Why SandRidge Needs the Permian

Joel South, The Motley Fool
Updated

After deciding to shift the company's focus away from natural gas production, SandRidge Energy stated that its three-year plan was to use its Permian Basin assets to generate cash flows that would be used to fund the exploration and production of the Mississippian Lime. But the company decided instead to sell off its Permian assets, and use the proceeds to pay down debt and expedite its production schedule in the Mississippian. In this video, Motley Fool energy analyst Joel South tells us why he doesn't like the move. It leaves the company concentrated solely in the Mississippian, where SandRidge has been striking more natural gas than oil, which is something investors don't like to see at the moment. In addition, he looks at Chesapeake Energy , which is taking a more cautious approach to the Mississippian, one that will employ capital more efficiently.

SandRidge will release fourth-quarter earnings on Feb. 28 and investors should be focusing on the oil content from new wells drilled the past three months. If you are unsure about the future of this emerging oil and gas junior, and are looking to find out more about its strengths and weaknesses, you should view this brand-new premium report detailing SandRidge's game plan and what to expect from the company going forward. To get started -- click here!


The article Why SandRidge Needs the Permian originally appeared on Fool.com.

Joel South owns shares of SandRidge Energy. The Motley Fool owns shares of SandRidge Mississippian Trust II and has the following options: Long Jan 2014 $20 Calls on Chesapeake Energy, Long Jan 2014 $30 Calls on Chesapeake Energy, and Short Jan 2014 $15 Puts on Chesapeake Energy. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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