NEW YORK (TheStreet) -- Shares of SandRidge Energy (SD) fell more than 6.5% to a 52-week low of $3.50 on Tuesday after the company announced the SEC has asked SandRidge to reassess how it accounts for penalties paid under a deal with Occidental Petroleum (OXY) .
This review could lead SandRidge to restate almost two years' worth of quarterly results.
The company also said it would postpone the announcement of its third-quarter earnings until it reviews the situation and comes to a resolution with the SEC.
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SandRidge must pay a penalty fee under its 30-year agreement with Occidental Petroleum whenever SandRidge comes up short of minimum required carbon-delivery volume targets.
SandRidge said it has factored in the penalty on an annual basis, but the SEC has asked the company to determine if it should be accounted for quarterly. This review could lead SandRidge to restate its quarterly earnings results from the period ended December 2012 through the period ended June 30, 2014.
Separately, TheStreet Ratings team rates SANDRIDGE ENERGY INC as a "hold" with a ratings score of C-. TheStreet Ratings Team has this to say about their recommendation:
"We rate SANDRIDGE ENERGY INC (SD) a HOLD. The primary factors that have impacted our rating are mixed - some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its expanding profit margins and notable return on equity. However, as a counter to these strengths, we also find weaknesses including unimpressive growth in net income, weak operating cash flow and generally higher debt management risk."