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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549





Form 10-Q





(Mark One)

|þ | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|- | ---------------------------------------------------------------------------------------

For the quarterly period ended September 30, 2012

OR



| ̈ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|- | ----------------------------------------------------------------------------------------

For the transition period from              to

Commission File Number:
001-35274





SANDRIDGE PERMIAN TRUST

(Exact name of registrant as specified in its charter)







|                                                                                                      |  |                                     
|----------------------------------------------------------------------------------------------------- |  | ------------------------------------
|Delaware                                                                                              |  | 45-6276683                          
|(State or other jurisdiction of
incorporation or organization)                                        |  | (I.R.S. Employer Identification No.)
|                                                                                                      | 
|The Bank of New York Mellon Trust Company, N.A., Trustee 919 Congress Avenue, Suite
500 Austin, Texas |  | 78701                               
|(Address of principal executive offices)                                                              |  | (Zip Code)                          

Registrants telephone number, including area code:

(512) 236-6531

Former name, former address and former fiscal year, if changed since last report: Not applicable





Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or
15 (d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past
90 days.    Yes  þ    No    ̈

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate website, if any,
every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such
files).    Yes   ̈    No    ̈

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated
filer, or a smaller reporting company. See the definitions of large accelerated filer, accelerated filer and smaller reporting company in Rule 12b-2 of the Exchange Act.



|                        |  |                                                 |  |                           |  |  
|----------------------- |  | ----------------------------------------------- |  | ------------------------- |  | -
|Large accelerated filer |  |  ̈                                               |  | Accelerated filer         |  |  ̈
|                        |  |                                                 | 
|Non-accelerated filer   |  | þ (Do not check if a smaller reporting
company) |  | Smaller reporting company |  |  ̈

Indicate by check mark whether the registrant is a shell company (as defined in
Rule 12b-2 of the Exchange Act).    Yes   ̈    No   þ

As of November 6, 2012, 39,375,000 Common Units and 13,125,000 Subordinated Units of Beneficial Interest in
SandRidge Permian Trust were outstanding.









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SANDRIDGE PERMIAN TRUST

FORM 10-Q

Quarter Ended September 30, 2012



|                              |  |                                                                                    |  |  |    | 
|----------------------------- |  | ---------------------------------------------------------------------------------- |  |  | -- | 
|PART I. FINANCIAL INFORMATION |  |                                                                                    |  | 
|                              |  |                                                                                   
|ITEM 1.                       |  | Financial Statements (Unaudited)                                                   |  |  | 4  | 
|                              |  | Statements of Assets and Trust Corpus                                              |  |  | 4  | 
|                              |  | Statements of Distributable Income                                                 |  |  | 5  | 
|                              |  | Statements of Changes in Trust Corpus                                              |  |  | 6  | 
|                              |  | Notes to Financial Statements                                                      |  |  | 7  | 
|ITEM 2.                       |  | Trustees Discussion and Analysis of Financial Condition and Results of Operations |  |  | 12 | 
|ITEM 3.                       |  | Quantitative and Qualitative Disclosures About Market Risk                         |  |  | 16 | 
|ITEM 4.                       |  | Controls and
Procedures                                                            |  |  | 17 | 
|                              | 
|PART II. OTHER INFORMATION    |  |                                                                                    |  | 
|                              |  |                                                                                   
|ITEM 1A.                      |  | Risk Factors                                                                       |  |  | 18 | 
|ITEM 6.                       |  | Exhibits                                                                           |  |  | 18 | 

All references to we, us, our, or the
Trust refer to SandRidge Permian Trust. References to SandRidge refer to SandRidge Energy, Inc., and where the context requires, its subsidiaries. The royalty interests conveyed by SandRidge from its interests in certain
properties in the Permian Basin in Andrews County, Texas and held by the Trust are referred to as the Royalty Interests.



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DISCLOSURES REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q (Quarterly Report) includes forward-looking statements about
the Trust, SandRidge and other matters discussed herein that are subject to risks and uncertainties within the meaning of Section 27A of the Securities Act of 1933, as amended (the Securities Act), and Section 21E of the
Securities Exchange Act of 1934, as amended (the Exchange Act). All statements other than statements of historical fact included in this document, including, without limitation, statements under Trustees Discussion and
Analysis of Financial Condition and Results of Operations in Item 2 of Part I and elsewhere herein regarding the Trusts or SandRidges plans and objectives for future operations, information regarding target distributions and
statements regarding the number of development wells to be completed in future periods, are forward-looking statements. Actual outcomes and results may differ materially from those projected. Our forward-looking statements are generally accompanied
by words such as estimate, target, project, predict, believe, expect, anticipate, potential, could, may, foresee,
plan, goal, should, intend or other words that convey the uncertainty of future events or outcomes. We have based these forward-looking statements on our current expectations and assumptions about
future events. These statements are based on certain assumptions made by us in light of our experience and our perception of historical trends, current conditions and expected future developments as well as other factors we believe are appropriate
under the circumstances. However, whether actual results and developments will conform with our expectations and predictions is subject to a number of risks and uncertainties, including the risk factors discussed in Item 1A of the Trusts
Annual Report on Form 10-K for the fiscal year ended December 31, 2011 (the 2011 Form 10-K), which could affect the future results of the energy industry in general, and the Trust and SandRidge in particular, and could cause those
results to differ materially from those expressed in such forward-looking statements. The actual results or developments anticipated may not be realized or, even if substantially realized, they may not have the expected consequences to or effects on
SandRidges business or the Trusts results. Such statements are not guarantees of future performance and actual results or developments may differ materially from those projected in such forward-looking statements. The Trust undertakes no
obligation to publicly update or revise any forward-looking statements.



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PART I. Financial Information

ITEM 1. Financial Statements

SANDRIDGE PERMIAN TRUST

STATEMENTS OF ASSETS AND TRUST CORPUS

(In thousands, except unit data)



|                                                                                                                                           |  |                   |         |   |                  |   |         |  
|------------------------------------------------------------------------------------------------------------------------------------------ |  | ----------------- | ------- | - | ---------------- | - | ------- | -
|                                                                                                                                           |  | September 30,2012 |         |   | December 31,2011 |  
|                                                                                                                                           |  | (Unaudited)       |         |   |                  |  
|ASSETS                                                                                                                                     |  |                   |         |   |                  |   |         |  
|Cash and cash equivalents                                                                                                                  |  | $                 | 4,429   |   |                  | $ | 1,815   |  
|                                                                                                                                           |  |                  
|Investment in royalty interests                                                                                                            |  |                   | 549,831 |   |                  |   | 549,831 |  
|Less: accumulated amortization                                                                                                             |  |                   | (52,483 | ) |                  |   | (23,121 | )
|                                                                                                                                           |  |                   |         |   |                  |   |         |  
|Net investment in royalty interests                                                                                                        |  |                   | 497,348 |   |                  |   | 526,710 |  
|                                                                                                                                           |  |                   |         |   |                  |   |         |  
|                                                                                                                                           |  |                  
|Total assets                                                                                                                               |  | $                 | 501,777 |   |                  | $ | 528,525 |  
|                                                                                                                                           |  |                   |         |   |                  |   |         |  
|                                                                                                                                           |  |                  
|TRUST CORPUS                                                                                                                               |  |                   |         |   |                  |   |         |  
|                                                                                                                                           |  |                  
|Trust corpus, 39,375,000 common units and 13,125,000 subordinated units issued and outstanding at September 30, 2012 and
December 31, 2011 |  | $                 | 501,777 |   |                  | $ | 528,525 |  
|                                                                                                                                           |  |                   |         |   |                  |   |         |  

The accompanying notes are an integral part of these financial statements.



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SANDRIDGE PERMIAN TRUST

STATEMENTS OF DISTRIBUTABLE INCOME

(In thousands, except unit and per unit data)



|                                                                        |  |                                       |          |  |                                      |   |          | 
|----------------------------------------------------------------------- |  | ------------------------------------- | -------- |  | ------------------------------------ | - | -------- | 
|                                                                        |  | Three Months 
EndedSeptember 30, 2012 |          |  | Nine Months 
EndedSeptember 30, 2012 |  
|                                                                        |  | (Unaudited)                           |         
|Revenues                                                                |  |                                       |          |  |                                      |   |          | 
|Royalty income                                                          |  | $                                     | 33,193   |  |                                      | $ | 94,733   | 
|Derivative settlements, net                                             |  |                                       | 1,852    |  |                                      |   | 3,746    | 
|                                                                        |  |                                       |          |  |                                      |   |          | 
|                                                                        |  |                                      
|Total revenues                                                          |  |                                       | 35,045   |  |                                      |   | 98,479   | 
|                                                                        |  |                                      
|Expenses                                                                |  |                                       |          |  |                                      |   |          | 
|Post-production expenses                                                |  |                                       | 24       |  |                                      |   | 90       | 
|Property taxes                                                          |  |                                       |         |  |                                      |   | 162      | 
|Production taxes                                                        |  |                                       | 1,573    |  |                                      |   | 4,516    | 
|Franchise taxes                                                         |  |                                       |         |  |                                      |   | 155      | 
|Trust administrative expenses                                           |  |                                       | 291      |  |                                      |   | 1,193    | 
|Cash reserves withheld, net of amounts used for current Trust expenses  |  |                                       | 1,363    |  |                                      |   | 1,810    | 
|                                                                        |  |                                       |          |  |                                      |   |          | 
|Total expenses                                                          |  |                                       | 3,251    |  |                                      |   | 7,926    | 
|                                                                        |  |                                       |          |  |                                      |   |          | 
|                                                                        |  |                                      
|Distributable income available to unitholders                           |  | $                                     | 31,794   |  |                                      | $ | 90,553   | 
|                                                                        |  |                                       |          |  |                                      |   |          | 
|Distributable income per unit (52,500,000 units issued and outstanding) |  | $                                     | 0.605594 |  |                                      | $ | 1.724817 | 
|                                                                        |  |                                       |          |  |                                      |   |          | 

The accompanying notes are an integral part of these financial statements.



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SANDRIDGE PERMIAN TRUST

STATEMENTS OF CHANGES IN TRUST CORPUS

(In thousands)



|                                                       |  |                                         |         |   |                                |   |          |  
|------------------------------------------------------ |  | --------------------------------------- | ------- | - | ------------------------------ | - | -------- | -
|                                                       |  | Nine Months Ended    September 30, 2012 |         |   | Period
EndedSeptember 30, 2011 |  
|                                                       |  | (Unaudited)                             |        
|Trust corpus, beginning of period                      |  | $                                       | 528,525 |   |                                | $ |         |  
|Initial Trust funding                                  |  |                                         |        |   |                                |   | 1        |  
|Issuance of Trust units                                |  |                                         |        |   |                                |   | 580,635  |  
|Conveyance of royalty interests                        |  |                                         |        |   |                                |   | 549,832  |  
|Consideration paid for conveyance of royalty interests |  |                                         |        |   |                                |   | (580,635 | )
|Amortization of investment in royalty interests        |  |                                         | (29,362 | ) |                                |   | (14,506  | )
|Net cash reserves withheld                             |  |                                         | 1,810   |   |                                |   |         |  
|Distributable income                                   |  |                                         | 90,553  |   |                                |   |         |  
|Distributions paid or payable to unitholders           |  |                                         | (89,749 | ) |                                |   |         |  
|                                                       |  |                                         |         |   |                                |   |          |  
|Trust corpus, end of period                            |  | $                                       | 501,777 |   |                                | $ | 535,327  |  
|                                                       |  |                                         |         |   |                                |   |          |  

The accompanying notes are an integral part of these financial statements.



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SANDRIDGE PERMIAN TRUST

NOTES TO FINANCIAL STATEMENTS

(Unaudited)



1. Organization of Trust

SandRidge Permian Trust (the Trust) is a statutory trust formed on May 12, 2011 under the Delaware Statutory Trust Act pursuant to a trust agreement by and among SandRidge Energy, Inc.
(SandRidge), as Trustor, The Bank of New York Mellon Trust Company, N.A., as Trustee (the Trustee), and The Corporation Trust Company, as Delaware Trustee (the Delaware Trustee). The trust agreement was amended
and restated by SandRidge, the Trustee and the Delaware Trustee on August 16, 2011. References in this report to the trust agreement are to the amended and restated trust agreement.

The Trust was created to acquire and hold Royalty Interests in specified oil and natural gas properties located in
Andrews County, Texas (the Underlying Properties). The Royalty Interests were conveyed by SandRidge to the Trust concurrent with the initial public offering of the Trusts common units in August 2011. As consideration for conveyance
of the Royalty Interests, the Trust remitted the proceeds of the offering, along with 4,875,000 Trust common units and 13,125,000 Trust subordinated units, to certain wholly owned subsidiaries of SandRidge. At September 30, 2012, SandRidge
owned 2,875,000 Trust common units and 13,125,000 Trust subordinated units.

The Royalty Interests entitle the
Trust to receive 80% of the proceeds (after deducting post-production costs and any applicable taxes) from the sale of oil, including natural gas liquids, and natural gas production attributable to SandRidges net revenue interest in 517 oil
and natural gas wells developed as of April 1, 2011, including 21 wells awaiting completion at that time (the Initial Wells) and 70% of the proceeds (after deducting post-production costs and any applicable taxes) from the sale of
oil, including natural gas liquids, and natural gas production attributable to SandRidges net revenue interest in 888 development wells to be drilled (the Trust Development Wells) within an area of mutual interest (AMI)
beginning on April 1, 2011, the effective date of the conveyance. Although the Trust was formed on May 12, 2011, conveyance of the Royalty Interests did not occur until August 2011 and no proceeds from the sale of oil and natural gas
production were received by the Trust until November 2011.

As specified in the development agreement executed
by the Trust with SandRidge (see Note 5), SandRidge is credited for having drilled one full Trust Development Well if the well is drilled and perforated for completion to the Grayburg/San Andres formation and SandRidges net revenue interest in
the well is equal to 69.3%. The actual number of wells required to be drilled may increase or decrease in proportion to SandRidges net revenue interest in each well. At September 30, 2012, the Trusts properties consisted of Royalty
Interests in (a) the Initial Wells, (b) 400 additional wells (equivalent to approximately 415 Trust Development Wells under the development agreement as described in Note 5) that were drilled and perforated for completion between
April 1, 2011 and September 30, 2012, and (c) the equivalent of approximately 473 Trust Development Wells to be drilled within the AMI.

The Trust makes quarterly cash distributions of substantially all of its cash receipts, after deducting amounts for the Trusts administrative expenses and cash reserves withheld by the Trustee,
property tax and Texas franchise tax, on or about 60 days following the completion of each quarter. Due to the timing of the payment of production proceeds to the Trust, each distribution covers production from a three-month period consisting of the
first two months of the most recently ended quarter and the final month of the quarter preceding it.

The
common and subordinated units have identical rights and privileges, except with respect to their rights to receive distributions. The subordinated units, all of which are held by SandRidge, constitute 25% of the Trust units issued and outstanding.
The subordinated units are entitled to receive pro rata distributions from the Trust each quarter if and to the extent there is sufficient cash to provide a cash distribution on the common units that is no less than 80% of the target distribution
for the corresponding quarter (Subordination Threshold). If there is not sufficient cash to fund such a distribution on all of the common units, the distribution to be made with respect to the subordinated units is reduced or eliminated
for such quarter in order to make a distribution, to the extent possible, of up to the Subordination Threshold amount on all of the common units. In exchange for agreeing to subordinate a portion of its Trust units, and in order to provide
additional financial incentive to SandRidge to satisfy its drilling obligation, SandRidge is entitled to receive incentive distributions equal to 50% of the amount by which the cash available for distribution on all of the Trust units in any quarter
exceeds 120% of the target distribution for such quarter (Incentive Threshold). At the end of the fourth full calendar quarter following SandRidges satisfaction of its drilling obligation with respect to the Trust Development
Wells, the subordinated units will automatically convert into common units on a one-for-one basis and SandRidges right to receive incentive distributions will terminate. After such time, the common units will no longer have the protection of
the Subordination Threshold, and all Trust unitholders will share on a pro rata basis in the Trusts distributions.



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SANDRIDGE PERMIAN TRUST

NOTES TO FINANCIAL STATEMENTS - CONTINUED

(Unaudited)



2. Basis of Presentation and Summary of Significant Accounting Policies

Basis of Accounting. The financial statements of the Trust differ from financial statements prepared in
accordance with accounting principles generally accepted in the United States of America (GAAP) as the Trust records revenues when cash is received (rather than when earned) and expenses when paid (rather than when incurred) and may also
establish certain cash reserves for contingencies, which would not be accrued in financial statements prepared in accordance with GAAP. This comprehensive basis of accounting other than GAAP corresponds to the accounting permitted for royalty trusts
by the Securities and Exchange Commission (SEC) as specified by Staff Accounting Bulletin Topic 12:E, Financial Statements of Royalty Trusts. Amortization of investment in royalty interests, calculated on a unit-of-production
basis, and any impairments are charged directly to trust corpus. Distributions to unitholders are recorded when declared.

Significant Accounting Policies.Most accounting pronouncements apply to entities whose financial statements are prepared in accordance with GAAP, directing such entities to accrue or defer
revenues and expenses in a period other than when such revenues are received or expenses are paid. Because the Trusts financial statements are prepared on the modified cash basis as described above, most accounting pronouncements are not
applicable to the Trusts financial statements.

The Trust is treated for federal and applicable state
income tax purposes as a partnership. For U.S. federal income tax purposes, a partnership is not a taxable entity and incurs no U.S. federal income tax liability. With respect to state taxation, a partnership is typically treated in the same manner
as it is for U.S. federal income tax purposes. However, the Trusts activities result in the Trust having nexus in Texas and, therefore, make it subject to the Texas franchise tax, which is treated as an income tax for financial statement
purposes. The Trust is required to pay Texas franchise tax each year at a maximum effective rate of 0.7% of its gross income apportioned to Texas in the prior year. The Trust records Texas franchise tax when paid.

Interim Financial Statements. The accompanying unaudited financial statements have been prepared in accordance
with the accounting policies stated in the audited financial statements contained in the 2011 Form 10-K and reflect all adjustments that are, in the opinion of the Trustee, necessary to state fairly the information in the Trusts unaudited
interim financial statements. The accompanying statement of assets and trust corpus as of December 31, 2011 has been derived from audited financial statements. The unaudited financial statements should be read in conjunction with the financial
statements and notes thereto included in the 2011 Form 10-K.

Risks and Uncertainties. The
Trusts revenue and distributions are substantially dependent upon the prevailing and future prices for oil and natural gas, each of which depends on numerous factors beyond the Trusts control such as overall oil and natural gas
production and inventories in relevant markets, economic conditions, the global political environment, regulatory developments and competition from other energy sources. Oil and natural gas prices historically have been volatile and may be subject
to significant fluctuations in the future. The Trusts derivative arrangements serve to mitigate a portion of the effect of this price volatility. See Note 5 for a discussion of the Trusts open oil derivative contracts.

3. Distributions to Unitholders

The Trust makes quarterly cash distributions of substantially all of its cash receipts, after deducting amounts for the Trusts administrative expenses and cash reserves withheld by the Trustee,
property tax and Texas franchise tax, on or about 60 days following the completion of each quarter. Other than the first distribution, which covered production for the five-month period from April 1, 2011 to August 31, 2011, distributions
cover a three-month period. See Note 6 for discussion of the Trusts quarterly distribution to be paid in November 2012. A summary of distributions declared and paid to unitholders during 2011 and the nine-month period ended September 30,
2012 is as follows:



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SANDRIDGE PERMIAN TRUST

NOTES TO FINANCIAL STATEMENTS - CONTINUED

(Unaudited)



|                      |  |                          |                                     |  |               |  |                  |           |  |  |                       |  |  |                      |             |  |  |  |               | 
|--------------------- |  | ------------------------ | ----------------------------------- |  | ------------- |  | ---------------- | --------- |  |  | --------------------- |  |  | -------------------- | ----------- |  |  |  | ------------- | 
|                      |  | CoveredProduction Period |                                     |  | Date Declared |  |                  | Date Paid |  |  | TotalDistributionPaid |  |  | DistributionPer Unit |            
|                      |  |                          |                                     |  |               |  |                  |           |  |  | (in millions)         |  |  |                      |            
|Calendar Quarter 2011 |  |                          |                                     |  |               |  |                  |           |  |  |                       |  |  |                      |             |  |  |  |               | 
|                      |  |                          |                                     |  |              
|First Quarter         |  |                          | N/A                                 |  |               |  | N/A              |           |  |  | N/A                   |  |  |                      | N/A         |  |  |  | N/A           | 
|Second Quarter        |  |                          | N/A                                 |  |               |  | N/A              |           |  |  | N/A                   |  |  |                      | N/A         |  |  |  | N/A           | 
|Third Quarter         |  |                          | N/A                                 |  |               |  | N/A              |           |  |  | N/A                   |  |  |                      | N/A         |  |  |  | N/A           | 
|Fourth Quarter        |  |                          | April 1 August 31,
2011            |  |               |  | October 28, 2011 |           |  |  | November 30, 2011     |  |  |                      | $      37.9 |  |  |  | $    0.722746 | 
|                      |  |                          |                                     |  |              
|Calendar Quarter 2012 |  |                          |                                     |  |               |  |                  |           |  |  |                       |  |  |                      |             |  |  |  |               | 
|                      |  |                          |                                     |  |              
|First Quarter         |  |                          | September 1 November 30,
2011      |  |               |  | February 2, 2012 |           |  |  | February 29, 2012     |  |  |                      | $      29.1 |  |  |  | $    0.553523 | 
|Second Quarter        |  |                          | December 1, 2011 February 29, 2012 |  |               |  | April 30, 2012   |           |  |  | May 30, 2012          |  |  |                      | $      30.5 |  |  |  | $    0.581742 | 
|Third Quarter         |  |                          | March 1, 2012 May 31, 2012         |  |               |  | July 26, 2012    |           |  |  | August 29, 2012       |  |  |                      | $      30.1 |  |  |  | $    0.574232 | 

4. Loan Commitment

Pursuant to the trust agreement, if at any time the Trusts cash on hand (including available cash reserves) is not sufficient to pay the Trusts ordinary course administrative expenses as they
become due, SandRidge will loan funds to the Trust necessary to pay such expenses. Any funds loaned by SandRidge pursuant to this commitment will be limited to the payment of current accounts payable or other obligations to trade creditors in
connection with obtaining goods or services or the payment of other accrued current liabilities arising in the ordinary course of the Trusts business, and may not be used to satisfy Trust indebtedness, or to make distributions. If SandRidge
loans funds pursuant to this commitment, unless SandRidge agrees otherwise, no further distributions will be made to unitholders (except in respect of any previously determined quarterly cash distribution amount) until such loan is repaid. Any such
loan will be on an unsecured basis, and the terms of such loan will be substantially the same as those which would be obtained in an arms length transaction between SandRidge and an unaffiliated third party. There was no such loan outstanding
with SandRidge at September 30, 2012 or December 31, 2011.

5. Related Party Transactions

Trustee Administrative Fee. Under the terms of the trust agreement, the Trust pays an annual administrative
fee of $150,000 to the Trustee, which will be adjusted for inflation by no more than 3% in any year beginning in 2017. During the three and nine-month periods ended September 30, 2012, the Trustees administrative fees were equal to
approximately $38,000 and $113,000, respectively.

Registration Rights Agreement. The Trust is
party to a registration rights agreement pursuant to which the Trust has agreed to register the offering of the Trust units held by SandRidge and certain of its affiliates and permitted transferees upon request by SandRidge. On October 24,
2012, pursuant to the registration rights agreement, the Trust and SandRidge filed a registration statement on Form S-3 registering the offering by SandRidge Exploration and Production, LLC of 2,875,000 common units. The registration statement
was effective immediately upon filing.

Development Agreement. The Trust is party to a development
agreement with SandRidge, effective April 1, 2011, that obligates SandRidge to drill, or cause to be drilled, the Trust Development Wells by March 31, 2016. Additionally, SandRidge agreed not to drill and complete, or allow another person
within its control to drill and complete, any other well in the AMI other than (a) the Trust Development Wells, (b) up to five horizontal wells to test the results of horizontal drilling in the AMI and (c) wells that were spud and
temporarily abandoned on or before March 31, 2011, until SandRidge has fulfilled its drilling obligation. The Trust will not own any interests in the five test horizontal wells, and such wells will not count toward SandRidges drilling
obligation.

A wholly owned subsidiary of SandRidge granted to the Trust a lien (Drilling Support
Lien) covering its interest in the AMI (except its interest in the Initial Wells) in order to secure the estimated amount of the drilling costs for the Trusts interests in the undeveloped Underlying Properties. The initial amount
recoverable by the Trust pursuant to the Drilling Support Lien could not exceed approximately $295.0 million, subject to adjustment as described below. As SandRidge fulfills its drilling obligation over time,



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SANDRIDGE PERMIAN TRUST

NOTES TO FINANCIAL STATEMENTS - CONTINUED

(Unaudited)



the total amount that may be recovered is proportionately reduced and the Trust Development Wells drilled and perforated for completion are released from the lien. If SandRidge does not fulfill
its drilling obligation by March 31, 2016, the Trust may foreclose on any remaining interest in the AMI that is subject to the Drilling Support Lien. Any amounts actually recovered in a foreclosure action would be applied to the completion of
SandRidges drilling obligation and would not result in a distribution to the Trusts unitholders. At September 30, 2012, SandRidge had drilled and perforated for completion approximately 415 equivalent Trust Development Wells, and,
accordingly, the maximum amount potentially recoverable under the Drilling Support Lien had been reduced to approximately $156.9 million.

Administrative Services Agreement. The Trust is party to an administrative services agreement with SandRidge, effective April 1, 2011, that obligates the Trust to pay SandRidge an annual
administrative services fee for accounting, tax preparation, bookkeeping and informational services to be performed by SandRidge on behalf of the Trust. Additionally, the administrative services agreement designates SandRidge as the Trusts
hedge manager, pursuant to which SandRidge has authority to administer the derivative contracts underlying the derivatives agreement (described below), and, on behalf of the Trust, to administer the Trusts derivative contracts with
unaffiliated third parties. For its services under the administrative services agreement, SandRidge receives an annual fee of $300,000, which is payable in equal quarterly installments and will remain fixed for the life of the Trust. SandRidge is
also entitled to receive reimbursement for its out-of-pocket fees, costs and expenses incurred in connection with the provision of any of the services under this agreement. The administrative services agreement will terminate on the earliest to
occur of: (i) the date the Trust shall have dissolved and commenced winding up in accordance with the trust agreement, (ii) the date that all of the Royalty Interests have been terminated or are no longer held by the Trust,
(iii) pertaining to services to be provided with respect to any Underlying Properties transferred by SandRidge, the date that either SandRidge or the Trustee may designate by delivering 90-days prior written notice, provided that
SandRidges drilling obligation has been completed and the transferee of such Underlying Properties assumes responsibility to perform the services in place of SandRidge and (iv) a date mutually agreed to by SandRidge and the Trustee.
During the three and nine-month periods ended September 30, 2012, the Trust paid SandRidges administrative fees equal to $75,000 and $225,000, respectively.

Derivatives Agreement. The Trust is party to a derivatives agreement with SandRidge, effective August 1,
2011, that provides the Trust with the economic effect of certain oil derivative contracts entered into between SandRidge and a third party. Under the derivatives agreement, SandRidge pays the Trust amounts it receives from its counterparty and the
Trust pays SandRidge any amounts that SandRidge is required to pay such counterparty. Substantially concurrent with the execution of the derivatives agreement, SandRidge novated certain of the derivative contracts underlying the derivatives
agreement to the Trust. As a party to these contracts, the Trust receives payment directly from the counterparty and is required to pay any amounts owed directly to the counterparty. To secure its obligations under these novated contracts, the Trust
entered into a collateral agency agreement and granted the counterparty a lien on the Royalty Interests. Under the collateral agency agreement, the Trust pays a $15,000 annual fee to the collateral agent. Under the derivatives agreement,
as Trust Development Wells are drilled, SandRidge has the right, under certain circumstances, to assign or novate to the Trust additional derivative contracts. The Trusts derivative contracts consist of fixed price swaps, under which the Trust
receives a fixed price for the contract and pays a floating market price over a specified period for a contracted volume. On April 12, 2012, SandRidge novated certain additional portions of the derivative contracts underlying the derivatives
agreement to the Trust.

The following tables present, as of September 30, 2012, the notional amount and
weighted average fixed price of the open contracts underlying the derivatives agreement and the contracts that have been novated to the Trust. The combined volume in the tables below reflects the total volume of oil derivative contracts for the
Trust.

Oil Contracts Underlying the Derivatives Agreement



|                             |  |                |     |  |                          |          
|---------------------------- |  | -------------- | --- |  | ------------------------ | ---------
|                             |  | Notional(MBbl) |     |  | Weighted Avg.Fixed Price
|October 2012  December 2012 |  |                | 116 |  |                          | $  102.20
|January 2013  December 2013 |  |                | 714 |  |                          | $  102.84
|January 2014  December 2014 |  |                | 950 |  |                          | $  101.75
|January 2015  March 2015    |  |                | 200 |  |                          | $  100.90



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SANDRIDGE PERMIAN TRUST

NOTES TO FINANCIAL STATEMENTS - CONTINUED

(Unaudited)



Oil Contracts Underlying the Derivatives Agreement and Novated to the Trust



|                             |  |                |     |  |                          |  |           | 
|---------------------------- |  | -------------- | --- |  | ------------------------ |  | --------- | 
|                             |  | Notional(MBbl) |     |  | Weighted Avg.Fixed Price | 
|October 2012  December 2012 |  |                | 174 |  |                          |  | $  102.20 | 
|January 2013  December 2013 |  |                | 575 |  |                          |  | $  102.84 | 
|January 2014  December 2014 |  |                | 461 |  |                          |  | $  101.75 | 
|January 2015  March 2015    |  |                | 103 |  |                          |  | $  100.90 | 

6. Subsequent Events

Distribution to Unitholders.On November 1, 2012, the Trust declared a cash distribution of $0.625203 per
unit covering production for the three-month period from June 1, 2012 to August 31, 2012 for record holders as of November 14, 2012. The distribution will be paid on or about November 29, 2012. Distributable income for
June 1, 2012 to August 31, 2012 was calculated as follows (in thousands, except for unit and per unit amounts):



|                                                                        |  |   |          | 
|----------------------------------------------------------------------- |  | - | -------- | 
|Revenues                                                                |  |   |          | 
|Royalty income                                                          |  | $ | 31,731   | 
|Derivative settlements, net                                             |  |   | 4,093    | 
|                                                                        |  |   |          | 
|Total revenues                                                          |  |   | 35,824   | 
|                                                                        |  |   |          | 
|Expenses                                                                |  |   |          | 
|Post-production expenses                                                |  |   | 28       | 
|Production taxes                                                        |  |   | 1,492    | 
|Cash reserves withheld by Trustee (1)                                   |  |   | 1,481    | 
|                                                                        |  |   |          | 
|Total expenses                                                          |  |   | 3,001    | 
|                                                                        |  |   |          | 
|Distributable income available to unitholders                           |  | $ | 32,823   | 
|                                                                        |  |   |          | 
|Distributable income per unit (52,500,000 units issued and outstanding) |  | $ | 0.625203 | 
|                                                                        |  |   |          | 





|(1) | Includes amounts withheld for payment of future Trust administrative expenses.
|--- | ------------------------------------------------------------------------------



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ITEM 2.Trustees Discussion and Analysis of Financial
Condition and Results of Operations

Introduction

The following discussion and analysis is intended to help the reader understand the Trusts financial condition,
results of operations, liquidity and capital resources. This discussion and analysis should be read in conjunction with the Trusts unaudited financial statements and the accompanying notes included in this Quarterly Report and the Trusts
audited financial statements and the accompanying notes included in the 2011 Form 10-K.

Overview

The Trust is a statutory trust created on May 12, 2011 under the Delaware Statutory Trust Act. The business and
affairs of the Trust are managed by the Trustee and, as necessary, the Delaware Trustee. The Trusts purpose is to hold the Royalty Interests, to distribute to the Trust unitholders cash that the Trust receives in respect of the Royalty
Interests and the derivatives agreement (described in Note 5 to the unaudited financial statements contained in Part I, Item 1 of this Quarterly Report) and to perform certain administrative functions in respect of the Royalty Interests and the
Trust units. Other than the foregoing activities, the Trust does not conduct any operations or activities. The Trustee has no involvement with, control or authority over, or responsibility for, any aspect of the operations on or relating to the
properties in which the Trust has an interest. The Trust derives all or substantially all of its income and cash flow from the Royalty Interests and the derivatives agreement. The Trust is treated as a partnership for federal income tax purposes.
The Trusts activities result in the Trust having nexus in Texas and, therefore, make it subject to Texas franchise tax. The Trust is required to pay Texas franchise tax each year at a maximum effective rate of 0.7% of its gross income
apportioned to Texas in the prior year.

Properties.At September 30, 2012, the Trusts
properties consisted of Royalty Interests in (a) the Initial Wells, (b) 400 additional wells (equivalent to approximately 415 Trust Development Wells under the development agreement as described below) that were drilled and perforated for
completion between April 1, 2011 and September 30, 2012, and (c) the equivalent of approximately 473 Trust Development Wells to be drilled within an AMI consisting of approximately 17,400 gross acres (15,800 net acres) in Andrews
County, Texas.

SandRidge is obligated to drill, or cause to be drilled, the Trust Development Wells on or
before March 31, 2016. SandRidge is not permitted to drill and complete any well within the AMI for its own account, subject to certain exceptions, until it has satisfied the drilling obligation to the Trust. SandRidge has granted to the Trust
a lien covering its interest in the AMI (except its interest in the Initial Wells) in order to secure the estimated amount of the drilling costs for the Trusts interests in the undeveloped Underlying Properties, the balance of which is reduced
as SandRidge fulfills its drilling obligation under the development agreement. At September 30, 2012, the amount potentially recoverable under the lien was approximately $156.9 million.

The Trust is not responsible for any costs related to the drilling of the Trust Development Wells or any other operating
or capital costs related to the Underlying Properties. The following table presents the number of Initial Wells, Trust Development Wells drilled and Trust Development Wells to be drilled as of December 31, 2011 and September 30, 2012.



|                   |  |               |     |  |                                  |  |     |                                     |  |  |       |  |  |  |       | 
|------------------ |  | ------------- | --- |  | -------------------------------- |  | --- | ----------------------------------- |  |  | ----- |  |  |  | ----- | 
|                   |  | Initial Wells |     |  | TrustDevelopmentWells Drilled(1) |  |     | TrustDevelopmentWells To Be Drilled |  |  | Total | 
|December 31, 2011  |  |               | 517 |  |                                  |  | 195 |                                     |  |  | 693   |  |  |  | 1,405 | 
|September 30, 2012 |  |               | 517 |  |                                  |  | 415 |                                     |  |  | 473   |  |  |  | 1,405 | 



|(1) | SandRidge is credited for having drilled one full Trust Development Well if a well is drilled and perforated for completion to the Grayburg/San
Andres formation and SandRidges net revenue interest in the well is equal to 69.3%. For wells in which SandRidge has a net revenue interest greater or less than 69.3%, SandRidge will receive proportionate credit for such well. In certain
circumstances, SandRidge may also receive Trust Development Well credit for horizontal wells drilled to such formation.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Distributions. The Trust makes quarterly cash distributions of substantially all of its cash receipts, after deducting amounts for the Trusts administrative expenses and cash reserves
withheld by the Trustee, property tax and Texas franchise tax, on or about 60 days following the completion of each quarter. The Trusts subordinated units are entitled to receive pro rata distributions from the Trust each quarter if and to the
extent there is sufficient cash to provide a cash distribution on the common units that is at least equal to the Subordination Threshold. If there is not sufficient cash to fund such a distribution on all of the common units (including the common
units SandRidge owns), the distribution to be made with respect to the subordinated units is reduced or eliminated for such quarter in order to make a distribution, to the extent possible, to all of the common units (including the common units held
by



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SandRidge) up to the Subordination Threshold. However, there is no minimum distribution. If the cash available for distribution on all of the Trust units in any quarter exceeds the Incentive
Threshold for the corresponding quarter, SandRidge, as holder of the Trusts subordinated units, is entitled to 50% of the amount by which the cash available for distribution exceeds the Incentive Threshold.

The following table sets forth the Subordination Threshold and Incentive Threshold for each remaining calendar quarter
through the first quarter of 2017, as set out in the trust agreement.



|               |  |                           |      |  |                       |   |      | 
|-------------- |  | ------------------------- | ---- |  | --------------------- | - | ---- | 
|Period(1)      |  | SubordinationThreshold(2) |      |  | IncentiveThreshold(2) |  
|2012           |  |                           |      |  |                       |   |      | 
|Third quarter  |  | $                         | 0.47 |  |                       | $ | 0.70 | 
|Fourth quarter |  |                           | 0.49 |  |                       |   | 0.74 | 
|               |  |                          
|2013           |  |                           |      |  |                       |   |      | 
|First quarter  |  |                           | 0.51 |  |                       |   | 0.77 | 
|Second quarter |  |                           | 0.53 |  |                       |   | 0.80 | 
|Third quarter  |  |                           | 0.56 |  |                       |   | 0.84 | 
|Fourth quarter |  |                           | 0.58 |  |                       |   | 0.87 | 
|               |  |                          
|2014           |  |                           |      |  |                       |   |      | 
|First quarter  |  |                           | 0.61 |  |                       |   | 0.91 | 
|Second quarter |  |                           | 0.63 |  |                       |   | 0.95 | 
|Third quarter  |  |                           | 0.65 |  |                       |   | 0.98 | 
|Fourth quarter |  |                           | 0.66 |  |                       |   | 0.98 | 
|               |  |                          
|2015           |  |                           |      |  |                       |   |      | 
|First quarter  |  |                           | 0.64 |  |                       |   | 0.96 | 
|Second quarter |  |                           | 0.61 |  |                       |   | 0.92 | 
|Third quarter  |  |                           | 0.56 |  |                       |   | 0.85 | 
|Fourth quarter |  |                           | 0.54 |  |                       |   | 0.81 | 
|               |  |                          
|2016           |  |                           |      |  |                       |   |      | 
|First quarter  |  |                           | 0.53 |  |                       |   | 0.80 | 
|Second quarter |  |                           | 0.52 |  |                       |   | 0.78 | 
|Third quarter  |  |                           | 0.51 |  |                       |   | 0.77 | 
|Fourth quarter |  |                           | 0.50 |  |                       |   | 0.75 | 
|               |  |                          
|2017           |  |                           |      |  |                       |   |      | 
|First quarter  |  |                           | 0.49 |  |                       |   | 0.74 | 



| | (1) | Due to the timing of the payment of production proceeds to the Trust, each distribution covers production from a three-month period consisting of
the first two months of the most recently ended quarter and the final month of the quarter preceding it.
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (2) | Each of the Subordination Threshold (80% of quarterly target distribution) and Incentive Threshold (120% of quarterly target distribution)
terminates after the fourth full calendar quarter following SandRidges completion of its drilling obligation.
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Pursuant to Internal Revenue Code Section 1446, withholding tax on income effectively connected to a United States trade or business allocated to foreign partners should be made at the highest
marginal rate. Under Section 1441, withholding tax on fixed, determinable, annual, periodic income from United States sources allocated to foreign partners should be made at 30% of gross income unless the rate is reduced by treaty. This is
intended to be a qualified notice to nominees and brokers as provided for under Treasury Regulation Section 1.1446-4(b) by the Trust, and while specific relief is not specified for Section 1441 income, this disclosure is intended to
suffice. Nominees and brokers should withhold 35% of the distribution made to foreign partners.

Results of Trust Operations

The primary factors affecting the Trusts revenues and costs are the quantity of oil and natural gas
production attributable to the Royalty Interests, the prices received for such production and amounts paid or received as net settlements under the derivatives agreement and the Trusts derivative contracts with unaffiliated third parties.
Royalty income, post-production expenses, certain taxes and derivative settlements are recorded on a cash basis when net revenue distributions are received by the Trust from SandRidge and net derivative settlements are received from the Trusts
derivative counterparty. Although the Trust was formed on May 12, 2011, the conveyance of the Royalty Interests did not occur until August 2011 and no proceeds from the sale of oil and natural gas production



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were received by the Trust until November 2011. As a result, the Trust did not recognize any income or make any distributions until November 2011. Information regarding the Trusts
production, pricing and costs for the three and nine-month periods ended September 30, 2012 is presented below.



|                                                                                         |  |                                          |       |  |                                         |   |       | 
|---------------------------------------------------------------------------------------- |  | ---------------------------------------- | ----- |  | --------------------------------------- | - | ----- | 
|                                                                                         |  | Three Months 
EndedSeptember 30, 2012(1) |       |  | Nine Months 
EndedSeptember 30, 2012(2) |  
|Production Data                                                                          |  |                                          |       |  |                                         |   |       | 
|Oil (MBbls)(3)                                                                           |  |                                          | 369   |  |                                         |   | 1,058 | 
|Natural gas (MMcf)                                                                       |  |                                          | 104   |  |                                         |   | 280   | 
|Combined equivalent volumes (MBoe)                                                       |  |                                          | 386   |  |                                         |   | 1,105 | 
|Average daily combined equivalent volumes (MBoe/d)                                       |  |                                          | 4.2   |  |                                         |   | 4.0   | 
|                                                                                         |  |                                         
|Average Prices                                                                           |  |                                          |       |  |                                         |   |       | 
|Oil (per Bbl)(3)                                                                         |  | $                                        | 89.44 |  |                                         | $ | 88.90 | 
|Natural gas (per Mcf)                                                                    |  | $                                        | 1.73  |  |                                         | $ | 2.33  | 
|Combined equivalent (per Boe)                                                            |  | $                                        | 85.91 |  |                                         | $ | 85.74 | 
|                                                                                         |  |                                         
|Average Prices  including impact of derivative settlements and post-production expenses |  |                                          |       |  |                                         |   |       | 
|Oil (per Bbl)(3)(4)                                                                      |  | $                                        | 90.00 |  |                                         | $ | 91.68 | 
|Natural gas (per Mcf)                                                                    |  | $                                        | 1.49  |  |                                         | $ | 2.01  | 
|Combined equivalent (per Boe)                                                            |  | $                                        | 86.37 |  |                                         | $ | 88.32 | 
|                                                                                         |  |                                         
|Expenses (per Boe)                                                                       |  |                                          |       |  |                                         |   |       | 
|Post-production                                                                          |  | $                                        | 0.06  |  |                                         | $ | 0.08  | 
|Production taxes                                                                         |  | $                                        | 4.07  |  |                                         | $ | 4.09  | 
|                                                                                         |  |                                          |       |  |                                         |   |       | 
|Total expenses                                                                           |  | $                                        | 4.13  |  |                                         | $ | 4.17  | 
|                                                                                         |  |                                          |       |  |                                         |   |       | 



|(1) | Oil and natural gas volumes and related revenues and expenses for the three-month period ended September 30, 2012 (included in SandRidges
August 2012 net revenue distribution to the Trust) represent oil and natural gas production from March 1, 2012 to May 31, 2012.
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(2) | Oil and natural gas volumes and related revenues and expenses for the nine-month period ended September 30, 2012 (included in SandRidges
February 2012, May 2012 and August 2012 net revenue distributions to the Trust) represent oil and natural gas production from September 1, 2011 to May 31, 2012.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(3) | Includes natural gas liquids.
|--- | -----------------------------

|(4) | Includes impact of derivative settlements attributable to production from March 1, 2012 to May 31, 2012 for the three-month period ended
September 30, 2012 and from September 1, 2011 to May 31, 2012 for the nine-month period ended September 30, 2012.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Trust Operations for the Three Months Ended September 30, 2012

Royalty Income. Royalty income received during the three-month period ended September 30, 2012 totaled $33.2 million. This was based upon production attributable to the Royalty Interests of
369 MBbls of oil and 104 MMcf of natural gas for the period from March 1, 2012 to May 31, 2012. Average prices received for oil and natural gas production, excluding the impact of derivative settlements and post-production expenses, during
the three-month period ended September 30, 2012 were $89.44 per Bbl of oil and $1.73 per Mcf of natural gas.

Derivative Settlements. The Trusts derivatives agreement with SandRidge reduces the Trusts exposure to commodity price volatility attributable to a portion of production from the
Royalty Interests through March 31, 2015 through the use of oil fixed price swaps. Net cash settlements received related to the Trusts derivatives during the three-month period ended September 30, 2012 were approximately $1.9
million, and included net settlements received of approximately $0.4 million related to production from March 1, 2012 to May 31, 2012 and net settlements received of approximately $1.5 million related to June 2012 production. Total net
derivative settlements received by the Trust for production from March 1, 2012 to May 31, 2012, including $0.2 million paid in April 2012, were $0.2 million, which effectively increased the average price received for oil production for the
related period by $0.56 per Bbl to $90.00 per Bbl.

Post-Production Expenses. The Trust bears
post-production expenses attributable to production from the Royalty Interests. Post-production expenses generally consist of costs incurred to gather, store, compress, transport, process, treat, dehydrate and market the oil and natural gas
produced. Post-production expenses for the three-month period ended September 30, 2012 totaled approximately $25,000.



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Production Taxes.Production taxes are calculated as a percentage of
oil and natural gas revenues, excluding the effects of derivative settlements and net of any applicable tax credits. Production taxes for the three-month period ended September 30, 2012 totaled approximately $1.6 million, or $4.07 per Boe, and
were approximately 4.7% of royalty income.

Distributable Income.Distributable income for the
three-month period ended September 30, 2012 was $31.8 million, which included a net addition to the cash reserve for payment of future Trust expenses of approximately $1.4 million (approximately $1.7 million withheld from the August 2012 cash
distribution to unitholders less approximately $0.3 million used to pay Trust expenses during the period).

Trust Operations for the
Nine Months Ended September 30, 2012

Royalty Income. Royalty income received during the
nine-month period ended September 30, 2012 totaled $94.7 million. This was based upon production attributable to the Royalty Interests of 1,058 MBbls of oil and 280 MMcf of natural gas for the period from September 1, 2011 to May 31,
2012. Average prices received for oil and natural gas production, excluding the impact of derivative settlements and post-production expenses, during the nine-month period ended September 30, 2012 were $88.90 per Bbl of oil and $2.33 per Mcf of
natural gas.

Derivative Settlements.Net cash settlements received related to the Trusts
derivatives during the nine-month period ended September 30, 2012 were approximately $3.7 million and included net settlements received of approximately $2.2 million related to production from September 1, 2011 to May 31, 2012 and net
settlements received of approximately $1.5 million related to June 2012 production. Total net derivative settlements received by the Trust for production from September 1, 2011 to May 31, 2012 were $2.9 million, including $0.7 million
received in 2011, and effectively increased the average price received for oil production for the related period by $2.78 per Bbl to $91.68 per Bbl.

Post-Production Expenses. Post-production expenses for the nine-month period ended September 30, 2012 totaled approximately $90,000.

Production Taxes. Production taxes for the nine-month period ended September 30, 2012 totaled approximately
$4.5 million, or $4.09 per Boe, and were approximately 4.8% of royalty income.

Property Taxes.The
Trust paid its property tax for the period ended December 31, 2011 of approximately $0.2 million during the nine-month period ended September 30, 2012.

Texas Franchise Tax.The Trust paid its Texas franchise tax for the period ended December 31, 2011 of
approximately $0.2 million during the nine-month period ended September 30, 2012.

Distributable Income.Distributable income for the nine-month period ended September 30, 2012 was $90.6
million, which included a net addition to the cash reserve for payment of future Trust expenses of approximately $1.8 million (approximately $3.3 million withheld from the February 2012, May 2012 and August 2012 cash distributions to
unitholders less approximately $1.5 million used to pay Trust expenses during the period).

Liquidity and Capital Resources

The Trusts principal sources of liquidity and capital are cash flow generated from the Royalty Interests,
derivative contracts, and borrowings to fund administrative expenses, including any amounts borrowed under SandRidges loan commitment described in Note 4 to the unaudited financial statements contained in Part I, Item I of this Quarterly
Report. The Trusts primary uses of cash are distributions to Trust unitholders, including, if applicable, incentive distributions to SandRidge, payment of amounts owed under the Trusts derivative contracts, payment of Trust
administrative expenses, including any reserves established by the Trustee for future liabilities, payment of applicable taxes and payment of expense reimbursements to SandRidge for out-of-pocket expenses incurred on behalf of the Trust. Under the
conveyances granting the Royalty Interests, the Trust does not have any capital requirements related to drilling wells or any other operating and capital costs related to the wells.

Administrative expenses include payments to the Trustee and the Delaware Trustee as well as a quarterly fee to SandRidge
pursuant to an administrative services agreement. Each quarter, the Trustee determines the amount of funds available for distribution. Available funds are the excess cash, if any, received by the Trust from the sale of oil and natural gas production
attributable to the Royalty Interests for the quarter, over the Trusts expenses for the quarter, subject in all cases to the subordination and incentive



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provisions previously described. If at any time the Trusts cash on hand (including available cash reserves) is not sufficient to pay the Trusts ordinary course administrative expenses
as they become due, the Trust may borrow funds from the Trustee or other lenders, including SandRidge, to pay such expenses. If such funds are borrowed, no further distributions will be made to unitholders (except in respect of any previously
determined quarterly distribution amount) until the borrowed funds have been repaid, except that if SandRidge loans such funds, SandRidge may permit the Trust to make distributions prior to SandRidge being repaid. There was no such loan outstanding
at September 30, 2012 or December 31, 2011.

Under the derivatives agreement, SandRidge pays the
Trust amounts it receives from its counterparty and the Trust pays SandRidge any amounts that SandRidge is required to pay such counterparty. Additionally, the Trust receives payment directly from its counterparty to the contracts novated to the
Trust by SandRidge and is required to pay any amounts owed under those contracts directly to the counterparty. Significant payments by the Trust to SandRidge or the counterparty to the novated contracts could reduce or eliminate distributions paid
to unitholders.

2012 Trust Distributions to Unitholders.During the nine-month period ended
September 30, 2012, the Trusts distributions to unitholders were as follows:



|                      |  |                           |                                     |  |               |  |                  |           |  |  |                        |  |  |  |                 | 
|--------------------- |  | ------------------------- | ----------------------------------- |  | ------------- |  | ---------------- | --------- |  |  | ---------------------- |  |  |  | --------------- | 
|                      |  | Covered 
ProductionPeriod |                                     |  | Date Declared |  |                  | Date Paid |  |  | TotalDistribution Paid | 
|                      |  |                           |                                     |  |               |  |                  |           |  |  | (in millions)          | 
|Calendar Quarter 2012 |  |                           |                                     |  |               |  |                  |           |  |  |                        |  |  |  |                 | 
|First Quarter         |  |                           | September 1 November 30, 2011      |  |               |  | February 2, 2012 |           |  |  | February 29, 2012      |  |  |  | $          29.1 | 
|Second Quarter        |  |                           | December 1, 2011 February 29, 2012 |  |               |  | April 30, 2012   |           |  |  | May 30, 2012           |  |  |  | $          30.5 | 
|Third Quarter         |  |                           | March 1, 2012 May 31, 2012         |  |               |  | July 26, 2012    |           |  |  | August 29, 2012        |  |  |  | $          30.1 | 

Future Trust Distributions to Unitholders.On November 1, 2012, the Trust
declared a cash distribution of $0.625203 per unit covering production for the period from June 1, 2012 to August 31, 2012 for record holders as of November 14, 2012. The distribution will be paid on or about November 29, 2012
and was calculated as follows (in thousands, except for unit and per unit amounts):



|                                                                        |  |   |          | 
|----------------------------------------------------------------------- |  | - | -------- | 
|Revenues                                                                |  |   |          | 
|Royalty income                                                          |  | $ | 31,731   | 
|Derivative settlements, net                                             |  |   | 4,093    | 
|                                                                        |  |   |          | 
|Total revenues                                                          |  |   | 35,824   | 
|                                                                        |  |   |          | 
|Expenses                                                                |  |   |          | 
|Post-production expenses                                                |  |   | 28       | 
|Production taxes                                                        |  |   | 1,492    | 
|Cash reserves withheld by Trustee(1)                                    |  |   | 1,481    | 
|                                                                        |  |   |          | 
|Total expenses                                                          |  |   | 3,001    | 
|                                                                        |  |   |          | 
|Distributable income available to unitholders                           |  | $ | 32,823   | 
|                                                                        |  |   |          | 
|Distributable income per unit (52,500,000 units issued and outstanding) |  | $ | 0.625203 | 
|                                                                        |  |   |          | 



|(1) | Includes amounts withheld for payment of future Trust administrative expenses.
|--- | ------------------------------------------------------------------------------

ITEM 3.Quantitative and Qualitative Disclosures about Market Risk

This discussion provides information about commodity derivative contracts, certain benefits and obligations of which
SandRidge has passed to the Trust pursuant to a derivatives agreement effective August 1, 2011. Under the derivatives agreement, SandRidge pays the Trust amounts it receives from its counterparty under certain of its derivative contracts with a
third party, and the Trust pays SandRidge any amounts that SandRidge is required to pay its counterparty under such derivative contracts. Substantially concurrent with the execution of the derivatives agreement and again in April 2012, SandRidge
novated certain of the derivative contracts underlying the derivatives agreement to the Trust. As a party to these contracts, the Trust receives payment directly from the counterparty, and is required to pay any amounts owed directly to the
counterparty. To secure its obligations under these novated contracts, the Trust entered into a collateral agency agreement and has granted the counterparty a lien on the Royalty Interests. Under the collateral agency agreement, the Trust
pays a $15,000 annual fee to the collateral agent. Under the derivatives agreement, as Trust Development Wells are drilled, SandRidge has the right, under certain circumstances, to assign or novate to the Trust additional derivative contracts. The
commodity derivative contracts underlying the derivatives agreement are settled in cash and do not require the actual delivery of a commodity at settlement. Fixed price swap contracts are settled based upon New York Mercantile Exchange



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prices. The contracts underlying the derivatives agreement cover a portion of the anticipated future sales volumes of oil production from the Initial Wells as well as a portion of the anticipated
future production from the Trust Development Wells through March 31, 2015. See Note 5 to the unaudited financial statements contained in Part I, Item I of this Quarterly Report for notional and price information of the Trusts open oil
derivative contracts. The Trust received net settlement proceeds of approximately $1.9 million and $3.7 million related to the derivatives agreement during the three and nine-month periods ended September 30, 2012, respectively.

Commodity Price Risk. Because the Trusts primary asset and source of income is the Royalty Interests,
which generally entitles the Trust to receive a portion of the net proceeds from sales of oil and natural gas production from the Underlying Properties, the Trusts most significant market risk relates to the prices received for oil and natural
gas production. The derivative contracts described above are intended to mitigate a portion of the variability of oil prices received for the Trusts share of production from the Underlying Properties.

Credit Risk. A portion of the Trusts liquidity is concentrated in the derivative contracts described
above. The use of derivative contracts, including the arrangement between the Trust and SandRidge, involves the risk that SandRidge or its counterparty or the Trusts unaffiliated counterparty will be unable to meet their obligations under the
contracts. The Trusts counterparty under the derivatives agreement is SandRidge, whose sole current counterparty is an institution with a corporate credit rating equal to or better than an investment grade credit rating. The sole
current counterparty to the derivative contracts novated by SandRidge to the Trust is also an institution with a corporate credit rating of an investment grade credit rating. SandRidge is not required to pay the Trust to the extent of
payment defaults by SandRidges counterparty.

ITEM 4.Controls and Procedures

The Trustee conducted an evaluation of the Trusts disclosure controls and procedures, as defined in
Rules 13a-15 and 15d-15 under the Securities Act, designed to ensure that information required to be disclosed by the Trust in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported within the
time periods specified in the SECs rules and forms. Based on this evaluation, the Trustee has concluded that the disclosure controls and procedures of the Trust are effective as of the end of the period covered by this report. In its
evaluation of disclosure controls and procedures, the Trustee has relied, to the extent considered reasonable, on information provided by SandRidge.

Due to the nature of the Trust as a passive entity and in light of the contractual arrangements pursuant to which the Trust was created, including the provisions of (i) the trust agreement,
(ii) the administrative services agreement, (iii) the development agreement and (iv) the conveyances granting the Royalty Interests, the Trustees disclosure controls and procedures related to the Trust necessarily rely on
(A) information provided by SandRidge, including information relating to results of operations, the status of drilling of the Trust Development Wells, the costs and revenues attributable to the Trusts interests under the conveyance and
other operating and historical data, plans for future operating and capital expenditures, reserve information, information relating to projected production, and other information relating to the status and results of operations of the Underlying
Properties and the Royalty Interests, and (B) conclusions and reports regarding reserves by the Trusts independent reserve engineers.

There were no changes in the Trusts internal control over financial reporting during the quarter ended September 30, 2012, that have materially affected, or are reasonably likely to materially
affect, the Trustees internal control over financial reporting. The Trustee notes for purposes of clarification that it has no authority over, has not evaluated and makes no statement concerning, the internal control over financial reporting
of SandRidge.



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PART II. Other Information

ITEM 1A.Risk Factors

Risk factors relating to the Trust are contained in Item 1A of the Trusts Annual Report on Form 10-K for the
fiscal year ended December 31, 2011. No material change to such risk factors has occurred during the nine-month period ended September 30, 2012.

ITEM 6.Exhibits

See the Exhibit Index accompanying this Quarterly Report.



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SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be
signed on its behalf by the undersigned thereunto duly authorized.



| |  |                         |  |                                 
| |  | ----------------------- |  | --------------------------------
| |  | SANDRIDGE PERMIAN TRUST
| |  |                        
| |  | By:                     |  | THE BANK OF NEW YORK MELLON     
| |  |                         |  | TRUST COMPANY, N.A, Trustee     
| |  |                        
| |  | By:                     |  | /s/    Michael J. Ulrich        
| |  |                         |  | Michael J. Ulrich Vice President

Date: November 13, 2012

The registrant, SandRidge Permian Trust, has no principal executive officer, principal financial officer, board of directors or persons performing similar functions. Accordingly, no additional signatures
are available, and none have been provided. In signing the report above, the Trustee does not imply that it has performed any such function or that any such function exists pursuant to the terms of the trust agreement under which it serves.



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EXHIBIT INDEX



|            |  |                                                                                                                                                                                                                 |  |                           |     |  |             |  |            |         |  |  |             |  |  |               |            |  |  |  
|----------- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ------------------------- | --- |  | ----------- |  | ---------- | ------- |  |  | ----------- |  |  | ------------- | ---------- |  |  | -
|            |  |                                                                                                                                                                                                                 |  | Incorporated by Reference |     |  |            
|Exhibit
No. |  | Exhibit Description                                                                                                                                                                                             |  | Form                      |     |  | SECFile No. |  |            | Exhibit |  |  | Filing Date |  |  | FiledHerewith
|            |  |                                                                                                                                                                                                                 |  |                           |     | 
|3.1         |  | Certificate of Trust of SandRidge Permian Trust                                                                                                                                                                 |  |                           | S-1 |  |             |  | 333-174492 |         |  |  | 3.1         |  |  |               | 05/25/2011 |  |  |  
|            |  |                                                                                                                                                                                                                 |  |                           |     | 
|3.2         |  | Amended and Restated Trust Agreement of SandRidge Permian Trust, dated August 16, 2011, by and among SandRidge Energy, Inc., The Bank of New York Mellon Trust Company, N.A.,
and The Corporation Trust Company |  |                           | 8-K |  |             |  | 001-35274  |         |  |  | 4.1         |  |  |               | 08/19/2011 |  |  |  
|            |  |                                                                                                                                                                                                                 |  |                           |     | 
|3.3         |  | Amendment No. 1 to Amended and Restated Trust Agreement of SandRidge Permian Trust, dated June 18, 2012, by the Bank of New York Mellon Trust Company, N.A.                                                     |  |                           | 8-K |  |             |  | 001-35274  |         |  |  | 3.3         |  |  |               | 08/13/2012 |  |  |  
|            |  |                                                                                                                                                                                                                 |  |                           |     | 
|10.1        |  | Novation Agreement dated April 12, 2012 by and among SandRidge Permian Trust, SandRidge Energy, Inc., and Morgan Stanley Capital Group Inc                                                                      |  |                           | 8-K |  |             |  | 001-35274  |         |  |  | 10.1        |  |  |               | 04/13/2012 |  |  |  
|            |  |                                                                                                                                                                                                                 |  |                           |     | 
|31.1        |  | Section 302 Certification                                                                                                                                                                                       |  |                           |     |  |             |  |            |         |  |  |             |  |  |               |            |  |  | *
|            |  |                                                                                                                                                                                                                 |  |                           |     | 
|32.1        |  | Section 906 Certification                                                                                                                                                                                       |  |                           |     |  |             |  |            |         |  |  |             |  |  |               |            |  |  | *



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