There are few things that are a better indicator of company's future prospects than insider buying...and this energy company has some serious insider interest, writes Mark Skousen of Hot Commodities Alert.

A couple of Fridays ago, the government reported weak employment numbers, and the Fed announced it would not launch another round of quantitative easing. The money supply (M2) continues to grow, but at a slower pace.

These factors, combined with fears of a recession in Europe, have led a sell-off in stocks and commodities in general. Gold has been the exception, but it had sold off earlier and appears to have topped out.

SandRidge Energy (SD) is an Oklahoma-based oil and gas company that has increasingly focused on oil exploration as natural gas prices have plunged (now down to $2 per mmBTU!).

Since going public in 2007, SandRidge has been making bold moves to strengthen its reserves, building a cash cushion to bolster the company's oil-producing abilities, while spending less money and attention on natural gas. Good decision. The company's management is being creative and proactive in the building of a solid oil business.

The future looks bright for SandRidge. Revenues jumped 27% last year to $1.4 billion. Earnings are expected to double this year to 25 cents a share, and some analysts are predicting earnings as high as 72 cents.

SandRidge is aggressively boosting its oil reserves. Currently, the company has 38 rigs operating, including three drilling saltwater disposal wells, with plans to focus on drilling 1,139 wells in 2012. In the Permian Basin, SandRidge plans to drill 759 wells in hopes of adding production to its existing 13 rigs there that are drilling vertical wells as deep as 7,500 feet.

And, the company drilled 167 horizontal wells in the Mississippian operation in northern Oklahoma and southern Kansas last year. It also plans to increase rigs by adding one per month in 2012, while drilling 380 horizontal wells.

Additionally, divided into different segments, SandRidge is diversified with its Drilling and Oilfield Services providing pulling units, road construction, trucking, and rental tools, while its Midstream Gas Services segment engages in gathering, treating, and selling natural gas in west Texas.

Three weeks ago, Director Daniel Jordan bought 50,000 shares. The stock has been treading water between $7 and $8 a share for the past year. That’s probably going to change shortly.

Let’s buy SandRidge Energy and set a protective stop of $5.70 a share here. For those wildcatters out there, consider buying the September $8 calls, which last traded for 73 cents.

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