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TPG-Axon Issues Letter Urging SandRidge Energy Stockholders To Vote The GREEN Consent Card In Favor Of Its Proposals Before March 15th Deadline

The following actions and programs are some of the key highlights of our potential comprehensive plan to capture the dramatic upside we see for stockholders:

  • Appoint a new CEO and new independent Chairman of the Board. The CEO search is already well underway, and we believe there will be many highly-qualified and experienced candidates for the role.
  • We believe the many qualified and committed operating employees at the field level of SandRidge are the ones driving value creation for the Company – not Mr. Ward. In order to restore and grow stockholder value, we will expend every effort to ensure these valuable employees understand that their future will be enhanced and secured under new leadership. We believe employees recognize that the status quo is not sustainable, and should welcome change that leaves the Company financially stable and profitable.
  • Significant, but targeted, reductions in G&A spending, in order to bring overhead expenses down to sensible levels. We believe the Company can be operated effectively even with overhead reductions of $90-140 million, and this cashflow will be critical to reducing interest expense and debt over time. A significant portion of expense reduction could be realized in the near term, and we have made allowances for restructuring charges that may help accelerate streamlining of the Company.
  • Restructure executive compensation so it is performance driven and consistent with peers. Eliminate excessive perquisites, such as private planes and basketball tickets.
  • Further reduce debt and improve financial strength through the sale of non-core offshore assets. We believe these assets will be more valuable to a company with existing offshore capabilities and the financial and operational resources to manage existing production as well as invest in development.
  • Work with the Company’s debt holders to promptly restructure the debt, lowering costs and deploying the proceeds from the Permian sale to call or refinance at least $1.1bn of debt in June 2013. We believe that improved financial strength and a commitment to lower leverage goals will likely improve the perception of the Company in the debt market, reducing funding costs by at least 200-300bp.
  • Seek to monetize 30-50 percent of undeveloped acreage in the Mississippian, thereby reducing future capital expenditure requirements to affordable and sustainable levels. We believe value will be maximized by ‘biting off what we can chew,’ instead of drained by high financing costs, which we believe is likely to continue under the current management plan.
  • Consider the optimal means to monetize the value of the extensive infrastructure investment that has been made in the Mississippian water disposal system with a preference for retaining control.
  • We will work closely with financial advisors from the outset to ensure that any sale of assets is conducted in a thorough and sensible manner and avoids the perception of a fire-sale. We believe the current liquidity of the Company and our efforts on cost reduction will provide enough financial flexibility to take a value-maximizing and measured approach to asset sales.

By following the steps above, over time we believe SandRidge will emerge as a well-capitalized, attractive energy company with significant growth opportunities in its existing Mississippian acreage that should enable stockholders to realize Net Asset Value (NAV) per share of $10 to $12. We are confident our independent highly qualified director nominees possess the necessary skills and experience to carry out this strategic plan, restore market confidence and create value for stockholders in the process.


If appropriate steps are not taken to commit to a coherent strategy, restore investor confidence, drastically reduce overhead costs, and lower the cost of capital, there is no telling what SandRidge will look like in the future. It is time to take back our Company and facilitate change and capture the dramatic upside we see for stockholders.

We urge you to VOTE THE GREEN CONSENT CARD in favor of our proposals and director slate. It is important that you submit your GREEN consent card AS SOON AS POSSIBLE. If you do not vote your shares, your shares will count as a vote FOR management. Importantly, if you receive a white consent card from SandRidge DO NOT return it.

If your shares are registered in your own name, please submit your consent by signing, dating and returning the enclosed GREEN consent card in the postage-paid envelope provided. If you hold your shares in "street" name with a bank, broker firm or other nominee, it is critical that you instruct the institution that holds your shares to execute a consent in favor of our proposals. We implore you to return your signed and dated GREEN consent card by February 28, 2013 or as soon as possible, to ensure your consent card is received by SandRidge prior to March 15, 2013, the deadline for submitting consents.

If you have any questions regarding your GREEN consent card or need assistance in executing your consent, please contact MacKenzie Partners, Inc. at (212) 929-5500 or Toll-Free (800) 322-2885.

Sincerely,TPG-Axon Capital

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