Newspaper article THE JOURNAL RECORD

TPG-Axon's Turn: Shareholder Details Plan for Change at OKC-Based SandRidge

Newspaper article THE JOURNAL RECORD

TPG-Axon's Turn: Shareholder Details Plan for Change at OKC-Based SandRidge

Article excerpt

SandRidge Energy's most vocal critic released its plan of how to reform spending and improve the company's growth rate on Friday. Shareholder TPG-Axon Capital Management and its affiliates, which collectively call themselves TPG-Axon, detailed in a 101-page presentation several ways to improve cash flow, reduce debt and pursue the company's best drilling assets. The investment firm owns 6.7 percent of company shares. Since November, they have called for other shareholders to support their efforts to restructure the board of directors through a process known as consent solicitation.

Through documents filed with the Securities and Exchange Commission, SandRidge has criticized TPG-Axon's plans to shake up the board as shortsighted and self-serving. The Oklahoma City-based driller also criticized TPG-Axon for not having a reform plan.

In the presentation, posted Thursday on the website ShareholdersForSandridge.com and filed with the SEC on Friday, TPG- Axon itemized several ways to improve the company. SandRidge should remove staggered board terms and allow members to be removed with or without cause, remove all board members, including Chairman Tom Ward, and elect independent members. TPG-Axon also recommended replacing Ward as the CEO and has retained a recruitment firm to find a successor.

SandRidge should sell its offshore assets, TPG-Axon wrote in the presentation. Buying Dynamic Offshore, a Gulf of Mexico producer, was a mistake, the investment firm wrote. Ward has defended the purchase, noting that cash from the wells in the Gulf will be used to pay for drilling programs in the Mississippi Lime rock formation in northern Oklahoma and southern Kansas. TPG-Axon wrote that SandRidge should use the proceeds from the sale of the offshore assets to bolster its budget. SandRidge should also consider a sale of the company, TPG-Axon wrote. Though an outright sale isn't required to improve the company's value, the board should carefully weigh the option, the investment firm wrote.

SandRidge should cut employee compensation and perks, such as personal services and luxury suites, the investment firm wrote. …

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