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SandRidge Energy, Inc. Message Board

  • johnnypinz johnnypinz Jun 19, 2013 11:43 PM Flag

    Please explain your reasonings for SD to be bought out by another company

    Please explain why this company will be purchased by another Company

    Sentiment: Strong Buy

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    • The only reason someone might consider buying SD is to replace their dwindling inventory of reserves. For someone to buy SD to increase the rate of exploitation of SD's assets makes no sense, the market is currently amply supplied (in short, the world is "floating" in oil right now). I don't see SD getting bought-out.

    • The exploitation of SD's current set of assets requires more cash than is currently being generated (cash flow). SD could do a secondary offering to get more capital to accelerate development of their assets, but taking-on more debt only delays getting to a cash flow positive position. Slowing CAPEX and amortization of existing debt makes a lot of sense. Selling assets that are outside of SD's "focus" areas to achieve higher EPS is the best course of action. If I was super-bullish about the future of crude and nat gas prices, more leverage rather than less would make sense. Given the slowing in commodity prices, I think the more conservative approach to growth is needed at SD. If I really believed that crude was going to $150/bbl and nat gas was going to +$6/mbtu w/in the next 24 months, I would be more aggressive.

    • Because they do not have the internal cash flow to drill out what they have. They didn't properly balance leases, drilling, and infrastructure. While they may have enough to finish out the remainder of the year and part of next, the future doesn't look so promising. Cash flow over the next few quarters will determine the future growth of the company. Taking on more debt will kill it, selling Dynamic (at a loss) will only slow the bleeding. Real question is when will capex be with in cash flow. I don't see the two coming together. SD has been sitting at the stop light so long its time to tow her away. One step forward and two steps back. They are not replacing lost/sold production fast enough. Looks like asset sales have been a bust.

    • it bodes well for cooperman to have bought in so heavily. i think he's up to even with the # of shares tpg has. they are going to flip it and this has been common knowledge ever since they won the proxy fight. i'm sure they've been shopping it around the clock since the takeover.

    • TPG stated that's one of their priorities.. another to rid TW, mission accomplished.. These guys are not Oilmen they are here to get value $$$ for their millions of shares..

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