In this video, Motley Fool energy analyst Joel South describes his three reasons for buying SandRidge Energy (UNKNOWN: SD.DL ) . First, the Mississippian Lime play is cheap to explore and produce -- drilling costs are roughly a third of drilling costs in the Bakken Shale play. SandRidge has also invested in its own saltwater disposal systems, further reducing its costs. Second, the sale of Permian Basin assets both reduced costs and raised sufficient capital to aggressively drill in the Mississippian Lime play through 2014. Third, even though the Mississippian Lime is a bit more gas heavy than originally thought, some oil-heavy finds have been made. Natural gas prices have also come off their 2012 lows, and that helps the value of SandRidge's assets.
Investors were startled after SandRidge plummeted when natural gas prices reached 10-year lows, but with the company focusing on growing liquids production, the future looks optimistic. If you are unsure about the future of this emerging oil and gas junior and are looking to find out more about its strengths and weaknesses, then check out The Motley Fool's premium research report detailing SandRidge's game plan and what to expect from the company going forward. To get started, simply click here now!