Another investor for Oklahoma City-based SandRidge Energy calls for change

Investment firm Mount Kellett Capital Management LP is seeking management changes at SandRidge Energy Inc.
by Jay F. Marks Published: November 16, 2012
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“In the interim, we urge the board not to take any hasty strategic actions, such as the precipitous sale of the Permian assets, which will permanently impair stockholder value,” according to the letter. “The company has no immediate financing needs and there is no need to sell assets at fire-sale prices.”

SandRidge said last week it was exploring the sale of some of its holdings in oil-rich west Texas so it could focus on developing the Mississippian play in northern Oklahoma and southern Kansas. The potential sale won't include acreage connected to the publicly traded SandRidge Permian Trust.

The company acquired its acreage in the Permian after natural gas prices collapsed in 2008.

SandRidge took on significant debt and nearly tripled its share count in its shift to focusing on crude oil, Morningstar analyst Mark Hanson said in a Nov. 9 report on the company.

Criticism echoes

Hanson said SandRidge's future looks bright because of its holdings in two attractive liquids plays, but he was not surprised by the complaints raised by TPG-Axon. Many were echoed Thursday by Mount Kellett.

He said SandRidge's “approach to capital spending, corporate governance, deal-making and balance-sheet maneuvers” is similar to Chesapeake Energy Corp.

Chesapeake, which Ward co-founded, faced a significant boardroom shake-up earlier this year because of investor unrest, Hanson said.

by Jay F. Marks
Energy Reporter
Jay F. Marks has been covering Oklahoma news since graduating from Oklahoma State University in 1996. He worked in Sulphur and Enid before joining The Oklahoman in 2005. Marks has been covering the energy industry since 2009.
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