NYSE Plans To Delist SandRidge Energy After Months Below $1 Per Share

Jan 8, 2016

After months of speculation, the New York Stock Exchange delisted SandRidge Energy after threatening to do so for month, citing an "abnormally low" stock price as its reasoning.

Trading was halted at 15 cents per share, and the NYSE said in a statement it would allow SandRidge to appeal the decision to the Securities and Exchange Commission. In an email to The Journal Record's Sarah Terry-Cobo Wednesday, SandRidge spokesman David Kimmel said the company plans to start trading shares on the over the counter markets, which it did Thursday:

“The prolonged depression of commodity prices have caused nearly all companies in our industry to suffer material degradation in value,” Kimmel wrote. “While the delisting of our stock from the NYSE is certainly not an outcome we desired, it’s important to note that this action does not affect our day-to-day operations. SandRidge continues to have ample liquidity and we remain focused on navigating the current commodity downturn and extending our capabilities, including developing our recently acquired Niobrara assets. We expect SandRidge shares to begin trading over the counter tomorrow.”

The company’s share price fell below $1 on June 26, 2015, and has not traded above that amount since then.

The driller planned to hold a shareholder meeting Nov. 6 to vote on a reverse stock split, which would decrease the number of shares and increase the share price. However, SandRidge executives canceled the meeting Oct. 28.

On Thursday, SandRidge filed paperwork with the SEC indicating it didn't plan to appeal the NYSE decision, according to The Journal Record's managing editor Adam Brooks.

"SandRidge is really uniquely threatened right now because of the earthquake situation in Oklahoma," Brooks said. "If that ends up shutting down disposal wells, they're so geographically focused that it could really hurt them. However, the company did make some acquisitions late in 2015 so they can expand into the Niobrara Shale."

Customers shop for clothes at Edmond Summit Co. at 100 N. Broadway in Edmond.
Credit Brent Fuchs / The Journal Record

Retail Rebound

The first of the two winter storms to close out 2015 hurt Black Friday and Small Business Saturday holiday shopping, with some retailers reporting sales 30 percent lower than usual.

Rebecca Bean, the owner of Stash in Norman, told The Journal Record's Molly Fleming her store ended December up 40 percent compared to December 2014:

“I think the particularly good weather helped to extend sales,” she said. “We even sold most of our cold-weather gifts that I was worried about with the late arrival of any really cold weather.”

Nationwide, retail sales from Thanksgiving to Christmas Eve grew 7.9 percent compared to 2014, according to MasterCard SpendingPulse, which looks at U.S. retail sales trends across cards, cash and checks. The company doesn’t release the exact sales figures. E-commerce grew 20 percent compared to 2014, according to MasterCard.

Blue 7 owner Caleb Arter said despite a 30-percent drop on Black Friday weekend compared with 2014, his December is looking better than the previous year.

. . .

He said he expects December to end with a 10-percent increase compared to 2014. He said the year’s sales at his N. May Avenue store will likely be similar to 2014, though he hasn’t run the figures yet.

"The warm weather is definitely making some changes," Brooks said. "The manager of a Lowe's told us that the store was selling grills, and mowers, and rakes when it's usually got Christmas trees out, and storage items. They said they're also seeing a strong activity for fences, siding, and roofs that normally drops off in the winter, so it is increasing some activity in some areas."
Credit Brent Fuchs / The Journal Record

Building Boom, Labor Lags

That uptick in construction supplies sales is also indicative of growth within the industry, despite a nationwide labor shortage.

Brooks says a survey conducted by the Association of General Contractors of American expect Oklahoma to see a 30 percent growth in the dollar value of projects in 2016.

"They especially expect to see that in schools and hospitals," Brooks said. "But also 40 percent of those contractors said that it's hard to find employees and qualified subcontractors who can make bids on projects."

According to Fleming, this is nothing new:

AGC Chief Economist Kenneth Simonson said the labor shortage dates back at least 20 years, when parents and counselors started pushing students into college. That led to a decline in people entering vocational trades. When the recession hit, commercial construction slowed dramatically and people left the industry. From April 2006 to January 2011, across the country 2.3 million people left the industry. In Oklahoma, many went into the energy industry and never returned.

“It’s hard to get people back, especially if they’ve spent time finding work,” said Simonson.

The Business Intelligence Report is a collaborative news project between KGOU and The Journal Record.

As a community-supported news organization, KGOU relies on contributions from readers and listeners to fulfill its mission of public service to Oklahoma and beyond. Donate online, or by contacting our Membership department.

The Journal Record is a multi-faceted media company specializing in business, legislative and legal news. Print and online content is available via subscription.