plato1976 Posted March 14, 2013 Share Posted March 14, 2013 Agree that their current reserve and production is not worth much more than the current market cap, and SD 's value is really in the undeveloped reserve. However, to unlock these reserve you need to drill drill drill to at least show the potential - it requires huge capital expenditure - a dilemma at least Well, if Ward had kept control the share would crash; and if Ward lost control, the share dropped so who were supporting the share price before today - quite a puzzle for me :) 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...
alertmeipp Posted March 14, 2013 Share Posted March 14, 2013 I bet some pro-TW ppl are selling out today. Maybe even the management themselves. Also, those who bought in hoping for a pop will sell on the news. I think Sinopec will be interested, SD assets and know-how plus CHK's they just acquired will do wonder. Link to comment Share on other sites More sharing options...
Guest FFHfan Posted March 14, 2013 Share Posted March 14, 2013 SandRidge Energy outlook just got murkier: analysts http://blogs.marketwatch.com/energy-ticker/2013/03/14/sandridge-energy-outlook-just-got-murkier-analysts/ Prem Watsa Hedge fund manager? ;D Hedge fund manager Prem Watsa, sometimes known as the Canadian Warren Buffett, apparently believes SandRidge will see better times ahead. In the fourth quarter, he bought some 28.1 million shares, which made SandRidge 8.5% of his portfolio, according to datarama. http://finance.yahoo.com/news/canadian-warren-buffett-buys-sandridge-162011432.html Link to comment Share on other sites More sharing options...
muscleman Posted March 14, 2013 Share Posted March 14, 2013 SandRidge Energy outlook just got murkier: analysts http://blogs.marketwatch.com/energy-ticker/2013/03/14/sandridge-energy-outlook-just-got-murkier-analysts/ Prem Watsa Hedge fund manager? ;D Hedge fund manager Prem Watsa, sometimes known as the Canadian Warren Buffett, apparently believes SandRidge will see better times ahead. In the fourth quarter, he bought some 28.1 million shares, which made SandRidge 8.5% of his portfolio, according to datarama. http://finance.yahoo.com/news/canadian-warren-buffett-buys-sandridge-162011432.html These media folks are our friends. Because of their idiotic reports, we get better opportunities to buy low and sell high. :) Link to comment Share on other sites More sharing options...
Parsad Posted March 14, 2013 Share Posted March 14, 2013 I bet some pro-TW ppl are selling out today. Maybe even the management themselves. Also, those who bought in hoping for a pop will sell on the news. I think Sinopec will be interested, SD assets and know-how plus CHK's they just acquired will do wonder. I agree. I think it is probably pro-management selling. I also agree that Sinopec would be interested...among others. Cheers! Link to comment Share on other sites More sharing options...
plato1976 Posted March 14, 2013 Share Posted March 14, 2013 Quite curious who are these pro-TW ppl :) :0 I doube Fairfax is selling today - quite unlikely - they are smart ppl anyway... I bet some pro-TW ppl are selling out today. Maybe even the management themselves. Also, those who bought in hoping for a pop will sell on the news. I think Sinopec will be interested, SD assets and know-how plus CHK's they just acquired will do wonder. I agree. I think it is probably pro-management selling. I also agree that Sinopec would be interested...among others. Cheers! Link to comment Share on other sites More sharing options...
Parsad Posted March 14, 2013 Share Posted March 14, 2013 Quite curious who are these pro-TW ppl :) :0 I doube Fairfax is selling today - quite unlikely - they are smart ppl anyway... I bet some pro-TW ppl are selling out today. Maybe even the management themselves. Also, those who bought in hoping for a pop will sell on the news. I think Sinopec will be interested, SD assets and know-how plus CHK's they just acquired will do wonder. I agree. I think it is probably pro-management selling. I also agree that Sinopec would be interested...among others. Cheers! Very unlikely Fairfax is selling. They may have supported Tom Ward, but they made the investment because they thought the assets were undervalued. Cheers! Link to comment Share on other sites More sharing options...
alertmeipp Posted March 14, 2013 Share Posted March 14, 2013 What's FFH's cost basis on the common? I think above 6? Link to comment Share on other sites More sharing options...
muscleman Posted March 15, 2013 Share Posted March 15, 2013 In SD's presentation, does anyone know their assumptions for getting the $31 per share net asset value? I can't find any info regarding that. http://phx.corporate-ir.net/External.File?item=UGFyZW50SUQ9MTc0MzQ0fENoaWxkSUQ9LTF8VHlwZT0z&t=1 Link to comment Share on other sites More sharing options...
Parsad Posted March 15, 2013 Share Posted March 15, 2013 In SD's presentation, does anyone know their assumptions for getting the $31 per share net asset value? I can't find any info regarding that. http://phx.corporate-ir.net/External.File?item=UGFyZW50SUQ9MTc0MzQ0fENoaWxkSUQ9LTF8VHlwZT0z&t=1 I think that's mentioned in one of the posts earlier, but assumes that all of the proven reserves are developed and cash flows discounted back to the present. It may or may not be accurate, as it has not happened, and historically these things are a crapshoot because anything could happen in between, and you still have to fund all of the capex to develop the land. Cheers! Link to comment Share on other sites More sharing options...
muscleman Posted March 15, 2013 Share Posted March 15, 2013 In SD's presentation, does anyone know their assumptions for getting the $31 per share net asset value? I can't find any info regarding that. http://phx.corporate-ir.net/External.File?item=UGFyZW50SUQ9MTc0MzQ0fENoaWxkSUQ9LTF8VHlwZT0z&t=1 I think that's mentioned in one of the posts earlier, but assumes that all of the proven reserves are developed and cash flows discounted back to the present. It may or may not be accurate, as it has not happened, and historically these things are a crapshoot because anything could happen in between, and you still have to fund all of the capex to develop the land. Cheers! I asked that question earlier but no body answered. I am still trying to figure out: 1. What is the oil and gas price assumed for this net asset value. 2. Is the future cash flow discounted by 10% or other ratios. 3. Is the net asset value the future discounted cash flow minus expected capex? I think if the management just put out that net asset value of $31 without detailed explanation, and given the promotional nature of TW, that figure is likely way off. Link to comment Share on other sites More sharing options...
plato1976 Posted March 15, 2013 Share Posted March 15, 2013 never took it seriously :) but I am curious if it only counted the discounted value of all proved reserve if developed, or it also considered unproved reserve in some sense. As I remember the proved reserve (even if developed) is not worth that much (actually far from) In SD's presentation, does anyone know their assumptions for getting the $31 per share net asset value? I can't find any info regarding that. http://phx.corporate-ir.net/External.File?item=UGFyZW50SUQ9MTc0MzQ0fENoaWxkSUQ9LTF8VHlwZT0z&t=1 I think that's mentioned in one of the posts earlier, but assumes that all of the proven reserves are developed and cash flows discounted back to the present. It may or may not be accurate, as it has not happened, and historically these things are a crapshoot because anything could happen in between, and you still have to fund all of the capex to develop the land. Cheers! I asked that question earlier but no body answered. I am still trying to figure out: 1. What is the oil and gas price assumed for this net asset value. 2. Is the future cash flow discounted by 10% or other ratios. 3. Is the net asset value the future discounted cash flow minus expected capex? I think if the management just put out that net asset value of $31 without detailed explanation, and given the promotional nature of TW, that figure is likely way off. Link to comment Share on other sites More sharing options...
Parsad Posted March 15, 2013 Share Posted March 15, 2013 Very good and fair article from Seekingalpha on SD. Cheers! http://seekingalpha.com/article/1276211-sandridge-energy-activists-win-why-is-the-stock-down?source=yahoo Link to comment Share on other sites More sharing options...
Guest FFHfan Posted March 15, 2013 Share Posted March 15, 2013 Departing SandRidge COO gets $9 million payout, basketball tickets. http://finance.yahoo.com/news/departing-sandridge-coo-gets-9-213204066.html Link to comment Share on other sites More sharing options...
LC Posted March 19, 2013 Share Posted March 19, 2013 http://www.insidermonkey.com/blog/what-ceo%E2%80%99s-probable-removal-means-for-sandridge-energy-inc-sd-89817/ TPG wins board... Four directors nominated by TPG-Axon will immediately be added to SandRidge’s Board, which will hire an independent firm to review land deals by Ward and his family Link to comment Share on other sites More sharing options...
fareastwarriors Posted March 19, 2013 Share Posted March 19, 2013 Departing SandRidge COO gets $9 million payout, basketball tickets. http://finance.yahoo.com/news/departing-sandridge-coo-gets-9-213204066.html go thunders! Link to comment Share on other sites More sharing options...
abcd Posted March 19, 2013 Share Posted March 19, 2013 I bet some pro-TW ppl are selling out today. Maybe even the management themselves. Also, those who bought in hoping for a pop will sell on the news. I think Sinopec will be interested, SD assets and know-how plus CHK's they just acquired will do wonder. I agree. I think it is probably pro-management selling. I also agree that Sinopec would be interested...among others. Cheers! That seems to be the case. It is TW himself. http://www.sec.gov/cgi-bin/own-disp?action=getowner&CIK=0001038276 Link to comment Share on other sites More sharing options...
compoundinglife Posted March 19, 2013 Share Posted March 19, 2013 Wrote some 2015 $5 puts for SD today at 1.48 and picked up some common. I was guessing the pressure was insider selling, glad it was. Link to comment Share on other sites More sharing options...
plato1976 Posted March 19, 2013 Share Posted March 19, 2013 Wonder why insiders are selling (even if they will leave)... They don't see a value even at this price ? Wrote some 2015 $5 puts for SD today at 1.48 and picked up some common. I was guessing the pressure was insider selling, glad it was. Link to comment Share on other sites More sharing options...
Parsad Posted March 19, 2013 Share Posted March 19, 2013 Wonder why insiders are selling (even if they will leave)... They don't see a value even at this price ? Wrote some 2015 $5 puts for SD today at 1.48 and picked up some common. I was guessing the pressure was insider selling, glad it was. Because he's going to plow his money into something he owns and controls directly. Cheers! Link to comment Share on other sites More sharing options...
alertmeipp Posted March 20, 2013 Share Posted March 20, 2013 Wonder why insiders are selling (even if they will leave)... They don't see a value even at this price ? Wrote some 2015 $5 puts for SD today at 1.48 and picked up some common. I was guessing the pressure was insider selling, glad it was. Because he's going to plow his money into something he owns and controls directly. Cheers! TW has tons to sell if it want out completely. Holding my underwater shares. Link to comment Share on other sites More sharing options...
plato1976 Posted March 20, 2013 Share Posted March 20, 2013 I like this - a "forced" seller in some sense, although I am not 100% sure why TW has to sell. This is getting interesting... thinking about adding more Wonder why insiders are selling (even if they will leave)... They don't see a value even at this price ? Wrote some 2015 $5 puts for SD today at 1.48 and picked up some common. I was guessing the pressure was insider selling, glad it was. Because he's going to plow his money into something he owns and controls directly. Cheers! TW has tons to sell if it want out completely. Holding my underwater shares. Link to comment Share on other sites More sharing options...
Myth465 Posted March 20, 2013 Share Posted March 20, 2013 Parsad has a point, I mean Tom controls an entity which has hundreds of thousands of acres in the same location, why would he hold is the question? Link to comment Share on other sites More sharing options...
Cardboard Posted March 20, 2013 Share Posted March 20, 2013 I read in the filings somewhere that the vast majority of his shares are pledged for loans. Who did that too? I guess his good old buddy Aubrey McClendon. Cardboard Link to comment Share on other sites More sharing options...
alertmeipp Posted March 20, 2013 Share Posted March 20, 2013 I think we can assume there will be no sale near term. If not, I don't see how TW would leave millions on the table by selling now. Wonder what will Fairfax do, they loaded up on 6+ Link to comment Share on other sites More sharing options...
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