Intangible Valuation
Value, contrarian, coat tail rider, idiosyncratic research

SandRidge: Future Numbers Will Be Better Than Today's Numbers

SandRidge Energy (NYSE:SD) has levered up the company and invested shareholder's and creditor's capital at an extraordinary pace. Amidst the hurry to drill out the Mississippian, SandRidge is doing all it can to fund its capital expenditures. Most recently, this included the sale of its Permian assets. The common stock of SandRidge has also been volatile as investors attempt to value the future business amidst swings in GAAP net income (due to their well-placed hedges) and in midst of their massive $1.7 billion capital expenditure program (massive when compared to their market cap of $2.6 billion and their operating cash flow of $783mm).

In this context, the investor is stuck without an obvious means of valuation and must...

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