1349436--2/26/2009--SANDRIDGE_ENERGY

related topics

{gas, price, oil}

{debt, indebtedness, cash}

{cost, regulation, environmental}

{loss, insurance, financial}

{loan, real, estate}

{cost, contract, operation}

{operation, natural, condition}

{operation, international, foreign}

Volatility in the capital markets could affect the value of certain assets as well as our ability to obtain capital. Future price declines may result in further reductions of the asset carrying values of our natural gas and crude oil properties. We have a substantial amount of indebtedness, which may adversely affect our cash flow and our ability to operate our business. Our estimated reserves are based on many assumptions that may turn out to be inaccurate. Any significant inaccuracies in these reserve estimates or underlying assumptions will materially affect the quantities and present value of our reserves. The present value of future net cash flows from our proved reserves will not necessarily be the same as the current market value of our estimated natural gas and oil reserves. Unless we replace our natural gas and oil reserves, our reserves and production will decline, which would adversely affect our business, financial condition and results of operations. Our potential drilling location inventories are scheduled over several years, making them susceptible to uncertainties that could materially alter the occurrence or timing of their drilling. We will not know conclusively prior to drilling whether natural gas or oil will be present in sufficient quantities to be economically viable. Properties that we buy 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. The development of the proved undeveloped reserves in the WTO and other areas of operation may take longer and may require higher levels of capital expenditures than we currently anticipate. A significant portion of our operations are located in the WTO, making us vulnerable to risks associated with operating in one major geographic area. Many of our prospects in the WTO may contain natural gas that is high in CO 2 content, which can negatively affect our economics. All of our consolidated drilling and services revenues are derived from companies in the oil and gas industry. A significant decrease in natural gas production in our areas of midstream gas services operations, due to the decline in production from existing wells, depressed commodity prices or otherwise, would adversely affect our revenues and cash flow for our midstream gas services segment. Our use of 2-D and 3-D seismic data is subject to interpretation and may not accurately identify the presence of natural gas and oil. In addition, the use of such technology requires greater predrilling expenditures, which could adversely affect the results of our drilling operations. Drilling for and producing natural gas and oil are high risk activities with many uncertainties that could adversely affect our business, financial condition or results of operations. Market conditions or operational impediments may hinder our access to natural gas and oil markets or delay our production. Our development and exploration operations require substantial capital, and we may be unable to obtain needed capital or financing on satisfactory terms, which could lead to a loss of properties and a decline in our natural gas and oil reserves. The agreements governing our existing indebtedness have restrictions, financial covenants and borrowing base redeterminations which could adversely affect our operations. Our derivative activities could result in financial losses or could reduce our earnings. Competition in the oil and gas industry is intense, which may adversely affect our ability to succeed. We 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. Our operations expose us to potentially substantial costs and liabilities with respect to environmental, health and safety matters. The Century Plant may not be constructed, operate or perform as intended.

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1349436--2/26/2009--SANDRIDGE_ENERGY_INC