Photo Credit: SandRidge Energy

SandRidge Energy (NYSE: SD) is scheduled to report earnings on Aug. 6. It will be the company's first quarter with its new management team in place which makes it an especially important report for the company. Let's take a look at three questions in particular that investors will want to see answered when it reports.

Is it getting oilier?
Last quarter, SandRidge's production in the Mississippi Lime grew to 39,500 barrels of oil equivalent per day, which was 10% higher than the first quarter. Even better, the oil and liquids portion of that production was 46% of total production, up just a hair from its average of 45%. SandRidge's ability to find oilier prospects to drill are critical to its ability to produce cash flow as 80% of its cash flows from the Mississippian are from oil.

If the company can push its overall oil mix higher over the long term it would really show investors that it's finding the best spots in the Mississippian to drill. What investors don't want to see is its production mix slipping below 45% because that really would negatively affect its margins and cash flow. That's why the mix is almost as important as its overall production growth numbers; it really can't afford to be investing in natural-gas-heavy wells at this time.

What's the plan for capex?
Investors have been witnessing a monumental shift in the industry over the past year as companies have gone from growth at all costs to living within cash flow. Peers, such as Chesapeake Energy (CHKA.Q), which had aggressively invested well above its cash flow for years, much like SandRidge, are now cutting back capital outflows dramatically. Chesapeake is the most dramatic example because it is only planning to run an average of 64 rigs in the second half of this year, down from an average of 81 last year. Further, it plans to complete 20% fewer wells in the second half compared to the first half of this year. Finally, it would appear that new CEO, Doug Lawler, is planning to keep the company's capital spending within cash flow next year, which is a huge shift from its history of outspending cash flow.

It will be interesting to see if SandRidge decides to follow and cut its capital spending to better align with cash flow. It has already slashed its capex budget this year and it's possible that the new management team will decide that growth at all costs is simply costing the jobs of too many management teams.

Is it time to consider strategic alternatives?
The final area investors will need to watch is for any hint that the company is exploring strategic alternatives for either its Gulf of Mexico assets or the company as a whole. Now that activist investors have wrestled control of the company from former CEO Tom Ward, it's possible they will do whatever it takes to maximize the value of the assets. With oil prices running high, now might be a good time to put the company's oil-focused assets on the auction block and see what value it can extract from the market. Any hint that the board is considering a change in direction could send the stock higher.

Final Foolish thoughts
SandRidge is entering an interesting phase. With founder and former CEO Tom Ward now out of the picture, the company has many more options at its disposal so it will be interesting to see what path it chooses. One thing is certain, the company has vast potential and value just waiting to be unlocked. It is now up to the board and the new management team to get the job done and start to deliver lasting value for investors.