SandRidge Energy, Inc. (NYSE:SD), a petroleum and natural gas exploration company, enacted 80 job cuts on Monday. The SandRidge layoffs in Oklahoma City, Oklahoma reduced the company’s workforce by 30% in that city, from 269 to 189 employees. The company is now left with a total workforce of fewer than 400 employees.
The Oklahoma layoffs were part of the company’s cost-cutting measures, which include a reduction in SandRidge’s general and administrative (G&A) expenses. SandRidge Energy said in a news release, “As part of the company’s previously announced commitment to reduce go-forward costs, it was necessary to restructure the organization to best align with the revised strategic plan.”
SandRidge’s recently-appointed CEO, Bill Griffin, said last week that he is working with his executives and directors to implement a new strategy for the company. Griffin said that this strategy will include job cuts and other ways to reduce costs, and that it will continue throughout this year. He said that the decisions will not be taken lightly, because general and administrative reductions are not easy to implement and because the changes will affect the company’s employees.
SandRidge Reported Loss of $19 Million in Fourth Quarter
SandRidge’s fourth-quarter results were announced last week. The results included a net loss of $19.0 million, or $0.54 per share.
Although SandRidge Energy reported a total profit of $47.0 million ($1.44 per share) for the year, the company reported lower oil production in the fourth quarter. The fourth-quarter production was 3.5 million equivalent barrels, compared to 4.3 million equivalent barrels for the same period in the prior year.
These results may help explain the push for the Oklahoma layoffs and other expense reductions.
SandRidge to Cut G&A Expenses & Budget for 2018
On February 8, SandRidge Energy shared its strategic objectives with its shareholders. The company said it had updated its objectives to be consistent with market conditions and feedback from its large shareholders.
The board of directors approved SandRidge’s 2018 budget, which included total capital expenditures of $180.0 million to $190.0 million, down from $247.0 million in 2017.
The company is in the process of introducing changes to the organizational structure for more efficient execution of its strategies. These changes are meant to reduce SandRidge’s G&A cash expenses by one-third, to a range of $36.0 million to $39.0 million per year. The company hopes that these measures will enhance shareholder value and improve competitiveness in the marketplace.
Following the SandRidge layoffs, Griffin is still hopeful about the company, which is taking steps to improve its cash flow margins. Griffin said that the company has a significant amount of undeveloped acreage and prospective inventory available.
“SandRidge enters 2018 with a revised strategy and strong platform for economic growth,” said Griffin. “I step into this role with a full and determined commitment to work diligently with our veteran, senior executive team to quickly implement the announced G and A reductions while maintaining core competencies and shifting organizational focus.”
“SandRidge Energy to reduce Oklahoma City workforce by 30 percent,” KOCO 5 News, February 26, 2018.
“SandRidge Energy lays off 80 OKC employees,” NewsOK, February 26, 2018.
“SandRidge Energy Issues Letter To Shareholders,” Sandridge Energy, Inc., February 8, 2018.
“SandRidge Energy, Inc. Reports Financial and Operational Results for Fourth Quarter and Full Year of 2017,” Sandridge Energy, Inc., February 21, 2018.
“4th Q Loss Prompts Revised Strategy at SandRidge Energy,” Professional Energy Marketers Association, February 22, 2018.