Sandridge Energy Inc (NYSE:SD)

CAPS Rating: 3 out of 5

The company engages in the exploration, development, and production of oil and gas properties.


Player Avatar smsheldon (89.47) Submitted: 1/27/2012 1:48:11 PM : Outperform Start Price: $8.17 SD Score: -132.17

4 years of alternative enegy flops, Oil will continue to be King.

Member Avatar DerrickPetroleum (< 20) Submitted: 2/2/2012 11:40:38 PM
Recs: 0

SandRidge Energy Inc will acquire Dynamic Offshore Resources for $1.275 billion. Dynamic’s assets include low operating cost, mature fields (R/P~7 years, 80% developed).

SandRidge will pay $51,000/Daily BOE which is inline with some of the larger deals in the region, viz. Energy XXI-ExxonMobil valued at $44,720/Daily BOE and Apache-Devon valued at $36,696/Daily BOE. The oil percentage in these deals ranged between 50-60%, similar to the SandRidge-Dynamic deal. Also, the two deals were struck when the WTI price was in its 80?s and happened in the wake of the Macondo oil spill, when the overall GoM assets were traded at a discount.

The $/daily BOE is high for deals which have a high oil content (>90%).

Derrick has observed historic deal values in the range of 60,000-90,000/Daily BOE for GoM deals and $100,000-120,000/Daily BOE for US onshore deals.

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