longlake95 Posted March 13, 2013 Share Posted March 13, 2013 I thought it would trade way up, in after hours trading? Link to comment Share on other sites More sharing options...
Parsad Posted March 13, 2013 Share Posted March 13, 2013 Sanjeev Congrats.. http://www.reuters.com/article/2013/03/13/us-sandridge-settlement-idUSBRE92C14X20130313?feedType=RSS&feedName=innovationNews&rpc=43 Then http://finance.yahoo.com/news/sandridge-energy-expands-board-directors-200500922.html Thanks! It's right up there as one of our largest holdings. I'm really looking forward to what the remaining board, Fairfax and TPG can do with it now. And at least they won't be blowing through $1.2B in capital expenditures next year. I suspect if they remove Tom Ward eventually, they'll come to some compromise in his settlement package, otherwise they could probably sue him. Although, it may just be better to rein him in, provide far more oversight and let him continue to generate shareholder value but with a leash on capital expenditures, compensation and expansion. Cheers! Link to comment Share on other sites More sharing options...
muscleman Posted March 13, 2013 Share Posted March 13, 2013 Sanjeev Congrats.. http://www.reuters.com/article/2013/03/13/us-sandridge-settlement-idUSBRE92C14X20130313?feedType=RSS&feedName=innovationNews&rpc=43 Then http://finance.yahoo.com/news/sandridge-energy-expands-board-directors-200500922.html Thanks! It's right up there as one of our largest holdings. I'm really looking forward to what the remaining board, Fairfax and TPG can do with it now. And at least they won't be blowing through $1.2B in capital expenditures next year. I suspect if they remove Tom Ward eventually, they'll come to some compromise in his settlement package, otherwise they could probably sue him. Although, it may just be better to rein him in, provide far more oversight and let him continue to generate shareholder value but with a leash on capital expenditures, compensation and expansion. Cheers! Prasad, would you mind disclosing how much of your total portfolio is in SD? I have around 10%. I think the current outcome is the best. SD does need transition periods to make it operate in a better way. I think TPG is probably giving up the rights to sue TW for his related party transactions in order to get this settlement outcome. Link to comment Share on other sites More sharing options...
alertmeipp Posted March 13, 2013 Share Posted March 13, 2013 I don't really like the news. TPG is getting control with holding only 7% and creating uncertainty til June. Link to comment Share on other sites More sharing options...
rogermunibond Posted March 13, 2013 Share Posted March 13, 2013 I don't really like the news. TPG is getting control with holding only 7% and creating uncertainty til June. And Tom Ward has created more uncertainty with his lack of strategy for longer and he owns less than TPG. Link to comment Share on other sites More sharing options...
alertmeipp Posted March 13, 2013 Share Posted March 13, 2013 I don't really like the news. TPG is getting control with holding only 7% and creating uncertainty til June. And Tom Ward has created more uncertainty with his lack of strategy for longer and he owns less than TPG. how much % of TW's networth is tied to SD? How about TPG? Link to comment Share on other sites More sharing options...
Myth465 Posted March 14, 2013 Share Posted March 14, 2013 I don't really like the news. TPG is getting control with holding only 7% and creating uncertainty til June. LOL Link to comment Share on other sites More sharing options...
Parsad Posted March 14, 2013 Share Posted March 14, 2013 Sanjeev Congrats.. http://www.reuters.com/article/2013/03/13/us-sandridge-settlement-idUSBRE92C14X20130313?feedType=RSS&feedName=innovationNews&rpc=43 Then http://finance.yahoo.com/news/sandridge-energy-expands-board-directors-200500922.html Thanks! It's right up there as one of our largest holdings. I'm really looking forward to what the remaining board, Fairfax and TPG can do with it now. And at least they won't be blowing through $1.2B in capital expenditures next year. I suspect if they remove Tom Ward eventually, they'll come to some compromise in his settlement package, otherwise they could probably sue him. Although, it may just be better to rein him in, provide far more oversight and let him continue to generate shareholder value but with a leash on capital expenditures, compensation and expansion. Cheers! Prasad, would you mind disclosing how much of your total portfolio is in SD? I have around 10%. I think the current outcome is the best. SD does need transition periods to make it operate in a better way. I think TPG is probably giving up the rights to sue TW for his related party transactions in order to get this settlement outcome. Almost 12%. I like the outcome too. The new board can implement some controls and conduct due diligence, while Tom remains at the company. You know that SD is now not going to be able to blow through all of that $2.6B in cash they received for the Permian assets, and anything that happens going forward will increase shareholder value...be it development of remaining properties and assets, sale of properties and assets, and there will be strict expenditure controls...bye, bye private jets! Cheers! Link to comment Share on other sites More sharing options...
Parsad Posted March 14, 2013 Share Posted March 14, 2013 I don't really like the news. TPG is getting control with holding only 7% and creating uncertainty til June. The only uncertainty is around Tom Ward...not the direction of the company. Everything, whether Tom stays or not, is going to run through the board now...just like CHK. And what was the alternative: - I did not want to see Tom spend over $1.2B in capital expenditures in 2013! - I don't want SD to have over 120% debt to equity again! - I don't want multiple private jets at Sandridge. - I don't want SD buying properties from Tom's children's trusts. - I don't want Tom reaping huge rewards in royalty trusts from properties the company owns. - I don't want SD buying a box at the Oklahoma Thunder. - I don't want lavish head offices built as if money was pouring out of our asses like Apple or Google! I want accountability to shareholders from management and the board. I want to see the executives' pockets lined with bonuses and incentives only when shareholder pockets are lined with returns on invested capital. I want a business with a reputation of gold, not breaches of ethics and inherent conflicts of interest. Cheers! Link to comment Share on other sites More sharing options...
lessthaniv Posted March 14, 2013 Share Posted March 14, 2013 I like the arrangement. Tom has new parents. Link to comment Share on other sites More sharing options...
Kiltacular Posted March 14, 2013 Share Posted March 14, 2013 I like the arrangement. Tom has new parents. Where was TPG when I was a kid !?!? Just kidding Mom and Dad Link to comment Share on other sites More sharing options...
Myth465 Posted March 14, 2013 Share Posted March 14, 2013 I don't really like the news. TPG is getting control with holding only 7% and creating uncertainty til June. The only uncertainty is around Tom Ward...not the direction of the company. Everything, whether Tom stays or not, is going to run through the board now...just like CHK. And what was the alternative: - I did not want to see Tom spend over $1.2B in capital expenditures in 2013! - I don't want SD to have over 120% debt to equity again! - I don't want multiple private jets at Sandridge. - I don't want SD buying properties from Tom's children's trusts. - I don't want Tom reaping huge rewards in royalty trusts from properties the company owns. - I don't want SD buying a box at the Oklahoma Thunder. - I don't want lavish head offices built as if money was pouring out of our asses like Apple or Google! I want accountability to shareholders from management and the board. I want to see the executives' pockets lined with bonuses and incentives only when shareholder pockets are lined with returns on invested capital. I want a business with a reputation of gold, not breaches of ethics and inherent conflicts of interest. Cheers! The only things better then the current outcome would be a $10 sale or Parsad as Chairman. I agree with just about everything you wrote. Link to comment Share on other sites More sharing options...
muscleman Posted March 14, 2013 Share Posted March 14, 2013 I don't really like the news. TPG is getting control with holding only 7% and creating uncertainty til June. The only uncertainty is around Tom Ward...not the direction of the company. Everything, whether Tom stays or not, is going to run through the board now...just like CHK. And what was the alternative: - I did not want to see Tom spend over $1.2B in capital expenditures in 2013! - I don't want SD to have over 120% debt to equity again! - I don't want multiple private jets at Sandridge. - I don't want SD buying properties from Tom's children's trusts. - I don't want Tom reaping huge rewards in royalty trusts from properties the company owns. - I don't want SD buying a box at the Oklahoma Thunder. - I don't want lavish head offices built as if money was pouring out of our asses like Apple or Google! I want accountability to shareholders from management and the board. I want to see the executives' pockets lined with bonuses and incentives only when shareholder pockets are lined with returns on invested capital. I want a business with a reputation of gold, not breaches of ethics and inherent conflicts of interest. Cheers! The only things better then the current outcome would be a $10 sale or Parsad as Chairman. I agree with just about everything you wrote. Yep... Except that the stock price didn't seem to move much on this news... Fortunately I had only a small position in call options and a large position in stocks, so I won't be affected that much. Link to comment Share on other sites More sharing options...
alertmeipp Posted March 14, 2013 Share Posted March 14, 2013 I don't really like the news. TPG is getting control with holding only 7% and creating uncertainty til June. The only uncertainty is around Tom Ward...not the direction of the company. Everything, whether Tom stays or not, is going to run through the board now...just like CHK. And what was the alternative: - I did not want to see Tom spend over $1.2B in capital expenditures in 2013! - I don't want SD to have over 120% debt to equity again! - I don't want multiple private jets at Sandridge. - I don't want SD buying properties from Tom's children's trusts. - I don't want Tom reaping huge rewards in royalty trusts from properties the company owns. - I don't want SD buying a box at the Oklahoma Thunder. - I don't want lavish head offices built as if money was pouring out of our asses like Apple or Google! I want accountability to shareholders from management and the board. I want to see the executives' pockets lined with bonuses and incentives only when shareholder pockets are lined with returns on invested capital. I want a business with a reputation of gold, not breaches of ethics and inherent conflicts of interest. Cheers! The only things better then the current outcome would be a $10 sale or Parsad as Chairman. I agree with just about everything you wrote. how about Tom get booted and replaced with a credible CEO right away Link to comment Share on other sites More sharing options...
Parsad Posted March 14, 2013 Share Posted March 14, 2013 I don't really like the news. TPG is getting control with holding only 7% and creating uncertainty til June. The only uncertainty is around Tom Ward...not the direction of the company. Everything, whether Tom stays or not, is going to run through the board now...just like CHK. And what was the alternative: - I did not want to see Tom spend over $1.2B in capital expenditures in 2013! - I don't want SD to have over 120% debt to equity again! - I don't want multiple private jets at Sandridge. - I don't want SD buying properties from Tom's children's trusts. - I don't want Tom reaping huge rewards in royalty trusts from properties the company owns. - I don't want SD buying a box at the Oklahoma Thunder. - I don't want lavish head offices built as if money was pouring out of our asses like Apple or Google! I want accountability to shareholders from management and the board. I want to see the executives' pockets lined with bonuses and incentives only when shareholder pockets are lined with returns on invested capital. I want a business with a reputation of gold, not breaches of ethics and inherent conflicts of interest. Cheers! The only things better then the current outcome would be a $10 sale or Parsad as Chairman. I agree with just about everything you wrote. Yep... Except that the stock price didn't seem to move much on this news... Fortunately I had only a small position in call options and a large position in stocks, so I won't be affected that much. It will take a bit of time. As the board goes to work, clarity will appear in their plans and Tom's fate will be decided. After that, at least these guys will be working hard to make sure the company's value increases and they'll be accountable on operating costs. Cheers! Link to comment Share on other sites More sharing options...
Myth465 Posted March 14, 2013 Share Posted March 14, 2013 Good news for the company doesnt always equate with good news for the stock. I am happy with the outcome, but unhappy with the stock price. My guess is TPG was close and didnt want to risk losing. I also sort of think or perhaps hope is a better word, Ward is close to selling the company and getting his parachute. He needs a few more months to formalize things, and TPG agreed because the new buyers would pay Ward the $90 million and TPG could cash out, TPG also got reimbursed for the proxy battle making it a win for them there as well. If Ward cant find a suitable buyer, or butts head with the new board members he can be fired with cause pending the outcome of the investigation. FFH, Cooperman, and everyone else can also save face, but get change. Everyone comes out on top, except for June option holders (I have a small June position). I think we will have a decent conclusion by YE. Unlike CHK most majors or super Independents can gobble up SD fairly easily. Especially if the Gulf is sold and debt is paid down. Link to comment Share on other sites More sharing options...
Parsad Posted March 14, 2013 Share Posted March 14, 2013 I don't really like the news. TPG is getting control with holding only 7% and creating uncertainty til June. The only uncertainty is around Tom Ward...not the direction of the company. Everything, whether Tom stays or not, is going to run through the board now...just like CHK. And what was the alternative: - I did not want to see Tom spend over $1.2B in capital expenditures in 2013! - I don't want SD to have over 120% debt to equity again! - I don't want multiple private jets at Sandridge. - I don't want SD buying properties from Tom's children's trusts. - I don't want Tom reaping huge rewards in royalty trusts from properties the company owns. - I don't want SD buying a box at the Oklahoma Thunder. - I don't want lavish head offices built as if money was pouring out of our asses like Apple or Google! I want accountability to shareholders from management and the board. I want to see the executives' pockets lined with bonuses and incentives only when shareholder pockets are lined with returns on invested capital. I want a business with a reputation of gold, not breaches of ethics and inherent conflicts of interest. Cheers! The only things better then the current outcome would be a $10 sale or Parsad as Chairman. I agree with just about everything you wrote. how about Tom get booted and replaced with a credible CEO right away Tom has value as CEO. The sale of the Permian assets show that by itself. But sometimes executives need to be accountable to someone other than themselves and a co-opted board. Just take a look at a well-known burger restaurant CEO we all know and love! No doubt that burger CEO is talented, but he does not know what restraint is and a CEO's ethics can be blurred by the shadow their ego casts. Presently, there is a CEO and he reports to the board. If the board feels they need to change that CEO, they will find someone suitable. But thank God there is finally some strict oversight! Cheers! Link to comment Share on other sites More sharing options...
alertmeipp Posted March 14, 2013 Share Posted March 14, 2013 I don't really like the news. TPG is getting control with holding only 7% and creating uncertainty til June. The only uncertainty is around Tom Ward...not the direction of the company. Everything, whether Tom stays or not, is going to run through the board now...just like CHK. And what was the alternative: - I did not want to see Tom spend over $1.2B in capital expenditures in 2013! - I don't want SD to have over 120% debt to equity again! - I don't want multiple private jets at Sandridge. - I don't want SD buying properties from Tom's children's trusts. - I don't want Tom reaping huge rewards in royalty trusts from properties the company owns. - I don't want SD buying a box at the Oklahoma Thunder. - I don't want lavish head offices built as if money was pouring out of our asses like Apple or Google! I want accountability to shareholders from management and the board. I want to see the executives' pockets lined with bonuses and incentives only when shareholder pockets are lined with returns on invested capital. I want a business with a reputation of gold, not breaches of ethics and inherent conflicts of interest. Cheers! The only things better then the current outcome would be a $10 sale or Parsad as Chairman. I agree with just about everything you wrote. Yep... Except that the stock price didn't seem to move much on this news... Fortunately I had only a small position in call options and a large position in stocks, so I won't be affected that much. It's okay. The next 3 months is going to be a mess in SD, we are going to have four BODs investigate the CEO, no COO. CEO knows that he will likely to be kicked soon. My bet is this will play out the same as CHK, only more nasty, Tom will resign without full 100million package and BODs will found no wrong doing. Let's see if TPG can get rid of the GOM assets and monetize the infrastructure at a good price, simplify the capital structure and lower their cost by year end. Link to comment Share on other sites More sharing options...
Parsad Posted March 14, 2013 Share Posted March 14, 2013 Good news for the company doesnt always equate with good news for the stock. I am happy with the outcome, but unhappy with the stock price. My guess is TPG was close and didnt want to risk losing. I also sort of think or perhaps hope is a better word, Ward is close to selling the company and getting his parachute. He needs a few more months to formalize things, and TPG agreed because the new buyers would pay Ward the $90 million and TPG could cash out, TPG also got reimbursed for the proxy battle making it a win for them there as well. If Ward cant find a suitable buyer, or butts head with the new board members he can be fired with cause pending the outcome of the investigation. FFH, Cooperman, and everyone else can also save face, but get change. Everyone comes out on top, except for June option holders (I have a small June position). I think we will have a decent conclusion by YE. Unlike CHK most majors or super Independents can gobble up SD fairly easily. Especially if the Gulf is sold and debt is paid down. You might be right Myth. I think TPG's plan is most likely to sell the assets for a premium. If they can't because of market forces, they will continue to operate the business. And yes, you are correct. SD's size means it is far more likely to be taken out. Cheers! Link to comment Share on other sites More sharing options...
Parsad Posted March 14, 2013 Share Posted March 14, 2013 I don't really like the news. TPG is getting control with holding only 7% and creating uncertainty til June. The only uncertainty is around Tom Ward...not the direction of the company. Everything, whether Tom stays or not, is going to run through the board now...just like CHK. And what was the alternative: - I did not want to see Tom spend over $1.2B in capital expenditures in 2013! - I don't want SD to have over 120% debt to equity again! - I don't want multiple private jets at Sandridge. - I don't want SD buying properties from Tom's children's trusts. - I don't want Tom reaping huge rewards in royalty trusts from properties the company owns. - I don't want SD buying a box at the Oklahoma Thunder. - I don't want lavish head offices built as if money was pouring out of our asses like Apple or Google! I want accountability to shareholders from management and the board. I want to see the executives' pockets lined with bonuses and incentives only when shareholder pockets are lined with returns on invested capital. I want a business with a reputation of gold, not breaches of ethics and inherent conflicts of interest. Cheers! The only things better then the current outcome would be a $10 sale or Parsad as Chairman. I agree with just about everything you wrote. Yep... Except that the stock price didn't seem to move much on this news... Fortunately I had only a small position in call options and a large position in stocks, so I won't be affected that much. It's okay. The next 3 months is going to be a mess in SD, we are going to have four BODs investigate the CEO, no COO. CEO knows that he will likely to be kicked soon. My bet is this will play out the same as CHK, only more nasty, Tom will resign without full 100million package and BODs will found no wrong doing. Let's see if TPG can get rid of the GOM assets and monetize the infrastructure at a good price, simplify the capital structure and lower their cost by year end. I suspect the board will be looking for buyers concurrent to their investigation...thus no COO...why pay him? TPG doesn't plan on blowing all the cash exploring the properties. The company will probably be sold, or an offer will be tendered, before the investigation is completed. Cheers! Link to comment Share on other sites More sharing options...
Myth465 Posted March 14, 2013 Share Posted March 14, 2013 The COO should go. After the IRR reductions, I dont see much value in that role or the $7 million it cost. Why do we even need a COO? I also think some high paying executive had to be thrown overboard. I was hoping for Ward and Grubb, but will settle for just Grubb. The best part of the announcement is the piece concerning James Bennett. I have always liked him and SD's finances began to get better once he came along. He would make an excellent interim CEO and President. He has done wonders on our debt / risk profile. I doubt Parsad would have touched SD a few years ago given their maturities and the interest rates they were paying. I really like this agreement, as I said win win for all, and there is a plan behind the madness. The only that makes sense is a pending sale where everyone can save face. CHK has partially screwed that up with their distressed sale. Link to comment Share on other sites More sharing options...
plato1976 Posted March 14, 2013 Share Posted March 14, 2013 If there is a buyout, what is the possible price ? I would say $8-$9 The COO should go. After the IRR reductions, I dont see much value in that role or the $7 million it cost. Why do we even need a COO? I also think some high paying executive had to be thrown overboard. I was hoping for Ward and Grubb, but will settle for just Grubb. The best part of the announcement is the piece concerning James Bennett. I have always liked him and SD's finances began to get better once he came along. He would make an excellent interim CEO and President. He has done wonders on our debt / risk profile. I doubt Parsad would have touched SD a few years ago given their maturities and the interest rates they were paying. I really like this agreement, as I said win win for all, and there is a plan behind the madness. The only that makes sense is a pending sale where everyone can save face. CHK has partially screwed that up with their distressed sale. Link to comment Share on other sites More sharing options...
Parsad Posted March 14, 2013 Share Posted March 14, 2013 The best part of the announcement is the piece concerning James Bennett. I have always liked him and SD's finances began to get better once he came along. He would make an excellent interim CEO and President. He has done wonders on our debt / risk profile. I doubt Parsad would have touched SD a few years ago given their maturities and the interest rates they were paying. You are totally correct. I've been following SD for a couple of years now, ever since Tom started coming to our dinners with Prem. But I have never felt comfortable with the balance sheet. It wasn't until the Permian asset sale, where they had $2.6B coming in to pay off the debt maturing in the next couple of years, that I finally decided to take a serious look. Once TPG started getting serious with the proxy fight, and the stock was tanking, I decided to buy. I didn't want Tom blowing that money on $1.2B plus in capital expenditures for 2013. I saw their latest presentation, and I'm thinking, why the hell would you spend more than you can afford in capex? And there was talk of even going into the line of credit if necessary...WTF! If there is a buyout, what is the possible price ? I would say $8-$9 I think they could get $9-10 with the right buyer who wants those assets. With TPG in charge, lots of cash on the books, and total accountability on spending, they can wait for the right buyer. Cheers! Link to comment Share on other sites More sharing options...
alertmeipp Posted March 14, 2013 Share Posted March 14, 2013 hope the market will like that deal as much as you guys do. Link to comment Share on other sites More sharing options...
Cardboard Posted March 14, 2013 Share Posted March 14, 2013 I think that the market reaction had to be expected or more or less muted. TPG-Axon winning seats or their vote was not adding any value immediately and it was the likely outcome. If Ward had kept full control, then IMO the reaction would have been quite negative. The case for a "pop" was an immediate sale of the company at some premium which IMO is currently unlikely. The oil production content has dropped from 54 to 44% following the Permian sale. So, I think that they have no choice, but to continue developing the Mississippian formation to increase production (cash flow), oil content and reserves. Moreover, if you do a quick extrapolation from the Permian sale to all other assets of the company based on current reserves and production minus debt, you get about current stock price. And that is assuming reasonable selling prices. The latest sale from Chesapeake indicates that we are no longer in a sellers market. I understand that they were forced sellers, but when you consider that it took a Chinese buyer on U.S. soil to acquire assets at distressed prices then it should give you a pause. Just selling the company or assets as TPG and Mount Kellett mentioned is not a viable or way to obtain good returns at the moment. So how the Mississippian is developed is another question and this latest development will drive better capital allocation and restraint on folly. One has to scratch their head as to why they spent $1.2 billion to acquire Dynamic in the Gulf with a reserve life of only 5.0 years, to only realize months later that they have to spend a massive amount to develop their best asset in the Mississippian. So now, the Gulf asset is there only to generate free cash flow to develop the Mississippian with just a 5 year life or in need of exploration and development! Another hope is this mysterious joint venture disclosed in the latest presentation that they have considered to develop the Kansas part of the Mississippian. They must have had discussions with some partners, so this could alleviate the need to spend their own cash and to do it all on their own. It could also end up being now a bigger deal than what was considered by Ward and team. My main fear with this investment currently is the price of oil since it will take a little while in my view to get this value to surface. Cardboard Link to comment Share on other sites More sharing options...
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