FFHWatcher Posted May 7, 2012 Share Posted May 7, 2012 Myth, I agree that Ward is a great investor with SD corp. assets. I asked the question because you made the comment within the paragraph that related to his personal hedge fund so I thought you were referring to his pesonal investment performance. Personally, I wish he stayed in Oklahoma to run SD. His promotional gigs obviously aren't successfully spreading the word, same goes for Chad at FTP. My suggestion... Go sit at your desk and create real value. Link to comment Share on other sites More sharing options...
Myth465 Posted May 7, 2012 Share Posted May 7, 2012 I have mixed feelings. The promos have really helped me understand the story, but you are right the market isnt responding. SD just needs to sell 400,000 acres for 1.8 billion cash and carry. The stock price would respond if that happened. Not hard when you have 200k in extra that showed up cheaply. Until then we are a slave to WTI. Selling 200k to 400k along with another billion dollar Miss trust, and 500 million permian trust would be nice though. A few small bolt ons in the Gulf at 2x cash flow wouldnt be bad either... Link to comment Share on other sites More sharing options...
alertmeipp Posted May 7, 2012 Share Posted May 7, 2012 Mr. market currently has no love to commodities stocks. It's his job to promote the company either way. The value is now self-creating daily thru drill bits. I regret that I bought some LEAPs once again. Link to comment Share on other sites More sharing options...
DCG Posted May 8, 2012 Share Posted May 8, 2012 Mr. market currently has no love to commodities stocks. It's his job to promote the company either way. No it's not. It's his job to run and grow the company, and to not care about short-term movements of the stock. Link to comment Share on other sites More sharing options...
alertmeipp Posted May 8, 2012 Share Posted May 8, 2012 Mr. market currently has no love to commodities stocks. It's his job to promote the company either way. No it's not. It's his job to run and grow the company, and to not care about short-term movements of the stock. I don't think its either or. He can run and grow the company as well as promoting it. Link to comment Share on other sites More sharing options...
DCG Posted May 8, 2012 Share Posted May 8, 2012 Mr. market currently has no love to commodities stocks. It's his job to promote the company either way. No it's not. It's his job to run and grow the company, and to not care about short-term movements of the stock. I don't think its either or. He can run and grow the company as well as promoting it. Right, but my point is promoting the company and promoting the stock are two different things. He's nowhere near as bad as Mclendon though.. Who does the rounds of talk shows saying CHK stock should double. Link to comment Share on other sites More sharing options...
AZ_Value Posted May 13, 2012 Share Posted May 13, 2012 I have mixed feelings. The promos have really helped me understand the story, but you are right the market isnt responding. SD just needs to sell 400,000 acres for 1.8 billion cash and carry. The stock price would respond if that happened. Not hard when you have 200k in extra that showed up cheaply. Until then we are a slave to WTI. Selling 200k to 400k along with another billion dollar Miss trust, and 500 million permian trust would be nice though. A few small bolt ons in the Gulf at 2x cash flow wouldnt be bad either... I don't know Myth. I agree to a certain extent with you about asset sales and Ward has said that a net sale of about 250K acres could be in the works, but if you think about it, doing all that selling you describe would get the stock moving but is it in the best interest in the long run? It sure looks great to sell assets for $4,600/acre that he bought for $215/acre, but hanging on to those assets and exploiting them rather than monetizing them would give SD a value of $14,000/acre. To me this has always been a story about having the foresight to acquire great assets at really dirt cheap prices and then having to get creative in finding the cash to exploit them. If you think about it, even the Dynamic acquisition was done to get their hands on immediate cash flows on the cheap which means that much less assets they have to sell in their main plays on the continent. I think we sometimes are our own biggest enemy as we tend to play in the options world and the problem with options every now and then something happens like a scandal about the CEO or something and someone calls time on us before our game is over. But I do think SD's story is developing as expected and it will continue to do so. Link to comment Share on other sites More sharing options...
Packer16 Posted May 13, 2012 Share Posted May 13, 2012 It looks like CHK has 2.0 million acers for sale in the Mississippi. It will be interesting to see if SD can either get a good deal or can structure a win-win deal with CHK. Packer Link to comment Share on other sites More sharing options...
Myth465 Posted May 13, 2012 Share Posted May 13, 2012 I have till 2014 on the bulk of my options. I havent done a calculation, but I remember on a call a few quarters ago a discussion between Ward and an analyst. The PV really drops off after 10 years or so. Ward wants less then 10 years of inventory, and probably has closer to 15 right now. You want to pull that forward to avoid having most of it discounted away. The only way to do that is to sell some of it. He doesnt want to sell the Permian which makes sense. Its like a factory, and no one will drill it better than them. You run the 10 rigs or so there for the next 10 years, and get 80% IRRs. You can do a few trusts along the way and that area of the company is basically self funding. In this Miss we just so happened to pick up an extra 200k for maybe $400 an acre. He could today sell that for $4k to $6k, generating a 10k return in a matter of months. He could probably sell acreage in the old Miss for more due to it being proved out. Instead of getting a 10x return and basically eliminating the funding gap till 2014, you want him to hobble along for another few years dependant on the markets. You also risk a take under because the shares wont rise without the gap being closed, and with that crippled balance sheet. Sometimes you got to give a little to get alot. I would prefer no funding gap, and a large JV partner for another 200k-400k (we would still have 800k - 1 million to ourselves, we got 200k just out of the blue). Then finally a billion dollar trust in the Permian and Miss each year (selling 50% of each would net SD $1 billion in cash, $1 billion in shares). This cash should be used to reduce debt, and acquire offshore assets. Who losses here? We lose out on some of the NAV from $4k / $6k to $14k on those acres, but after you discount that 10 - 15 years do we really loss? NAV per acre is probably closer to $20k after taking into account oil price risings and 4 acre spacing, but still its being discounted over 15 years because these would be the last wells drilled. Those are my thoughts, let me know what you think. Link to comment Share on other sites More sharing options...
king888 Posted May 14, 2012 Share Posted May 14, 2012 I have just finished reading 34 pages on this thread. It's clear that why SD is one of favorite stock in the board. I have some questions that I still do not understand because I am very new to O&G industry. How many of production out of SD has been hedged ? I read in the investor presentation. SD has 80% of Oil production hedged in 2012 but only 13% of NG is hedged (swap&collar) in 2012 . Is this correct ? Link to comment Share on other sites More sharing options...
FFHWatcher Posted May 14, 2012 Share Posted May 14, 2012 I can't put my finger on the exact number but I believe that SD isn't planning on selling much NG into the markets until the prices improve, therefore, not much of a reason to hedge production (as there isn't any...or at least not very much). Link to comment Share on other sites More sharing options...
ourkid8 Posted May 15, 2012 Share Posted May 15, 2012 I just significantly added to my position earlier today, I cannot believe how this stock is selling at this price!!! Anyone else added? Link to comment Share on other sites More sharing options...
Zorrofan Posted May 15, 2012 Share Posted May 15, 2012 Why the big drop today? SD is fairly well hedged so I am not sure why the drop in oil would cause such a large drop... cheers Zorro Link to comment Share on other sites More sharing options...
gordoffh Posted May 15, 2012 Share Posted May 15, 2012 I have a large position in this stock and thought we were through with this volatility with the positive last quarter. They are meeting all targets and wells are producing better than expected. It will take time for the drill bit to offset the debt but barring a complete collapse of oil they should do extremely well. The hedges will take them tnrough a fairly long period. I am adding as the stock drops to average down a bit even though I have enough. Been a tough couple of weeks when added to my position in MFC but will hold. Never thought stock would approach the 5's again but such is the market. Bought some may calls just before the quarter for a flip in case of positive news. Well I won,t be doing that again. Link to comment Share on other sites More sharing options...
enoch01 Posted May 15, 2012 Share Posted May 15, 2012 Why the big drop today? SD is fairly well hedged so I am not sure why the drop in oil would cause such a large drop... cheers Zorro I think it's because I started a position halfway through the day. Link to comment Share on other sites More sharing options...
alertmeipp Posted May 16, 2012 Share Posted May 16, 2012 Sucks, this might have to do with CHK. Link to comment Share on other sites More sharing options...
Myth465 Posted May 16, 2012 Share Posted May 16, 2012 SD has always been a slave to WTI. This happened last year, and I wanted to buy more. Then it moved up 22% on the announcement of a Miss JV. I predict similar results this time around. Link to comment Share on other sites More sharing options...
alertmeipp Posted May 16, 2012 Share Posted May 16, 2012 90$ oil is like ~75% IRR. And next couple years is well hedged. Even 60$ won't kill this company, that's still a respectable 30 IRR. But they probably could have picked up Dynamic cheaper now. Link to comment Share on other sites More sharing options...
AZ_Value Posted May 16, 2012 Share Posted May 16, 2012 Re: SD - SandRidge Energyk=topic=3427" data-ipsquote-contentclass="forums_Topic" 76918#msg76918 data-ipsquote-timestamp=1336952268] I have till 2014 on the bulk of my options. I havent done a calculation, but I remember on a call a few quarters ago a discussion between Ward and an analyst. The PV really drops off after 10 years or so. Ward wants less then 10 years of inventory, and probably has closer to 15 right now. You want to pull that forward to avoid having most of it discounted away. The only way to do that is to sell some of it. He doesnt want to sell the Permian which makes sense. Its like a factory, and no one will drill it better than them. You run the 10 rigs or so there for the next 10 years, and get 80% IRRs. You can do a few trusts along the way and that area of the company is basically self funding. In this Miss we just so happened to pick up an extra 200k for maybe $400 an acre. He could today sell that for $4k to $6k, generating a 10k return in a matter of months. He could probably sell acreage in the old Miss for more due to it being proved out. Instead of getting a 10x return and basically eliminating the funding gap till 2014, you want him to hobble along for another few years dependant on the markets. You also risk a take under because the shares wont rise without the gap being closed, and with that crippled balance sheet. Sometimes you got to give a little to get alot. I would prefer no funding gap, and a large JV partner for another 200k-400k (we would still have 800k - 1 million to ourselves, we got 200k just out of the blue). Then finally a billion dollar trust in the Permian and Miss each year (selling 50% of each would net SD $1 billion in cash, $1 billion in shares). This cash should be used to reduce debt, and acquire offshore assets. Who losses here? We lose out on some of the NAV from $4k / $6k to $14k on those acres, but after you discount that 10 - 15 years do we really loss? NAV per acre is probably closer to $20k after taking into account oil price risings and 4 acre spacing, but still its being discounted over 15 years because these would be the last wells drilled. Those are my thoughts, let me know what you think. I think you're right. I almost forgot why I personally asked Ward about his answer to all his critics who say that fixing SD's balance sheet is not a priority for him. I asked him because it's priority for me :) I agree with you, if SD shareholders could chose, I think we would all chose to close the funding gap so that we don't take on any additional debt and then work on solidifying the balance sheet. All in all your position makes more sense than mine I think. Link to comment Share on other sites More sharing options...
Myth465 Posted May 16, 2012 Share Posted May 16, 2012 Thanks AZ. Hopefully we both come through with long term gains. Ward has always been a few steps ahead of me, and much more creative. He will sort things out. Link to comment Share on other sites More sharing options...
ourkid8 Posted May 18, 2012 Share Posted May 18, 2012 Does anyone know if Prem still owns Sandridge in his personal account? What is his percentage ownership in the company? Link to comment Share on other sites More sharing options...
gordoffh Posted May 22, 2012 Share Posted May 22, 2012 I don,t know about the rest of you SD holders but I have to admit I am getting whiplash the way this stock goes up and down. Can only assume the big machines are playing this. Have been for the most part buy and hold but certainly could have day traded this if was so inclined. Keep drilling and bringing those wells on line and at some point you would assume value would be recognized. Link to comment Share on other sites More sharing options...
alertmeipp Posted May 22, 2012 Share Posted May 22, 2012 I don,t know about the rest of you SD holders but I have to admit I am getting whiplash the way this stock goes up and down. Can only assume the big machines are playing this. Have been for the most part buy and hold but certainly could have day traded this if was so inclined. Keep drilling and bringing those wells on line and at some point you would assume value would be recognized. LEAPS Link to comment Share on other sites More sharing options...
KFRCanuk Posted May 23, 2012 Share Posted May 23, 2012 This is getting crazy cheap now $6! UG. Link to comment Share on other sites More sharing options...
Zorrofan Posted May 23, 2012 Share Posted May 23, 2012 We have falling oil prices, Europe being....europe, and Patriot coal rumours of chapter 11. This might get even cheaper. I am waiting for FFH and Prem to start buying, for value guys they seemed to call the top on this one pretty well. cheers Zorro Link to comment Share on other sites More sharing options...
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