SD
SandRidge Energy, Inc.
$13.85
Oil & Gas E&P
85%
FCF at Price Deck × Multiple
Strong
·
Conviction
Undervalued
Trading 47.2% below fair value
You pay
$13.85
Bear
$14.83
Fair
$26.23
Bull
$41.43
Bear
$14.83
+7.1%
FCF $55M × 8x
Fair
$26.23
+89.5%
FCF $78M × 11x
Bull
$41.43
+199.2%
FCF $101M × 14x
Key Value Driver
Oil price assumption ($75/bbl base case)
Implied Market Multiple
5.1x
Summary
At $75/bbl oil with a 11x EV/FCF multiple, intrinsic value is $26.23 per share. Range: $14.83 (bear) to $41.43 (bull).
Warnings
Where you think oil prices will settle long-term drives over 80% of this valuation. The biggest risk isn't the company itself — it's getting the commodity price wrong.
Key Risks
- Growth DCF inappropriate — commodity volumes do not compound
- Geopolitical premiums are real but historically temporary
- Reserve replacement ratio below 100% for 3 years is existential