SandRidge board cuts spending, reports quarter loss
(Reuters) - SandRidge Energy Inc (SD.N) said its board, which now includes directors named by activist investors, has cut spending and the U.S. oil and gas company will now focus on drilling its most productive acreage in the Mississippian formation.
SandRidge's 10-member board now includes four directors backed by TPG-Axon Capital after the hedge fund, which owns 7.3 percent of the company, pressed for more financial discipline and better management.
The Oklahoma City company's strategy has been under review for two months by SandRidge's management team and board. Investors, who have watched the stock decline about 20 percent so far this year, expected details in Tuesday's earnings release.
Shares of SandRidge were nearly unchanged in post-market trade from a New York Stock Exchange close of $5.39.
Changes resulting from the review include an increased focus on capital discipline, the creation of sustainable returns and lowering risk levels, SandRidge said in a statement.
"On the whole I like what I see; it's definitely a step in the right direction, said Mark Hanson, oil company analyst at Morningstar in Chicago. "The areas they hold are so vast it would take 20 years to develop, so I do think is makes sense to focus drilling in proven areas."
Capital expenditures are now forecast at $1.45 billion this year, down from a February forecast of $1.75 billion, SandRidge said.
Because the company will drill fewer wells on its tighter budget, SandRidge said it now expects to produce 32.7 million barrels oil equivalent in 2013, down about 5 percent from a prior forecast.
As part of its new strategy, SandRidge will focus on drilling wells in areas of the Mississippian formation near existing infrastructure. More wells will also be drilled in areas that already have productive wells.
SandRidge reported a first-quarter net loss of $493 million, or $1.03 per share, compared with a loss of $232 million or 58 cents per share in the same period a year earlier.
(Reporting By Anna Driver; Editing by Carol Bishopric)