Good day, ladies and gentlemen, and welcome to the thirdquarter 2007 SandRidge Energy earnings conference call. (Operator Instructions)I would now like to turn the call over to your host for today, Mr. Dirk M. VanDoren, Chief Financial Officer of SandRidge Energy. Please proceed, sir.

Thank you. I have a few housekeeping items, including theforward-looking statement to read, then Tom and I will discuss the highlightsof the quarter and finally we will have a question-and-answer session. We willtake all the questions with no time limit and I will be available to take callslater in the day and throughout the week at your convenience. My direct numberis on the press release. If you have not received a press release, please go to ourwebsite. www.sandridgeenergy.com under the investor relations tab. There is away also to sign up for our filings automatically. We also filed our 10-Q lastnight as well. Turning to the forward-looking statement, this conferencecall could include forward-looking statements within the meaning of variousprovisions of the Securities Act of 1933 as amended and the Securities Act of1934 as amended. These statements express a belief, expectation or intentionand are generally accompanied by words that convey the uncertainty of futureevents or outcomes. The forward-looking statements include projections andestimates concerning the timing and success of specific projects and our futureproduction revenues, income and capital spending. We have based theseforward-looking statements on our current expectations and assumptions andanalyses made by us in light of our experience and our perception of historicaltrends, current conditions, and expected future developments, as well as otherfactors we believe appropriate under the circumstances. However, whether actualresults and developments will conform with our expectations and predictions issubject to a number of risks and uncertainties, including the volatility ofnatural gas, our success in discovering, estimating, developing and replacingnatural gas and crude oil reserves, the availability in terms of capital andthe amount and timing of future development costs and other factors, many of whichare beyond our control. We refer you to the discussion of risks in our prospectusdated November 5, 2007 and filed with the Securities and Exchange Commission onNovember 6, 2007. All of the forward-looking statements made on thisconference call are qualified by these cautionary statements and there can beno assurance that the actual results or developments anticipated will berealized. Such statements are not guarantees of future performance and actualresults or developments may differ materially from those projected in theforward-looking statements. We also undertake no obligation to update or revise anyforward-looking statements. Now let me turn the call over to our Chairman and CEO, TomWard.

Thank you, Dirk and thank you for joining our third quarter2007 earnings conference call. You’ve just heard from Dirk, our Chief FinancialOfficer, and we also have in our office Matt Grubb, our Chief OperatingOfficer. We’ve posted our third quarter numbers on our website and Dirk willdiscuss those with you momentarily. I do have several items to discuss with regard to ouroperations today. SandRidge currently has 40 rigs operating. These rigs aredistributed as follows; 30 in West Texas Overthrust; six in East Texas drillingour Cotton Valley trend; two in Oklahoma; one in [Ektar] County, Texas,drilling for Permian oil and one in our Galveston Bay area. We have also finalized our third quarter reserve numbers andhave added 99 bcfe during the quarter. This brings our total reserves to 1.27tcf gas equivalent. Year-to-date through September 30th, we have added over 270bcfe of reserves. Our PUD count has moved down to 59% from 68% at the beginningof the year and 62% at the end of the second quarter. As we continue to drillthe West Texas Overthrust, we expect this PUD count to stay fairly constant.Our year-to-date PUD drilling in the West Texas Overthrust is approximately 65%and during the third quarter, our PUD drilling was 71%. During the third quarter, SandRidge drilled and completed 48operated wells in the western division and 21 operated wells in the easterndivision. Our drilling finding costs came in over budget at $2.27 per mcfe forthe quarter; however, our finding costs for the first nine months of 2007 was$1.77 per mcfe. This increase in finding costs was a direct result of theaggressive ramp-up of our drilling program. We were challenged on the cost sideof our business during the first half of 2007 as we ramped up from drillingseven rigs to 30 rigs in the West Texas Overthrust. Many of the wells…

Thanks, Tom. I’d like to highlight a few financial items forthe quarter and then start the Q&A portion of the conference call. We filedour 10-Q last night and in combination with the press release, saw theimportant numbers for the quarter are covered in these two documents so I won’tgo through them. Our main focus is adjusted EBITDA, a non-GAAP measurement,which was $102.6 million for the quarter and ahead of our internal model. Forthe nine months of 2007, the result was $259.7 million. Another result that might be of interest is our net incomeper share excluding unrealized hedging. For the third quarter of ’07, thenumber was negative $0.01 per share compared to $0.15 per share for the thirdquarter of ’06. The number I’d like to discuss is our shares outstandingafter the IPO. Before the IPO, we had 109.3 million shares outstanding. We sold32.4 million shares in November, so the total is 141.9. To calculate fullydiluted, you must add 22.3 million of the preferred stock conversion, thus thetotal fully diluted shares outstanding pro forma for the IPO is 164.1 millionshares. Today we plan on filing the registration statement forcommon stock issued in December 2005, November 2006, and March 2007, as well asthe common stock issuable upon the conversion of the preferred stock issued inNovember 2006. We will also file an 8-K tomorrow that has all of our secondquarter financials broken out since that was not available in our prospectus.This should help anyone building a model. November was a busy month for financing. First, wesuccessfully completed the initial public offering in early November and raised$795 million net to SandRidge. We used the proceeds to repay debt on therevolver of $515 million and $49 million for an acquisition note. We alsoclosed on a $20 million mortgage on our new corporate headquarters and parkinggarage in downtown Oklahoma City. And late in November, we closed on a $32million acquisition in the WTO and a $10 million acquisition of the Gray Ranchplant, thus pro forma for all these transactions, we had approximately $210million of cash on hand and total debt was $1.072 billion. Because the road show was a month ago, we do not have newguidance and hence did not include that in our third quarter press release. Weplan on having 2008 guidance on our year-end call or sooner. Right now, we areplanning on having that call in early March and a half-day analyst meeting afew days later. We’ll have details of the time and location shortly. Finally, our conference call schedule for January andFebruary is as follows: we’ll be attending the Goldman Sachs conference inmid-January in Las Vegas and we’ll be at the Credit Suisse conference in earlyFebruary in Vail, Colorado. That ends my formal remarks. We’re now ready to open thequestion-and-answer period.

(Operator Instructions) Your first question comes from theline of Joe Allman with J.P. Morgan. Please proceed.

Tom, the three acquisitions that you’ve made so far in thefourth quarter, could you talk about any proved reserves or production andacreage associated with those acquisitions?

You mean third quarter? Or do you mean -- are you talkingabout the West Texas --

No, it seems in your press release, you mentioned -- I mean,it looks like you didn’t make -- you made hardly any acquisitions year-to-date,but you made I think $116 million worth of acquisitions in the fourth quarterso far. There were two separate properties. One was $74 million --

Yeah, we got it. We did do a fairly significant acquisition.It’s a $75 million acquisition of West Tex, which is additional interest in thePiñon field and that was approximately 34 bcfs of reserves and we did a[smaller deal] with [Hayfield], which I think is another 10 bcfs or so.

And then we’ve got the $32 million one.

Yeah, we did about $32 million from Malone Mitchell ofadditional acreage in the Piñon field area, and also his participation in thewells and associated reserves.

Okay, so you got 34 bcf added of proved, plus 10 so it’s a44 -- how about part of the 32?

We should have it before we get off the call here. We canbreak out the $32 million on how much was proved.

And if you could also, additional acreage net to you guys,that would be helpful too. And then in terms of your rig activities, you sayyou’ve got 30 in the WTO, one outside of Piñon, and you went through some ofthe stuff fairly quickly and I didn’t catch it. What’s that one rig doing rightnow?

The one rig is drilling in the Thistle Field, which isreally also -- it isn’t shot yet with 3D seismic, so it’s a lot like the waywe’ve drilled Piñon to date, is off of sub-surface control, so there was someexisting wells we’re drilling within the limits of the older fields, which isjust about 15 miles east of Piñon. And we have one well that’s been tested tomake 2.2 million a day that’s not -- that’s currently waiting on -- actually Ithink we have a line just getting to that and then we have a well that’s downand waiting on completion. And we continue to have one rig working in what wecall the Thistle Field. It’s in the South Sabino area.

Okay, that’s helpful. And so you’ll continue working thatrig and then the seismic data, could you talk about how much has come in so forand specifically where is that? Is that right over the Piñon field or is itoutside the Piñon field? And I guess you are going to drill first wells outsideof the Piñon field based on the -- besides where you’re drilling with that onerig based on the seismic as it comes in?

That is correct. The seismic that we have shot is not overPiñon field. We’ve shot 300 square miles and currently have 150 miles of itprocessed. And that is with two crews, so it’s two different shoots. One isapproximately 30 miles east of Piñon and the other is about 15 miles southeastof Piñon. So these shoots are a considerable distance away from the Piñonfield. We plan to shoot the Piñon field in the first quarter of2008 and we do have some prospects that we are going to drill in the firstquarter off of these two shoots. One is a deep project, about 16,500 feet deepand the other is about 8,000 feet and both of those will be just testing theDevonian Cherts.

Okay, very helpful. Thank you.

Your next question comes from the line of Brian Singer withGoldman Sachs. Please proceed.

Thank you very much. Good morning. How close are you orcould you give us update on signing contracts for CO2? And as you’ve delvedinto the petro source and the CO2 EOR opportunities, any thoughts regardingthat potential?

We are not close yet to signing contracts on the CO2. Infact, we’re just really in the initial stages of evaluating the economics ofdelivering CO2 to the Permian. We have a lot of interest, I would say that, andjust right now we don’t know which alternative that we’ll go to or whetherwe’ll partner with someone else -- partner with a producer, partner with apipeline company. There’s a potential we could be a merchant seller ourselves.It’s just there are a lot of options right now with the delivery of CO2 intothe Permian.

And then going back to the Thistle area, you had I thinkinitial success on a reentry a few months back. Can you be a little bit morespecific on what this rig will be doing and the timing of results from thedrilling that you are doing without the three?

Sure. That rig, it will continue to drill in this area andwe have now one rig or one well that’s ready to produce that had an initialtest of 2.2 million and then the second well will be fracked I believe thisweek and then we have the rig that’s currently working there, so by the nextquarter, that rig will continue to drill wells every 45 days. We should havesome I think a decent amount of production news by the end of the quarter.

Great. Thank you.

Your next question comes from the line of Scott Hanold withRBC Capital Markets. Please proceed.

Thank you. Good morning. Tom, could you give us a little bitof color -- I guess you got some of your seismic in and process. Can you justtell us what you’ve seen and what you’re specifically targeting here in thefirst quarter?

The seismic data that we have in is very good quality, soeven better quality than we though it might be when we first came out to shoot.In order to get this type of quality, you have to have very long offsets andtherefore it requires us to have a very large shoot in order to get data andthat’s what we’re doing now, is we’re shooting a very large area. And so what we see is that it’s our belief that you have tohave structure really to make this chertfractured enough to produce and so we look for deep-seeded structures and thenthrusting along in the Devonian, which is the target zone of interest. So as we look for a thrust fault, wrench faults and then thestructure itself. So basically looking for very conventional type traps.

Okay, and is it pretty consistent with the stuff you’veprocessed? Have you seen similar stuff? Can you kind of give us a little bit ofcolor on I guess what the expectations are here?

Well, it’s our expectation that the Piñon field is also on astructure or several structures and we don’t have that shot yet but justthrough sub-surface control and logs, we know that it’s a very complicated areaand so I think that after 2008, we’ll have a lot better picture than we dotoday. However, we feel comfortable with the data we have to date to go aheadand move forward with drilling wells there. I think we know we have some penetrations that we can get upstructure to and feel like the deep-seeded structures we’re drilling on willcause the fracturing.

Okay. And I think you said -- was it November production wasrunning at 220 a day, is that correct?

That was our average for November.

Average for November -- what was it in the WTO? And couldyou give us what the sweet versus high CO2 breakout was?

Matt I think has that.

Yeah, for -- of that 220 in November, the WTO was about 120of that in November and then the methane developed from the high CO2 reservoirwas approximately 40 a day.

Okay, because I think you said that you are constrained alittle bit currently on the high CO2. Is that correct?

That is correct. We are maxed out on our plant capacity andwe’ll be continuing to ramp that up over the next year.

Okay, so if you look forward in the next say six months withboth I guess sweet and high CO2, are there any constraints that we need to bethinking about in terms of modeling out production growth?

No, I think we’re in very good shape on the sweet side withthe new ETT line and the compression work and the infrastructure work that weare doing. We do have 29 rigs running and drilling for sweet gas, so we’re ingood shape there. Today our capacity for treating high CO2 gas is approximately170 million a day and we should be at about 260 million a day by the end ofsecond quarter 2008, so we’ll move that along also. The big thing for high CO2 is just getting additional plantsbuilt and that will be in ’09 and ’10 to really take that up to 700 million aday.

Okay, thank you and one last question, I guess for Dirk; canyou talk a little bit about the DD&A number in the third quarter? I guessit came up a little bit from where you guys were on the second quarter. Can yougive a little color on that?

Well, I think it’s really related to a little bit higherfinding costs that we had in the third versus the second versus the first.

Okay. Can you --

And we’ve also got all of our rigs now in as well, so thenon is up a little as well.

Okay, got it. And actually I lied -- I do have one quickquestion here. You mentioned that there was some severance costs in thatG&A number. Could you give us what that amount was in the third quarter?

I think it was -- the total amount I think is about $1million and that was due to a few people from Riata that left the company in thethird quarter of ’06, and we felt it was the right thing to do to give themtheir stock.

Okay, so the $1 million pretax?

Yes.

Okay. Appreciate your time, thanks.

Your next question comes from the line of Jeff Robinson withLehman Brothers. Please proceed.

Thanks. Tom, you mentioned Ellenburger tests in yourcomments around the exploration program. Are those prospects that are beingshot out with the seismic and maybe incorporated into the drilling program nextyear?

Yes, Jeff. After we saw the seismic, we believe there is --well, there’s a pop-up structure in the Ellenburger and we see some of these structuresand we now understand what we thought was probably happening is that you had tohave a deep-seeded structured in order to make the Devonian Cherts fracture,and so what we see is pop-up structures like the diagram that we show. They doexist and so we are going to probably test one of those. I think it will be -- I think there will be prolific gasthere. My question will be is it 30% CO2 or is it 85% CO2?

Okay, and then at South Sabino, are there any penetrationsclose by that tell you anything about the quality of the Caballos Cherts there?

Not close by. This will be a fairly big step out. However,we did drill a couple of wells without 3D last year in the South Sabino area.This will be several miles from those but we do believe that we will be able tofind sweet gas there based off of the Thistle field area and the wells that wedrilled.

Okay, and one last question on the CO2 takeaway issues, ispart of the discussion that you all are having, does it include using otherpeople’s capital to build the plants in a related processing capacity?

We do not model having any costs for plants or pipe in ourmodel.

Okay. Thank you.

Your next question comes from the line of David Heikkinenwith Tudo Pickering. David Heikkinen -Tudo Pickering & Co. : Good morning. Just in your November average production,Matt, can you give the rest of the breakouts beyond WTO, the remaining 100million a day?

Yes, I can. Actually, the average exact number was 222.6. Wehad in the Gulf Coast was 42.9; East Texas, 29.5; Gulf of Mexico, 17.9; and theMidcontinent, 11.7. David Heikkinen -Tudo Pickering & Co. : Thanks. And then, looking at the Thistle field, any limitsas far as takeaway capacity? Or what is the takeaway capacity out of that areawith the rig running there next year?

The Thistle field, we’re actually -- we have a right of wayalready acquired and we are right now just trying to understand what size linewe need. We do have a fairly short connection to our main line. We have twolines. They are called Sabino lines. We have a 12-inch line and a 10-inch line.One is for high CO2 and one is for sweet gas and we can take the 10-inch line,which is currently sweet gas, take it back to Piñon and flow gas back out theETC interconnect. So I don’t foresee any capacity constraints in that areaanytime soon. David Heikkinen -Tudo Pickering & Co. : Okay. Thanks a lot, guys.

And we should have the line in for the --

Well, we -- as Tom mentioned earlier, we did re-complete awell in Thistle and tested for 2.2 million. Today, we’re flowing about amillion a day through a compressor and we have a 3.5-inch temporary line. Andthen going forward, we’re just trying to understand our potential out there insize. We’re looking at 8-inch to 10-inch line that we’ll be putting in. David Heikkinen -Tudo Pickering & Co. : Okay.

(Operator Instructions) You have a follow-up question from theline of Joe Allman with J.P. Morgan.

In terms of your proved reserve adds, could you break outhow much came from performance related revisions and how much came fromextensions in discoveries?

I think we’ve got that.

Yeah, revisions, performance related revisions is 89.7 bcfe;extension discoveries is 15.6; acquisitions, 4.5; pricing revisions, 5.2; andwe produce 16.1. That would be a negative to the total.

Okay. And what would you attribute the performance relatedrevisions to?

It’s mainly operations. It had to do a lot with ourmidstream results of lowering line pressures, adding in more pipe compression,flatten out declines, et cetera.

Okay.

We inherited a system that really had to have some overhaulto it to be able to produce these rates. It was really not designed to have thePiñon field grow like it has, so that’s something we continue to work on.

Very helpful. Thanks, guys.

You have a follow-up question from the line of Scott Hanoldwith RBC Capital Markets.

Tom, could you give us your view on the gas market? I knowyou guys have your fingers on the pulse. Can you just give us your perspectivehere?

I guess my thought is that we need some weather. If we gothrough the year without any winter, we’ll be in -- have lower prices comingout next year. If we can’t have some winter weather, then I think that it’sfairly priced where we are. We continue to look for a way to hedge out ourfourth quarter ’08 production and hopefully we’ll get a chance to do thatthrough the winter period this year. What we try to do is just look one year out and hedge ourgas into that one year period. So no crystal ball here -- just believe that weneed to have some winter weather.

Okay, and in terms of -- do you have any perspective onexpectations for where production is going on the North American side of thingsand how that plays into your growth outlook?

Well, I am constantly amazed at how much gas can be foundout of the Shell plays. Those guys are doing a fantastic job of growingproduction in these different areas. Of course, that’s always the supply side,there’s always a concern as we grow production. It is a little comforting thatwe have less rigs running in Canada and that our rig count, even though we’restill going up this year, has increased at a more moderate rate and I thinkdepletion at the end of the day does still overcome a lot of the new wells thatwe bring on. I think ultimately that my belief is that we don’t have thatmuch incremental coal generation and that we will come up with some demand fromthe natural gas side as the business moves forward.

Thank you again.

(Operator Instructions)

Joe, this is Matt Grubb again. Your first question, Iapologize. We were going to talk more in detail about those in the Q4 but asfar as the [Hayfield], West Texas, Malone Mitchell acquisition, that totaled$119.5 million and proved reserves of 71.3 bcfs.

We’ll get you the acreage position. Hopefully if Joe didn’tcatch that, somebody can call him.

You have a follow-up question from the line of Joe Allman.

I got it, thanks. So you said 71.3 bcfe -- do you happen tohave the production numbers, any production associated with that?

I don’t remember the exact number off the top of my head butit’s in the 6 million to 7 million a day type range.

Okay, and you’ll come back with the acreage?

Come back with the acreage and the acquisitions, theseacquisitions were really made for tying up the last bits of acreage around thePiñon field.

Okay, so you wouldn’t expect anymore similar types ofacquisitions, or very few?

I don’t think there are anymore to be had. We’re up to about93% to 95%, most of our wells that are drilling now in the Piñon.

All right. Very helpful, guys. Thank you.

At this time, there are no further questions. I would nowlike to turn the call back over to management for closing remarks.

We do thank you. It’s our inaugural call and hopefully asthe quarters go by, we’ll be a little bit better prepared and ready to answerall the questions. Thank you so much.

This concludes the presentation. You may now disconnect andhave a good day.