NEW YORK Feb 19 (Reuters) - One of SandRidge Energy Inc's largest shareholders, pushing to remove its chief executive, said on Tuesday that a company controlled by the CEO's children has amassed about 475,000 acres near SandRidge's operations.
Hedge fund TPG-Axon, which has launched a campaign to remove all of SandRidge's board and replace CEO Tom Ward, claimed WCT Resources, an oil and gas company formed from trusts benefiting Ward's three adult children and run by his eldest son, Trent, is the fifth largest company doing business in the Mississippian shale formation that spans parts of Oklahoma and Kansas.
Oil and gas company SandRidge owns the most acreage in the Mississippian, with around 2.3 million acres, according to the hedge fund's presentation to shareholders. Chesapeake Energy Corp is the second largest, with about 2 million acres there.
WCT Resources' position is also behind that of Royal Dutch Shell Plc and Devon Energy Corp, which own about 600,000 acres and 545,000 acres in the region, respectively, according to TPG-Axon.
TPG-Axon alleges land owned by WCT Resources in the Mississippian will benefit from SandRidge's efforts to build infrastructure in the region, adding that a smaller company like WCT Resources was not likely able to shoulder such a cost-intensive process.
TPG-Axon owns 7 percent of SandRidge's outstanding shares. The hedge fund has been campaigning for changes at the company since November.
The hedge fund has been releasing details of the Ward family's land deals as it tries to convince shareholders to vote to remove the SandRidge board. The shareholders have until March 15 to vote on the matter.
SandRidge's board has given Ward wide latitude to profit from personal oil-and-gas deals in ways that pose potential conflicts of interest, according to a Reuters review of employment contracts and recent transactions.
SandRidge could not be reached immediately for comment. The company said proxy advisory firm Egan-Jones has recommended shareholders reject TPG-Axon's campaign to remove the company's board.
On Friday, another proxy advisory firm, ISS, recommended shareholders vote to replace a majority of SandRidge's board, backing five of TPG-Axon's nominees.
On Jan. 25, SandRidge responded to shareholder allegations that Ward and his family improperly sold acreage to SandRidge. The company said it found no wrongdoing in the transactions. Impartial members of its board review all related-party transactions, the company said.
"TPG-Axon goes to great lengths to establish that WCT Resources owns leasehold acreage adjacent to acreage held by the company," SandRidge said, noting that it is the largest landholder in the region. "Virtually all companies active in the play are likely to have some interests that could be characterized as adjacent to the company's holdings."
SandRidge stock rose 1.6 percent to $6.