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SandRidge proxy fight could affect downtown Oklahoma City

Downtown Oklahoma City observers are watching the SandRidge activist shareholder drama closely, noting that in just five years the company has become a major anchor of central business district.
by Steve Lackmeyer Published: February 25, 2013
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The ongoing proxy fight between SandRidge Energy Inc. and one of its largest shareholders could have serious ramifications on downtown Oklahoma City, city and industry observers say.

Activist shareholder TPG-Axon Capital is trying to take control of the Oklahoma City energy company's board. If successful, the shareholder group has said it would consider selling the company.

The threat comes nearly seven years after Anadarko Corp. bought Kerr-McGee Corp., eliminating or moving to Houston 200 Oklahoma City jobs and vacating a large section of downtown Oklahoma City.

SandRidge later bought the old Kerr-McGee headquarters and has filled it with 720 employees.

While a SandRidge departure would take with it far more employees than Kerr-McGee did, Oklahoma City is much more able to handle such a loss today, said Mickey Hepner, dean of the University of Central Oklahoma College of Business.

“It would be easier to absorb, but it still wouldn't be pleasant,” he said. “Oklahoma City is recognized as a much more attractive place to be and a much more attractive place to work today. From that perspective, the city has changed such that we would still be perceived as a rather cool, upcoming, dynamic city.

“The loss of a company the size of SandRidge would be a little bit of a dent in this shiny new image Oklahoma City has.”

The loss of 700 relatively high-paying jobs would hurt the city's commercial and residential real estate markets and affect the whole economy, Hepner said.

“But the biggest concern is the psychological impact on the city and perception of Oklahoma City,” he said. “Part of what makes this an attractive place is we've started to change the perception of what this place is. If there's a hint of a bust-type atmosphere coming, that changes the story we're trying to tell about the city.”

Because the Oklahoma City economy is more diversified, the city is better equipped today to handle the loss of a large employer, said Roy Williams, president of the Greater Oklahoma City Chamber.

“When you look at our employment sector today, you see bioscience growth and 40,000 plus jobs in aerospace. The service sector has grown substantially,” he said. “With the different types of businesses that are growing our economy, we're not overly reliant on any one sector.”

Even within the energy sector, Oklahoma City is more diversified today than it was seven years ago, Williams said.

“Kerr-McGee was the big company in town. Kerr-McGee had the skyscraper,” he said. “When you look at our landscape today, Devon Energy has a tower multiples the size of Kerr-McGee. Now we have SandRidge and Continental (Resources). When Kerr-McGee left, Chesapeake (Energy) was just beginning to come into its own. So it's a really different landscape today.”

The city's economic diversification also has insulated its housing market, said Keith Taggart, president of the Oklahoma City Metro Association of Realtors.

“At this point, the market is so strong and the number of people moving into Oklahoma City is much more than in our history,” he said. “We have lots of buyers, but not enough inventory for the number of buyers we have. I wouldn't think any negative news at SandRidge or any other company would be enough to bring us down.”

Yet downtown observers are watching the SandRidge drama closely, noting that in just five years the company has become a major anchor of the central business district.

Williams is among those who recall it was 2007 when SandRidge CEO Tom Ward entered into a three-way real estate transaction involving his former company, Chesapeake, and Houston-based Anadarko.

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by Steve Lackmeyer
Business Reporter
Steve Lackmeyer is a reporter and columnist who started his career at The Oklahoman in 1990. Since then, he has won numerous awards for his coverage, which included the 1995 bombing of the Alfred P. Murrah Federal Building, the city's Metropolitan...
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