SandRidge Energy News

[HangryHippo]

When is this shareholder revolt thing with TPG-Axon supposed to wrap up?

[Pete]

The vote on possible new directors is March 15th.

[Teo9969]

The vote on possible new directors is March 15th.

Quick...everyone buy shares!!!!

[Pete]

Full page ad in today's Oklahoman:

[OKCTalker]

Typos (at least two), grammatical errors and clumsy sentence structure. I don't want to be the "grammar Nazi" here, but if these guys can't competently write a full-page ad in the DO, then what in the world can we expect them to do at the reins of SD?

[onthestrip]

Typos (at least two), grammatical errors and clumsy sentence structure. I don't want to be the "grammar Nazi" here, but if these guys can't competently write a full-page ad in the DO, then what in the world can we expect them to do at the reins of SD?

Maybe not loot the company like Tom Ward..?

[blangtang]

9:27 PM TPG-Axon increases its stake in SandRidge Energy (SD) to 36.2M shares from 33M at 2012's end. The deadline for voting on TPG's bid to replace the board is March 15. Between TPG and Leon Cooperman - who sounded on last week's CC like he's had it with management - that's more than 70M shares vs. a float of nearly 500M.

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On last week's conference call, Cooperman called in to ask a question after management explained that everything was great, the results are good, etc. Here's the exchange:

"What is the Street missing," asks an agitated Leon Cooperman (owner of 24M shares) on the SandRidge (SD -3.7%) earnings call. Noting TPG's estimate of the company's value is double the current price, Cooperman wants to know why the stock is languishing and how management plans to turn it around. In response, CEO Ward says the company continues to suffer from the "unorthodox" moves taken to stay afloat in 2009. He notes a string of earnings beats and the "extraordinary value" of the Mississippi play."

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This morning SandRidge held a 2013 Investor/Analyst Meeting Conference Call.

I copied the intro and Tom Ward's opening comment, link to the rest of it at the bottom

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Kevin White

Welcome to the Sixth Annual SandRidge Investor/Analyst Day. We are glad to have such a big crowd here today. I am just going to do real quick brief introduction. Also at the lawyer’s request, actually always read the forward-looking information. Also, we do sponsor three public trusts, SandRidge, Mississippian Trust I and II and SandRidge Permian Trust and today we will not really cover anything related to those trusts. This will just all be on SandRidge, the [C]-Corporation.

Just to outline for the day today, most of the day is going to be spent with our technical executives here, doing a deep dive into our assets and we’ll save the questions for the end of the day. I believe we have a break about halfway through, I think it’s after Dave Lawler’s presentation.

And with that just brief introduction, I'll introduce Tom Ward.

Tom Ward

Sorry, running a little bit late, I was back to talking to Aubrey about Board seat; just kidding, just kidding. Okay, our operating regions have changed a bit over the years. We now have three operating regions that we are active in, still active in the Permian, even after the sale. We are most active in the Mississippian, where we have, that's the area that is the growth interest for the company and then in the Gulf of Mexico we had the acquisition last year of Dynamic, that continues to exceed our expectations and then lastly we still have our gas asset in the West Texas Overthrust. So if you were to be here six years ago as Kevin mentioned, you would have had a company that was focused only in the West Texas Overthrust and a 100% natural gas. So moving forward overtime what we've done is the most dramatic shift to oil of any public company.

Read more: SandRidge Energy's CEO Hosts 2013 Investor/Analyst Meeting Conference (Transcript)

[fromdust]

SandRidge Investors Win Injunction in Proxy Fight Case - Businessweek
SandRidge Energy Inc. (SD) investors persuaded a judge to bar the energy company’s directors from impeding their efforts to replace the board in a proxy fight, according to court filings.

[metro]

Not good. I reallyyyyyy hope the amenities building and Kerr Park gets finished prior to any major changes. If those get done, the properties would be easy to market and won't last long at all.

[Pete]

Kerr/Couch Park is particularly troubling because the other contributor to it's renovation was to be Chesapeake.

[HangryHippo]

If SandRidge shareholders win this battle, does that kill the mystery tower?

[Pete]

SandRidge approves director candidates proposed by dissident shareholder
By Adam Wilmoth | Published: March 12, 2013


The Oklahoma City energy company had previously said that if hedge fund TPG-Axon Capital were successful in its move to oust the SandRidge board, the action would constitute a “change of control” that could cost the company more than $4.3 billion. The company later backed off that figure.

Delaware Chancery Court Judge Leo E. Strine Jr. on Friday blocked the SandRidge board from soliciting votes in its ongoing proxy fight until it approved TPG- Axon's director candidates.

SandRidge moved to meet that requirement Tuesday morning.

[blangtang]

settled with TPG, giving 4 board members

[Pete]

SandRidge Energy Expands Board Of Directors
Press Release: SandRidge Energy, Inc. – 9 minutes ago

OKLAHOMA CITY, March 13, 2013 /PRNewswire/ -- SandRidge Energy, Inc. (SD) today announced that it has reached a settlement agreement with TPG-Axon Capital. Under the terms of the agreement:

• Four of the TPG-Axon Group's nominees – Stephen C. Beasley, Edward W. Moneypenny, Alan J. Weber and Dan A. Westbrook – will be added to the Board of Directors effective immediately.
• The Board of Directors will complete a review by an independent firm of the related-party transactions that have been outlined by TPG-Axon, and expects the results of that review to be completed no later than June 15, 2013. Mr. Ward will remain Chairman and CEO while the Board completes its review.
• The Board of Directors will decide by June 30, 2013, whether or not to terminate Mr. Ward's employment. If the Board does not terminate Mr. Ward by June 30, 2013, three current directors will resign, and one additional TPG-Axon nominee will be elected to the Board, resulting in a majority of the Board being TPG-Axon nominees.
• In the event that Mr. Ward is no longer CEO, James Bennett will be appointed interim CEO, and the Board will conduct a search for a successor CEO. Mr. Bennett has been appointed President and Jeffrey Serota has been appointed lead independent director. In the event Mr. Ward is no longer Chairman of the Board, Mr. Serota will be appointed interim Chairman, for a term of six months.
• The Board will also conduct a comprehensive review of the Company's strategy and costs, with particular focus on reducing corporate overhead and optimizing capital expenditures. As a symbol of its commitment to improving efficiency, the Board has reduced compensation for directors, effective immediately, from $375,000 to $250,000 per year.

Mr. Serota stated "We believe these actions open a new chapter for SandRidge. Going forward, the Company will focus on maximizing the potential of its existing assets, particularly its valuable position in the Mississippian formation. In addition, we remain committed to creating long-term value for all stakeholders including our shareholders and employees and the communities in which we operate. We look forward to the immediate contribution of our new directors."

Dinakar Singh, founder of TPG-Axon, commented: "We are pleased to reach agreement with the SandRidge directors, and look forward to working together to build shareholder value. We believe the actions taken by the Board address our concerns, and are a promising start to a bright future for SandRidge. We all believe that SandRidge has tremendous asset value, and we expect that the Company will relentlessly focus on growing and realizing that value through a particular focus on execution and efficiency."

TPG-Axon Group has agreed to terminate its consent solicitation and withdraw its notice to the Company of its intent to present certain proposals and nominate certain individuals for election as directors at the Company's 2013 annual meeting.

The Company noted that while the Board's review to date has not revealed any improper conduct by Mr. Ward, the Audit Committee of the Board is conducting a further review, with the assistance of independent counsel, and expects the results of that review to be completed no later than June 15, 2013.

Separately, SandRidge also announced today that Matthew K. Grubb, the Company's President and Chief Operating Officer, has informed the Company of his intent to resign to pursue other opportunities. Mr. Ward commented, "I want to thank Matt for his tireless work over the last seven years. He has been instrumental in helping SandRidge transition to a liquids rich company with a solid financial footing. We wish him the best in his future endeavors."

[Pete]

^

What this tells me is that SandRidge expected to lose the shareholder vote that was due by March 15 and if that had come to pass, their entire board would have been thrown out.

So, they settled for these terms and are hoping they come through the independent review without Ward being tossed. But even if he isn't, TPG-Axon will still gain majority on the board.

I pray they don't stop construction on the Amenities Building. Seems like that may be a very real possibility.

[onthestrip]

^

What this tells me is that SandRidge expected to lose the shareholder vote that was due by March 15 and if that had come to pass, their entire board would have been thrown out.

So, they settled for these terms and are hoping they come through the independent review without Ward being tossed. But even if he isn't, TPG-Axon will still gain majority on the board.

I pray they don't stop construction on the Amenities Building. Seems like that may be a very real possibility.

Well at least Ward, er, his son, has half a million acres of mineral leases to fall back on. Quite interesting how Aubrey and Tom might end up being forced out of their respective companies in the same year.

[warreng88]

What are the chances Tom Ward gets ousted and he and Aubrey decide to start another energy company giving up some of their "severance"?

[adaniel]

^

What this tells me is that SandRidge expected to lose the shareholder vote that was due by March 15 and if that had come to pass, their entire board would have been thrown out.

So, they settled for these terms and are hoping they come through the independent review without Ward being tossed. But even if he isn't, TPG-Axon will still gain majority on the board.

I pray they don't stop construction on the Amenities Building. Seems like that may be a very real possibility.

The amenities building has probably already been expensed in their books and contracted out, so I don't think they will stop construction. Their more ambitious campus plans, however, are likely on hold for the foreseeable future.

[metro]

The amenities building has probably already been expensed in their books and contracted out, so I don't think they will stop construction. Their more ambitious campus plans, however, are likely on hold for the foreseeable future.

Yeah, I think this is the most likely scenario. We can probably kiss the garage renovations/expansion goodbye, as well as the Broadway Auto Alley buildings. They are almost completely done with the basement on amenities building.

[HangryHippo]

Well, maybe this means they'll hang around OKC and at least the whole board isn't being ousted by TPG.

[Pete]

As far as the undeveloped land on Broadway, wouldn't be the worst thing to put that on the market and get it into the hands of someone wanting to develop it sooner rather than later. SD only had this in their very long-term plans.

With the Amenities Building, having it budgeted and having spent the money are two entirely different things. They have probably let out some of the contracts but certainly not all. And I guarantee they have not ordered hardly any of the materials or paid up front for labor. Plenty of building projects get stopped before finishing, so I'm not so confident the new board is going to be okay with this, especially since they keep harping on about extravagance.

I'm also worried about Kerr / Couch park as SandRidge and Chesapeake were to put up the funds to rebuild it, and SD was to take responsibility for maintenance and programming.

Whether Ward stays after June or not, TPG-Axon will at that point control the board. At the very least, Ward would almost certainly be demoted from board chair (ala Aubrey) and then eventually forced completely out.


I see all this unfolding in a very similar manner to Chesapeake, they just got started about a year earlier. As far as I know CHK hasn't halted any of their construction projects but most of theirs were very far along.

[ljbab728]

Changes at SandRidge leave questions about CEO Ward's future | News OK

“It looks like Tom Ward's days are numbered here,” Morningstar analyst Mark Hanson said. “If the current board doesn't terminate him in the next three months, it looks like TPG takes control and they will oust him, I'm sure, shortly thereafter.”

Edmond investment adviser Greg Womack said Wednesday's “surprise” agreement seemingly gives Ward a chance to audition for his job.

“He's a great talent. He knows his business,” said Womack, president of Womack Investment Advisers Inc. “He's probably the right man for the job.”

If Ward were terminated without cause, he would stand to receive nearly $96 million, according to SandRidge's proxy statement filed in April 2012. Ward would be owed nothing if he were terminated with cause.

The proxy does not state what would happen if Ward were to resign or retire.

[ljbab728]

SandRidge shares slip in heavy trading after shareholder settlement | News OK

“Given the public pronouncement that TPG-Axon has made about Ward, it's hard to see that we could get to June 15 and the board says he's been so phenomenal that they aren't going to get rid of Ward. That would fly in the face of the PowerPoint presentations, letters and CNBC appearances (TPG-Axon CEO) Dinakar Singh has made over the past four months. It would hurt his credibility.”

[HangryHippo]

Some people seem to be more skeptical about SandRidge's survival than that of Chesapeake. I really don't know what's going to happen to SandRidge, but it doesn't look good. Does TPG want to move them out of OKC or just get their financials shored up? They seem to have a vendetta against Ward and the board.

[adaniel]

^
No. Why would they move? Corporate relocations are expensive and the vast majority of Sandridge's operations in are NW Oklahoma. I guess they can move to Enid LOL.

More concerning are possible staff cuts and an outright sale of the company. I tend to agree their future is far murkier than CHK, which has largely stabilized and will probably be okay.