SandRidge Energy Inc. (OTCMKTS:SDOCQ) emerges from its reshuffle with a debt-light capital arrangement. In essence, the first lien credit deal is the major class of claims to come out from the reorganization with reasonably minor impairments.
The highlights
Despite the anticipated massive debt write-off and interest through the Chapter 11, the revamp will not resolve company’s strategic issues. Having made a big bet on the Mississippian plan, investing borrowed dollars at an immediate pace, SandRidge Energy ended up in a state where it effectively does not reflect an asset platform to continue as a development firm in the existing commodity price environment.
SandRidge’s oil production in mid-continent continues to drop at a rapid pace despite outspending. In fact, vast downward revisions of verified oil reserves have turned into an almost yearly occurrence, increasing concerns that the wells keep on underperforming the firm’s indicated type curves.
The details
SandRidge’s corporate level proceeds on new capital invested are not at par with the well-level return projections shown in investor presentations. The seismicity resulting from water disposal indicates potential liability for the firm and needs to be considered into economic assessments. The company’s recent measure to move away from the Mississippian play by buying a large prospect in Colorado remains an unsure bet.
It is still in early assessment phase and it is not the best time to have confidence pertaining to its commerciality. Given the firm’s poor operational performance, the fact that this capital-intensive measure may end up without success cannot be ignored at this point.
Later SandRidge may have problem retaining a credible technical team and new senior management to help control the continuing value degradation, provided that the firm does not have a viable asset base for the team. With no radical movement from the capital allocation measures, there is an increased risk that SandRidge will again burn its cash pile.
Pluristem Therapeutics Inc. (NASDAQ:PSTI) Gets FDA Approval For Phase III trial of PLX-PAD in Critical Limb Ischemia
Pluristem Therapeutics Inc. (NASDAQ:PSTI) has moved a step closer to flexing its muscle in the $12 billion a year critical limb ischemia market. The FDA has reportedly issued a positive feedback on the proposed Phase III trial on the use of PLX-PAD cells to treat the unmet medical condition.
The company can now move forward and carry out the Phase III trial as part of a randomized placebo-controlled trial in 250 patients. Enrolments will be carried out both in the US and Europe. The primary endpoint of the trial will be amputation as well as death (amputation-free survival)
Critical Limb Ischemia is a medical condition synonymous with fatty deposits blocking arteries in the leg which most of the time leads to reduced blood flow causing uncomfortable pain at rest.
