Adjacent or Advance Acquisitions:
The detailed examples that TPG-Axon provided of advance or adjacent acquisitions by WCT Resources are illustrative and are just examples of the significant overlap in both location and timing between the activity of WCT Resources and SandRidge in the Mississippian. From the data TPG-Axon has reviewed so far, this pattern of activity is not rare; it is frequent, - particularly in more recent expansions in the Mississippian.
The Board claims that “virtually all companies active in the play are likely to have some interests that could be characterized as adjacent to the Company’s holdings”. Yet, it is simply not true that all companies have frequent correlation of activity, in both time and place. Even the Company, in the Consent Revocation Statement it recently filed, proudly trumpets that SandRidge created value by “quietly and inexpensively” acquiring rights ahead of other companies. Therefore, for WCT Resources to appear frequently alongside or in advance of SandRidge is notable, and not “entirely unremarkable.”
“We challenge the Board to show that the pattern of overlap between WCT Resources and SandRidge is modest compared to that of others. It is simply astonishing that family-controlled entities are active in the same business that SandRidge is active in. It is even more astonishing that these entities have frequently, as opposed to rarely, appeared ahead of, or alongside, SandRidge in areas of interest,” said TPG-Axon.Inter-Company Transactions: The direct transactions between WCT Resources and SandRidge are a small fraction of the overall pattern of overlap between WCT Resources and SandRidge, simply because much of the property or rights acquired by WCT Resources appear to have been kept, or sold to third parties. If WCT Resources buys land or rights in advance of the Company, there is potential for harm to SandRidge stockholders, whether that land is kept or sold, and regardless of whom it is sold to.
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