents discounted future net cash flows relating to proved oil, natural gas, and NGL reserves based on the standardized measure in ASC Topic 932. Determined using
YE23 reserves at January 1, 2024 effective date and 2023 fourth quarter SEC prices, calculated using an average price equal to the unweighted arithmetic average of the first
day of each month within the 12-month period ended December 31, 2023 of $78.22 per Bbl of oil and $2.64 per MMBtu of gas. Does not reflect actual prices received or
current market prices. Cawley, Gillespie and Associates, Inc. ("CGA") prepared estimates for approximately 95% of the Company's proved reserves as of December 31, 2023,
in accordance with the rules and regulations of the SEC. PV-10 is a non-GAAP financial measure and represents the present value of estimated future cash flows from proved
oil, gas and NGL reserves, less future development and production costs, discounted at 10% per annum to reflect the timing of future cash flows. The calculation of PV-10
does not give effect to hedging activities, non-property related expenses such as general and administrative expenses, debt service and depreciation, depletion and
amortization. Management believes that PV-10 provides useful information to investors because it is widely used by professional analysts and sophisticated investors in
evaluating oil and gas companies. PV-10 should not be considered as an alternative to the standard measure of discounted future net cash flows as computed under GAAP.
See Proved Reserves section of the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2023 for additional discussion.
13) Sensitivities calculated using YE23 SEC reserves (see endnote 12), adjusted for commodity pricing. YE23 PD PV-10 at SEC pricing is very similar to PV-10 utilizing 2/16/2023
NYMEX futures pricing.
14) Reflects potential improvements to commodity price realizations associated with higher NYMEX West Texas Intermediate and Henry Hub pricing.
15) Midcon capital workover projects during 2023.
16) SD metrics are Midcon only; pro forma for North Park Basin ("NPB") divestiture.
17) Public SMID Cap (<~$2,500MM market capitalization) peer U.S. E&P operators with <70% dry gas production as of 3Q23, in alphabetical order, include AMPY, BATL, BRY,
CPE, CRGY, EP, EPM, GRNT, HPK, REI, REPX, SBOW, TALO, TXO, VTLE, and WTI. Peers based on 3Q23 per FactSet. SD reflects FY23. Peer metrics adjusted for
nonrecurring items where appropriate.
18) Excluding NW Stack or other properties not connected to saltwater gathering system.
19) Total G&A includes stock-based compensation. NPB sold in February 2021.
20) Cash operating costs include lease operating expense, expense workovers, adjusted G&A (excludes stock-based compensation), and production and ad valorem taxes.
21) Net leverage ratio defined as total debt less cash and cash equivalents divided by last twelve months EBITDA.
22) Reflects total capital expenditure guidance for 2024. There is no operated drilling and completions activity currently planned for the year.
23) Average performance of existing Meramec producers within one mile of SD's recent and planned drilling locations.
24) Uses $5.1MM capex, 85% working interest, and 75% net revenue interest.
25) Represents deferred tax expense recorded in the fourth quarter of 2023 resulting from valuation allowance movement.
19
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