SecProbe.io

November 13 , 2013

Via E -mail
Eddie M. LeBlanc III
Executive Vice President and Chief Financial Officer
SandR idge Energy, Inc.
123 Robert S. Kerr Avenue
Oklahoma City, Oklahoma  73102

Re:   SandR idge Energy, Inc.
Form 10 -K for the Fis cal Year E nded December 31, 2012
Filed March 1 , 2013
Form 10 -Q for the Fiscal Quarter ended March 31, 2013
Filed May 8, 2013
Definitive Proxy Statement on Schedule 14A
Filed May 29, 2013
Response letter dated August 21, 2013
File No. 001-33784

Dear Mr. LeBlanc:

We have reviewed your filings and response letter and have the following additional
comments.

Please respond to this letter within ten business days by amending your filing s, by
providing the re quested information, or by advising us when you will provide the requested
response.   If you do not believe our comment s apply  to your facts and cir cumstances or do not
believe amendment s are appropriate, please tell us why in your response.

After reviewing any amendment s to your filing s and the information you provide in
response to these  comment s, we may have  additional comments.

Form  10-K for Fiscal  Year  Ended  December  31, 2012

General

1. We note your response to comment 23 from our letter to you dated July 30, 2013. While
Mr. Ward’s employment with the Company was terminated effective June 28, 2013, the
non-competition provisions remain operative into the future.  Please tell us what
consideration you have given to discussing these p rovisions in another part of your filing,
such as in the risk factor entitled “ Competition in the oil and natural gas industry is
intense …”

SandR idge Energy, Inc.
November 13 , 2013
Page 2

 Item 1: Business, page 1

Business Segments and Primary Operations, page 4

West Texas Overthrust, page 6

2. We have read your response to prior comment one and are un clear as to whether you
have  record ed your shortfall liability at a rate of $0.25 per Mcf or have also factored in
the incremental payment of $0.70 per Mcf  that will be due if you are unable to make up
the current shortfall with excess deliveries in subsequent years.  Please explain your
accounting policy for each component and if you are not recording the shortfall at the full
rate of $0.95  per Mcf , please explain the basis for assuming that future excess deliveries
will occur and be sufficient to avoid the additional payment imposed under your
contractual arrangement .

Reserve Quantities, PV -10 and Standardized Measure, page 10

3. We note from your respon se to prior comment three that you have determined the
separate disclosure of your natural gas liquids (NGLs) reserves for the years ending 2011
and 2010 is not warranted based on your assessment using guidance contained in FASB
ASC paragraph 932 -235-50-4(a) and the Glossary under FASB ASC paragraph 932 -235-
20.  Based on the information presented on page F -65, we note NGLs represent
approximately 12.4% of total proved liquids reserves reported therein as “oil” as of
December 31, 2011, and that the “oil” qua ntities that you have disclosed are
approximately 14.2% higher than you would have reported had NGLs been reported
separately.

Furthermore, the table presented with Item 1202(a)(1) of Regulation S -K contemplates
reserve disclosure for product types othe r than crude oil and natural gas, e.g. “Product
A.”  NGLs represent a separate product type and therefore, consideration should also be
given in assessing their disclosure based on the requirement to disclose separately
material reserves as per Item 1202(a )(4) of Regulation S -K.  In your response, you note
that NGLs comprised 6% and 9% of total proved reserves at December 31, 2011 and
2010, respectively.

Based on the information contained in your filing and as provided in your response, we
believe the quan tities attributable to your natural gas liquids reserves for the periods
ending 2011 and 2010 should be reported separately.  Please revise the disclosure
throughout your filing to provide separate disclosure of your natural gas liquid reserves
for each of  the last three years.

Production and Price History, page 14

4. We note from  your response to prior comment five  that you have determined the separate
disclosure of information relating to your natural gas liquids (NGLs) as final products

SandR idge Energy, Inc.
November 13 , 2013
Page 3

 sold under Items 1204(a) and 1204(b)(1) of Regulation S -K is not warranted.  Your
determination is based on an application of the 10% “significance” criteria from FASB
ASC 932 -235-20.  However, as there is no quantitative threshold referenced under Items
1204(a) and 1204(b)(1) of Regulation S -K for the disclosure by final product sold, we are
not in a position to agree with your assessment.  Under your circumstances, the lack of
separate disclosure of the produced volume is inconsistent with your separate d isclosure
of NGL reserves for the same period.  Therefore, please revise your disclosure to include
the volumes produced and the average sales price received for you r natural gas liquids as
separate product types within your current tables.

Risk Factors , page 32

“The Company’s  development  and exploration  operations  require  substantial  capital …,” page 37

5. We note your response to prior comment eight  and we reissue that comment in part.  We
note that your capital  expe nditures for 2012 related to your exploration  and production
segment  were  $2.0 billion , while your cash flows from operations were $783 million.
Please  provide  context  for this risk factor  by quantifying  the amount  of cash flows from
operations  available in the recent  past to fund your capital expenditures.

Management's  Discussion  and Analysis,  page  61

Liquidity  and Capital  Resources,  page  73

6. We note your response to prior comment 11 and we reissue that comment.
Notwithstanding your presentation at Note 3 of drilling carry amounts received, utilized,
and remaining, we believe that you should provide here a more robust discussion of your
dependence on such arrangements.  Our MD&A  requirements  call for companies  to
provide  investors  and other  users  with material  information  that is necessary  to an
understanding  of the company's  financial  condition  and operating  performance,  as well as
its prospects  for the future.   In determining  required  or appropriate  disclosure,  you should
evaluate  separately  your ability  to meet  upcoming  cash requirements  over both the short
and long term.   Absent  further  analysis,  merely  reciting  the sources  that you “depend  on”
for cash flows  is not sufficient.   Nor is stating  that you have  adequate  resources  to meet
your short -term cash requirements,  unless  no additional  more  detailed  or nuanced
information  is material.

Given your history of not generating sufficient cash flows from operations t o fund your
exploration  and production  capital  expe nditures, we believe you should further discuss
and analyze your various sources of financing.  For further  guidance  on the overall
approach  to MD&A,  including  the presentation,  content,  and focus  of the disclosure,
please  refer  to Sections  III and IV of the SEC Interpretive  Release  No. 33-8350  and
Sections  501.12 and 501.13  of the Financial  Reporting  Codification .

SandR idge Energy, Inc.
November 13 , 2013
Page 4

 With respect to your response that you expect drilling carries in 2013 to be consistent
with amounts received in respect of 2012, please tell us whether you are aware of or
expect these amounts to be consistent beyond 2013.

Financial Statements

Note 1 - Summary of Significant Accounting Policies, page F -9

Revenue Recognition and Natural Ga s Balancing, page F -13

7. We have read your response to prior comment 13 and have the following additional
questions regarding your accounting for the contracts with Occidental Petroleum
Corporation  to build the Century Plant and to deliver CO2 :

a. Given that you disclosed that you were following the completed contract method
of accounting, and entered into both contracts in conjunction with one another,
explain how you considered the CO2 delivery obligation to be outside of the
contract accounting model and no t subject to the project segmenting criteria in
FASB ASC 605 -35-25-11, 12 and 13.

b. Tell us how you determined that the 30 -year treating agreement was both
“separate” and “at market,” as indicated in your response.  Please analyze and
discuss how “the price  you pay” under the agreement to treat your natural gas,
and the annual and end -of-agreement shortfall payments over the 30 year duration
of the agreement have been taken into account.

c. Please explain how you would view these contracts as pertaining to separate
earnings process es and discrete earnings events  in defining your units of account,
with reference as applicable to the guidance in FASB ASC 605-25, regarding
multiple element arrangements , also considering the guidance in SAB Topic
13:A.3.f., IRQ1,  as the economics of plant construction from the standpoint of the
counterparty would seem to depend on your CO2 delivery obligation .

d. You state that construction of the plant was necessary to develop your natural gas
reserves in the Piñon Field , and for t his reason you accounted for loss on the
construction contract as a development cost under the full cost methodology
rather than as prescribed in FASB ASC 605 -35-25-46.  Tell us the quantities of
reserves in this field that were reclassified fr om proved un developed to proved
developed in conjunction with completing construction of the plant in the fourth
quarter of 2012, and explain how the related CO2 content compares to the
amounts you are required to deliver.

e. Please explain the reasons for any discrepan cy between the incremental developed
reserves obtained upon completing construction and the quantities necessary to

SandR idge Energy, Inc.
November 13 , 2013
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 satisfy your delivery obligations so that we may better understand your view of
the losses as development costs.

f. Submit a schedule showin g a rollforward of your contract costs, billings,
collections, and contract losses booked to the full cost pool each period since the
commencement of the construction contract.  Tell us the manner by which the
losses were calculated and the extent to which  the amounts reflected a change in
your estimates of future costs.

g. Tell us the extent to which the shortfall obligation you have recognized is
attributable to insufficient CO2 content in deliveries that were made and expected
to satisfy your delivery obligation for the period, or curtailed or limited
production from the Piñon Field .

h. Please explain how the circumstances leading to the CO2 delivery shortfall have
been considered in forming an expectation about meeting your delivery
obligations in future periods.

8. We have read your response to prior comment 14 and note tha t you  describe an
accounting policy for mobilization fees that does not appear to be the same as the policy
disclosed in your financial statements .  Further, it is not clear how your practice of
recognizing such fees as revenues upon completing mobilizatio n complies with either  the
guidance on segmenting contracts in FASB ASC 605 -35-25-12 and 13, or SAB Topic 13
(A)(3)(f) , IRQ 1 .  Please explain to us the reason for the apparent disparity between your
explanation in the response letter and your policy discl osure on page F -13.  Please also
provide reference to the authoritative literature that you have followed in formulating
your accounting policy for mobilization fees.

9. We have read your response to prior comment 15 , regarding income recognized for
services  performed on behalf of  third -parties  having interests in wells that you operate.
We understand that you have not considered the prohibition on income recognition in
Rule 4 -10(c)(6)(iv)(C) of Regulation S -X to be applicable because you are not the
sponsor of the properties n or an owner also manag ing other investment s of the investors,
and you consider your role to be that of an operator, which you view differently than a
manager of oil and gas producing activities.  However, the guidance referenced above
does not accommodate the interpretation you have described.  W e regard an operator of
oil and gas properties to be a manager that is subject to the prohibition imposed by this
guidance.

Under the full cost method, fees received for contractual ser vices performed in
connection with properties in which you or an affiliate hold an ownership or other
economic interest and for which either you or an affiliate serve as the operator , should be
recorded as an adjustment to the full cost pool rather than as  income .  Please submit the
revisions that you propose to conform with the aforementioned guidance, including the
changes to your accounting, narratives in MD&A, and the related policy disclosures.  If

SandR idge Energy, Inc.
November 13 , 2013
Page 6

 you believe the revisions would not be material please  submit your analysis for each
quarterly and annual period.

Note 14 - Derivatives, page F -37

10. We have read your response s to prior comment 17  including your observation that the
terms realized  and unrealized gain  and loss are used in ASC 815.  Please i dentify the
specific provisions of ASC 815  that support the separate disclosure of realized and
unrealized gains / losses on derivative contracts not designated as cash flow hedges.  As
part of your response, explain to us why the measure of unrealized gai ns / losses that you
have presented is an amount calculated in accordance with U.S. GAAP.  In addition,
please tell us whether unrealized gains / losses on derivative contracts not designated as
cash flow hedges represents both unrealized gains / losses on  instruments held at period
end and the reversal of previously recognized gains / losses on instruments settled during
the period.

11. Separately, in view of our question regarding the support under U.S. GAAP for your
separate presentation of realized and unr ealized gains and losses, please explain your
basis for concluding the following presentations are appropriate:

 Separate disclosure of unrealized gains and losses on the face of your consolidated
statements of operations;

 The line items for “Unrealized h edge loss (gain)” and  “Realized (gain) loss on
derivative contracts” in your consolidated statements of cash flows;

 Disaggregated presentation of realized and unrealized gains / losses in the notes to
your consolidated financial statements;

 Separate presentation and discussion of realized and unrealized gains /losses  in both
tables and text provided in your MD&A; and

 Separate presentation and discussion of realized and unrealized gains /losses under
your Quantitative and Qualitative Disclos ures About Market Risk.

As part of your response to these points, explain to us why you believe presentations
based solely on total net GAAP gain or loss and/or total net proceeds, as may be relevant
to the circumstances of a particular presentation, would not be preferable.

Note 16 - Commitments and Contingencies, page F -41

12. We have read your response to prior comments 11 and 12 regarding  payments that may
be required under your development agreements with Royalty Trusts and your CO2
delivery obligat ions under your Treating Agreement Commitment.  Please expand your

SandR idge Energy, Inc.
November 13 , 2013
Page 7

 disclosure under this heading to quantify payments that are reasonably possible under
these arrangements.  Given the uncertainty and potential significance of your minimum
CO2 delivery obli gations, this disclosure should include the maximum cumulative
payments that may be required over the term of the agreement , on the basis of being
unable to deliver quantities of CO2  beyond those future deliveries that you assess as
probable of occurring, for which the incurrence of payments un