CHICAGO (Reuters) - A group of SandRidge Energy Inc shareholders SDOCQ.PK is accusing the oil and gas producer of grossly understating its value, threatening to derail a prepackaged bankruptcy agreement with its lenders.
The shareholders’ court filing late on Wednesday comes before a hearing next week, when the company will ask a judge to approve the Oklahoma City company’s reorganization plan.
Shareholders are hoping to prove SandRidge may be the rare bankruptcy where a company’s assets are valuable enough to repay creditors and have money left over for stockholders, according to their filing with the U.S. Bankruptcy Court in Houston.
SandRidge filed the prepackaged bankruptcy pact in May to restructure roughly $4 billion of debt, joining a long list of oil-and-gas producers hit by a deep crash in U.S. energy prices.
The company’s financial adviser, Houlihan Lokey, estimated the reorganized company’s enterprise value, generally a measure of market capitalization plus debt minus cash, at $1.0 billion to $1.3 billion. The shareholders said an analysis by energy consultant SSR put the value at almost three times that amount.
SandRidge, which was founded in 2006 by former Chesapeake Energy Corp (CHK.N) executive Tom Ward, did not immediately respond to requests for comment. Houlihan Lokey declined to comment.
SSR could not provide a full report on its evaluation because it was running against an Aug. 31 deadline with insufficient information from SandRidge, the shareholders said.
SandRidge had estimated its assets were worth $7 billion as of March 31, according to its Chapter 11 filing in May.
In a court filing, Sunil Gupta, an attorney working with shareholders, said he was aware of a U.S. Securities and Exchange Commission investigation of a former SandRidge employee who was fired for protesting the company’s improper reporting of its reserve values. Gupta said he tracked down the SandRidge whistleblower, a former director of reservoir engineering, and opponents of the plan wanted to depose him.
A Texas school district that is a SandRidge creditor indicated it wanted the whistleblower to turn over all documents he provided to the SEC as well as information regarding SandRidge reserves.
Shares of SandRidge have generally traded below 2 cents in recent months. They had dropped to about 6 cents the day before the company filed for bankruptcy from more than $7 when commodity prices began falling in mid-2014.
(The story was refiled to correct the description of Gupta in paragraph 9 to attorney working with shareholders, from shareholder)
Reporting by Tracy Rucinski; Editing by Tom Hals and Lisa Von Ahn