It's not supposed to be a "wildcat drilling venture," but it may have turned into one with the recent drilling results. Supposed to be "development drilling," which usually entails bringing largely known reserves to the surface.
Kel..............just an observer
PER gets a bad rap because its sponsor SD is also the sponsor of SDT and SDR (hold your nose before you load up their charts...) which are dogs. But PER has consistently cleared its subordination threshold and is likely, in my opinion, to be a reliable generator of cash.
Yes I have learned over 30 years of investing you can pick any point on a chart and make your case for any scenario.
price at close 12/31/13 $11.87 . minus 3 Partnership distributions of $1.87 = cost basis of $10.00 price now 11.75 = profit of 1.75 15% and oil going down for the past month,
a decent return and much better than the Dow which is up about 1%
Buy this only if you do the research and understand what this partnership is about and how it is constructed, This is NOT a stock, you are a PARTNER in a wildcat drilling venture. spoiler alert ..
.you may win , B/E or lose...... shocking
If you want safe, my local bank will gladly give you 2%on your money for the next 17 years
Thats' exactly what they did... Sandridge Energy is a name that will live in infamy in the O&G industry...
Remember, PER is in the Permian basin which is much more favorable than the other trusts in Oklahoma area. Oils are being pressured also lately by the decline in crude prices..........
So we will still get more wells but we don't know what we will get? Not that SD's trusts have been reliable in the past with SDR/SDT giving #$%$ wells in those trusts. Now its PER's turn to get #$%$ wells?
I'm still trying to figure out how big of a deal this is to PER.
Got my finger on the sell button but would hate to do it if its priced in.
According to the last quarterly report I read, it said they drilled 743 wells of the 888. So they drilled another 70 and is that it because of the water issues? I wonder how important those last 80 wells are for the trust. PER was already down 4% today so is this priced in or is this worth closer to 10%?
All the wells will be drilled, just not in the areas that were intially thought, where proved reserves were known. It still seems to me to be in SD's interest to drill in areas that prove positive since they still have an interest in PER with their subordinated units.
Can you explain how important this is for the trust? These last wells that are no longer going to be drilled, would they make up a big % of the trust net worth?
Global Hunter downgrades SD from accumulate to neutral. Bought PER on this selloff......the market makers are making hay today...........Tuesday is ex-dividend and the units are off 4.2%......I think it closes the week around 12.65...........let's see if they don't mark it up again.
Taking a beating down 10+%, way oversold here( rsi 19) , might be worth a nibble, nearing 5 year lows. Did somebody announce that the world was getting off oil and NG?? . no position in SD long PER
That's the smart way to play it. according to my spreadsheet, if distributions come in at 80% of projections, this is currently priced at about 12% IRR for remaining life of trust (with payback of your initial investment in 6 years or so), so your 9% expectation is reasonably conservative.
A portion of final area available for development in the Permian trust encountered high water saturations
which is estimated to result in a total shortfall of 350 MBoe (95% liquids) for 2014.
In the company’s Permian properties, 70 wells were drilled during the second quarter of 2014, all for SandRidge Permian Trust. The company’s Permian Basin assets produced 5.9 MBoe per day during the
quarter (88% Oil, 8% NGLs, 4% Natural Gas).
At June 30, 2014, the company was obligated to drill nine development wells for SandRidge
Mississippian Trust II (SDR) and 76 development wells for SandRidge Permian Trust (PER). The company expects to complete its drilling obligations for SDR and PER in the fourth quarter of 2014.