Why SandRidge Energy Inc. (OTCMKTS:SDOCQ) Share Prices Doubled

452

SandRidge Energy Inc. (OTCMKTS:SDOCQ) shares were up 100.51% to $0.0391 on Monday and an additional 1.02% in after-hours trading. The company has a market cap of $28.13 million at 719.46 million shares outstanding. Share prices have been trading in a 52-week range of $0.00 to $0.56.

SandRidge Energy is an oil and natural gas company that is engaged in the exploration, development and production of crude oil, natural gas and natural gas liquids. The company owns and operates additional interests in west Texas, on top of operating businesses and infrastructure systems, including a saltwater gathering and disposal system, and an electrical transmission system.

Back in June, the SEC filed a $1.2 million claim in the pending bankruptcy case of SandRidge Energy but didn’t disclose more details other than citing that the company is in violation of federal securities laws. The company has fired an employee who claimed that it didn’t accurately state its oil and natural gas reserves, noting that SandRidge Energy substantially undervalued its reserves under the reorganzation plan details submitted to the SEC.

Since then, the company’s shareholders have requested for more time to look into the whistleblower’s claims. They have sought the services of a consulting petroleum engineer to evaluate SandRidge Energy’s reserves data and share prices have bounced off the lows in hopes that the findings would reveal greater value to shareholders. In its plan, the company wants to reorganize $4.4 million in debt to bring it out of bankruptcy.

This would include the cancellation of certain preferred stock and all common stock and the creation of a $425 million credit facility. This plan is set to be confirmed by the Bankruptcy Court with the hearing scheduled on September 6.

On Friday, a US judge ruled that the discovery deadline can be extended to give shareholders more time to investigate data that is critical to analysis.

DISCLAIMER: There is a substantial risk of loss with any speculative asset, especially small cap stocks. The opinions expressed are those of the author, and do not constitute recommendations to buy or sell a stock. Do your own research before committing capital.