Good day, ladies and gentlemen, and welcome to the SandRidge Energy first quarter 2008 Earnings Call. My name is Sylvana. I will be your coordinator for today. At this time all participants are in a listen only mode. We will be facilitating a question and answer session towards the end of the conference. (Operator Instructions) I would now like to turn the presentation over to your host for today's call Mr. Dirk Van Doren, Chief Financial Officer. You may proceed.

Thank you, Sylvana. Good morning this is Dirk Van Doren. Before I turn the call over to Tom L. Ward, our Chairman, President and CEO, I need to make few opening remarks. Last night the company issued a press release detailing SandRidge's financial and operating performance for the first quarter of 2008 and we also filed our 10-Q. We have also issued a press release about the pending sale of our Piceance assets. If you do not have the copy of the release, you can the find one on the company's website www.sandridgeenergy.com. Also, you can find up for releases that will automatically be sent to you and this is located under the investors relations tab. Now for the forward-looking statement, please keep in mind that during today's call, the company will be making forward-looking statements, which are subject to risks and uncertainties. Actual results may differ materially from those projected in these forward-looking statements. Additional information concerning risk factors that could cause such differences is detailed in the company's filings with the SEC. Today's presentation will include information regarding adjusted net income, adjusted EBITDA, and other non-GAAP financial measures. As required by SEC rules, a reconciliation of the most directly comparable GAAP measures are available on our website under the Investor Relations tab. Now, let me turn the call over to Tom Ward. Tom?

Thank you, Dirk. Welcome to our first quarter 2008 earnings conference call. Joining Dirk and me in our office is Matt Grubb, our Chief Operating Officer. We've now posted our first quarter numbers on our website and Dirk will discuss those momentarily. I will now discuss the quarter's operations. During the quarter, we had several conference presentations and also an investor presentation. Therefore, there is not too much information that we've not already shared. However, we will discuss the first cab development and each quarter from this point forward, will give you an update on the expiration outside of the Piñon Field in West Texas Overthrust. We currently have 41 rigs operating and 31 of those rigs drilling in the West Texas Overthrust, of which 28 are drawing in the Piñon Field. We've now divided the Piñon Field into three areas, 16 rigs are working on the Western side developing the Tesnus, which is a Pennsylvanian sand and lower Caballos reservoirs. Five of those 16 rigs are drilling to 4500 to 5000 feet into the Tesnus sand, while the other 11 rigs drill for the lower Caballos sweet methane production. We do continue to expand the limits of the second cab, both vertically and by drilling deeper and geographically by stepping out of the existing proven areas. Two rigs are drilling the high CO2, first Caballos in the Southern portion of the Piñon field where we have done above pro forma first cab production with CO2 percentages in the 60% range. The last well drilled in this high CO2 region is producing at a rate of 12 million cubic feet a gas day with 55% CO2 and 45% methane. The pro forma first cab high CO2 well delivers 7 Bcf of total gas of which 2.1 Bcf is methane or…

Thanks Tom. I will focus on a few first quarter highlights, our current financial position and our 2008 projections. The key major seas we look at the company are production, operating cost, EBITDA, free cash flow and funding needs, if any. Production was above expectations and cost was slightly below our guidance, as our main area of growth is the one with the lowest LOE expense at WTO. Adjusted EBITDA was $167.6 million for the first quarter, which was above our guidance and our internal model. Our quarterly capital expenditures were $418.7 million and hence we had a negative free cash flow. This was covered with the $63 million of cash we had on-hand at year-end, as well as $215 million of borrowings on our revolving credit facility. At the end of the quarter, we had $1.279 billion of debt and less than $1 million of cash. Looking at subsequent events, we have experienced a very active second quarter. In early April, we increased our credit facility to $1.75 billion from $750 million and on borrowings basis, now $1.2 billion, up from $700 million. This has greatly enhanced our financial flexibility. On May 1st, we successfully exchanged 100% of $1 billion of term loans to senior notes. Those notes are now trading in the high yield market. On May 7th, we achieved all the requirements to force convert all the preferred stock. That equates to $381 million of preferred stock and 18.8 million shares. And yesterday, we announced, we had signed the PSA to sell the Piñon's assets. Our current debt position as of May 7th was $410 million drawn on a revolver and $1.47 billion of total debt, which does not include proceeds from the Piñon sale. Our net cash position is under $100 million. Additionally, as Tom mentioned,…

(Operator Instructions) And the first question comes from the line of Dave Kistler from Simmons & Company. You may proceed.

Good morning guys.

Good morning.

Last conference call, you gave us a little bit of an update on the extent of the Piñon, kind of as you've been testing in Northeast, south and west areas of it. Have you taken that any further than the last call or is still about 60,000 acres defining the Piñon?

We still define Piñon at 60,000 acres with, that includes several step-out wells of the last quarter. What we've done more is infill within those step-outs. The field does continue to expand somewhat to the West and we haven't drilled any further wells South, but we continue to have very good wells there and we are stepping out to the East as we discussed with our first cab production. We haven't drilled the second cab yet up to the very eastern edges of the field. And so, a mile step-out though, if you think of this, you can drill a lot of wells in each section, because we basically look at this as 40 acres spacing. So, we do continue to step out, but we haven't increased the acreage amount in Piñon Field.

Okay. And kind of building on the thoughts of stepping out, stepping out into the WTO, in aggregate with 12 exploration wells. Can you define how those are going to be spread out at this point, I think of the last time when you were talking about 7, you had, I want to say 6 of them or so going to the east of the Piñon and only one going to the west. Does that applied to the 12 as wells, does it concentrate more to the east?

Well, the way I think of it is, that we had in 2007 we shot 389 square miles and out of that there have been a number of potential locations that we can drill or proved prospects. And as we did a new 3D in 2008, those might move around some, but it is our goal to test all of the outside areas being from Allison Ranch all the way to McKay Creek within the next year. Some of those might actually spend in 2009. So we could move those around. We have a lot of prospects that if we find gas that we can drill. So I can't really answer your question, because those locations could move depending on success or lack of success we have on each exploration area. I can't say that most of them are miles apart from each other, so as we learn, we'll learn a lot with the wells that we are drilling and then we'll take that knowledge and try to pick other places on our 3D that looks either like that or different front it.

And then last question just with respect to Piñon specifically, can you talk a little bit about cost per well and how that's changed in the last really three or six months?

Really not much changed in the last quarter. We had a dramatic change of about 400,000 per well less year-over-year and we are drilling about 1400 feet deeper. But in the last quarter, I would say the costs we are maintaining are fairly flat. We went through a drilling curve, that is increased. We've done better overtime. So maybe we'll add a point to that is more at the bottom side of the well curve.

Great. Well thank you guys so much. Good quarter.

Thank you.

Thank you.

And the next question comes from the line of Joe Allman from JPMorgan. You may proceed.

Thank you. Good morning, everybody.

Good morning, Joe.

Hey, Tom, just follow up to David's question about stepping out in the Piñon Field, if not mistaken you had planned 40 wells that would be kind of extension wells in the Piñon. And if I remember the math, it seems to be stepping out in all different directions, could you clarify that?

The north end of the Piñon is not as easily to step out and because we've defined further trust is on the very north end of Piñon Field, so I kind of look at this as stepping out to the west towards Allison Ranch and stepping out to the east. We will cross the major wrench faults and drill in South Sabino and stepping out the South in our higher CO2 areas that are being very productive in the Piñon Field, so it's kind of a Southwest area of Piñon.

Okay. So you said at some point this year or maybe early next year, we can look forward to potential Piñon getting extended in different directions?

Yes, what will happen is that if our model is correct the Piñon will move into Allison Ranch in South Sabino and even though it's one continuous field we've divided it up the long wrench faults.

That's okay. Thank you. And on the west side, you were going in and drilling the, I guess it was the second cab and hitting it twice, could you give us an update on that?

Yes, we continue to drill those wells and there is really not much has changed, but as we drill wells there, it's easier for us to model where that lower limb is, it will be even more helpful when we get our 3D in over the field which should be in July. We actually have it shot and we're processing so we should have that data in June or July.

That's helpful. And then on the east side of Piñon, the upper cab wells, the no CO2 wells, what's your estimate for reserves per well in that area of Piñon?

We'd stay with 7 Bcf per well as long as we had the first cab, that's a very good type curve, that's been used over. I think our type curve has over 75 wells, there have been several 100 wells that have drilled through the first cab. But our type of curve is over 20 years old from the oldest well and what I believe is actually a little conservative at 7 Bcf, it's a tremendous reservoir what we would world class reservoir this depth. The only issue has been in the past that it had too much CO2 to in it to produce.

That's okay. And then lastly, tell me raising numbers in your prepared remarks about how much production you are going get? I think you said by year end from the high CO2 reservoir, could you give that number again?

Okay. You are telling about how much we are going move from. In high CO2, we are at 200 million a day total volume gas today and by year-end, we will move that to 300 million a day of total volume gas. We would project about 30% of that is methane. So about 100 million a day of net of methane production at year end.

Okay, great. Thanks very much.

Thank you.

And the next question comes from the line of Brian Singer from Goldman Sachs. You may proceed.

Thank you. Good morning

Good morning, Brian.

Can you talk a little bit more about the CO2 transitions down? I think you said there is a one well producing about 3.5 million a day. What are your expectations there and how vast is that down versus sweet of the high CO2?

We think it's just the same reservoir that produces to the west of it at 60% CO2 and there are some wells that go as high as 80% CO2 on further west and then as we move the east, you move more in to what we call the transition zone. We tested one well that, I think today is making 4.2 million a day. It's been online about 20 days and the CO2 volume, there is 45% and as you move another mile to the east then we cross a fall and that ends up being in the fall block that we're now producing, no CO2 at those same types of rates or even better. So, it really is what we call a transition zone, it's a fall block that has less CO2 and it's in the fall blocks to the west. Our theory is that it's a sourcing mechanism that we're being sourced as we move to the east, the source changes from high CO2 source to a sweet gas source.

Great. Can you talk about your well costs and where they're trending now?

Well, costs are basically flat. I'll let Matt take that one.

The well costs, last year we just say when we ramped up our costs, we're laying up to mid-year '07, but there have been steady going down from mid-year '07 to Q4 of '07 and we've been pretty flat there in the last two quarters really and the positive thing about that is we remained flat, we know the drill is deeper. So, I think, I look forward going forward to be flat with where we're right now with our find costs. We model $1.75 drilling finding costs and we beat that for the last two quarters.

I mean, I guess, if you do get 7 Bcf wells without any CO2, I assume that the F&D costs should be significantly lower?

We model those at about $0.60 an Mcf.

Great.

I'm sorry, Brian. That's what the wells that averages about 3 million a day IP on a 13.5% exponential decline.

Okay. Any changes in your ability, your interest in monetizing CO2, if you're finding more non-CO2 opportunities as petro in the CO2 business become any less strategic?

Well, it's not any less strategic. We think the natural resource continues to add value to the company, the projects that we have there have not started to receive or start making to roll out. We are still objecting CO2, so I think if we did monetize that it would be too early, if not, it would not be a asset that we would look to monetize any more or less than the other assets outside of the West Texas Overthrust. However, any of these assets as we continue to grow on finding methane gas, which is our goal, we'll look at that versus, I have been very clear that next year we are going to need to either issue equity or sell assets and so everything outside the West Texas Overthrust, we'll take a look at.

Great, thank you.

Thank you.

And the next question comes from the line of David Heikkinen from Tudor, Pickering, Holt. You may proceed.

Good morning. Just a question around the low CO2 cab one. You talked about running four rigs in that area and 12 sections at 40-acre spacing, is that the current plan for developing that overall acreage area?

We might extent that a bit. If we continue to have the success that we have right now, there is really not a better place that I know of on earth to drill well, so we have six rigs running in it now.

Okay.

And we'll continue to look at that and then hopefully if we can cross a ranch fall here and still find another fall block or find more fall block or find more fall blocks that has the same type of reservoir. We will add accordingly.

So I remember at the Analyst Meeting you talked about the 831 well. How many step-outs have you made towards east as you approach the ranch fall?

We have now two producing and we have two that are being completed and we have three that are down encased and all have the reservoir, but only two wells that are actually producing sweet gas today.

And those are all about a quarter a mile apart if I am remembering right when you talked about plan?

The two wells producing are basically the 40-acre offsets and actually the bottom hole drifted very close to the other location at that part of it, so you can almost look at the two wells producing, it's has been very close together and than you can, the transition well is a mile away to the west, that's producing 45% CO2 and we have a well that's about probably three quarters a mile to the Southeast and that kind of expand. So they're not all forty acre offsets, but they're not all step-outs.

Okay. And 12 sections, is your currently defined area and your thought is as you go to South Sabino potentially, you may have low CO2 there as well because of the Woodford being the source?

Well, the 12 sections that I look at is really the expansion in the South Sabino that has a lot of projection in it.

Okay. That is helpful.

That hasn't been proven.

Okay, thank you.

And the next question comes from the line of Jeff Robertson from Lehman brothers. You may proceed

Tom, there is a follow-up to your comments on the CO2 transitions zone in your idea that it's partly due to sourcing. Have you all been able to take that and use it in your exploration program as you tried to identify where your better chance of finding sweet gas is?

I don't think so yet. I think what we'll have to do is to drill several wells and get logs and then to understand how this all fits together. Just for example, it's a very complex, as you know. And then so if you step-out 30 miles and drill a well, we won't know until we actually see production whether we are in the first two, whether it's first cab or second cab, it might be the first occurrence of the cab in the Big Canyon. But it might not be the same Caballos as the Piñon Field, so they are various years ahead of us, trying to understand this fits together. I will say that with every well we drill and get a log on, we will tie that back into seismic. But the seismic is a very good indicator of trying to find the trap. It's not a very good indicator of or not nearly as good as wellbore that has a log on it and then has production to understand what we are really seeing. So it's hard for us to correlate off of seismic, what Piñon field, what exact zones might be projected up to the East and West.

Secondly, in the exploration program, how many wells do you think you will actually get to total depth on this year, with the lay out your plans?

We know that, I think we know we are going to spud 12 and I am assuming we will have five or six, yeah probably half opened this year.

Okay, thank you.

Thank you.

(Operator Instructions) And our next question comes from the line of Joe Allman from JPMorgan. You may proceed.

Thank you. Just a follow-up. Tom, I know you mentioned that given your plans to develop Haynesville Shale, but could you share with us, what you think about the Haynesville Shale, what data you have at this point?

We really don't have much data, as we don't work it. But we were fortunate to have proud as getting here. We owned 13,000 acres of kind of fits in, what I guess the middle of in North Louisiana. So we will sit on that and watch what happens around us and then we know just from other conference calls that people drilling or I guess caveat is drilling in the Minden Field as drill some vertical Haynesville test, that's where our East Texas production is fairly close to field. In fact, we own some Minden ourselves. So that was just a comment to say that we have acreage that's near or other people are seeing to be doing very well and we wish them all the best.

Okay, I appreciate that. Thanks.

And the next question comes from the line of Ellen Hannan from Bear Stearns. You may proceed.

Thank you, and good morning.

Good morning.

Just a couple of follow-ups on the fall block that you found now that has no CO2, any idea of the areal extent of that?

We projected each of these as tariff faults so we look at this kind of n the north south direction, that could be miles in length north to south. And then, as you cross this tariff faults and then as they abutted by major wrench faults. The wrench faults systems are just larger and they go further to north south. They are in areas that are, maybe a couple of miles in the east to west, west link.

All right. And just a question on your CapEx, you're increasing your Capex this year, how should we think of that the increasing kind of in proportion to the way you are spending was in the first quarter in terms of drilling versus midstream versus other?

We can think about it exactly if you'd like Ellen.

Okay, even better.

Here we go.

The numbers as I read down are rough numbers, call it, 960 now E&P, that's up from 860. Oilfield service goes up to 66 from 53, midstream goes to 158 from 106. Our tertiary business, we have legally changed the name of PetroSource to SandRidge Tertiary now. Tertiary business is same at 33, land and seismic is 242 from 194 and other was zero, is now 37 and others really are building as we continue to runaway our headquarters which we have got 200 people in now and we expect to have north of 400 people when we fully move in December, January of in couple of months from now.

Great.

That should get you to about 1.5 from 1.25.

Thank you very much.

Okay.

I would like to clarify what I was talking about on that. Earlier, there are multiple faults in between basically each of the wells even on 40-acre spacing. So I didn't want to make it sound like there is one tera fall that defines the deal. So every time we drill a well and we give log that is, it does change the way we look at the fields. In fact Tom just brought me on something, here it says that we look at the size of the new fall block as being about 7700 acres in the high with the help of the no CO2 fall block in beginning '08 that does not cross over into South Sabino.

And the next question comes from the line of Scott Hanold from RBC Capital Markets. You may proceed.

Good morning.

Good morning, Mr. Scott.

Tom, I think you'd indicated and just to clarify, I think you said that if these sweets, your two blocks continue to work that could add I think you said 1.2 Tcf. Is that just specific that 7700-acre block in the Piñon Field?

No, that extends. That would be an extension over into South Sabino.

Okay. And then currently when you look at sort of Piñon, I know your last number you threw out at the Analyst Meeting 4.2 Tcf of potential on a risk basis, how big could these become in sort of the known area if you look at it, this sweets your two area works (inaudible)?

Okay. The three P potential would be drilling our 10 step-out wells that will have your the three P definition. So kind of one, one well offsetting proven and I mean obviously if we were fortunate enough that all of these would be sweet that could be several Tcf. But we are -- I am a little hesitant even throughout the first because we haven't drilled outside of this fall block. So there is a lot of gas out here and I'm not sure, but how much more Tcfs there are.

Okay, fair enough. And just one quick question on the Piñon sale. I think there was a small amount of production if memory serves me right, it's probably just around a 1 million a day. Is that correct?

Less than a 1 million, I think we were yesterday about 680 Mcf.

All right. Thank you.

Thank you.

And at this time, we don't have any further questions in the queue. I would pass the call over to management for closing remarks.

As always, we are thankful to have you spent your time with us and appreciate everything and that all of our holders do for us. Thank you very much.

Thank you. Ladies and gentlemen, this concludes the presentation. You may now disconnect.