SandRidge Energy (SD) released its first quarter earnings on May 3, reporting a net income of $21.2 million. The company achieved record oil production of 3.4 mmbbls – with the peak production of 99 mboe per day was reported just before the release of the earnings report. I believe this is an indication of the recent growth of SandRidge Energy and a sign of good things to come.
However, I also expect its CEO Tom Ward to remain in the news for the wrong reasons in weeks to come. He was the co-founder and former President of Chesapeake Energy (CHK). He resigned from Chesapeake in 2006 and bought a stake in Riata Energy, which later became SandRidge. Prior to that, Ward ran a hedge fund that is currently under scrutiny.
Acquisition fueled growth
SandRidge recently acquired Dynamic Offshore Resources (DOR). It was a surprisingly fast acquisition, considering the fact that Dynamic completed its first IPO in January 2012. In fact, the first reports of the acquisition by Sandridge appeared as early as February 1, merely weeks after the IPO. It was a definitely a great move. SandRidge wanted to increase its oil production and double its current output. The acquisition of Dynamic gives it an instant access to 62.5 mmboe, which is in line with SandRidge’s intentions. Moreover, both the companies have similar focus on shallow and on-shore drilling. Dynamic, having half of its resource base in shallow water (at depths of 300 feet or less) is a perfect target for SandRidge, which has focused on shallow drilling throughout its short history.To continue reading, click here.
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