bargainman Posted August 12, 2011 Share Posted August 12, 2011 Swizzled, I'm not sure if you're reading this, but why don't you have a position in SD? Why CHK instead of SD? Or are you planning to pick some up after the recent fall? Or has your experience with ATPG made you want to stay away from highly leveraged asset gathering managements? Thanks! Link to comment Share on other sites More sharing options...
rogermunibond Posted August 17, 2011 Share Posted August 17, 2011 http://www.vcall.com/customevent/conferences/enercom/20110814/webcast.html Tom Ward presented today at Enercom - 4:20 pm Link to comment Share on other sites More sharing options...
bluedevil Posted August 22, 2011 Share Posted August 22, 2011 Wonder what effect today's rapid events in Libya will have on the price of oil. That's 1.5 million barrels a day that will flow back to the international markets. Link to comment Share on other sites More sharing options...
Myth465 Posted August 22, 2011 Share Posted August 22, 2011 I would guess its a negative effect. Should be interesting over the next few months. WTI has pulled back quite a bit, I wonder what will drop brent. Link to comment Share on other sites More sharing options...
alertmeipp Posted August 22, 2011 Share Posted August 22, 2011 My guess is the effect of it will be very small. Those who follow the news know this is coming. The key (at least what the media is trying to paint) is economy. No one care about demand and supply any more. Link to comment Share on other sites More sharing options...
S2S Posted August 22, 2011 Share Posted August 22, 2011 You don't have to guess, Brent Crude is trading at $106.90/bbl as of this posting, down 1.57% The Brent-WTI spread, meanwhile, still sits at a mind-boggling $24 >:( https://www.theice.com/homepage.jhtml Link to comment Share on other sites More sharing options...
Swizzled Posted August 22, 2011 Share Posted August 22, 2011 "Swizzled, I'm not sure if you're reading this, but why don't you have a position in SD? Why CHK instead of SD? Or are you planning to pick some up after the recent fall? Or has your experience with ATPG made you want to stay away from highly leveraged asset gathering managements?" Sorry I'm slow to respond. Couldn't get logged in for a couple of days for some reason, likely my own lack of brain power. I don't have a good answer for you on why no SD. I looked at it last summer and bought some in the low $4s and then sold when it bounced over $5. Missed the entire ride to $13. When I bought I had no knowledge of the Miss play, and at the time I just wasn't sure I understood what all of their assets were worth. I should have likely worked a little harder. I've looked again recently and wrote these: http://seekingalpha.com/article/287091-a-second-opportunity-to-invest-in-sandridge-energy-at-a-bargain-price http://seekingalpha.com/article/285200-is-it-rational-for-sandridge-energy-s-market-capitalization-to-drop-42-in-one-week I'd quite happily buy at these prices, but I'm fully invested now. Too bloody early again !!! Link to comment Share on other sites More sharing options...
tyska Posted August 22, 2011 Share Posted August 22, 2011 You don't have to guess, Brent Crude is trading at $106.90/bbl as of this posting, down 1.57% The Brent-WTI spread, meanwhile, still sits at a mind-boggling $24 >:( https://www.theice.com/homepage.jhtml Sure need another outlet for our Canuck oil. :) Wonder what effect today's rapid events in Libya will have on the price of oil. That's 1.5 million barrels a day that will flow back to the international markets. Is there any idea how much damage has been done to the infrastructure. And are the rebels going to be cohesive enough to provide stability for the oil companies to move back in. I'd think Gaddafi falling is but a small part to the picture right know. Link to comment Share on other sites More sharing options...
alertmeipp Posted August 23, 2011 Share Posted August 23, 2011 Some insider buy. I was buying at 11 just weeks ago.. now at 6. :-\ they hedged close to 35% of their 11, 12 and 13 production. both SDT and PER still trade relatively well so there is demand for trusts. If they are willing to give up 30% of their old Miss play, the funding gap will be closed for 2012. Hope they execute. A big position for me now. Link to comment Share on other sites More sharing options...
Myth465 Posted August 23, 2011 Share Posted August 23, 2011 Im all in on 2013s. I think it works out barring a double dip or world wide recession killing oil prices. SD is hedged and Capex will be closed via trusts and JVs. With the fed keeping rates at 0 till 2013 we should have plenty of demand for trust yielding 7% unless oil drops below $70. We also have a significant amount of oil hedged for 2011 and 2012. The stock though is a slave to the market, and will continue to sell off with Oil, Europe, and other issues. Probably best not to watch over the next few months if you are all in. Also I think it will get taken out if it hangs around $6 for a while. You could offer $12 and not too many shareholders would say no at this point. The value is in the assets in my opinion... Link to comment Share on other sites More sharing options...
alertmeipp Posted August 23, 2011 Share Posted August 23, 2011 Im all in on 2013s. I think it works out barring a double dip or world wide recession killing oil prices. SD is hedged and Capex will be closed via trusts and JVs. With the fed keeping rates at 0 till 2013 we should have plenty of demand for trust yielding 7% unless oil drops below $70. We also have a significant amount of oil hedged for 2011 and 2012. The stock though is a slave to the market, and will continue to sell off with Oil, Europe, and other issues. Probably best not to watch over the next few months if you are all in. Also I think it will get taken out if it hangs around $6 for a while. You could offer $12 and not too many shareholders would say no at this point. The value is in the assets in my opinion... We are on the same page. What's ur cash level? Link to comment Share on other sites More sharing options...
Myth465 Posted August 23, 2011 Share Posted August 23, 2011 Im tapped out. Maybe 5% or so.... Without much cash, no point in watching, I wont sell / exercise until $12 or late 2012 early 2013. This too shall pass :), or not. Either way life goes on. I feel much better about SD then ATPG. I think Ward knows what he is doing and like the 1 million acres. The guys at ATPG, thats more of a gamble / pray type situation.... Link to comment Share on other sites More sharing options...
alertmeipp Posted August 23, 2011 Share Posted August 23, 2011 Market is saying they will issue equity. Ward said it's unattractive to do so. Another 500millions trust would go a long way. Link to comment Share on other sites More sharing options...
Myth465 Posted August 23, 2011 Share Posted August 23, 2011 Market is saying they will issue equity. Ward said it's unattractive to do so. Another 500millions trust would go a long way. To be honest. The market may be right. Ward has done it before with the converts. I hope if he issues equity we get way more then we give up (such as with Miss 1). I dont see why he would need to now though, selling none core gas and more trusts makes more sense. The company should be Pinion, Miss, and Permian, and perhaps should sell the Pinion. Link to comment Share on other sites More sharing options...
Zorrofan Posted August 23, 2011 Share Posted August 23, 2011 Market is saying they will issue equity. Ward said it's unattractive to do so. Another 500millions trust would go a long way. To be honest. The market may be right. Ward has done it before with the converts. I hope if he issues equity we get way more then we give up (such as with Miss 1). I dont see why he would need to now though, selling none core gas and more trusts makes more sense. The company should be Pinion, Miss, and Permian, and perhaps should sell the Pinion. Myth - no, don't sell the Pinion. Hold on a few more years and it will be worth a lot more - if you believe CHK. I would rather see another trust than anything else, Ward did better with the trusts. I was rather disappointed in the JV pricing and in this low interest environment the trusts will continue to be successful. Just MHO..... cheers Zorro Link to comment Share on other sites More sharing options...
Myth465 Posted August 23, 2011 Share Posted August 23, 2011 You are probably right Zorro though I dont see a nat gas rebound anytime soon. The JV valuation was a bit low but I believe Ward was A. Trying to maintain control and operator status, and B was trying to offset expanding capex with the JV. The JV was really out of no where, I just assumed he would keep issuing trusts at 7% yield to unit buyers. I think Ward and Audrey are creating tremendous value, and was looking to switch into CHK at some point due to them continuing to buy land. I was quite happy when Ward announced another million acres at a similar price. Once things recover a bit I hope to rebuy into CHK. The NAV to SP is getting ridiculous there with all the new places / JVs. Link to comment Share on other sites More sharing options...
alertmeipp Posted August 23, 2011 Share Posted August 23, 2011 Market is saying they will issue equity. Ward said it's unattractive to do so. Another 500millions trust would go a long way. To be honest. The market may be right. Ward has done it before with the converts. I hope if he issues equity we get way more then we give up (such as with Miss 1). I dont see why he would need to now though, selling none core gas and more trusts makes more sense. The company should be Pinion, Miss, and Permian, and perhaps should sell the Pinion. Myth - no, don't sell the Pinion. Hold on a few more years and it will be worth a lot more - if you believe CHK. I would rather see another trust than anything else, Ward did better with the trusts. I was rather disappointed in the JV pricing and in this low interest environment the trusts will continue to be successful. Just MHO..... cheers Zorro 500 millions for ~10% is not low. Remember those are raw land. Link to comment Share on other sites More sharing options...
Myth465 Posted September 7, 2011 Share Posted September 7, 2011 New presentation and a few new slides. http://phx.corporate-ir.net/External.File?item=UGFyZW50SUQ9NDE4NjA2NnxDaGlsZElEPTQzODk0NXxUeXBlPTI=&t=1 I like slide 22, Also up to 400,000 acres in #2. Link to comment Share on other sites More sharing options...
AZ_Value Posted September 7, 2011 Share Posted September 7, 2011 New presentation and a few new slides. http://phx.corporate-ir.net/External.File?item=UGFyZW50SUQ9NDE4NjA2NnxDaGlsZElEPTQzODk0NXxUeXBlPTI=&t=1 I like slide 22, Also up to 400,000 acres in #2. Thanks. SD has definitely looked like a fat pitch to me for the last few weeks with the stock dropping so much. I tripled my money in SD over the last year and even though I think it is now a better company than when I first bought in, with the recent pullback, Mr Market was offering me the stock for almost the same price I originally paid for the shares. I think Tom Ward is definitely in his element when it comes to unlocking value out of plays like those SD has. Link to comment Share on other sites More sharing options...
Myth465 Posted September 7, 2011 Share Posted September 7, 2011 I agree. I also like the way he thinks and puts things. The plans leave out about $1 million acres and he hopes to self fund it. I dont think he will have a hard time signing up a JV partner, and will likely do a few a trusts once they ramp up drilling. I am hoping for a repeat of last year, except this time I will take a bit more profits along the way lol. The only big fear for me is the economy. Unlike ATPG, SD is pretty solid operationally. Low oil prices though could sink the idea. All indicators though point to tightening oil markets though, but we all know those indicators go right out the door when the economy slows or declines.... Link to comment Share on other sites More sharing options...
AZ_Value Posted September 7, 2011 Share Posted September 7, 2011 Well, regarding a drop in the economy and oil prices, I like to think (or fool myself) that given that Ward has learned his lesson with natural gas, the hedges he put in place for SD's oil production should be good enough to guarantee us good results. But then again I say fool myself because when oil prices drop usually that is all Mr. Market looks at, and doesn't bother looking at who has hedges in place or not and SD would get killed like everybody else. Link to comment Share on other sites More sharing options...
Myth465 Posted September 7, 2011 Share Posted September 7, 2011 Yes I agree. I am slowly learning that Intrinsic value and Quoted value often have very little to do with each other. Ward is putting together a solid company, and a solid business plan. I agree with him regarding trust demand as well. Only time will tell, but I am very comfortable holding. Link to comment Share on other sites More sharing options...
rijk Posted September 8, 2011 Share Posted September 8, 2011 hmmmmm.... which company could this be??? could fairfax be buying back the shares they sold at $11 at a 40% discount? regards rijk Where do you see speculation in the markets today? Clearly in the commodity markets. The price of gold and oil and whatever commodity you want to look at—corn, wheat, agricultural commodities, mining commodities— have all gone up in parabolic curves. Say you are a gold producer with gold at US$1,500 an ounce. You cannot hedge today. No gold company will hedge that gold production. They could guarantee a huge amount of profits, but they won’t do that because they think it will be going higher. You would have been wrong if you tried to hedge at US$900, US$1,000, US$1,100, US$1,200, and US$1,300, so people will not hedge. They will not hedge oil. I can think of only one company that hedges its oil. Link to comment Share on other sites More sharing options...
Myth465 Posted September 11, 2011 Share Posted September 11, 2011 09.11.2011 - Q2 2011 updates listed below. Key Metrics - These dont paste very well, just a rehash of production data and costs from the 10q. FCF Allocation and Capex Management - Like it or love it Tom Ward is allocating every dollar of cash flow, debt, and trust money into capex. The latest trust in the Permian has been funded and capex has been raised to $1.8 billion each year until 2014. By 2015 they plan on being self funding. Ward completed a JV on the old Miss for $250 million dollars in cash and $250 million in carries. In addition to this the company now plans to spend $250 million buying another million acres in the New Miss. This sent the market into a panic, but makes perfect sense to me. 13% of the old Miss for 100% of the new Miss, you also get the carries. Based on the last presentation they have 400,000 acres locked up. If this new acreage can be flipped for $2000 an acre - $4000 an acre via a JV, or drilled to add to their current NAV then it will be a big win. Ward said all capital plans stated do not include this new play. He also plans to make the new play self funding. This inmo means a JV, or drilling 40 - 100 wells followed quickly by a trust to recapture the cash and fund additional capex. If the New Miss is as good as the old miss regarding costs, oil percentages, type curves, and production declines then it will be a home run. If its better on any or a few of the metrics it will be a grand slam. As a hedge Ward said he can dial back capex in the Permian because it is held by production, and is also still continuing to lock in oil hedges. They predict $2 billion or more in EBITDA in 2014, and a debt to EBITDA of 2 to 1. Plans call for another $1.4 billion in debt in 2013. It also calls $1 billion in none debt sources over the next few years. Ward has already stated he will look to do another billion dollar Miss trust (not sure if it was net or gross) at the end of the year, and will also consider selling Gas Assets, additional JVs, or retained trust units. Based on filings and comments at presentations Ward has started drilling in the Pinion. He said he would like to see what they have before they sell it and would be spending capital on gas assets. I would like to see them sell all none core gas assets (gulf coast and east Texas), and would like to see a JV / small asset sell in the WTO, at least enough to fill the first tranche of the Century plant. Currently it looks like SD is not getting any credit for gas assets and is simply trading against WTI. They also don’t have the capital to develop everything and a JV is better then losing acreage due to not drilling inmo. The CO2 also gives SD some value which just isnt being reflected in its share price. Based on the 10k SD is also conducting a small EOR pilot program in the Permian using CO2. Interesting stuff. General Thoughts on Company, Market, and Business - I like the fact that SD is continuing to buy new leases and entering new plays. I considered switching to CHK for this type of growth, and am happy that its available at SD. I find Tom Ward to be a much better operator, developer, and flipper of assets, and also like the fact that the bets are hedged slightly (can reduce capex and hedges). SandRidge is the most leveraged large company I can find related to oil. They are quickly increasing the leverage and have a huge capex budget in place. I am a long term oil bull, and believe the hedges will provide protection on an oil pullback or crash due to short term macro based reasons. The hedges will however not protect SD from a long term oil crash or pullback. Either way SD is likely toast or will be sold if oil prices pullback for a long period of time. Given that I agree with increasing capex and pushing for self funding 3 years out. Its risky, but I don’t see other serious options given Management. Might as well swing for the fences and pull as much NAV forward as possible. Ward will have a hard time holding 1 million to 2 million acres by production in 5 years. It will be interesting to watch him and the CEO work this out.…. Thoughts on Investment and Stock Performance thus Far - The pullback in SDs share price is annoying, but probably warranted given the jittery markets, increased capex and risks, issues in Europe, and weak economic growth. All one can do is position themselves for the long term. Get out of options or push them out as long dated options come out and continue to watch Ward and his team execute. I hope to see / hear additional news regarding asset sales, data / filings related to the new trusts. I am very happy thus far with the disclosures regarding capex, and 2012 - 2014 plans. Hopefully gaps continue to be closed, and additional info keeps coming out. SD is still my largest holding. Link to comment Share on other sites More sharing options...
AZ_Value Posted September 12, 2011 Share Posted September 12, 2011 hmmmmm.... which company could this be??? could fairfax be buying back the shares they sold at $11 at a 40% discount? regards rijk Where do you see speculation in the markets today? Clearly in the commodity markets. The price of gold and oil and whatever commodity you want to look at—corn, wheat, agricultural commodities, mining commodities— have all gone up in parabolic curves. Say you are a gold producer with gold at US$1,500 an ounce. You cannot hedge today. No gold company will hedge that gold production. They could guarantee a huge amount of profits, but they won’t do that because they think it will be going higher. You would have been wrong if you tried to hedge at US$900, US$1,000, US$1,100, US$1,200, and US$1,300, so people will not hedge. They will not hedge oil. I can think of only one company that hedges its oil. rijk, I also immediately thought about SD when I read that quote from Watsa in the article and we know him and Ward are very close. Link to comment Share on other sites More sharing options...
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