SD in my opinion has potential... now more than ever. With SD kicking to the curb toxic management... and having a 'icahn' in cooperman... and having TPG... and narrowing it's focus to a core play... and a core strategy... low cost drilling management and focusing on particular area... I think SD is now more than ever moving towards buyout candidate territory as such... but a buyout won't happen until the production starts beating what they forecast.. and it gets... hot... so to speak.
However, my key point is really this... SD seems to have really narrowed its targets on something that is sustainable and attainable... much like it's bigger competitors like an Encana which is overseeing a MAJOR strategy shift overall... now SD does not have the most credit-worthy metrics today.. and is certainly leveraged... which makes it risky.. but it seems to me... with the more focus oriented management that SD will be able to capitalize in the longer term.
Sentiment: Strong Buy
where do you usually monitor your option data please? not critiquing just want to do it myself as well.
i went to the option channel and said put call ratio is like .64 ish what are you talking about?
note i am bullish just want to confirm
excellent point, with exports to mexico, and LNG exports to japan and potentially europe LNG is going to be a massive business in America... SD does have NG in their fuel mix along with liquids... so there is definite major potential for additional revenue and demand.
Mexico is more close timeline then LNG to japan as mexico is in need in next few years for their power demand switch... they just issued a major RFP google it.
as far as I am concerned this is business as usual. If SD had not earned money and had revenues much worse than they were we could speculate on Lawler leaving for legitimate business concerns... as far as a buyout it could go either way...
On one hand Lawler would want to stay if he would receive some compensation on a buyout stock wise... on another hand Lawler may already have accummulated a ton of stock (in his mind) and he can just hold on to it long term or sell it when he feels its rightfully valued...up to him.
SO really, the business concern on Lawler is not proven and complete speculation.
I actually think its more realistically speculative to say this is more of a regime change with Ward now gone, and Lawler being a senior manager from the ward era.
His position at BP is not as high, but still fairly high and he could be receiving a higher salary... I don't know lawler's history one way or the other... but from TPG and COOP and equity holder perspective lawler is a senior manager who is not delivering enough... so we want him gone...
Like i said earlier out with the old in with the new, let's revamp the company's assets continue building on core plays and maximizing value and kick out the old mongers.
Current Lawler ownership is ~490,000 shares according to SEC Form 4 and Bennett is 1.3M shares according to the same source.
I think this is a move towards change and as far as SD's last 5 year stock performance more change is good than less.
credit suisse has an analyst report that walks you through the asset/liability values of SD as a follow up to the analyst day... suisse alleges a 6.2 NAV as we sit, net of debt...
Others have said 9-15 NAV net of debt.
It really depends on what the true potential of miss. lime is, that will be the driver for some share action. But at least bennett seems dead set on unlocking value, which will only make him more wealthy due to his stock options, unlike ward that milked the co under the radar before TPG and Coop stepped in.
Thank you for the compliment boar, and thank you everyone else for your contributions as well.
Before I get started I will say, I am overweight sandridge now... my cost basis is mid to high 5's and low to high 6's is my ultimate sellout goal, unless I see serious potential for a move to 7-8 that is my near term goal...
Now, I will also say that I am not a geologist, nor am I as knowledgeable in E&P and oil/gas as some other posters out there, and I am newer in general, but my general sentiment seems to be an extreme mistrust of management post Tom Ward, along with high leverage and poor(ish) production... coupled with a complicated structure around trusts, and other items... that were maybe a result of management missteps in the past.
It would seem to me, that the stock is certainly undervalued relative to assets, from proven and unproven basis... I believe certain posters have valued everything conservatively... and I plan to do so further in a component basis to net out debt, and risks and other concerns and come up with a "true value"
Right now, analysts are conservatively optimistic for a 20-30% upside with target average at mid 6's it would seem.
A buyout is a lovely idea, and certainly always the investors dream scenario... Being overweight with a volatile stock as SD has been lately has not been fun I will admit, but I would really like to see what all your thoughts are on what SD really needs to prove to the market to show the street things are changing.
There seem to be improvements in operations in Sandridge, and they seem to be more focus oriented... if they can improve their credit metrics and deliver on production goals that would go a long way towards making the market see them as a serious game changer.
-LNG Exports business gets hot, picks up demand overall sector
-Buyout on premium for proven/forecasted reserves, either bigger energy player or private equity take over
-Beating forecasted revenues next quarter
-Costs reduced more
-Leverage ratio goes down
-Reducing forecasts further
-Crash in commodities
-Overall market downward swing
If i missed any please share, if I take a look at SD in a bubble outside of the stock market, I see the commodity downside being minimal. I see the main downside risk being the overall market and/or increase in rates by the FED.
Sentiment: Strong Buy
if you are going to post this, shouldn't you include his reward package, and maybe contrast it to tom wards... then you may have a better case..
the opposite to my argument saying the shorts are right... are trading the company as if a guy like ward is running it... I am not saying bennett is perfect, he has total comp of 4M right now, which you might argue is high given the share price... but given what bennett is getting compared to ward, it seems more fair...
Ward has scarred the rep of Sandridge and I learn that more and more when I research historical articles on the controversy... it would seem today that shareholders are more active to step up to management to say WTF in certain scenarios... I am not saying cooperman is a savior, but I do appreciate someone there to stick up for the equity holders... (us)
Now - the real question is, can the company unlock the value for us in the future... if you believe so, then the investment makes sense.
Are short sighted. Now I am not an oil/gas energy expert like some of you are, but if there really is some value in the miss. lime, chester, etc... and there is some serious underlying value here in future production... then there is serious potential for buyout or equity stakes, or hostile takeovers... sometimes those result in speculation that drives down the pps... but sometimes it results in crazy movements which drive it higher... shorts are playing a risky business by staying short in the 5's... IMO
The ONLY true short thesis is under performing asset base and leverage ratio increase... when leverage ratio flips to the lower side.. and costs continue to drop lower... and efficiency improves... there are some serious move potentials into other plays and potentially divesting current properties that could unlock some value for SD... let alone a buyout to a real player that would be very interesting given market paradigms...
Now as we sit NG is fairly low... and Oil prices fluctuate... they could go to 60-80... they could go to 110-120.
My guess is they trend between 90's to 110... and in the future there is only one true direction for oil and that is up... especially with NGL and LNG export demand coming in the future.. We are about to end up in a North American energy boom and everyone under the sun... mexico, japan, europe is going to want a piece of american energy infrastructure.
seems like this is primary concern more than everything, q/q leverage ratio increase, and debt levels a bit high relative to industry... not out of control high... but high.... cost controls definitely making an impact towards earnings which will help reduce debt in the LONG term, but capex must be more efficiently spent as well... but what is the consensus on the debt levels reducing/company outlook?
right now the market is pricing SD for some serious headwinds... which we do have some... but it is pricing it as if the company is still being run by Tom Ward...
There are arguments of insolvency and no equity returns long term, but these seem quite moot, and too heavily weighted on the shortsightedness and hatred towards the stock which is fair if you have been here for years... but what do we need to see to really believe the change is occurring and will result in a return on our equity investment?
what is the odds of them reducing debt significantly? as their leverage ratios are not great right now because of an excessive capex budget with limited cash flow relative to spend...?
It is a tremendous sign the company is dedicated to fixing the financial health of the company... which involves paying down on debt, reducing their overall leverage... and making them a better credit-worthy company, thus making their properties more valuable for a buyout candidate, private equity, etc.
I am following cost cutting measures VERY closely, because production can be volatile, but if cost cutting is managed effectively, that is a very good sign that management wants to change.
Good luck to all, this is my read of the situation, if you would like to discuss debt load or cost cutting please let's use this thread as a good message to do so.
Sentiment: Strong Buy
IMHO SD needs to cut costs even further, and needs to pay down more debt, this can be achieved by hiring external consultants maybe labor reduction and some other items to really turn this company towards profit.
turnaround won't be overnight but confident this buying area will reward shareholders in long term (6 months to 2 years)
Sentiment: Strong Buy
are you kidding 7.5? this is worth 12-15 at a MINIMUM 10 bucks easily... just needs tsome better policies in place and better management of production costs and outages.
is they invest for the long term, you win some and lose some, but in the end good plays with smart targets to get realized one day or another... if its a true POS then stocks go out of business and get delisted... but real companies with real earnings and potential and markets... do make strides over time... some are mismanaged and the shares suffer, some are cyclical and some depend on energy prices... there are always scenarios... but if the costs are going down and the company is smart, and not throwing the shareholders under the bus then those are the companies that do reward investors one day.
HK = diff company, growth shot up and no cash and less assets, different company profile altogether... can't really compare the two apples to apples now can you?