SandRidge Energy News

[Bellaboo]

Just curious, but if Sandridge sells their downtown property what other assest do they have? When you lease land to an oil company do they own all the oil or only what they recover?

All depends on the lease. You can buy an existing well and only get those minerals at the well head. You can buy a lease from someone and get anywhere from 82 to 75 % of royalty. When that lease expires and if you fail to produce, if there is no extension clause, then at term the lease expires and all reverts back to the mineral owner. It's a complicated mess.

[Just the facts]

Thanks Bellaboo. With that in mind, if SD declares bankruptcy what happens to the leases they hold, if anything? Can the landowner renegotiate them?

[PhiAlpha]

Thanks Bellaboo. With that in mind, if SD declares bankruptcy what happens to the leases they hold, if anything? Can the landowner renegotiate them?

It would obviously depend on the terms agreed upon in each individual lease, but generally no they could not. If SD did not plan to reorganize and filed Chapter 7, all of their assets, including O&G leases, wells, surface facilities, etc would be liquidated. After the sale they would be assigned to the purchaser similarly to a normal divestiture.

As an exception, certain leases contain "consent to assign" provisions that require the lessor's consent to assign the lease. Depending on the language, assigning a lease without consent could void the lease. I'm not sure how such provisions would be handled in a bankruptcy liquidation though as I've never handled one.

[bchris02]

SandRidge Energy Inc.'s credit rating is lowered | News OK

[Just the facts]

Their hedges start expiring this summer. If prices aren't up at least to $70/bbl I imagine they'll fall into BK.

Did you see the quote from Harold Hamm today that they sold off all their hedges to raise cash in the fourth quarter? That is the ultimate hedge right there because you can only do that once. Any idea that CLR will buy the SD campus looks to be pure fantasy at this point. If oil doesn't hit HH's $85 price there might be more than one downtown tower on the market.

[PhiAlpha]

Did you see the quote from Harold Hamm today that they sold off all their hedges to raise cash in the fourth quarter? That is the ultimate hedge right there because you can only do that once. Any idea that CLR will buy the SD campus looks to be pure fantasy at this point. If oil doesn't hit HH's $85 price there might be more than one downtown tower on the market.

Continental is a $17 Billion diversified company that can still make money without being hedged in the Bakken and SCOOP down to around $45 per barrel.

Sandridge is a $558 Million company that invested way too much cash in one play and can barely make money even with it's hedges.

Depending on what SD is hoping to get for its HQ, Continental could likely purchase it with the money it plans to spend drilling 20-30 of the 283 wells in the drilling schedule this year. At 31 rigs, they spend more money drilling and completing wells every month, than they would likely need to buy SD's campus. If they want it, they can afford it.

While I don't think Hamm's decision to sell CLR's hedges was the smartest move he's ever made, don't make the mistake of comparing these to companies in any operational way. Their situations are in no way similar.

[Just the facts]

Thanks PhiAlpha

[PhiAlpha]

Thanks PhiAlpha

No problem...here's to SD finding a way out of this...

Though if they don't, I see the potential for a really funny (and ironic) situation to develop if SD goes bankrupt...

Apparently as SD continues to crater... Tapstone is doing pretty well and is generating a lot of interest from potential buyers. I could see a situation in which Tom Ward sells Tapstone and purchases SD's assets out of bankruptcy (or the investors interested in Tapstone invest more money and Tapstone buys SD out of bankruptcy). Hilarity ensues.

Tom Ward?s Tapstone Energy Fields Interest From Suitors - WSJ

[okatty]

No problem...here's to SD finding a way out of this...

Though if they don't, I see the potential for a really funny (and ironic) situation to develop if SD goes bankrupt...

Apparently as SD continues to crater... Tapstone is doing pretty well and is generating a lot of interest from potential buyers. I could see a situation in which Tom Ward sells Tapstone and purchases SD's assets out of bankruptcy (or the investors interested in Tapstone invest more money and Tapstone buys SD out of bankruptcy). Hilarity ensues.

Tom Ward?s Tapstone Energy Fields Interest From Suitors - WSJ

Irony at its best!!

[Just the facts]

No problem...here's to SD finding a way out of this...

Though if they don't, I see the potential for a really funny (and ironic) situation to develop if SD goes bankrupt...

Apparently as SD continues to crater... Tapstone is doing pretty well and is generating a lot of interest from potential buyers. I could see a situation in which Tom Ward sells Tapstone and purchases SD's assets out of bankruptcy (or the investors interested in Tapstone invest more money and Tapstone buys SD out of bankruptcy). Hilarity ensues.

Tom Ward?s Tapstone Energy Fields Interest From Suitors - WSJ

Watch the movie Rocket Singh: Salesman of the Year

Rocket Singh: Salesman of the Year (2009) - IMDb

[moose]

No problem...here's to SD finding a way out of this...

Though if they don't, I see the potential for a really funny (and ironic) situation to develop if SD goes bankrupt...

Apparently as SD continues to crater... Tapstone is doing pretty well and is generating a lot of interest from potential buyers. I could see a situation in which Tom Ward sells Tapstone and purchases SD's assets out of bankruptcy (or the investors interested in Tapstone invest more money and Tapstone buys SD out of bankruptcy). Hilarity ensues.

Tom Ward?s Tapstone Energy Fields Interest From Suitors - WSJ

I don't think their looking for a buyer is a sign of success but rather a sign of pressure from GSO to sell before their hedges roll. They just made a large acquisition of sub-par assets and are positioned similarly to SD.

[PhiAlpha]

I don't think their looking for a buyer is a sign of success but rather a sign of pressure from GSO to sell before their hedges roll. They just made a large acquisition of sub-par assets and are positioned similarly to SD.

Which acquistion was subpar? They've drilled several good wells in Harper county, Kansas which they acquired from shell at a major discount and the acreage they bought from Apache out in western ok is pretty good. The article doesn't say they are looking for buyers, it said they're fielding offers and its becuase their assets are good and their debt level is so much lower than most other E&P companies. How does that put them in a position that's anywhere close to that of SD?

[okatty]

Agree...SD and CLR are night and day. Like a pretty good West Conf NBA team (CLR) being compared to a cellar dweller in the East (SD).

[PhiAlpha]

Agree...SD and CLR are night and day. Like a pretty good West Conf NBA team (CLR) being compared to a cellar dweller in the East (SD).

More like a pretty good team in the west compared to an average D League team.

[okatty]

More like a pretty good team in the west compared to an average D League team.

OK, I thought a bad team in the East was an average D league team!

[Scotty22]

With SD going into Selective Default with a lender this is really bad news. Full on default/bankruptcy could be coming soon.

[moose]

Which acquistion was subpar? They've drilled several good wells in Harper county, Kansas which they acquired from shell at a major discount and the acreage they bought from Apache out in western ok is pretty good. The article doesn't say they are looking for buyers, it said they're fielding offers and its becuase their assets are good and their debt level is so much lower than most other E&P companies. How does that put them in a position that's anywhere close to that of SD?

Shell could have given them the acreage and it would make little different - 90% of the Miss doesn't work, especially the KS Miss. Not sure about their Apache acquisition either. Apache has had a major overhaul in their Midcon division after overpaying for those from Cordillera and Tapstone bought it from them at near top of the market. I know what the article says however I was told that there is some pressure.

[BillyOcean]

^^^^^^^

this is the correct story regarding tapstone...

[Just the facts]

I hope whomever buys the Sandridge building they bring a lawn mower and an edger. I walked through there today and it made me want to come out of yard care retirement.

[ljbab728]

Apparently there is some somewhat positive news about them today. It is tempered by other things.

http://www.oklahoman.com/article/542...1.25%20billion

“The fact that they haven’t run out of options and that they can still issue debt at this stage is a small victory,” said Jake Dollarhide, president of Longbow Asset Management Co. in Tulsa. “They’re looking to replace higher-yielding debt with lower-yielding debt.”
Also Thursday, credit ratings agency Standard & Poor’s raised its debt ratings for SandRidge. S&P boosted its corporate credit rating on SandRidge to “CCC+,” up five notches from selective default (SD). The outlook remained negative. S&P rated SandRidge’s Thursday senior secure note offering at “B,” which is five rungs below investment grade.

[jccouger]

Apparently there is some somewhat positive news about them today. It is tempered by other things.

http://www.oklahoman.com/article/542...1.25%20billion

Good move. You following the rumors that they are looking to make some acquisitions?

[BBatesokc]

SandRidge Energy receives delisting notification

SandRidge Energy receives delisting notification | News OK

[Pete]

Ugh.

Things seem to be going from bad to worse for them.

[okatty]

About the only thing positive is that its price to book ratio is about .3 which beats the industry and could indicate some value BUT that's grasping for a positive in the face of various negatives.

[soonerguru]

Should I buy Chesapeake stock? It's down to about $8.50 a share right now.