Re: Is SD a steal at 7 dollars
It would be a steal if it is true and you could trust the guy that is saying it. In this case that would be Tom Ward. Prior to starting Sandridge he was Aubreys partner and I think he is cut out of the same cloth. Don't watch their lips moving just focus on revenues and expenses.
I have said it before and will say it again. If the economics are that compelling then why are they raising money through these royalty trust offerings. If the economics were that good they would keep them themselves or find private equity. If the wells were that good they woul have people beating down the door to give them money. These trusts are like the old drilling funds in that they are making money on overrides and well operation fees.
They also don't mention how much water these wells make. They have 5 rigs drilling disposal wells I think.