OKLAHOMA CITY, Jan. 25, 2013 /PRNewswire/ -- SandRidge Energy, Inc. (NYSE: SD) today released the following statement on behalf of its Board of Directors.
TPG-Axon Group has made allegations in public statements concerning certain activities of our Chairman and Chief Executive Officer, Tom Ward, and questioning the Board's oversight of those activities. Specifically, TPG-Axon claims that Mr. Ward and WCT Resources, LLC, an independent oil and gas company, have engaged in "front running" and "flipping" leasehold interests to the Company. TPG-Axon also notes that WCT Resources actively competes with the Company in its Mississippian Lime play. Mount Kellett Capital Management LP has also voiced its concern regarding the allegations made by TPG-Axon. The Board has reviewed issues related to these allegations several times over the Company's history and has found no wrongdoing to have taken place.
WCT Resources was formed in 2002 by irrevocable trusts established in 1989 for the benefit of Mr. Ward's children, all of whom are adults. The management of WCT Resources is vested entirely in managers, including Mr. Ward's son, who are independent from the Company and have no access to non-public information concerning the Company's land and mineral acquisition programs. Mr. Ward has no control over the trusts or WCT Resources and does not participate in its management, operations or business. Thus, contrary to TPG-Axon's assertions, neither the Company nor Mr. Ward has the power to "allow" WCT Resources to engage in any business regardless of whether it competes with the Company. As an ongoing business not controlled by the Company or Mr. Ward, WCT Resources is free to engage in whatever commerce it deems suitable wherever it chooses.
Transactions between WCT Resources and the Company have occurred rarely, involve less than one-quarter of one percent of the acreage leased by the Company in the Mississippian play and have been reviewed and approved in advance by disinterested Board members. The Company maintains and enforces a written policy that requires material related party transactions to be reviewed and approved by disinterested members of the Board. In connection with enforcing that policy, and meeting certain disclosure requirements of the Securities and Exchange Commission, disinterested members of the Board have thoroughly reviewed and approved transactions between the Company and WCT Resources and other related party transactions disclosed in the Company's public filings.