SD - SandRidge Energy

[biaggio]

Did any of you find it strange when Prem said Tom W. was in attendance at the meeting? 

 

Packer

 

At least he was not up on the panel answering questions like last year. Now that would be awkward

 

Prem did say during the AGM that he was in the audience

 

 

[Cardboard]

Well... These comments from Prem that TPG-Axon will make money in the short term, but that Fairfax would have made more in the long term with Tom Ward AND that Tom was still there this year sitting along with Prem's lieutenants despite all the controversy tells me that a take-over of SandRidge with Fairfax involved is a possibility. You really have to ask yourself, what is the guy doing there?

 

I am not sure what Prem and company have in mind, but they seem to imply that if the company was run for the very long term that it could do quite well, but it would have to be done without the constant scrutiny of the public market.

 

However, this comment may detract from that logic:

 

"Prem said at the meeting today that if Tom were to start new ventures they would look forward to investing with him in his future endeavours."

 

Size is an issue for Fairfax to swallow all of SandRidge. In any case, if Tom proposes ways to keep the company under his control with Fairfax to participate in a substantial way, they may be quite interested.

 

Cardboard

[Philip Morris IV]

What are the issues with TW & Co. aside from the excessive compensation?  I mean - is there a chance the new board and TW could negotiate a reasonable comp package and keep him onboard?

[T-bone1]

Did any of you find it strange when Prem said Tom W. was in attendance at the meeting? 

 

Packer

 

I was outside by the book table during the entire Q&A, so was Tom actually present?  Cheers!

 

If he was, he was well disguised (or perhaps in the upper balcony with some of the overflow)

[mrvlad0]

Does anybody have any insights from based on questions/comments by the Oracle of Toronto during the the Fairfax Annual meeting held today, as to if, and why, Fairfax is holding their position in SD?

Thanks.

 

The question came up at the dinner and meeting. In summary they reiterated support for Tom and said he was the reason they invested in SD. They said that TPG (did not mention by name) is short sighted and will end up with a decent gain over the short term but are walking away from the greater upside that could be achieved in the long term with Tom.

 

Prem said at the meeting today that if Tom were to start new ventures they would look forward to investing with him in his future endeavours.

 

At the dinner Sam said something to tune of "we will make money on this but not as much as we would have with Tom". So it sounds like they are not getting out anytime soon, unless maybe there is a big move in the price.

 

If someone else who was there notices any inaccuracies of my account please point them out.

 

That language above feels as though TPG is looking for short term gain (Sale of company) versus holding on long term with TW.

[compoundinglife]

Does anybody have any insights from based on questions/comments by the Oracle of Toronto during the the Fairfax Annual meeting held today, as to if, and why, Fairfax is holding their position in SD?

Thanks.

 

The question came up at the dinner and meeting. In summary they reiterated support for Tom and said he was the reason they invested in SD. They said that TPG (did not mention by name) is short sighted and will end up with a decent gain over the short term but are walking away from the greater upside that could be achieved in the long term with Tom.

 

Prem said at the meeting today that if Tom were to start new ventures they would look forward to investing with him in his future endeavours.

 

At the dinner Sam said something to tune of "we will make money on this but not as much as we would have with Tom". So it sounds like they are not getting out anytime soon, unless maybe there is a big move in the price.

 

If someone else who was there notices any inaccuracies of my account please point them out.

 

That language above feels as though TPG is looking for short term gain (Sale of company) versus holding on long term with TW.

 

That is the point they were trying to get across. I think Prem was also trying to make a point with regards to activism in general and how it tends to be in his view short cited. As a result you make some quick money but you end up leaving lots of money on the table.

 

Sure you can jump in turn some knobs, adjust some levers and rack up a quick gain.

But if you are willing to take some punches up front and not focus on short term results you can end up with superior results.

[txlaw]

In addition to the things mentioned above, Paul Rivett apparently said in a conversation after the dinner that it wouldn't even be worth trying to put an FFH-affiliated guy on the SD board, as the hedge funds are in control and are looking for a nice short term gain. 

 

All this indicates to me that there is an M&A catalyst to watch for in the next few months.  Which is good for me.  I'd like to be out of SD completely and put more into XCO.

 

Btw, it does look like FFH would be more than willing to finance a new Tom Ward enterprise in the future.  Would make sense if you believe that TW is great at turning borrowed/permanent funds into substantially more NAV from exploration and drilling.  And they clearly think TW is great at FFH.

 

I still find the related party transactions (which we got detail on from TPG-Axon and which were only summarily described in the proxy) a bit disturbing. 

[compoundinglife]

Btw, it does look like FFH would be more than willing to finance a new Tom Ward enterprise in the future.  Would make sense if you believe that TW is great at turning borrowed/permanent funds into substantially more NAV from exploration and drilling.  And they clearly think TW is great at FFH.

 

I still find the related party transactions (which we got detail on from TPG-Axon and which were only summarily described in the proxy) a bit disturbing.

 

Yeah it was very clear they really like TW.

 

Sam mentioned multiple times during the dinner Q&A that for these plays you need to ensure you get high quality "rock" and getting stuck with low quality rock is how you fail. So as the saying goes "if you don't know jewelry know the jeweler" and I think they consider TW and team to be their jeweler in this context. 

[txlaw]

Btw, it does look like FFH would be more than willing to finance a new Tom Ward enterprise in the future.  Would make sense if you believe that TW is great at turning borrowed/permanent funds into substantially more NAV from exploration and drilling.  And they clearly think TW is great at FFH.

 

I still find the related party transactions (which we got detail on from TPG-Axon and which were only summarily described in the proxy) a bit disturbing.

 

Yeah it was very clear they really like TW.

 

Sam mentioned multiple times during the dinner Q&A that for these plays you need to ensure you get high quality "rock" and getting stuck with low quality rock is how you fail. So as the saying goes "if you don't know jewelry know the jeweler" and I think they consider TW and team to be their jeweler in this context.

 

Yup.  Both TW and Aubrey McClendon where awesome landmen, which is how they built CHK into what it is today.

[Cardboard]

"The question came up at the dinner and meeting. In summary they reiterated support for Tom and said he was the reason they invested in SD. They said that TPG (did not mention by name) is short sighted and will end up with a decent gain over the short term but are walking away from the greater upside that could be achieved in the long term with Tom."

 

You see, that sounds very awkward to me. When you have a good idea, that will work really well in the long term, that you truly believe in and that you have spent a fair bit of time and energy on it, then why in the world would you simply hand out the keys of the company to an outsider who owns only 7 or 8%?

 

That is exactly what Fairfax and Tom Ward have done. They didn't fight. Fighting in my view is not going in front of a judge to prevent a consent solicitation from the hedge fund guys. No, it is about defending your view in public and explaining in clear terms what is the plan and how this will deliver more value for shareholders than what is being proposed by the hedge fund guys. If this had been done and the plan looked credible, then it is quite possible that shareholders would have supported Ward and tossed the hedge fund guys.

 

The reality or this accusation of short termism vs long termism is quite different.

 

First and as I mentioned, I could not see any kind of cohesive long term plan for this company. It was all about we drill the Mississippian play like crazy and trust us, money will abound afterwards. Simply looking at the history of SandRidge made you take a step back. There was the shift in focus from gas to oil, then $1.2 billion spent on a weird acquisition in the Gulf of Mexico, then suddenly the crown jewel is sold for a decent, but still average price to reinforce the balance sheet and to reinvest it all in the Mississippian. Through all of this, where was the growth in NAV per share or cash flow per share?

 

Second, you have an operator that is paid large salaries and bonuses, has private planes like it is a multi-national, the company is blowing money on a basketball team and there are family dealings going on with his son's company. It is no wonder that the hedge fund was able to attract investors attention who had seen their share price do terrible over the long term while such behavior was going on.

 

Regarding short termism, I am really curious to see what TPG-Axon will be able to do to make money in the short term since they likely paid at least 20% more than the current price. My view is that it will take a lot longer than what is being described by Mr. Watsa to straighten up this company and get some cash flow to be visible or to find buyers for a proper amount, so that all shareholders can finally experience a decent gain.

 

So if there was such a strong belief in long termism and that short termism is such an evil and such a bad route to take then I wonder why words were not transformed into action?

 

Cardboard

 

[rogermunibond]

http://seekingalpha.com/article/1342401-mississippian-lime-encana-narrows-focus-to-just-82k-acres-in-osage-extension-area-acreage-did-not-meet-expectations

 

Encana is focusing on OK prt of this play and that means a lot of the KS acreage that SD calls the extension is getting ignored.  Looks like the higher NG content of this extension play is making it uneconomic.  Maybe SD's cost is low enough that it still generates a positive IRR.

 

Other thing to note is that the Nemaha Ridge part of the Miss Lime is now the sweet spot of the play and while SD has some acreage there it is mostly a DVN and RRC controlled area.

 

So while Sam Mitchell says it's all about the rock, we are finding that some of the Miss Lime rock is a lot better than other parts of the rock.  And it looks like SD missed on the sweet spot.

[Parsad]

http://seekingalpha.com/article/1342401-mississippian-lime-encana-narrows-focus-to-just-82k-acres-in-osage-extension-area-acreage-did-not-meet-expectations

 

Encana is focusing on OK prt of this play and that means a lot of the KS acreage that SD calls the extension is getting ignored.  Looks like the higher NG content of this extension play is making it uneconomic.  Maybe SD's cost is low enough that it still generates a positive IRR.

 

Other thing to note is that the Nemaha Ridge part of the Miss Lime is now the sweet spot of the play and while SD has some acreage there it is mostly a DVN and RRC controlled area.

 

So while Sam Mitchell says it's all about the rock, we are finding that some of the Miss Lime rock is a lot better than other parts of the rock.  And it looks like SD missed on the sweet spot.

 

I think it's too early to say anything.  There are massive amounts of area still to be drilled.  The ending of the article pretty much states as much:

 

While the Miss Lime play may end up redefined, at least for the time being, with a much tighter contour, its size still remains enormous. The ongoing highgrading of drilling inventory around the most productive sweet spots is a natural and necessary process. The good news, the play may start to deliver much stronger operating reports from select areas and may surprise to the upside with a regained momentum.

 

Cheers!

[ASTA]

Well I doubled down yesterday and have 14% at 5.22.

I hope this does not turn out like one of my first investments HPQ down 70% (sold at down 45%)

According too my observations NG should be going up with Australia halting LNG projects and allot of other Gurus are investing in this space. 

Its also a new take on my position system where as I have 7% first and if my research becomes more favorable I can double.

And a 7% position is able to move the needle as well.

Thanks for everyone posting on this specific stock to.   

[tombgrt]

In addition to the things mentioned above, Paul Rivett apparently said in a conversation after the dinner that it wouldn't even be worth trying to put an FFH-affiliated guy on the SD board, as the hedge funds are in control and are looking for a nice short term gain. 

 

All this indicates to me that there is an M&A catalyst to watch for in the next few months.  Which is good for me.  I'd like to be out of SD completely and put more into XCO.

 

Btw, it does look like FFH would be more than willing to finance a new Tom Ward enterprise in the future.  Would make sense if you believe that TW is great at turning borrowed/permanent funds into substantially more NAV from exploration and drilling.  And they clearly think TW is great at FFH.

 

I still find the related party transactions (which we got detail on from TPG-Axon and which were only summarily described in the proxy) a bit disturbing. 

 

So you have a completely out-of-favor stock with valuable assets built by a "great landman" with hedged production and lowest debt leverage ever, trading at a 52-week low while an activist who seems capable is aggressively looking to make a short term gain at maybe double today's stock price.

 

Aren't LEAPS possibly attractive here? Or would you guys generally avoid them giving the current state of the market?

 

 

Yesterday I bought a small position.

 

[Parsad]

In addition to the things mentioned above, Paul Rivett apparently said in a conversation after the dinner that it wouldn't even be worth trying to put an FFH-affiliated guy on the SD board, as the hedge funds are in control and are looking for a nice short term gain. 

 

All this indicates to me that there is an M&A catalyst to watch for in the next few months.  Which is good for me.  I'd like to be out of SD completely and put more into XCO.

 

Btw, it does look like FFH would be more than willing to finance a new Tom Ward enterprise in the future.  Would make sense if you believe that TW is great at turning borrowed/permanent funds into substantially more NAV from exploration and drilling.  And they clearly think TW is great at FFH.

 

I still find the related party transactions (which we got detail on from TPG-Axon and which were only summarily described in the proxy) a bit disturbing. 

 

So you have a completely out-of-favor stock with valuable assets built by a "great landman" with hedged production and lowest debt leverage ever, trading at a 52-week low while an activist who seems capable is aggressively looking to make a short term gain at maybe double today's stock price.

 

Aren't LEAPS possibly attractive here? Or would you guys generally avoid them giving the current state of the market?

 

 

Yesterday I bought a small position.

 

I like TPG and Dinaker Singh.  Everything he's said so far and done has been dead on.  They are working very quickly to fix a business that would not have existed in a couple of years.  And they forced Tom's hand to sell the Permian assets and fix the balance sheet.  Director's fees have been chopped...planes are gone...new boards and oversight are in place...I would expect the Gulf Assets to possibly go next, if not the whole thing.  Cheers!

[plato1976]

yep, they are the indirect reason Tom said Permian; however, they don't like it as TPG once said. TPG liked this asset

 

In addition to the things mentioned above, Paul Rivett apparently said in a conversation after the dinner that it wouldn't even be worth trying to put an FFH-affiliated guy on the SD board, as the hedge funds are in control and are looking for a nice short term gain. 

 

All this indicates to me that there is an M&A catalyst to watch for in the next few months.  Which is good for me.  I'd like to be out of SD completely and put more into XCO.

 

Btw, it does look like FFH would be more than willing to finance a new Tom Ward enterprise in the future.  Would make sense if you believe that TW is great at turning borrowed/permanent funds into substantially more NAV from exploration and drilling.  And they clearly think TW is great at FFH.

 

I still find the related party transactions (which we got detail on from TPG-Axon and which were only summarily described in the proxy) a bit disturbing. 

 

So you have a completely out-of-favor stock with valuable assets built by a "great landman" with hedged production and lowest debt leverage ever, trading at a 52-week low while an activist who seems capable is aggressively looking to make a short term gain at maybe double today's stock price.

 

Aren't LEAPS possibly attractive here? Or would you guys generally avoid them giving the current state of the market?

 

 

Yesterday I bought a small position.

 

I like TPG and Dinaker Singh.  Everything he's said so far and done has been dead on.  They are working very quickly to fix a business that would not have existed in a couple of years.  And they forced Tom's hand to sell the Permian assets and fix the balance sheet.  Director's fees have been chopped...planes are gone...new boards and oversight are in place...I would expect the Gulf Assets to possibly go next, if not the whole thing.  Cheers!

[muscleman]

In addition to the things mentioned above, Paul Rivett apparently said in a conversation after the dinner that it wouldn't even be worth trying to put an FFH-affiliated guy on the SD board, as the hedge funds are in control and are looking for a nice short term gain. 

 

All this indicates to me that there is an M&A catalyst to watch for in the next few months.  Which is good for me.  I'd like to be out of SD completely and put more into XCO.

 

Btw, it does look like FFH would be more than willing to finance a new Tom Ward enterprise in the future.  Would make sense if you believe that TW is great at turning borrowed/permanent funds into substantially more NAV from exploration and drilling.  And they clearly think TW is great at FFH.

 

I still find the related party transactions (which we got detail on from TPG-Axon and which were only summarily described in the proxy) a bit disturbing. 

 

So you have a completely out-of-favor stock with valuable assets built by a "great landman" with hedged production and lowest debt leverage ever, trading at a 52-week low while an activist who seems capable is aggressively looking to make a short term gain at maybe double today's stock price.

 

Aren't LEAPS possibly attractive here? Or would you guys generally avoid them giving the current state of the market?

 

 

Yesterday I bought a small position.

 

I like TPG and Dinaker Singh.  Everything he's said so far and done has been dead on.  They are working very quickly to fix a business that would not have existed in a couple of years.  And they forced Tom's hand to sell the Permian assets and fix the balance sheet.  Director's fees have been chopped...planes are gone...new boards and oversight are in place...I would expect the Gulf Assets to possibly go next, if not the whole thing.  Cheers!

 

I tried to find Dinaker Singh's track record but I couldn't. I only found his bio. He graduated from Yale in 1990 and became a partner in GS in 1998? That is surprising to me. In only 8 years, most entry level analysts can only become associate analysts or at most a low level VP.

[tombgrt]

In addition to the things mentioned above, Paul Rivett apparently said in a conversation after the dinner that it wouldn't even be worth trying to put an FFH-affiliated guy on the SD board, as the hedge funds are in control and are looking for a nice short term gain. 

 

All this indicates to me that there is an M&A catalyst to watch for in the next few months.  Which is good for me.  I'd like to be out of SD completely and put more into XCO.

 

Btw, it does look like FFH would be more than willing to finance a new Tom Ward enterprise in the future.  Would make sense if you believe that TW is great at turning borrowed/permanent funds into substantially more NAV from exploration and drilling.  And they clearly think TW is great at FFH.

 

I still find the related party transactions (which we got detail on from TPG-Axon and which were only summarily described in the proxy) a bit disturbing. 

 

So you have a completely out-of-favor stock with valuable assets built by a "great landman" with hedged production and lowest debt leverage ever, trading at a 52-week low while an activist who seems capable is aggressively looking to make a short term gain at maybe double today's stock price.

 

Aren't LEAPS possibly attractive here? Or would you guys generally avoid them giving the current state of the market?

 

 

Yesterday I bought a small position.

 

I like TPG and Dinaker Singh.  Everything he's said so far and done has been dead on.  They are working very quickly to fix a business that would not have existed in a couple of years.  And they forced Tom's hand to sell the Permian assets and fix the balance sheet.  Director's fees have been chopped...planes are gone...new boards and oversight are in place...I would expect the Gulf Assets to possibly go next, if not the whole thing.  Cheers!

 

 

I agree, looks like he's a capable and rational guy and his actions up to this point say a lot.

 

It's odd to see the stock tanking given the latest evolutions. Sure oil has dropped a bit these last few days but on the other hand NG is suddenly at $4.4!

 

Bought some jan'14 this morning, equal to half my common position.

[craigatk]

I like TPG and Dinaker Singh.  Everything he's said so far and done has been dead on.  They are working very quickly to fix a business that would not have existed in a couple of years.  And they forced Tom's hand to sell the Permian assets and fix the balance sheet.  Director's fees have been chopped...planes are gone...new boards and oversight are in place...I would expect the Gulf Assets to possibly go next, if not the whole thing.  Cheers!

 

I tried to find Dinaker Singh's track record but I couldn't. I only found his bio. He graduated from Yale in 1990 and became a partner in GS in 1998? That is surprising to me. In only 8 years, most entry level analysts can only become associate analysts or at most a low level VP.

 

He could rise so quickly because he was making money hand over fist within GS Principal Strategies. This was a 100% proprietary investing group that was on the Equities side of the business. They were basically an internal hedge fund that came out of the risk arbitrage desk culture. Remember the desk that Robert Rubin, ex-Treasury Secretary used to run? It has been one of the greatest sources of training for future hedge fund managers that has ever existed. I visited GSPS once in their Tokyo office, I guess it was in mid-2009, before they split off to GSAM. They had their own private office with notices "GSPS employees ONLY" posted to the door. Basically to keep compliance happy and them separated completely on a different floor, behind a closed door from the client facing businesses. This global team was running many billions of GS's internal capital and by most accounts making exceptional returns. Things have changed. Part of the group was spun out into the asset management business, where it still runs billions of Goldman's money, along side client money. The other part continued but has been reportedly shut-down since then due to the no-prop trading bank rules. A hedge fund client of mine (I used to be a headhunter) once distributed a ranking of hedge fund targets for recruiting. It was a sort of A-B-C target list that they would consider for interviews. The A-List was basically all hedge funds that were started by ex-GSPS people. I'm don't know anything particular about Dinakar Singh whether he is stand up individual or worth of respect, but in terms of his understanding of risk, capital allocation and how to make absolute returns, he has my utmost respect.

[Parsad]

In addition to the things mentioned above, Paul Rivett apparently said in a conversation after the dinner that it wouldn't even be worth trying to put an FFH-affiliated guy on the SD board, as the hedge funds are in control and are looking for a nice short term gain. 

 

All this indicates to me that there is an M&A catalyst to watch for in the next few months.  Which is good for me.  I'd like to be out of SD completely and put more into XCO.

 

Btw, it does look like FFH would be more than willing to finance a new Tom Ward enterprise in the future.  Would make sense if you believe that TW is great at turning borrowed/permanent funds into substantially more NAV from exploration and drilling.  And they clearly think TW is great at FFH.

 

I still find the related party transactions (which we got detail on from TPG-Axon and which were only summarily described in the proxy) a bit disturbing. 

 

So you have a completely out-of-favor stock with valuable assets built by a "great landman" with hedged production and lowest debt leverage ever, trading at a 52-week low while an activist who seems capable is aggressively looking to make a short term gain at maybe double today's stock price.

 

Aren't LEAPS possibly attractive here? Or would you guys generally avoid them giving the current state of the market?

 

 

Yesterday I bought a small position.

 

I like TPG and Dinaker Singh.  Everything he's said so far and done has been dead on.  They are working very quickly to fix a business that would not have existed in a couple of years.  And they forced Tom's hand to sell the Permian assets and fix the balance sheet.  Director's fees have been chopped...planes are gone...new boards and oversight are in place...I would expect the Gulf Assets to possibly go next, if not the whole thing.  Cheers!

 

I tried to find Dinaker Singh's track record but I couldn't. I only found his bio. He graduated from Yale in 1990 and became a partner in GS in 1998? That is surprising to me. In only 8 years, most entry level analysts can only become associate analysts or at most a low level VP.

 

Not sure about his days at GS, but his fund has returned about 60% between 2006 and 2012.  He's a good investor...not spectacular, but good.  Cheers!

[Poor Charlie]

In addition to the things mentioned above, Paul Rivett apparently said in a conversation after the dinner that it wouldn't even be worth trying to put an FFH-affiliated guy on the SD board, as the hedge funds are in control and are looking for a nice short term gain. 

 

All this indicates to me that there is an M&A catalyst to watch for in the next few months.  Which is good for me.  I'd like to be out of SD completely and put more into XCO.

 

Btw, it does look like FFH would be more than willing to finance a new Tom Ward enterprise in the future.  Would make sense if you believe that TW is great at turning borrowed/permanent funds into substantially more NAV from exploration and drilling.  And they clearly think TW is great at FFH.

 

I still find the related party transactions (which we got detail on from TPG-Axon and which were only summarily described in the proxy) a bit disturbing. 

 

So you have a completely out-of-favor stock with valuable assets built by a "great landman" with hedged production and lowest debt leverage ever, trading at a 52-week low while an activist who seems capable is aggressively looking to make a short term gain at maybe double today's stock price.

 

Aren't LEAPS possibly attractive here? Or would you guys generally avoid them giving the current state of the market?

 

 

Yesterday I bought a small position.

 

I like TPG and Dinaker Singh.  Everything he's said so far and done has been dead on.  They are working very quickly to fix a business that would not have existed in a couple of years.  And they forced Tom's hand to sell the Permian assets and fix the balance sheet.  Director's fees have been chopped...planes are gone...new boards and oversight are in place...I would expect the Gulf Assets to possibly go next, if not the whole thing.  Cheers!

 

I tried to find Dinaker Singh's track record but I couldn't. I only found his bio. He graduated from Yale in 1990 and became a partner in GS in 1998? That is surprising to me. In only 8 years, most entry level analysts can only become associate analysts or at most a low level VP.

 

Not sure about his days at GS, but his fund has returned about 60% between 2006 and 2012.  He's a good investor...not spectacular, but good.  Cheers!

 

 

TPG-Axon is not a typical long/short fund that puts on single name longs/shorts based on the individual merit of each idea.  My understanding is they build hedges directly into each long.  Many funds do this (basically a pairs trade) but TPG-Axon is unique in that they spend a lot of effort looking for more creative or bespoke hedges.  Think of something like long subprime mortgage originators long subprime CDS.  I would imagine they have built hedges into their SD position that significantly alter the risk/return dynamics from simply being long the stock.

 

The person in this situation (SD) I find really interesting is Mark Mcgoldrick (Mount Kellett).  The guy used to be a rainmaker at GS’s special situation desk.  Anyone who is given the moniker ‘Goldfinger’ at a place like GS is someone worth following.  I believe before he left he was paid more than Blankfein.

 

[Cardboard]

So in terms of hedging this long position in SD what do you think they could have done? I can see short natural gas, short oil, short CHK. Just curious as to how complex you have in mind for these guys. Thanks!

 

Cardboard

[muscleman]

So in terms of hedging this long position in SD what do you think they could have done? I can see short natural gas, short oil, short CHK. Just curious as to how complex you have in mind for these guys. Thanks!

 

Cardboard

 

I am not sure longing SD and shorting nat gas is a good idea. Recently SD has tanked a lot and nat gas has jumped up a lot.

I think a pure long SD position is fine for me because SD itself has hedged the oil and gas prices.

[alertmeipp]

did they actually hedged gas as well?

[Redskin212]

People should be aware that SD's hedging program was heavily influenced by Prem and Hamblin Wasta.  I recall a couple of years ago an the FFH annual meeting that SD had put hedges on through 2014 and his comment was "we would be hedged all the way through 2015 or 2016 if Prem had his way"