When SandRidge signs a joint venture agreement, as it has with companies like Repsol and Atinum, there is benefit for SandRidge stockholders. The Company and its stockholders bear the initial expense and overhead of identifying opportunities. However, the partners then pay a premium to the Company for a share of the land, and share in the expense of developing the land.On the other hand, if in fact, family-controlled entities have gained information and advantage through the relationship with Mr. Ward and SandRidge, then by contrast, the situation with WCT Resources and other Ward family entities is remarkably advantageous for them. In such circumstances, SandRidge would bear the expense of huge overhead, which presumably would help in identifying attractive opportunities while WCT Resources would appear to reach that same result with little overhead spending or resources. SandRidge would also, in such circumstances, bear the cost of drilling to prove whether the land was valuable or not. If it was valuable, WCT Resources would benefit from having adjacent land, even without having borne that cost.
TPG-Axon Responds To SandRidge Energy’s Statement Regarding Related Party Transactions
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