Deutsche Bank (DB) lowered its price target on SandRidge Energy Inc. (NYSE:SD) to $9 from $11, while maintaining its "Hold" rating on the stock.
"SandRidge's most recent corporate presentation included some welcome (and largely positive) data on drilling results in the Mississippian, but was largely overshadowed by an unexpected 30% reduction in the Permian type curve," DB analyst Ryan Todd wrote in a note.
SD has increased the mix of shallow wells in its Permian drilling program, resulting in a shift towards higher liquids cut, lower EUR and less expensive wells, but at a cost of lower well returns, Todd said.
While the mix shift in Permian drilling will be slightly more "oily", the net result of the move is a $2.00/sh reduction in his NAV, Todd added.
Shares fell 0.8% to $7.36 on Wednesday. The stock has been trading in the 52-week range between $4.55 and $13.34.