Canaccord Genuity Maintains a 'Hold' on SandRidge Energy (SD); Underlying Financial Imbalance Remains Going Forward
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Price: $14.34 --0%
Rating Summary:
2 Buy, 13 Hold, 11 Sell
Rating Trend:
Up
Today's Overall Ratings:
Up: 6 | Down: 5 | New: 17
Rating Summary:
2 Buy, 13 Hold, 11 Sell
Rating Trend:
Up
Today's Overall Ratings:
Up: 6 | Down: 5 | New: 17
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Canaccord Genuity maintains a 'Hold' on SandRidge Energy (NYSE: SD) price target of $7.00.
Analyst, John Gerdes, said, "We applaud SandRidge’s recent Mississippian joint venture as it should improve the company’s’12 financial imbalance by nearly $500 million. The agreement, in conjunction with the second Mississippian royalty trust ($500-$600 million) should offset the company’s ’12 cash flow deficit. That said, we remain cautious on the company’s underlying financial imbalance going forward. Assuming the company sells an additional ~500,000 net Mississippian acres (~250,000 extension acres @ $2,000/acre and ~250,000 original acres @ $4,400/acre), SandRidge would still be ~25% over-drawn on its current borrowing base at year-end ’14."
"Notably, in conjunction with the joint venture announcement, SandRidge lowered ’12 production guidance ~4% to 26.5 Mboe. We estimate this implies the “extensional” Mississippian acreage is ~25% less productive than the “original” Mississippian play though has ~60% oil composition. Consequently, we have increased our capital intensity assumption to better calibrate with the company’s outlook and modestly increased our liquids capital allocation."
For an analyst ratings summary and ratings history on SandRidge Energy click here. For more ratings news on SandRidge Energy click here.
Shares of SandRidge Energy closed at $8.05 yesterday.
Analyst, John Gerdes, said, "We applaud SandRidge’s recent Mississippian joint venture as it should improve the company’s’12 financial imbalance by nearly $500 million. The agreement, in conjunction with the second Mississippian royalty trust ($500-$600 million) should offset the company’s ’12 cash flow deficit. That said, we remain cautious on the company’s underlying financial imbalance going forward. Assuming the company sells an additional ~500,000 net Mississippian acres (~250,000 extension acres @ $2,000/acre and ~250,000 original acres @ $4,400/acre), SandRidge would still be ~25% over-drawn on its current borrowing base at year-end ’14."
"Notably, in conjunction with the joint venture announcement, SandRidge lowered ’12 production guidance ~4% to 26.5 Mboe. We estimate this implies the “extensional” Mississippian acreage is ~25% less productive than the “original” Mississippian play though has ~60% oil composition. Consequently, we have increased our capital intensity assumption to better calibrate with the company’s outlook and modestly increased our liquids capital allocation."
For an analyst ratings summary and ratings history on SandRidge Energy click here. For more ratings news on SandRidge Energy click here.
Shares of SandRidge Energy closed at $8.05 yesterday.
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