Daniel R Moore
Portfolio strategy, bonds, oil & gas, long-term horizon

SandRidge Permian Trust: Risk Outweighs Potential Reward Of Higher Oil Prices

After reaching an all-time low of $2.01 in mid-January 2016, SandRidge Permian Trust (NYSE:PER) shares rallied over 35% to close at $2.72 on 1/29/2016. The rally was supported by a distribution announcement of $0.19 per unit after hours on 1/28/2016.

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For multiple reasons, including the depressed market price of oil and the recent conversion of subordinated shares into common, the distribution level is not sustainable in the future. These factors, as well as risks associated with the virtual certain bankruptcy of SandRidge Energy (OTCPK:SDOC), the Trust well operating partner, make assessing the current fair value of the Trust shares a challenge.

This report provides a fundamental valuation assessment of the SandRidge Permian Trust

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