SandRidge warns of possible default if board is changed

Fri Feb 8, 2013 9:37am EST

Feb 8 (Reuters) - SandRidge Energy Corp said replacing its board, as suggested by its third-largest shareholder TPG-Axon, would lead to a default under its credit agreement and require the company to make an offer to repurchase its senior notes.

The oil and gas producer, however, said a default under the credit agreement would not have a material consequence at this time.

The holders of the senior notes would be unlikely to accept an offer to repurchase, because the notes are trading at values in excess of the repurchase price specified in the note agreement, the company said in a regulatory filing.

Shareholders TPG-Axon Capital Management and Mount Kellett Capital Management are seeking to replace the company's board and chief executive.

The hedge funds, who own more than 11 percent of SandRidge, have accused the company of poor performance and of allowing Chief Executive Tom Ward to engage in land deals in which he stands to profit at the expense of the company.

A couple walks along the rough surf during sunset at Oahu's North Shore, December 26, 2013. REUTERS/Kevin Lamarque

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