SandRidge investor demands ouster of CEO
11/09/2012 6:30 AM
11/09/2012 6:31 AM
One of SandRidge Energy’s biggest shareholders on Thursday demanded that the company replace CEO Tom Ward and consider selling itself after a “disastrous” performance, citing the decline in the company’s stock by 77 percent since it began trading in 2007.
SandRidge has overpaid its CEO and is an “insatiable spender” with an incoherent strategy, Dinakar Singh, CEO of New York-based TPG-Axon, wrote in a letter to the seven-member board.
SandRidge should replace some board members with independent directors and representatives of large shareholders, according to Singh, who said his fund owns more than a 4.5 percent stake in the company.
“To the investment community, SandRidge often appeared to behave in a reckless and unpredictable manner,” he wrote.
SandRidge is a major player in the horizontal drilling oil boom in the Mississippian formation in northern Oklahoma and southern and western Kansas.
Oklahoma City-based SandRidge responded Thursday with a statement: “While our perspectives on various points made in the letter from TPG-Axon differ in many instances, we agree that SandRidge has valuable assets and that we need to focus on improving performance for shareholders.”
In an interview with The Eagle, Ward declined to comment further on the letter, but did talk about SandRidge’s prospects.
The company continues to ramp up its drilling program in the Mississippian play, as planned, he said. The company also just announced its intention to sell its oil production in Texas’ Permian Basin to reduce debt and finance drilling in the Mississippian formation.
“Our growth is around the Mississippian play, which is great news for Kansas,” he said.
Once the Permian wells are sold, the company will have “the best financial liquidity the company has ever seen,” he said.
The sale would cut debt and improve operating profit, which will push up the stock, he said.
He has a conference call with analysts scheduled for Friday morning.
The call follows SandRidge’s quarterly earnings report, released Thursday, which beat analysts’ estimates.
Contributing: Dan Voorhis of The Eagle
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