Sandridge Stock Analysis - 100% upside?!

Sandridge Stock Analysis - 100% upside?!

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In this video I give my view on Sandridge Energy, a small cap energy producer based in the Mid-West.
I believe the disconnect between US gas prices (at HH) and those currently in Eurasia are due to converge, potentially leading to as much as a 5x increase and possibly as soon as Q4 2022.

SD has huge leverage to rising gas prices as their production is unhedged leading into the back half of the year.
Using conservative production and price models I estimate a current EV/FCF yield of approx. 50% by Q4 2022, with a massive upside should my thesis on US gas prices come to fruition.
Sandridge will likely a net cash balance of approx. $4-5 per share which provides a nice downside protection of sorts.
Finally, with an estimated reserve well life of 10 years at current production, one might think of buying SD today at current prices as paying for roughly 2 years of production and getting a further 8 years of production for free at industry-leading FCF conversion rates.

All the best & DYODD.
Kind regards
Ben


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