SD - SandRidge Energy

[valueorama]

I see 2 possibilities:

  1. As he has pledged his shares for loans, he is de-leveraging. Will wait to see what TPG has up their sleeve.

or 2. He just wants out and going to liquidate and resign.

[plato1976]

don't think fairfax needs to do anything :)

their cost is very low, compared to most others

 

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+

[cogitator99]

Does anyone have a detailed breakdown of the major shareholders?

 

See attached...

 

Thanks. Looks like Allan Mecham bought 1806134 shares in Q4 2012. ~$10 million…

 

http://www.cornerofberkshireandfairfax.ca/forum/general-discussion/the-400-man!/

 

Thanks a lot! Where did you get that data? From sec.gov, I searched for Arlington Value Management, and couldn't find anything like 13HR.

That sounds amazing given the fund only has 20 M under management currently.

 

Oh...... I just realized that the original post is pretty old. Do you know the current size of this fund?

 

Arlington currently had close to $190mn in AUM at end-2012. (Should be more now given BRK and BAC's strong YTD performance) SD is a 6% position for Mecham.

 

As for the comment about Mecham buying 1.8mn shares in 4Q12, that seems wrong. That's his entire position as far we know, and my understanding is that he's had this position for a while. 

[cogitator99]

Wow, are you guys retarded or what to put as plainly as I can?  You have access to one of the best insurance and investment minds in North America once a year for about 4 hours at his AGM and another 1.5 hours at our dinner...so you could all ask him this in person.  He's also willing to take your calls on their conference call. 

 

Prem's always led a very transparent, humble, equitable and shareholder-friendly company...do you think there may be other ways he's trying to rectify things here?  And after all the crap you've heard about various participants who were involved in trading Fairfax shares, including published emails and court transcripts, and you guys wonder if he was gaming the system to save his company?  All I can say is "Wow!" 

 

By the way, they read this board every friggin' day, and if he asks me who the numbskull was that said something, I'm more than happy to tell him.  Please sell all of your Fairfax shares if you think Prem's unethical.  I'll be more than happy to buy them at book value. 

 

Sorry for the rant, but you guys are fortunate to be shareholders in this company.  Cheers!

 

Agree with Parsad here...you shouldn't be making decisions about FFH based on what you believe are the merits (or lack thereof) of the current investment exposures. It's just like when people were hating on FFH because of RIMM, not bothering to check what the impact the holding would have even in an adverse scenario.

 

I don't think anyone buys or sells BRK based on how KO, WFC, or IBM is doing on any given day...

[muscleman]

Nat gas price is back up to $4 in March.... That is quite something. March is usually not too cold and not too hot so there is normally not much demand for either heating or cooling. I bet there is a lot of industrial demand.

It could also be that a lot of speculators were betting the gas price going down to $2 again like last year, and they were forced to close the short position.

 

How much would SD be worth if gas price goes back to $6?

[oldye]

Back of the envelope calculation:

In the analyst presentation for 2013, they were projecting 333 million in revenue from nat gas assuming $3.45

Assuming $4 average price, FFO should increase by about 15%.  At $6 average gas,  FFO should increase by about 70%. Not to mention make the overland thrust, which currently costing them money into a viable asset they could sell!  This isn't taking into account the effect of using enhanced oil recovery on 300+ new wells this year.  I wouldn't wait for $6 gas, I hope they full hedge their nat gas production at these prices because rig count has started to creep up this week.

 

 

[alertmeipp]

if NG trades near 5 end of this year, their NAV will look very good.

[muscleman]

http://google.brand.edgar-online.com/displayfilinginfo.aspx?FilingID=9182431-1480-19521&type=sect&TabIndex=2&companyid=696018&ppu=%252fdefault.aspx%253fsym%253dSD

 

Mount Kellett Capital Management LP bought more shares.

[Guest FFHfan]

SandRidge CEO's $20.8 Million Sale

 

http://online.barrons.com/article/SB50001424052748704882404578382382610130270.html?mod=BOL_twm_da

[muscleman]

Back of the envelope calculation:

In the analyst presentation for 2013, they were projecting 333 million in revenue from nat gas assuming $3.45

Assuming $4 average price, FFO should increase by about 15%.  At $6 average gas,  FFO should increase by about 70%. Not to mention make the overland thrust, which currently costing them money into a viable asset they could sell!  This isn't taking into account the effect of using enhanced oil recovery on 300+ new wells this year.  I wouldn't wait for $6 gas, I hope they full hedge their nat gas production at these prices because rig count has started to creep up this week.

 

Do you know any minimum drilling agreement on that Overland Thrust? I know for lease opeartions, if they don't drill like, a minimum of two wells per year, the land got seized.

But anyway, that could be treated like a nat gas call option. Free lottery to play.

[rogermunibond]

On the West Texas Overthrust..  from the 2007 10-K

 

We have drilled and developed natural gas in the WTO since 1986. This area is located in Pecos and Terrell Counties in West Texas and is associated with the Marathon-Ouachita fold and thrust belt that extends east-northeast across the United States into the Appalachian Mountain Region. The WTO was created by the collision of the ancestral North American and South American continents resulting in source rock and reservoir rock, including potential hydrocarbon traps, becoming thrusted upon one another in multiple layers (imbricate stacking) along the leading edge of the WTO. The collision and thrusting resulted in the reservoir rock becoming highly fractured, increasing the likelihood of conventional natural gas and oil accumulations in the reservoir rock and creating a unique geological setting in North America.

 

The primary reservoir rocks in the WTO range in depth from 2,000 to 11,000 feet and range in geologic age from the Permian to the Devonian. The imbricate stacking of these conventional gas-prone reservoirs provides for multi-pay exploration and development opportunities. Despite this, the WTO has historically been largely under-explored due primarily to the remoteness and lack of infrastructure in the region, as well as historical limitations of conventional subsurface geological and geophysical methods. However, several fields including our prolific Piñon Field have been discovered. We believe our access to and control of the necessary infrastructure combined with application of modern seismic techniques will allow us to identify further exploration and development opportunities in the WTO.

 

In May 2007, we began a three-year, multi-phase seismic program to acquire 1,400 square miles of modern 3-D seismic data in the WTO. We believe this enhanced 3-D seismic program may identify structural details of potential reservoirs, thus lowering exploratory drilling risk and improving completion efficiency. The first two phases of the seismic program covered 389 square miles and were completed during 2007.

 

We have acquired leasehold acreage in the WTO, tripling our position since January 2006. As of December 31, 2007 we owned 600,546 gross (508,745 net) acres in the WTO, substantially all of which are along the leading edge of the WTO.

 

Now from the 2012 10-K...

 

West Texas Overthrust. The WTO is an area located in Pecos and Terrell Counties in west Texas and is associated with the Marathon-Ouachita fold and thrust belt that extends east-northeast across the United States into the Appalachian Mountain Region. Low natural gas prices continue to limit development activity in this area. The Company held interests in approximately 257,000 gross (215,000 net) leasehold acres in the WTO at December 31, 2012. The Company’s average daily net production in this area was approximately 7.9 MBoe for the month of December 2012.

[muscleman]

On the West Texas Overthrust..  from the 2007 10-K

 

We have drilled and developed natural gas in the WTO since 1986. This area is located in Pecos and Terrell Counties in West Texas and is associated with the Marathon-Ouachita fold and thrust belt that extends east-northeast across the United States into the Appalachian Mountain Region. The WTO was created by the collision of the ancestral North American and South American continents resulting in source rock and reservoir rock, including potential hydrocarbon traps, becoming thrusted upon one another in multiple layers (imbricate stacking) along the leading edge of the WTO. The collision and thrusting resulted in the reservoir rock becoming highly fractured, increasing the likelihood of conventional natural gas and oil accumulations in the reservoir rock and creating a unique geological setting in North America.

 

The primary reservoir rocks in the WTO range in depth from 2,000 to 11,000 feet and range in geologic age from the Permian to the Devonian. The imbricate stacking of these conventional gas-prone reservoirs provides for multi-pay exploration and development opportunities. Despite this, the WTO has historically been largely under-explored due primarily to the remoteness and lack of infrastructure in the region, as well as historical limitations of conventional subsurface geological and geophysical methods. However, several fields including our prolific Piñon Field have been discovered. We believe our access to and control of the necessary infrastructure combined with application of modern seismic techniques will allow us to identify further exploration and development opportunities in the WTO.

 

In May 2007, we began a three-year, multi-phase seismic program to acquire 1,400 square miles of modern 3-D seismic data in the WTO. We believe this enhanced 3-D seismic program may identify structural details of potential reservoirs, thus lowering exploratory drilling risk and improving completion efficiency. The first two phases of the seismic program covered 389 square miles and were completed during 2007.

 

We have acquired leasehold acreage in the WTO, tripling our position since January 2006. As of December 31, 2007 we owned 600,546 gross (508,745 net) acres in the WTO, substantially all of which are along the leading edge of the WTO.

 

Now from the 2012 10-K...

 

West Texas Overthrust. The WTO is an area located in Pecos and Terrell Counties in west Texas and is associated with the Marathon-Ouachita fold and thrust belt that extends east-northeast across the United States into the Appalachian Mountain Region. Low natural gas prices continue to limit development activity in this area. The Company held interests in approximately 257,000 gross (215,000 net) leasehold acres in the WTO at December 31, 2012. The Company’s average daily net production in this area was approximately 7.9 MBoe for the month of December 2012.

 

Thank you!

215k net acres doesn't seem to be significant to pay attention to. The key of SD success is still how the Missisipian Lime plays out. With better nat gas prices recently, I think SD and CHK will both see some relief.

[plato1976]

Not sure if CHK will see big relief

They hedged at low NG price , LOL

 

 

On the West Texas Overthrust..  from the 2007 10-K

 

We have drilled and developed natural gas in the WTO since 1986. This area is located in Pecos and Terrell Counties in West Texas and is associated with the Marathon-Ouachita fold and thrust belt that extends east-northeast across the United States into the Appalachian Mountain Region. The WTO was created by the collision of the ancestral North American and South American continents resulting in source rock and reservoir rock, including potential hydrocarbon traps, becoming thrusted upon one another in multiple layers (imbricate stacking) along the leading edge of the WTO. The collision and thrusting resulted in the reservoir rock becoming highly fractured, increasing the likelihood of conventional natural gas and oil accumulations in the reservoir rock and creating a unique geological setting in North America.

 

The primary reservoir rocks in the WTO range in depth from 2,000 to 11,000 feet and range in geologic age from the Permian to the Devonian. The imbricate stacking of these conventional gas-prone reservoirs provides for multi-pay exploration and development opportunities. Despite this, the WTO has historically been largely under-explored due primarily to the remoteness and lack of infrastructure in the region, as well as historical limitations of conventional subsurface geological and geophysical methods. However, several fields including our prolific Piñon Field have been discovered. We believe our access to and control of the necessary infrastructure combined with application of modern seismic techniques will allow us to identify further exploration and development opportunities in the WTO.

 

In May 2007, we began a three-year, multi-phase seismic program to acquire 1,400 square miles of modern 3-D seismic data in the WTO. We believe this enhanced 3-D seismic program may identify structural details of potential reservoirs, thus lowering exploratory drilling risk and improving completion efficiency. The first two phases of the seismic program covered 389 square miles and were completed during 2007.

 

We have acquired leasehold acreage in the WTO, tripling our position since January 2006. As of December 31, 2007 we owned 600,546 gross (508,745 net) acres in the WTO, substantially all of which are along the leading edge of the WTO.

 

Now from the 2012 10-K...

 

West Texas Overthrust. The WTO is an area located in Pecos and Terrell Counties in west Texas and is associated with the Marathon-Ouachita fold and thrust belt that extends east-northeast across the United States into the Appalachian Mountain Region. Low natural gas prices continue to limit development activity in this area. The Company held interests in approximately 257,000 gross (215,000 net) leasehold acres in the WTO at December 31, 2012. The Company’s average daily net production in this area was approximately 7.9 MBoe for the month of December 2012.

 

Thank you!

215k net acres doesn't seem to be significant to pay attention to. The key of SD success is still how the Missisipian Lime plays out. With better nat gas prices recently, I think SD and CHK will both see some relief.

[sampr01]

Not sure if CHK will see big relief

They hedged at low NG price , LOL

 

CHK hedged 50% NG at $3.62.

[muscleman]

Not sure if CHK will see big relief

They hedged at low NG price , LOL

 

CHK hedged 50% NG at $3.62.

 

Right. $3.62 is not too bad.

[stahleyp]

why were the pfds (SDRXP) trading at $4.375 today???  :o

[fareastwarriors]

why were the pfds (SDRXP) trading at $4.375 today???  :o

 

What?

 

I'm seeing quote at 94.375 from E-Trade.

 

day's range

94.375 - 94.375

 

 

 

 

 

is par $100?

[stahleyp]

why were the pfds (SDRXP) trading at $4.375 today???  :o

 

What?

 

I'm seeing quote at 94.375 from E-Trade.

 

day's range

94.375 - 94.375

 

 

 

 

 

is par $100?

 

Yeah, par is $100. They are trading there now but on the system I see there was a volume of 250 share sat the $4 range. I was shocked. I put an order it, but it didn't fill. haha

[fareastwarriors]

why were the pfds (SDRXP) trading at $4.375 today???  :o

 

What?

 

I'm seeing quote at 94.375 from E-Trade.

 

day's range

94.375 - 94.375

 

 

 

 

 

is par $100?

 

Yeah, par is $100. They are trading there now but on the system I see there was a volume of 250 share sat the $4 range. I was shocked. I put an order it, but it didn't fill. haha

 

I see. If it filled, it would have been a very nice monday morning!  :D

[stahleyp]

Oh yeah, probably the best Monday morning ever! haha. I wouldn't be surprised if the 250 lot ended up being busted though.

[alertmeipp]

this thing has been under pressure ever since TPG gets the board seat.

[plato1976]

TW still has near 20M shares SD to sell ?

That's a lot of selling pressure ahead ...

:)

 

this thing has been under pressure ever since TPG gets the board seat.

[luck]

yeah, i should have thought about that before i bought a little bit at 5.69.  c'est la vie.  if it gets to the 4's, i might buy more.  tom ward's definitely running for the hills with his stock it seems.

[fareastwarriors]

Anyone adding during this price drop?

[enoch01]

Anyone adding during this price drop?

 

Yes, today.