Recent Chapter 11 Filings Raise Questions About SandRidge Energy

 | Apr 15, 2016 | 4:17 PM EDT
  • Comment
  • Print Print
  • Print
Stock quotes in this article:






It has been a brutal week in the energy space as several companies have filed for chapter 11 protection and the possibility of more filings looms.

Last month, Real Money reported on attempts made by three energy companies to avoid filing for chapter 11 protection. In the last week, two of the named companies -- Energy XXI (EXXI) and Goodrich Petroleum (GDPM)-- filed. Could SandRidge Energy (SDOC) follow their path?

Oklahoma City-based SandRidge delayed filing its 2015 10-K earlier this year because its financial statements were expected to include a paragraph that questioned the company's ability to continue as a going concern. The presence of a so-called "going concern qualification" often puts companies in technical default under some of their debt obligations, which could trigger cross-defaults.

Indeed, when SandRidge ultimately filed its 10-K with the Securities and Exchange Commission on March 30, the company said it retained advisors to help it assess "strategic alternatives," which could include a "private restructuring or reorganization under Chapter 11 of the Bankruptcy Code."

Broadly speaking, SandRidge Energy's problems are not unlike the problems of other companies in the oil and gas space. The company has $3.6 billion in long-term debt and it has deferred interest payments on some of its obligations earlier this year, though it was ultimately able to make payments within the grace period.

The company has also faced other headwinds.

On Friday, SandRidge said, via a filing with the SEC, that it was no longer a "subject or target" of the Justice Department's investigation of violations of antitrust laws involved in the acquisition of land, oil, or natural gas rights.

In March, Aubrey McClendon, the former-CEO of Chesapeake Energy (CHK) was indicted by the Justice Department on bid-rigging charges. The indictment listed an unnamed co-conspirator who was not charged. Bloomberg News reported -- citing sources close to the matter -- that Tom Ward, the former CEO of SandRidge Energy was the alleged co-conspirator. Ward co-founded Chesapeake Energy with Aubrey McClendon.

The end of the investigation may bring some relief to SandRidge, but its financial troubles still lurk.

Columnist Conversations

As far as TSLA is concerned, I still have a higher target above the market at the 409 area.  I stated in ...
The TLT setup discussed in my last commentary is a bust. Key support was violated and it violated the recent l...
BBY is getting smoked this mornings(weak forecast).  The stock is off 8% after opening the session with a...



News Breaks

Powered by


Except as otherwise indicated, quotes are delayed. Quotes delayed at least 20 minutes for all exchanges. Market Data provided by Interactive Data. Company fundamental data provided by Morningstar. Earnings and ratings provided by Zacks. Mutual fund data provided by Valueline. ETF data provided by Lipper. Powered and implemented by Interactive Data Managed Solutions.

TheStreet Ratings updates stock ratings daily. However, if no rating change occurs, the data on this page does not update. The data does update after 90 days if no rating change occurs within that time period.

IDC calculates the Market Cap for the basic symbol to include common shares only. Year-to-date mutual fund returns are calculated on a monthly basis by Value Line and posted mid-month.