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SandRidge Energy: Buy or Sell?

Monday, 24 May 2010 | 9:11 PM ET
Oil Systems Go?
Cramer looks into the future of the sector, with Tom Ward, SandRidge Energy chairman/CEO.

When Cramer recommended SandRidge Energyback on March 19, he liked the company as a possible takeover target. But instead of being acquired, SandRidge went out and acquired Arena Resources. That, in addition to a disappointing quarter reported this month, has pulled down the stock a full 27% to its 52-week low.

SandRidge’s prospects going forward don’t seem particularly good, either. Management has lowered its production guidance for 2010 and increased its finding-costs forecast by 6%. Even still, though, Cramer wondered if SD hadn’t fallen too far, especially considering that crude prices are down just 13% over the same time period.

Also, Cramer is bullish on the Arena takeover. The deal will boost SD’s oil-to-natural-gas exposure to 57%/43% from 48%/52%, which is key in an environment of low nat-gas prices and lack of support for the commodity in Washington. Plus, he likes SandRidge’s assets in West Texas, the Permian Basin and Oklahoma, too.

So who’s right, the markets or Cramer? Watch this interview with CEO Tom Ward and decide for yourself.

Call Cramer: 1-800-743-CNBC

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