SandRidge shares slip in heavy trading after shareholder settlement

Dissident shareholder TPG-Axon has taken control of SandRidge Energy Inc. and has not changed its position that CEO Tom Ward should leave.
by Adam Wilmoth Published: March 15, 2013
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The first trading day after SandRidge Energy Inc. agreed to major leadership changes to settle a proxy battle, the Oklahoma City energy company's stock price remained largely unchanged, although trading volume was heavy.

The shares closed down 14 cents, or 2.4 percent, to $5.71 as nearly 27 million shares changed hands — roughly three times the average daily volume.

Industry analyst Mark Hanson said he was not surprised by the price change.

“We're more of the mind that while in the short run management teams can do some damage, but at the end of the day, the single biggest driver is what is in the ground,” said Hanson, an analyst with Morningstar in Chicago.

In a settlement announced Wednesday between SandRidge and dissident shareholder TPG-Axon, the shareholder group essentially took control of the Oklahoma City energy company. TPG-Axon has maintained that SandRidge CEO Tom Ward should be replaced.

The SandRidge board has been expanded to 11 to add four TPG-Axon representatives. The new board will review whether Ward should keep his job. A decision is expected by June 15.

Hanson said he is “100 percent certain” Ward soon will be replaced.

Greg Dewey, SandRidge vice president of communications, said predictions about Ward's future are pointless.

“It's unreasonable to speculate on what 11 independent men are going to decide,” Dewey said in an email.

Neverless Hanson said, “With (CEO) Tom Ward leaving, you can probably trim the edges off overhead spending, cut director compensation and sell the corporate jets. But what ultimately makes money at the end of the day is going to be what comes out of the ground and what it sells for. Even with Ward out, that doesn't change.”

“Given the public pronouncement that TPG-Axon has made about Ward, it's hard to see that we could get to June 15 and the board says he's been so phenomenal that they aren't going to get rid of Ward. That would fly in the face of the PowerPoint presentations, letters and CNBC appearances (TPG-Axon CEO) Dinakar Singh has made over the past four months. It would hurt his credibility.”

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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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