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Sandridge Mississippian Trust II Message Board

  • carmineconspiracy carmineconspiracy Feb 22, 2014 1:02 PM Flag


    Unlike SDT,SDR still has 27 more wells to drill.This is the best reason to hold,esp. since the price of ng drawn from these wells will fetch a much higher price.By the time all the 27 wells are drilled you would get back $5 in div. and although the decline rate is high eventually they level off and production becomes stable.In two yrs. you can sell it for $5 while making another $5 in div,thats $10 for $8 in two yrs.where else can you get that kind of return.

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    • In the last reported distribution quarter they drilled an average of 3.5 wells per month. With less than 30 wells to drill they should be done drilling in three more distribution quarters, or August 2014. Then you will have one transition quarter where they will have some impact from the new wells but no new wells coming online. Then three quarters of progressively poorer production till the end of the sub period when distributions fall off by 25% from the sub conversion.
      Not sure how you arrived at the $5 by the end of drilling number.
      Maybe you should build a model to see what you come up with. Some who have believe that subordination will end one quarter sooner, or June 2015. That would be even worse.

    • The overabundance of NatGas will still continue as the weather changes and there are so many producers that can restart their idled NatGas production and easily add more to the existing inventory.. We are still many quarters away from getting this gift to our trucks and newer markets through exporting..There is also a smaller % of NatGas production in these trusts compared to Oil that have weak/questionable hedges. I still own half my units so I would like to see some better valuations in the near term; however, reality keeps deteriorating the PPS and our wealth. Keep in mind this administration is completely inept and is in no way fossil fuel friendly. The green energy initiatives have been somewhat dismal as if TLSA is a practical/viable solution for the average consumer but for only a handful of the wealthy who have the luxury of owning multiple vehicles and a garage for that matter.

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