Myth465 Posted January 8, 2014 Share Posted January 8, 2014 For the wells already in existence SD has a liability on the books to plug and abandon them (think of it like a make good). They sold the assets, and moved the Liability for P&A work to the entity which now controls the assets. It makes the deal look slightly less bad, but is irrelevant inmo. Those liability moved on the books a few years ago and we gave up 1.2 in cash for the bulk of the assets. Now we get $750 million, a royalty which has some value, and move off the books the same liabilities. Bennett was CFO, I think its his way of showing the total movement in the balance sheet and to make the deal look less bad then it does from a capital allocation standpoint. They should have put what the PV10 numbers were which were associated with the GOM. Link to comment Share on other sites More sharing options...
ourkid8 Posted January 8, 2014 Share Posted January 8, 2014 ah... Thanks! For the wells already in existence SD has a liability on the books to plug and abandon them (think of it like a make good). They sold the assets, and moved the Liability for P&A work to the entity which now controls the assets. It makes the deal look slightly less bad, but is irrelevant inmo. Those liability moved on the books a few years ago and we gave up 1.2 in cash for the bulk of the assets. Now we get $750 million, a royalty which has some value, and move off the books the same liabilities. Bennett was CFO, I think its his way of showing the total movement in the balance sheet and to make the deal look less bad then it does from a capital allocation standpoint. They should have put what the PV10 numbers were which were associated with the GOM. Link to comment Share on other sites More sharing options...
oldye Posted January 8, 2014 Share Posted January 8, 2014 They said during the cc that the unofficial pv 10 was about 1bil. I think the real upside will become obvious when 29 rigs are running full steam. I wish we had 4 or 5 years of drilling at those levels but unfortunately I think it will be taken out long before that. :-X Link to comment Share on other sites More sharing options...
Myth465 Posted January 8, 2014 Share Posted January 8, 2014 They said during the cc that the unofficial pv 10 was about 1bil. I think the real upside will become obvious when 29 rigs are running full steam. I wish we had 4 or 5 years of drilling at those levels but unfortunately I think it will be taken out long before that. :-X Oldye is the CC worth listening to? I think you are right, they did an annaysis which probably showed that investing that $750 over the next few years gave a better rate of return the holding the Gulf steady for either PV10 or just depleting it. That or the prospective buyer said he didnt want the Gulf. Either way it was a good move inmo. Link to comment Share on other sites More sharing options...
CorpRaider Posted January 8, 2014 Share Posted January 8, 2014 Yeah man its worth listening to. Lee cooperman and dinkar singh asked questions like they were analysts. Link to comment Share on other sites More sharing options...
Myth465 Posted January 8, 2014 Share Posted January 8, 2014 Yeah man its worth listening to. Lee cooperman and dinkar singh asked questions like they were analysts. That actually does sound worthwhile. Would think they would just call the CFO with questions. I am sure he takes their calls. Must have been an effort to educate the market... Link to comment Share on other sites More sharing options...
bmichaud Posted January 8, 2014 Share Posted January 8, 2014 Yes Cooperman was making his monthly cheerleading appearance - for goodness sakes he asked when the frickin analyst day was. Wow. Had no idea short interest was 15% either. Wow. So market cap is around $2.8B, trailing ebitda is $1.1 and PF net debt is 2.7x or ~2.9b for an ev of around 5.8. Bennett said this deal knocks .275 off of the 1.1 ebitda consensus, down to $825MM. So sd currently trades at 7x forward ebitda. Assume the 825 grows 25% for two years - that's $1.3B in 2016. At a 5.8 ev it trades for 4.5 2016 ebitda. I love event stocks and I'd love to get on board with the potential sale thesis here but I honestly just do not understand. Link to comment Share on other sites More sharing options...
Myth465 Posted January 8, 2014 Share Posted January 8, 2014 I tend to agree bmichaud, from an operations / valuation perspective, I think the Canadian space is better. On the sales thesis I feel as though they have had a year to set something up. They seem to be positioning it for a sale, but also could just be refocusing it so they can run it. I think it will be sold a few months after I have sold my last share, but I remember someone once saying that things usually arent sold when you expect them to sell, and the unexpected investment are typically sold. There are alot of assets in NA for sale, and if I were Repsol I would be buying in Canada. I am transitioning out of SD, but will continue to watch and hold some token shares. Link to comment Share on other sites More sharing options...
oldye Posted January 8, 2014 Share Posted January 8, 2014 Liquids growth is expected to be over 40%. If pricing is good they'll do much better than 25% organic ebitda growth. They said that we should expect more than 25% ebitda growth. They also decided to hedge 40% of their nat gas for 2014 at $4.21. They must think prices have room to improve. Link to comment Share on other sites More sharing options...
Cardboard Posted January 8, 2014 Share Posted January 8, 2014 "I love event stocks and I'd love to get on board with the potential sale thesis here but I honestly just do not understand. " Heck of a lot easier to understand than the thesis on SHLD. Cardboard Link to comment Share on other sites More sharing options...
CorpRaider Posted January 9, 2014 Share Posted January 9, 2014 Dinakar is on Squawk this morning. Link to comment Share on other sites More sharing options...
alertmeipp Posted January 9, 2014 Share Posted January 9, 2014 thanks for the heads up.. should be good for couple percent trade. :) Link to comment Share on other sites More sharing options...
phil_Buffett Posted January 9, 2014 Share Posted January 9, 2014 does he said something about Sandridge? Link to comment Share on other sites More sharing options...
cubsfan Posted January 9, 2014 Share Posted January 9, 2014 does he said something about Sandridge? Kind of in passing, he said it will take a couple of years and it is worth double. Should be a replay available. Link to comment Share on other sites More sharing options...
phil_Buffett Posted January 9, 2014 Share Posted January 9, 2014 does he said something about Sandridge? Kind of in passing, he said it will take a couple of years and it is worth double. Should be a replay available. great thanks :) Link to comment Share on other sites More sharing options...
cubsfan Posted January 9, 2014 Share Posted January 9, 2014 does he said something about Sandridge? Kind of in passing, he said it will take a couple of years and it is worth double. Should be a replay available. great thanks :) http://video.cnbc.com/gallery/?play=1&video=3000234476 At the very end, he makes his quick comment about SD - and doubling of EBIDTA. Link to comment Share on other sites More sharing options...
phil_Buffett Posted January 9, 2014 Share Posted January 9, 2014 does he said something about Sandridge? Kind of in passing, he said it will take a couple of years and it is worth double. Should be a replay available. great thanks :) http://video.cnbc.com/gallery/?play=1&video=3000234476 At the very end, he makes his quick comment about SD - and doubling of EBIDTA. thanks ;) Link to comment Share on other sites More sharing options...
CorpRaider Posted January 9, 2014 Share Posted January 9, 2014 Singh's comments this morning: He's probably got continued beats in his ebitda number so he said it is trading at ~6x and he's apparently got a 30%+ ebidta growth (which he was seemingly highlighting in his questions on the conference call about the operating leverage on the +~26% production guidance). He says SD trades @ ~6x ebitda, which will double in three years. Link to comment Share on other sites More sharing options...
ourkid8 Posted January 23, 2014 Share Posted January 23, 2014 Sandridge has been on a nice little run! :) Link to comment Share on other sites More sharing options...
fareastwarriors Posted January 23, 2014 Share Posted January 23, 2014 http://www.bloomberg.com/news/2014-01-23/natural-gas-rises-for-third-day-on-sustained-u-s-cold-weather.html Link to comment Share on other sites More sharing options...
phil_Buffett Posted January 23, 2014 Share Posted January 23, 2014 Sandridge has been on a nice little run! :) very nice! good to see green numbers ;D Link to comment Share on other sites More sharing options...
ourkid8 Posted January 23, 2014 Share Posted January 23, 2014 Let's hope management is hedging at these prices! :-). I cannot wait until end of February when they release the new type curve. Tks, S http://www.bloomberg.com/news/2014-01-23/natural-gas-rises-for-third-day-on-sustained-u-s-cold-weather.html Link to comment Share on other sites More sharing options...
alertmeipp Posted January 23, 2014 Share Posted January 23, 2014 type curve wont change much, will help irr tho. Link to comment Share on other sites More sharing options...
oldye Posted January 23, 2014 Share Posted January 23, 2014 type curve wont change much, will help irr tho. The new PV10 will be based off of 12/31/2013 nat gas when Henry Hub was at $4.31. From some of the well data that has been posted online its looking like the initial oil cut will be much better than the 140 bopd used in the last type curve, so I think there will be an upward revision and improved IRR. As of the last CC they already hedged 40% of 2014 production at $4.21 so I think they've been pretty busy hedging last couple of days. Anyone know why their realized nat gas price is about $1 less than Henry Hub? I'm guessing it has to do with the proximity to Cushing OK - Are there any prospects for it to improve due to new pipeline capacity etc.? Management would really earn their pay if they sold the legacy fields right now for a positive value and used that money to put a few more rigs to work in the Miss. Link to comment Share on other sites More sharing options...
gordoffh Posted January 27, 2014 Share Posted January 27, 2014 Up down up down no matter what the circumstances - ng flying, company appears to be in decent shape, but no matter the news it gets beaten up - been a tough one to own - patience wearing a bit now - I was waiting for ng to move and now it has - Link to comment Share on other sites More sharing options...
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