You don't understand how things work. As soon as there is an "inkling" that crude prices are set to move higher from here, every refiner and speculator will will be "diving" into the futures market trying to lock-in a low 12-18 month supply of the "cheap crude". Prices go even higher as consumers react to low gasoline prices by increasing their consumption. Smell the roses Moses (tammara), low oil prices are temporary.
265 jobs in Permian Basin well serv. biz goes buh-bye. Sandridge is serious about cutting costs of non-profitable operations. Lariat has 4 rigs that will prolly move to SD's midstream biz.
Where is Russia et al going to get the capital to finance these (above) projects? Who says drilling in these places is going to be cheaper than the U.S.? A $1.7 billion drilling company (Eurasia Drilling Co.) won't even "move the needle" in Russia's production.
They probably need the money AND it is a very small portion of their overall holdings. Nothing to get excited about. They aren't "jumping ship".
Coulda, shoulda, woulda. However, the real question is, will SD stock ever achieve a materially higher valuation from where it currently is ($1.36)? I believe it will. IMO, SD will trade like a 'future' on crude and everyone will ignore the re-structuring that will be occurring in the industry. SD is not one of the companies that is desperately in need of financial restructuring. All SD needs to do is to find ways to exploit opportunities to lower its drilling costs as prices fall. Six months from now, the supply/demand growth metrics and the outlook will be different, granting a premium valuation to companies who are best able to achieve a "lower production cost". Crude prices also need to start moving higher rather than lower.
Let's be clear here, option traders are motivated by moving crude prices as low as they can, as fast as they can. They don't make as much money by small moves. These guys (option traders) want to drive prices to a "bottom" as fast as they can, so "their words" are to motivate everyone to sell (or short) crude at this juncture, providing them (the traders) a nice low and safer entry point. Don't be a chump and act in accordance with their over-loaded bearish views.
It is also about "drilling costs". Drilling costs need to drop correspondingly with crude prices. Saddawg needs to continue to focus on the properties that leverage their sunken infrastructure investments (saltwater disposal system). Effectively achieving material cost-cutting is ESSENTIAL! and the best way to stretch the BK horizon. As an investor, I am not only concerned with WHEN oil prices change direction, but with HOW MUCH they recover. I can't assume $100, $90, $80 or even a $70 crude price w/in the next 24-months. If Saddawg can't figure out a way to be profitable on $60 crude (WTI), they have a HUGE problem with remaining solvent. As an investor, at the present time, I am more concerned that Saddawg will be taken-over for pennies on my investment dollar than losing all in bankruptcy.
The possibility for BK is on the view-able horizon. BK is inside of an 18-month view if crude prices don't recover and settle above $70. It is a real threat for Saddawg investors and deserves mention.
When you guys get tired of tossing each other off, realize you are looking at 3rd qtr 2014 and it shares very little resemblance of how tough things are going to get this year.
The time may come, but it makes no sense to PANIC now as crude tries to find its bottom. There is no historical basis to support the notion that crude prices are going to stay at the current low levels for a prolonged period. When crude prices start moving back up, the "picture" will change materially.
True, assets get written down when you "mark to market". However, debt is selling at a huge discount also (~60 cents on the dollar), so the $3 billion in debt is really $2 billion. The real threat here is not SD going BK, but rather a big money player positioning themselves to take-out SD for pennies on the dollar.
I am all for your "drill, drill, drill" strategy, but tell me where we are going to get the "money, money, money" to do it?