Comeback Time for SandRidge Energy Inc. (OTCMKTS:SDOC)

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SandRidge Energy Inc. (OTCMKTS:SDOC) has exploded onto the OTCB quickly becoming one of the top most traded stocks on the entire exchange.

SDOC was delisted from the NYSE on January 8 due to “abnormally low” trading price levels and failing to meet the exchange’s minimum $1 bid requirement. The Company said in a statement ‘”While the delisting of our stock from the NYSE is certainly not an outcome we desired, it’s important to note that this action does not affect our day-to-day operations. SandRidge continues to have ample liquidity, and we remain focused on navigating the current commodity downturn and extending our capabilities, including developing our recently acquired Niobrara assets.”

SandRidge Energy Inc. (OTCMKTS:SDOC) is an oil and natural gas exploration and production company headquartered in Oklahoma City, Oklahoma with its principal focus on developing high-return, growth-oriented projects in the Mid-Continent region of the United States. In addition, SandRidge owns and operates a saltwater gathering and disposal system and a drilling rig and related oil field services

SandRidge is the largest producer in the water-rich Mississippi Lime formation in northwestern Oklahoma and accounted for about one-third of all the produced saltwater disposed into Arbuckle zones in 2014, according to an analysis of volume data from the Oklahoma Corporation Commission.

SDOC made its initial public offering on November 5, 2007, offering over 28 million common stocks at roughly $26.00 US a share. The Company was founded in 2006 by Tom Ward by virtue of buying approximately 50% of Riata Energy of Amarillo, TX. SandRidge’s drilling activities are focused on its oil properties in the Mid-Continent and Permian Basin. The Company also maintains production in West Texas. The company owns and operates drilling rigs under the brand name Lariat Services, Inc.

In the past SDOC was using hedges on its oil and natural gas production about 3 to 4 years into the future. This program was wisely instituted by ex CEO Tom Ward who left the Company in 2013 and will be mostly gone by 2016.

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SDOC like many small oil and gas producers had been in steep decline over the past year seeing its share price drop over 95% as oil and natural gas prices have continued to fall.

Oil prices hit a new low last week, as the row between Saudi Arabia and Iran was seen making any cooperation between major exporters to cut output even more unlikely, and after a sharp rise in U.S. gasoline inventories.

Benchmark Brent crude futures fell to $34.26 a barrel down 5.93 percent and at their lowest since early June 2004, having staged their largest one-day drop in percentage terms in nearly five weeks.

On January 8 SDOC announced its BOD has decided to suspend payment of the $4.25 per share semi-annual dividend on shares of its 8.5% Convertible Perpetual Preferred Stock. The dividend suspension follows the prior suspension of dividend payments on shares of the Company’s 7.0% Convertible Perpetual Preferred Stock announced on September 28, 2015 and reflects the Company’s continued focus on preservation of liquidity, prudent capital allocation and support of long-term enterprise value.

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Currently trading at a $19 million market valuation SDOC has $790 million in the treasury and significant long term debt. The stock has arrived on the OTC with a bang and there is little surprise why; SDOC has a ton going for it; besides the obvious incredible $790 million in cash the Company is actually healthy recently announcing it is delivering 300 per cent greater oil production and 200 per cent higher natural gas production compared to the previous artificial lift solution. They have also made all the right moves in this oil price downturn; efficiencies and costs are cut dramatically, risks have been decreased and Company is now very well positioned as oil priced increase. We will be updating on SDOC on a daily basis so make sure you are subscribed to microcapdaily.com so you know what is going on with SDOC.

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Disclosure: we hold no position in SDOC either long or short and we have not been compensated for this article.

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6 Comments

  1. Oklahoma Well Service on

    Sandridge is in deep financial distress, they closed down and laid off all employees from their Lariat oilfield service subsidiary because they could not make PAyroll! Sandridge is meeting with financial advisors about a bankruptcy filing, so save your money- don’t buy this shale oil junkie.

  2. Are the officers and directors still receiving a large paycheck. It seems to me those large paychecks last till the end and the poor workers always go first. Deep financial distressed should mean everyone should take a large pay cut . Look at payroll of the big wigs. Look at the shareholders. I am in at about $7.00 /share. My $7000. is now worth $28.00 . I am screwed. Is it possible That I should buy more. Or is That dumb and dumber.

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