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Energy trusts suffer another shellacking after RBC Capital issues downgrades and target...

Energy trusts suffer another shellacking after RBC Capital issues downgrades and target price reductions for SandRidge Permian Trust (PER -6.6%), due to reduced production visibility and increased risk profiles following below-expected Q4 distributions, and SandRidge Mississippian Trust I (SDT -5.5%) and II (SDR -1.6%), as increasing risk meets additional production concerns.
Comments (10)
  • 395308
    , contributor
    Comments (35) | Send Message
     
    Looks to me like a pattern. All SD trusts have been downgraded. I do not think anyone sane will buy another SD trust. Just another source of funds that will be cut off from Tom Ward. SELL.
    6 Feb 2013, 01:08 PM Reply Like
  • gfriedmanmd
    , contributor
    Comment (1) | Send Message
     
    Wrong !! This is just a blip in what eventually will be a bright future for investors in these trusts. Gas is only going to be worth more in the future especially as Feds tries to encourage use of domestic energy sources rather than Middle East, South American and Russian petroleum.
    7 Feb 2013, 02:18 AM Reply Like
  • DT160
    , contributor
    Comments (20) | Send Message
     
    What became of the "Subordinated units" ? I understood that they were to make up for the loss if the regular units failed to produce a certain revenue level (Subordination Threshold). In the case of SDR, 25% of the units were to have been Subordinated and short fall was to be made up by those units.
    6 Feb 2013, 03:21 PM Reply Like
  • unclemike7849
    , contributor
    Comments (175) | Send Message
     
    The minimum distribution was not reached, therefore SD did not have to respond with additional funds.
    6 Feb 2013, 05:06 PM Reply Like
  • rmdonovan
    , contributor
    Comments (54) | Send Message
     
    These downgrades are another HUGE blackeye for SD's CEO and BOD who really CONTROL the trusts.

     

    Some of the drilling and production assets have already been moved out of the PER area of mutual interest and will only come back by "need" which could be a regulatory push on SD to perform.

     

    RMD
    6 Feb 2013, 03:47 PM Reply Like
  • peter9810
    , contributor
    Comments (44) | Send Message
     
    That being said....Is Energy going away?
    6 Feb 2013, 04:59 PM Reply Like
  • Aristiphones
    , contributor
    Comments (1327) | Send Message
     
    If this is the front end of an energy BUST then clearly this bears watching. if "free energy" is in our immediate future i would say "go long transportation stocks"...but even they look pretty frothy right now...save for the railroad stocks since they have a unique "load factor" that simply isn't relevant to the rest of the sector.
    6 Feb 2013, 06:15 PM Reply Like
  • RobandB
    , contributor
    Comments (42) | Send Message
     
    PER is PERfectly sound. SD went back to a normal 3 rig drilling program, just like it says in the prospectus. RBC analysts are by far the worst of the analyst community.
    6 Feb 2013, 07:14 PM Reply Like
  • richardklaus
    , contributor
    Comment (1) | Send Message
     
    I own units in SDR and SDT. I will never buy anything associated with SandRidge. It appears that management is inept across all trusts.

     

    ARK
    7 Feb 2013, 02:18 AM Reply Like
  • ritalia
    , contributor
    Comments (21) | Send Message
     
    I'm surprised they overlooked downgrading WHX as according to what I've read on this website it will be going to zero in about 2 years due to the termination of the trust.
    7 Feb 2013, 02:24 AM Reply Like
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