The acreage held by WCT Resources could be worth billions of dollars if SandRidge continues its efforts to build infrastructure in the play, the hedge fund said.
TPG-Axon contends the related-party transactions may have disadvantaged SandRidge stockholders.
TPG-Axon is pushing for an overhaul of the company's board, citing its poor performance since SandRidge's initial public offering in 2007. It has nominated its own slate of directors to replace Ward and the rest of SandRidge's board.
Shareholders must cast their ballots in the proxy fight by March 15.
Analyst Neal Dingmann said SandRidge shareholders shouldn't be too concerned about the connection between the company and WCT Resources.
“SandRidge was able to acquire all the acreage they could afford. It would be different if they were trying to go into the Utica or Permian and got locked out and you found out that Tom Ward's son got that,” the SunTrust Robinson Humphrey analyst said.
“But in this case, they got what they wanted. I don't look at it as a big issue.”
Morningstar analyst Mark Hanson said the allegations brought by TPG-Axon don't reflect well on SandRidge.
“I can't opine about whether the front running argument is valid, but it doesn't look good. I'm not sure if there's validity to it, but it certainly does not look good,” Hanson said. “It seems improbable that they could amass a position of that size without knowledge of what SandRidge knows. It doesn't pass the logic test.”
SandRidge's stock gained 11 cents, or nearly 2 percent, on Tuesday, closing at $6.01 a share.
CONTRIBUTING: Energy Editor Adam Wilmoth