Introduction
The following discussion and analysis is intended to help the reader understand our business, financial condition, results of operations, liquidity and capital resources. This discussion and analysis should be read in conjunction with the accompanying unaudited condensed consolidated financial statements and the accompanying notes included in this Quarterly Report, as well as our audited consolidated financial statements and the accompanying notes included in the 2020 Form 10-K. Our discussion and analysis includes the following subjects:
•Overview;
•Consolidated Results of Operations; •Liquidity and Capital Resources; and •Critical Accounting Policies and Estimates
The financial information with respect to the three-month periods ended
Overview
We are an independent oil and natural gas company with a principal focus on
acquisition, development and production activities in the
The charts below shows production by product for the three-month periods ended
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(1)For the year three-months ended
Total production for the three-month periods ended
19
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Tabl e of Contents
Mid-continent production for the three-months ended
Recent Events
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Outlook
We will focus on maximizing free cash flow in 2021 through a combination of cost control measures and the continued exercise of financial discipline and prudent capital allocation, which includes limiting our capital projects to projects we believe will provide high rates of return in the current commodity price environment. As a result, our planned capital expenditures for 2021 will be similar to our 2020 levels. Given this expected level of capital expenditures, our oil, natural gas and NGL production will likely decline in 2021. We will consider expanding our capital program after assessing all factors, including commodity prices. We will also continue our pursuit of acquisitions and business combinations which provide high margin properties with attractive returns at current commodity prices.
The COVID-19 pandemic reduced global economic activity and negatively impacted
energy demand during the previous twelve months. Demand for oil and natural gas
is slowly returning to pre-pandemic levels as COVID-19 vaccination rates and
economic activity have increased. Additionally, we have implemented several
additional initiatives to maximize free cash flow, reduce our debt level,
maximize our liquidity position and, ultimately realize greater shareholder
value. These initiatives included personnel and non-personnel cost reductions,
along with the sale of the Company's headquarters during 2020. Prior to
Consolidated Results of Operations
The majority of our consolidated revenues and cash flow are generated from the
production and sale of oil, natural gas and NGLs. Our revenues, profitability
and future growth depend substantially on prevailing prices received for our
production, the quantity of oil, natural gas and NGLs we produce, and our
ability to find and economically develop and produce our reserves. Prices for
oil, natural gas and NGLs fluctuate widely and are difficult to predict. To
provide information on the general trend in pricing, the average
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