alertmeipp Posted March 22, 2012 Share Posted March 22, 2012 Not so much the spacing, that would be backed into any JV. Its probably going to be 4 and that will be confirmed after the CHK experiment. I think they wouldnt want to JV acreage if the intial production / flow rates move from around 300 to around 800. I dont know if people are just posting the best flow rates, or if SD has found the secret sauce. If they can get flow rates to 500 bop consistently, then I doubt Ward would sell acreage for $4k. ok... should they call off the trust then? hmmm.. actually I can't remember now, the pending trust is on Permian? Link to comment Share on other sites More sharing options...
Myth465 Posted March 22, 2012 Share Posted March 22, 2012 Trust is Miss 2 and its a good way to raise capital. They are IPOing producing wells so this doesnt effect that. Also not sure if the IPs are moving up due to drilling changes or due to the region being drilled. Again it may be cherry picking of the best wells though. I may buy the trust due to the fact that its a trap for retail investors that works quite well. They will allocate an extra rig to juice the dividend and will sell in 6 - 9 months once the trust has moved up 40% due to the high yield. If they have found a new secret sauce then they could juice the dividend without adding an extra rig due to the increased IPs. Link to comment Share on other sites More sharing options...
alertmeipp Posted March 22, 2012 Share Posted March 22, 2012 Thanks Myth. I live in Canada so I don't think I can't get a hand on the trust. If they are so confidence on the Miss, they should sell Permian and move all resources to Miss. No reasons to got for 70% IRR when u can get 90%. Link to comment Share on other sites More sharing options...
Myth465 Posted March 22, 2012 Share Posted March 22, 2012 Thats not a bad idea, but you arent going to get PV10 for it or NAV. The other guy is going to want a 40% return. Permian is a nice little growth engine, and who knows what the upside will be with future technology. Its factory. You cant do much more there due to logistics. You also have EOR prospects with gas from the Century Plant. Permian might as well be held, its a cash cow. I would prefer trust after trust in the Permian area. Ward is on to something, if he can hold as much as he can, avoid a take over, drill baby drill, and fix the balance sheet to get us towards the defined 2x EBITDA then the share price will take care of itself. Eventually SD will be taken over if they cant perform... Its all quite exciting. We have 2 very strong legs, with a third leg pending. We may be able to acquire offshore assets at 2x EBITDA. Link to comment Share on other sites More sharing options...
alertmeipp Posted March 22, 2012 Share Posted March 22, 2012 Dynamic has some nice gas hedge for next couple years. The cash flow will be lower if those hedge are not in place. Link to comment Share on other sites More sharing options...
Swizzled Posted March 23, 2012 Share Posted March 23, 2012 In early April through Seeking Alpha I'm taking part in an interview with Tom Ward. Apparently I get to submit five questions. If anyone has specific questions that they would like me to ask, let me know: http://valueinvestorcanada.blogspot.ca/2012/03/contribute-your-questions-for-interview.html Link to comment Share on other sites More sharing options...
alertmeipp Posted March 23, 2012 Share Posted March 23, 2012 This team has been transparent, so none really good. - With low risk of execution and willingness to hedge, why market gives 7 dollars pps while management keeps mentioning $60 NAV - where is the disconnect? - Any risk of rising cost in the Miss play as the field become more well known? - In the Investor Day call, it was mentioned that they can start harvest their water disposal infra-structures when the field get more mature? What's the timeline on that? - Will Sandridge be doing any major acquisitions between it reaches its 2014 goal? Should we see SD as a E&P company with a focus in Miss and Central or investment fund that can go wherever cheap oil is? - how come no insider buy at this level? Is it because of pending deals? Link to comment Share on other sites More sharing options...
Packer16 Posted March 23, 2012 Share Posted March 23, 2012 How do lower oil costs impact estimated NAV? For example at $80 and $60 per barrel. In my opinion, this is the highest risk so it would be useful to determine the impact of lower oil prices. Thx. Packer Link to comment Share on other sites More sharing options...
BargainValueHunter Posted March 23, 2012 Share Posted March 23, 2012 Mr. Ward: What generally unexpected corporate decision will you make next that could possibly throw shareholders for a loop? Link to comment Share on other sites More sharing options...
mountboney Posted March 23, 2012 Share Posted March 23, 2012 My question is really just a pet peeve. By far the number one issue with SD is the long term performance of the Mississippi Lime. The market is obviously skeptical of SD's claim of 9000, 450 MBOE wells over the 2 mm acres, and rightfully so. These kind of claims just create eye rolling. The geology is complex and heterogenous. The natural fracturing is complex. The structure is complex. There are risks and ultimately much of the acreage will not be economic. But it's not bad news and I'm not negative on SD, just realistic. In fact the complicated geology is what created the opportunity in the first place. So my question would be something like - "The market is clearly skeptical of the 9000 well scenario in the Mississippi. Would SD not be better served if you provided more color on the risk and unknowns, along with the positive developments, in the Mississippi." SD is well undervalued even if a fraction of the Mississippi acreage is economic. Why create distrust by over-promoting? Link to comment Share on other sites More sharing options...
gordoffh Posted March 23, 2012 Share Posted March 23, 2012 Lots of chatter on yahoo board re takeover - up smartly today on volume - who knows ? This stock is up and down like a toilet seat but one of these days to the moon Alice. For you older guys out there Link to comment Share on other sites More sharing options...
alertmeipp Posted March 23, 2012 Share Posted March 23, 2012 I will take 20 bucks, please. Link to comment Share on other sites More sharing options...
JAllen Posted March 30, 2012 Share Posted March 30, 2012 This Range Resources presentation is interesting: http://www.rangeresources.com/rangeresources/files/aa/aaaf2a62-c9f9-4355-a6b5-73959e235d2a.pdf They're showing 400-500EURs but are focusing a county or two east of SD because the oil percentage is higher there (~95% as opposed to half west of there), although SD seems to be focused on the whole thing. Link to comment Share on other sites More sharing options...
zippy1 Posted April 9, 2012 Share Posted April 9, 2012 SandRidge Mississippian Trust II Launches Initial Public Offering OKLAHOMA CITY, April 9, 2012 /PRNewswire/ -- SandRidge Mississippian Trust II (the Trust) announced today that it has commenced an initial public offering of 26,000,000 common units representing a 52% beneficial interest in the Trust, along with 3,900,000 additional common units that may be purchased at the option of the underwriters to cover over-allotments. The initial public offering is being made pursuant to a Registration Statement on Form S-1 and Form S-3 previously filed with the U.S. Securities and Exchange Commission. Following completion of the offering, SandRidge Energy, Inc. (NYSE: SD - News) (SandRidge), as sponsor of the Trust, will own approximately 11.3 million common units, assuming no exercise of the underwriters' option, and approximately 12.4 million subordinated units convertible into common units, and the Trust will have a total of 49,725,000 units outstanding. The common units have been approved for listing on the New York Stock Exchange, and will trade under the symbol "SDR." http://finance.yahoo.com/news/sandridge-mississippian-trust-ii-launches-105300905.html Link to comment Share on other sites More sharing options...
gordoffh Posted April 9, 2012 Share Posted April 9, 2012 Too bad the last 2 times they have come out when market or sector weakness. They probably will get the lower pricing with oil selling off Link to comment Share on other sites More sharing options...
alertmeipp Posted April 9, 2012 Share Posted April 9, 2012 market for oil companies has been weak since beginning of the year. Looks at what SD has done in last few months and its share price doesn't really reflect those. Link to comment Share on other sites More sharing options...
alertmeipp Posted April 10, 2012 Share Posted April 10, 2012 Guys, what EV/EBITDA multiple will you assign for 2014 SD's 2 billions EBITDA? Use 4 billions debt and 500million share counts - 4x - 8x will give 8$ to 24$ pps. Link to comment Share on other sites More sharing options...
Myth465 Posted April 10, 2012 Share Posted April 10, 2012 I view SD as an asset play with assets worth $30 a share. They are converting those assets into cash flow, and also increasing the NAV value. As long as SD, trades below NAV and keeps growing NAV I am comfortable holding. Link to comment Share on other sites More sharing options...
alertmeipp Posted April 10, 2012 Share Posted April 10, 2012 I think well-hedged cash flow is a good supplement for NAV. The 14 Leaps are getting cheap? Link to comment Share on other sites More sharing options...
Myth465 Posted April 10, 2012 Share Posted April 10, 2012 I think well-hedged cash flow is a good supplement for NAV. The 14 Leaps are getting cheap? I agree on both accounts, that what makes SD worthwhile, unlike ATPG they are turning assets into cash flow. $2 billion is interesting, not because of a multiple, but mainly because they will be self funding at that point. Then transactions will be more about increasing NAV, and less about funding drilling. Link to comment Share on other sites More sharing options...
Ross812 Posted April 10, 2012 Share Posted April 10, 2012 Has anyone considered the convertible preferred shares? At 122 you are buying SD shares for 9.75 and pocketing (14.875/12.48) $1.19 in dividends per common share. Sdrxp trades at a premium to the common and you will do better buying the common if SD starts firing on all cylinders in the next two years. The preferred seem like a good way to make 7% while you wait for SD to take off. When it does take off, it looks like the gain after conversion is going to be 20-30% less than if you would have bough the common. 20-30% would be hit by the 7% dividend in 3-4 years so you are betting the price would stay below 10.41 for the next few years. Thoughts? Link to comment Share on other sites More sharing options...
Myth465 Posted April 10, 2012 Share Posted April 10, 2012 Ya I have mentioned them in another thread, and tried to buy a chunck but failed to get a bit even when going up 2-3 dollars. I prefer the leaps, but the converts in FTP, CHK, SD, and a few other names, really make you pretty care free about price movements and timing of value realization. Link to comment Share on other sites More sharing options...
alertmeipp Posted April 10, 2012 Share Posted April 10, 2012 those pfds really make u care less about daily quotes. I try to sell more ATPGP, I can't see even what's the current bid. Link to comment Share on other sites More sharing options...
alertmeipp Posted April 10, 2012 Share Posted April 10, 2012 Down to 7, really an ouch for me. Again, I had high hope for this one. Add some $10 14 leaps last few days. :'( http://online.wsj.com/article/SB10001424052702304072004577326284166231336.html Link to comment Share on other sites More sharing options...
ourkid8 Posted April 10, 2012 Share Posted April 10, 2012 I am really debating doubling my position as it is really tempting at the current price. S Link to comment Share on other sites More sharing options...
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