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SandRidge Energy, Inc. Message Board

  • bigg_redd_rockett bigg_redd_rockett Mar 1, 2012 10:01 AM Flag

    DEBT folks. It's all about DEBT as far as Wall Street

    is concerned.

    We can love SD or hate SD. We can pump it or dump it. But in the end it is all about DEBT.

    The Bloomberg article from yesterday goes hand in hand with the downgrade today. Until the debt improves DRAMATICALLY SD is not going to proper. I have been as bullish as anybody on this board except a few of the pump no matter what the news fellows and I now see the writing on the wall for what it is. DEBT.

    I just hope the price of oil and the economy can hold on long enough for SD to prosper. Because it is not going to happen this year, or next and maybe not in 2014. I am beginning to think it could be 2015 or beyond.

    Bloomberg article in case no body has seen it.

    http://www.bloomberg.com/news/2012-02-29/sandridge-chief-ward-shuns-shale-as-investors-pay-price-energy.html?cmpid=yhoo

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    • Thanx for throwing in that link, which for some reason Yahoo did not think was "news"

      • 1 Reply to chrisoverb2002
      • This has been posted before but lets assume for the sake of argument that this guy is not stupid
        By continuing to acquire assets, the company will increase cash flow and its overall size, shrinking its debt load in comparison, said Duane Grubert, a Stamford, Connecticut-based analyst at Susquehanna Financial Group, which owns at least 1 percent of the company’s shares.

        The strategy has “scared away some plain vanilla institutions,” said Grubert, who considers SandRidge the most under-recognized company among independent exploration and production companies. “I see this thing as really emerging as a home run over the next year or so.”

    • Lets see, ever hear of chk as it rose from $7 to $40? Its all about debt, every day, every week as it rose.

      • 1 Reply to thefarm666
      • If you bought CHK from $30 all the way to $40 you would not think debt is a big deal. You would think debt is a GIGANTICALLY MASSIVE deal as the stock price is 1/2 that $40 mark now.

        It is all relative if your talking about price.

        It is not relative if your talking about debt to stock price in today's economic world wide situation.

        As I said earlier in another post. Would be hugely positive if SD could close today green after the Bloomberg article and the downgrade. Might mean the bleeding has stopped for this round. Hope so.

    • What this is about is day traders and people shorting the stock. They like big swings in the stock price.

    • Debt is good when the Fed is adding liquidity (printing money). It doesn't hurt you if the operating side of business is performing. "For lack of a better word, debt is GOOOOD". ha ha .

    • Yes too much debt , but , this is not a good time to be selling ..... not NOW !!!!!! Going into Spring and Summer ????? DO NOT SELL NOW !!!!!!! In fact by some mo' !!!!!!! $120.00 Oil will make everyone forget about debt for a while

    • Sold all my SD this morning, precisely because of the debt levels, in fact I sold all my equity positions this morning for a rather paltry return, at least it was positive. Keeping a hefty cash position until the market has a less frothy valuation. I think we're in for a sizable pullback in the next couple of weeks.

    • The article is not all negative:

      The strategy has “scared away some plain vanilla institutions,” said Grubert, who considers SandRidge the most under-recognized company among independent exploration and production companies. “I see this thing as really emerging as a home run over the next year or so.”
      ‘Anti-Shale’ Producer

      Competitor EOG is aiming for average costs per well of about $5.5 million in the Eagle Ford, almost twice as much as SandRidge’s plan for about $3 million in well costs in the Mississippian.

      By seeking out conventional fields in the Permian, the Mississippian and the Gulf of Mexico, SandRidge is turning itself into an “anti-shale” producer, BNP’s Cameron wrote.

      Ward has described SandRidge before as being a “back to the future” company. He likes the older fields in the Permian and the Mississippian because they’re less crowded with competitors who push up the price for service companies.

      With service costs staying flat in its two largest plays since the middle of 2009, SandRidge is getting a 72 percent return on investment in the Permian Basin in West Texas and “close to 100 percent” return in the Mississippian play in northern Oklahoma and southern Kansas, Ward told analysts and investors on the earnings call.

    • I don't diagree. Today, SD is reacting more to the increase on Tbond yeilds than to the downgrade. When you have 4X debt, higher rates are going to influence the value the market is going to place on your shares. I still think Tom's plan is better than the value the market is willing to give it, thus, I'm a buyer (not selling).

    • When the return profile for their massive Miss. asset is the best or one of the best in E&P, would that not argue for as much debt as you could carry? If I had a cost of capital of 12% and used it for 100% returns, please tell me why I wouldn't lever this to the absolute maximum. do you read into them dialing back on asset sales as negative.. you couldn't be more wrong. the only thing that kills this equity is dramatically lower oil prices....period.

 
SD
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