looking for nuggets
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What a bloodbath
Even my beloved DOGE is back under a dime
Sometimes it’s best to just step away from the terminal
They should be allowing CE stocks. It’s not illegal.
Most of the CE warnings were placed on there because some third party frontloaded a stock and then did a spam blast.
Why should current shareholders still be penalized?
More bullcrap
Hi Dan,
The difference here is they are taking away freedoms.
We have been buying and selling Grey Sheet stocks for over 100 years. All of a sudden they are too dangerous?
Pleeeeeease.
You cited examples of where things became less restrictive.
In this case they have become more restrictive and the only reason cited is: “for your own protection.”
Thats the same reason China is using to lock down about 40 million people to protect them from a strain of COVID as dangerous as the common cold.
It's the same reason you give a child: "BECAUSE I TOLD YOU SO."
What they are doing should not sit well with anyone who does not like to be treated like a baby.
Yep. I made an OK trade on them when you initially started this board, but was disappointed the commons didn’t do better.
Took them totally off my radar for some reason. I guess because the financials were so bad, or maybe because there was mention of a R/S.
Yep.
Red as far as the eye can see.
The unilateral move to ban CE, Grey, and Expert stocks has left a vacuum.
Matter of time before it gets filled.
Hoping WeBull opens the gate without restrictions and many others (Robinhood included) rush in.
Total communist bullcrap to tell people they cannot buy a greysheet stock because it's too dangerous.
"We have to save you from your addictions, impulses, and bad decisions. It has nothing to do with the fact that we would prefer you put your dollars elsewhere (or leave them in your brokerage account for us to invest)."
Riiiiiiiight
Yep.
If you check the history, Bitcoin did this same fallback after its first big run over $10,000
Buy on weakness;
Sell on strength;
Know your location.
It can't rain all the time.
Bigtime.
But maybe it will turn out to be a huge blessing. Let the whales load the boat.
Sometimes you gotta go down before you go up.
Thanks,
Hope you crush it.
Those are still trading?
When do they expire?
XELAW
Looks like WeBull might be opening the door.
Not sure yet if this includes greys and Expert, but it certainly should.
OTC Trading is Coming Soon! #Webull #OTC #OTCtrading pic.twitter.com/5iHWfydF01
— Webull (@WebullGlobal) May 9, 2022
Oh wow. That's great news.
The return of the true discount broker!
And it sounds like it might be fairly quickly.
Nice. I probably need to open an account.
ILIM - nice job catching it so quickly. I'm slow on the draw these days because I am so busy with my "day job."
Of course, most of the time I cannot buy on day one anyways. Typically day two will work with Fidelity (forget-about-it with Schwab).
What broker are you using?
Can I borrow your industrial sized bottle of Visine?
Red everywhere I look
And you should not be allowed to eat tacos - or watch Steve Martin movies either for that matter.
The State sees no real benefit in humor. You are just getting fatter sitting there watching the idiot box/phone/screen.
Get outside and start working the fields, or cleaning the streets, or painting whatever they say to paint.
It's their fiduciary duty to make sure you are not wasting minutes in the day.
LMAO
If you cannot see that taking away freedoms "for your own good" is the path to tyranny then maybe its time to stop and read some Orwell.
"Fiduciary" is a bull-crap term that's being used out of context to establish more control.
Talk about a slippery slope.
Your bank could start using that exact same term to justify declining debit card transactions.
Good morning, Brande!
I have zero background in calls, and do not really understand the comparison you are trying to make.
Got time for a more in-depth explanation?
Sucks. Thanks for the link.
Hopefully it’s small
Sure thing.
They are running a tight ship.
I think we got a good shot at getting into the money before the warrants expire.
NG @ $8.83..!
Sandridge is still unhedged.
That means they are totally crushing it as NG keeps moving up!
SandRidge Energy's (SD) CEO Grayson Pranin on Q1 2022 Results - Earnings Call Transcript
May 05, 2022 3:34 PM ETSandRidge Energy, Inc. (SD)
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SandRidge Energy, Inc. (NYSE:SD) Q1 2022 Earnings Conference Call May 5, 2022 11:00 AM ET
Company Participants
Scott Prestridge – Director of Finance and Investor Relations
Grayson Pranin – Chief Executive Officer and Chief Operating Officer
Salah Gamoudi – Executive Vice President and Chief Financial Officer
Conference Call Participants
Joshua Young – Bison Interests
Operator
Good morning. My name is Julian, and I'll be your conference operator today. At this time, I'd like to welcome everyone to the SandRidge Energy's First Quarter 2022 Earnings Conference Call. All lines have been placed on muted to prevent any background noise. After the speakers' remarks there will be a question-and-answer session. [Operator Instructions] Thank you.
Scott Prestridge, Director of Finance and Investor Relations, you may begin your conference.
Scott Prestridge
Thank you and welcome everyone. With me today are Grayson Pranin, our CEO and COO; Salah Gamoudi, our CFO and CAO; as well as Dean Parrish, our SVP of Operations. We would like to remind you that today's call contains forward-looking statements and assumptions, which are subject to risk and uncertainty, and actual results may differ materially from those projected in these forward-looking statements. We may also refer to adjusted EBITDA and adjusted G&A and other non-GAAP financial measures. Reconciliations of these measures can be found on our website.
With that, I'll turn the call over to Grayson.
Grayson Pranin
Thank you. Good morning. I'm proud to report on another strong quarter result for the company and that the company remains well positioned to capitalize on recent commodity price tailwinds to include focused high-graded drilling in the core of the Northwest Stack and a continuation of our well reactivation, which will add incremental production this year.
Before expanding on this, Salah will touch on a few highlights from the first quarter.
Salah Gamoudi
Thank you, Grayson. Despite us having no drilling or completion activity during the past year, we were able widely increased 1Q 2021 to 1Q 2022 production averaging 17.5 MBoe per day and 17.8 MBoe per day in the Mid-Con over their respective periods. The production for the quarter as well as the last year benefited from the reactivation of over 139 wells that were previously curtailed during commodity price downdrafts in 2020. Net cash, including restricted cash, increased to approximately $166 million, which represents $4.51 per share of our common stock issued and outstanding as of March 31, 2022. That approximate $26 million increase over the quarter was supported by production from our Well Reactivation program, as well as higher commodity prices and realization and net of approximately $5 million in pre-purchases of materials related to our 2022 capital program.
The company has no term debt or revolving debt obligation as of March 31, 2022, and continues to live within cash flow funding all of its capital expenditures with organic free cash flow and cash held on the balance sheet. Over the quarter, the company generated adjusted EBITDA of approximately $39 million, again despite no new drilling or completion activities. As we have pointed out in the past, our adjusted EBITDA is a unique metric for SandRidge due as we have a no I and very little T. Given that we have no debt and a substantial NOL position, shield our cash flows from federal income taxes.
Commodity price realizations in the first quarter before considering the impact of hedges increased to $92.35 per barrel, and $3.84 per Mcf, which represents 97% and 82% of daily average index spot prices of WTI for oil and Henry Hub for natural gas and NGL realizations were $33.73 per barrel or 35% relative to WTI. Please note that current natural gas prices in the second quarter of 2022 have been recently reached spot prices above $7 per Mcf beginning in April, subsequent to the quarter we are reporting on.
As of today, we have no open hedge positions or commodity derivative contracts. However, as we invest shareholder capital into our drilling completion and Well Reactivation program, we will work side-by-side with our board to evaluate and potentially enter into hedge positions in order to help protect investor capital spend. As alluded to earlier, we have maintained our large NOL position, which was estimated to be $1.6 billion as of the end of 1Q 2022. Our NOL position has and will continue to allow us to shield our cash flows from federal income taxes.
Our cost discipline continued to improve during the quarter with adjusted G&A decreasing to $2.2 million or $1.35 per Boe from $2.5 million, or $1.46 per Boe in the prior quarter. We have also held LOE and expense workovers to approximately $10.9 million or $6.76 per Boe during the quarter, partially driven by an increase in workover activity associated with well reactivations and well repairs at higher commodity price. We still believe we compare favorably with our peers in regard to G&A and LOE on both an absolute and a per Boe basis. We continue to generate net income for our shareholders. During the quarter, we earned net income of approximately $35 million or $0.95 per share. We should note that our earnings release posted yesterday and the 10-Q that we plan to file later today, provide further detail on our financial and operational performance during the quarter.
Grayson Pranin
Thank you, Salah. We thought it would be helpful to walk through some of the company's highlights, management's strategies and other business details. As I mentioned previously, we are pleased with the results in the first quarter and are positioned to capitalize on robust commodity prices with high rate of return drilling in the Northwest Stack, continued well reactivations and further strengthened cash from our already producing properties in Mid-Con. We are able to keep Mid-Con production flat with modest increases from Q1 2021 to Q1 2022, despite no new drilling activity during the period, driven in part by the continued benefit of our well reactivations of 139 wells, since early 2021.
We will continue to reactivate wells targeting 30 projects over the year, averaging over a 100% IRRs. In addition, we will convert artificial lift systems of 35 wells to rod pumps, which will aid in optimizing lifting efficiency and lower 0.4 cost for this wealth set. With the additional inventory economic at today's commodity prices together with our board, we will evaluate the potential for additional capital allocation later in the year.
I'm happy to report that we about the first of nine wells budgeted this year targeting the [indiscernible] in the Northwest Stack play in April. Thus far drilling is progressing as plan. I'm extremely pleased with the planning and approach of our team has taken on this front.
As Salah mentioned earlier, we pre-purchased nearly $5 million of materials that include our KP for all of our drilling program, pumping units or capital work overs and other items. The investment made earlier this year is key to wording off inflationary pressures in today's market and has already benefited the program. We hope to share more details on the execution of this program in the next call.
Let's pause for a moment to revisit the key highlights of SandRidge. Our asset base focused in the Mid-Con region with a primarily PDP well set, which do not require any routine flaring of produced gas. These [indiscernible] assets are most fully helped by production, but the long hit breed down only diverted by production profile and double digit reserve life. These assets include more than a 1,000 miles each of owned and operated SWD and electrical infrastructure over our footprint. This substantial owned and integrated infrastructure provides the company both cost and strategic advantages, both bring asset operating margin through reduced lifting as well as water handling in its total cost. And combined with other advantages help de-risk individual well profitability down to $40 WTI and $2 Henry Hub. In addition, the interconnectivity and ample capacity help buffer against unforeseen curtailment.
Our assets continue to yield significant free cash flow with total net cast now totaling nearly $166 million with zero debt as of quarter end. This cast generation potential provides several paths to increase shareholder value and is benefited by relatively lowed G&A burden. As we realize value generate path, our board is committed to utilizing our assets, including our cast and maximize shareholder value.
SandRidge’s value proposition is materially de-risked from a financial perspective, higher strength of balance, robust net cash position, financial flexibility, and over $1.6 billion in NOL. Further, the company is not subject NDCs or other significant off balance sheet financial commitments. Currently, the company does not have any open hedging contract after March 31. However, we could enter into hedges from time to time and support of securing return for our capital campaign, manage commodity risk, or other fundamental drivers.
Finally, it's worth highlighting that we take our ESG commitment seriously and have implemented disciplined processes around us. We remain committed to our strategy to focus on growing the cash value its generation capability of our business in a safe, responsible, [indiscernible] manner while prudently allocating capital to high return organic growth opportunities and remain watchful for potential value accretive opportunities.
This strategy has four points. One, maximize the cap value and generation capacity of our incumbent on PDP asset five, extending and flattening our production profile at high rate return work over well reactivations and artificial lift conversions. Continuously pressed on operating in an administrative cost.
But the second is to sure we convert as much EBITDA to free cash flow as possible by exercising capital stewardship and advancing in projects and opportunities that have a high risk adjusted fully burden rates of return. Executing on our nine well drilling program in the core of the Northwest stack, that economically adds deduction.
We are committed to remain open statement in maintaining optionality for opportunistic value creative acquisition. We're focused on value adding opportunities that bring synergies further leveraging's [indiscernible] core competencies, compliment or balance the company's portfolio or otherwise yield the competitive return.
Further, as we generate cash, we will continue to work with our board to assess past maximize several value to include investment opportunities, strategic opportunities, return of capital and other uses. The final staple is to uphold our ESG responsibilities.
Now, circling back to this year drilling program. We’ve had a controlled and purposeful start to drilling, and we will continue to pursue with thoughtful and discipline execution this year in order to realize high rates of return with these investments. The program consists of nine wells that are offset to highly profitable horizontal well, and its favorable geologic and reservoir characteristics.
The focus area we will be developing with this year’s program has been previously delineated by SandRidge and other reputable operators. We know that very well, approximately 50% of the program will be infield development with the remaining 40% being first welded section or co-development that again, offset productive and profitable well.
Of note, that we are benefiting from having a long tenured history in Mid-Continent, previous development program and can lever a very tight cost structure to add incremental barrels to our production in a very capital efficient way. Growth ESG cost are estimated to be $4.75 million for single lateral and $7 million for extended lateral, which reflects 18 drilling and other material equipment and services already secured at reasonable cost and current market estimate.
We will continue to lean forward in repositioning the remaining items for the program to further offset inflationary pressure. However, inflation will be a central focus this year and has bearings on unsecured costs and future journaling decisions. So additional inventory is economic at today’s commodity pricing, program results, commodity price stabilization, or further flattening, well cost, to include expanded inflationary controls, denser well spacing, and other factors will guide future drilling decisions and inventory considerations.
In addition to well reactivation, we will continuously assess these factors and along with our Board evaluate the potential for digital future capital allocation in a prudent mass, but simply, we will continue to prove up results first and then go from there. Dipping to expenses, we are able to lower adjusted G&A quarter-over-quarter from $2.5 million or $1.40 per Boe in a prior quarter to $2.3 million or $1.35 per Boe in the first quarter.
Benefiting from a core value to remain cost disciplined as well as prior initiatives, which have tailored our organization to be fit for purpose. We continued balance the waiting of field versus corporate personnel to reflect where we actually create value and outsource necessary, but more perfunctory and less core functions such as operations accounting, land administration, IT, tax and HR.
Despite expanding activity and producing well count, our total personnel remain at roughly a 100 people, although corporate personnel stand at 15 people, we have retained key technical skills that both the experience and institutional knowledge of our area of operations for drilling and completions, as well as the ability to flex through additional outsourcing of specialized areas to do more.
While we continue to press on operating costs, we anticipate expenses specifically worked over expenses to remain near this quarter’s level, as we reactivate and repair more well this year. The increase in commodity price has improved the economics of the well that may have been or would have remained got in otherwise. The good news is that this will translate to additional production, however, while profitable, the remaining tranche of well reactivations have relatively higher operating costs, which will increase power, water, chemical, and other expenses.
In addition to the cost of an increasing producing well count and placement will continue to be approved throughout the year. We will continue to combat inflationary pressures as well through rigorous drilling processes, securing material, equipment and services over an appropriate tenure to offset market increases as well as continue to leverage our significant infrastructure, operation center and other company advantages.
In summary, the company has $166 million net cash and cash equivalents at quarter end which represent $4.51 per share of our common stock issued in outstanding. Modest production increases from Q1 2021 to Q1 2022 period in our mid-term position, expanded 2022 capital program of high return projects that further enhanced production and the rest decline, to include nine new wells hydrated in the core of Northwest Stack and continuation of our well reactivation program.
Low overhead as top tier G&A of $1.35 per Boe, no debt. In fact, negative leverage. Significant free cash flow and a growing net cash position supported by a diverse production profile, low decline, multi-digit light asset base. $1.6 billion in NOLs, which will shield future free cash flow for federal income taxes, large owned and operated SWD and electric infrastructure that requires costs and strategic advantages require little to no future capital to maintain.
This concludes our prepared remarks. Thank you for your time. We’ll now open the call to question.
Question-and-Answer Session
[Operator Instructions] And our first question comes from Joshua Young from Bison Interests. Please go ahead. Your line is open.
Q - Joshua Young
Great. Thank you. Thanks. Grayson and Salah, great quarter. Can you talk a little bit about, well, I guess I have a few quick questions. So, one you guys historically had disclosed your net cash position as of like the day before the press release. And I noticed that that was missing. And I guess I was curious about that. And I guess that’s probably a quick answer. And then your LOE was up. But you also, your realized gas price was up was there a connection there and if not, could you guys address the combination of kind of the change in LOE, kind of where that came from and then kind of why your realized gas price versus the hub price improved?
And then finally, and I guess this is probably people’s biggest question is just what are you guys doing with the cash and how do you avoid losing a bunch of money drilling wells like every other operator has in the area that you guys are active in over, I mean, over a multi-year period, since people have been drilling the wells of the type that you’re planning or actively drilling in that area?
Salah Gamoudi
Sure. Thanks, Josh. This is Salah, and I’ll go ahead and take the cash disclosure question. So, we in past quarters did report cash on hand. I just want to be clear that the – that was not true net cash that was strictly what was available in the bank. It was an unreconciled balance that didn’t take out things like outstanding checks and things like that. But we did not report that this quarter because we are currently spending money on our capital program. And so unlike in prior years where our capital program was very small and had de minimis impacts on our free cash flow. Capital being spent on our drilling and work over program this year is a lot more meaningful.
And so we want to make sure that we give investors the full picture through set the financials quarterly, and give them context. And unlike past years, and past quarters there, isn’t just sort of a cash build every single quarter that’s sequential and routine. Our capital program will dip into some of those cash balances as we go. So, we didn’t feel like it was as meaningful of a disclosure this quarter. And I’ll go ahead and let Grayson take the other questions.
Grayson Pranin
Yeah. Morning, Josh, thanks for calling in, and great questions. I’ll tackle LOE and differentials. First there was no connection between, LOE and differentials, very different drivers between the two. First on the differentials, we were happy to see that improvement and the decrease in the relative differentials on a percentage basis. A lot of that is driven by two things, a, as the index prices move up, the fixed components of those fees are reduced and diluted. The second is just marketing when molecules are traded on what day? So some positive benefits there and exceeded our guidance. And I think we have some tailwinds behind us in general with the WTI and Henry Hub.
On LOE, there’s really three drivers there. The first, we have more producing well today that add to power, water, chemical, and other similar type costs. The second is, continued work over activity as we reactivate and report repair more wells, as commodity price increases that helps us bring more wells online. So as an anticipate that work over activity to remain kind of this quarter’s level going into next quarter. And the third is inflation. I think, all EMPs are having to work through that environment. In addition to other markets. We have a proactive approach. We’re going and bidding out all of the services, equipment, and materials to gain favorable prices in the current market and appropriate tenure and will continue to lean into that throughout the year.
And then third, potential use of cash. This is something that’s important to us, and very much priority. We’re actively discussing with our board to assess best use of those cash assets. I do think we don’t want to repeat the sins of others or in the past. So we want to make sure that's appropriately put to use and in a sound investment we're definitely conservative and not wanting to overrun our skis and that's why we're having a controlled and purposeful start to our drilling program. But we have had a meaningful increase in commodity prices over the last quarter, in fact over the last weeks and days. So as we see that we continue to assess the potential for increase capital allocation, but want to again do that in a prudent manner.
Salah Gamoudi
Addition to that, Josh, to kind of round out Grayson's points on our cash (0:24:52) reserves, we do want to make it clear to you, our investors and our shareholder base that we will be extremely prudent in the current commodity price environment for any material cash M&A. So use of this cash will need to be very, very value accretive and secure for us to use it on any sort of cash M&A type transaction or combination.
Joshua Young
Great. Thank you, guys.
Operator
[Operator Instructions] Our next question comes from [indiscernible], a private investor. Please go ahead. Your line is open.
Unidentified Analyst
Hi, good morning. Grayson and Salah, and we done on the quarter. I have three questions for you today if I may.
First you said like you were pleased with the result, like I mean, it's more than pleased like I think one of your peer like the [indiscernible] CEO today said, you think likes [indiscernible] is one of the most compelling investment opportunity in the energy sector I'm quoting here. And I would agree, but I found like SandRidge is even a superior investment and just, I mean, the quick math is incredible. Like you disclose like $166 million or about of cash like it's an increase of $26 million since Q4, and you pay like $5 million of material just using the four [indiscernible], your very low cost. I'm not talking about LOE, but just like total cost. Like, I think it's like $10.82 per barrel, like cash should mathematically go up in Q2, in Q3, in Q4. I mean, it could be accidental [indiscernible] (0:26:42) at the end of year, it’s incredible. On top of that you have some of the nine new wells will be coming and contributing at the end of the year. And based on the deck, I think on Page 8, like, I mean, we were literally on uncharted territory, like it will be like over like 100% return, so that could be even more cash coming. So, and repeating what you say, Salah, like the $1.7 billion NOL that kill you from taxes, no tax meaning like no interest and no data and motivation. I mean, $20 a share is really undervalued despite like the $350 – as $350 sorry, 250% return over the last 12 months.
So my question is, would you be comfortable like paraphrasing [indiscernible] CEO saying likes SandRidge is one of the most compelling investment opportunity in the energy sector? And I guess I will sneak one, if so, like why would you not buy back some shares?
Grayson Pranin
Yes. Thank you for the kind words and for joining the call, and the challenging question. I think for us to really focus in on the blocking and tackling, let's make sure that we keep costs as low as possible and convert as much EBITDA to free cash flow as we can and make prudent investment decisions. So I think this is shown evident over the last few quarters and we've benefited from the commodity price this quarter and certainly this trip looks positive going forward. So we really focus on what we can control in the business, and making good decisions and the other inferences I'll lead to you Gazag. But I do think some of this hard work is showing up in our low G&A. We've been able to again blocking and tackling, keeping production up into the right. We're able through that well reactivation program to actually have a slight increase in Q1 of this year, relative to Q1 of last year which is really meaningful.
And so if you look at this year as we look at base declines and we anticipate high teams and with reactivations getting the low-single digit. And then you add on Northwest Stack drilling with results coming online in the back half of the year that can meaningfully add to that and even begin some production growth in that relative period. So we really, again focus on what we can control.
Salah Gamoudi
In addition to that, in relationship to the – your question about, about share repurchases and the repurchase program, I'd just like to remind our shareholders that that share repurchase program is a 10b-18 . So if, if the company has any material insight information or any sort of in sort of any restricted trading period, we can't exercise that. So there are times and places where perhaps we feel it might be opportunistic to buy back shares, but again, if we're in any sort of strategic discussion or have any insight information that can be fairly limiting on what we can do from a security law perspective.
Unidentified Analyst
Yes, of course. Thanks. And I think you said, I said earlier, like you have these nine Wells the integrated program in the cloud, the Northwest stack do you know, like how many other additional Wells be there for 2023 or 2024, should you decide to drill more like?
Grayson Pranin
Yes, again, as I mentioned earlier, we can continue to assess the potential for additional capital allocation with our board. The further increase in commodity price has certainly helped. I think, before we get into inventory, we want to resume drilling, get a couple of strong Wells behind us, and then you'll see us come out with additional commentary and inventory, but there's certainly, additional Wells, economic at today's presence.
Unidentified Analyst
And how many, well do you need to stay flat in 2023? Do you have an idea? or any indication?
Grayson Pranin
Yes, I think the, the nine Well program we actually plan to have a production increase from January to December. And again, because of the timing not all of that production wedge is hitting for full effect over the 2022 period, if you look at the full fiscal year, but it will materially impact annual decline this year with additional production uplifts going into next year.
Unidentified Analyst
Well done. And just last for me on Carbon Capture last year, I think one of the decks you had, like you disclosed like thousand miles of pipeline wide of ways 51 disposable Wells. And I think like what a disposal were divided by five of other last few years SandRidge so I mean, order of magnitude, at least. So I know there is no value in the Carbon Capture play today, and you said it in the press release, like you're only exploring the technical and commercial viability but would these asset be useful it?
Salah Gamoudi
Yes. [indiscernible] this is Salah. Absolutely. I mean, we are exploring using our incumbent asset base. Everything that you described is accurate. And, we have taken steps along this path and have gotten some initial reads with our partnership with the University of Oklahoma, that there is substantial potential for Carbon Sequestration on our asset base. However there is a lot of things to be done in regards to technical feasibility, commercial viability, finding an emitter. I mean, all of those things kind of need to come into place before we could ascribe any value to it. But we have taken steps and continue to move the football down the field, so to speak on those efforts.
Unidentified Analyst
Thank you. Thank you for taking my question.
Grayson Pranin
It's appropriate. And for us due diligence here, just because we have, these material assets in Northwest Oklahoma that are underutilized today in some places only using a portion of the, the total capacity and how can we further leverage that? But I will caveat that there is no capital currently being allocated to that, and we need to prove out the commercial liability before we do. So as soon as we have, meaningful news that could be the case, we'll come out and disclose that. But right now I would not subscribe any value to it.
Salah Gamoudi
Thank you. Continue to have work and congratulations again. Bye-Bye
Grayson Pranin
Thank you.
Operator
We have no further questions in queue. This will conclude today's conference call. Thank you for your participation. You may now disconnect.
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https://www.stck.pro/news/SD
Is the split confirmed?
I typically notice warrants are worth $1 when the commons are at the strike price.
Add $1 for every dollar above the strike price, since you have to pay a premium for the potential.
I think we will see both warrants move into the .30's if the commons can move into the mid $20's.
It's all about believability. Peeps gotta believe its possible to get into the money before time expires.
I did notice someone with over 1,000 followers on Twitter mention the warrants as .08 lotto tickets.
Yep. I guess this is going to be very common for some stocks.
DGLT SEC registration revoked:
https://www.sec.gov/litigation/opinions/2022/34-94816.pdf
NTPY back in Expert.
That didnt last long.
New 52 Week High: $21.26
Agree!
SD: Gotcha.
I have done great on the commons and hoping for a jackpot on the warrants.
This Q has got to be even better than last Q since the NG spike didn’t even occur until beginning of March.
I think there’s a good chance SD doubles again in the near future.
Zero debt and a massive NOL.
Nothing is 100% but SD seems more probable than most.
“Sandridge Energy $SD reporting earnings of $0.95/sh with net cash of $4.52/sh. With 12mo-strip for natty at $7.76 and WTI strip at $98.13 - I have a price target between $40.54-$52.55. Could be a double from today's closing price of $20.50.”
Sandridge Energy $SD reporting earnings of $0.95/sh with net cash of $4.52/sh. With 12mo-strip for natty at $7.76 and WTI strip at $98.13 - I have a price target between $40.54-$52.55. Could be a double from today's closing price of $20.50. pic.twitter.com/SjJ5eTaxu9
— (K)Dubbs ChonkyBoiCap 💰🏀 (@kdubbsy) May 4, 2022
Earnings out. Great report.
https://ih.advfn.com/stock-market/NYSE/sandridge-energy-SD/stock-news/88012966/sandridge-energy-inc-announces-financial-and-ope
Look at the cash on hand.
SD: Yep!
And that quarter doesn't even compare with what is in the works right now.
NG prices didn't start skyrocketing until the beginning of March.
Commons up to $21.27 in AH
Natural Gas Price Upside, Cash Protected Downside With SandRidge Energy
May 03, 2022 7:53 PM ETSandRidge Energy, Inc. (SD)NG1:COM13 Comments17 Likes
https://seekingalpha.com/article/4506480-natural-gas-price-upside-cash-protected-downside-with-sandridge-energy
Natural gas prices are surging.
SandRidge offers substantial free cash flow upside with higher natural gas prices.
Downside is theoretically limited by the large and growing cash balance.
Oil Refinery And Pipeline In Desert During Sunset
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Natural Gas (NG1:COM) prices surged recently amid a combination of bullish factors including lower than expected supply growth, export increases, supportive weather and low coal and natural gas inventories. This brought the price over $8/mmbtu, the highest in over a decade:
As prices rise, investors and speculators seek exposure through futures, options and equities. One company that I've discussed previously on Seeking Alpha and elsewhere has a differentiated proposition for natural gas exposure: substantial cash flow upside to higher natural gas prices, with potential downside protection from a large and rapidly growing net cash balance. That company is SandRidge Energy (NYSE:SD).
Cash Flow and Balance Estimation
Fueled by the ongoing surge in commodity prices, SandRidge may have approximately 169MM in net cash by end of the first quarter of 2022, and nearly ~209MM of net cash by the first half of the year:
forecasted periodic cash flows and balances for SD Q1 Q2 2022
Bison Interests
SandRidge’s cash flow has torque to higher commodity prices. In fact, despite significantly higher capital spending and lower production guidance for 2022, SandRidge likely generated approximately $30MM in free cash flow in Q1 2022, and may generate $39MM of free cash flow in Q2 2022, as can be seen below:
bison forecast cash flows and fcf for sandridge
Bison Interests
SandRidge likely generated slightly lower FCF in Q1 2022 vs. Q4 2021 due to higher capital expenditure guidance, lower production guidance and hedging losses. However, SandRidge's cash flow will likely increase materially in Q2 due to materially higher underlying commodity pricing, to which SandRidge has considerable torque given that it has no hedges after Q1.
To illustrate the effects of commodity prices on SandRidge’s unhedged free cash flow, the Q2 2022 estimate was sensitized to different oil and gas prices. Note that this assumes NGL prices are fixed at 70% of oil prices for SandRidge, which is reflective of the last four quarters of operation:
bison sandridge SD free cash flow sensitivity table
Bison Interests
Estimation Methodology
Below are some of the assumptions to arrive to the estimate of free cash flow.
Revenues: SandRidge’s revenues for oil, gas and NGL sales were each separately forecasted by multiplying estimated production by the market price for that period, and subsequently adjusting for SandRidge’s realized price as a % of market prices, which accounts for some of the cash costs of production.
Estimated Production: SandRidge’s management has provided ranges for FY2022 production guidance for oil, gas and NGL’s. The midpoints of each of these production ranges were used and quarterly production was projected to be highest in Q1 and decline slightly in every quarter thereafter, consistent with recent historical production trends for SandRidge.
Market Price: The prevailing market price was used for the period in question. NGL prices are based on the EIA NGL composite index, for which there is no price in March 2022, and only a spot estimate in April 2022. Q2 2022 forecasts are based on April average prices.
Realized Price as a % of Market Price: The simple average of the SandRidge’s price realization for 2021 was used for each commodity.
Cash Costs: Cash COGS and operating expenses were subtractedfrom revenues to get to EBITDA.
COGS: Includes operating transportation expense from the income statement and assumes quarterly inflation of 1% (4.06% per year).
Operating Expense: Includes SG&A and other operating expense or gain from the income statement. This also includes losses/gains on commodity derivates, which is marked to market using the average prices over the period in question.
Free Cash Flow: To arrive to an estimate of free cash flow, net capital expenditures, interest paid and cash taxes were subtracted from EBITDA.
Net Capital Expenditures: Management is guiding significantly higher capital expenditures in 2022 as SandRidge expects to resume drilling new wells. The midpoint of this guidance was used and it was attributed to each quarter, respectively. No other sales or purchases of assets in 2022 are assumed.
Interest Paid: The simple average of the last 4 quarters. Given SandRidge’s very low levels of debt this is not material to this analysis.
Cash Taxes: SandRidge has significant net operating losses to shield them from future tax liabilities, therefore, taxes were assumed to be 0.
Implications: A Substantial Net Cash Balance Gives Optionality Moving Forward
Following several strong quarters, SandRidge had a net cash balance of 139.5MM as of the end of 2021, and 161MM as of March 7, likely grows to nearly 209MM by the first half of 2022 at current commodity prices:
likely cash build and historical cash build at sandridge over time
Bison Interests
With a roughly 37MM share count, SandRidge had $3.77 in net cash per share as of the end of Q4 2021, which is projected to grow to $5.65 per share by the first half of 2022. With a significant cash balance, SandRidge’s balance sheet now has an embedded margin of safety should commodity prices fall materially.
This article was written by
Josh Young profile picture
Josh Young
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Josh Young is the Chief Investment Officer of Bison Interests, an investment firm focused on publicly traded oil and gas companies. And he is the former Chairman of the Board of Iron Bridge Resources, which sold to Warburg Pincus and CPPIB backed Velvet Energy in 2018 for $142 million. He is a value investor primarily focused on energy stocks, natural resources stocks, and companies trading at low multiples to earnings, cash flow, or book value. He has presented at numerous investment conferences, including Platts, LD Micro, Oil & Gas Money, Louisiana Energy Conference, and the Global Resources Investment Conference and has been featured in media including Barrons, Bloomberg, Business Insider, Fox Business News, RT and Oil & Gas Investor Magazine. He is a graduate with honors from the University of Chicago in economics.
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Disclosure: I/we have a beneficial long position in the shares of SD either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.
Additional disclosure: Important Disclaimer: Opinions expressed herein by the author are not an investment recommendation and are not meant to be relied upon in investment decisions. The author is not acting in an investment adviser capacity. This is not an investment research report. The author's opinions expressed herein address only select aspects of potential investment in securities of the companies mentioned and cannot be a substitute for comprehensive investment analysis. Any analysis presented herein is illustrative in nature, limited in scope, based on an incomplete set of information, and has limitations to its accuracy. The author recommends that potential and existing investors conduct thorough investment research of their own, including detailed review of the companies' SEC filings, and consult a qualified investment adviser. The information upon which this material is based was obtained from sources believed to be reliable, but has not been independently verified. Therefore, the author cannot guarantee its accuracy. Any opinions or estimates constitute the author's best judgment as of the date of publication and are subject to change without notice. The author and funds the author advises may buy or sell shares without any further notice.
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ESP equity research profile picture
ESP equity research
Today, 1:08 PM
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@Josh Young ;
Another good write-up - added to my SD, MTDR holding today. A bit surprised SD is down here with another huge up day for NG. What will they do with their cash? variable Divy, new acreage, buybacks?
ESP
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T-Town Investor
Today, 11:10 AM
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No earnings release or conference call this morning. Does anyone know why they have missed their deadlines?
- SandRidge Energy, Inc. (the “Company” or “SandRidge”) (NYSE: SD) today announced plans to release first quarter 2022 operational and financial results after the close of trading on Wednesday, May 4, 2022.
- SandRidge will host a conference call on Thursday, May 5, 2022 at 10:00 a.m. Central Time
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Looped61
Today, 12:22 PM
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@T-Town Investor dude.. "after the close of trading Wednesday May 4th".. it's after the bell today
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DrT
Today, 12:39 PM
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@Looped61 "Looped" seems appropriate.
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Bergerac
Yesterday, 11:10 PM
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Nice article as usual Josh. I'll disagree with one assumption though, the assumed 60% of market (Henry Hub) pricing for the dry natural gas. I think that as the HH price rises, the percentage of that garnered by SD should also rise.
The idea being that SD's discount per mcf to Henry Hub is probably more of a fixed number than a variable one. I've seen the same effect in nat gas collected in the Permian Basin, which is at a substantial discount to HH nat gas. But it's very close to a fixed price difference. To use an estimate of past pricing, $2/mcf HH might result in $0.50/mcf in the Permian, $3.50/mcf HH might yield $2/mcf in the Permian. $5.50/mcf HH might result in $4/mcf Permian, etc.
Or to use an fairly absurd example, if a $5/mcf HH price results in $3/mcf price paid to SD, then a $50/mcf HH price should result in a much higher than $30/mcf price to SD, at least $40/mcf and possibly $45/mcf. Not that I expect HH nat gas to reach $50/mcf, though it's been more than double that in Europe this year.
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Josh Young
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@Bergerac I hope you're right, and preferred to use a lower number and to be surprised to the upside if this turns out to be correct
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cereba
Yesterday, 9:08 PM
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That sensitivity table is extremely helpful. Thanks
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jcolbyclark
Yesterday, 8:33 PM
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@Josh Young great pick … because of you I had 50,000 shares all in average price of just under $8… and sold between $19.50 and $20. I should have held, but consider it more risky than my core holdings of AR, CVE, DVN and MRO.
You are a genius - thanks.
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Josh Young
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@jcolbyclark thanks!
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jcolbyclark
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@Josh Young thank you
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@jcolbyclark
tax lawyers Morgan Lewis & Bockius looking for clients!
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Pennydredful
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A share price would be nice and where they operate and any plans for cash ?
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@Pennydredful looks like you’re fairly new here so I’ll offer the following.
The share price is shown at the very top of the article under the byline. It’s updated to the day that you open the article, showing the gain or loss from the original published price.
Part of investing is doing your own research. The remaining questions you asked should be easily found out on your own. Don’t expect an author to do everything for you.
Jim
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NG @ $8.42
SD: LOL - sure.
500% gains really suck.
This stock was at $4.35 a year ago.
Got some sell-on-earnings/news at the moment.
Not surprising.
Gentlemen....
Place your bets.
New 52 Week High of $20.83
SD: Sandridge at $21 in pre.
ER coming today.
NG @ $8.31
Exactly 5 months until both warrants expire.
The commons have doubled over the last 90 days.
Do that again and the warrants are in the money.
SDRDW
SDRWW