TPG-Axon outlines SandRidge strategies
SandRidge shareholder TPG-Axon has spelled out five strategies it says will help restore value for shareholders.
Restructure the board of directors and replace CEO Tom Ward. The shareholder group has blamed the directors and Ward for the company's stock price falling 80 percent over the five years since its initial public offering. TPG-Axon also has pointed out that Ward is one of the highest-paid CEOs in the industry even though SandRidge is a relatively small publicly traded exploration and production company.
Drastically reduce overhead and waste. TPG-Axon has urged the company to cut back on overhead by as much as 75 percent by reducing employee compensation, selling the company's planes and some of its buildings and ending “extraneous expenses,” such as personal services payments, advertising and luxury suites.
Sell extraneous assets. The shareholder has asked the company to reduce debt and raise cash by selling more noncore assets. TPG-Axon has been especially critical of SandRidge's purchase last year of Gulf of Mexico oil producer Dynamic Offshore Resources LLC.
Reduce future funding needs. TPG-Axon said SandRidge has acquired more Mississippi Lime acreage in northern Oklahoma and western Kansas than it can develop. The shareholder has asked the company to either sell or develop joint ventures to help it reduce the cost of producing the large area.
Consider a full sale of the company. “While we do not believe a sale of the company is required to create significant value for shareholders, we do believe it is an option that the board should carefully consider,” TPG-Axon said in its stockholder solicitation.