Canaccord Genuity Maintains a 'Hold' on SandRidge Energy (SD); Third Royalty Trust to Improve N-T Liquidity, Though Structural Concerns Remain
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Price: $14.36 +0.14%
Rating Summary:
2 Buy, 13 Hold, 11 Sell
Rating Trend:
Up
Today's Overall Ratings:
Up: 8 | Down: 5 | New: 26
Rating Summary:
2 Buy, 13 Hold, 11 Sell
Rating Trend:
Up
Today's Overall Ratings:
Up: 8 | Down: 5 | New: 26
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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 Mississippian joint venture as it improves the company’s’12 financial imbalance by nearly $500 million. The agreement, combined with the announced second Mississippian royalty trust (~$700 million), should offset the company’s ’12 cash flow deficit."
"However, we remain cautious as to the company’s underlying financial imbalance going forward. Assuming the company sells an additional ~500,000 net Mississippian acres at terms comparable to the recent joint venture (~250,000 extension acres at $2,000/acre and ~250,000 original acres at $4,400/acre) and sells down its remaining unsubordinated common units in the initial two royalty trusts (~$200 million), SandRidge would still be ~15% over-drawn on its current borrowing base at year-end ’14. Further, we believe the company should outspend cash flow by ~$900 million in both ’15 and ’16."
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 $8.19 yesterday.
Analyst, John Gerdes, said, "We applaud SandRidge’s Mississippian joint venture as it improves the company’s’12 financial imbalance by nearly $500 million. The agreement, combined with the announced second Mississippian royalty trust (~$700 million), should offset the company’s ’12 cash flow deficit."
"However, we remain cautious as to the company’s underlying financial imbalance going forward. Assuming the company sells an additional ~500,000 net Mississippian acres at terms comparable to the recent joint venture (~250,000 extension acres at $2,000/acre and ~250,000 original acres at $4,400/acre) and sells down its remaining unsubordinated common units in the initial two royalty trusts (~$200 million), SandRidge would still be ~15% over-drawn on its current borrowing base at year-end ’14. Further, we believe the company should outspend cash flow by ~$900 million in both ’15 and ’16."
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 $8.19 yesterday.
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