SandRidge Earnings -- January 8, 2015

Updates

January 9, 2015:

SandRidge Energy +11.5% following quarterly results • 9:17 AM

• SandRidge Energy (NYSE:SD) +11.5% premarket after finally releasing FQ3 earnings after several months of discussions with the SEC and filing restated quarterly results for the past two years after the SEC questioned its accounting practices.
• FQ3 results beat Wall Street expectations after reporting unadjusted net income of $0.30/share vs. a $0.20 loss for the year-ago quarter.
• SD says it is already reducing 2015 capex levels from 2014's $1.55B as well as its rig count, and expects to announce its 2015 spending plans next month.
• SD has a fully undrawn borrowing base of $1.2B with a current facility of $900M, total long-term debt is sitting at $3.2B, and it holds $590M in cash, leaving net debt at $2.6B.
• Says its Mid-Continent drilling program continues to generate commercial returns, even at current commodity prices; in the first nine months of 2014, 81% of SD's capex went to this region.

Disclaimer: see disclaimer. 

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SandRidge reports earnings here.

An article on SandRidge over at SeekingAlpha on January 5, 2015:  SandRidge: Playing The Endgame With A Hedged Position.

At this point, I think you have to be operating under the assumption that SandRidge Energy has two years or less, from the month of January 2015, in existence. That doesn't mean, however, that BK is imminent or that SD is a complete avoid - it isn't at this point at least not entirely. In fact, I'm actually leaning heavily towards the idea that SD gets bought out, for pennies on the dollar I might add, by a multi-national looking for a way to add growth (this would be possible if you could revalue all of SD's assets based on current information among doing a few other things that I'll outline) or gets bought cheaply/taken private by a massive PE and then chopped up and sold piece by piece to bidders in the space.

So, to start this article let us assume two truths: 1) SD has 24 months of existence left and is officially on the clock - I don't think this is a stretch of imagination considering the ample SA coverage of the struggles at SD recently; and 2) SD does stand a really good chance of being acquired based on today's information.

Note: SeekingAlpha articles are often archived for subscribers only.

Disclaimer: this is not an investment site. Do not make any investment, financial, or relationship decisions based on what you read here. This particular article was very, very, very long. I did not read all of it; I will read it in its entirety at a later date. Or maybe not. But a quick run-through of the article helps me understand better how hedged positions in the Bakken may be helping Bakken operators survive. Also, my contract called for another linked article before going to bed, and I just decided to include this one.