NEW YORK Nov 15 A second large investor has
called for SandRidge Energy Inc to replace Chief
Executive Officer Tom Ward and overhaul its board, saying the
oil and gas company has suffered from "critical failures of
management and board oversight."
Mount Kellett Capital Management, which said it owned about
4.5 percent of SandRidge's outstanding shares, sent the company
a letter on Thursday calling for the changes. Mount Kellett is
following the lead of hedge fund TPG-Axon, which sent a similar
letter last week.
SandRidge, which has been searching for a strategy to
improve returns, has come under fire from investors because its
shares have underperformed peers.
Mount Kellett also called for the company to consider
selling itself, saying it believes SandRidge is worth more than
$20 a share - nearly four times its current stock price.
SandRidge's shares rose 3.5 percent to $5.37 in early
afternoon New York Stock Exchange trading.
SandRidge acknowledged in a statement last week that it
needs to improve performance for shareholders and said it is
open to constructive engagement with its investors.
Last week it said it planned to sell some of its assets in
the Permian Basin in western Texas.
The company, which has shifted its focus from natural gas to
oil in reaction to falling natural gas prices, also made a steep
cut to its estimates on how much oil it believes it can recover
from key wells in the Mississippian region of Oklahoma and
Since that announcement, the company's shares have fallen 11
percent, and Mount Kellett said a Permian sale would reduce the
"In the interim, we urge the board not to take any hasty
strategic actions, such as the precipitous sale of the Permian
assets, which will permanently impair stockholder value," the
Mount Kellett letter read.
Last week, hedge fund TPG-Axon, which controls a 6.2 percent
stake in the company, called for SandRidge to consider selling
itself, for Ward to step down, and for changes to the board,
saying management's strategy has been "incoherent, unpredictable
Ward bought into SandRidge's predecessor and took over the
company in 2006 after leaving Chesapeake Energy - a
company he co-founded with Aubrey McClendon. Chesapeake has had
to contend with its own governance and performance problems this
year and McClendon has been stripped of his title of chairman of
that company as a result.