SandRidge Energy hires fifth CEO since bankruptcy as it looks to survive current energy bust
An oil and gas executive who took a public, independent energy producer through a bankruptcy and recent sale is now the CEO at SandRidge.
Carl F. Giesler Jr., most recently Austin-based Jones Energy’s CEO, assumed the leadership position at SandRidge from interim CEO John Suter, who will remain at the company as its chief operating officer, company officials said.
The company also announced Tuesday it will make additional staffing and salary cuts (in February, it announced it would cut more than half of its 120 corporate headquarters employees in Oklahoma City, effective April 3) and limit its 2020 capital expenditures to bare essentials.
Only projects needed for safety or mechanical integrity and other, “small ball” workovers that have low costs, quick paybacks and enhance the company’s cash flow will be executed, officials said.
Given the ongoing pricing environment for oil, natural gas and natural gas liquids, SandRidge deferred any material drilling and completion plans until markets improve and withdrew previously issued guidance for the year.
Those steps and others will be undertaken to maximize SandRidge’s free cash flow, further reduce its debt and preserve its current liquidity and balance sheet.
SandRidge continues to evaluate potential sales of non-cash flowing assets and other potential deals that would deliver a premium value to its shareholders, including sales or strategic combinations that would boost economies of scale, improve operating margins, extend its reserves, lower its base production decline and grow its debt-adjusted cash flow per share.
The current energy bust, punctuated by the unfolding coronavirus pandemic, is just the latest challenge SandRidge must navigate.
It emerged from bankruptcy protection in 2016, shedding $3.7 billion in debt and having $500 million in its pockets.
In late 2017, it announced a plan to acquire Bonanza Creek Energy in a cash and stock deal worth $746 million.
That plan was scuttled by activist investor Carl Icahn, who led a successful battle to reshape the company’s board and replace its top executives.
SandRidge's challenges are far from routine. But Giesler, the fifth man to have held the company’s CEO position since it emerged from bankruptcy, has tackled tough challenges before.
When Giesler joined Jones Energy in 2018, the company had already experienced a difficult period.
In 2014, as oil prices set record highs, the company’s stock had been in high demand, with share values reaching $377.05 on June 30.
But then the value of its shares, traded under the ticker JONE, slid dramatically, falling in February 2016 to about $25.19 a share.
While its value rebounded to nearly $100 a share before that year ended, that didn’t last long and even a 20-for-one reverse stock split in late 2018 couldn’t help.
In May 2019 under Giesler's leadership, it filed for Chapter 11 bankruptcy and reorganization with the support of its stakeholders, converting about $1 billion of debt into equity and emerging as a private company after a federal judge signed off on the deal.
Jones Energy completed a merger with Revolution II WI Holding Company LLC, an affiliate of Mountain Capital Partners, worth $201.5 million to its investors in January of this year.
In 2019, it held about 170,000 acres in the Anadarko Basin, with 23,000 of that in the Merge area of Oklahoma's SCOOP/STACK plays in the eastern Anadarko Basin and the remainder in the western Anadarko Basin in the Texas Panhandle and Oklahoma.
Before joining Jones, Giesler served in the same roles at Glacier Oil and Gas and its predecessor company. Giesler has also served in various oil and gas principal investing and other roles with Harbinger Group Inc., Harbinger Capital Partners, AIG FP and Morgan Stanley.
Jonathan Frates, SandRidge’s board chairman, thanked Suter on Tuesday for his service as interim CEO.
Frates said the company’s most immediate goal under Giesler’s leadership remains maximizing the business’ value to shareholders.
The key, he continued, will be for SandRidge to further trim costs while it rationalizes its capital program to improve efficiencies.
“We believe that Carl, with his proven cost and operational turnaround experience at public oil and gas companies, is the right person to lead these initiatives."