“Thus, contrary to TPG-Axon's assertions, neither the company nor Mr. Ward has the power to ‘allow' WCT Resources to engage in any business regardless of whether it competes with the company,” the board said. “As an ongoing business not controlled by the company or Mr. Ward, WCT Resources is free to engage in whatever commerce it deems suitable wherever it chooses.”
Deals between SandRidge and WCT have been rare and carefully scrutinized by disinterested board members, as required by a written company policy, according to Friday's statement. Such deals also have been disclosed in U.S. Securities and Exchange Commission filings.
The board also dismissed TPG-Axon's concerns about WCT leasing acreage adjacent to SandRidge's holdings in the Mississippian oil play.
“Given the company's vast acreage holdings in the Mississippian play, which include interests in over 7,500 sections covering nearly five million acres in 30 counties throughout an area that encompasses approximately 17 million acres, this is an entirely unremarkable fact,” according to the board's statement. “Virtually all companies active in the play are likely to have some interests that could be characterized as adjacent to the company's holdings.”
The board said its dealings with TLW Land and Cattle LP, another company Ward has a stake in, involve acreage acquired well before SandRidge was formed in 2006.
“Mr. Ward disclosed these longtime business interests to the board early in the company's history and has discussed them with the board several times over the past several years, and the board has found no evidence of impropriety or ‘front running,'” the board said.
SandRidge's stock was up 2 cents Friday, closing at $7.07 a share.