Myth465 Posted February 29, 2012 Share Posted February 29, 2012 Im 30 minutes into the 3 hours and its very good. I think the Market will be surprised we have maybe half a dozen catalysts coming Sell of the Pinion Additional Trusts Sell of 250,000 Acres of Miss DOR Surprises and Bolt Ons Pushing out of debt at lower rates Well cost savings due to water related experiments in the miss and finally higher flow rates and around 25% more drilling locations in the miss due to experimentation on fracking and spacing Tom has a good sense of humor, I liked the Nigeria joke lol. NAV has almost doubled in a year. Thats worth something, SD should be at least 13 with all the changes. That will do wonders for my leaps. I closed out CHK and bought more SD. Link to comment Share on other sites More sharing options...
gordoffh Posted February 29, 2012 Share Posted February 29, 2012 myth just go to even on my jan 13 12.50 leaps after doubling down a few weeks ago and intended to move to 14's however premium is high and I think this has run in it so will ride them out a little longer - did add some common but kept my CHK - their plan looks better than ever now - now execute Link to comment Share on other sites More sharing options...
Myth465 Posted February 29, 2012 Share Posted February 29, 2012 My CHK 2014s were down about 30% about 2 weeks ago. I went all in on SD and wanted to sell CHK to buy even more SD. My SD 2014s that I just purchased are now up 33% and CHK is still sitting on the loss. I sold for SD because I understand the story much more. I like CHK but Aubrey inmo is creating a mess with his creative financing. The value is there, but the analyst are annoyed they are on CHK and have to work 3x as hard to understand the moving parts. The mezzanine financing and new entities only further complicate things. SD should be a $13 stock and the analyst are coming around. My 2013s are up 6% after being down 40% for a good chunk of last year. I plan to sell the 2013s at $10 or so, and slowly unwind 2014s if we March higher. I will hold a core amount of 2014s in my taxable account. I am just bearish on gas, and its simple easier to play oil via SD. Ward has shown he can grow NAV (doubled vs. last year) and can bring that NAV forward operationally (unlike ATPG). The stock will catch up at some point, and hopefully NAV keeps moving forward. CHK has the value and has the catalyst, but it will take time inmo. I think holding the 2013s is a good move. I had to hold my noise to buy the more expensive 2014s yesterday. Link to comment Share on other sites More sharing options...
Sea Island Posted February 29, 2012 Share Posted February 29, 2012 Myth, what is this b factor? Link to comment Share on other sites More sharing options...
Myth465 Posted February 29, 2012 Share Posted February 29, 2012 Myth, what is this b factor? Do you mean from the Analyst day page 41. Its a Geologist term, Im a trained Accountant so its all Greek to me. I know what they mean by type curve and that they use it to calculate the returns. I googled it and thought this might be useful. IMO this is what the independent Geologist are paid to verify / analysis. http://www.hamiltongroup.org/documents/Decline%20Curves%20-%20Dr%20Stephen%20Poston.pdf Link to comment Share on other sites More sharing options...
vinod1 Posted February 29, 2012 Share Posted February 29, 2012 On slide #10, the implied acreage value is shown as $6.35 billion but the resource NAV is shown as $23 billion. I would think that the value for this acreage would be closer to the price at which it has been monetized i.e. $6.35. What am I missing? What is additional value to get to the resource NAV of $23 billion? Thanks Vinod Link to comment Share on other sites More sharing options...
Sea Island Posted February 29, 2012 Share Posted February 29, 2012 OK, thanks Myth. Is the value differential the acerage at the implied value of $15,000 per acre of resource value Link to comment Share on other sites More sharing options...
Myth465 Posted February 29, 2012 Share Posted February 29, 2012 Not sure what you are asking, but will give it a crack. The acreage when drilled under the assumptions laid out has a value of $15,000. This is why Ward wants to hold it. The assumptions are probably a $95 oil price, the stated type curve, initaila production targets, and 3 acre spacing. There is upside if anything moves ups, and limited downside due to hedging. If sold a buyer will pay $4k for the acreage, put in the wells, and then reap the difference in the valuation. Also here are my updated thoughts after hearing the entire call. I focus on catalysts. § Additional Trusts § Sell of the Pinion Field § Sell / JV of 250,000 Acres of Miss t around $4000 an acre or more. § Around 25% more Miss locations due to going from 3 acre spacing to 4. § Well cost savings due to water and other related experiments in the miss. § Higher flow rates in the Miss due to figuring out the secret / cracking the code. § DOR Surprises and Bolt Ons (Ward always has upside, he will let us know once it closes). § Pushing out of debt at lower rates - The $350 Million are callable at Par in April, They are at 9.875%. The presentation also noted that NAV has almost doubled in a year. NAV is calculated using 3 Acre spacing vs. 4 in the Miss. They also priced oil at $98 rolling out to $91 and staying flat for the vast majority of the years. It appears to be a conservative calculation. We may have around 25% more drilling locations in the Miss if spacing is 4, and oil probably wont be $98 15 years out. Link to comment Share on other sites More sharing options...
vinod1 Posted March 1, 2012 Share Posted March 1, 2012 Not sure what you are asking, but will give it a crack. The acreage when drilled under the assumptions laid out has a value of $15,000. This is why Ward wants to hold it. The assumptions are probably a $95 oil price, the stated type curve, initaila production targets, and 3 acre spacing. There is upside if anything moves ups, and limited downside due to hedging. If sold a buyer will pay $4k for the acreage, put in the wells, and then reap the difference in the valuation. Also here are my updated thoughts after hearing the entire call. I focus on catalysts. § Additional Trusts § Sell of the Pinion Field § Sell / JV of 250,000 Acres of Miss t around $4000 an acre or more. § Around 25% more Miss locations due to going from 3 acre spacing to 4. § Well cost savings due to water and other related experiments in the miss. § Higher flow rates in the Miss due to figuring out the secret / cracking the code. § DOR Surprises and Bolt Ons (Ward always has upside, he will let us know once it closes). § Pushing out of debt at lower rates - The $350 Million are callable at Par in April, They are at 9.875%. The presentation also noted that NAV has almost doubled in a year. NAV is calculated using 3 Acre spacing vs. 4 in the Miss. They also priced oil at $98 rolling out to $91 and staying flat for the vast majority of the years. It appears to be a conservative calculation. We may have around 25% more drilling locations in the Miss if spacing is 4, and oil probably wont be $98 15 years out. Thanks. Now it makes sense. The market price for the acreage is $4k per acre (based on past historical transactions) but the mark to model price is $15k per acre. I assumed that they would be pretty close to each other. Vinod Link to comment Share on other sites More sharing options...
Myth465 Posted March 1, 2012 Share Posted March 1, 2012 It wouldnt make sense if there wasnt upside for the buyer. They want a return on their investment. Ward is interesting, he bought this acreage for $200, and wants to retain it for the full NAV of $15,000. JV partners also I guess would be paying for the know how / secret sauce. From the presentation it doesnt look like all the other guys are getting the same returns, because they arent employing all of the same cost savings. I am sure CHK will copy though, SD gets to look at the pilot program which features 4 acre spacing, I am sure they gave up some intel for that privilege. Link to comment Share on other sites More sharing options...
alertmeipp Posted March 1, 2012 Share Posted March 1, 2012 I think both CHK and SD will do very well if econ stays well. Both should at least double in 2 years if they don't get a buyout. for SD, I don't think Ward is going to sell the that 200k anytime soon - he sounded like he want to develop it further before doing a JV or sale. (Maybe it's a negotiations tactics.) Link to comment Share on other sites More sharing options...
alertmeipp Posted March 2, 2012 Share Posted March 2, 2012 I am thinking the selling is from DOR holders cashing in? This soon will end. Link to comment Share on other sites More sharing options...
Myth465 Posted March 2, 2012 Share Posted March 2, 2012 DOR hasnt closed. At least I dont think it has, also we have a lock up with the largest holder. They could be Arbing SD though to lock in their profits. Link to comment Share on other sites More sharing options...
alertmeipp Posted March 2, 2012 Share Posted March 2, 2012 it closes next Q but I don't see a reason that it won't so I think there is some profit taking and arb going on. Link to comment Share on other sites More sharing options...
alertmeipp Posted March 2, 2012 Share Posted March 2, 2012 and the beating continues - same thing happened to the Arena buyout. Link to comment Share on other sites More sharing options...
AZ_Value Posted March 3, 2012 Share Posted March 3, 2012 and the beating continues - same thing happened to the Arena buyout. Same thing happened for most of the 2011 second half of the year. Best thing is to ignore it. Big worry is if you're carrying 2013 LEAPS. Link to comment Share on other sites More sharing options...
alertmeipp Posted March 3, 2012 Share Posted March 3, 2012 and the beating continues - same thing happened to the Arena buyout. Same thing happened for most of the 2011 second half of the year. Best thing is to ignore it. Big worry is if you're carrying 2013 LEAPS. I left with some 10s 15s - the 15s will like go worthless. Link to comment Share on other sites More sharing options...
QLEAP Posted March 3, 2012 Share Posted March 3, 2012 http://www.investorvillage.com/groups.asp?mb=16083&mn=21594&pt=msg&mid=11511239 Link to comment Share on other sites More sharing options...
alertmeipp Posted March 20, 2012 Share Posted March 20, 2012 SD performance has been a major disappointment. PPS seems getting locked with the $8.02 buyout price. Link to comment Share on other sites More sharing options...
gordoffh Posted March 20, 2012 Share Posted March 20, 2012 SD performance has been a major disappointment. PPS seems getting locked with the $8.02 buyout price. You can say that again - one of my largest holdings and I like what ward has as a plan but the share price movement sure causes grief - made a fair bit on this last spring and will probably hold for the long term but every positive move followed by the inevitable downturn is tough - the story seems sound - a BAC. Type move would be welcome Link to comment Share on other sites More sharing options...
tombgrt Posted March 20, 2012 Share Posted March 20, 2012 http://www.smartmoney.com/invest/stocks/the-400-mans-new-big-bet-1332271348707/ Of SandRidge, Mecham likes its "enviable acreage holdings," a low-risk high-return drilling program, low and stable operating costs, and a screamingly cheap stock price." SandRidge stock hit $68 during the oil boom in 2008 -- compared to $8.42, or 37 times forecast earnings, now. I should check out SD properly but fear that I'll find another great company for which I really have no money left. :-X Link to comment Share on other sites More sharing options...
Packer16 Posted March 21, 2012 Share Posted March 21, 2012 I sold a modestly cheap holding for this 50 cent dollar that is growing due to Mississippian play potential and financial repression which will keep interest rates low. I like the royalty trust as an exit vehicle and a way to realize value that I see few others using. Packer Link to comment Share on other sites More sharing options...
Myth465 Posted March 22, 2012 Share Posted March 22, 2012 Judging by some of the postings on Yahoo which lead to the completion logs, Ward has found some upside in the drilling. The new IPs from some of the new wells are staggering. I am holding my oversized position and will unload some at $11, I may unload the 2013s around $9 towards the end of the year. The one negative is these new IPs could mean we JV / sale 0 acres. Ward will want to hold it all. I also plan on buying the Preferreds for a tiny preferred allocation I plan on starting. They yield 4.5% and are just about in the money. We havent heard anything in a month, and the trust should be closing soon. Once the offshore purchase closes we should hear the real reasons as to why the purchase had to be made. I am guessing there is hidden upside / a plan to realize value. Link to comment Share on other sites More sharing options...
alertmeipp Posted March 22, 2012 Share Posted March 22, 2012 Not sure what the pps is waiting for here. They can probably clear their LT debt if they choose to sell 500k acres + all remaining trust units. For me, it's fairly straight forward to see value. Absent another Euro like shock, I think we will see double by Xmas after the numbers starting showing up.. Myth - why u think no JV given the new spacing? Link to comment Share on other sites More sharing options...
Myth465 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. Link to comment Share on other sites More sharing options...
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