(NYSE: SDT) Pre Earnings Report
Welcome to Traders News Source,
Stay tuned and keep an eye on your inbox for our next hot Small-Mid Cap stock report coming soon.
We have an outstanding track record for near-term gains (1-90 days) in the Small Cap arena.
Do not forget to add us to your preferred/safe senders list within your email service provider. Expect one new Small Cap NASDAQ or NYSE listed company research report per week free of charge.
We only alert you to stocks we believe will offer up near-term trading profits.
Receive TEXT ALERTS the minute we initiate coverage
Text the word “Traders” to the number “25827” from your cell phone to receive small cap reports in real-time ahead of the crowd.
SandRidge Mississippian Trust I (NYSE: SDT), a statutory trust, holds royalty interests in specified oil and natural gas properties located in the Mississippian formation in Alfalfa, Garfield, Grant, and Woods counties in Oklahoma. As of December 31, 2017, the company’s properties comprised royalty interests in the initial wells; and 121 additional wells that were drilled and perforated by the company.
The company is expected to release its Q1 earnings report next week.
April 26, 2018. The company announced a quarterly distribution for the three-month period ended March 31, 2018 (which primarily relates to production attributable to the Trust’s interests from December 1, 2017 to February 28, 2018) of approximately $1.4 million, or $0.0488 per unit. The Trust makes distributions on a quarterly basis on or about the 60th day following the completion of each quarter. The distribution is expected to occur on or before May 25, 2018 to holders of record as of the close of business on May 11, 2018. https://finance.yahoo.com/news/sandridge-mississippian-trust-announces-quarterly-201500436.html
As per the management, although oil, natural gas and NGL prices rose during 2017, a buildup in inventories, lower global demand, or other factors could cause prices for U.S. oil, natural gas and NGL to weaken. Continued low oil, natural gas and NGL prices will reduce proceeds to which the Trust is entitled and may ultimately reduce the amount of oil, natural gas and NGL that is economic to produce from the Underlying Properties causing the Trust to make substantial downward adjustments to its estimated proved reserves. As a result, SandRidge or any third-party operator of any of the Underlying Properties could determine during periods of low oil, natural gas or NGL prices to shut in or curtail production from wells on the Underlying Properties. In addition, the operator of the Underlying Properties could determine during periods of low oil, natural gas or NGL prices to plug and abandon marginal wells that otherwise may have been allowed to continue to produce for a longer period under conditions of higher prices. Specifically, SandRidge or any third-party operator may abandon, at its cost, any well or property if it reasonably believes that the well or property can no longer produce oil, natural gas and NGL in commercially economic quantities. This could result in termination of the portion of the Royalty Interest relating to the abandoned well or property, and SandRidge would have no obligation to drill a replacement well.
About
SandRidge Mississippian Trust I is a statutory trust, holds royalty interests in specified oil and natural gas properties located in the Mississippian formation in Alfalfa, Garfield, Grant, and Woods counties in Oklahoma. As of December 31, 2017, the company’s properties comprised royalty interests in the initial wells; and 121 additional wells that were drilled and perforated by the company. SandRidge Mississippian Trust I was founded in 2010 and is based in Austin, Texas.
Financial review
Comparison of Results of the Trust for the Years Ended December 31, 2017 and 2016
Revenues
Royalty Income. Royalty income is a function of production volumes sold attributable to the Royalty Interests and associated prices received. Royalty income received during the year ended December 31, 2017 totaled $9.0 million compared to $8.5 million received during the year ended December 31, 2016. The approximate $0.5 million increase in royalty income consisted of approximately $2.4 million attributable to the increase in prices received, partially offset by approximately $1.9 million attributable to a decrease in total volumes produced. The average number of producing wells decreased by 18 during the year ended December 31, 2017 compared to the year ended December 31, 2016 as wells that could not economically produce due to continued depressed pricing were shut-in.
Derivative Settlements. The Trust’s derivatives agreement with SandRidge was intended to reduce the Trust’s exposure to commodity price volatility attributable to a portion of production from the Royalty Interests through December 31, 2015 by the use of oil fixed price swaps and natural gas collars. Net cash settlements under the derivatives agreement during the year ended December 31, 2016 were approximately $9.6 million ($9.1 million received related to oil fixed price swaps and $0.5 million received related to natural gas collars), which effectively increased the average price received for oil by $94.21 per Bbl, to $131.94 per Bbl, due to the ratio of the oil volumes hedged to oil volumes produced and the substantial declines in the market prices of oil compared to contract prices. Settlements under the derivatives agreement also increased the average price received for natural gas by $0.28 per Mcf, to $2.09 per Mcf ($1.58 per Mcf including the impact of post-production expenses). The derivatives agreement has terminated, and the Trust will not receive any additional settlements.
Expenses
Post-Production Expenses. The Trust bears post-production expenses attributable to production from the Royalty Interests. Post-production expenses generally consist of costs incurred to gather, store, compress, transport, process, treat, dehydrate and market the natural gas produced. Post-production expenses for the year ended December 31, 2017 totaled approximately $0.9 million compared to approximately $1.0 million for the year ended December 31, 2016. Post-production costs decreased as a result of decreased total production.
Production Taxes. Production taxes are calculated as a percentage of oil, natural gas and NGL revenues, excluding the effects of derivative settlements and net of any applicable tax credits. Production taxes for the year ended December 31, 2017 totaled $0.5 million, or $1.19 per Boe, and were approximately 5.8% of royalty income. Production taxes for the year ended December 31, 2016 totaled $0.4 million, or $0.66 per Boe, and were approximately 4.1% of royalty income. Production tax rates increased due to Trust wells reaching the expiration point of a previously reduced tax rate. The average effective production tax rate for the Trust will continue to increase, up to a maximum rate of 7%, as more Trust wells reach this expiration point.
Distributable Income
Distributable income for the year ended December 31, 2017 was $6.1 million, which included a net addition of approximately $0.3 million to the cash reserve for the payment of future Trust expenses reflecting approximately $1.5 million withheld in aggregate from 2017 cash distributions to unitholders partially offset by approximately $1.2 million used to pay Trust expenses during the period. Distributable income for the year ended December 31, 2016 was $15.3 million, which did not include any net reduction to the cash reserve for the payment of future Trust expenses reflecting approximately $1.5 million used to pay Trust expenses during the period offset by approximately $1.5 million withheld from 2016 cash distributions to unitholders.
Stock influences and risk factors
Continued increases in oil, natural gas or NGL prices could improve proceeds to the Trust and cash distributions to unitholders;
If they do not meet the NYSE’s continued listing requirements, the NYSE may delist the Trust units, which could affect the market price, trading volume, liquidity and resale price of the Trust Units;
The Trust is passive in nature and has no voting rights in SandRidge, managerial, contractual or other ability to influence SandRidge, or control over the field operations of, or sale of oil, natural gas and NGL from the Underlying Properties;
The amount of cash available for distribution by the Trust is reduced by Trust expenses, post-production costs and applicable taxes associated with the Royalty Interests.
Stock chart
On Wednesday, May 9, 2018, SDT shares were at $1.07 on traded volume of 358K. The current RSI (14) is 80.38
Disclaimer
Traders News Source is a wholly owned subsidiary of Traders News Source LLC, herein referred to as TNS LLC.
Traders News Source has not been compensated for this report by anyone and the opinions if any are that of the author Vikas Agrawal, CFA. Author’s Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I, wrote this article myself, and it expresses my own opinions. I have no business relationship with any company whose stock is mentioned in the article.
This web site, published by TNS LLC, and is an investment newsletter that is built on the premise of assisting individual investors in learning about investing. Our goal as publishers of financial information is to provide research and analysis of investments to our subscribers. TNS LLC does not give buy or sell recommendations. We do purchase distribution rights from analyst, financial writers and bloggers for a fee that may be licensed to issue price targets and recommendations. Furthermore, we encourage you to speak to a licensed professional prior to making an investment in any type of publicly traded security.
We do sell advertising to other companies including brokerage firms, web sites, publicly traded issuers, investor relations firms, and investment publications, among others. TNS LLC makes no warranty as to the policies of these organizations, and in no way endorses their offers, services, or the content of their advertisements.
When an advertiser is a publicly traded company or a third party acting on behalf of a public company, we fully disclose all compensation in the email advertisement. Such disclosure is included in a disclosure statement in each of the advertisements sent via email.
17B Disclosure
Our reports/releases are a commercial advertisement and are for general information purposes ONLY. We are engaged in the business of marketing and advertising companies for monetary compensation. Never invest in any stock featured on our site or emails unless you can afford to lose your entire investment. The disclaimer is to be read and fully understood before using our services, joining our site or our email/blog list as well as any social networking platforms we may use.
PLEASE NOTE WELL: TNS LLC and its employees are not a Registered Investment Advisor, Broker Dealer or a member of any association for other research providers in any jurisdiction whatsoever.
Release of Liability: Through use of this website viewing or using you agree to hold TNS LLC, its operator’s owners and employees harmless and to completely release them from any and all liability due to any and all loss (monetary or otherwise), damage (monetary or otherwise), or injury (monetary or otherwise) that you may incur. The information contained herein is based on sources which we believe to be reliable but is not guaranteed by us as being accurate and does not purport to be a complete statement or summary of the available data. TNS LLC encourages readers and investors to supplement the information in these reports with independent research and other professional advice. All information on featured companies is provided by the companies profiled, or is available from public sources and TNS LLC makes no representations, warranties or guarantees as to the accuracy or completeness of the disclosure by the profiled companies. None of the materials or advertisements herein constitute offers or solicitations to purchase or sell securities of the companies profiled herein and any decision to invest in any such company or other financial decisions should not be made based upon the information provide herein. Instead TNS LLC strongly urges you conduct a complete and independent investigation of the respective companies and consideration of all pertinent risks. Readers are advised to review SEC periodic reports: Forms 10-Q, 10K, Form 8-K, insider reports, Forms 3, 4, 5 Schedule 13D.
TNS LLC is compliant with the Can Spam Act of 2003. TNS LLC does not offer such advice or analysis, and TNS LLC further urges you to consult your own independent tax, business, financial and investment advisors. Investing in micro-cap and growth securities is highly speculative and carries an extremely high degree of risk. It is possible that an investor’s investment may be lost or impaired due to the speculative nature of the companies profiled.
The Private Securities Litigation Reform Act of 1995 provides investors a ‘safe harbor’ in regard to forward-looking statements. Any statements that express or involve discussions with respect to predictions, expectations, beliefs, plans, projections, objectives, goals, assumptions or future events or performance are not statements of historical fact may be “forward looking statements”. Forward looking statements are based on expectations, estimates, and projections at the time the statements are made that involve a number of risks and uncertainties which could cause actual results or events to differ materially from those presently anticipated. Forward looking statements in this action may be identified through use of words such as “projects”, “foresee”, “expects”, “will”, “anticipates”, “estimates”, “believes”, “understands”, or that by statements indicating certain actions & quote; “may”, “could”, or “might” occur.
Understand there is no guarantee past performance will be indicative of future results. In preparing this publication, TNS LLC has relied upon information supplied by its customers, publicly available information and press releases which it believes to be reliable; however, such reliability cannot be guaranteed. Investors should not rely on the information contained in this website. Rather, investors should use the information contained in this website as a starting point for doing additional independent research on the featured companies. The advertisements in this website are believed to be reliable, however, TNS LLC and its owners, affiliates, subsidiaries, officers, directors, representatives and agents disclaim any liability as to the completeness or accuracy of the information contained in any advertisement and for any omissions of materials facts from such advertisement. TNS LLC is not responsible for any claims made by the companies advertised herein, nor is TNS LLC responsible for any other promotional firm, its program or its structure.
