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SandRidge Permian Trust Message Board

  • eusdond eusdond Apr 11, 2013 10:11 AM Flag

    PER,SDT,SDR, or CHKR

    I can't decide which one I want to add some new money to my existing positions___ All opinions welcomed...

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    • I would rank PER,CHKR, SDT,SDR as 1,2,3,and 4 as choices long term. I hold some of all personally in IRA accounts and some outside at recent prices, not offering prices. New trusts often fall if dividends get soft. Here the NG price has doubled of the low and oil has stayed high. All these companies can and do hedge to keep the earnings stream safe. They do not need to save for investment as companies do. It is a finite investment, ending in 2031, subject to market risks in the price of oil and NG. Additional risks are in production and if the properties are worth the money paid. Maybe $25 wasn't right, but IMHO, these values are sustainable. I am not a financial advisor in any way, but I do put my money where my mouth is, so to speak.

      • 1 Reply to newman1979
      • Newman, I would double-check the hedge positions. I remember that PER, which is mostly oil, has hedged it around $100, but seem to recall that the others do not have nat gas hedges in place. Some have NGL hedges. The other thing is that they don't necessarily get the quoted NYMEX price in their nat gas sales, but instead get a lower amount. CHKR disclosed in their prospectus that this "differential" will grow over time (their selling price last quarter for nat gas was under $2 as I recall).
        I think these have become trading vehicles that run up into the distribution announcements only to be shorted after the runup.

    • PER is mostly oil, is in a well known area with existing operational and oil transport infrastructure and has several hundred additional in-fill wells still to be drilled in the next 2 years at no cost to the trust. It expires at the end of 2031 unless the field should deplete before then, which is highly unlikely. All 3 of the others you mention have had production decline or erronious reserve estimate problems mentioned in the press recently. PER is a buy. If it should drop below $14, then it is s steal! I would not own the others for any length of time.

      Sentiment: Buy

 
PER
12.78+0.19(+1.51%)Jul 21 4:02 PMEDT

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