Sandridge Energy (SD) risk factors, FY2025 10-K

Risks Relating to the Oil and Natural Gas Industry and Our Business

1. 01Oil, natural gas and NGL prices fluctuate widely due to a number of factors that are beyond our control. Declines in oil, natural gas or NGL prices significantly affect our financial condition and results of operations
2. 02Drilling for and producing oil and natural gas are high risk activities with many uncertainties that could adversely affect our business, financial condition or results of operations
3. 03Market conditions or operational impediments may hinder our access to oil, natural gas and NGL markets or delay production of oil, natural gas and NGLs
4. 04A financial downturn could negatively affect our business, results of operations, financial condition, cash flows and access to capital
5. 05Failure to successfully identify, complete and integrate acquisitions of properties or business combinations, or the lack of development activity, could slow or even eliminate our growth due to the natural decline of our producing properties and adversely affect our results of operationsNew
6. 06Future drilling activities face substantial uncertainties
7. 07Certain of our undeveloped acreage is subject to leases that will expire over the next several years unless production is established on units containing the acreage or we renew the leases
8. 08Further, we may not be able to develop, find or acquire additional reserves to replace our current and future production at acceptable costs, which could adversely affect our business, financial condition, access to capital and results of operations
9. 09Future commodity price declines may result in reductions of the asset carrying values of our oil and natural gas properties
10. 10The ability to attract and retain key personnel is critical to the success of our business and the loss of senior management or technical personnel or our inability to hire additional qualified personnel could adversely affect our operations
11. 11We are subject to litigation and adverse outcomes in such litigation could have a material effect on our financial condition
12. 12The present value of future net cash flows from our proved reserves calculated in accordance with SEC guidelines are not the same as the current market value of our estimated oil, natural gas and NGL reserves42% rewritten
13. 13We will not know conclusively prior to drilling whether oil or natural gas will be present in sufficient quantities to be economically producible
14. 14Production of oil, natural gas and NGLs could be materially and adversely affected by natural disasters or severe weather
15. 15Our business could be affected by macroeconomic risks
16. 16The capital markets could be volatile, and such volatility could adversely affect our ability to obtain capital, cause us to incur additional financing expense or affect the value of certain assets
17. 17Properties we acquire may not produce as projected, and we may be unable to determine reserve potential, identify liabilities associated with the properties or obtain protection from sellers against them
18. 18All of our operations are located in the Mid-Continent region, making us vulnerable to risks associated with operating in a limited number of major geographic areas
19. 19The inability of our significant customers to meet their obligations to us may adversely affect our financial resultsNew
20. 20Oil and natural gas wells are subject to operational hazards that can cause substantial losses for which we may not be adequately insured
21. 21Shortages or increases in costs of equipment, services and qualified personnel could adversely affect our ability to execute our development plans on a timely basis and within our budget
22. 22Competition in the oil and natural gas industry is intense, which may adversely affect our ability to succeed
23. 23Our use of 2-D and 3-D seismic data is subject to interpretation and may not accurately identify the presence of oil and natural gas. In addition, the use of such technology requires greater predrilling expenditures, which could adversely affect the economic results of drilling operations
24. 24Inflation may increase costs which can adversely impact cash flows and reserves value
25. 25As we outsource functions, we are more dependent on the entities performing those functions. Disruptions or delays at our third-party service providers could adversely impact our operations
26. 26We are subject to complex federal, state, local and other laws and regulations that could adversely affect the cost, manner or feasibility of conducting our operations or expose us to significant liabilities
27. 27Should we fail to comply with all applicable statutes, rules, regulations and orders of the FERC, the CFTC, the FTC or other regulators, we could be subject to substantial penalties and fines
28. 28Our operations are subject to environmental and occupational safety and health laws and regulations that could adversely affect the cost, manner or feasibility of conducting operations or result in significant costs and liabilities
29. 29Federal, state and local legislative and regulatory initiatives relating to hydraulic fracturing could result in increased costs and additional operating restrictions or delays and adversely affect our production29% rewritten
30. 30Legislation or regulatory initiatives intended to address seismic activity are restricting and could restrict our ability to dispose of saltwater produced alongside our hydrocarbons, which could limit our ability to produce oil and natural gas economically and have a material adverse effect on our business
31. 31Climate change laws and regulations restricting emissions of GHGs could result in increased operating costs and reduced demand for the oil and natural gas that we produce56% rewritten
32. 32Our failure to maintain an adequate system of internal control over financial reporting, could adversely affect our ability to accurately report our results
33. 33Our derivative activities could result in financial losses and are subject to new derivatives legislation and regulation, which could adversely affect our ability to hedge risks associated with our business
34. 34Cybersecurity incidents or other failures in telecommunications or IT systems could result in information theft, data corruption and significant disruption of our business operations
35. 35Repercussions from terrorist activities or armed conflict could harm our business
36. 36Conservation measures and technological advances could reduce demand for oil and natural gas
37. 37Events outside of our control, including an epidemic or outbreak of an infectious disease, may materially adversely affect our business

Risks Relating to Our NOLs

1. 38Our ability to use our NOLs may be limited. We have adopted a Tax Benefits Preservation Plan that is designed to protect our NOLs but there is no assurance it will prevent an ownership change resulting in loss of the Company’s NOLs

Risks Relating to Our Common Stock

1. 39We have adopted a Tax Benefits Preservation Plan, which may discourage a corporate takeover
2. 40Anti-takeover provisions in our charter documents and under Delaware corporate law may make it more difficult to acquire us, even though such acquisitions may be beneficial to our stockholders