Feb 8 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 U.S. oil and gas producer said, however, that a default
under the credit agreement would not have a material
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 released
Mark Hanson, oil analyst at Morningstar in Chicago, said
SandRidge would likely have a number of options in the event of
"There's probably a workaround in the credit agreement,"
Hanson said. "All these agreements have so many triggers."
Shareholders TPG-Axon Capital Management and Mount Kellett
Capital Management are seeking to replace the company's board
and chief executive. The investors have also asked that CEO Tom
Ward step down, citing poor management of the company.
The hedge funds, which 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.
Shares of SandRidge edged up 3 cents to $5.97 in morning
trading on the New York Stock Exchange.