Monday, April 13, 2015

5 Best Building Product Stocks To Own Right Now

5 Best Building Product Stocks To Own Right Now: SandRidge Mississippian Trust I (SDT)

SandRidge Mississippian Trust I (The Trust) is a statutory trust. The Trust was created to acquire and hold the Royalty Interests for the benefit of Trust unitholders. SandRidge conveyed to the Trust the Royalty Interests in specified oil and natural gas properties in the Mississippian formation in Alfalfa, Garfield, Grant, Major and Woods counties in Oklahoma (the Underlying Properties). These Royalty Interests were derived from SandRidge's interests in a 36 wells and the equivalent of 123 horizontal development wells to be drilled in the Mississippian formation (Trust Development Wells) within an area of mutual interest (AMI), consisting of approximately 49,600 gross acres (42,000 net acres) in the counties where the Underlying Properties are located.

Effective January 1, 2011, the Royalty Interests entitle the Trust to receive 90% of the proceeds from the sale of oil and natural gas production attributable to its net revenue interest in the Initial Wells and 50% of the proceeds from the sale of oil and natural gas production attributable to SandRidge's net revenue interest in the Trust Development Wells. As of December 31, 2011, the Trust's properties consisted of Royalty Interests in the Initial Wells, 48 wells (equivalent to approximately 53 Trust Development Wells under the development agreement) and the equivalent of approximately 70 Trust Development Wells to be drilled in the Mississippian formation.

Advisors' Opinion:
  • [By Adam Galas]

    As the chart illustrates, SandRidge's other royalty trust, SandRidge Mississippian Trust I (NYSE: SDT  ) , which has already had its final wells drilled, has been experiencing a severe decline in distributions, a result of its massive quarterly production declines of 26%, 21%, and 22% immediately after the las! t well was drilled. 

  • [By Matt DiLallo]

    The problem here is that SandRidge has been dependent on asset sales and its running out of assets to sell. In addition to the Permian sale, SandRidge has now taken three royalty trusts public. One consisting of Permian Basin assets, SandRidge Permian Trust (NYSE: PER  ) and two consisting of Mississippian assets, SandRidge Mississippian Trust I (NYSE: SDT  ) and SandRidge Mississippian Trust II (NYSE: SDR  ) . While SandRidge still owns a portion of each trust, it likely will continue to sell off its ownership stake in each trust as well as other assets it still owns. At some point SandRidge will need to live within its oil and gas cash flows, otherwise, its not worth owning. 

  • source from Top Stocks For 2015:http://www.topstocksblog.com/5-best-building-product-stocks-to-own-right-now-4.html

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