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Hedge Fund Activist Target - Sandridge Energy
Posted by: CanadianValue (IP Logged)
Date: November 9, 2012 11:05AM
Sandridge Energy (SD) might be familiar to Guru watchers as it has been in the past couple of years a favorite investment of Prem Watsa of Fairfax Financial.
The Sandridge story is that of an energy producer that as of 2009 was 100% weighted to natural gas. Sandridge's CEO foresaw that natural gas prices were not going to recover in the near future and made a daring transition to oil through acquisitions and identification of a very large new resource play called the Mississippi Lime.
Despite that move to oil, Sandridge is still fighting a heavy debt load and a constant need for external financing through creative strategies as it drills up its Mississippi Lime and Permian properties to increase cash flow to suitable levels.
The debt overhang has created a stock price that discounts the value of the company's assets. Here is an interview with hedge fund TPG-Axon that is now pushing to have that value realized through a sale.
Stocks Discussed: SD,