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Between the hedges: Outside investors in Oklahoma energy companies helped fuel growth

Recent shareholder action has focused attention on New York hedge funds and other outside groups that have funded oil and natural gas activity in Oklahoma for decades.
by Adam Wilmoth Modified: May 16, 2013 at 8:00 pm •  Published: May 17, 2013
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New York investors recently exerted control at two Oklahoma City energy companies, claiming strong presences on the boards of directors at Chesapeake Energy Corp. and SandRidge Energy Inc.

During the two conflicts, much of the attention was placed on how outside interests were trying to take over Oklahoma City companies.

While it is true that out-of-state financiers do not have the same priorities for Oklahoma as the companies' homegrown founders and management teams, it is important to remember how these New York hedge funds and outside interests became involved in the Oklahoma City companies in the first place.

They were welcomed — often begged — to invest in Oklahoma companies.

New York hedge funds and pension funds throughout the country have funded much of the oil and natural gas boom Oklahoma energy companies have enjoyed in recent years.

They have paid for thousands of jobs created throughout the Oklahoma oil patch over the past decade.

Becoming a publicly traded company is expensive and time-consuming. The process is not easy, and it exposes companies and their management to considerable risk, up to and including losing control of the business.

So why do they do it? Why would a founder accept the vast cost and risk of taking a private company public?

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by Adam Wilmoth
Energy Editor
Adam Wilmoth returned to The Oklahoman as energy editor in 2012 after working for four years in public relations. He previously spent seven years as a business reporter at The Oklahoman, including five years covering the state's energy sector....
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