SandRidge Energy Rallies on Asset Sale

Shares of SandRidge Energy SD traded sharply higher in Wednesday's after-hours session following an announcement from that company that it would sell its Permian Basin properties for $2.6 billion. The sale should not be too surprising, given that the company said it was considering selling the assets back in early November. Interestingly, SandRidge's entire market cap is only about $3 billion. SandRidge has been a terrible performer in 2012; year-to-date, shares are down over 20 percent. With its heavy exposure to natural gas, it has faced similar problems to Chesapeake Energy CHK, which has had similarly poor results this year. Although natural gases have rebounded from the record low seen in the spring, the commodity still remains relatively cheap on a historic basis. SandRidge's move to shed assets might allow it to shift its focus more to petroleum, which could more profitable in the longer term.