Section 1: Company Overview and Fundamentals

1.1 Company Overview:

SandRidge Energy, Inc. is an independent oil and gas firm focusing on acquisition, development, and production. The company's principal operating regions are in Oklahoma and Kansas on the Mid-Continent. The Company owns or has a stake in about 1,442 gross producing wells, 947 of which it operates, and over 551,000 gross total acres under lease, predominantly in Oklahoma and Kansas.

Kalkine’s Diversified Opportunities Report covers the Investment summary, Key Financial Metrics, Shareholding Pattern, Business Updates, Operational Metrics, Risks, Financial Outlook, Technical Analysis along with the Valuation, Target Price, and Recommendation on the stock.

1.2 The Key Positives, Negatives, and Investment summary

  

1.3 Key Metrics:

Having a bigger profit margin than the industry standard, SD is more adept at cost management, negotiating favorable terms with suppliers, and achieving higher levels of operational efficiency. A higher current ratio compared to rivals also suggests that the company is managing its working capital and short-term liquidity well.

1.4 Top 10 shareholders:

The top 10 shareholders together form ~37.48% of the total shareholding, signifying diverse shareholding. Icahn Associates Corporation and The Vanguard Group, Inc. are the biggest shareholders, holding the maximum stake in the company at ~13.07% and ~4.48%, respectively.

1.5 Natural gas and Oil prices analysis:

On Thursday, WTI oil futures decreased slightly to about USD 80 per barrel as fresh evidence suggested a looming recession that might reduce energy consumption. The US's services sector growth slowed to a 3-month low, private firms added fewer jobs than anticipated, and industrial orders declined for the second consecutive month, according to data, raising the possibility that the economy may be cooling. Since OPEC+ unexpectedly declared on Sunday that it will cut output by 1.16 million barrels per day from May until the end of 2023, the US oil benchmark has gained almost 6% this week. However, the most recent EIA data revealed larger-than-anticipated decreases in US petroleum and oil stocks. More than the market anticipated, the US crude oil stockpiles dropped by 3.739 million barrels last week. Distillate stockpiles decreased by 3.632 million barrels while petrol stockpiles fell by 4.119 million barrels. For the third consecutive month, Saudi Arabia has increased the cost of its premium oil for Asian consumers.

Due to continuously low demand brought on by above-normal temperatures and large supplies, US natural gas futures were trading at roughly USD 2.1/MMBtu, the lowest price since September 2020. According to the EIA, working stock levels in underground storage reached 1.853 trillion cubic feet on March 24. This is 321 billion cubic feet more than the five-year average of 1.532 tcf and 442 billion cubic feet higher than this time last year. Since Freeport LNG's export plant in Texas started operating again, natural gas flows to LNG export facilities have been on pace to reach record highs. Nevertheless, Freeport LNG unanticipatedly cancelled several shipments because of problems with one of the plant's three liquefaction trains, raising concerns that it would take longer than anticipated for the business to resume normal operations.

Section 2: Business Updates and Financial Highlights

2.1 Recent Updates:

The below picture gives an overview of the recent updates:

 2.2 Insights of FY22:

Section 3: Key Risks and Outlook

Section 4: Stock Recommendation Summary:

4.1 Price Performance and Technical Summary:

Price Performance:

• Due to the current rebound in the prices of underlying commodities, SD's share price has only decreased by 08% over the last three months. The oil stock had good momentum in the previous two weeks. However, over the longer term, the stock has fallen by 21.08% over the last six months.
• The stock is leaning towards the lower band of its 52-week range of USD 28 and 52-week low price of USD 12.62, with the current price near a decent support zone of USD 13.00-USD 15.00.
• The price is currently between both its short-term (50-day) SMA and long-term (200-day) SMA, with the current RSI of around 60.68.

4.2 Fundamental Valuation

Valuation Methodology: Price/ Earnings Multiple-Based Relative Valuation

Markets are trading in a highly volatile zone currently due to certain macroeconomic and geopolitical tensions prevailing. Therefore, it is prudent to follow a cautious approach while investing.

Note 1: Past performance is not a reliable indicator of future performance. 

Note 2: The reference date for all price data, currency, technical indicators, support, and resistance levels is April 05, 2023. The reference data in this report has been partly sourced from REFINITIV.

Note 3: Investment decisions should be made depending on an individual's appetite for upside potential, risks, holding duration, and any previous holdings. An 'Exit' from the stock can be considered if the Target Price mentioned as per the Valuation and or the technical levels provided has been achieved and is subject to the factors discussed above.

Note 4: The report publishing date is as per the Pacific Time Zone.

Technical Indicators Defined: -

Support: A level at which the stock prices tend to find support if they are falling, and a downtrend may take a pause backed by demand or buying interest. Support 1 refers to the nearby support level for the stock and if the price breaches the level, then Support 2 may act as the crucial support level for the stock.

Resistance: A level at which the stock prices tend to find resistance when they are rising, and an uptrend may take a pause due to profit booking or selling interest. Resistance 1 refers to the nearby resistance level for the stock and if the price surpasses the level, then Resistance 2 may act as the crucial resistance level for the stock.

Stop-loss: It is a level to protect further losses in case of unfavorable movement in the stock prices.

---

Disclaimer

References to ‘Kalkine’, ‘we’, ‘our’ and ‘us’ refer to Kalkine Limited.

This website is a service of Kalkine Limited. Kalkine Limited is a private limited company, incorporated in England and Wales with registration number 07903332. Kalkine Limited is authorised and regulated by the Financial Conduct Authority under reference number 579414.

The article has been prepared for informational purposes only and is not intended to be used as a complete source of information on any particular company. No advice or information, whether oral or written, obtained by you from Kalkine or through or from the service shall create any warranty not expressly stated. Kalkine does not intend to exclude any liability which it is not permitted to exclude under applicable law or regulation.

Kalkine does not offer financial advice based upon your personal financial situation or goals, and we shall NOT be held liable for any investment or trading losses you may incur by using the opinions expressed in our publications, market updates, news alerts and corporate profiles. Kalkine does not intend to exclude any liability which it is not permitted to exclude under applicable law or regulation. Kalkine’s non-personalised advice does not in any way endorse or recommend individuals, investment products or services for your personal financial situation. You should discuss your portfolios and the risk tolerance level appropriate for your personal financial situation, with a professional authorised financial planner and adviser. You should be aware that the value of any investment and the income from it can go down as well as up and you may not get back the amount invested.

Kalkine Media Limited, an affiliate of Kalkine Limited, may have received, or be entitled to receive, financial consideration in connection with providing information about certain entity(s) covered on its website.