Been tracking SD awhile now and looking to buy but have a couple of questions I would like to pose to the board as I cannot seem to get the answer:
1. WTO: In their latest investor presentation they showed it on property slide but never mentioned again. The slide showed as gas only. Is there no oil at all? Does the increased NG price bring this back? Is there any development of this asset.
2. The MS and Permian trusts: When they created these were current SD shareholders given shares, etc? Are they considering spinning off the MS infrastructure in a similiar way? It is my understanding that the infrastructure they built in the MS play is the real hidden value the market may not be appreciating? Is that too simpleton thinking?
Appreciate any/all thoughful responses. Disclosure: owned SD in November 2010 and sold (of course) before the big run up. Cannot believe it is back here as the balance sheet, prospects, etc seem better now than back then,
Re: #1 This is just a hunch, but I don't think 4.50 nat gas prices is enough to justify any effort/expense to stimulate any dry gas properties. I don't think there is a lot of upside to NG prices from here, I'll be really surprised if they can stay above $3.25 thru September.
Re:#2 The infrastructure (grid and disposal wells) are considerable assets and can be monetized as other producers move into the Miss and seek resources to support their drilling, production and water disposal. As I understood from the last conference call, only 50% of the capacity of these assets are presently being utilized by Sandridge activities.
We as shareholders never recieved shares in the Trusts. They were created to raise capitol for Capex. Is there no oil at all?, i don't think there is in current production i believe there is still possibilities in other undeveloped formations we havent explored yet.That may just be my own opinion. The increase in NG gets us closer for future development but still needs to go higher, SD is producing from these properties today even tho we havent drilled a well in two tears so any rise in NG we bennefit from. I believe were in alot better shape. Never hurts to take a profit Good Luck with what ever you decide....